As filed with the Securities and Exchange Commission on April 26, 2004

Registration No. 333-23359/811-4420

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-6

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

PRE-EFFECTIVE AMENDMENT NO.   ¨

POST-EFFECTIVE AMENDMENT NO. 10   x

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT

COMPANY ACT OF 1940

Amendment No. 25   x

(Check appropriate box or boxes)

WRL SERIES LIFE ACCOUNT

(Exact Name of Registrant)

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

(Name of Depositor)

570 Carillon Parkway

St. Petersburg, FL 33716

(Address of Depositor’s Principal Executive Offices) (Zip Code)

Depositor’s Telephone Number, including Area Code:

(727) 299-1800

Thomas E. Pierpan

Vice President, Assistant Secretary and Senior Counsel

Western Reserve Life Assurance Co. of Ohio

570 Carillon Parkway

St. Petersburg, FL 33716

(Name and Address of Agent for Service)

Copy to:

Mary Jane Wilson-Bilik, Esq.

Sutherland Asbill & Brennan LLP

1275 Pennsylvania Avenue, N.W.

Washington, D.C. 20004-2415

¨  immediately upon filing pursuant to paragraph (b)

x   on May 1, 2004 , pursuant to paragraph (b)

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

¨  on (date) , pursuant to paragraph (a)(1)

If appropriate, check the following box:

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

PART A

INFORMATION REQUIRED IN A PROSPECTUS

P R O S P E C T U S

May 1, 2004

WRL FINANCIAL FREEDOM BUILDER^®

issued through

WRL Series Life Account

by

Western Reserve Life Assurance Co. of Ohio

570 Carillon Parkway

St. Petersburg, Florida 33716

1-800-851-9777

(727) 299-1800

AN INDIVIDUAL FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY

This prospectus describes the WRL Financial Freedom Builder^®, a flexible premium variable life insurance policy (the “Policy”). You can allocate your Policy’s cash value to the fixed account (which credits a specified guaranteed interest rate) and/or to the WRL Series Life Account, which invests through its subaccounts in portfolios of the Transamerica Series Fund, Inc. (formly, AEGON/Transamerica Series Fund, Inc.) – Initial Class (the “Series Fund”), Fidelity Variable Insurance Products Funds – Service Class 2 (the “Fidelity VIP Fund”) and Access Variable Insurance Trust (“AVIT”), (collectively, the “funds”).

The portfolios of the Series Fund available to you under this Policy are:

¨	AEGON Bond	¨	Munder Net50
¨	American Century International	¨	PIMCO Total Return
¨	Asset Allocation – Conservative Portfolio	¨	Salomon All Cap
¨	Asset Allocation – Growth Portfolio	¨	Third Avenue Value
¨	Asset Allocation – Moderate Growth Portfolio	¨	Templeton Great Companies Global
¨	Asset Allocation – Moderate Portfolio	¨	Transamerica Balanced (formerly, Janus Balanced)
¨	Clarion Real Estate Securities	¨	Transamerica Convertible Securities
¨	Federated Growth & Income	¨	Transamerica Equity
¨	Great Companies – AmericaSM	¨	Transamerica Growth Opportunities
¨	Great Companies – TechnologySM	¨	Transamerica Money Market
¨	Janus Growth	¨	Transamerica Value Balanced
¨	J.P. Morgan Mid Cap Value (formerly, Dreyfus Mid Cap)	¨ ¨	T. Rowe Price Equity Income T. Rowe Price Small Cap
¨	Marsico Growth	¨	Van Kampen Emerging Growth
¨	Mercury Large Cap Value (formerly, PBHG/NWQ Value Select)

The portfolios of the Fidelity VIP Fund available to you under this Policy are:

¨  Fidelity VIP Equity-Income Portfolio*    ¨  Fidelity VIP Contrafund^® Portfolio*    ¨  Fidelity VIP Growth Opportunities Portfolio*

* Effective May 1, 2003, this portfolio is no longer available for sale to new investors.

The portfolios of the AVIT available to you under this Policy are:

¨	Potomac Dow 30 Plus Portfolio	¨	Wells S&P REIT Index Portfolio
¨	Potomac OTC Plus Portfolio	¨	Access U.S. Government Money Market Portfolio

If you already own a life insurance policy, it may not be to your advantage to buy additional insurance or to replace your Policy with the Policy described in this prospectus. And it may not be to your advantage to borrow money to purchase this Policy or to take withdrawals from another Policy you own to make premium payments under this Policy.

Prospectuses for the portfolios of the funds must accompany this prospectus. Certain portfolios may not be available in all states. Please read these documents before investing and save them for future reference.

An investment in this Policy is not a bank deposit. The Policy is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

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.

Table of Contents

Policy Benefits/Risks Summary	1
Policy Benefits	1
The Policy in General	1
Flexible Premiums	1
Variable Death Benefit	1
No Lapse Guarantee	2
Cash Value	2
Transfers	2
Loans	3
Cash Withdrawals and Surrenders	3
Tax Benefits	3
Policy Risks	4
Risk of an Increase in Current Fees and Expenses	4
Investment Risks	4
Risk of Lapse	4
Tax Risks (Income Tax and MEC)	5
Loan Risks	5
Portfolio Risks	5
Fee Tables	6
Range of Expenses for the Portfolios	12
Western Reserve, The Separate Account, the Fixed Account and the Portfolios	13
Western Reserve	13
The Separate Account	13
The Fixed Account	14
The Portfolios	14
Addition, Deletion, or Substitution of Investments	18
Your Right to Vote Portfolio Shares	18
Charges and Deductions	19
Premium Charges	19
Monthly Deduction	20
Mortality and Expense Risk Charge	21
Surrender Charge	21
Pro Rata Decrease Charge	22
Transfer Charge	23
Loan Interest Charge	23
Change in Net Premium Allocation Charge	23
Cash Withdrawal Charge	24
Taxes	24
Rider Charges	24
Portfolio Expenses	24
The Policy	25
Ownership Rights	25
Modifying the Policy	25
Purchasing a Policy	25
Tax-Free “Section 1035” Exchanges	26
When Insurance Coverage Takes Effect	26
Policy Features	28
Premiums	28

This Policy is not available in the State of New York.

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Allocating Premiums	28
Premium Flexibility	28
Planned Periodic Payments	28
Minimum Monthly Guarantee Premium	29
No Lapse Period	29
Premium Limitations	29
Making Premium Payments	30
Transfers	30
General	30
Fixed Account Transfers	33
Conversion Rights	33
Dollar Cost Averaging	33
Asset Rebalancing Program	34
Third Party Asset Allocation Services	35
Policy Values	35
Cash Value	35
Net Surrender Value	35
Subaccount Value	35
Subaccount Unit Value	36
Fixed Account Value	36
Death Benefit	37
Death Benefit Proceeds	37
Death Benefit	37
Effect of Cash Withdrawals on the Death Benefit	39
Choosing Death Benefit Options	39
Changing the Death Benefit Option	40
Decreasing the Specified Amount	40
No Increases in Specified Amount	40
Payment Options	41
Surrenders and Cash Withdrawals	41
Surrenders	41
Cash Withdrawals	41
Canceling a Policy	42
Loans	42
General	42
Interest Rate Charged	43
Loan Reserve Interest Rate Credited	43
Effect of Policy Loans	43
Policy Lapse and Reinstatement	44
Lapse	44
No Lapse Period	44
Reinstatement	45
Federal Income Tax Considerations	45
Tax Status of the Policy	45
Tax Treatment of Policy Benefits	46
Other Policy Information	48
Benefits at Maturity	48
Payments We Make	49
Split Dollar Arrangements	49
Policy Termination	50
Supplemental Benefits (Riders)	50
Children’s Insurance Rider	50
Accidental Death Benefit Rider	51

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Other Insured Rider	51
Disability Waiver Rider	52
Disability Waiver and Income Rider	52
Primary Insured Rider (“PIR”) and Primary Insured Rider Plus (“PIR Plus”)	52
Terminal Illness Accelerated Death Benefit Rider	53
Additional Information	54
Sale of the Policies	54
Legal Proceedings	54
Financial Statements	54
Performance Data	54
Rates of Return	54
Table of Contents of the Statement of Additional Information	58
Glossary	59
Appendix A – Surrender Charge Per Thousand (Based on the gender and rate class of the insured)	62
Appendix B - Illustrations	64
Prospectus Back Cover	67
Personalized Illustrations of Policy Benefits	67
Inquiries	67

iii

Policy Benefits/Risks Summary WRL Financial Freedom Builder^®

This summary describes the Policy’s important benefits and risks. More detailed information about the Policy appears later in this prospectus and in the Statement of Additional Information (“SAI”). For your convenience, we have provided a Glossary at the end of this prospectus that defines certain words and phrases used in this prospectus.

Policy Benefits

The Policy in General

• The WRL Financial Freedom Builder^® is an individual flexible premium variable life insurance policy. The Policy gives you the potential for long-term life insurance coverage with the opportunity for tax-deferred cash value accumulation. The Policy’s cash value will increase or decrease depending on the investment performance of the subaccounts, the premiums you pay, the fees and charges we deduct, the interest we credit to the fixed account, and the effects of any Policy transactions (such as transfers, loans and partial withdrawals).

• The Policy is designed to be long-term in nature in order to provide significant life insurance benefits for you. However, purchasing this Policy involves certain risks. You should purchase the Policy only if you have the financial ability to keep it in force for a substantial period of time. You should consider the Policy in conjunction with other insurance you own. The Policy is not suitable as a short-term savings vehicle. There may be adverse consequences should you decide to surrender your Policy early, such as payment of a surrender charge that applies during the first 15 Policy years.

• Fixed Account. You may place money in the fixed account where it earns at least 4% annual interest. We may declare higher rates of interest, but are not obligated to do so. The fixed account is part of our general account. The fixed account is not available if your Policy was issued in the State of New Jersey.

• Separate Account. You may direct the money in your Policy to any of the subaccounts of the separate account. Each subaccount invests exclusively in one of the portfolios listed on the cover of this prospectus. Money you place in a subaccount is subject to investment risk and its value will vary each day according to the investment performance of the portfolios in which the subaccounts invest.

• Supplemental Benefits (Riders). Supplemental riders are available under the Policy. We deduct charges for these riders from cash value as part of the monthly deduction. These riders may not be available in all states.

Flexible Premiums

• You select a premium payment plan but the plan is flexible – you are not required to pay premiums according to the plan. You can change the frequency and amount, within limits, and can skip premium payments. Unplanned premiums may be made, within limits. Premium payments must be at least $50.

• You increase your risk of lapse if you do not regularly pay premiums at least as large as the current minimum monthly guarantee premium. Under certain circumstances, extra premiums may be required to prevent lapse.

• Once we deliver your Policy, the free-look period begins. You may return the Policy during this period and receive a refund.

Variable Death Benefit

• If the insured dies while the Policy is in force, we will pay a death benefit to the beneficiary(ies). The amount of the death benefit depends on the specified amount of insurance you select, the death benefit option you chose, and any additional insurance provided by riders you purchase.

• Choice Among Death Benefit Options. You must choose one of three death benefit options. We offer the following:

• Option A is the greater of:

• the current specified amount, or

• a specified percentage, multiplied by the Policy’s cash value on the date of the insured’s death.

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• Option B is the greater of:

• the current specified amount, plus the Policy’s cash value on the date of the insured’s death, or

• a specified percentage, multiplied by the Policy’s cash value on the date of the insured’s death.

• Option C is the greater of:

• the amount payable under Option A, or

• the current specified amount, multiplied by an age-based “factor,” plus the Policy’s cash value on the date of the insured’s death.

We will reduce the death benefit proceeds by any outstanding loan amount and any due and unpaid charges. We will increase the death benefit proceeds by any additional insurance benefits you add by rider and any interest you paid in advance on any loan for the period between the date of death and the next Policy anniversary.

• Under current tax law, the death benefit should generally be U.S. federal income tax free to the beneficiary. Other taxes, such as estate taxes, may apply.

• Change in Death Benefit Option and Specified Amount. After the third Policy year and once each Policy year thereafter, you may make one of the following changes: change the death benefit option or decrease the specified amount. A decrease in specified amount is limited to no more than 20% of the specified amount prior to the decrease. The new specified amount cannot be less than the minimum specified amount as shown in your Policy.

No Lapse Guarantee

• We guarantee that your Policy will not lapse until the no lapse date shown on your Policy schedule page, so long as on any Monthiversary you have paid total premiums (minus any cash withdrawals, minus any outstanding loan amount, and minus any pro rata decrease charge) that equal or exceed the sum of the minimum monthly guarantee premiums in effect for each month since the Policy date up to and including the current month. If you take a cash withdrawal or a loan, you decrease your specified amount, if you change the death benefit option, or if you add, increase or decrease a rider, you may need to pay additional premiums in order to keep the no lapse guarantee in place.

Cash Value

• Cash value is the starting point for calculating important values under the Policy, such as net surrender value and the death benefit. There is no guaranteed minimum cash value. The Policy may lapse if you do not have sufficient cash value in the Policy to pay the monthly deductions, the surrender charge and/or any outstanding loan amount(s) (including interest you owe on any Policy loan(s)).

• The Policy will not lapse during the no lapse period so long as you have paid sufficient premiums.

Transfers

• You can transfer cash value among the subaccounts and the fixed account. You may make transfers in writing, by telephone, by fax or electronically through our website.

• We charge a $25 transfer processing fee for each transfer after the first 12 transfers in a Policy year.

• Dollar cost averaging and asset rebalancing programs are available.

• Unless you select dollar cost averaging from the fixed account, the Policy allows transfers from the fixed account only during the 30 days following each Policy anniversary. During this period, the Policy allows transfer of the greater of up to 25% of the amount in the fixed account, or the amount transferred in the previous Policy year. Currently, we allow you to transfer at any one time during a Policy year up to 100% of the fixed account value from the fixed account. If we modify or stop this current practice, we will notify you.

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• Transfers between any AVIT subaccount and any Sereis Fund or Fidelity VIP Fund subaccount will be processed only if you send us a written request through standard United States Postal First Class mail delivery, with an original signature authorizing each transfer.

• Transfers resulting from loans or the exercise of conversion rights are currently not treated as transfers for the purpose of the transfer charge.

• Transfers via the Internet are not treated as transfers for the purpose of the transfer charge.

Loans

• After the first Policy year (as long as your Policy is in force), you may take a loan against the Policy up to 90% of the cash value, minus any surrender charge and minus any outstanding loan amount. We may permit a loan prior to the first anniversary for Policies issued pursuant to 1035 Exchanges. The minimum loan amount is generally $500.

• We currently charge 5.2% interest annually. The interest will be charged in advance each year on any outstanding loan amount.

• To secure the loan, we transfer a portion of your cash value to a loan reserve account. The loan reserve account is part of the fixed account. We will credit the amount in the loan reserve with interest at an effective annual rate of at least 4.0%.

• After the 10th Policy year, on all amounts you have borrowed, we currently credit interest to the part of the cash value in excess of the premiums paid less withdrawals at an interest rate equal to the interest rate we charge on the total loan. The remaining portion, equal to the cost basis, is currently credited 4.75%.

• Federal income taxes and a penalty tax may apply to loans you take against the Policy.

Cash Withdrawals and Surrenders

• You may take one withdrawal of cash value per Policy year after the first Policy year.

• The amount of the withdrawal may be limited to:

• at least $500; and

• no more than 10% of the net surrender value.

• We will deduct a processing fee equal to $25 or 2% of the amount you withdraw (whichever is less) from the withdrawal, and we will pay you the balance.

• A cash withdrawal will reduce the death benefit by at least the amount of the withdrawal. We will not impose a pro rata decrease charge when the specified amount is decreased as a result of taking a cash withdrawal.

• You may fully surrender the Policy at any time before the insured’s death or the maturity date. Life insurance coverage will end. You will receive the net surrender value (cash value minus surrender charge, minus any outstanding loan amount, plus any interest paid in advance on the loan for the period between the date of surrender and the next Policy anniversary). The surrender charge will apply during the first 15 Policy years. The surrender charge may be significant. You may receive little or no net surrender value if you surrender your Policy in the early Policy years.

• A cash withdrawal will reduce the cash value, so it will increase the risk that the Policy will lapse. A cash withdrawal may also increase the risk that the no lapse guarantee will not remain in effect.

• Federal income taxes and a penalty tax may apply to cash withdrawals and surrenders.

Tax Benefits

We intend for the Policy to satisfy the definition of life insurance under the Internal Revenue Code so that the death benefit generally should be excludible from the taxable income of the beneficiary. In addition, if the Policy is a Modified Endowment Contract (“MEC”), you should not be deemed to be in receipt of any taxable gains on cash value until you take a withdrawal, Policy loan, pledge or surrender the Policy, or we pay the maturity benefit. Moreover, transfers between the subaccounts are not taxable transactions.

3

Policy Risks

Risk of an Increase in Current Fees and Expenses

Certain fees and expenses currently are assessed at less than their guaranteed maximum levels. In the future, we may increase these current charges up to the guaranteed (that is, maximum) levels. If fees and expenses are increased, you may need to increase the amount and/or frequency of premiums to keep the Policy in force.

Investment Risks

If you invest your Policy’s cash value in one or more subaccounts, then you will be subject to the risk that investment performance of the subaccounts will be unfavorable and that the cash value in your Policy will decrease. In addition, we deduct Policy fees and charges from your cash value, which can significantly reduce your cash value. During times of poor investment performance, this deduction will have an even greater impact on your cash value. You could lose everything you invest and your Policy could lapse without value, unless you pay additional premiums. If you allocate premiums to the fixed account, then we credit your fixed account value with a declared rate of interest. You assume the risk that the interest rate on the fixed account may decrease, although it will never be lower than a guaranteed minimum annual effective rate of 4%.

Risk of Lapse

If your Policy fails to meet certain conditions, we will notify you that the Policy has entered a 61-day grace period and will lapse without value unless you make a sufficient payment during the grace period.

Your Policy contains a no lapse period. Your Policy will not lapse before the no lapse date stated in your Policy, as long as you pay sufficient minimum guarantee premiums. If you do not pay sufficient premiums, you will automatically lose the no lapse guarantee and you will increase the risk that your Policy will lapse.

If you take a cash withdrawal or Policy loan, if you decrease the specified amount, if you change your death benefit option, or if you add, increase or decrease a rider, we will adjust the minimum monthly guarantee premium accordingly and notify you of the new amount. If the new amount is higher than it was before and you do not make any necessary higher premium payments, you will increase the risk of losing the no lapse guarantee. We deduct the total amount of your withdrawals, any outstanding loan amount and any pro rata decrease charge from your premiums paid when we determine whether your premium payments are high enough to keep the no lapse period in effect.

If you change death benefit options, decrease the specified amount, or add or increase a rider, we will increase the amount of your minimum monthly guarantee premium.

You will lessen the risk of Policy lapse if you keep the no lapse period guarantee in effect. Before you take a cash withdrawal, loan, decrease the specified amount, change the death benefit option or add, increase or decrease a rider, you should consider carefully the effect it will have on the no lapse period guarantee.

After the no lapse period, your Policy may lapse if loans, cash withdrawals, the monthly deductions, and insufficient investment returns reduce the net surrender value to zero. The Policy will enter a grace period if on any Monthiversary the net surrender value (that is, the cash value minus the surrender charge, and minus any outstanding loan amount, plus any interest you paid in advance on the loan between the date of surrender and the next Policy anniversary) is not enough to pay the monthly deduction due.

A Policy lapse may have adverse tax consequences.

You may reinstate this Policy within five years after it has lapsed (and prior to the maturity date), if the insured meets the insurability requirements and you pay the amount we require.

4

Tax Risks (Income Tax and MEC)

We expect that the Policy will generally be deemed a life insurance contract under federal tax law, and that the death benefit paid to the beneficiary will generally not be subject to federal income tax.

Depending on the total amount of premiums you pay, the Policy may be treated as a modified endowment contract (“MEC”) under federal tax laws. If a Policy is treated as a MEC, partial withdrawals, surrenders, assignments, pledges and loans will be taxable as ordinary income to the extent there are earnings in the Policy. In addition, a 10% penalty tax may be imposed on the taxable portion of cash withdrawals, surrenders, assignments, pledges and loans taken before you reach age 59 ¹/2. If a Policy is not treated as a MEC, partial surrenders, surrenders, assignments, pledges and withdrawals will not be subject to tax to the extent of your investment in the Policy. Amounts in excess of your investment in the Policy, while subject to tax as ordinary income, will not be subject to a 10% penalty tax. You should consult a qualified tax advisor for assistance in all tax matters involving your Policy.

Loan Risks

A Policy loan, whether or not repaid, will affect cash value over time because we subtract the amount of the loan from the subaccounts and the fixed account and place that amount in the loan reserve as collateral. We then credit a fixed interest rate at an annual effective rate of 4.0% to the loan collateral. As a result, the loan collateral does not participate in the investment results of the subaccounts and may not continue to receive the current interest rates credited to the unloaned portion of the fixed account. The longer the loan is outstanding, the greater the effect is likely to be. Depending on the investment results of the subaccounts and the interest rates credited to the fixed account, the effect could be favorable or unfavorable.

We also currently charge interest on Policy loans at a rate of 5.2% to be paid in advance. Interest is added to the amount of the loan to be repaid.

A Policy loan could make it more likely that a Policy would lapse. A Policy loan will increase the risk that the no lapse period guarantee will not remain in effect. There is also a risk that if the loan, insurance charges and unfavorable investment experience reduce your net surrender value and the no lapse period guarantee is no longer in effect, then the Policy will lapse. Adverse tax consequences may result.

If the Policy lapses or is surrendered while a loan is outstanding, you will realize taxable income equal to the lesser of the gain in the Policy or the sum of the excess of the loan balance and any cash received on surrender over your basis in the Policy. If the Policy is a MEC or becomes a MEC within two years of taking a loan, the amount of the outstanding indebtedness will be taxed as if it were a withdrawal from the Policy.

If the Policy lapses or terminates due to volatility in the investment performance of the underlying portfolios or another reason, you may incur tax consequences at an unexpected time.

Portfolio Risks

A comprehensive discussion of the risks of each portfolio may be found in each portfolio’s prospectus. Please refer to the prospectuses for the portfolios for more information.

There is no assurance that any of the portfolios will achieve its stated investment objective.

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Fee Tables

The following tables describe the fees and expenses that you will pay when buying, owning and surrendering the Policy. If the amount of a charge depends on the personal characteristics of the insured or the owner, then the fee table lists the minimum and maximum charges we assess under the Policy, and the fees and charges of a typical insured with the characteristics set forth below. These charges may not be typical of the charges you will pay.

The first table describes the fees and expenses that you will pay when buying the Policy, paying premiums, making cash withdrawals from the Policy, surrendering the Policy, or transferring Policy cash value among the subaccounts and the fixed account.

Transaction Fees

		Amount Deducted
Charge	When Charge is Deducted	Guaranteed Charge	Current Charge
Premium Charges: Premium Expense Charge	Upon payment of each premium	First 10 Policy years = 6.0% of each premium payment; and 2.5% of premiums in Policy years 11+	First 10 Policy years = 6.0% of each premium payment; and 2.5% of premiums in Policy years 11+
Premium Collection Charge		$3.00 per premium	$3.00 per premium
Cash Withdrawal Charge1	Upon withdrawal	2.0% of the amount withdrawn, not to exceed $25	2.0% of the amount withdrawn, not to exceed $25
Surrender Charge2	Upon full surrender of the Policy during the first 15 Policy years
•      Minimum Charge3		$7.68 per $1,000 of specified amount during first Policy year.	$7.68 per $1,000 of specified amount during first Policy year.
•      Maximum Charge4		$57.00 per $1,000 of specified amount during first Policy year.	$57.00 per $1,000 of specified amount during first Policy year.

¹ When we incur the expense of expedited delivery of your partial withdrawal or complete surrender payment, we will assess the following charges: $20 for overnight delivery ($30 for Saturday delivery); and $25 for wire service.

² The surrender charge will vary based on the issue age, gender and underwriting class of the insured on the Policy. The surrender charge is calculated as the surrender charge per $1,000 of specified amount multiplied by the surrender charge factor. The surrender charge factor on a Policy where the insured’s age on the Policy date is less than 40 will be 1.00 for the first 5 Policy years and then decrease by 0.10 each Policy year until it reaches zero at the end of the 15^th Policy year after the Policy date. For a Policy where the age on the Policy date is greater than 39, the surrender charge factor is less than 1.00 at the end of the First Policy year and decreases every year until it reaches zero at the end of the 15^th Policy year after the Policy date. The surrender charge shown in the table may not be typical of the charges you will pay. More detailed information about the surrender charges applicable to you is available from your agent.

³ This minimum surrender charge is based on an insured with the following characteristics: female, issue age 4, in the juvenile underwriting class. This minimum charge may also apply to insureds with other characteristics.

⁴ This maximum surrender charge is based on an insured with the following characteristics: male, issue age 80, in the standard tobacco use underwriting class. This maximum charge may also apply to insureds with other characteristics.

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Transaction Fees

		Amount Deducted
Charge	When Charge is Deducted	Guaranteed Charge	Current Charge
Surrender Charge (continued) •      Charge for a Policy insuring a male, issue age 30 in the ultimate select non-tobacco use underwriting class		$12.52 per $1,000 of specified amount during first Policy year.	$12.52 per $1,000 of specified amount during first Policy year.
Transfer Charge5	Upon transfer	$25 for each transfer in excess of 12 per Policy year	$25 for each transfer in excess of 12 per Policy year
Change in Net Premium Allocation Charge	Upon change of allocation instructions for premium payments in excess of one per Policy quarter	$25	None
Pro Rata Decrease Charge	Deducted when specified amount is decreased during the first 15 Policy years	Equal to the surrender charge (as of the date of the decrease) applicable to that portion of the specified amount that is decreased.	Equal to the surrender charge (as of the date of the decrease) applicable to that portion of the specified amount that is decreased.

The table below describes the fees and expenses that you will pay periodically during the time that you own the Policy, not including portfolio fees and expenses.

⁵ The first 12 transfers per Policy year are free.

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Periodic Charges Other Than Portfolio Operating Expenses

		Amount Deducted
Charge	When Charge is Deducted	Guaranteed Charge	Current Charge
Monthly Policy Charge	Monthly, on the Policy date and on each Monthiversary	$7.50 per month	$5.00 per month
Cost of Insurance6 (without Extra Ratings)7	Monthly, on the Policy date and on each Monthiversary until the insured reaches age 95
•      Minimum Charge8		$0.06 per $1,000 of net amount at risk per month	$0.06 per $1,000 of net amount at risk per month
•      Maximum Charge9		$24.85 per $1,000 of net amount at risk per month	$21.12 per $1,000 of net amount at risk per month
•      Initial charge for a male insured, issue age 30, in the ultimate select non-tobacco use class		$0.12 per $1,000 of net amount at risk per month	$0.12 per $1,000 of net amount at risk per month
Mortality and Expense Risk Charge	Daily	Annual rate of 0.90% of daily net assets of each subaccount in which you are invested	Annual rate of 0.90% for Policy years 1 - 15 and 0.75% for Policy years 16+ of daily net assets of each subaccount in which you are invested
Loan Interest Spread	On Policy anniversary10	1.49% (effective annual rate, after rounding)11	0.74% (effective annual rate, after rounding)11

⁶ Cost of insurance charges are based on each insured’s issue age, gender, underwriting class, specified amount, Policy year, and the net amount at risk. Cost of insurance rates generally will increase each year with the age of the insured. The cost of insurance rates shown in the table may not be representative of the charges you will pay. Your Policy’s schedule page will indicate the guaranteed cost of insurance charges applicable to your Policy. You can obtain more detailed information concerning your cost of insurance charges by contacting your agent.

⁷ We may place insureds in sub-standard underwriting classes with extra ratings that reflect higher mortality risks and that result in higher cost of insurance rates. If the insured possesses additional mortality risks, we may add a surcharge to the cost of insurance rates of up to $83.33 monthly per $1,000 of net amount at risk.

⁸ This minimum charge is based on an insured with the following characteristics: female, age 10 at issue, juvenile class and in the first Policy year. This minimum charge may also apply to insureds with other characteristics.

⁹ This maximum charge is based on an insured with the following characteristics: male, age 75 at issue, standard tobacco underwriting class and in the 20^th Policy year. This maximum charge may also apply to insureds with other characteristics.

¹⁰ While a Policy loan is outstanding, loan interest is payable in advance on each Policy anniversary. If prior to the next Policy anniversary, there is a loan repayment, Policy lapse or surrender, Policy termination, or the insured’s death, we will refund the amount of any loan interest we charged in advance for the period between the date of any such occurrence above and the next Policy anniversary.

¹¹ The Loan Interest Spread is the difference between the amount of interest we charge you for a loan and the amount of interest we credit to your loan account. We charge you an annual interest rate on a Policy loan of 5.2% in advance (5.49% effective annual interest rate) on each Policy anniversary. We will also currently credit the amount in the loan reserve with an effective annual interest rate of 4.75% (4.0% minimum guaranteed).

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Periodic Charges Other Than Portfolio Operating Expenses

		Amount Deducted
Charge	When Charge is Deducted	Guaranteed Charge	Current Charge
Optional Rider Charges12:
Accidental Death Benefit Rider	Monthly, on the Policy date and on each Monthiversary until the insured reaches age 70
•      Minimum Charge13		$0.10 per $1,000 of rider face amount per month	$0.10 per $1,000 of rider face amount per month
•      Maximum Charge14		$0.18 per $1,000 of rider face amount per month	$0.18 per $1,000 of rider face amount per month
•      Initial charge for a male insured, issue age 30		$0.10 per $1,000 of rider face amount per month	$0.10 per $1,000 of rider face amount per month
Disability Waiver Rider15	Monthly, on the Policy date and on each Monthiversary until the insured reaches age 60
•      Minimum Charge16		$0.03 per $1,000 of base Policy specified amount per month	$0.03 per $1,000 of base Policy specified amount per month
•      Maximum Charge17		$0.39 per $1,000 of base Policy specified amount per month	$0.39 per $1,000 of base Policy specified amount per month
•      Initial charge for amale insured, issue age 30		$0.04 per $1,000 of base Policy specified amount per month	$0.04 per $1,000 of base Policy specified amount per month

¹² Optional rider cost of insurance charges are based on each insured’s attained age, gender and rider face amount. The cost of insurance rates shown in the table may not be representative of the charges you will pay. The rider will indicate the maximum guaranteed rider charges applicable to your Policy. You can obtain more information about this rider by contacting your agent.

¹³ This minimum charge is based on an insured with the following characteristics: male, age 45 at issue and in the first policy year. This minimum charge may also apply to insureds with other characteristics.

¹⁴ This maximum charge is based on an insured with the following characteristics: male, age 50 at issue and in the 20^th policy year. This maximum charge may also apply to insureds with other characteristics.

¹⁵ Disability Waiver charges are based on the base insured’s issue age, gender and face amount. The charges shown are for base Policy only (no riders and benefits). The addition of other riders and benefits would increase these charges. The cost of insurance rates shown in the table may not be representative of the charges you will pay. The rider will indicate the maximum guaranteed rider charges applicable to your Policy. You can obtain more information about these riders by contacting your agent.

¹⁶ This minimum charge is based on an insured with the following characteristics: male, age 25 at issue. This minimum charge may also apply to insureds with other characteristics.

¹⁷ This maximum charge is based on an insured with the following characteristics: female, age 55 at issue. This maximum charge may also apply to insureds with other characteristics.

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Periodic Charges Other Than Portfolio Operating Expenses

		Amount Deducted
Charge	When Charge is Deducted	Guaranteed Charge	Current Charge
Disability Waiver and Income Rider18	Monthly, on the Policy date and on each Monthiversary until the insured reaches age 60
•      Minimum Charge19		$0.20 per $10 monthly rider units	$0.20 per $10 monthly rider units
•      Maximum Charge20		$0.86 per $10 monthly rider units	$0.86 per $10 monthly rider units
•      Initial charge for a male insured, issue age 30		$0.23 per $10 monthly rider units	$0.23 per $10 monthly rider units
Children’s Insurance Rider21	Monthly, on the Policy date and on each Monthiversary until the youngest child reaches age 25	$0.60 per $1,000 of rider face amount per month	$0.60 per $1,000 of rider face amount per month
Other Insured Rider22 (without Extra Ratings)7	Monthly, on the Policy date and on each Monthiversary until the insured reaches age 95
•      Minimum Charge8		$0.06 per $1,000 of rider face amount per month	$0.06 per $1,000 of rider face amount per month
•      Maximum Charge9		$24.85 per $1,000 of rider face amount per month	$21.12 per $1,000 of rider face amount per month

¹⁸ The charge for this rider is based on the base insured’s issue age, gender and number of units of monthly disability income selected.

¹⁹ This minimum charge is based on an insured with the following characteristics: male, age 27 at issue. This minimum charge may also apply to insureds with other characteristics.

²⁰ This maximum charge is based on an insured with the following characteristics: female, age 55 at issue. This maximum charge may also apply to insureds with other characteristics.

²¹ The charge for this rider is based on the rider face amount and does not vary.

²² Rider cost of insurance charges are based on each insured’s issue age, gender, underwriting class, Policy year, and the rider face amount. Cost of insurance rates generally will increase each year with the age of the insured. The cost of insurance rates shown in the table may not be representative of the charges you will pay. The rider will indicate the maximum guaranteed rider charges applicable to your Policy. You can obtain more information about these riders by contacting your agent.

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Periodic Charges Other Than Portfolio Operating Expenses

		Amount Deducted
Charge	When Charge is Deducted	Guaranteed Charge	Current Charge
Other Insured Rider (continued) •      Initial charge for a male insured, issue age 30, in the ultimate select non-tobacco use class		$0.12 per $1,000 of rider face amount per month	$0.12 per $1,000 of rider face amount per month
Primary Insured Rider22 (without Extra Ratings)7	Monthly, on the Policy date and on each Monthiversary until the insured reaches age 90
•      Minimum Charge8		$0.06 per $1,000 of rider face amount per month	$0.05 per $1,000 of rider face amount per month
•      Maximum Charge23		$18.46 per $1,000 of rider face amount per month	$14.91 per $1,000 of rider face amount per month
•      Initial charge for a male insured, issue age 30, in the ultimate select non-tobacco use class		$0.12 per $1,000 of rider face amount per month	$0.10 per $1,000 of rider face amount per month
Primary Insured Plus Rider22 (without Extra Ratings)7	Monthly, on the Policy date and on each Monthiversary until the insured reaches age 85
•      Minimum Charge		$0.08 per $1,000 of rider face amount per month24	$0.04 per $1,000 of rider face amount per month25
•      Maximum Charge		$13.54 per $1000 of rider face amount per month26	$10.93 per $1000 of rider face amount per month27

²³ This maximum charge is based on an insured with the following characteristics: male, age 70 at issue standard tobacco underwriting class and in the 20^th Policy year. This maximum charge may also apply to insureds with other characteristics.

²⁴ This minimum charge is based on an insured with the following characteristics: female, age 18 at issue, non-tobacco use class and in the first Policy year. This minimum charge may also apply to insureds with other characteristics.

²⁵ This minimum charge is based on an insured with the following characteristics: female, age 29 at issue, ultimate select non-tobacco use class and first Policy year. This minimum charge may also apply to insureds with other characteristics.

²⁶ This maximum charge is based on an insured with the following characteristics: male, age 75 at issue, standard tobacco use class and in the 10th Policy year. This maximum charge may also apply to insureds with other characteristics.

²⁷ This maximum charge is based on an insured with the following characteristics: male, age 70 at issue, standard tobacco use class and in the 15th Policy year. This maximum charge may also apply to insureds with other characteristics.

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Periodic Charges Other Than Portfolio Operating Expenses

		Amount Deducted
Charge	When Charge is Deducted	Guaranteed Charge	Current Charge
Primary Insured Plus Rider (continued) •      Initial charge for a male insured, issue age 30, in the ultimate select non-tobacco use class		$0.12 per $1000 of rider face amount per month	$0.06 per $1000 of rider face amount per month
Terminal Illness Accelerated Death Benefit Rider	When rider is exercised	Discount Factor28	Discount Factor28

Range of Expenses for the Portfolios^{1 2}

The next table shows the lowest and highest total operating expenses charged by the portfolios during the fiscal year ended December 31, 2003. Expenses of the portfolios may be higher or lower in the future. More detail concerning each portfolio’s fees and expenses is contained in the prospectus for each portfolio.

	Minimum		Maximum
Total Annual Portfolio Operating Expenses (total of all expenses that are deducted from portfolio assets, including management fees, 12b-1 fees, and other expenses)	0.38	%	1.50	%
Net Annual Portfolio Operating Expenses (total of all expenses that are deducted from portfolio assets, including management fees, 12b-1 fees, and other expenses, after contractual waiver of fees and expenses)3	0.38	%	1.45	%

¹ The portfolio expenses used to prepare this table were provided to Western Reserve by the funds. Western Reserve has not independently verified such information. The expenses shown are those incurred for the year ended December 31, 2003. Current or future expenses may be greater or less than those shown.

² The table showing the range of expenses for the portfolios takes into account the expenses of several Series Fund asset allocation portfolios that are ‘funds of funds.” A “fund of funds” portfolio typically allocates its assets, within predetermined percentage ranges, among certain other Series Fund portfolios. Each “fund of funds” has its own set of operating expenses, as does each of the portfolios in which it invests. In determining the range of portfolio expenses, Western Reserve took into account the combined actual expenses for each of the “fund of funds” and for the portfolios in which it invests, assuming a constant allocation by each “fund of funds” of its assets among the portfolios identical to its actual allocation at December 31, 2003.

³ The range of Net Annual Portfolio Operating Expenses takes into account contractual arrangements for 8 portfolios that require a portfolio’s investment adviser to reimburse or waive portfolio expenses until April 30, 2005.

²⁸ We do not assess an administrative charge for this rider; however, we do reduce the single sum benefit by a discount factor to compensate us for lost income due to the early payment of the death benefit.

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Western Reserve, The Separate Account, the Fixed Account and the Portfolios

Western Reserve

Western Reserve Life Assurance Co. of Ohio located at 570 Carillon Parkway, St. Petersburg, Florida 33716 is the insurance company issuing the Policy. We are obligated to pay all benefits under the Policy.

The Separate Account

The separate account is a separate account of Western Reserve, established under Ohio law. We own the assets in the separate account and we may use assets in the separate account to support other variable life insurance policies we issue. The separate account is registered with the Securities and Exchange Commission (“SEC”) as a unit investment trust under the Investment Company Act of 1940, as amended (the “1940 Act”).

The separate account is divided into subaccounts, each of which invests in shares of a specific portfolio of a fund. These subaccounts buy and sell portfolio shares at net asset value without any sales charge. Any dividends and distributions from a portfolio are reinvested at net asset value in shares of that portfolio.

Income, gains, and losses credited to, or charged against, a subaccount of the separate account reflect the subaccount’s own investment experience and not the investment experience of our other assets. The separate account’s assets may not be used to pay any of our liabilities other than those arising from the Policies and other variable life insurance policies we issue. If the separate account’s assets exceed the required reserves and other liabilities, we may transfer the excess to our general account.

Changes to the Separate Account. As permitted by applicable law, we reserve the right to make certain changes to the structure and operation of the separate account, including, among others, the right to:

• Remove, combine, or add subaccounts and make the new or combined subaccounts available to you at our discretion;

• Substitute shares of another registered open-end management company, which may have different fees and expenses, for shares of a subaccount at our discretion;

• Close subaccounts to allocations of new premiums by existing or new Policyowners at any time in our discretion;

• Transfer assets supporting the Policies from one subaccount to another or from the separate account to another separate account;

• Combine the separate account with other separate accounts, and/or create new separate accounts;

• Deregister the separate account under the 1940 Act, or operate the separate account as a management investment company under the 1940 Act, or as any other form permitted by law; and

• Modify the provisions of the Policy to reflect changes to the subaccounts and the separate account and to comply with applicable law.

Some, but not all, of these future changes may be the result of changes in applicable laws or interpretation of the law.

The portfolios, which sell their shares to the subaccounts, may discontinue offering their shares to the subaccounts. We will not make any such changes without receiving any necessary approval of the SEC and applicable state insurance departments. We will notify you of any changes. We reserve the right to make other structural and operational changes affecting the separate account.

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The Fixed Account

The fixed account is part of Western Reserve’s general account. We use general account assets to support our insurance and annuity obligations other than those funded by separate accounts. Subject to applicable law, Western Reserve has sole discretion over the investment of the fixed account’s assets. Western Reserve bears the full investment risk for all amounts contributed to the fixed account. Western Reserve guarantees that the amounts allocated to the fixed account will be credited interest daily at an annual net effective interest rate of at least 4.0%. We will determine any interest rate credited in excess of the guaranteed rate at our sole discretion. We have no formula for determining fixed account interest rates in excess of the guaranteed rate nor any duration for such rates.

Money you place in the fixed account will earn interest compounded daily at a current interest rate in effect at the time of your allocation. We may declare current interest rates from time to time. We may declare more than one interest rate for different money based upon the date of allocation or transfer to the fixed account. When we declare a higher current interest rate on amounts allocated to the fixed account, we guarantee the higher rate on those amounts for at least one year (the “guarantee period”) unless those amounts are transferred to the loan reserve. At the end of the guarantee period we may declare a new current interest rate on those amounts and any accrued interest thereon. We will guarantee this new current interest rate for another guarantee period. We credit interest greater than 4.0% during any guarantee period at our sole discretion. You bear the risk that interest we credit will not exceed 4.0%.

We allocate amounts from the fixed account for cash withdrawals, transfers to the subaccounts, or monthly deduction charges on a last in, first out basis (“LIFO”) for the purpose of crediting interest.

New Jersey: The fixed account is not available to you if your Policy was issued in the State of New Jersey. You may not direct or transfer any premium payments or cash value to the fixed account. The fixed account is used solely for Policy loans.

The fixed account has not been registered with the Securities and Exchange Commission and the staff of the Securities and Exchange Commission has not reviewed the disclosure in this prospectus relating to the fixed account.

The Portfolios

The separate account invests in shares of the portfolios of a fund. Each portfolio is an investment division of a fund, which is an open-end management investment company registered with the SEC. Such registration does not involve supervision of the management or investment practices or policies of the portfolios by the SEC.

Each portfolio’s assets are held separate from the assets of the other portfolios, and each portfolio has investment objectives and policies that are different from those of the other portfolios. Thus, each portfolio operates as a separate investment fund, and the income or loss of one portfolio has no effect on the investment performance of any other portfolio. Pending any prior approval by a state insurance regulatory authority, certain subaccounts and corresponding portfolios may not be available to residents of some states.

Each portfolio’s investment objective(s) and policies are summarized below. There is no assurance that any of the portfolios will achieve its stated objective(s). Certain portfolios may have investment objectives and policies similar to other portfolios that are managed by the same investment adviser or sub-adviser. The investment results of the portfolios, however, may be higher or lower than those of such other portfolios. We do not guarantee or make any representation that the investment results of the portfolios will be comparable to any other portfolio, even those with the same investment adviser or manager.

You can find more detailed information about the portfolios, including a description of risks, in the fund prospectuses. You may obtain a free copy of the fund prospectuses by contacting us at 1-800-851-9777 or visiting our website at www.westernreserve.com. You should read the fund prospectuses carefully.

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Portfolio	Sub-Adviser or Adviser and Investment Objective
Munder Net50	Munder Capital Management Seeks long-term capital appreciation.
Van Kampen Emerging Growth	Van Kampen Asset Management Inc. Seeks capital appreciation
T. Rowe Price Small Cap	T. Rowe Price Associates, Inc. Seeks long-term growth of capital by investing primarily in common stocks of small growth companies.
Third Avenue Value	Third Avenue Management LLC Seeks long-term capital appreciation.
American Century International	American Century Investment Management, Inc. Seeks capital growth.
Templeton Great Companies Global	Templeton Management, Ltd. Great Companies, L.L.C. Seeks long-term growth of capital in a manner consistent with the preservation of capital.
Great Companies – TechnologySM	Great Companies, L.L.C. Seeks long-term growth of capital.
Janus Growth	Janus Capital Management LLC Seeks growth of capital.
Marsico Growth	Banc of America Capital Management, LLC Seeks long-term growth of capital.
Great Companies – AmericaSM	Great Companies, L.L.C. Seeks long-term growth of capital.
Salomon All Cap	Salomon Brothers Asset Management Inc Seeks capital appreciation.
T. Rowe Price Equity Income	T. Rowe Price Associates, Inc. Seeks to provide substantial dividend income, as well as long-term growth of capital by primarily investing in the dividend-paying common stocks of established companies.
Transamerica Value Balanced	Transamerica Investment Management, LLC Seeks preservation of capital and competitive investment returns.

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Portfolio	Sub-Adviser or Adviser and Investment Objective
Clarion Real Estate Securities	ING Clarion Real Estate Securities Seeks long-term total return from investments primarily in equity securities of real estate companies. Total return will consist of realized and unrealized capital gains and losses plus income.
Federated Growth & Income	Federated Investment Counseling Seeks total return by investing in securities that have defensive characteristics.
AEGON Bond	Banc One Investment Advisors Corp. Seeks the highest possible current income within the confines of the primary goal of insuring the protection of capital.
Transamerica Money Market	Transamerica Investment Management, LLC Seeks to provide maximum current income consistent with preservation of principal and maintenance of liquidity.
Asset Allocation – Conservative Portfolio*	AEGON/Transamerica Fund Advisers, Inc. Seeks current income and preservation of capital.
Asset Allocation – Moderate Portfolio*	AEGON/Transamerica Fund Advisers, Inc. Seeks capital appreciation.
Asset Allocation – Moderate Growth Portfolio*	AEGON/Transamerica Fund Advisers, Inc. Seeks capital appreciation.
Asset Allocation – Growth Portfolio*	AEGON/Transamerica Fund Advisers, Inc. Seeks capital appreciation and current income.
Transamerica Convertible Securities	Transamerica Investment Management, LLC Seeks maximum total return through a combination of current income and capital appreciation.
PIMCO Total Return	Pacific Investment Management Company, LLC Seeks maximum total return consistent with preservation of capital and prudent investment management.
Transamerica Equity	Transamerica Investment Management, LLC Seeks to maximize long-term growth.
Transamerica Growth Opportunities	Transamerica Investment Management, LLC Seeks to maximize long-term growth.
J.P. Morgan Mid Cap Value	J.P. Morgan Investment Management Inc. Seeks growth from capital appreciation.

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Portfolio	Sub-Adviser or Adviser and Investment Objective
Mercury Large Cap Value	Mercury Advisors Seeks to achieve superior long-term performance with below average volatility relative to the Russell 1000 Value Index.
Transamerica Balanced	Transamerica Investment Management, LLC Seeks to achieve long-term capital growth and current income with a secondary objective of capital preservation, by balancing investments among stocks, bonds, and cash or cash equivalents.
Fidelity VIP Equity-Income Portfolio – Service Class 2 Shares	Fidelity Management & Research Company Seeks reasonable income. The fund will also consider the potential for capital appreciation. The fund’s goal is to achieve a yield which exceeds the composite yield on the securities comprising the Standard & Poor’s 500SM Index.
Fidelity VIP Contrafund® Portfolio – Service Class 2 Shares	Fidelity Management & Research Company Seeks long-term capital appreciation.
Fidelity VIP Growth Opportunities Portfolio – Service Class 2 Shares	Fidelity Management & Research Company Seeks to provide capital growth.
Potomac Dow 30 Plus Portfolio**	Rafferty Asset Management, LLP Seeks daily investment results that correspond to 125% of the performance of the Dow Jones Industrial AverageSM.
Potomac OTC Plus Portfolio**	Rafferty Asset Management, LLP Seeks to provide investment returns that correspond to 125% of the performance of the Nasdaq 100 IndexTM.
Access U.S. Government Money Market Portfolio**	Rafferty Asset Management, LLP Seeks to provide security of principal, current income and liquidity.
Wells S&P REIT Index Portfolio**	Wells Asset Management, Inc. Seeks to provide investment results corresponding to the performance of the S&P Real Estate Investment Trust Composite Index.

* Each asset allocation portfolio invests in a combination of underlying Series Fund portfolios.

** The AVIT portfolios allow market timing / frequent transfers. Market timing may increase portfolio expenses and have other adverse consequences for long-term investors. See “Disruptive Trading and Market Timing”. Some AVIT portfolios may use investment techniques not associated with most mutual fund portfolios. Investors in those AVIT portfolios will bear additional investment risks. See the AVIT fund prospectus for a description of the investment objectives and risks associated with investing in the AVIT portfolios.

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AEGON/Transamerica Fund Advisers, Inc. (“AEGON/Transamerica Advisers”), located at 570 Carillon Parkway, St. Petersburg, Florida 33716, is directly owned by Western Reserve (78%) and AUSA Holding Company (22%), serves as investment adviser to the Series Fund and manages the Series Fund in accordance with policies and guidelines established by the Series Fund’s Board of Directors. For certain portfolios, AEGON/Transamerica Advisers has engaged investment sub-advisers to provide portfolio management services. AEGON/Transamerica Advisers and each investment sub-adviser are registered investment advisers under the Investment Advisers Act of 1940, as amended. See the Series Fund prospectuses for more information regarding AEGON/Transamerica Advisers and the investment sub-advisers.

Fidelity Management & Research Company (“FMR”), located at 82 Devonshire Street, Boston, Massachusetts 02109, serves as investment adviser to the Fidelity VIP Fund and manages the Fidelity VIP Fund in accordance with policies and guidelines established by the Fidelity VIP Fund’s Board of Trustees. For certain portfolios, FMR has engaged investment sub-advisers to provide portfolio management services with regard to foreign investments. FMR and each sub-adviser are registered investment advisers under the Investment Advisers Act of 1940, as amended. See the Fidelity VIP Fund prospectuses for more information regarding FMR and the investment sub-advisers.

Morningstar Associates, LLC (“Morningstar”), located at 225 West Wacker Drive, Chicago, Illinois 60606, serves as a “consultant” to AEGON/Transamerica Advisers for investment model creation and maintenance to the Asset Allocation – Conservative Portfolio, Asset Allocation – Moderate Portfolio, Asset Allocation – Moderate Growth Portfolio and Asset Allocation – Growth Portfolio of the Series Fund. Morningstar will be paid an annual fee for its services. See the Series Fund prospectuses for more information regarding Morningstar.

Access Fund Management, LLC, located at 28050 US Highway 19 N, Suite 301, Clearwater, Florida 33761, serves as the investment adviser to the AVIT fund and manages the AVIT fund in accordance with policies and guidelines established by the AVIT fund’s Board of Trustees. For certain portfolios, AVIT has engaged investment sub-advisers to provide portfolio management services with regard to foreign investments. AVIT and each sub-adviser are registered investment advisers under the Investment Advisers Act of 1940, as amended. See the AVIT fund prospectus for more information regarding Access and the investment sub-advisers.

Addition, Deletion, or Substitution of Investments

We do not guarantee that each portfolio will always be available for investment through the Policy. We reserve the right, subject to compliance with applicable law, 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. New or substitute portfolios may have different fees and expenses and their availability may be limited to certain classes of purchasers. We will not add, delete or substitute any 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. We may also decide to purchase securities from other portfolios for the separate account. We reserve the right to transfer separate account assets to another separate account that we determine to be associated with the class of contracts to which the Policy belongs.

Your Right to Vote Portfolio Shares

Even though we are the legal owner of the portfolio shares held in the subaccounts, and have the right to vote on all matters submitted to shareholders of the portfolios, we will vote our shares only as policyowners instruct, so long as such action is required by law.

Before a vote of a portfolio’s shareholders occurs, you will receive voting materials from us. We will ask you to instruct us on how to vote and to return your proxy to us in a timely manner. You will have the right to instruct us on the number of portfolio shares that corresponds to the amount of cash value you have in that portfolio (as of a date set by the portfolio).

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If we do not receive voting instructions on time from some policyowners, we will vote those shares in the same proportion as the timely voting instructions we receive. Should federal securities laws, regulations and interpretations change, we may elect to vote portfolio shares in our own right. If required by state insurance officials, or if permitted under federal regulation, we may disregard certain owner voting instructions. If we ever disregard voting instructions, we will send you a summary in the next annual report to policyowners advising you of the action and the reasons we took such action.

Charges and Deductions

This section describes the charges and deductions that we make under the Policy in consideration for: (1) the services and benefits we provide; (2) the costs and expenses we incur; and (3) the risks we assume. The fees and charges deducted under the Policy may result in a profit to us.

Services and benefits we provide under the Policy:	•	the death benefit, cash and loan benefits;
	•	investment options, including premium allocations;
	•	administration of elective options; and
	•	the distribution of reports to owners.
Costs and expenses we incur:	•	costs associated with processing and underwriting applications;
	•	expenses of issuing and administering the Policy (including any Policy riders);
	•	overhead and other expenses for providing services and benefits and sales and marketing expenses, including compensation paid in connection with the sale of the Policies; and
	•	other costs of doing business, such as collecting premiums, maintaining records, processing claims, effecting transactions, and paying federal, state and local premium and other taxes and fees.
Risks we assume:	•	that the charges we may deduct may be insufficient to meet our actual claims because insureds die sooner than we estimate; and
	•	that the costs of providing the services and benefits under the Policies may exceed the charges we are allowed to deduct.

Some or all the charges we deduct are used to pay aggregate Policy costs and expenses we incur in providing the services and benefits under the Policy and assuming the risks associated with the Policy.

Premium Charges

Before we allocate the net premium payments you make, we will deduct the following charges.

The premium expense charge equals:		•      6.0% of premiums during the first ten Policy years; and
		•      2.5% of premiums thereafter.
	•	Some or all of the premium expense charges we deduct are used to pay the aggregate Policy costs and expenses we incur, including distribution costs and/or state premium taxes. Although state premium tax rates imposed on us vary from state to state, the premium expense charge deducted will not vary with the state of residence of the policyowner.

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The premium collection charge equals:	•	$3.00 per premium payment.
	•	We will not increase this charge.

Monthly Deduction

We take a monthly deduction from the cash value on the Policy date and on each Monthiversary. We deduct this charge from each subaccount and the fixed account in accordance with the current premium allocation instructions. If the value of any account is insufficient to pay that account’s portion of the monthly deduction, we will take the monthly deduction on a pro rata basis from all accounts (i.e., in the same proportion that the value in each subaccount and the fixed account bears to the total cash value on the Monthiversary). Because portions of the monthly deduction (such as cost of insurance) can vary monthly, the monthly deduction will also vary.

The monthly deduction is equal to:	•	the monthly Policy charge; plus
	•	the monthly cost of insurance charge for the Policy; plus
	•	the monthly charge for any benefits provided by riders attached to the Policy; plus
	•	the pro rata decrease charge (if applicable) incurred as a result of a decrease in the specified amount.
	Monthly Policy Charge:
	•	This charge currently equals $5.00 each Policy month. After the first Policy year, we may increase this charge.
	•	We guarantee this charge will never be more than $7.50 per month.
	•	This charge is used to cover aggregate Policy expenses.
	Cost of Insurance Charge:
	•	We deduct this charge each month. It varies each month and is determined as follows:
		1.        divide the death benefit on the Monthiversary by 1.0032737 (this factor reduces the net amount at risk, for purposes of computing the cost of insurance, by taking into account assumed monthly earnings at an annual rate of 4.0%);
		2.        subtract the cash value on the Monthiversary;
		3.        multiply the appropriate monthly cost of insurance rate for the Policy.
	Optional Insurance Riders:
	•	The monthly deduction will include charges for any optional insurance benefits you add to your Policy by rider.

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To determine the monthly cost of insurance rates we refer to a schedule of current cost of insurance rates using the insured’s attained age, gender, underwriting class, and the length of time that the Policy has been in force. The factors that affect the net amount at risk include investment performance of the portfolios in which you invest, payment of premiums, the fees and charges deducted under the Policy, the death benefit option you chose, as well as any Policy transactions (such as loans, partial withdrawals, transfers, and changes in specified amount). The actual monthly cost of insurance rates are primarily based on our expectations as to future mortality experience and expenses. Monthly cost of insurance rates may be changed by us from time to time. The actual rates we charge will never be greater than the Table of Guaranteed Maximum Life Insurance Rates stated in your Policy. These guaranteed rates are based on the Commissioners 1980 Standard Ordinary Mortality Tobacco and Non-Tobacco Tables (“1980 C.S.O. Tables”) and the insured’s attained age, gender, and rate class. For non sub-standard rate classes, these guaranteed rates will never be greater than the rates in the 1980 C.S.O. Tables.

The underwriting class of the insured will affect the cost of insurance rates. We use a standard method of underwriting in determining underwriting classes, which are based on the health of the insured. We currently place insureds into preferred and standard classes. We also place insureds into sub-standard classes with extra ratings, which reflect higher mortality risks and will result in higher cost of insurance rates.

We may issue certain Policies on a simplified or expedited basis. Cost of insurance rates for any Policies issued on a simplified or expedited basis may cause healthy individuals to pay higher cost of insurance rates than they would pay under a substantially similar Policy that we offer using different underwriting criteria.

Mortality and Expense Risk Charge

We deduct a daily charge from your cash value in each subaccount that, together with other fees and charges, compensates us for services rendered, the expenses expected to be incurred and the risks assumed. This charge is equal to:

• your Policy’s cash value in each subaccount multiplied by

• the daily pro rata portion of the annual mortality and expense risk charge rate.

The annual rate is equal to 0.90% of the average daily net assets of each subaccount. We intend to reduce this charge to 0.75% in the 16^th Policy year, but we do not guarantee that we will do so, and we reserve the right to maintain this charge at the 0.90% level after the 15^th Policy year.

If this charge combined with other Policy fees and charges, does not cover our total actual costs for services rendered and expenses incurred, we absorb the loss. Conversely, if these fees and charges more than cover actual costs, the excess is added to our surplus. We expect to profit from these charges.

Surrender Charge

If you surrender your Policy completely during the first 15 years, we deduct a surrender charge from your cash value and pay the remaining cash value (less any outstanding loan amount) to you. There is no surrender charge if you wait until the end of the 15^th Policy anniversary to surrender your Policy. The payment you receive is called the net surrender value. The formula we use reduces the surrender charge at older ages in compliance with state laws.

The surrender charge may be significant. You should evaluate this charge carefully before you consider a surrender. Under some circumstances the level of surrender charges might result in no net surrender value available if you surrender your Policy in the early Policy years. This will depend on a number of factors, but is more likely if:

• you pay premiums equal to or not much higher than the minimum monthly guarantee premium shown in your Policy; and/or

• investment performance is too low.

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The surrender charge is equal to:	•	the surrender charge per thousand; multiplied by
	•	the number of thousands in the Policy’s specified amount as it is stated in the Policy; multiplied by
	•	the surrender charge factor.

The surrender charge per thousand applies to each $1,000 of specified amount stated in your Policy. It varies with the insured’s issue age, gender and rate class. See the surrender charge table found in Appendix A.

The surrender charge factor varies with the insured’s age and number of years the Policy has been in force. For insureds issue ages 0-39, the surrender charge factor is equal to 1.00 during Policy years 1-5. It decreases by 0.10 each year until the end of the 15^th year when it is zero. If you are older than 39 when we issue your Policy, the factor is less than 1.00 at the end of the first Policy year and decreases to zero at the end of the 15^th year. In no event are the surrender charge factors any greater than those shown on the table below. We always determine the surrender charge factor from the Policy date to the surrender date, regardless of whether there were any prior lapses and reinstatements.

Surrender Charge Factors

Issue Ages 0-39

End of Year*	Factor
At Issue	1.00
1-5	1.00
6	90
7	80
8	70
9	60
10	50
11	40
12	30
13	20
14	10
15	0
16+	0

* The factor on any date other than a Policy anniversary will be determined proportionately using the factor at the end of the Policy year prior to surrender and the factor at the end of the Policy year of surrender.

• Surrender Charge Example: Assume a male tobacco user purchases the Policy at issue age 30 with a specified amount of $100,000. The Policy is surrendered in Policy year 5. The surrender charge per thousand is $12.52. This is multiplied by the surrender charge factor of 1.00

The surrender charge	=	the surrender charge per thousand ($12.52) x the number of thousands of initial specified amount (100) x the surrender charge factor (1.0)
	=	$1,252.

The surrender charge helps us recover distribution expenses that we incur in connection with the Policy, including agent sales commissions and printing and advertising costs, as well as aggregate Policy expenses.

Pro Rata Decrease Charge

If you decrease the specified amount during the first 15 Policy years we will deduct a pro rata decrease charge from your cash value.

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The pro rata decrease charge is equal to:	•	the surrender charge per thousand; multiplied by
	•	the number of thousands in the specified amount decreased; multiplied by
	•	the surrender charge factor applicable at the time of the decrease. (See Appendix A.)

We will not deduct the pro rata decrease charge from the cash value when a specified amount decrease results from:

• a change in the death benefit option; or

• a cash withdrawal (when you select death benefit Option A).

If a pro rata decrease charge is deducted because of a decrease in specified amount, any future decrease charges incurred during the surrender charge period will be based on the reduced specified amount.

We will determine the pro rata decrease charge using the above formula, regardless of whether your Policy has lapsed and been reinstated, or you have previously decreased your specified amount. We will not allow a decrease in specified amount if the pro rata decrease charge will cause the Policy to go into a grace period. A decrease in specified amount will generally decrease the insurance protection of the Policy.

Transfer Charge

• We currently allow you to make 12 transfers each year free from charge.

• We charge $25 for each additional transfer.

• For purposes of assessing the transfer charge, all transfers made in one day, regardless of the number of subaccounts affected by the transfer, is considered a single transfer.

• We deduct the transfer charge from the amount being transferred.

• Transfers due to loans, or the exercise of conversion rights or due to reallocation of cash value immediately after the reallocation date, currently do not count as transfers for the purpose of assessing this charge.

• Transfers via the Internet do not count as transfers for the purpose of assessing this charge.

• Transfers under dollar cost averaging and asset rebalancing are transfers for purposes of this charge.

• We will not increase this charge.

Loan Interest Charge

We charge you an annual interest rate on a Policy loan of 5.2% in advance (5.49% effective annual interest rate, after rounding) on each Policy anniversary. We also currently credit the amount in the loan reserve with an effective annual interest rate of 4.75% (4.0% guaranteed minimum). After offsetting the 4.75% interest we credit, the net cost of loans currently is 0.74% annually, after rounding (1.49% maximum guaranteed, after rounding). After the 10^th Policy year, you will receive preferred loan credited rates on an amount equal to the cash value minus total premiums paid (less any cash withdrawals) and minus any outstanding loan amount including accrued loan interest. The current preferred loan interest rate credited is 5.49% effective annually, after rounding, and is not guaranteed.

Change in Net Premium Allocation Charge

We currently do not charge you if you change your net premium allocation. However, in the future we may decide to charge you $25 if you make more than one change every three months in your allocation schedule. We will notify you if we decide to impose this charge.

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Cash Withdrawal Charge

• After the first Policy year, you may take one cash withdrawal per Policy year.

• When you make a cash withdrawal, we charge a processing fee of $25 or 2% of the amount you withdraw, whichever is less.

• We deduct this amount from the withdrawal, and we pay you the balance.

• We will not increase this charge.

Taxes

We currently do not make any deductions for taxes from the separate account. We may do so in the future if such taxes are imposed by federal or state agencies.

Rider Charges

• Terminal Illness Accelerated Death Benefit Rider. We do not assess an administrative charge for this rider; however, we do reduce the single sum benefit by a discount factor to compensate us for expected lost income due to the early payment of the death benefit.

• Children’s Insurance Rider. We assess a cost of insurance charge based on the rider face amount regardless of the number of children insured.

• Accidental Death Benefit Rider. We assess a cost of insurance charge based on the insured’s attained age and rider face amount. Cost of insurance charges generally will increase each year with the age of the insured.

• Other Insured Rider. We assess a cost of insurance charge based on each other insured’s issue age, gender, underwriting class, Policy year and the rider face amount. Cost of insurance charges generally will increase each year with the age of the insured.

• Disability Waiver Rider. We assess a rider charge based on the primary insured’s issue age, gender and net amount at risk for the Policy, as well as a charge based on those riders that would be eligible to have monthly deductions waived.

• Disability Waiver and Income Rider. The charge for this rider is based on the primary insured’s issue age, gender and the amount of monthly waiver of premium benefit that would be paid in the event of total disability, as defined in the rider.

• Primary Insured Rider (“PIR”) and Primary Insured Rider Plus (“PIR Plus”). We assess a cost of insurance charge based on the insured’s issue age, gender, underwriting class, Policy year and the rider face amount. Cost of insurance charges generally will increase each year with the age of the insured.

Portfolio Expenses

The portfolios deduct management fees and expenses from the amounts you have invested in the portfolios. These fees and expenses reduce the value of your portfolio shares. Some portfolios also deduct 12b-1 fees from portfolio assets. See the fund prospectuses.

Our affiliate, AFSG Securities Corporation (“AFSG”), the principal underwriter for the Policies, will receive the 12b-1 fees of 0.25% of average daily assets of the Fidelity VIP Fund and the AVIT portfolios for providing shareholder support services to the Fidelity VIP Fund and the AVIT portfolios. In addition, we and our affiliates, including the principal underwriter for the Policies, may receive compensation related to separate account operations from the investment advisers, administrators, and/or distributors (and an affiliate thereof) of the portfolios in connection with administrative or other services and cost savings experienced by the investment advisers, administrators or distributors. It is anticipated that such compensation may range up to 0.40% of the value of the assets of the particular portfolios attributable to the Policy. Some advisers, administrators, distributors or portfolios may pay us (and our affiliates) more than others.

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The Policy

Ownership Rights

The Policy belongs to the owner named in the application. The owner may exercise all of the rights and options described in the Policy. The owner is the insured unless the application specifies a different person as the insured. If the owner dies before the insured and no contingent owner is named, then ownership of the Policy will pass to the owner’s estate. The principal rights an owner may exercise are:

• to designate or change beneficiaries;

• to receive amounts payable before the death of the insured;

• to assign the Policy (if you assign the Policy, your rights and the rights of anyone who is to receive payment under the Policy are subject to the terms of that assignment);

• to change the owner of this Policy; and

• to change the specified amount or death benefit option type of this Policy.

No designation or change in designation of an owner will take effect unless we receive written request thereof. When received, the request will take effect as of the date we receive it, subject to payment or other action taken by us before it was received.

Modifying the Policy

Any modifications or waiver of any rights or requirements under the Policy must be in writing and signed by our president or secretary. No agent may bind us by making any promise not contained in this Policy. Upon notice to you, we may modify the Policy:

• to make the Policy or the separate account comply with any law or regulation issued by a governmental agency to which we are subject; or

• to assure continued qualification of the Policy under the Internal Revenue Code or other federal or state laws relating to variable life policies; or

• to reflect a change in the operation of the separate account; or

• to provide additional subaccounts and/or fixed account options.

Purchasing a Policy

To purchase a Policy, you must submit a completed application and an initial premium to us through any licensed life insurance agent who is also a registered representative of a broker-dealer having a selling agreement with AFSG, the principal underwriter for the Policy and us.

You select the specified amount of insurance coverage for your Policy within the following limits. Our current minimum specified amount for a Policy for issue ages 0-45 is generally $50,000. It declines to $25,000 for issue ages 46-80.

We will generally only issue a Policy to you if you provide sufficient evidence that the insured meets our insurability standards. Your application is subject to our underwriting rules, and we may reject any application for any reason permitted by law. We will not issue a Policy to you if the insured is over age 80. The insured must be insurable and acceptable to us under our underwriting rules on the later of:

• the date of your application; or

• the date the insured completes all of the medical tests and examinations that we require.

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Tax-Free “Section 1035” Exchanges

You can generally exchange one life insurance policy for another covering the same insured in a “tax-free exchange” under Section 1035 of the Internal Revenue Code. Before making an exchange, you should compare both life insurance policies carefully. Remember that if you exchange another life insurance policy for the one described in this prospectus, you might have to pay a surrender charge on your old policy, other charges may be higher (or lower) and the benefits may be different. If the exchange does not qualify for Section 1035 treatment, you may also have to pay federal income tax on the exchange. You should not exchange another life insurance policy for this one unless you determine, after knowing all the facts, that the exchange is in your best interest and not just better for the person selling you the Policy (that person will generally earn a commission if you buy this Policy through an exchange or otherwise).

When Insurance Coverage Takes Effect

Insurance coverage under the Policy will take effect only if all of the following conditions have been met: (1) the first full premium must be received by the Company; (2) during the lifetime of every proposed insured, the proposed owner must have personally received and accepted the Policy which was applied for and all answers on the application must be true and correct on the date such Policy is received and accepted; and (3) on the date of the later of either (1) or (2) above, all of the statements and answers given in the application must be true and complete, and there must have been no change in the insurability of any proposed insured.

Conditional Insurance Coverage. If you pay the full initial premium listed in the conditional receipt attached to the application, and we deliver the conditional receipt to you, the insured will have conditional insurance coverage under the terms of the conditional receipt. Because we do not accept initial premiums in advance for Policies with a specified amount in excess of $1,000,000, we do not offer conditional insurance coverage for Policies issued with a specified amount in excess of $1,000,000. Conditional insurance coverage is void if the check or draft you gave us to pay the initial premium is not honored when we first present it for payment.

The aggregate amount of conditional insurance coverage, if any, is the lesser of:	•	the amounts applied for under all conditional receipts issued by us; or
	•	$500,000 of life insurance.
Subject to the conditions and limitations	•	the date of application;
of the conditional receipt, conditional insurance under the terms of the policy applied for may become effective as of the later of:	•	the date of the last medical examination, test, and other screenings required by us, if any (the “Effective Date”). Such conditional insurance will take effect as of the Effective Date, so long as all of the following requirements are met:
		1.       Each person proposed to be insured is found to have been insurable as of the Effective Date, exactly as applied for in accordance with our underwriting rules and standards, without any modifications as to plan, amount, or premium rate;
		2.       As of the Effective Date, all statements and answers given in the application must be true;
		3.       The payment made with the application must not be less than the full initial premium for the mode of payment chosen in the application and must be received at our office within the lifetime of the proposed insured;
		4.       All medical examinations, tests, and other screenings required of the proposed insured by us are completed and the results received at our office within 60 days of the date the application was completed; and

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		5.       All parts of the application, any supplemental application, questionnaires, addendum and/or amendment to the application are signed and received at our office.
Any conditional life insurance coverage terminates on the earliest of:	a.	60 days from the date the application was signed;
	b.	the date we either mail notice to the applicant of the rejection of the application and/or mail a refund of any amounts paid with the application;
	c.	when the insurance applied for goes into effect under the terms of the Policy applied for; or
	d.	the date we offer to provide insurance on terms that differ from the insurance for which you have applied.
Special limitations of the conditional receipt:	•	the conditional receipt is not valid unless:
		•      all blanks in the conditional receipt are completed; and
		•      the Receipt is signed by an agent or authorized Company representative.
Other limitations:	•	There is no conditional receipt coverage for riders or any additional benefits, if any, for which you may have applied.
	•	If one or more of the Receipt’s conditions have not been met exactly, or if a proposed insured dies by suicide, we will not be liable except to return any payment made with the application.
	•	If we do not approve and accept the application within 60 days of the date you signed the application, the application will be deemed to be rejected by us and there will be no conditional insurance coverage. In that case, Western Reserve’s liability will be limited to returning any payment(s) you have made upon return of this Receipt to us.

Full Insurance Coverage and Allocation of Initial Premium. Once we determine that the insured meets our underwriting requirements and you have paid the initial premium, full insurance coverage will begin and we will begin to take the monthly deductions from your net premium. This date is the Policy date. On the Policy date, we will allocate your initial net premium, minus monthly deductions, to the WRL Transamerica Money Market subaccount. On the record date, which is the date we record your Policy on our books as an in force Policy, we will allocate our cash value from the WRL Transamerica Money Market subaccount to the accounts you elect on our application.

On any day we credit net premiums or transfer cash value to a subaccount, we will convert the dollar amount of the net premium (or transfer) into subaccount units at the unit value for that subaccount, determined at the end of the day on which we receive the premium or transaction request at our office. We will credit amounts to the subaccounts only on a valuation date, that is, on a date the New York Stock Exchange (“NYSE”) is open for trading.

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Policy Features

Premiums

Allocating Premiums

You must instruct us on how to allocate your net premium among the subaccounts and the fixed account. The fixed account may not be available in all states to direct or transfer money into. You must follow these guidelines:

• allocation percentages must be in whole numbers;

• if you select dollar cost averaging, you must have at least $5,000 in each subaccount from which we will make transfers and you must transfer at least a total of $100 monthly; and

• if you select asset rebalancing, the cash value of your Policy, if an existing Policy, or your minimum initial premium, if a new Policy, must be at least $5,000.

Currently, you may change the allocation instructions for additional premium payments without charge at any time by writing us or calling us at 1-800-851-9777 Monday - Friday 8:30 a.m. - 7:00 p.m. Eastern time. The change will be effective at the end of the valuation date on which we receive the change. Upon instructions from you, the registered representative/agent of record for your Policy may also change your allocation instructions for you. The minimum amount you can allocate to a particular subaccount is 10% of a net premium payment. We reserve the right to limit the number of premium allocation changes or to charge $25 for each change in excess of one per Policy year quarter.

Whenever you direct money into a subaccount, we will credit your Policy with the number of units for that subaccount that can be bought for the dollar payment. Premium payments received at our office before the NYSE closes are priced using the unit value determined at the closing of the regular business session of the NYSE (usually at 4:00 p.m. Eastern time). If we receive a premium payment after the NYSE closes, we will process the order using the subaccount value determined at the close of the next regular session of the NYSE. We will credit amounts to the subaccounts only on a valuation date, that is, on a date the NYSE is open for trading. Your cash value will vary with the investment experience of the subaccounts in which you invest. You bear the investment risk for amounts you allocate to the subaccounts.

You should periodically review how your cash value is allocated among the subaccounts and the fixed account because market conditions and your overall financial objectives may change.

Premium Flexibility

You generally have flexibility to determine the frequency and the amount of the premiums you pay. Unlike conventional insurance policies, you do not have to pay your premiums according to a rigid and inflexible premium schedule. Before we issue the Policy to you, we may require you to pay a premium at least equal to a minimum monthly guarantee premium set forth in your Policy. Thereafter (subject to the limitations described below), you may make unscheduled premium payments at any time and in any amount over $50. Under some circumstances, you may be required to pay extra premiums to prevent a lapse. Your minimum monthly guarantee premium may change if you request a change in your Policy. If this happens, we will notify you of the new minimum monthly guarantee premium.

Planned Periodic Payments

You will determine a planned periodic payment schedule, which allows you to pay level premiums at fixed intervals over a specified period of time. You are not required to pay premiums according to this schedule. You may change the amount, frequency, and the time period over which you make your planned periodic payments. Please be sure to notify us or your agent/registered representative of any address changes so that we may be able to keep your current address on record.

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Even if you make your planned periodic payments on schedule, your Policy may still lapse. The duration of your Policy depends on the Policy’s net surrender value. If the net surrender value is not high enough to pay the monthly deduction when due (and your no lapse period has expired) then your Policy will lapse (unless you make the payment we specify during the 61-day grace period).

Minimum Monthly Guarantee Premium

The full initial premium is the only premium you are required to pay under the Policy. However, you greatly increase your risk of lapse if you do not regularly pay premiums at least as large as the current minimum monthly guarantee premium.

Until the no lapse date shown on your Policy schedule page, we guarantee that your Policy will not lapse, so long as on any Monthiversary you have paid total premiums (minus any cash withdrawals, minus any outstanding loan amount, and minus any pro rata decrease charge) that equal or exceed the sum of the minimum monthly guarantee premiums in effect for each month from the Policy date up to and including the current month. If you take a cash withdrawal, a loan, or if you decrease your specified amount or if you add, increase or decrease a rider, you may need to pay additional premiums in order to keep the no lapse period guarantee in place.

The initial minimum monthly guarantee premium is shown on your Policy’s schedule page, and depends on a number of factors, including the age, gender, rate class of the insured, and the specified amount requested. We will adjust the minimum monthly guarantee premium if you change death benefit options, decrease the specified amount, or if any of the riders are added, increased or decreased. We will notify you of the new minimum monthly guarantee premium.

After the no lapse period ends, paying the current minimum monthly guarantee premium each month will not necessarily keep your Policy in force. You may need to pay additional premiums to keep the Policy in force.

No Lapse Period

Until the no lapse date shown on your Policy schedule page, your Policy will remain in force and no grace period will begin, even if your net surrender value is too low to pay the monthly deduction, so long as:

• the total amount of the premiums you paid (minus any cash withdrawals, minus any outstanding loan amount, and minus any pro rata decrease charge) equals or exceeds:

• the sum of the minimum monthly guarantee premium in effect for each month from the Policy date up to and including the current month.

Premium Limitations

Premium payments must be at least $50 ($1,000 if by wire). We may return premiums less than $50. We will not allow you to make any premium payments that would cause the total amount of the premiums you pay to exceed the current maximum premium limitations, which qualify the Policy as life insurance according to federal tax laws. This maximum is set forth in your Policy. If you make a payment that would cause your total premiums to be greater than the maximum premium limitations, we will return the excess portion of the premium payment. We will not permit you to make additional premium payments until they are allowed by the maximum premium limitations. In addition, we reserve the right to refund a premium if the premium would increase the death benefit by more than the amount of the premium.

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Making Premium Payments

We will consider any payments you make to be premium payments, unless you clearly mark them as loan repayments. We will deduct certain charges from your premium payments. We will accept premium payments by wire transfer.

If you wish to make payments by wire transfer, you should contact our Call Center at 1-800-851-9777 for instructions on wiring federal funds to us.

Tax-Free Exchanges (“1035 Exchanges”). We will accept part or all of your initial premium from one or more contracts insuring the same insured that qualify for tax-free exchanges under Section 1035 of the Internal Revenue Code. If you contemplate such an exchange, you should consult a competent tax advisor to learn the potential tax effects of such a transaction.

Subject to our underwriting requirements, we will permit you to make one additional cash payment within three business days of receipt at our office of the proceeds from the 1035 Exchange before we finalize your Policy’s specified amount.

Transfers

General

You or your agent/registered representative of record may make transfers among the subaccounts or from the subaccounts to the fixed account. We determine the amount you have available for transfers at the end of the valuation period when we receive your transfer request at our office. We may, at any time, discontinue transfer privileges, modify our procedures, or limit the number of transfers we permit. The following features apply to transfers under the Policy:

• Unless you select dollar cost averaging from the fixed account, the Policy allows transfers from the fixed account only during the 30 days following each Policy anniversary. During this period, the Policy allows transfer of the greater of up to 25% of the amount in the fixed account, or the amount transferred in the previous Policy year. Currently, we allow you to transfer at any one time during a Policy year up to 100% of the fixed account value from the fixed account. If we modify or stop this current practice, we will notify you..

• You may request transfers in writing (in a form we accept), by fax, by telephone to our office or electronically through our website (www.westernreserve.com).

• There is no minimum amount that must be transferred.

• There is no minimum amount that must remain in a subaccount after a transfer.

• We deduct a $25 charge from the amount transferred for each transfer in excess of 12 transfers in a Policy year.

• We consider all transfers made in any one day to be a single transfer.

• Transfers resulting from loans or the exercise of conversion rights or due to the reallocation of cash value immediately after the record date currently are not treated as transfers for the purpose of the transfer charge.

• Transfers via the Internet are not treated as transfers for the purpose of the transfer charge.

• Transfers under dollar cost averaging and asset rebalancing are treated as transfers for purposes of the transfer charge.

• Transfers between any AVIT subaccount and any Series Fund or Fidelity VIP Fund subaccount will be processed only if you send us a written request through standard United States Postal First Class mail delivery, with an original signature authorizing each transfer. Transfer requests received via overnight or priority delivery service will be returned to you.

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We will process any transfer order we receive at our office before the NYSE closes (usually 4:00 p.m. Eastern time) using the subaccount unit value determined at the end of that session of the NYSE. If we receive the transfer order at our office after the NYSE closes, we will process the order using the subaccount unit value determined at the close of the next regular business session of the NYSE.

Disruptive Trading And Market Timing. Statement of Policy. This policy was not designed for the use of programmed, large, frequent, or short-term transfers. Such transfers may be disruptive to the underlying fund portfolios and increase transaction costs.

Programmed, large, frequent, or short-term transfers among the subaccounts or between the subaccounts and the fixed account can cause risks with adverse effects for other policyowners (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 unit values 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 impeding a portfolio manager’s ability to sustain an investment objective, causing the underlying fund portfolio to maintain a higher level of cash than would otherwise be the case, or 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 policyowners invested in those subaccounts, not just those making the transfers.

Do not invest with us except in the Access Variable Insurance Trust (AVIT) subaccounts if you intend to conduct market timing or other disruptive trading.

Detection. We have developed policies and procedures with respect to market timing and other transfers and do not grant exceptions thereto. 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 with different policies and procedures may invest in the underlying fund portfolios, we cannot guarantee all harmful trading will be detected or that an underlying fund portfolio will not suffer harm from programmed, large, frequent, or short-term transfers among subaccounts of variable products issued by these other insurance companies.

Deterrence. If we determine you are engaged in market timing or other 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. As described below, restrictions may take various forms, and may include permanent loss of expedited transfer privileges. We consider transfers by telephone, fax, overnight mail, or the Internet to be “expedited” transfers. We may also restrict the transfer 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, the payment or transfer, or series of transfers, would have a negative impact on an underlying fund portfolio’s operations, if an underlying fund portfolio would reject or has rejected our purchase order, or because of a history of large or frequent transfers. We may impose other restrictions on transfers, such as requiring written transfer requests with an original signature conveyed only via U.S. Mail for all transfers, or even prohibit transfers for any owner who, in our view, has abused, or appears likely to abuse, the transfer privilege. 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. We also reserve the right to reverse a potentially harmful transfer. For all of these purposes, we may aggregate two or more policies that we believe are connected.

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In addition to our internal policies and procedures, we will administer your policy to comply with 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 we are unable to purchase or redeem shares of any of the underlying fund portfolios.

AVIT Subaccounts. The restrictions above do not apply to AVIT subaccounts. However, you may only transfer between AVIT subaccounts and non-AVIT subaccounts by sending us your written request, with original signature authorizing each transfer, through standard U.S. Mail (no expedited transfers). Transfers that involve only the AVIT subaccounts may generally use expedited transfer privileges.

Because the above restrictions do not apply to the AVIT subaccounts, they may have a greater risk than others of suffering from the harmful effects of programmed, large, frequent or short-term transfers, as discussed above (i.e., dilution, an adverse effect on portfolio management, and increased expenses).

We may, at any time, discontinue transfer privileges, modify our procedures, or limit the number of transfers we permit.

Your Policy, as applied for and issued, will automatically receive telephone transfer privileges unless you provide other instructions. The telephone transfer privileges allow you to give authority to the registered representative or agent of record for your Policy to make telephone transfers and to change the allocation of future payments among the subaccounts and the fixed account on your behalf according to your instructions. To make a telephone transfer, you may call us at 1-800-851-9777 Monday - Friday 8:30 a.m. - 7:00 p.m. Eastern time, or fax your instructions to 727-299-1648.

Please note the following regarding telephone or fax transfers:

• We will employ reasonable procedures to confirm that telephone instructions are genuine.

• If we follow these procedures, we are not liable for any loss, damage, cost or expense from complying with telephone instructions we reasonably believe to be authentic. You bear the risk of any such loss.

• If we do not employ reasonable confirmation procedures, we may be liable for losses due to unauthorized or fraudulent instructions.

• Such procedures may include requiring forms of personal identification prior to acting upon telephone instructions, providing written confirmation of transactions to owners, and/or tape recording telephone instructions received from owners.

• We may also require written confirmation of your order.

• If you do not want the ability to make telephone transfers, you should notify us in writing at our office.

• We will not be responsible for same-day processing of transfers if faxed to a number other than 727-299-1648.

• We will not be responsible for any transmittal problems when you fax us your order unless you report it to us within five business days and send us proof of your fax transmittal. We may discontinue this option at any time.

We cannot guarantee that telephone and faxed transactions will always be available. For example, our offices may be closed during severe weather emergencies or there may be interruptions in telephone or fax service beyond our control. If the volume of calls is unusually high, we might not have someone immediately available to receive your order. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability under all circumstances.

Online transactions processed via the Internet may not always be possible. Telephone and computer systems, whether yours, your Internet service provider’s, your agent’s or Western Reserve’s, can experience outages

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or slowdowns for a variety of reasons. These outages or slowdowns may prevent or delay our receipt of your request. If you are experiencing problems, you should make your request or inquiry in writing. You should protect your personal identification number (PIN) because self-service options will be available to your agent of record and to anyone who provides your PIN. We will not be able to verify that the person using your PIN and providing instructions online is you or one authorized by you.

Fixed Account Transfers

Currently, we allow you once per Policy year to transfer from the fixed account up to 100% of the fixed account amount. If we change this, we will notify you. This current restriction does not apply if you have selected dollar cost averaging.

We reserve the right to limit the maximum amount you may transfer from the fixed account to the greater of:

• 25% of the amount in the fixed account; or

• the amount you transferred from the fixed account in the immediately prior Policy year.

We will make the transfer at the end of the valuation date on which we receive the request. We also reserve the right to require that you make the transfer request in writing and that we receive the written transfer request no later than 30 days after a Policy anniversary.

New Jersey: The fixed account is not available to you if your Policy was issued in the State of New Jersey. You may not direct or transfer any money to the fixed account.

Conversion Rights

If, within 24 months of your Policy date, you transfer all of your subaccount values to the fixed account, then we will not charge you a transfer fee, even if applicable. You must make your request in writing to our office.

Dollar Cost Averaging

Dollar cost averaging is an investment strategy designed to reduce the average purchase price per unit. The strategy spreads the allocation of your premium into the subaccounts over a period of time. This potentially allows you to reduce the risk of investing most of your premium into the subaccounts at a time when prices are high. The success of this strategy is not assured and depends on market trends. You should consider carefully your financial ability to continue the program over a long enough period of time to purchase units when their value is low as well as when it is high. We make no guarantee that dollar cost averaging will result in a profit or protect you against loss.

Under dollar cost averaging, we automatically transfer a set dollar amount from the WRL Transamerica Money Market subaccount, the WRL AEGON Bond subaccount or the fixed account to a subaccount that you choose (except the AVIT subaccounts). We will make the transfers monthly as of the end of the valuation date after the first Monthiversary after the record date. We will make the first transfer in the month after we receive your request at our office, provided that we receive the form by the 25^th day of the month.

To start dollar cost averaging:	•	you must submit a completed form to us at our office requesting dollar cost averaging;
	•	you must have at least $5,000 in each account from which we will make transfers;
	•	your total transfers each month under dollar cost averaging must be at least $100; and
	•	each month, you may not transfer more than one-tenth of the amount that was in your fixed account at the beginning of dollar cost averaging.

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You may request dollar cost averaging at any time. There is no charge for dollar cost averaging. However, each transfer under dollar cost averaging counts towards your 12 free transfers each year.

Dollar cost averaging will terminate if:	•	we receive your request to cancel your participation;
	•	the value in the accounts from which we make the transfers is depleted;
	•	you elect to participate in the asset rebalancing program; or
	•	you elect to participate in any asset allocation services provided by a third party.

We may modify, suspend, or discontinue dollar cost averaging at any time.

Asset Rebalancing Program

We also offer an asset rebalancing program under which you may transfer amounts periodically to maintain a particular percentage allocation among the subaccounts (except the AVIT subaccounts) you have selected. Cash value allocated to each subaccount will grow or decline in value at different rates. The asset rebalancing program automatically reallocates the cash value in the subaccounts at the end of each period to match your Policy’s currently effective premium allocation schedule. Cash value in the fixed account and the dollar cost averaging program is not available for this program. This program does not guarantee gains. A subaccount may still have losses.

You may elect asset rebalancing to occur on each quarterly, semi-annual or annual anniversary of the Policy date. Once we receive the asset rebalancing request form at our office, we will effect the initial rebalancing of cash value on the next such anniversary, in accordance with the Policy’s current premium allocation schedule. You may modify your allocations quarterly. We will credit the amounts transferred at the unit value next determined on the dates the transfers are made. If a day on which rebalancing would ordinarily occur falls on a day on which the NYSE is closed, rebalancing will occur on the next day that the NYSE is open.

To start asset rebalancing:	•	you must submit a completed asset rebalancing request form to us at our office before the maturity date; and
	•	you must have a minimum cash value of $5,000 or make a $5,000 initial premium payment.

There is no charge for the asset rebalancing program. However, each reallocation we make under the program counts towards your 12 free transfers each year.

Asset rebalancing will cease if:	•	you elect to participate in the dollar cost averaging program;
	•	we receive your request to discontinue participation at our office;
	•	you make any transfer to or from any subaccount other than under a scheduled rebalancing; or
	•	you elect to participate in any asset allocation services provided by a third party.

You may start and stop participation in the asset rebalancing program at any time; but we restrict your right to re-enter the program to once each Policy year. If you wish to resume the asset rebalancing program, you must complete a new request form. We may modify, suspend, or discontinue the asset rebalancing program at any time.

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Third Party Asset Allocation Services

We may provide administrative or other support services to independent third parties you authorize to conduct transfers on your behalf, or who provide recommendations as to how your subaccount values should be allocated. This includes, but is not limited to, transferring subaccount values among subaccounts in accordance with various investment allocation strategies that these third parties employ. These independent third parties may or may not be appointed Western Reserve agents for the sale of Policies. Western Reserve does not engage any third parties to offer investment allocation services of any type, so that persons or firms offering such services do so independent from any agency relationship they may have with Western Reserve for the sale of Policies. Western Reserve therefore takes no responsibility for the investment allocations and transfers transacted on your behalf by such third parties or any investment allocation recommendations made by such parties. Western Reserve does not currently charge you any additional fees for providing these support services. Western Reserve reserves the right to discontinue providing administrative and support services to owners utilizing independent third parties who provide investment allocation and transfer recommendations.

Policy Values

Cash Value

• Varies from day to day, depending on the investment experience of the subaccounts you choose, the interest credited to the fixed account, the charges deducted and any other Policy transactions (such as additional premium payments, transfers, withdrawals and Policy loans).

• Serves as the starting point for calculating values under a Policy.

• Equals the sum of all values in each subaccount and the fixed account.

• Is determined on the Policy date and on each valuation date.

• Has no guaranteed minimum amount and may be more or less than premiums paid.

• Includes any amounts held in the fixed account to secure any outstanding Policy loan.

Net Surrender Value

The net surrender value is the amount we pay when you surrender your Policy. We determine the net surrender value at the end of the valuation period when we receive your written surrender request at our office.

Net surrender value on any valuation date equals:	•	the cash value as of such date; minus
	•	any surrender charge as of such date; minus
	•	any outstanding Policy loan amount(s); plus
	•	any interest you paid in advance on the loan(s) for the period between the date of the surrender and the next Policy anniversary.

Subaccount Value

Each subaccount’s value is the cash value in that subaccount. At the end of any valuation period, the subaccount’s value is equal to the number of units that the Policy has in the subaccount, multiplied by the unit value of that subaccount.

The number of units in any subaccount on any valuation date equals:	•	the initial units purchased at unit value on the record date; plus
	•	units purchased with additional net premium(s); plus
	•	units purchased via transfers from another subaccount or the fixed account; minus

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•     units redeemed to pay for monthly deductions; minus

• units redeemed to pay for cash withdrawals (including charges); minus

• units redeemed as part of a transfer to another subaccount or the fixed account; minus

• units redeemed to pay pro rata decrease charge and transfer charges.

Every time you allocate, transfer or withdraw money to or from a subaccount, we convert that dollar amount into units. We determine the number of units we credit to, or subtract from, your Policy by dividing the dollar amount of the allocation, transfer or cash withdrawal by the unit value for that subaccount next determined at the end of the valuation period on which the premium, transfer request or cash withdrawal request is received at our office.

Subaccount Unit Value

The value (or price) of each subaccount unit will reflect the investment performance of the portfolio in which the subaccount invests. Unit values will vary among subaccounts. The unit value of each subaccount was originally established at $10 per unit. The unit value may increase or decrease from one valuation period to the next.

The unit value of any subaccount at the end of a valuation period is calculated as:	•	the total value of the portfolio shares held in the subaccount, including the value of any dividends or capital gains distribution declared and reinvested by the portfolio during the valuation period. This value is determined by multiplying the number of portfolio shares owned by the subaccount by the portfolio’s net asset value per share determined at the end of the valuation period; minus
	•	a charge equal to the daily net assets of the subaccount multiplied by the daily equivalent of the daily charge; minus
	•	the accrued amount of reserve for any taxes or other economic burden resulting from applying tax laws that we determine to be properly attributable to the subaccount; and the result divided by
	•	the number of outstanding units in the subaccount before the purchase or redemption of any units on that date.

The portfolio in which any subaccount invests will determine its net asset value per share once daily, as of the close of the regular business session of the NYSE (usually 4:00 p.m. Eastern time) except on customary national holidays on which the NYSE is closed, which coincides with the end of each valuation period.

Fixed Account Value

On the record date, the fixed account value is equal to the cash value allocated to the fixed account from the WRL Transamerica Money Market subaccount.

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The fixed account value at the end of any valuation period is equal to:	•	the sum of net premium(s) allocated to the fixed account; plus
	•	any amounts transferred from a subaccount to the fixed account; plus
	•	total interest credited to the fixed account; minus
	•	amounts charged to pay for monthly deductions; minus
	•	amounts withdrawn or surrendered from the fixed account; minus
	•	amounts transferred from the fixed account to a subaccount; minus
	•	amounts withdrawn from the fixed account to pay any pro rata decrease charge incurred due to a decrease in specified amount.

New Jersey: For Policies issued in the State of New Jersey, the fixed account value at the end of any valuation period is equal to:

• any amounts transferred from a subaccount to the fixed account to establish a loan reserve; plus

• total interest credited to the fixed account.

Death Benefit

Death Benefit Proceeds

As long as the Policy is in force, we will determine the amount of and pay the death benefit proceeds on an individual Policy upon receipt at our office of satisfactory proof of the insured’s death, plus written direction (from each eligible recipient of death benefit proceeds) regarding how to pay the death benefit payment, and any other documents, forms and information we need. We may require return of the Policy. We will pay the death benefit proceeds to the primary beneficiary(ies), if living, or to a contingent beneficiary. If each beneficiary dies before the insured and there is no contingent beneficiary, we will pay the death benefit proceeds to the owner or the owner’s estate. We will pay the death benefit proceeds in a lump sum or under a payment option.

Death benefit proceeds equal:	•	the death benefit (described below); minus
	•	any monthly deductions due during the grace period (if applicable); minus
	•	any outstanding loan amount; plus
	•	any additional insurance in force provided by rider; plus
	•	any interest you paid in advance on the loan(s) for the period between the date of death and the next Policy anniversary.

We may further adjust the amount of the death benefit proceeds if we contest the Policy or if you misstate the insured’s age or gender.

Death Benefit

The Policy provides a death benefit. The death benefit is determined at the end of the valuation period in which the insured dies. You must select one of the three death benefit options we offer in your application. No matter which death benefit option you choose, we guarantee that, so long as the Policy does not lapse, the death benefit will never be less than the specified amount on the date of the insured’s death.

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Death benefit Option A equals the greater of:	•	the current specified amount; or
	•	a specified percentage called the “limitation percentage,” multiplied by the cash value on the insured’s date of death.

Under Option A, your death benefit remains level unless the limitation percentage multiplied by the cash value is greater than the specified amount; then the death benefit will vary as the cash value varies.

The limitation percentage is the minimum percentage of cash value we must pay as the death benefit under federal tax requirements. It is based on the attained age of the insured at the beginning of each Policy year. The following table indicates the limitation percentages for different ages:

Attained Age	Limitation Percentage
40 and under	250%
41 to 45	250% of cash value minus 7% for each age over age 40
46 to 50	215% of cash value minus 6% for each age over age 45
51 to 55	185% of cash value minus 7% for each age over age 50
56 to 60	150% of cash value minus 4% for each age over age 55
61 to 65	130% of cash value minus 2% for each age over age 60
66 to 70	120% of cash value minus 1% for each age over age 65
71 to 75	115% of cash value minus 2% for each age over age 70
76 to 90	105%
91 to 95	105% of cash value minus 1% for each age over age 90
96 and older	100%

If the federal tax code requires us to determine the death benefit by reference to these limitation percentages, the Policy is described as “in the corridor.” An increase in the cash value will increase our risk, and we will increase the cost of insurance we deduct from the cash value.

Option A Illustration. Assume that the insured’s attained age is under 40, and that there are no outstanding loans. Under Option A, a Policy with a $50,000 specified amount will generally pay $50,000 in death benefits. However, because the death benefit must be equal to or be greater than 250% of cash value, any time the cash value of the Policy exceeds $20,000, the death benefit will exceed the $50,000 specified amount. Each additional dollar added to the cash value above $20,000 will increase the death benefit by $2.50.

Similarly, so long as the cash value exceeds $20,000, each dollar taken out of the cash value will reduce the death benefit by $2.50. If at any time the cash value multiplied by the limitation percentage is less than the specified amount, the death benefit will equal the specified amount of the Policy reduced by the dollar value of any cash withdrawals.

Death benefit Option B equals the greater of:	•	the current specified amount; plus
		•	the cash value on the insured’s date of death; or
	•	the limitation percentage, multiplied by
		•	the cash value on the insured’s date of death.

Under Option B, the death benefit always varies as the cash value varies.

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Option B Illustration. Assume that the insured’s attained age is under 40 and that there are no outstanding loans. Under Option B, a Policy with a specified amount of $50,000 will generally pay a death benefit of $50,000 plus cash value. Thus, a Policy with a cash value of $10,000 will have a death benefit of $60,000 ($50,000 + $10,000). The death benefit, however, must be at least 250% of cash value. As a result, if the cash value of the Policy exceeds $33,333, the death benefit will be greater than the specified amount plus cash value. Each additional dollar of cash value above $33,333 will increase the death benefit by $2.50.

Similarly, any time cash value exceeds $33,333, each dollar taken out of cash value will reduce the death benefit by $2.50. If at any time, cash value multiplied by the limitation percentage is less than the specified amount plus the cash value, then the death benefit will be the specified amount plus the cash value of the Policy.

Death benefit Option C equals the greater of:	•	death benefit Option A; or
	•	the current specified amount, multiplied by
		•	a “factor” equal to the lesser of
			•	1.0% or
			•	0.04 times (95 minus insured’s attained age at death); plus
		•	the cash value on the insured’s date of death.

Under Option C, the death benefit varies with the cash value and the insured’s attained age.

Option C – Three Illustrations.

1. Assume that the insured is under age 40 and that there are no outstanding loans. Under Option C, a Policy with a specified amount of $50,000 and with a cash value of $10,000 will have a death benefit of $60,000 ($50,000 x the minimum of (1.0 and (0.04 x (95-40))) + $10,000). So long as the insured is under age 71, this benefit is the same as the Option B benefit.

2. Assume that the insured is attained age 75 and that there are no outstanding loans. Under Option C, a Policy with a specified amount of $50,000 and with a cash value of $12,000 will have a death benefit of $52,000 ($50,000 x the minimum of (1.0 and (0.04 x (95-75))) + $12,000). The death benefit, however, must be at least 105% of cash value as shown in the limitation percentage table above.

3. Assume that the insured is attained age 75 and that there are no outstanding loans. Under Option C, a Policy with a specified amount of $50,000 and with a cash value of $9,000 will have a death benefit equal to the specified amount of $50,000, since the calculation of $50,000 times the minimum of (1.0 and (0.04 x (95-75))) plus $9,000 is less than the specified amount.

Effect of Cash Withdrawals on the Death Benefit

If you choose Option A, a cash withdrawal will reduce the specified amount by an amount equal to the amount of the cash withdrawal. We will not impose a pro rata decrease charge when the specified amount is decreased as a result of taking a cash withdrawal. Regardless of the death benefit option you choose, a cash withdrawal will reduce the death benefit by at least the amount of the withdrawal.

Choosing Death Benefit Options

You must choose one death benefit option on your application. This is an important decision. The death benefit option you choose will have an impact on the dollar value of the death benefit, on your cash value, and on the amount of cost of insurance charges you pay.

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If you do not select a death benefit option on your application, we will assume you selected death benefit Option A and will ask you to confirm the selection of Option A in writing or choose one of the other death benefit options.

You may find Option A more suitable for you if your goal is to increase your cash value through positive investment experience. You may find Option B more suitable if your goal is to increase your total death benefit. You may find Option C more suitable if your goal is to increase your total death benefit before you reach attained age 70, and to increase your cash value through positive investment experience thereafter.

Changing the Death Benefit Option

After the third Policy year, you may change your death benefit option once each Policy year if you have not increased or decreased the specified amount that year. We will notify you of the new specified amount.

• You must send your written request to our office.

• The effective date of the change will be the Monthiversary on or following the date when we receive your request for a change.

• You may not make a change that would decrease the specified amount below the minimum specified amount shown on your Policy schedule page.

• There may be adverse federal tax consequences. You should consult a tax advisor before changing your Policy’s death benefit option.

Decreasing the Specified Amount

After the Policy has been in force for three years, you may decrease the specified amount once each Policy year if you have not changed the death benefit option that year. A decrease in the specified amount will affect your cost of insurance charge and your minimum monthly guarantee premium, and may have adverse federal tax consequences. You should consult a tax advisor before decreasing your Policy’s specified amount.

Conditions for decreasing the specified amount:	•	you must send your written request to our office;
	•	you may not change your death benefit option in the same Policy year that you decrease your specified amount;
	•	you may not decrease your specified amount lower than the minimum specified amount shown on your Policy schedule page;
	•	you may not decrease your specified amount if it would disqualify your Policy as life insurance under the Internal Revenue Code;
	•	we may limit the amount of the decrease to no more than 20% of the specified amount;
	•	a decrease in specified amount will take effect on the Monthiversary on or after we receive your written request; and
	•	we will assess a pro rata decrease charge against the cash value if you request a decrease in your specified amount within the first 15 Policy years.

No Increases in the Specified Amount

We do not allow increases in the specified amount. If you want additional insurance, you may purchase a term rider (PIR or PIR Plus) or purchase an additional policy(ies) naming the same owner. We may waive the Policy charge at issue on these additional policies.

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Payment Options

There are several ways of receiving proceeds under the death benefit and surrender provisions of the Policy, other than in a lump sum.

Surrenders and Cash Withdrawals

Surrenders

You must make a written request containing an original signature to surrender your Policy for its net surrender value as calculated at the end of the valuation date on which we receive your request at our office. The insured must be alive, the Policy must be in force, and it must be before the maturity date when you make your written request. A surrender is effective as of the date when we receive your written request. You will incur a surrender charge if you surrender the Policy during the first 15 Policy years. Once you surrender your Policy, all coverage and other benefits under it cease and cannot be reinstated. We will normally pay you the net surrender value in a lump sum within seven days or under a settlement option. A surrender may have tax consequences. See Federal Income Tax Considerations.

Cash Withdrawals

After the first Policy year, you may request a cash withdrawal of a portion of your cash value subject to certain conditions.

Cash withdrawal conditions:		•	You must send your written cash withdrawal request with an original signature to our office. You may also fax your withdrawal request to us if it is less than $50,000 at 727-299-1667.
		•	We only allow one cash withdrawal per Policy year.
		•	We may limit the amount you can withdraw to at least $500, and to no more than 10% of the net surrender value.
	•		The remaining net surrender value after the cash withdrawal must be at least $500.
		•	You may not take a cash withdrawal if it will reduce the specified amount below the minimum specified amount set forth in the Policy.
		•	You may specify the subaccount(s) and the fixed account from which to make the withdrawal. If you do not specify an account, we will take the withdrawal from each account in accordance with your current premium allocation instructions.
		•	We generally will pay a cash withdrawal request within seven days following the valuation date we receive the request at our office.
		•	We will deduct a processing fee equal to $25 or 2% of the amount you withdraw, whichever is less. We deduct this amount from the withdrawal, and we pay you the balance.
		•	You may not take a cash withdrawal that would disqualify your Policy as life insurance under the Internal Revenue Code.
		•	A cash withdrawal may have tax consequences.

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A cash withdrawal will reduce the cash value by the amount of the cash withdrawal, and will reduce the death benefit by at least the amount of the cash withdrawal. When death benefit Option A is in effect, a cash withdrawal will reduce the specified amount by an amount equal to the amount of the cash withdrawal. We will not impose a pro rata decrease charge when the specified amount is decreased as a result of taking a cash withdrawal.

When we incur extraordinary expenses, such as overnight mail expenses or wire service fees, for expediting delivery of your partial withdrawal or complete surrender payment, we will deduct that charge from the payment. We charge $20 for an overnight delivery ($30 for Saturday delivery) and $25 for wire service.

Canceling a Policy

You may cancel a Policy for a refund during the “free-look period” by returning it to our office, to one of our branch offices or to the agent who sold you the Policy. The free-look period expires 10 days after you receive the Policy. In some states you may have more than 10 days. If you decide to cancel the Policy during the free-look period, we will treat the Policy as if it had never been issued. We will pay the refund within seven days after we receive the returned Policy at our office. The amount of the refund will be:

• any charges and taxes we deduct from your premiums; plus

• any monthly deductions or other charges we deducted from amounts you allocated to the subaccounts and the fixed account; plus

• your cash value in the subaccounts and the fixed account on the date we (or our agent) receive the returned Policy at our office.

Some states may require us to refund all of the premiums you paid for the Policy.

Loans

General

After the first Policy year (as long as the Policy is in force) you may borrow money from us using the Policy as the only security for the loan. We may permit a loan prior to the first anniversary for Policies issued pursuant to 1035 Exchanges. A loan that is taken from, or secured by, a Policy may have tax consequences. See Federal Income Tax Considerations.

Policy loans are subject to certain conditions:	•	we may require you to borrow at least $500; and
	•	the maximum amount you may borrow is 90% of the cash value, minus any surrender charge and minus any outstanding loan amount.

When you take a loan, we will withdraw an amount equal to the requested loan plus interest in advance until the next Policy anniversary from each of the subaccounts and the fixed account based on your current premium allocation instructions (unless you specify otherwise). We will transfer that amount to the loan reserve. The loan reserve is the portion of the fixed account used as collateral for a Policy loan.

We normally pay the amount of the loan within seven days after we receive a proper loan request at our office. We may postpone payment of loans under certain conditions.

You may request a loan by telephone by calling us at 1-800-851-9777 Monday - Friday 8:30 a.m. - 7:00 p.m. Eastern time. If the loan amount you request exceeds $50,000 or if the address of record has been changed within the past 10 days, we may reject your request or require a signature guarantee. If you do not want the ability to request a loan by telephone, you should notify us in writing at our office. You will be required to provide certain information for identification purposes when you request a loan by telephone. We may ask you to provide us with written confirmation of your request. We will not be liable for processing a loan request if we believe the request is genuine.

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You may also fax your loan request to us at 727-299-1667. We will not be responsible for any transmittal problems when you fax your request unless you report it to us within five business days and send us proof of your fax transmittal.

You can repay a loan at any time while the Policy is in force. Loan repayments must be sent to our office and will be credited as of the date received. We will consider any payments you make on the Policy to be premium payments unless the payments are clearly specified as loan repayments. Because we do not apply the premium expense charge to loan repayments, it is very important that you indicate clearly if your payment is intended to repay all or part of a loan.

At each Policy anniversary, we will compare the outstanding loan amount to the amount in the loan reserve. We will also make this comparison any time you repay all or part of the loan, or make a request to borrow an additional amount. At each such time, if the outstanding loan amount exceeds the amount in the loan reserve, we will withdraw the difference from the subaccounts and the fixed account and transfer it to the loan reserve, in the same manner as when a loan is made. If the amount in the loan reserve exceeds the amount of the outstanding loan, we will withdraw the difference from the loan reserve and transfer it to the subaccounts and the fixed account in the same manner as current premiums are allocated. No charge will be imposed for these transfers, and these transfers are not treated as transfers in calculating the transfer charge. We reserve the right to require a transfer to the fixed account if the loans were originally transferred from the fixed account.

Interest Rate Charged

We will charge you an annual interest rate on a Policy loan that is equal to an effective annual rate of 5.5% that is payable annually in advance. Loan interest that is unpaid when due will be added to the amount of the loan on each Policy anniversary and will bear interest at the same rate.

Loan Reserve Interest Rate Credited

We will credit the amount in the loan reserve with interest at an effective annual rate of at least 4.0%. We may credit a higher rate, but we are not obligated to do so.

• We currently credit interest at an effective annual rate of 4.75% on amounts you borrow during the first ten Policy years.

• After the tenth Policy year, on all amounts that you have borrowed, we currently credit interest to the part of the cash value in excess of the premiums paid less withdrawals at an interest rate equal to the interest rate we charge on the total loan. The remaining portion, equal to the cost basis, is currently credited an effective annual rate of 4.75%.

Effect of Policy Loans

A Policy loan reduces the death benefit proceeds and net surrender value by the amount of any outstanding loan amount. Repaying the loan causes the death benefit proceeds and net surrender value to increase by the amount of the repayment. As long as a loan is outstanding, we hold an amount equal to the loan plus interest charged in advance until the next Policy anniversary in the loan reserve. This amount does not participate in the separate account’s investment performance, may not be credited with the interest rates accruing on any unloaned portion of the fixed account, and therefore can affect the Policy’s cash value and death benefit whether or not the loan is repaid. Amounts transferred from the separate account to the loan reserve will affect the value in the separate account because we credit such amounts with an interest rate declared by us rather than a rate of return reflecting the investment results of the separate account.

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We also charge interest on Policy loans at an effective annual rate of 5.5%. Because interest is added to the amount of the Policy loan to be repaid, the size of the loan will constantly increase unless the Policy loan is repaid.

There are risks involved in taking a Policy loan, including the potential for a Policy to lapse if projected earnings, taking into account outstanding loans, are not achieved. A Policy loan may also have possible adverse tax consequences. You should consult a tax advisor before taking out a Policy loan.

We will notify you (and any assignee of record) if the sum of your loan amount plus any interest you owe on the loan is more than the net surrender value. If you do not submit a sufficient payment within 61 days from the date of the notice, your Policy may lapse.

Policy Lapse and Reinstatement

Lapse

Your Policy may not necessarily lapse (terminate without value) if you fail to make a planned periodic payment. However, even if you make all your planned periodic payments, there is no guarantee that your Policy will not lapse. This Policy provides a no lapse period. See below. Once your no lapse period ends, your Policy may lapse (terminate without value) if the net surrender value on any Monthiversary is less than the monthly deductions due on that day. Such lapse might occur if unfavorable investment experience, loans and cash withdrawals cause a decrease in the net surrender value, or you have not paid sufficient premiums as discussed below to offset the monthly deductions.

If the net surrender value is not enough to pay the monthly deductions, we will mail a notice to your last known address and any assignee of record. The notice will specify the minimum payment you must pay and the final date by which we must receive the payment to prevent a lapse. We generally require that you make the payment within 61 days after the date of the notice. This 61-day period is called the grace period. If we do not receive the specified minimum payment by the end of the grace period, all coverage under the Policy will terminate without value.

No Lapse Period

This Policy provides a no lapse period. As long as you keep the no lapse period in effect, your Policy will not lapse and no grace period will begin. Even if your net surrender value is not enough to pay your monthly deduction, the Policy will not lapse so long as the no lapse period is in effect. The no lapse period will not extend beyond the no lapse date stated in your Policy. Each month we determine whether the no lapse period is still in effect.

No lapse period	•	For a Policy issued to any insured ages 0-60, the no lapse date is either the number of years to attained age 65 or the 20th Policy anniversary, whichever is less.
	•	For a Policy issued to an insured ages 61-80, the no lapse date is the fifth Policy anniversary.
	•	The no lapse date is specified in your Policy.
Early termination of the no lapse period	•	The no lapse period will not be effective if you do not pay sufficient minimum monthly guarantee premiums

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•	You must pay total premiums (minus withdrawals, outstanding loan amounts, and any pro rata decrease charge) that equal at least:
	•      the sum of the minimum monthly guarantee premiums in effect for each month from the Policy date up to and including the current month.

You will lessen the risk of Policy lapse if you keep the no lapse period in effect. Before you take a cash withdrawal or a loan or decrease the specified amount or add, increase or decrease a rider you should consider carefully the effect it will have on the no lapse period guarantee.

In addition, if you change death benefit options, decrease the specified amount, or add, increase or decrease a rider, we will adjust the minimum monthly guarantee premium. See Minimum Monthly Guarantee Premium for a discussion of how the minimum monthly guarantee premium is calculated and can change.

Reinstatement

We will reinstate a lapsed Policy within five years after the lapse (and prior to the maturity date). To reinstate the Policy you must:

• submit a written application for reinstatement to our office;

• provide evidence of insurability satisfactory to us;

• make a minimum premium payment sufficient to provide a net premium that is large enough to cover three monthly deductions.

The cash value of the loan reserve on the reinstatement date will be zero. Your net surrender value on the reinstatement date will equal the net premiums you pay at reinstatement, minus one monthly deduction and any surrender charge. The reinstatement date for your Policy will be the Monthiversary on or following the day we approve your application for reinstatement. We may decline a request for reinstatement.

Federal Income Tax Considerations

The following summarizes some of the basic federal income tax considerations associated with a Policy and does not purport to be complete or to cover all situations. This discussion is not intended as tax advice. Please consult counsel or other qualified tax advisors for more complete information. We base this discussion on our understanding of the present federal income tax laws as they are currently interpreted by the Internal Revenue Service (the “IRS”). Federal income tax laws and the current interpretations by the IRS may change.

Tax Status of the Policy

A Policy must satisfy certain requirements set forth in the Internal Revenue Code (the “Code”) in order to qualify as a life insurance policy for federal income tax purposes and to receive the tax treatment normally accorded life insurance policies under federal tax law. Guidance as to how these requirements are to be applied is limited. Nevertheless, we believe that this Policy should generally satisfy the applicable Code requirements. It is also uncertain whether death benefits under policies where the maturity date has been extended will be excludible from the beneficiary’s gross income and whether policy cash value will be deemed to be distributed to you on the original maturity date. Such a deemed distribution may be taxable. If it is subsequently determined that a Policy does not satisfy the applicable requirements, we may take appropriate steps to bring the Policy into compliance with such requirements and we reserve the right to restrict Policy transactions in order to do so.

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In certain circumstances, owners of variable life insurance policies have been considered for federal income tax purposes to be the owners of the assets of the separate account supporting their policies due to their ability to exercise investment control over those assets. Where this is the case, the policyowners have been currently taxed on income and gains attributable to the separate account assets. There is little guidance in this area, and some features of the Policies, such as your flexibility to allocate premiums and cash values, have not been explicitly addressed in published rulings. We believe that the Policy does not give you investment control over separate account assets.

In addition, the Code requires that the investments of the separate account be “adequately diversified” in order to treat the Policy as a life insurance policy for federal income tax purposes. We intend that the separate account, through the portfolios, will satisfy these diversification requirements.

The following discussion assumes that the Policy will qualify as a life insurance policy for federal income tax purposes.

Tax Treatment of Policy Benefits

In General. We believe that the death benefit under a Policy should be excludible from the beneficiary’s gross income. Federal, state and local transfer, estate and other tax consequences of ownership or receipt of Policy proceeds depend on your circumstances and the beneficiary’s circumstances. A tax advisor should be consulted on these consequences.

Generally, you will not be deemed to be in constructive receipt of the cash value until there is a distribution. When distributions from a Policy occur, or when loans are taken out from or secured by a Policy (e.g., by assignment), the tax consequences depend on whether the Policy is classified as a “Modified Endowment Contract” (“MEC”). Moreover, if a loan from a Policy that is not a MEC is outstanding when the Policy is surrendered or lapses, the amount of the outstanding indebtedness will be added to the amount distributed and will be taxed accordingly.

Modified Endowment Contracts. Under the Code, certain life insurance policies are classified as MECs and receive less favorable tax treatment than other life insurance policies. The rules are too complex to summarize here, but generally depend on the amount of premiums paid during the first seven Policy years or in the seven Policy years following certain changes in the Policy. Certain changes in the Policy after it is issued could also cause the Policy to be classified as a MEC. Due to the Policy’s flexibility, each Policy’s circumstances will determine whether the Policy is classified as a MEC. Among other things, a reduction in benefits could cause a Policy to become a MEC. If you do not want your Policy to be classified as a MEC, you should consult a tax advisor to determine the circumstances, if any, under which your Policy would or would not be classified as a MEC.

Upon issue of your Policy, we will notify you as to whether or not your Policy is classified as a MEC based on the initial premium we receive. If your Policy is not a MEC at issue, then you will also be notified of the maximum amount of additional premiums you can pay without causing your Policy to be classified as a MEC. If a payment would cause your Policy to become a MEC, you and your agent will be notified immediately. At that time, you will need to notify us if you want to continue your Policy as a MEC. Unless you notify us that you do want to continue your Policy as a MEC, we will refund the dollar amount of the excess premium that would cause the Policy to become a MEC.

Distributions (other than Death Benefits) from MECs. Policies classified as MECs are subject to the following tax rules:

• All distributions other than death benefits from a MEC, including distributions upon surrender and cash withdrawals, will be treated first as distributions of gain taxable as ordinary income. They will be treated as tax-free recovery of the owner’s investment in the Policy only after all gain has been distributed. Your investment in the Policy is generally your total premium payments. When a distribution is taken from the Policy, your investment in the Policy is reduced by the amount of the distribution that is tax-free.

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• Loans taken from or secured by (e.g., by assignment) such a Policy are treated as distributions and taxed accordingly. If the Policy is part of a collateral assignment split dollar arrangement, the initial assignment as well as increases in cash value during the assignment may be distributions and taxable.

• A 10% additional federal income tax is imposed on the amount included in income except where the distribution or loan is made when you have attained age 59 ½ or are disabled, or where the distribution is part of a series of substantially equal periodic payments for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and the beneficiary.

• If a Policy becomes a MEC, distributions that occur during the Policy year will be taxed as distributions from a MEC. In addition, distributions from a Policy within two years before it becomes a MEC will be taxed in this manner. This means that a distribution from a Policy that is not a MEC at the time when the distribution is made could later become taxable as a distribution from a MEC.

Distributions (other than Death Benefits) from Policies that are not MECs. Distributions from a Policy that is not a MEC are generally treated first as a recovery of your investment in the Policy, and as taxable income after the recovery of all investment in the Policy. However, certain distributions which must be made in order to enable the Policy to continue to qualify as a life insurance policy for federal income tax purposes if Policy benefits are reduced during the first 15 Policy years may be treated in whole or in part as ordinary income subject to tax. Distributions from or loans from or secured by a Policy that is not a MEC are not subject to the 10% additional tax.

Policy Loans. Loans from or secured by a Policy that is not a MEC are generally not treated as distributions. Instead, such loans are treated as indebtedness. If a loan from a Policy that is not a MEC is outstanding when the Policy is surrendered or lapses, the amount of the outstanding indebtedness will be taxed as if it were a distribution at that time. The tax consequences associated with Policy loans outstanding after the first 10 Policy years with preferred loan rates are less clear and a tax advisor should be consulted about such loans.

Multiple Policies. All MECs that we issue (or that our affiliates issue) to the same owner during any calendar year are treated as one MEC for purposes of determining the amount includible in the owner’s income when a taxable distribution occurs.

Deductibility of Policy Loan Interest. In general, interest you pay on a loan from a Policy will not be deductible. Before taking out a Policy loan, you should consult a tax advisor as to the tax consequences.

Investment in the Policy. Your investment in the Policy is generally the sum of the premium payments you made. When a distribution from the Policy occurs, your investment in the Policy is reduced by the amount of the distribution that is tax-free.

Withholding. To the extent that Policy distributions are taxable, they are generally subject to withholding for the recipient’s federal income tax liability. The federal income tax withholding rate is generally 10% of the taxable amount of the distribution. Withholding applies only if the taxable amount of all distributions are at least $200 during a taxable year. Some states also require withholding for state income taxes. With the exception of amounts that represent eligible rollover distributions from Pension Plans and 403(b) arrangements, which are subject to mandatory withholding of 20% for federal tax, recipients can generally elect, however, not to have tax withheld from distributions. If the taxable distributions are delivered to foreign countries, withholding will apply unless you certify to us that you are not a U.S. person residing abroad. Taxable distributions to non-resident aliens are generally subject to withholding at a 30% rate unless withholding is eliminated under an international treaty with the United States. The payment of death benefits is generally not subject to withholding.

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Business Uses of the Policy. The Policy may be used in various arrangements, including nonqualified deferred compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, retiree medical benefit plans and others. The tax consequences of such plans and business uses of the Policy may vary depending on the particular facts and circumstances of each individual arrangement and business uses of the Policy. Therefore, if you are contemplating using the Policy in any arrangement the value of which depends in part on its tax consequences, you should be sure to consult a tax advisor as to tax attributes of the arrangement. In recent years, moreover, Congress has adopted new rules relating to life insurance owned by businesses and the IRS has recently issued new guidelines on split-dollar arrangements. Any business contemplating the purchase of a new Policy or a change in an existing Policy should consult a tax advisor.

Alternative Minimum Tax. There also may be an indirect tax upon the income in the Policy or the proceeds of a Policy under the federal corporate alternative minimum tax, if the policyowner is subject to that tax.

Terminal Illness Accelerated Death Benefit Rider. We believe that the single-sum payment we make under this rider should be fully excludible from the gross income of the beneficiary, except in certain business contexts. You should consult a tax advisor about the consequences of adding this rider to your Policy, or requesting a single-sum payment.

Continuation of Policy Beyond Age 100. The tax consequences of continuing the Policy beyond the insured’s attained age 100 are unclear and may include taxation of the gain in the Policy at the original maturity date or the taxation of the death benefit in whole or in part. You should consult a tax advisor if you intend to keep the Policy in force beyond the insured’s attained age 100.

Other Tax Considerations. The transfer of the Policy or designation of a beneficiary may have federal, state, and/or local transfer and inheritance tax consequences, including the imposition of gift, estate, and generation-skipping transfer taxes. The individual situation of each owner or beneficiary will determine the extent, if any, to which federal, state, and local transfer and inheritance taxes may be imposed and how ownership or receipt of Policy proceeds will be treated for purposes of federal, state and local estate, inheritance, generation-skipping and other taxes.

Special Rules for Pension Plans and Section 403(b) Arrangements. If the Policy is purchased in connection with a section 401(a) qualified pension or profit sharing plan, including a section 401(k) plan, or in connection with a section 403(b) plan or program, federal and state and estate tax consequences could differ from those stated in this prospectus. The purchase may also affect the qualified status of the plan. You should be consult a qualified tax advisor in connection with such purchase.

Policies owned under these types of plans may be subject to the Employee Retirement Income Security Act of 1974, or ERISA, which may impose additional requirements on the purchase of policies by such plans. You should consult a qualified advisor regarding ERISA.

Other Policy Information

Benefits at Maturity

If the insured is living and the Policy is in force, the Policy will mature on the Policy anniversary nearest the insured’s 95^th birthday. This is the maturity date. On the maturity date we will pay you the net surrender value of your Policy.

If your Policy was issued before May 1, 1999, and you send a written request to our office, we may extend the maturity date if your Policy is still in force on the maturity date and there are no adverse tax consequences in doing so. You must submit a written request for the extension between 90 and 180 days prior to the maturity date. We must agree to the extension.

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If your Policy was issued on or after May 1, 1999, and you send a written request to our office, we will extend the maturity date if your Policy is still in force on the maturity date. Any riders in force on the scheduled maturity date will terminate on that date and will not be extended. Interest on any outstanding Policy loans will continue to accrue during the period for which the maturity date is extended. You must submit a written request to our office, for the extension between 90 and 180 days prior to the maturity date and elect one of the following:

1. If you had previously selected death benefit Option B or C, we will change the death benefit to Option A. On each valuation date, we will adjust the specified amount to equal the cash value, and the limitation percentage will be 100%. We will not permit you to make additional premium payments unless it is required to prevent the Policy from lapsing. We will waive all future monthly deductions; or

2. We will automatically extend the maturity date until the next Policy anniversary. You must submit a written request to our office, between 90 and 180 days before each subsequent Policy anniversary, stating that you wish to extend the maturity date for another Policy year. All benefits and charges will continue as set forth in your Policy. We will charge the then current cost of insurance rates.

If you choose 2 above, you may change your election to 1 above at any time. However, if you choose 1 above, then you may not change your election to 2 above.

The tax consequences of extending the maturity date beyond the 100^th birthday of the insured are uncertain and may include taxation of the gain in the Policy at the original maturity date or taxation of the death benefit in whole or in part. You should consult a tax advisor as to those consequences.

Payments We Make

We usually pay the amounts of any surrender, cash withdrawal, death benefit proceeds, or settlement options within seven calendar days after we receive all applicable written notices and/or due proofs of death at our office. However, we can postpone such payments if:

• the NYSE is closed, other than customary weekend and holiday closing, or trading on the NYSE is restricted as determined by the SEC; or

• the SEC permits, by an order, the postponement for the protection of policyowners; or

• the SEC determines that an emergency exists that would make the disposal of securities held in the separate account or the determination of their value not reasonably practicable.

If you have submitted a recent check or draft, we have the right to defer payment of surrenders, cash withdrawals, death benefit proceeds, or payments under a settlement option until such check or draft has been honored. We also reserve the right to defer payment of transfers, cash withdrawals, death benefit proceeds, or surrenders from the fixed account for up to six months.

If mandated under applicable law, we may be required to reject a premium payment and/or block a policyowner’s account and thereby refuse to pay any request for transfers, withdrawals, surrenders, loans or death benefits until instructions are received from the appropriate regulators. We may also be required to provide additional information about you or your account to governmental regulators.

Split Dollar Arrangements

You may enter into a split dollar arrangement with another owner or another person(s) whereby the payment of premiums and the right to receive the benefits under the Policy (i.e., cash surrender value of insurance proceeds) are split between the parties. There are different ways of allocating these rights.

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For example, an employer and employee might agree that under a Policy on the life of the employee, the employer will pay the premiums and will have the right to receive the cash surrender value. The employee may designate the beneficiary to receive any insurance proceeds in excess of the cash surrender value. If the employee dies while such an arrangement is in effect, the employer would receive from the insurance proceeds the amount that he would have been entitled to receive upon surrender of the Policy and the employee’s beneficiary would receive the balance of the proceeds.

No transfer of Policy rights pursuant to a split dollar arrangement will be binding on us unless in writing and received by us at our office. Split dollar arrangements may have tax consequences. You should consult a tax advisor before entering into a split dollar arrangement.

On July 30, 2002, President Bush signed into law significant accounting and corporate governance reform legislation, known as the Sarbanes-Oxley Act of 2002 (the “Act”). The Act prohibits, with limited exceptions, publicly-traded companies, including non-U.S. companies that have securities listed on exchanges in the United States, from extending, directly or through a subsidiary, many types of personal loans to their directors or executive officers. It is possible that this prohibition may be interpreted as applying to split-dollar life insurance policies for directors and executive officers of such companies, since such insurance arguably can be viewed as involving a loan from the employer for at least some purposes.

Although the prohibition on loans of publicly-traded companies is generally effective as of July 30, 2002, there is an exception for loans outstanding as of the date of enactment, so long as there is no material modification to the loan terms and the loan is not renewed after July 30, 2002. Any affected business contemplating the payment of a premium on an existing Policy, or the purchase of a new Policy, in connection with a split-dollar life insurance arrangement should consult legal counsel.

In addition, the IRS recently issued guidance that affects the tax treatment of split-dollar arrangements and the Treasury Department recently issued final regulations that would significantly affect the tax treatment of such arrangements. The IRS guidance and the final regulations affect all split dollar arrangements, not just those involving publicly-traded companies. Consult your qualified tax advisor with respect to the effect of this current and proposed guidance on your split dollar policy.

Policy Termination

Your Policy will terminate on the earliest of:

•      the maturity date;	•      the end of the grace period; or
•      the date the insured dies;	•      the date the Policy is surrendered.

Supplemental Benefits (Riders)

The following supplemental benefits (riders) are available and may be added to a Policy. Monthly charges for these riders are deducted from cash value as part of the monthly deduction. The riders available with the Policies do not build cash value and provide benefits that do not vary with the investment experience of the separate account. For purposes of the riders, the primary insured is the person insured under the Policy. These riders may not be available in all states and certain benefits and features may vary by state. Adding these supplemental benefits to an existing Policy or canceling them may have tax consequences and you should consult a tax advisor before doing so.

Children’s Insurance Rider

This rider provides a face amount on the primary insured’s children. Our current minimum face amount for this rider for issue ages 15 days – 18 years of age is $2,000. The maximum face amount is $10,000. At the age of 25 or upon the death of the primary insured, whichever happens first, this rider may be converted to a new

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policy with a maximum face amount of up to five times the face amount of the rider. We will pay a death benefit once we receive proof that the insured child died while both the rider and coverage were in force for that child. If the primary insured dies while the rider is in force, we will terminate the rider 31 days after the death, and we will offer a separate life insurance policy to each insured child.

Accidental Death Benefit Rider

Our current minimum face amount for this rider for issue ages 15-59 is $10,000. The maximum face amount available for this rider is $150,000 (up to 150% of specified amount).

Subject to certain limitations, we will pay a face amount if the primary insured’s death results solely from accidental bodily injury where:

• the death is caused by external, violent, and accidental means;

• the death occurs within 90 days of the accident; and

• the death occurs while the rider is in force.

The rider will terminate on the earliest of:

• the Policy anniversary nearest the primary insured’s 70^th birthday;

• the date the Policy terminates; or

• the Monthiversary when the rider terminates at the owner’s request.

Other Insured Rider

This rider insures the spouse and/or dependent children of the primary insured. Subject to the terms of the rider, we will pay the face amount of the rider to the primary insured. Our current minimum face amount for this rider for issue ages 0-80 is $10,000. The maximum face amount is the lesser of $500,000 or the amount of coverage on the primary insured. The maximum number of Other Insured Riders that is allowed on any one Policy is five (5). We will pay the rider’s face amount when we receive proof at our office of the other insured’s death. On any Monthiversary while the rider is in force, you may convert it to a new policy on the other insured’s life (without evidence of insurability).

Conditions to convert the rider:	•	your request must be in writing and sent to our office;
	•	the rider has not reached the anniversary nearest to the other insured’s 70th birthday;
	•	the new policy is any permanent insurance policy that we currently offer for conversion;
	•	subject to the minimum specified amount required for the new policy, the amount of the insurance under the new policy will equal the face amount in force under the rider as long as it meets the minimum face amount requirements of the original Policy; and
	•	we will base your premium on the other insured’s rate class under the rider.
Termination of the rider:	The rider will terminate on the earliest of:
	•	the maturity date of the Policy;
	•	the Policy anniversary nearest to the insured’s 95th birthday;

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• the date the Policy terminates for any reason except for death of the primary insured;

• the date of conversion of this rider; or

• the Monthiversary on which the rider is terminated upon written request by the owner.

Disability Waiver Rider

Subject to certain conditions, we will waive the Policy’s monthly deductions while the insured is disabled. This rider may be purchased if your issue age is 15-55 years of age. We must receive proof that:

• the insured is totally disabled;

• the rider was in force when the insured became disabled;

• the insured became disabled before the anniversary nearest their 60^th birthday; and

• the insured is continuously disabled for at least six months.

We will not waive any deduction that becomes due more than one year before we receive written notice of your claim.

Disability Waiver and Income Rider

This rider has the same benefits as the Disability Waiver Rider, but adds a monthly income benefit for up to 120 months. This rider may be purchased if your issue age is 15-55 years of age. The minimum income amount for this rider is $10. The maximum income amount is the lesser of 0.2% of your specified amount or $300 per month.

Primary Insured Rider (“PIR”) and Primary Insured Rider Plus (“PIR Plus”)

Under the PIR and the PIR Plus, we provide term insurance coverage on a different basis from the coverage in your Policy.

Features of PIR and PIR Plus:	•	the rider increases the Policy’s death benefit by the rider’s face amount;
	•	the PIR may be purchased from issue ages 0-80;
	•	the PIR Plus may be purchased from issue ages 18-80;
	•	the PIR terminates when the insured turns 90, and the PIR Plus terminates when the insured turns 85;
	•	the minimum purchase amount for the PIR and PIR Plus is $25,000. There is no maximum purchase amount;
	•	we do not assess any additional surrender charge for PIR and PIR Plus;
	•	generally PIR and PIR Plus coverage costs less than the
		insurance coverage under the Policy, but has no cash value;
	•	you may cancel or reduce your rider coverage without decreasing your Policy’s specified amount; and
	•	you may generally decrease your specified amount without reducing your rider coverage.

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Conditions to convert the rider:	•	your request must be in writing and sent to our office;
	•	the rider has not reached the anniversary nearest to the primary insured’s 70th birthday;
	•	the new policy is any permanent insurance policy that we currently offer;
	•	subject to the minimum specified amount required for the new policy, the amount of the insurance under the new policy will equal the specified amount in force under the rider as long as it meets the minimum specified amount requirements of a Base Policy; and
	•	we will base your premium on the primary insured’s rate class under the rider.
Termination of the rider:		The rider will terminate on the earliest of:
	•	when the insured turns 90 for a PIR and when the insured turns 85 for a PIR Plus; or
	•	the date the Policy terminates; or
	•	the date you fully convert the rider; or
	•	the Monthiversary on which you terminate the rider by written request.

It may cost you less to reduce your PIR or PIR Plus coverage than to decrease your Policy’s specified amount, because we do not deduct a surrender charge in connection with your PIR or PIR Plus. It may cost you more to keep a higher specified amount under the Base Policy, because the specified amount may have a cost of insurance that is higher than the cost of the same amount of coverage under your PIR or PIR Plus.

You should consult your registered representative to determine if you would benefit from PIR or PIR Plus. We may discontinue offering PIR or PIR Plus at any time. We may also modify the terms of these riders for new policies.

Terminal Illness Accelerated Death Benefit Rider

This rider allows us to pay all or a portion of the death benefit once we receive satisfactory proof that the insured is ill and has a life expectancy of one year or less. A doctor must certify the insured’s life expectancy.

We will pay a “single-sum benefit” equal to:

• the death benefit on the date we pay the single-sum benefit; multiplied by

• the election percentage of the death benefit you elect to receive; divided by

• 1 + i (“i” equals the current yield on 90-day Treasury bills or the Policy loan interest rate, whichever is greater) (“discount factor”); minus

• any indebtedness at the time we pay the single-sum benefit, multiplied by the election percentage.

The maximum terminal illness death benefit used to determine the single-sum benefit as defined above is equal to:

• the death benefit available under the Policy once we receive satisfactory proof that the insured is ill; plus

• the benefit available under any PIR or PIR Plus in force.

• a single-sum benefit may not be greater than $500,000.

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The election percentage is a percentage that you select. It may not be greater than 100%.

We will not pay a benefit under the rider if the insured’s terminal condition results from self-inflicted injuries that occur during the period specified in your Policy’s suicide provision.

The rider terminates at the earliest of:

• the date the Policy terminates;

• the date a settlement option takes effect;

• the date we pay a single-sum benefit; or

• the date you terminate the rider.

We do not assess an administrative charge for this rider; however, we do reduce the single sum benefit by a discount factor to compensate us for lost income due to the early payment of the death benefit. This rider may not be available in all states, or its terms may vary depending on a state’s insurance law requirements.

The tax consequences of adding this rider to an existing Policy or requesting payment under the rider are uncertain and you should consult a tax advisor before doing so.

Additional Information

Sale of the Policies

We will pay sales commissions to our life insurance agents who are registered representatives of broker-dealers. Other payments may be made for other services related to sale of the Policies.

We have entered into a distribution agreement with AFSG Securities Corporation (“AFSG”) for the distribution and sale of the Policies. AFSG is affiliated with us. AFSG may sell the Policies by entering into selling agreements with other broker-dealers who in turn may sell the Policies through their sales representatives.

See “Sale of the Policies” in the SAI for more information concerning compensation paid for the sale of Policies.

Legal Proceedings

Western Reserve, like other life insurance companies, is involved in lawsuits, including class action lawsuits. In some lawsuits involving 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, at the present time, it appears that there are no pending or threatened lawsuits that are likely to have a material adverse impact on the separate account, on AFSG’s ability to perform under its principal underwriting agreement, or on Western Reserve’s ability to meet its obligations under the Policy.

Financial Statements

The financial statements of Western Reserve and the separate account are included in the SAI.

Performance Data

Rates of Return

The average rates of return in Table 1 reflect each subaccount’s actual historical investment performance. The total return of a subaccount assumes that an investment has been held in the subaccount for various periods of time, including a period measured from the date the first subaccount of the separate account investing in the underlying portfolios began operations. When the first subaccount investing in the underlying portfolios has been

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in operation for 1, 3, 5 and 10 years, the total return for these periods will be provided, adjusted to reflect the subaccount charges for this Policy. We do not show performance for subaccounts in operation for less than six months. This information does not represent or project future investment performance.

Some portfolios began operation before their corresponding subaccount. For these portfolios, we have included in Table 2 below adjusted portfolio performance from the portfolio’s inception date. The adjusted portfolio performance is designed to show the performance that would have resulted if the subaccount had been in operation during the time the portfolio was in operation.

The numbers reflect the annual mortality and expense risk charge, investment management fees and direct fund expenses.

These rates of return do not reflect other charges that are deducted under the Policy or from the separate account (such as the premium expense charge, monthly deduction or the surrender charge). If these charges were deducted, performance would be significantly lower. These rates of return are not estimates, projections or guarantees of future performance.

We also show below comparable figures for the unmanaged Standard & Poor’s Index of 500 Common Stocks (“S&P 500”), a widely used measure of stock market performance. The S&P 500 does not reflect any deduction for the expenses of operating and managing an investment portfolio.

Table 1

Average Annual Subaccount Total Return For the Periods Ended on December 31, 2003

Subaccount	1 Year		3 Years		5 Years		10 Years or Inception		Subaccount Inception Date
WRL Van Kampen Emerging Growth	27.01	%	(17.70	)%	0.21	%	9.92	%	03/01/93
WRL T. Rowe Price Small Cap	39.15	%	(3.58	)%	N/A		0.03	%	07/01/99
WRL Third Avenue Value	36.04	%	7.73	%	14.00	%	10.07	%	01/02/98
WRL American Century International	24.17	%	(9.71	)%	(5.15	)%	(1.26	)%	01/02/97
WRL Great Companies – TechnologySM	49.61	%	(16.92	)%	N/A		(22.97	)%	05/01/00
WRL Janus Growth†	30.82	%	(13.53	)%	(6.35	)%	7.78	%	10/02/86
WRL Marsico Growth	25.21	%	(7.87	)%	N/A		(4.71	)%	07/01/99
WRL Great Companies – AmericaSM	23.56	%	(5.45	)%	N/A		(1.22	)%	05/01/00
WRL Salomon All Cap	33.95	%	0.37	%	N/A		5.43	%	07/01/99
WRL T. Rowe Price Equity Income	25.73	%	(1.32	)%	N/A		(0.93	)%	07/01/99
WRL Transamerica Value Balanced	19.09	%	1.08	%	2.33	%	7.26	%	01/03/95
WRL Clarion Real Estate Securities	34.53	%	14.98	%	13.24	%	8.34	%	05/01/98
WRL Federated Growth & Income	25.71	%	12.99	%	11.82	%	11.33	%	03/01/94
WRL AEGON Bond†	3.35	%	6.46	%	4.99	%	5.25	%	10/02/86
WRL Transamerica Money Market(1) †	(0.11	)%	1.15	%	2.50	%	3.24	%	10/02/86
WRL Templeton Great Companies
Global	22.15	%	(11.86	)%	(1.04	)%	8.23	%	03/01/94
WRL Munder Net50	65.12	%	(9.35	)%	N/A		(12.05	)%	07/01/99
WRL Asset Allocation – Conservative
Portfolio	21.82	%	N/A		N/A		5.93	%	05/01/02
WRL Asset Allocation – Moderate
Portfolio	23.75	%	N/A		N/A		4.95	%	05/01/02
WRL Asset Allocation – Moderate
Growth Portfolio	26.03	%	N/A		N/A		3.99	%	05/01/02

55

WRL Asset Allocation – Growth
Portfolio	29.63	%	N/A		N/A		3.13	%	05/01/02
WRL Transamerica Convertible
Securities	22.56	%	N/A		N/A		7.92	%	05/01/02
WRL PIMCO Total Return	3.97	%	N/A		N/A		5.75	%	05/01/02
WRL Transamerica Equity	30.05	%	N/A		N/A		6.43	%	05/01/02
WRL Transamerica Growth
Opportunities	30.04	%	N/A		N/A		1.75	%	05/01/02
WRL Mercury Large Cap Value	28.62	%	2.10	%	5.39	%	7.25	%	05/01/96
WRL J.P. Morgan Mid Cap Value	30.25	%	2.36	%	N/A		4.47	%	07/01/99
WRL Transamerica Balanced	12.88	%	N/A		N/A		3.84	%	05/01/02
Potomac Dow 30 Plus Portfolio	N/A		N/A		N/A		21.52	%	05/01/03
Potomac OTC Plus Portfolio	N/A		N/A		N/A		25.16	%	05/01/03
Access U.S. Government Money
Market Portfolio	N/A		N/A		N/A		(0.57	)%	05/01/03
Wells S&P REIT Index Portfolio	N/A		N/A		N/A		22.39	%	05/01/03
Fidelity VIP Growth Opportunities
Portfolio	28.25	%	(5.70	)%	N/A		(8.63	)%	05/01/00
Fidelity VIP Contrafund® Portfolio	27.05	%	(0.42	)%	N/A		(2.06	)%	05/01/00
Fidelity VIP Equity-Income Portfolio	28.87	%	(0.20	)%	N/A		2.44	%	05/01/00
S&P 500†	26.38	%	(5.55	)%	(1.98	)%	9.07	%	10/02/86

† Shows ten year performance.

(1) The current yield more closely reflects the current earnings of the subaccount than the total return. An investment in this subaccount is not insured or guaranteed by the FDIC. While this subaccount’s investment in shares of the underlying portfolio seeks to preserve its value at $1.00 per share, it is possible to lose money by investing in this subaccount.

Table 2

Adjusted Historical Portfolio Average Annual Total Return For the Periods Ended on December 31, 2003

Portfolio	1 Year		3 Years		5 Years		10 Years or Inception		Portfolio Inception Date
Van Kampen Emerging Growth	27.01	%	(17.70	)%	(0.21	)%	9.81	%	03/01/93
T. Rowe Price Small Cap	39.15	%	(3.58	)%	N/A		2.45	%	05/03/99
Third Avenue Value	36.04	%	7.72	%	13.99	%	10.06	%	01/02/98
American Century International	24.17	%	(9.72	)%	(5.15	)%	(1.27	)%	01/02/97
Great Companies – TechnologySM	49.61	%	(16.93	)%	NA		(22.96	)%	05/01/00
Janus Growth†	30.82	%	(13.54	)%	(6.35	)%	7.79	%	10/02/86
Marsico Growth	25.21	%	(7.88	)%	N/A		(3.86	)%	05/03/99
Great Companies – AmericaSM(10)	23.56	%	(5.46	)%	N/A		(1.23	)%	05/01/00
Salomon All Cap	33.95	%	0.36	%	N/A		6.84	%	05/03/99
T. Rowe Price Equity Income(5)	24.46	%	2.88	%	N/A		11.29	%	05/03/99
Transamerica Value Balanced(12)	19.09	%	0.98	%	2.32	%	7.26	%	01/03/95
Clarion Real Estate Securities	34.53	%	14.97	%	13.23	%	8.33	%	05/01/98
Federated Growth & Income	25.71	%	12.98	%	11.81	%	11.30	%	03/01/94
AEGON Bond†	3.35	%	6.45	%	4.98	%	5.24	%	10/02/86
Transamerica Money Market(1) †	(0.11	)%	1.16	%	2.46	%	3.19	%	10/02/86
Templeton Great Companies Global(6) †	22.15	%	(11.86	)%	(1.05	)%	8.23	%	12/03/92
Munder Net50	65.10	%	(9.35	)%	N/A		1.41	%	05/03/99
Asset Allocation – Conservative
Portfolio	21.82	%	N/A		N/A		5.92	%	05/01/02
Asset Allocation – Moderate Portfolio	23.75	%	N/A		N/A		4.94	%	05/01/02

56

Asset Allocation – Moderate Growth
Portfolio	26.03	%	N/A		N/A		3.99	%	05/01/02
Asset Allocation – Growth Portfolio	29.63	%	N/A		N/A		3.13	%	05/01/02
Transamerica Convertible Securities	22.56	%	N/A		N/A		7.92	%	05/01/02
PIMCO Total Return	3.97	%	N/A		N/A		5.74	%	05/01/02
Transamerica Equity(3)(11) †	30.05	%	(6.48	)%	(0.01	)%	15.53	%	02/26/69
Transamerica Growth Opportunities(4)(13)	30.04	%	N/A		N/A		8.02	%	05/02/01
Mercury Large Cap Value(7)	28.62	%	2.09	%	5.38	%	7.25	%	05/01/96
J.P. Morgan Mid Cap Value(8)	30.25	%	2.36	%	N/A		5.41	%	05/03/99
Transamerica Balanced(9)	12.88	%	N/A		N/A		3.84	%	05/01/02
Potomac Dow 30 Plus Portfolio(2)	N/A		N/A		N/A		20.17	%	05/01/03
Potomac OTC Plus Portfolio(2)	N/A		N/A		N/A		22.96	%	05/01/03
Access U.S. Government Money
Market Portfolio(2)	N/A		N/A		N/A		(0.60	)%	05/01/03
Wells S&P REIT Index Portfolio(2)	N/A		N/A		N/A		20.27	%	05/01/03
Fidelity VIP Equity-Income†	28.87	%	(0.21	)%	2.31	%	9.73	%	10/09/86
Fidelity VIP Contrafund®	27.05	%	(0.43	)%	2.32	%	12.80	%	01/03/95
Fidelity VIP Growth Opportunities	28.25	%	(5.64	)%	(6.59	)%	6.35	%	01/03/95
S&P 500†	26.38	%	(5.55	)%	(1.98	)%	9.07	%	10/02/86

† Shows ten year performance.

(1) The current yield more closely reflects the current earnings of the subaccount than the total return. An investment in this subaccount is not insured or guaranteed by the FDIC. While this subaccount’s investment in shares of the underlying portfolio seeks to preserve its value at $1.00 per share, it is possible to lose money by investing in this subaccount.

(2) Not annualized.

(3) The historical financial information for periods prior to May 1, 2002 has been derived from the financial history of the predecessor portfolio, Growth Portfolio of Transamerica Variable Insurance Fund, Inc.

(4) The historical financial information for periods prior to May 1, 2002 has been derived from the financial history of the predecessor portfolio, Small Company Portfolio of Transamerica Variable Insurance Fund, Inc.

(5) The historical financial information for periods prior to May 1, 2002 has been derived from the financial history of the predecessor portfolio, T. Rowe Price Equity Income Portfolio of the Endeavor Series Trust.

(6) Effective May 1, 2004, Templeton Great Companies Global merged into Janus Global and was renamed Templeton Great Companies Global.

(7) Effective May 1, 2004, PBHG/NWQ Value Select was renamed Mercury Large Cap Value.

(8) Effective May 1, 2004, Dreyfus Mid Cap was renamed J. P. Morgan Mid Cap Value.

(9) Effective May 1, 2004, Janus Balanced was renamed Transamerica Balanced.

(10) Effective May 1, 2004, GE U.S. Equity merged into Great Companies – America^SM.

(11) Effective May 1, 2004, Alger Aggressive Growth merged into Transamerica Equity.

(12) Effective May 1, 2004, LKCM Strategic Total Return merged into Transamerica Value Balanced.

(13) Effective May 1, 2004, PBHG Mid Cap Growth merged into Transamerica Growth Opportunities.

The annualized yield for the WRL Transamerica Money Market subaccount for the seven days ended December 31, 2003 was (0.22)%.

Additional information regarding the investment performance of the portfolios appears in the fund prospectuses, which accompany this prospectus.

57

Table of Contents of the Statement of Additional Information

Glossary

The Policy – General Provisions

Ownership Rights

Our Right to Contest the Policy

Suicide Exclusion

Misstatement of Age or Gender

Modifying the Policy

Mixed and Shared Funding

Addition, Deletion, or Substitution of Investments

Additional Information

Settlement Options

Additional Information about Western Reserve and the Separate Account

Legal Matters

Variations in Policy Provisions

Personalized Illustrations of Policy Benefits

Sale of the Policies

Report to Owners

Records

Independent Auditors

Experts

Financial Statements

Underwriters

Underwriting Standards

IMSA

Performance Data

Other Performance Data in Advertising Sales Literature

Western Reserve’s Published Ratings

Index to Financial Statements

WRL Series Life Account

Western Reserve Life Assurance Co. of Ohio

58

Glossary
accounts	The options to which you can allocate your money. The accounts include the fixed account and the subaccounts in the separate account.
attained age	The issue age of the person insured, plus the number of completed years since the Policy date.
beneficiary(ies)	The person or persons you select to receive the death benefit from this Policy. You name the primary beneficiary and contingent beneficiaries.
cash value	The sum of your Policy’s value in the subaccounts and the fixed account. If there is a Policy loan outstanding, the cash value includes any amounts held in our fixed account to secure the Policy loan.
death benefit proceeds	The amount we will pay to the beneficiary(ies) on the insured’s death. We will reduce the death benefit proceeds by the amount of any outstanding loan amount, and any due and unpaid monthly deductions. We will increase the death benefit proceeds by any interest you paid in advance on the loan for the period between the date of death and the next Policy anniversary.
fixed account	An option to which you may allocate net premiums and cash value. We guarantee that any amounts you allocate to the fixed account will earn interest at a declared rate. New Jersey: the fixed account is not available to you if your Policy was issued in the State of New Jersey.
free-look period	The period during which you may return the Policy and receive a refund as described in this prospectus. The length of the free-look period varies by state. The free-look period is listed in the Policy.
funds	Investment companies which are registered with the U.S. Securities and Exchange Commission. The Policy allows you to invest in the portfolios of the funds through our subaccounts. We reserve the right to add other registered investment companies to the Policy in the future.
in force	While coverage under the Policy is active and the insured’s life remains insured.
initial premium	The amount you must pay before insurance coverage begins under this Policy. The initial premium is shown on the schedule page of your Policy.
insured	The person whose life is insured by this Policy.
issue age	The insured’s age on his or her birthday nearest to the Policy date.
lapse	When life insurance coverage ends because you do not have enough cash value in the Policy to pay the monthly deduction, the surrender charge and any outstanding loan amount, and you have not made a sufficient payment by the end of a grace period.
loan amount	The total amount of all outstanding Policy loans, including both principal and interest due.

59

loan reserve account	A part of the fixed account to which amounts are transferred as collateral for Policy loans.
maturity date	The Policy anniversary nearest the insured’s 95th birthday if the insured is living and the Policy is still in force. It is the date when life insurance coverage under this Policy ends. You may continue coverage, at your option, under the Policy’s extended maturity date benefit provision.
minimum monthly guarantee premium	The amount shown on your Policy schedule page (unless changed when you change death benefit options, or decrease the specified amount or increase or add a rider) that we use during the no lapse period to determine whether a grace period will begin. We will adjust the minimum monthly guarantee premium if you change death benefit options, decrease the specified amount, or add, increase or decrease a rider, and you may need to pay additional premiums in order to keep the no lapse guarantee in place. A grace period will begin whenever your net surrender value is not enough to meet monthly deductions.
Monthiversary	This is the day of each month when we determine Policy charges and deduct them from cash value. It is the same date each month as the Policy date. If there is no valuation date in the calendar month that coincides with the Policy date, the Monthiversary is the next valuation date.
monthly deduction	The monthly Policy charge, plus the monthly cost of insurance, plus the monthly charge for any riders added to your Policy, plus, if any, the pro rata decrease charge incurred as a result of a decrease in your specified amount.
net premium	The part of your premium that we allocate to the fixed account or the subaccounts. The net premium is equal to the premium you paid minus the premium expense charge and the premium collection charge.
net surrender value	The amount we will pay you if you surrender the Policy while it is in force. The net surrender value on the date you surrender is equal to: the cash value, minus any surrender charge, minus any outstanding loan amount, plus any interest you paid in advance on the loan for the period between the date of surrender and the next Policy anniversary.
no lapse date	For a Policy issued to any insured ages 0-60, the no lapse date is either the anniversary on which the insured’s attained age is 65 or the twentieth Policy anniversary, whichever is earlier. For a Policy issued to an insured ages 61-80, the no lapse date is the fifth Policy anniversary. The no lapse date is specified in your Policy.
no lapse period	The period of time between the Policy date and the no lapse date during which the Policy will not lapse if certain conditions are met.
NYSE	The New York Stock Exchange.
office	Our administrative office and mailing address is P.O. Box 5068, Clearwater, Florida 33758-5068. Our street address is 570 Carillon Parkway, St. Petersburg, Florida 33716. Our phone number is 1-800-851-9777. Our hours are Monday - Friday from 8:30 a.m. - 7:00 p.m. Eastern time.
planned periodic premium	A premium payment you make in a level amount at a fixed interval over a specified period of time.

60

Policy date	The date when our underwriting process is complete, full life insurance coverage goes into effect, we begin to make the monthly deductions, and your initial net premium is allocated to the WRL Transamerica Money Market subaccount. The Policy date is shown on the schedule page of your Policy. We measure Policy months, years, and anniversaries from the Policy date.
portfolio	One of the separate investment portfolios of a fund.
premiums	All payments you make under the Policy other than loan repayments.
pro rata decrease charge	Surrender charge that may be imposed upon a decrease in specified amount during the first 15 Policy years.
record date	The date we record your Policy on our books as an in force Policy and we allocate your cash value from the WRL Transamerica Money Market subaccount to the accounts you selected on your application.
separate account	The WRL Series Life Account. It is a separate investment account that is divided into subaccounts. We established the separate account to receive and invest net premiums under the Policy and other variable life insurance policies we issue.
specified amount	The minimum death benefit we will pay under the Policy provided the Policy is in force. It is the amount shown on the Policy’s schedule page, unless you decrease the specified amount. In addition, we will reduce the specified amount by the dollar amount of any cash withdrawal if you choose Option A (level) death benefit.
subaccount	A subdivision of the separate account that invests exclusively in shares of one investment portfolio of a fund.
surrender charge	If, during the first 15 Policy years, you fully surrender the Policy, we will deduct a surrender charge from the cash value.
termination	When the insured’s life is no longer insured under the Policy.
valuation date	Each day the New York Stock Exchange is open for trading. Western Reserve is open for business whenever the New York Stock Exchange is open.
valuation period	The period of time over which we determine the change in the value of the subaccounts. Each valuation period begins at the close of normal trading on the New York Stock Exchange (currently 4:00 p.m. Eastern time on each valuation date) and ends at the close of normal trading of the New York Stock Exchange on the next valuation date.
we, us, our (Western Reserve)	Western Reserve Life Assurance Co. of Ohio.
written notice	The written notice you must sign and send us to request or exercise your rights as owner under the Policy. To be complete, it must: (1) be in a form we accept, (2) contain the information and documentation that we determine we need to take the action you request, and (3) be received at our office.
you, your (owner or policyowner)	The person entitled to exercise all rights as owner under the Policy.

61

Appendix A

Surrender Charge Per Thousand

(Based on the gender and rate class of the insured)

Issue Standard/ Age	Male Ultimate Select/ Select	Male Ultimate Standard/ Standard	Male/ Female Juvenile	Female Ultimate Select/ Select	Female Ultimate Standard/ Standard
0	N/A	N/A	11.76	N/A	N/A
1	N/A	N/A	8.16	N/A	N/A
2	N/A	N/A	8.16	N/A	N/A
3	N/A	N/A	7.92	N/A	N/A
4	N/A	N/A	7.68	N/A	N/A
5	N/A	N/A	7.68	N/A	N/A
6	N/A	N/A	7.68	N/A	N/A
7	N/A	N/A	7.68	N/A	N/A
8	N/A	N/A	7.68	N/A	N/A
9	N/A	N/A	7.68	N/A	N/A
10	N/A	N/A	7.68	N/A	N/A
11	N/A	N/A	7.68	N/A	N/A
12	N/A	N/A	7.68	N/A	N/A
13	N/A	N/A	7.92	N/A	N/A
14	N/A	N/A	8.16	N/A	N/A
15	N/A	N/A	8.40	N/A	N/A
16	N/A	N/A	8.52	N/A	N/A
17	N/A	N/A	8.88	N/A	N/A
18	8.72	9.20		8.72	9.20
19	8.84	9.32		8.84	9.32
20	8.96	9.44		8.96	9.44
21	9.16	9.88		9.16	9.64
22	9.32	10.04		9.32	9.80
23	9.52	10.24		9.52	10.00
24	9.68	10.40		9.68	10.40
25	9.88	10.84		9.88	10.60
26	10.56	11.28		10.32	11.04
27	11.00	11.72		10.76	11.48
28	11.40	12.12		11.16	12.12
29	12.08	12.80		11.84	12.56
30	12.52	13.24		12.28	13.00
31	13.04	14.00		12.80	13.52
32	13.76	14.48		13.52	14.24
33	14.28	15.24		14.04	14.76
34	14.76	15.96		14.52	15.48
35	15.52	16.48		15.28	16.00
36	16.20	17.40		15.96	16.92
37	17.20	18.40		16.72	17.92
38	18.12	19.56		17.64	18.60
39	19.08	20.76		18.36	19.56

62

Issue Standard/ Age	Male Ultimate Select/ Select	Male Ultimate Standard/ Standard	Female Ultimate Select/ Select	Female Ultimate Standard/ Standard
40	20.28	21.96	19.32	20.52
41	21.64	23.56	20.68	22.12
42	23.08	25.24	22.12	23.80
43	24.44	27.08	23.15	25.40
44	26.04	29.16	23.86	26.96
45	27.44	31.04	24.59	27.83
46	28.72	32.80	25.38	28.76
47	29.84	34.56	26.22	29.73
48	31.00	36.32	27.11	30.75
49	32.24	38.32	28.04	31.84
50	33.56	40.56	29.05	32.99
51	34.98	42.56	30.11	34.20
52	36.49	45.24	31.24	35.48
53	38.10	47.68	32.45	36.84
54	39.83	50.84	33.72	38.28
55	41.68	53.28	35.09	39.79
56	43.63	55.79	36.54	41.39
57	45.74	57.00	38.08	43.06
58	47.98	57.00	39.74	44.88
59	50.38	57.00	41.54	46.85
60	52.97	57.00	43.47	48.97
61	55.74	57.00	45.57	51.26
62	57.00	57.00	47.82	53.73
63	57.00	57.00	50.26	56.41
64	57.00	57.00	52.88	57.00
65	57.00	57.00	55.68	57.00
66 and over	57.00	57.00	57.00	57.00

63

Appendix B

Illustrations

The following illustrations show how certain values under a sample Policy would change with different rates of fictional investment performance over an extended period of time. In particular, the illustrations show how the death benefit, cash value, and net surrender value under a Policy issued to an insured of a given age, would change over time if the premiums indicated were paid and the return on the assets in the subaccounts were a uniform gross annual rate (before any expenses) of 0%, 6% or 10%. The tables illustrate Policy value that would result based on assumptions that you pay the premiums indicated, you do not change your specified amount, and you do not take any cash withdrawals or Policy loans. The values under the Policy will be different from those shown even if the returns averaged 0%, 6% or 10%, but fluctuated over and under those averages throughout the years shown.

We based the illustration on page 65 on a Policy for an insured who is a 30 year old male in the Ultimate Select rate class, annual premium paid on the first day of each Policy year of $2,500, a $300,000 initial specified amount and death benefit Option A. The illustration on that page also assumes cost of insurance charges based on our current cost of insurance rates.

The illustration on page 66 is based on the same factors of those on page 65, except the cost of insurance charges are based on the guaranteed cost of insurance rates and expenses (based on the 1980 Commissioners Standard Ordinary Mortality Table).

The amounts we show for the death benefits, cash values and net surrender values take into account all Policy, subaccount and portfolio fees assessed under the Policy and the timing of those charges. The current illustration uses the current charges for a Policy and the guaranteed illustration uses the guaranteed charges for a Policy. These fees are:

(1) the daily charge for assuming mortality and expense risks assessed against each subaccount. This charge is equivalent to an annual charge of 0.90% of the average net assets of the subaccounts during the first 15 Policy years. We intend to reduce this charge to 0.75% in the 16^th Policy year but we do not guarantee that we will do so, and we reserve the right to maintain this charge at the 0.90% level after the 15^th Policy year;

(2) estimated daily expenses equivalent to an effective arithmetic average annual expense level of 0.90% of the portfolios’ gross average daily net assets. The 0.90% gross average portfolio expense level assumes an equal allocation of amounts among the 32 subaccounts. We used annualized actual audited expenses incurred during 2003 for the portfolios to calculate the gross average annual expense level; and

(3) the premium expense charge (6.0% of all premium payments during the first ten Policy years and 2.5% of all premiums paid thereafter) and cash value charges using the current monthly Policy charge.

The hypothetical returns shown in the tables are provided only to illustrate the mechanics of a hypothetical policy and do not represent past or future investment rates of return. Tax charges that may be attributable to the separate account are not reflected because we are not currently making such charges. In order to produce after tax returns of 0%, 6% or 10% if such charges are made in the future, the separate account would have to earn a sufficient amount in excess of 0%, 6% or 10% or cover any tax charges. Your actual rates of return for a particular Policy likely will be more or less than the hypothetical investment rates of return. The actual return on your cash value will depend on factors such as the amounts you allocate to particular portfolios, the amounts deducted for the Policy’s monthly charges and other charges, the portfolios’ expense ratios, and your loan and withdrawal history, in addition to the actual investment experience of the portfolios.

We will furnish the owner, upon request, a personalized illustration reflecting the proposed insured’s age, gender, risk classification and desired Policy features. Contact your registered representative or our office. (See prospectus back cover – Inquiries.)

64

WRL FINANCIAL FREEDOM BUILDER

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

HYPOTHETICAL ILLUSTRATIONS

MALE ISSUE AGE 30

Specified Amount $300,000                     Annual Premium $2,500	Ultimate Slect Class Option Type A
Using Current Cost of Insurance Rates

	DEATH BENEFIT Assuming Hypothetical Gross and Net Annual Investment Return of			CASH VALUE Assuming Hypothetical Gross and Net Annual Investment Return of
End of Policy Year	0% (Gross) -0.90% (Net)	6% (Gross) 5.10% (Net)	10% (Gross) 9.10% (Net)	0% (Gross) -0.90% (Net)	6% (Gross) 5.10% (Net)	10% (Gross) 9.10% (Net)
1	300,000	300,000	300,000	1,828	1,953	2,037
2	300,000	300,000	300,000	3,620	3,985	4,238
3	300,000	300,000	300,000	5,373	6,097	6,613
4	300,000	300,000	300,000	7,091	8,294	9,181
5	300,000	300,000	300,000	8,775	10,581	11,958
6	300,000	300,000	300,000	10,420	12,957	14,955
7	300,000	300,000	300,000	10,027	15,424	18,192
8	300,000	300,000	300,000	13,590	17,981	21,681
9	300,000	300,000	300,000	15,114	20,636	25,449
10	300,000	300,000	300,000	16,579	23,374	29,499
15	300,000	300,000	300,000	23,289	38,748	55,279
20	300,000	300,000	300,000	27,961	56,398	92,746
25	300,000	300,000	300,000	31,995	78,290	149,422
30 (Age 60)	300,000	300,000	314,461	33,748	104,099	234,672
35 (Age 65)	300,000	300,000	441,811	32,530	134,649	362,140
40 (Age 70)	300,000	300,000	638,804	26,979	171,196	550,693
45 (Age 75)	300,000	300,000	889,303	16,188	216,629	831,124
50 (Age 80)	*	300,000	1,312,439	*	275,106	1,249,942
55 (Age 85)	*	368,674	1,960,793	*	351,118	1,867,422
60 (Age 90)	*	465,056	2,910,619	*	442,911	2,772,018
65 (Age 95)	*	562,487	4,161,441	*	556,917	4,120,239

NET SURRENDER VALUE

	Assuming Hypothetical Gross and Net Annual Investment Return of
End of Policy Year	0% (Gross) -0.90% (Net)	6% (Gross) 5.10% (Net)	10% (Gross) 9.10% (Net)	End of Policy Year	0% (Gross) -0.90% (Net)	6% (Gross) 5.10% (Net)	10% (Gross) 9.10% (Net)
1	—	—	—	20	27,961	56,398	92,746
2	—	229	482	25	31,995	78,290	149,422
3	1,617	2,341	2,857	30 (Age 60)	33,748	104,099	234,672
4	3,335	4,538	5,425	35 (Age 65)	32,530	134,649	362,140
5	5,019	6,825	8,202	40 (Age 70)	26,979	171,196	550,693
6	7,040	9,576	11,575	45 (Age 75)	16,188	216,629	831,124
7	9,022	12,419	15,187	50 (Age 80)	*	275,106	1,249,942
8	10,961	15,352	19,052	55 (Age 85)	*	351,118	1,867,422
9	12,860	18,383	23,196	60 (Age 90)	*	442,911	2,772,018
10	14,701	21,496	27,621	65 (Age 95)	*	556,917	4,120,239
15	23,289	38,748	55,279

* In the absence of an additional payment, the Policy would lapse.

65

WRL FINANCIAL FREEDOM BUILDER

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

HYPOTHETICAL ILLUSTRATIONS

MALE ISSUE AGE 30

Specified Amount $300,000 Annual Premium $2,500     Ultimate Select Class Option Type A            

Using Guaranteed Cost of Insurance Rates

	DEATH BENEFIT Assuming Hypothetical Gross and Net Annual Investment Return of			CASH VALUE Assuming Hypothetical Gross and Net Annual Investment Return of
End of Policy     Year	0% (Gross) -0.90% (Net)	6% (Gross) 5.10% (Net)	10% (Gross) 9.10% (Net)	0% (Gross) -0.90% (Net)	6% (Gross) 5.10% (Net)	10% (Gross) 9.10% (Net)
1	300,000	300,000	300,000	1,798	1,922	2,006
2	300,000	300,000	300,000	3,552	3,913	4,163
3	300,000	300,000	300,000	5,268	5,982	6,492
4	300,000	300,000	300,000	6,941	8,126	9,000
5	300,000	300,000	300,000	8,569	10,346	11,701
6	300,000	300,000	300,000	10,148	12,639	14,603
7	300,000	300,000	300,000	11,678	15,009	17,726
8	300,000	300,000	300,000	13,152	17,452	21,078
9	300,000	300,000	300,000	14,568	19,967	24,678
10	300,000	300,000	300,000	15,923	22,554	28,541
15	300,000	300,000	300,000	22,085	37,048	53,106
20	300,000	300,000	300,000	26,159	53,356	88,302
25	300,000	300,000	300,000	27,301	71,138	139,240
30 (Age 60)	300,000	300,000	300,000	23,564	89,213	214,286
35 (Age 65)	300,000	300,000	397,974	11,669	105,672	326,208
40 (Age 70)	*	300,000	565,670	*	116,393	487,647
45 (Age 75)	*	300,000	772,653	*	113,005	722,105
50 (Age 80)	*	300,000	1,121,263	*	72,375	1,067,869
55 (Age 85)	*	*	1,634,777	*	*	1,556,930
60 (Age 90)	*	*	2,341,702	*	*	2,230,192
65 (Age 95)	*	*	3,249,607	*	*	3,217,433

NET SURRENDER VALUE

	Assuming Hypothetical Gross and Net Annual Investment Return of
End of Policy Year	0% (Gross) -0.90% (Net)	6% (Gross) 5.10% (Net)	10% (Gross) 9.10% (Net)	End of Policy Year	0% (Gross) -0.90% (Net)	6% (Gross) 5.10% (Net)	10% (Gross) 9.10% (Net)
1	—	—	—	20	26,159	53,356	88,302
2	—	157	407	25	27,301	71,138	139,240
3	1,512	2,226	2,736	30 (Age 60)	23,564	89,213	214,286
4	3,185	4,370	5,244	35 (Age 65)	11,669	105,672	326,208
5	4,813	6,590	7,945	40 (Age 70)	*	116,393	487,647
6	6,767	9,258	11,223	45 (Age 75)	*	113,005	722,105
7	8,673	12,004	14,721	50 (Age 80)	*	72,375	1,067,869
8	10,523	14,822	18,449	55 (Age 85)	*	*	1,556,930
9	12,315	17,714	22,424	60 (Age 90)	*	*	2,230,192
10	14,045	20,676	26,663	65 (Age 95)	*	*	3,217,433
15	22,085	37,048	53,106

* In the absence of an additional payment, the Policy would lapse.

66

Prospectus Back Cover

Personalized Illustrations of Policy Benefits

In order to help you understand how your Policy values could vary over time under different sets of assumptions, we will provide you, without charge and upon request, with certain personalized hypothetical illustrations showing the death benefit, cash surrender value and cash value. These hypothetical illustrations will be based on the age and insurance risk characteristics of the insured persons under your Policy and such factors as the specified amount, death benefit option, premium payment amounts, and hypothetical rates of return (within limits) that you request. The illustrations are not a representation or guarantee of investment returns or cash value. You may request illustrations that reflect the expenses of the portfolios in which you intend to invest.

Inquiries

To learn more about the Policy, you should read the SAI dated the same date as this prospectus. The SAI has been filed with the SEC and is incorporated herein by reference. The table of contents of the SAI is included near the end of this prospectus.

For a free copy of the SAI, for other information about the Policy, and to obtain personalized illustrations, please contact your agent, or our office at:

Western Reserve Life

P.O. Box 5068

Clearwater, Florida 33758-5068

1-800-851-9777

Facsimile: 1-727-299-1648

(Monday - Friday from 8:30 a.m. - 7:00 p.m. Eastern time)

www.westernreserve.com

More information about the Registrant (including the SAI) may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. For information on the operation of the Public Reference Room, please contact the SEC at 202-942-8090. You may also obtain copies of reports and other information about the Registrant on the SEC’s website at http://www.sec.gov and copies of this information may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC at 450 Fifth Street, NW, Washington, D.C. 20549-0102. The Registrant’s file numbers are listed below.

67

PART B

INFORMATION REQUIRED IN A

STATEMENT OF ADDITIONAL INFORMATION

STATEMENT OF ADDITIONAL INFORMATION

May 1, 2004

WRL FINANCIAL FREEDOM BUILDER^®

issued through

WRL Series Life Account

by

Western Reserve Life Assurance Co. of Ohio

570 Carillon Parkway

St. Petersburg, Florida 33716

1-800-851-9777

(727) 299-1800

This Statement of Additional Information (“SAI”) expands upon subjects discussed in the current prospectus for the WRL Financial Freedom Builder^® flexible premium variable life insurance policy offered by Western Reserve Life Assurance Co. of Ohio. You may obtain a copy of the prospectus dated May 1, 2004, by calling 1-800-851-9777 (Monday – Friday from 8:30 a.m. – 7:00 p.m. Eastern time), or by writing to the administrative office at, Western Reserve Life, P.O. Box 5068, Clearwater, Florida 33758-5068. The prospectus sets forth information that a prospective investor should know before investing in a Policy. Terms used in this SAI have the same meanings as in the prospectus for the Policy.

This SAI is not a prospectus and should be read only in conjunction with the prospectuses for the Policy and the AEGON/Transamerica Series Fund, Inc. – Initial Class, Access Variable Insurance Trust and the Fidelity Variable Insurance Products Funds – Service Class 2 Shares.

Table of Contents

Glossary	1
The Policy – General Provisions	4
Ownership Rights	4
Our Right to Contest the Policy	5
Suicide Exclusion	5
Misstatement of Age or Gender	5
Modifying the Policy	5
Mixed and Shared Funding	5
Addition, Deletion, or Substitution of Investments	6
Additional Information	6
Settlement Options	6
Additional Information about Western Reserve and the Separate Account	7
Legal Matters	8
Variations in Policy Provisions	8
Personalized Illustrations of Policy Benefits	8
Sale of the Policies	8
Reports to Owners	9
Records	9
Independent Auditors	9
Experts	9
Financial Statements	10
Underwriters	10
Underwriting Standards	10
IMSA	10
Performance Data	11
Other Performance Data in Advertising Sales Literature	11
Western Reserve’s Published Ratings	11
Index to Financial Statements	11
WRL Series Life Account	F-1
Western Reserve Life Assurance Co. of Ohio	F-67

i

Glossary

accounts	The options to which you can allocate your money. The accounts include the fixed account and the subaccounts in the separate account.
attained age	The issue age of the person insured, plus the number of completed years since the Policy date.
beneficiary(ies)	The person or persons you select to receive the death benefit from this Policy. You name the primary beneficiary and contingent beneficiaries.
cash value	The sum of your Policy’s value in the subaccounts and the fixed account. If there is a Policy loan outstanding, the cash value includes any amounts held in our fixed account to secure the Policy loan.
death benefit proceeds	The amount we will pay to the beneficiary(ies) on the insured’s death. We will reduce the death benefit proceeds by the amount of any outstanding loan amount and any due and unpaid monthly deductions. We will increase the death benefit proceeds by any interest you paid in advance on the loan for the period between the date of death and the next Policy anniversary.
fixed account	An option to which you may allocate net premiums and cash value. We guarantee that any amounts you allocate to the fixed account will earn interest at a declared rate. New Jersey: the fixed account is not available to you if your Policy was issued in the State of New Jersey.
free-look period	The period during which you may return the Policy and receive a refund as described in the prospectus. The length of the free-look period varies by state. The freelook period is listed in the Policy.
funds	Investment companies which are registered with the U.S. Securities and Exchange Commission. The Policy allows you to invest in the portfolios of the funds through our subaccounts. We reserve the right to add other registered investment companies to the Policy in the future.
in force	While coverage under the Policy is active and the insured’s life remains insured.
initial premium	The amount you must pay before insurance coverage begins under this Policy. The initial premium is shown on the schedule page of your Policy.
insured	The person whose life is insured by this Policy.
issue age	The insured’s age on his or her birthday nearest to the Policy date.
lapse	When life insurance coverage ends because you do not have enough cash value in the Policy to pay the monthly deduction, the surrender charge and any outstanding loan amount, and you have not made a sufficient payment by the end of a grace period.
loan amount	The total amount of all outstanding Policy loans, including both principal and interest due.
loan reserve account	A part of the fixed account to which amounts are transferred as collateral for Policy loans.
maturity date	The Policy anniversary nearest the insured’s 95th birthday if the insured is living and the Policy is still in force. It is the date when life insurance coverage under this Policy ends. You may continue coverage, at your option, under the Policy’s extended maturity date benefit provision.

1

minimum monthly guarantee premium	The amount shown on your Policy schedule page (unless changed when you change death benefit options, or decrease the specified amount or increase or add a rider) that we use during the no lapse period to determine whether a grace period will begin. We will adjust the minimum monthly guarantee premium if you change death benefit options, decrease the specified amount, or add, increase or decrease a rider. We make this determination whenever your net surrender value is not enough to meet monthly deductions.
Monthiversary	This is the day of each month when we determine Policy charges and deduct them from cash value. It is the same date each month as the Policy date. If there is no valuation date in the calendar month that coincides with the Policy date, the Monthiversary is the next valuation date.
monthly deduction	The monthly Policy charge, plus the monthly cost of insurance, plus the monthly charge for any riders added to your Policy, plus, if any, the pro rata decrease charge incurred as a result of a decrease in your specified amount.
net premium	The part of your premium that we allocate to the fixed account or the subaccounts. The net premium is equal to the premium you paid minus the premium expense charge and the premium collection charge.
net surrender value	The amount we will pay you if you surrender the Policy while it is in force. The net surrender value on the date you surrender is equal to: the cash value minus any surrender charge, minus any outstanding loan amount, plus any interest you paid in advance on the loan for the period between the date of surrender and the next Policy anniversary.
no lapse date	For a Policy issued to any insured ages 0-60, the no lapse date is either the anniversary on which the insured’s attained age is 65 or the twentieth Policy anniversary, whichever is earlier. For a Policy issued to an insured ages 61-80, the no lapse date is the fifth Policy anniversary. The no lapse date is specified in your Policy.
no lapse period	The period of time between the Policy date and the no lapse date during which the Policy will not lapse if certain conditions are met.
NYSE	The New York Stock Exchange.
office	Our administrative office and mailing address is P.O. Box 5068, Clearwater, Florida 33758-5068. Our street address is 570 Carillon Parkway, St. Petersburg, Florida 33716. Our phone number is 1-800-851-9777. Our hours are Monday - Friday from 8:30 a.m. - 7:00 p.m. Eastern time.
planned periodic premium	A premium payment you make in a level amount at a fixed interval over a specified period of time.
Policy date	The date when our underwriting process is complete, full life insurance coverage goes into effect, we begin to make monthly deductions, and your initial net premium is allocated to the WRL Transamerica Money Market subaccount. The Policy date is shown on the schedule page of your Policy. We measure Policy months, years, and anniversaries from the Policy date.
portfolio	One of the separate investment portfolios of a fund.
premiums	All payments you make under the Policy other than loan repayments.

2

record date	The date we record your Policy on our books as an in force Policy, and we allocate your cash value from the WRL Transamerica Money Market subaccount to the accounts that you selected on your application.
separate account	The WRL Series Life Account. It is a separate investment account that is divided into subaccounts. We established the separate account to receive and invest net premiums under the Policy and other variable life insurance policies we issue.
specified amount	The minimum death benefit we will pay under the Policy provided the Policy is in force. It is the amount shown on the Policy’s schedule page, unless you decrease the specified amount. In addition, we will reduce the specified amount by the dollar amount of any cash withdrawal if you choose the Option A (level) death benefit.
subaccount	A subdivision of the separate account that invests exclusively in shares of one investment portfolio of a fund.
surrender charge	If, during the first 15 Policy years, you fully surrender the Policy, we will deduct a surrender charge from the cash value.
termination	When the insured’s life is no longer insured under the Policy.
valuation date	Each day the New York Stock Exchange is open for trading. Western Reserve is open for business whenever the New York Stock Exchange is open.
valuation period	The period of time over which we determine the change in the value of the subaccounts. Each valuation period begins at the close of normal trading on the New York Stock Exchange (currently 4:00 p.m. Eastern time on each valuation date) and ends at the close of normal trading of the New York Stock Exchange on the next valuation date.
we, us, our (Western Reserve)	Western Reserve Life Assurance Co. of Ohio.
written notice	The written notice you must sign and send us to request or exercise your rights as owner under the Policy. To be complete, it must: (1) be in a form we accept, (2) contain the information and documentation that we determine we need to take the action you request, and (3) be received at our office.
you, your (owner or policyowner)	The person entitled to exercise all rights as owner under the Policy.

3

In order to supplement the description in the prospectus, the following provides additional information about Western Reserve and the Policy, which may be of interest to a prospective purchaser.

The Policy – General Provisions

Ownership Rights

The Policy belongs to the owner named in the application. The owner may exercise all of the rights and options described in the Policy. The owner is the insured unless the application specifies a different person as the insured. If the owner dies before the insured and no contingent owner is named, then ownership of the Policy will pass to the owner’s estate. The owner may exercise certain rights described below.

Changing the Owner	•	Change the owner by providing written notice to us at our office at any time while the insured is alive and the Policy is in force.
	•	Change is effective as of the date that the written notice is accepted by us at our office.
	•	Changing the owner does not automatically change the beneficiary.
	•	Changing the owner may have tax consequences. You should consult a tax advisor before changing the owner.
	•	We are not liable for payments we made before we received the written notice at our office.
Choosing the Beneficiary	•	The owner designates the beneficiary (the person to receive the death benefit when the insured dies) in the application.
	•	If the owner designates more than one beneficiary, then each beneficiary shares equally in any death benefit proceeds unless the beneficiary designation states otherwise.
	•	If the beneficiary dies before the insured, then any contingent beneficiary becomes the beneficiary.
	•	If both the beneficiary and contingent beneficiary die before the insured, then the death benefit will be paid to the owner or the owner’s estate upon the insured’s death.
Changing the Beneficiary	•	The owner changes the beneficiary by providing written notice to us at our office.
	•	Change is effective as of the date the owner signs the written notice.
	•	We are not liable for any payments we made before we received the written notice at our office.
Assigning the Policy	•	The owner may assign Policy rights while the insured is alive.
	•	The owner retains any ownership rights that are not assigned.
	•	Assignee may not change the owner or the beneficiary, and may not elect or change an optional method of payment. Any amount payable to the assignee will be paid in a lump sum.
	•	Claims under any assignment are subject to proof of interest and the extent of the assignment.
	•	We are not:
		•      bound by any assignment unless we receive a written notice of the assignment at our office;
		•      responsible for the validity of any assignment;
		•      liable for any payment we made before we received written notice of the assignment at our office; or

4

	•      bound by any assignment which results in adverse tax consequences to the owner, insured(s) or beneficiary(ies).
•	Assigning the Policy may have tax consequences. You should consult a tax advisor before assigning the Policy.

Our Right to Contest the Policy

In issuing this Policy, we rely on all statements made by or for the insured in the application or in a supplemental application. Therefore, if you make any material misrepresentation of a fact in the application (or any supplemental application), then we may contest the Policy’s validity or may resist a claim under the Policy.

In the absence of fraud, we cannot bring any legal action to contest the validity of the Policy after the Policy has been in force during the insured’s lifetime for two years from the Policy date, or if reinstated, for two years from the date of reinstatement.

Suicide Exclusion

If the insured commits suicide, while sane or insane, within two years of the Policy date (or two years from the reinstatement date, if the Policy lapses and is reinstated), the Policy will terminate and our liability is limited to an amount equal to the premiums paid, less any outstanding loan amount, and less any cash withdrawals. We will pay this amount to the beneficiary in one sum.

Misstatement of Age or Gender

If the age or gender of the insured was stated incorrectly in the application or any supplemental application, then the death benefit will be adjusted based on what the cost of insurance charge for the most recent monthly deduction would have purchased based on the insured’s correct age and gender.

Modifying the Policy

Only our President or Secretary may modify this Policy or waive any of our rights or requirements under this Policy. Any modification or waiver must be in writing. No agent may bind us by making any promise not contained in this Policy.

If we modify the Policy, we will provide you notice and we will make appropriate endorsements to the Policy.

Mixed and Shared Funding

In addition to the separate account, shares of the portfolios are also sold to other separate accounts that we (or our affiliates) establish to support variable annuity contracts and variable life insurance policies. It is possible that, in the future, it may become disadvantageous for variable life insurance separate accounts and variable annuity separate accounts to invest in the portfolios simultaneously. Neither the funds nor we currently foresee any such disadvantages, either to variable life insurance policyowners or to variable annuity contract owners. However, the funds’ Board of Directors/Trustees will monitor events in order to identify any material conflicts between the interests of such variable life insurance policyowners and variable annuity contract owners, and will determine what action, if any, it should take. Such action could include the sale of portfolio shares by one or more of the separate accounts, which could have adverse consequences. Material conflicts could result from, for example, (1) changes in state insurance laws, (2) changes in federal income tax laws, or (3) differences in voting instructions between those given by variable life insurance policyowners and those given by variable annuity contract owners.

5

If a fund’s Board of Directors/Trustees were to conclude that separate funds should be established for variable life insurance and variable annuity separate accounts, Western Reserve will bear the attendant expenses, but variable life insurance policyowners and variable annuity contract owners would no longer have the economies of scale resulting from a larger combined fund.

Addition, Deletion, or Substitution of Investments

We do not guarantee that each portfolio will always be available for investment through the Policy. We reserve the right, subject to compliance with applicable law, to add new portfolios, close existing portfolios, or substitute portfolio shares that are held by any subaccount for shares of a different portfolio. New or substitute portfolios may have different fees and expenses and their availability may be limited to certain classes of purchasers. We will only add, delete or substitute shares of another portfolio of a fund (or of another open-end, registered investment company) if the shares of a portfolio are no longer available for investment, or if in our judgement further investment in any portfolio would become inappropriate in view of the purposes of the separate account. We will not add, delete or substitute any 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. We may also decide to purchase for the separate account securities from other portfolios. We reserve the right to transfer separate account assets to another separate account that we determine to be associated with the class of contracts to which the Policy belongs.

We also reserve the right to establish additional subaccounts of the separate account, each of which would invest in a new portfolio of a fund, or in shares of another investment company, with specified investment objectives. We may establish new subaccounts when, in our sole discretion, marketing, tax or investment conditions warrant. We will make any new subaccounts available to existing owners on a basis we determine. We may also eliminate one or more subaccounts for the same reasons as stated above.

In the event of any such substitution or change, we may make such changes in this and other policies as may be necessary or appropriate to reflect such substitution or change. If we deem it to be in the best interests of persons having voting rights under the Policies, and when permitted by law, the separate account may be (1) operated as a management company under the 1940 Act, (2) deregistered under the 1940 Act in the event such registration is no longer required, (3) managed under the direction of a committee, or (4) combined with one or more other separate accounts, or subaccounts.

Additional Information

Settlement Options

If you surrender the Policy, you may elect to receive the net surrender value in either a lump sum or as a series of regular income payments under one of the three settlement options described below. In either event, life insurance coverage ends. Also, when the insured dies, the beneficiary may apply the lump sum death benefit proceeds to one of the same settlement options. If the regular payment under a settlement option would be less than $100, we will instead pay the proceeds in one lump sum. We may make other settlement options available in the future.

Once we begin making payments under a settlement option, you or the beneficiary will no longer have any value in the subaccounts or the fixed account. Instead, the only entitlement will be the amount of the regular payment for the period selected under the terms of the settlement option chosen. Depending upon the circumstances, the effective date of a settlement option is the surrender date or the insured’s date of death.

Under any settlement option, the dollar amount of each payment will depend on four things:

• the amount of the surrender on the surrender date or death benefit proceeds on the insured’s date of death;

• the interest rate we credit on those amounts (we guarantee a minimum annual interest rate of 3.0%);

• the mortality tables we use; and

• the specific payment option(s) you choose.

6

Option 1–Equal Monthly Installments for a Fixed Period	•		We will pay the proceeds, plus interest, in equal monthly
			installments for a fixed period of your choice, but not longer than 240 months.
	•		We will stop making payments once we have made all the payments for the period selected.
Option 2–Equal Monthly Installments for Life (Life Income)		At your or the beneficiary’s direction, we will make equal monthly installments:
	•		only for the life of the payee, at the end of which payments will end; or
	•		for the longer of the payee’s life, or for 10 years if the payee dies before the end of the first 10 years of payments; or
	•		for the longer of the payee’s life, or until the total amount of all payments we have made equals the proceeds that were applied to the settlement option.
Option 3–Equal Monthly Installments for the Life of the Payee and then to a Designated	•		We will make equal monthly payments during the joint lifetime of two persons, first to a chosen payee, and then to a co-payee,
Survivor (Joint and Survivor)			if living, upon the death of the payee.
	•		Payments to the co-payee, if living, upon the payee’s death will equal either:
			•      the full amount paid to the payee before the payee’s death; or
			•      two-thirds of the amount paid to the payee before the payee’s death.
	•		All payments will cease upon the death of the co-payee.

Additional Information about Western Reserve and the Separate Account

Western Reserve is a stock life insurance company that is wholly-owned by First AUSA Life Insurance Company, which, in turn, is wholly-owned indirectly by AEGON USA, Inc., which conducts most of its operations through subsidiary companies engaged in the insurance business or in providing non-insurance financial services. Western Reserve’s office is located at 570 Carillon Parkway, St. Petersburg, Florida 33716-1202 and the mailing address is P.O. Box 5068, Clearwater, Florida 33758-5068.

Western Reserve was incorporated in 1957 under the laws of Ohio and is subject to regulation by the Insurance Department of the State of Ohio, as well as by the insurance departments of all other states and jurisdictions in which it does business. Western Reserve is licensed to sell insurance in all states (except New York), Puerto Rico, Guam, and in the District of Columbia. Western Reserve submits annual statements on its operations and finances to insurance officials in all states and jurisdictions in which it does business. The Policy described in the prospectus has been filed with, and where required, approved by, insurance officials in those jurisdictions in which it is sold.

Western Reserve established the separate account as a separate investment account under Ohio law in 1985. We own the assets in the separate account and are obligated to pay all benefits under the Policies. The separate account is used to support other life insurance policies of Western Reserve, as well as for other purposes permitted by law. The separate account is registered with the SEC as a unit investment trust under the 1940 Act and qualifies as a “separate account” within the meaning of the federal securities laws.

7

Western Reserve holds the assets of the separate account physically segregated and apart from the general account. Western Reserve maintains records of all purchases and sales of portfolio shares by each of the subaccounts. A blanket bond was issued to AEGON USA, Inc. (“AEGON USA”) in the aggregate amount of $12 million, covering all of the employees of AEGON USA and its affiliates, including Western Reserve. A Stockbrokers Blanket Bond, issued to AEGON U.S.A. Securities, Inc. providing fidelity coverage, covers the activities of registered representatives of AFSG to a limit of $10 million.

Legal Matters

All matters of Ohio law pertaining to the Policy have been passed upon by Thomas E. Pierpan, Vice President, Senior Counsel and Assistant Secretary of Western Reserve.

Variations in Policy Provisions

Certain provisions of the Policy may vary from the descriptions in the prospectus, depending on when and where the Policy was issued, in order to comply with different state laws. These variations may include restrictions on use of the fixed account and different interest rates charged and credited on Policy loans. Please refer to your Policy, since any variations will be included in your Policy or in riders or endorsements attached to your Policy.

Personalized Illustrations of Policy Benefits

In order to help you understand how your Policy values would vary over time under different sets of assumptions, we will provide you with certain personalized illustrations upon request. These will be based on the age and insurance risk characteristics of the insured persons under your Policy and such factors as the specified amount, death benefit option, premium payment amounts, and rates of return (within limits) that you request.

The illustrations are not a representation or guarantee of investment returns or cash value. You may request illustrations that reflect the expenses of the portfolios in which you intend to invest.

Sale of the Policies

The Policy will be sold by individuals who are licensed as our life insurance agents and who are also registered representatives of broker-dealers having written sales agreements for the Policy with Western Reserve and AFSG Securities Corporation (“AFSG”), the principal underwriter of the Policy. Both AFSG and Western Reserve are indirect subsidiaries of AEGON U.S. Corporation. AFSG is located at 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499. AFSG is registered with the SEC under the Securities Exchange Act of 1934 as a broker-dealer, and is a member of the National Association of Securities Dealers, Inc. (“NASD”). AFSG was organized on March 12, 1986 under the laws of the State of Pennsylvania. The Principal Underwriting Agreement between AFSG and Western Reserve on behalf of its separate account went into effect May 1, 1999. More information about AFSG is available at http://www.nasdr.com or by calling 1-800-289-9999. The sales commission paid to broker-dealers during 2003 was, on average:

• 53% of all premiums you make during the first Policy year, plus

• 3.5% of all premiums you make during Policy years 2 – 10.

We will pay an additional sales commission of up to 0.30% of the Policy’s cash value on the Policy anniversary if the cash value (minus amounts attributable to loans) equals at least $5,000. In addition, certain production, persistency and managerial bonuses may be paid.

To the extent permitted by NASD rules, promotional incentives or payments may also be provided to broker-dealers based on sales volumes, the assumption of wholesaling functions or other sales-related criteria. Payments may also be made for other services that do not directly involve the sale of the Policies. These services may include the recruitment and training of personnel, production of promotional literatures, and similar services.

8

We intend to recoup commissions and other sales expenses through: the premium expense charge, the cost of insurance charge, the mortality and expense risk charge, and earnings on amounts allocated under the Policies to the fixed account and the loan account. Commissions paid on sales of the Policies, including other sales incentives, are not directly charged to policyowners or the separate account.

We offer the Policies to the public on a continuous basis. We anticipate continuing to offer the Policies, but reserve the right to discontinue the offering.

AFSG Securities Corporation, the principal underwriter for the Policy, will receive 12b-1 fees that equal 0.25% of average daily portfolio assets of the Fidelity VIP Fund, and 0.25% of average daily net assets of AVIT portfolio shares held for the Policies as compensation for providing certain shareholder support services. AFSG will also receive an additional fee based on the value of shares of the Fidelity VIP Fund and AVIT portfolios held for the Policies as compensation for providing certain recordkeeping services.

During fiscal years 2003, 2002 and 2001, AFSG received $67,236,938, $82,236,981 and $104,819,449, respectively, as sales compensation with respect to all Policies issued through the separate account. No amounts were retained by AFSG.

Reports to Owners

At least once each year, or more often as required by law, we will mail to policyowners at their last known address a report showing the following information as of the end of the report period:

•	the current cash value	•	any activity since the last report
•	the current net surrender value	•	projected values
•	the current death benefit	•	investment experience of each subaccount
•	outstanding loans	•	any other information required by law

You may request additional copies of reports, but we may charge a fee for such additional copies. In addition, we will send written confirmations of any premium payments and other financial transactions you request including: changes in specified amount, changes in death benefit option, transfers, partial withdrawals, increases in loan amount, loan interest payments, loan repayments, lapses and reinstatements. We also will send copies of the annual and semi-annual report to shareholders for each portfolio in which you are indirectly invested.

Records

We will maintain all records relating to the separate account and the fixed account.

Independent Auditors

The accounting firm of Ernst & Young LLP, independent auditors, provided audit services to the separate account and Western Reserve for the year ended December 31, 2003. The principal business address of Ernst & Young LLP is 801 Grand Avenue, Suite 3400, Des Moines, Iowa 50309-2764.

Experts

Actuarial matters included in this SAI have been examined by Lorne Schinbein, Vice President and Managing Actuary of Western Reserve, located at 570 Carillon Parkway, St. Petersburg, Florida 33716, as stated in the opinion filed as an exhibit to the registration statement.

9

Financial Statements

Western Reserve’s financial statements and schedules appear on the following pages. These financial statements and schedules should be distinguished from the separate account’s financial statements and you should consider these financial statements and schedules only as bearing upon Western Reserve’s ability to meet our obligations under the Policies. You should not consider our financial statements and schedules as bearing upon the investment performance of the assets held in the separate account.

Western Reserve’s financial statements and schedules at December 31, 2003 and 2002 and for each of the three years in the period ended December 31, 2003, have been prepared on the basis of statutory accounting principles rather than accounting principles generally accepted in the United States.

Underwriters

Underwriting Standards

This Policy uses mortality tables that distinguish between men and women. As a result, the Policy pays different benefits to men and women of the same age. Montana prohibits our use of actuarial tables that distinguish between males and females to determine premiums and policy benefits for policies issued on the lives of its residents. Therefore, we will base the premiums and benefits in Policies that we issue in Montana, to insure residents of that state, on actuarial tables that do not differentiate on the basis of gender.

Your cost of insurance charge will vary by the insured’s rate class. We currently place insureds into the following rate classes:

• ultimate select, non-tobacco use;

• select, non-tobacco use;

• ultimate standard, tobacco use; and

• standard, tobacco use.

We also place insureds in various sub-standard rate classes, which involve a higher mortality risk and higher charges. We generally charge higher rates for insureds who use tobacco. We currently charge lower cost of insurance rates for insureds who are in an “ultimate class.” An ultimate class is only available if our underwriting guidelines require you to take a blood test because of the specified amount you have chosen.

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 240-497-2900.

10

Performance Data

Other Performance Data in Advertising Sales Literature

We may compare each subaccount’s performance to the performance of:

• other variable life issuers in general;

• variable life insurance policies which invest in mutual funds with similar investment objectives and policies, as reported by Lipper Analytical Services, Inc. (“Lipper”) and Morningstar, Inc. (“Morningstar”); and other services, companies, individuals, or industry or financial publications (e.g., Forbes, Money, The Wall Street Journal, Business Week, Barron’s, Kiplinger’s Personal Finance, and Fortune);

• Lipper and Morningstar rank variable annuity contracts and variable life policies. Their performance analysis ranks such policies and contracts on the basis of total return, and assumes reinvestment of distributions; but it does not show sales charges, redemption fees or certain expense deductions at the separate account level.

• the Standard & Poor’s Index of 500 Common Stocks, or other widely recognized indices;

• unmanaged indices may assume the reinvestment of dividends, but usually do not reflect deductions for the expenses of operating or managing an investment portfolio; or

• other types of investments, such as:

• certificates of deposit;

• savings accounts and U.S. Treasuries;

• certain interest rate and inflation indices (e.g., the Consumer Price Index); or

• indices measuring the performance of a defined group of securities recognized by investors as representing a particular segment of the securities markets (e.g., Donoghue Money Market Institutional Average, Lehman Brothers Corporate Bond Index, or Lehman Brothers Government Bond Index).

Western Reserve’s Published Ratings

We may publish in advertisements, sales literature, or reports we send to you the ratings and other information that an independent ratings organization assigns to us. These organizations include: A.M. Best Company, Moody’s Investors Service, Inc., Standard & Poor’s Insurance Rating Services, and Fitch Ratings. These ratings are opinions regarding an operating insurance company’s financial capacity to meet the obligations of its insurance policies in accordance with their terms. These ratings do not apply to the separate account, the subaccounts, the funds or their portfolios, or to their performance.

Index to Financial Statements

WRL Series Life Account:

Report of Independent Auditors, dated February 5, 2004

Statements of Assets and Liabilities at December 31, 2003

Statements of Operations for the year ended December 31, 2003

Statements of Changes in Net Assets for the years ended December 31, 2003 and 2002

Notes to the Financial Statements

Western Reserve Life Assurance Co. of Ohio

Report of Independent Auditors, dated February 13, 2004

Balance Sheets Statutory-Basis at December 31, 2003 and 2002

Statements of Operations Statutory-Basis for the years ended December 31, 2003, 2002 and 2001

Statements of Changes in Capital and Surplus Statutory-Basis for the years ended December 31, 2003, 2002 and 2001

Statements of Cash Flow Statutory-Basis for the years ended December 31, 2003, 2002 and 2001

Notes to Financial Statements—Statutory-Basis

Statutory-Basis Financial Statement Schedules

11

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Contract Owners of the WRL Series Life Account

Western Reserve Life Assurance Company of Ohio

We have audited the accompanying statements of assets and liabilities of each of the subaccounts constituting the WRL Series Life Account (the Separate Account, a separate account of Western Reserve Life Assurance Co. of Ohio) as of December 31, 2003, 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 auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of mutual fund shares owned as of December 31, 2003, by correspondence with the mutual fund’s transfer agent. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the respective subaccounts constituting the WRL Series Life Account at December 31, 2003, and the results of their operations and changes in net assets for the periods indicated thereon, in conformity with accounting principles generally accepted in the United States.

Des Moines, Iowa

February 5, 2004

F-1

WRL SERIES LIFE ACCOUNT

STATEMENTS OF ASSETS AND LIABILITIES

At December 31, 2003

(all amounts except per unit amounts in thousands)

	WRL Transamerica Money Market Subaccount		WRL AEGON Bond Subaccount		WRL Janus Growth Subaccount		WRL Janus Global Subaccount		WRL LKCM Strategic Total Return Subaccount
Assets:
Investment in securities:
Number of shares		58,255		4,350		19,907		15,462		6,040
Cost	$	58,255	$	52,504	$	959,155	$	378,482	$	91,470
Investment, at net asset value	$	58,255	$	54,858	$	601,196	$	250,788	$	90,114
Dividend receivable		1		0		0		0		0
Transfers receivable from depositor		0		13		0		0		0
Total assets		58,256		54,871		601,196		250,788		90,114
Liabilities:
Accrued expenses		0		0		0		0		0
Transfers payable to depositor		94		0		376		91		122
Total liabilities		94		0		376		91		122
Net assets	$	58,162	$	54,871	$	600,820	$	250,697	$	89,992
Net Assets Consists of:
Policy owners’ equity:
Class A	$	58,117	$	54,846	$	600,794	$	250,670	$	89,992
Class B		20		0		0		0		0
Depositor’s equity:
Class A		0		0		0		0		0
Class B		25		25		26		27		0
Net assets applicable to units	$	58,162	$	54,871	$	600,820	$	250,697	$	89,992
Policy owners’ units:
Class A		3,053		1,879		9,058		11,513		3,959
Class B		2		0		0		0		0
Depositor’s units:
Class A		0		0		0		0		0
Class B		3		3		3		3		0
Total units outstanding:
Class A		3,053		1,879		9,058		11,513		3,959
Class B		5		3		3		3		0
Accumulation unit value:
Class A	$	19.04	$	29.19	$	66.33	$	21.77	$	22.73
Class B		10.00		10.10		10.51		10.66		n/a

See accompanying notes.

F-2

WRL SERIES LIFE ACCOUNT

STATEMENTS OF ASSETS AND LIABILITIES

At December 31, 2003

(all amounts except per unit amounts in thousands)

	WRL Van Kampen Emerging Growth Subaccount		WRL Alger Aggressive Growth Subaccount		WRL Federated Growth & Income Subaccount		WRL Transamerica Value Balanced Subaccount		WRL PBHG/ NWQ Value Select Subaccount
Assets:
Investment in securities:
Number of shares		18,856		15,551		5,987		5,146		2,550
Cost	$	464,632	$	313,117	$	86,995	$	66,465	$	33,932
Investment, at net asset value	$	314,137	$	225,020	$	102,324	$	63,867	$	38,176
Dividend receivable		0		0		0		0		0
Transfers receivable from depositor		0		0		0		0		0
Total assets		314,137		225,020		102,324		63,867		38,176
Liabilities:
Accrued expenses		0		0		0		0		0
Transfers payable to depositor		92		50		30		19		24
Total liabilities		92		50		30		19		24
Net assets	$	314,045	$	224,970	$	102,294	$	63,848	$	38,152
Net Assets Consists of:
Policy owners’ equity:
Class A	$	314,020	$	224,970	$	102,251	$	63,822	$	38,125
Class B		0		0		16		0		0
Depositor’s equity:
Class A		0		0		0		0		0
Class B		25		0		27		26		27
Net assets applicable to units outstanding	$	314,045	$	224,970	$	102,294	$	63,848	$	38,152
Policy owners’ units:
Class A		9,926		10,274		3,433		3,397		2,229
Class B		0		0		1		0		0
Depositor’s units:
Class A		0		0		124		0		0
Class B		3		0		3		3		3
Total units outstanding:
Class A		9,926		10,274		3,557		3,397		2,229
Class B		3		0		4		3		3
Accumulation unit value:
Class A	$	31.64	$	21.90	$	28.74	$	18.79	$	17.10
Class B		10.09		n/a		10.76		10.36		10.91

See accompanying notes.

F-3

WRL SERIES LIFE ACCOUNT

STATEMENTS OF ASSETS AND LIABILITIES

At December 31, 2003

(all amounts except per unit amounts in thousands)

	WRL American Century International Subaccount		WRL GE U.S. Equity Subaccount		WRL Third Avenue Value Subaccount		WRL Clarion Real Estate Securities Subaccount		WRL Marsico Growth Subaccount
Assets:
Investment in securities:
Number of shares		3,461		2,539		3,311		1,962		1,179
Cost	$	25,047	$	36,059	$	46,831	$	23,681	$	8,920
Investment, at net asset value	$	26,062	$	33,486	$	56,055	$	29,595	$	10,009
Dividend receivable		0		0		0		0		0
Transfers receivable from depositor		3		16		12		11		0
Total assets		26,065		33,502		56,067		29,606		10,009
Liabilities:
Accrued expenses		0		0		0		0		0
Transfers payable to depositor		0		0		0		0		4
Total liabilities		0		0		0		0		4
Net assets	$	26,065	$	33,502	$	56,067	$	29,606	$	10,005
Net Assets Consists of:
Policy owners’ equity:
Class A	$	26,065	$	33,502	$	56,041	$	29,571	$	9,980
Class B		0		0		0		8		0
Depositor’s equity:
Class A		0		0		0		0		0
Class B		0		0		26		27		25
Net assets applicable to units outstanding	$	26,065	$	33,502	$	56,067	$	29,606	$	10,005
Policy owners’ units:
Class A		2,849		2,165		3,153		1,878		1,240
Class B		0		0		0		0		0
Depositor’s units:
Class A		0		0		0		0		0
Class B		0		0		3		3		3
Total units outstanding:
Class A		2,849		2,165		3,153		1,878		1,240
Class B		0		0		3		3		3
Accumulation unit value:
Class A	$	9.15	$	15.47	$	17.77	$	15.75	$	8.05
Class B		n/a		n/a		10.50		10.91		10.09

See accompanying notes.

F-4

WRL SERIES LIFE ACCOUNT

STATEMENTS OF ASSETS AND LIABILITIES

At December 31, 2003

(all amounts except per unit amounts in thousands)

	WRL Munder Net50 Subaccount		WRL T. Rowe Price Equity Income Subaccount		WRL T. Rowe Price Small Cap Subaccount		WRL Salomon All Cap Subaccount		WRL PBHG Mid Cap Growth Subaccount
Assets:
Investment in securities:
Number of shares		1,565		433		1,546		3,196		4,145
Cost	$	10,703	$	7,570	$	15,114	$	39,696	$	51,542
Investment, at net asset value	$	12,957	$	8,217	$	17,302	$	41,735	$	36,686
Dividend receivable		0		0		0		0		0
Transfers receivable from depositor		37		0		6		0		0
Total assets		12,994		8,217		17,308		41,735		36,686
Liabilities:
Accrued expenses		0		0		0		0		0
Transfers payable to depositor		0		17		0		6		4
Total liabilities		0		17		0		6		4
Net assets	$	12,994	$	8,200	$	17,308	$	41,729	$	36,682
Net Assets Consists of:
Policy owners’ equity:
Class A	$	12,963	$	8,160	$	17,274	$	41,702	$	36,682
Class B		6		13		8		0		0
Depositor’s equity:
Class A		0		0		0		0		0
Class B		25		27		26		27		0
Net assets applicable to units outstanding	$	12,994	$	8,200	$	17,308	$	41,729	$	36,682
Policy owners’ units:
Class A		1,612		851		1,725		3,287		4,730
Class B		0		1		0		0		0
Depositor’s units:
Class A		0		0		0		0		0
Class B		3		3		3		3		0
Total units outstanding:
Class A		1,612		851		1,725		3,287		4,730
Class B		3		4		3		3		0
Accumulation unit value:
Class A	$	8.04	$	9.59	$	10.01	$	12.69	$	7.75
Class B		10.13		10.73		10.33		10.63		n/a

See accompanying notes.

F-5

WRL SERIES LIFE ACCOUNT

STATEMENTS OF ASSETS AND LIABILITIES

At December 31, 2003

(all amounts except per unit amounts in thousands)

	WRL Dreyfus Mid Cap Subaccount		WRL Great Companies- AmericaSM Subaccount		WRL Great Companies- TechnologySM Subaccount		WRL Templeton Great Companies Global Subaccount
Assets:
Investment in securities:
Number of shares		1,179		4,920		3,619		1,162
Cost	$	13,357	$	54,317	$	12,438	$	7,275
Investment, at net asset value	$	15,245	$	48,119	$	14,366	$	8,194
Dividend receivable		0		0		0		0
Transfers receivable from depositor		0		6		6		16
Total assets		15,245		48,125		14,372		8,210
Liabilities:
Accrued expenses		0		0		0		0
Transfers payable to depositor		18		0		0		0
Total liabilities		18		0		0		0
Net assets	$	15,227	$	48,125	$	14,372	$	8,210
Net Assets Consists of:
Policy owners’ equity:
Class A	$	15,227	$	47,907	$	14,269	$	8,158
Class B		0		0		0		8
Depositor’s equity:
Class A		0		191		77		17
Class B		0		27		26		27
Net assets applicable to units outstanding	$	15,227	$	48,125	$	14,372	$	8,210
Policy owners’ units:
Class A		1,250		5,011		3,715		1,190
Class B		0		0		0		0
Depositor’s units:
Class A		0		20		20		3
Class B		0		3		3		3
Total units outstanding:
Class A		1,250		5,031		3,735		1,193
Class B		0		3		3		3
Accumulation unit value:
Class A	$	12.18	$	9.56	$	3.84	$	6.86
Class B		n/a		10.61		10.35		10.73

See accompanying notes.

F-6

WRL SERIES LIFE ACCOUNT

STATEMENTS OF ASSETS AND LIABILITIES

At December 31, 2003

(all amounts except per unit amounts in thousands)

	WRL Asset Allocation- Conservative Portfolio Subaccount		WRL Asset Allocation- Moderate Portfolio Subaccount		WRL Asset Allocation- Moderate Growth Portfolio Subaccount		WRL Asset Allocation- Growth Portfolio Subaccount		WRL PIMCO Total Return Subaccount
Assets:
Investment in securities:
Number of shares		994		2,977		6,086		3,939		836
Cost	$	9,275	$	27,732	$	56,264	$	36,016	$	8,789
Investment, at net asset value	$	11,092	$	32,714	$	65,853	$	42,028	$	9,180
Dividend receivable		0		0		0		0		0
Transfers receivable from depositor		6		48		37		129		31
Total assets		11,098		32,762		65,890		42,157		9,211
Liabilities:
Accrued expenses		0		0		0		0		0
Transfers payable to depositor		0		0		0		0		0
Total liabilities		0		0		0		0		0
Net assets	$	11,098	$	32,762	$	65,890	$	42,157	$	9,211
Net Assets Consists of:
Policy owners’ equity:
Class A	$	11,072	$	32,736	$	65,864	$	42,131	$	9,186
Class B		0		0		0		0		0
Depositor’s equity:
Class A		0		0		0		0		0
Class B		26		26		26		26		25
Net assets applicable to units outstanding	$	11,098	$	32,762	$	65,890	$	42,157	$	9,211
Policy owners’ units:
Class A		1,006		3,021		6,171		4,002		837
Class B		0		0		0		0		0
Depositor’s units:
Class A		0		0		0		0		0
Class B		3		3		3		3		3
Total units outstanding:
Class A		1,006		3,021		6,171		4,002		837
Class B		3		3		3		3		3
Accumulation unit value:
Class A	$	11.01	$	10.84	$	10.67	$	10.53	$	10.98
Class B		10.39		10.43		10.50		10.58		10.14

See accompanying notes.

F-7

WRL SERIES LIFE ACCOUNT

STATEMENTS OF ASSETS AND LIABILITIES

At December 31, 2003

(all amounts except per unit amounts in thousands)

	WRL Janus Balanced Subaccount		WRL Transamerica Convertible Securities Subaccount		WRL Transamerica Equity Subaccount		WRL Transamerica Growth Opportunities Subaccount		WRL Capital Guardian Value Subaccount
Assets:
Investment in securities:
Number of shares		277		177		581		353		64
Cost	$	2,674	$	1,816	$	9,018	$	3,780	$	991
Investment, at net asset value	$	2,995	$	2,038	$	10,468	$	4,437	$	1,130
Dividend receivable		0		0		0		0		0
Transfers receivable from depositor		0		0		21		4		8
Total assets		2,995		2,038		10,489		4,441		1,138
Liabilities:
Accrued expenses		0		0		0		0		0
Transfers payable to depositor		2		3		0		0		0
Total liabilities		2		3		0		0		0
Net assets	$	2,993	$	2,035	$	10,489	$	4,441	$	1,138
Net Assets Consists of:
Policy owners’ equity:
Class A	$	2,967	$	2,004	$	10,463	$	4,381	$	1,078
Class B		0		5		0		8		7
Depositor’s equity:
Class A		0		0		0		26		26
Class B		26		26		26		26		27
Net assets applicable to units outstanding	$	2,993	$	2,035	$	10,489	$	4,441	$	1,138
Policy owners’ units:
Class A		279		177		943		426		102
Class B		0		0		0		0		0
Depositor’s units:
Class A		0		0		0		3		3
Class B		3		3		3		3		3
Total units outstanding:
Class A		279		177		943		429		105
Class B		3		3		3		3		3
Accumulation unit value:
Class A	$	10.65	$	11.35	$	11.09	$	10.29	$	10.55
Class B		10.37		10.27		10.49		10.49		10.81

See accompanying notes.

F-8

WRL SERIES LIFE ACCOUNT

STATEMENTS OF ASSETS AND LIABILITIES

At December 31, 2003

(all amounts except per unit amounts in thousands)

	WRL Transamerica U.S. Government Securities Subaccount		WRL J.P. Morgan Enhanced Index Subaccount		WRL MFS High Yield Subaccount		WRL Capital Guardian U.S. Equity Subaccount
Assets:
Investment in securities:
Number of shares		29		70		42		111
Cost	$	355	$	758	$	415	$	1,001
Investment, at net asset value	$	357	$	897	$	436	$	1,120
Dividend receivable		0		0		0		0
Transfers receivable from depositor		0		2		0		0
Total assets		357		899		436		1,120
Liabilities:
Accrued expenses		0		0		0		0
Transfers payable to depositor		0		0		2		0
Total liabilities		0		0		2		0
Net assets	$	357	$	899	$	434	$	1,120
Net Assets Consists of:
Policy owners’ equity:
Class A	$	332	$	846	$	386	$	1,093
Class B		0		0		0		0
Depositor’s equity:
Class A		0		26		22		27
Class B		25		27		26		0
Net assets applicable to units outstanding	$	357	$	899	$	434	$	1,120
Policy owners’ units:
Class A		31		81		35		100
Class B		0		0		0		0
Depositor’s units:
Class A		0		3		2		3
Class B		3		3		3		0
Total units outstanding:
Class A		31		84		37		103
Class B		3		3		3		0
Accumulation unit value:
Class A	$	10.68	$	10.37	$	10.90	$	10.87
Class B		10.09		10.67		10.34		0.00

See accompanying notes.

F-9

WRL SERIES LIFE ACCOUNT

STATEMENTS OF ASSETS AND LIABILITIES

At December 31, 2003

(all amounts except per unit amounts in thousands)

	Access U.S. Government Money Market Portfolio Subaccount		Potomac Dow 30 Plus Portfolio Subaccount		Potomac OTC Plus Portfolio Subaccount		Wells S&P REIT Index Portfolio Subaccount
Assets:
Investment in securities:
Number of shares		10,460		15		570		31
Cost	$	10,460	$	172	$	6,812	$	376
Investment, at net asset value	$	10,460	$	185	$	7,050	$	378
Dividend receivable		0		0		0		0
Transfers receivable from depositor		1,636		1		0		0
Total assets		12,096		186		7,050		378
Liabilities:
Accrued expenses		0		0		0		0
Transfers payable to depositor		0		0		1,664		0
Total liabilities		0		0		1,664		0
Net assets	$	12,096	$	186	$	5,386	$	378
Net Assets Consists of:
Policy owners’ equity:
Class A	$	12,051	$	135	$	5,360	$	328
Class B		0		0		0		0
Depositor’s equity:
Class A		20		24		0		24
Class B		25		27		26		26
Net assets applicable to units outstanding	$	12,096	$	186	$	5,386	$	378
Policy owners’ units:
Class A		1,212		11		428		27
Class B		0		0		0		0
Depositor’s units:
Class A		2		2		0		2
Class B		3		3		3		3
Total units outstanding:
Class A		1,214		13		428		29
Class B		3		3		3		3
Accumulation unit value:
Class A	$	9.94	$	12.15	$	12.52	$	12.24
Class B		9.99		10.82		10.31		10.57

See accompanying notes.

F-10

WRL SERIES LIFE ACCOUNT

STATEMENTS OF ASSETS AND LIABILITIES

At December 31, 2003

(all amounts except per unit amounts in thousands)

	Fidelity VIP Growth Opportunities Portfolio Subaccount		Fidelity VIP Contrafund® Portfolio Subaccount		Fidelity VIP Equity-Income Portfolio Subaccount		Fidelity VIP Index 500 Portfolio Subaccount
Assets:
Investment in securities:
Number of shares		208		460		456		0
Cost	$	2,730	$	8,911	$	9,338	$	25
Investment, at net asset value	$	3,119	$	10,545	$	10,481	$	27
Dividend receivable		0		0		0		0
Transfers receivable from depositor		0		0		0		0
Total assets		3,119		10,545		10,481		27
Liabilities:
Accrued expenses		0		0		0		0
Transfers payable to depositor		16		62		21		0
Total liabilities		16		62		21		0
Net assets	$	3,103	$	10,483	$	10,460	$	27
Net Assets Consists of:
Policy owners’ equity:
Class A	$	3,085	$	10,460	$	10,460		0
Class B		0		0		0		0
Depositor’s equity:
Class A		18		23		0		0
Class B		0		0		0		27
Net assets applicable to units outstanding	$	3,103	$	10,483	$	10,460	$	27
Policy owners’ units:
Class A		429		1,128		958		0
Class B		0		0		0		0
Depositor’s units:
Class A		3		3		0		0
Class B		0		0		0		3
Total units outstanding:
Class A		432		1,131		958		0
Class B		0		0		0		3
Accumulation unit value:
Class A	$	7.18	$	9.27	$	10.92		n/a
Class B		n/a		n/a		n/a	$	10.60

See accompanying notes.

F-11

WRL SERIES LIFE ACCOUNT

STATEMENTS OF OPERATIONS

For the Year Ended December 31, 2003

(all amounts in thousands)

	WRL Transamerica Money Market Subaccount			WRL AEGON Bond Subaccount			WRL Janus Growth Subaccount			WRL Janus Global Subaccount			WRL LKCM Strategic Total Return Subaccount
Investment Income:
Dividend income	$	651		$	2,746		$	0		$	0		$	2,209
Expenses:
Mortality and expense risk:
Class A		721			555			4,796			2,001			736
Class B		0			0			0			0			0
Total expenses		721			555			4,796			2,001			736
Net investment income (loss)		(70	)		2,191			(4,796	)		(2,001	)		1,473
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investment securities		0			1,263			(33,779	)		(15,117	)		(743	)
Realized gain distributions		0			0			0			0			0
Change in unrealized appreciation (depreciation)		0			(1,431	)		182,300			63,309			15,565
Net gain (loss) on investment securities		0			(168	)		148,521			48,192			14,822
Net increase (decrease) in net assets resulting from operations	$	(70	)	$	2,023		$	143,725		$	46,191		$	16,295
	WRL Van Kampen Emerging Growth Subaccount			WRL Alger Aggressive Growth Subaccount			WRL Federated Growth & Income Subaccount			WRL Transamerica Value Balanced Subaccount			WRL PBHG/NWQ Value Select Subaccount
Investment Income:
Dividend	$	0		$	0		$	3,760		$	1,816		$	270
Expenses:
Mortality and expense risk:
Class A		2,519			1,761			789			523			291
Class B		0			0			0			0			0
Total expenses		2,519			1,761			789			523			291
Net investment income (loss)		(2,519	)		(1,761	)		2,971			1,293			(21	)
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investment securities		(43,906	)		(11,310	)		822			(1,201	)		(720	)
Realized gain distributions		0			0			1,754			0			0
Change in unrealized appreciation (depreciation)		113,413			69,371			15,097			10,282			9,103
Net gain (loss) on investment securities		69,507			58,061			17,673			9,081			8,383
Net increase (decrease) in net assets resulting from operations	$	66,988		$	56,300		$	20,644		$	10,374		$	8,362

See accompanying notes.

F-12

WRL SERIES LIFE ACCOUNT

STATEMENTS OF OPERATIONS

For the Year Ended December 31, 2003

(all amounts in thousands)

	WRL American Century International Subaccount			WRL GE U.S. Equity Subaccount			WRL Third Avenue Value Subaccount			WRL Clarion Real Estate Securities Subaccount			WRL Marsico Growth Subaccount
Investment Income:
Dividend income	$	0		$	178		$	193		$	539		$	0
Expenses:
Mortality and expense risk:
Class A		159			264			386			207			56
Class B		0			0			0			0			0
Total expenses		159			264			386			207			56
Net investment income (loss)		(159	)		(86	)		(193	)		332			(56	)
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investment securities		(719	)		(900	)		(21	)		338			(209	)
Realized gain distributions		0			0			0			84			0
Change in unrealized appreciation (depreciation)		6,076			6,933			14,177			6,335			1,650
Net gain (loss) on investment securities		5,357			6,033			14,156			6,757			1,441
Net increase (decrease) in net assets resulting from operations	$	5,198		$	5,947		$	13,963		$	7,089		$	1,385
	WRL Munder Net50 Subaccount			WRL T. Rowe Price Equity Income Subaccount			WRL T. Rowe Price Small Cap Subaccount			WRL Salomon All Cap Subaccount			WRL PBHG Mid Cap Growth Subaccount
Investment Income:
Dividend income	$	0		$	103		$	0		$	127		$	0
Expenses:
Mortality and expense risk:
Class A		62			51			96			294			279
Class B		0			0			0			0			0
Total expenses		62			51			96			294			279
Net investment income (loss)		(62	)		52			(96	)		(167	)		(279	)
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investment securities		67			(4	)		(252	)		(572	)		(3,304	)
Realized gain distributions		0			34			0			0			0
Change in unrealized appreciation (depreciation)		2,441			1,358			3,785			10,649			10,870
Net gain (loss) on investment securities		2,508			1,388			3,533			10,077			7,566
Net increase (decrease) in net assets resulting from operations	$	2,446		$	1,440		$	3,437		$	9,910		$	7,287

See accompanying notes.

F-13

WRL SERIES LIFE ACCOUNT

STATEMENTS OF OPERATIONS

For the Year Ended December 31, 2003

(all amounts in thousands)

	WRL Dreyfus Mid Cap Subaccount			WRL Great Companies- AmericaSM Subaccount			WRL Great Companies- TechnologySM Subaccount			WRL Templeton Great Companies Global Subaccount			WRL Asset Allocation- Conservative Portfolio Subaccount
Investment Income:
Dividend income	$	13		$	193		$	0		$	7		$	12
Expenses:
Mortality and expense risk:
Class A		103			373			82			49			82
Class B		0			0			0			0			0
Total expenses		103			373			82			49			82
Net investment income (loss)		(90	)		(180	)		(82	)		(42	)		(70	)
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investment securities		(72	)		(2,894	)		(328	)		(127	)		301
Realized gain distributions		0			0			0			0			0
Change in unrealized appreciation (depreciation)		3,298			12,120			3,889			1,502			1,754
Net gain (loss) on investment securities		3,226			9,226			3,561			1,375			2,055
Net increase (decrease) in net assets resulting from operations	$	3,136		$	9,046		$	3,479		$	1,333		$	1,985
	WRL Asset Allocation- Moderate Portfolio Subaccount			WRL Asset Allocation- Moderate Growth Portfolio Subaccount			WRL Asset Allocation- Growth Portfolio Subaccount			WRL PIMCO Total Return Subaccount			WRL Janus Balanced Subaccount
Investment Income:
Dividend income	$	22		$	53		$	32		$	113		$	5
Expenses:
Mortality and expense risk:
Class A		189			322			176			87			25
Class B		0			0			0			0			0
Total expenses		189			322			176			87			25
Net investment income (loss)		(167	)		(269	)		(144	)		26			(20	)
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investment securities		58			(106	)		(53	)		184			68
Realized gain distributions		0			0			0			23			0
Change in unrealized appreciation (depreciation)		5,041			9,797			6,224			97			326
Net gain (loss) on investment securities		5,099			9,691			6,171			304			394
Net increase (decrease) in net assets resulting from operations	$	4,932		$	9,422		$	6,027		$	330		$	374

See accompanying notes.

F-14

WRL SERIES LIFE ACCOUNT

STATEMENTS OF OPERATIONS

For the Year Ended December 31, 2003

(all amounts in thousands)

	WRL Transamerica Convertible Securities Subaccount			WRL Transamerica Equity Subaccount			WRL Transamerica Growth Opportunities Subaccount			WRL Capital Guardian Value Subaccount
Investment Income:
Dividend income	$	2		$	0		$	0		$	4
Expenses:
Mortality and expense risk:
Class A		11			55			19			4
Class B		0			0			0			0
Total expenses		11			55			19			4
Net investment income (loss)		(9	)		(55	)		(19	)		0
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investment securities		43			38			9			5
Realized gain distributions		0			0			0			0
Change in unrealized appreciation (depreciation)		225			1,759			667			164
Net gain (loss) on investment securities		268			1,797			676			169
Net increase (decrease) in net assets resulting from operations	$	259		$	1,742		$	657		$	169
	WRL Transamerica U.S. Government Securities Subaccount			WRL J.P. Morgan Enhanced Index Subaccount			WRL MFS High Yield Subaccount(1)			WRL Capital Guardian U.S. Equity Subaccount
Investment Income:
Dividend income	$	8		$	2		$	1		$	1
Expenses:
Mortality and expense risk:
Class A		3			4			1			4
Class B		0			0			0			0
Total expenses		3			4			1			4
Net investment income (loss)		5			(2	)		0			(3	)
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investment securities		4			7			2			6
Realized gain distributions		0			0			0			0
Change in unrealized appreciation (depreciation)		(5	)		144			21			133
Net gain (loss) on investment securities		(1	)		151			23			139
Net increase (decrease) in net assets resulting from operations	$	4		$	149		$	23		$	136

See accompanying notes.

F-15

WRL SERIES LIFE ACCOUNT

STATEMENTS OF OPERATIONS

For the Year Ended December 31, 2003

(all amounts in thousands)

	Access U.S. Government Money Market Portfolio Subaccount(1)			Potomac Dow 30 Plus Portfolio Subaccount(1)		Potomac OTC Plus Portfolio Subaccount(1)		Wells S&P REIT Index Portfolio Subaccount(1)
Investment Income:
Dividend income	$	0		$	2	$	124	$	7
Expenses:
Mortality and expense risk:
Class A		60			0		15		0
Class B		0			0		0		0
Total expenses		60			0		15		0
Net investment income (loss)		(60	)		2		109		7
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investment securities		0			3		389		2
Realized gain distributions		0			0		0		0
Change in unrealized appreciation (depreciation)		0			13		238		2
Net gain (loss) on investment securities		0			16		627		4
Net increase (decrease) in net assets resulting from operations	$	(60	)	$	18	$	736	$	11

	Fidelity VIP Growth Opportunities Portfolio Subaccount			Fidelity VIP Contrafund® Portfolio Subaccount			Fidelity VIP Equity-Income Portfolio Subaccount			Fidelity VIP Index 500 Portfolio Subaccount(1)
Investment Income:
Dividend income	$	9		$	22		$	114		$	0
Expenses:
Mortality and expense risk:
Class A		21			73			72			0
Class B		0			0			0			0
Total expenses		21			73			72			0
Net investment income (loss)		(12	)		(51	)		42			0
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investment securities		(81	)		(4	)		(70	)		0
Realized gain distributions		0			0			0			0
Change in unrealized appreciation (depreciation)		698			2,103			2,268			2
Net gain (loss) on investment securities		617			2,099			2,198			2
Net increase (decrease) in net assets resulting from operations	$	605		$	2,048		$	2,240		$	2

See accompanying notes.

F-16

WRL SERIES LIFE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the Year Ended

(all amounts in thousands)

	WRL Transamerica Money Market Subaccount					WRL AEGON Bond Subaccount					WRL Janus Growth Subaccount
	December 31,					December 31,					December 31,
	2003			2002		2003			2002		2003			2002
Operations:
Net investment income (loss)	$	(70	)	$	470	$	2,191		$	1,536	$	(4,796	)	$	(5,012	)
Net gain (loss) on investment securities		0			0		(168	)		2,773		148,521			(210,223	)
Net increase (decrease) in net assets resulting from operations		(70	)		470		2,023			4,309		143,725			(215,235	)
Capital Unit Transactions:
Proceeds from units sold (transferred)		(15,163	)		28,184		1,648			19,850		73,257			80,390
Less cost of units redeemed:
Administrative charges		7,684			7,315		6,124			4,658		61,192			67,288
Policy loans		1,160			1,698		492			514		848			0
Surrender benefits		10,881			8,517		3,311			2,237		26,849			22,526
Death benefits		293			153		209			148		1,306			996
		20,018			17,683		10,136			7,557		90,195			90,810
Increase (decrease) in net assets from capital unit transactions		(35,181	)		10,501		(8,488	)		12,293		(16,938	)		(10,420	)
Net increase (decrease) in net assets		(35,251	)		10,971		(6,465	)		16,602		126,787			(225,655	)
Depositor’s equity contribution (net redemption)		25			0		25			0		25			0
Net Assets:
Beginning of period		93,388			82,417		61,311			44,709		474,008			699,663
End of period	$	58,162		$	93,388	$	54,871		$	61,311	$	600,820		$	474,008

See accompanying notes.

F-17

WRL SERIES LIFE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the Year Ended

(all amounts in thousands)

	WRL Janus Global Subaccount						WRL LKCM Strategic Total Return Subaccount						WRL Van Kampen Emerging Growth Subaccount
	December 31,						December 31,						December 31,
	2003			2002			2003			2002			2003			2002
Operations:
Net investment income (loss)	$	(2,001	)	$	4,669		$	1,473		$	1,875		$	(2,519	)	$	(2,535	)
Net gain (loss) on investment securities		48,192			(87,647	)		14,822			(12,681	)		69,507			(127,784	)
Net increase (decrease) in net assets resulting from operations		46,191			(82,978	)		16,295			(10,806	)		66,988			(130,319	)
Capital Unit Transactions:
Proceeds from units sold (transferred)		23,498			28,004			6,170			8,019			43,552			45,407
Less cost of units redeemed:
Administrative charges		25,124			28,362			7,703			8,198			31,908			35,720
Policy loans		811			921			173			440			865			1,402
Surrender benefits		11,470			10,567			4,281			3,860			14,274			13,454
Death benefits		377			323			126			236			432			456
		37,782			40,173			12,283			12,734			47,479			51,032
Increase (decrease) in net assets from capital unit transactions		(14,284	)		(12,169	)		(6,113	)		(4,715	)		(3,927	)		(5,625	)
Net increase (decrease) in net assets		31,907			(95,147	)		10,182			(15,521	)		63,061			(135,944	)
Depositor’s equity contribution (net redemption)		25			0			0			0			25			0
Net Assets:
Beginning of period		218,765			313,912			79,810			95,331			250,959			386,903
End of period	$	250,697		$	218,765		$	89,992		$	79,810		$	314,045		$	250,959

See accompanying notes.

F-18

WRL SERIES LIFE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the Year Ended

(all amounts in thousands)

	WRL Alger Aggressive Growth Subaccount						WRL Federated Growth & Income Subaccount					WRL Transamerica Value Balanced Subaccount
	December 31,						December 31,					December 31,
	2003			2002			2003		2002			2003			2002
Operations:
Net investment income (loss)	$	(1,761	)	$	(1,818	)	$	2,971	$	3,853		$	1,293		$	1,484
Net gain (loss) on investment securities		58,061			(86,865	)		17,673		(4,864	)		9,081			(10,499	)
Net increase (decrease) in net assets resulting from operations		56,300			(88,683	)		20,644		(1,011	)		10,374			(9,015	)
Capital Unit Transactions:
Proceeds from units sold (transferred)		38,628			40,020			15,781		33,512			7,399			31,611
Less cost of units redeemed:
Administrative charges		23,915			26,439			8,435		7,408			6,251			5,788
Policy loans		857			471			497		371			428			242
Surrender benefits		9,805			8,049			4,312		3,053			2,943			2,569
Death benefits		238			273			122		290			90			169
		34,815			35,232			13,366		11,122			9,712			8,768
Increase (decrease) in net assets from capital unit transactions		3,813			4,788			2,415		22,390			(2,313	)		22,843
Net increase (decrease) in net assets		60,113			(83,895	)		23,059		21,379			8,061			13,828
Depositor’s equity contribution (net redemption)		0			0			25		0			25			0
Net Assets:
Beginning of period		164,857			248,752			79,210		57,831			55,762			41,934
End of period	$	224,970		$	164,857		$	102,294	$	79,210		$	63,848		$	55,762

See accompanying notes.

F-19

WRL SERIES LIFE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the Year Ended

(all amounts in thousands)

	WRL PBHG/NWQ Value Select Subaccount						WRL American Century International Subaccount						WRL GE U.S. Equity Subaccount
	December 31,						December 31,						December 31,
	2003			2002			2003			2002			2003			2002
Operations:
Net investment income (loss)	$	(21	)	$	412		$	(159	)	$	(50	)	$	(86	)	$	(128	)
Net gain (loss) on investment securities		8,383			(5,908	)		5,357			(2,027	)		6,033			(6,727	)
Net increase (decrease) in net assets resulting from operations		8,362			(5,496	)		5,198			(2,077	)		5,947			(6,855	)
Capital Unit Transactions:
Proceeds from units sold (transferred)		4,373			7,488			16,269			3,468			5,205			6,882
Less cost of units redeemed:
Administrative charges		3,107			3,168			2,329			1,298			3,101			3,283
Policy loans		139			162			127			22			206			95
Surrender benefits		1,563			1,177			900			265			1,076			851
Death benefits		88			86			20			15			41			44
		4,897			4,593			3,376			1,600			4,424			4,273
Increase (decrease) in net assets from capital unit transactions		(524	)		2,895			12,893			1,868			781			2,609
Net increase (decrease) in net assets		7,838			(2,601	)		18,091			(209	)		6,728			(4,246	)
Depositor’s equity contribution (net redemption)		25			0			0			0			0			0
Net Assets:
Beginning of period		30,289			32,890			7,974			8,183			26,774			31,020
End of period	$	38,152		$	30,289		$	26,065		$	7,974		$	33,502		$	26,774

See accompanying notes.

F-20

WRL SERIES LIFE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the Year Ended

(all amounts in thousands)

	WRL Third Avenue Value Subaccount						WRL Clarion Real Estate Securities Subaccount					WRL Marsico Growth Subaccount
	December 31,						December 31,					December 31,
	2003			2002			2003		2002			2003			2002
Operations:
Net investment income (loss)	$	(193	)	$	358		$	332	$	145		$	(56	)	$	(29	)
Net gain (loss) on investment securities		14,156			(6,438	)		6,757		(407	)		1,441			(1,185	)
Net increase (decrease) in net assets resulting from operations		13,963			(6,080	)		7,089		(262	)		1,385			(1,214	)
Capital Unit Transactions:
Proceeds from units sold (transferred)		10,593			14,963			7,044		14,584			5,133			2,591
Less cost of units redeemed:
Administrative charges		3,944			3,735			2,546		1,838			710			538
Policy loans		153			301			154		91			7			3
Surrender benefits		2,027			1,400			1,392		660			283			117
Death benefits		46			136			24		68			2			5
		6,170			5,572			4,116		2,657			1,002			663
Increase (decrease) in net assets from capital unit transactions		4,423			9,391			2,928		11,927			4,131			1,928
Net increase (decrease) in net assets		18,386			3,311			10,017		11,665			5,516			714
Depositor’s equity contribution (net redemption)		25			0			25		0			25			0
Net Assets:
Beginning of period		37,656			34,345			19,564		7,899			4,464			3,750
End of period	$	56,067		$	37,656		$	29,606	$	19,564		$	10,005		$	4,464

See accompanying notes.

F-21

WRL SERIES LIFE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the Year Ended

(all amounts in thousands)

	WRL Munder Net50 Subaccount						WRL T. Rowe Price Equity Income Subaccount					WRL T. Rowe Price Small Cap Subaccount
	December 31,						December 31,					December 31,
	2003			2002			2003		2002			2003			2002
Operations:
Net investment income (loss)	$	(62	)	$	(19	)	$	52	$	(15	)	$	(96	)	$	(61	)
Net gain (loss) on investment securities		2,508			(1,080	)		1,388		(822	)		3,533			(2,324	)
Net increase (decrease) in net assets resulting from operations		2,446			(1,099	)		1,440		(837	)		3,437			(2,385	)
Capital Unit Transactions:
Proceeds from units sold (transferred)		9,137			1,112			3,064		2,656			8,837			3,498
Less cost of units redeemed:
Administrative charges		698			317			645		519			1,107			878
Policy loans		32			0			31		25			21			76
Surrender benefits		314			57			246		93			526			324
Death benefits		9			4			1		7			4			0
		1,053			378			923		644			1,658			1,278
Increase (decrease) in net assets from capital unit transactions		8,084			734			2,141		2,012			7,179			2,220
Net increase (decrease) in net assets		10,530			(365	)		3,581		1,175			10,616			(165	)
Depositor’s equity contribution (net redemption)		25			0			25		0			25			0
Net Assets:
Beginning of period		2,439			2,804			4,594		3,419			6,667			6,832
End of period	$	12,994		$	2,439		$	8,200	$	4,594		$	17,308		$	6,667

See accompanying notes.

F-22

WRL SERIES LIFE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the Year Ended

(all amounts in thousands)

	WRL Salomon All Cap Subaccount						WRL PBHG Mid Cap Growth Subaccount						WRL Dreyfus Mid Cap Subaccount
	December 31,						December 31,						December 31,
	2003			2002			2003			2002			2003			2002
Operations:
Net investment income (loss)	$	(167	)	$	52		$	(279	)	$	(258	)	$	(90	)	$	(77	)
Net gain (loss) on investment securities		10,077			(9,462	)		7,566			(9,855	)		3,226			(1,748	)
Net increase (decrease) in net assets resulting from operations		9,910			(9,410	)		7,287			(10,113	)		3,136			(1,825	)
Capital Unit Transactions:
Proceeds from units sold (transferred)		9,932			11,953			9,424			9,414			4,397			7,429
Less cost of units redeemed:
Administrative charges		4,066			4,191			4,442			5,227			1,161			956
Policy loans		111			144			163			164			77			20
Surrender benefits		1,501			941			1,388			744			562			442
Death benefits		43			210			37			32			4			13
		5,721			5,486			6,030			6,167			1,804			1,431
Increase (decrease) in net assets from capital unit transactions		4,211			6,467			3,394			3,247			2,593			5,998
Net increase (decrease) in net assets		14,121			(2,943	)		10,681			(6,866	)		5,729			4,173
Depositor’s equity contribution (net redemption)		25			0			0			0			0			0
Net Assets:
Beginning of period		27,583			30,526			26,001			32,867			9,498			5,325
End of period	$	41,729		$	27,583		$	36,682		$	26,001		$	15,227		$	9,498

See accompanying notes.

F-23

WRL SERIES LIFE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the Year Ended

(all amounts in thousands)

	WRL Great Companies- AmericaSM Subaccount						WRL Great Companies- TechnologySM Subaccount						WRL Templeton Great Companies Global Subaccount
	December 31,						December 31,						December 31,
	2003			2002			2003			2002			2003			2002
Operations:
Net investment income (loss)	$	(180	)	$	(179	)	$	(82	)	$	(49	)	$	(42	)	$	(27	)
Net gain (loss) on investment securities		9,226			(6,671	)		3,561			(2,774	)		1,375			(771	)
Net increase (decrease) in net assets resulting from operations		9,046			(6,850	)		3,479			(2,823	)		1,333			(798	)
Capital Unit Transactions:
Proceeds from units sold (transferred)		10,638			31,951			7,333			3,029			3,815			3,465
Less cost of units redeemed:
Administrative charges		5,300			4,060			1,105			908			762			647
Policy loans		395			545			43			0			21			29
Surrender benefits		2,070			833			505			246			261			139
Death benefits		55			34			7			4			3			6
		7,820			5,472			1,660			1,158			1,047			821
Increase (decrease) in net assets from capital unit transactions		2,818			26,479			5,673			1,871			2,768			2,644
Net increase (decrease) in net assets		11,864			19,629			9,152			(952	)		4,101			1,846
Depositor’s equity contribution (net redemption)		25			0			25			0			25			0
Net Assets:
Beginning of period		36,236			16,607			5,195			6,147			4,084			2,238
End of period	$	48,125		$	36,236		$	14,372		$	5,195		$	8,210		$	4,084

See accompanying notes.

F-24

WRL SERIES LIFE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the Year Ended

(all amounts in thousands)

	WRL Asset Allocation- Conservative Portfolio Subaccount						WRL Asset Allocation- Moderate Portfolio Subaccount						WRL Asset Allocation- Moderate Growth Portfolio Subaccount
	December 31,						December 31,						December 31,
	2003			2002(1)			2003			2002(1)			2003			2002(1)
Operations:
Net investment income (loss)	$	(70	)	$	(13	)	$	(167	)	$	(30	)	$	(269	)	$	(38	)
Net gain (loss) on investment securities		2,055			41			5,099			(98	)		9,691			(247	)
Net increase (decrease) in net assets resulting from operations		1,985			28			4,932			(128	)		9,422			(285	)
Capital Unit Transactions:
Proceeds from units sold (transferred)		6,155			4,723			21,158			11,575			50,465			16,346
Less cost of units redeemed:
Administrative charges		985			150			3,412			492			7,094			865
Policy loans		0			70			0			35			47			0
Surrender benefits		396			180			628			107			1,823			167
Death benefits		35			0			66			60			87			0
		1,416			400			4,106			694			9,051			1,032
Increase (decrease) in net assets from capital unit transactions		4,739			4,323			17,052			10,881			41,414			15,314
Net increase (decrease) in net assets		6,724			4,351			21,984			10,753			50,836			15,029
Depositor’s equity contribution (net redemption)		(2	)		25			0			25			0			25
Net Assets:
Beginning of period		4,376			0			10,778			0			15,054			0
End of period	$	11,098		$	4,376		$	32,762		$	10,778		$	65,890		$	15,054

See accompanying notes.

F-25

WRL SERIES LIFE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the Year Ended

(all amounts in thousands)

	WRL Asset Allocation- Growth Portfolio Subaccount						WRL PIMCO Total Return Subaccount						WRL Janus Balanced Subaccount
	December 31,						December 31,						December 31,
	2003			2002(1)			2003			2002(1)			2003			2002(1)
Operations:
Net investment income (loss)	$	(144	)	$	(19	)	$	26		$	(28	)	$	(20	)	$	(6	)
Net gain (loss) on investment securities		6,171			(248	)		304			332			394			(32	)
Net increase (decrease) in net assets resulting from operations		6,027			(267	)		330			304			374			(38	)
Capital Unit Transactions:
Proceeds from units sold (transferred)		33,889			7,553			3,219			7,623			699			2,421
Less cost of units redeemed:
Administrative charges		3,838			472			1,059			304			309			73
Policy loans		31			0			18			109			0			0
Surrender benefits		636			88			623			161			88			6
Death benefits		5			0			11			2			2			10
		4,510			560			1,711			576			399			89
Increase (decrease) in net assets from capital unit transactions		29,379			6,993			1,508			7,047			300			2,332
Net increase (decrease) in net assets		35,406			6,726			1,838			7,351			674			2,294
Depositor’s equity contribution (net redemption)		0			25			(3	)		25			0			25
Net Assets:
Beginning of period		6,751			0			7,376			0			2,319			0
End of period	$	42,157		$	6,751		$	9,211		$	7,376		$	2,993		$	2,319

See accompanying notes.

F-26

WRL SERIES LIFE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the Year Ended

(all amounts in thousands)

	WRL Transamerica Convertible Securities Subaccount						WRL Transamerica Equity Subaccount						WRL Transamerica Growth Opportunities Subaccount
	December 31,						December 31,						December 31,
	2003			2002(1)			2003			2002(1)			2003			2002(1)
Operations:
Net investment income (loss)	$	(9	)	$	(1	)	$	(55	)	$	(8	)	$	(19	)	$	(2	)
Net gain (loss) on investment securities		268			(8	)		1,797			(47	)		676			(27	)
Net increase (decrease) in net assets resulting from operations		259			(9	)		1,742			(55	)		657			(29	)
Capital Unit Transactions:
Proceeds from units sold (transferred)		1,610			309			7,089			2,916			3,514			599
Less cost of units redeemed:
Administrative		116			13			639			80			173			25
Policy loans		1			0			8			0			30			0
Surrender benefits		27			1			465			23			98			13
Death benefits		0			0			10			2			6			5
		144			14			1,122			105			307			43
Increase (decrease) in net assets from capital unit transactions		1,466			295			5,967			2,811			3,207			556
Net increase (decrease) in net assets		1,725			286			7,709			2,756			3,864			527
Depositor’s equity contribution (net redemption)		(1	)		25			(1	)		25			25			25
Net Assets:
Beginning of period		311			0			2,781			0			552			0
End of period	$	2,035		$	311		$	10,489		$	2,781		$	4,441		$	552

See accompanying notes.

F-27

WRL SERIES LIFE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the Year Ended

(all amounts in thousands)

	WRL Capital Guardian Value Subaccount					WRL Transamerica U.S. Government Securities Subaccount					WRL J.P. Morgan Enhanced Index Subaccount
	December 31,					December 31,					December 31,
	2003		2002(1)			2003			2002(1)		2003			2002(1)
Operations:
Net investment income (loss)	$	0	$	9		$	5		$	0	$	(2	)	$	0
Net gain (loss) on investment securities		169		(61	)		(1	)		6		151			(5	)
Net increase (decrease) in net assets resulting from operations		169		(52	)		4			6		149			(5	)
Capital Unit Transactions:
Proceeds from units sold (transferred)		809		217			179			195		708			33
Less cost of units redeemed:
Administrative charges		43		9			41			5		30			3
Policy loans		0		0			0			0		0			0
Surrender benefits		3		0			0			0		3			0
Death benefits		0		0			5			0		0			0
		46		9			46			5		33			3
Increase (decrease) in net assets from capital unit transactions		763		208			133			190		675			30
Net increase (decrease) in net assets		932		156			137			196		824			25
Depositor’s equity contribution (net redemption)		25		25			(1	)		25		25			25
Net Assets:
Beginning of period		181		0			221			0		50			0
End of period	$	1,138	$	181		$	357		$	221	$	899		$	50

See accompanying notes.

F-28

WRL SERIES LIFE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the Year Ended

(all amounts in thousands)

	WRL MFS High Yield Subaccount		WRL Capital Guardian U.S. Equity Subaccount						Access U.S. Government Money Market Portfolio Subaccount
	December 31,		December 31,						December 31, 2003(1)
	2003(1)		2003			2002(1)
Operations:
Net investment income (loss)	$	0	$	(3	)	$	0		$	(60	)
Net gain (loss) on investment securities		23		139			(36	)		0
Net increase (decrease) in net assets resulting from operations		23		136			(36	)		(60	)
Capital Unit Transactions:
Proceeds from units sold (transferred)		378		874			160			12,543
Less cost of units redeemed:
Administrative charges		11		28			5			282
Policy loans		0		0			0			20
Surrender benefits		1		6			0			130
Death benefits		0		0			0			0
		12		34			5			432
Increase (decrease) in net assets from capital unit transactions		366		840			155			12,111
Net increase (decrease) in net assets		389		976			119			12,051
Depositor’s equity contribution (net redemption)		45		0			25			45
Net Assets:
Beginning of period		0		144			0			0
End of period	$	434	$	1,120		$	144		$	12,096

See accompanying notes.

F-29

WRL SERIES LIFE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the Year Ended

(all amounts in thousands)

	Potomac Dow 30 Plus Portfolio Subaccount		Potomac OTC Plus Portfolio Subaccount		Wells S&P REIT Index Portfolio Subaccount		Fidelity VIP Growth Opportunities Portfolio Subaccount
	December 31, 2003(1)		December 31, 2003(1)		December 31, 2003(1)		December 31,
							2003			2002
Operations:
Net investment income (loss)	$	2	$	109	$	7	$	(12	)	$	(3	)
Net gain (loss) on investment securities		16		627		4		617			(380	)
Net increase (decrease) in net assets resulting from operations		18		736		11		605			(383	)
Capital Unit Transactions:
Proceeds from units sold (transferred)		129		4,778		327		1,110			1,196
Less cost of units redeemed:
Administrative charges		4		65		3		338			301
Policy loans		0		3		0		0			18
Surrender benefits		1		78		1		117			39
Death benefits		0		7		0		2			7
		5		153		4		457			365
Increase (decrease) in net assets from capital unit transactions		124		4,625		323		653			831
Net increase (decrease) in net assets		142		5,361		334		1,258			448
Depositor’s equity contribution (net redemption)		44		25		44		0			0
Net Assets:
Beginning of period		0		0		0		1,845			1,397
End of period	$	186	$	5,386	$	378	$	3,103		$	1,845

See accompanying notes.

F-30

WRL SERIES LIFE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the Year Ended

(all amounts in thousands)

	Fidelity VIP Contrafund® Portfolio Subaccount						Fidelity VIP Equity-Income Portfolio Subaccount					Fidelity VIP Index 500 Portfolio Subaccount
	December 31,						December 31,					December 31, 2003(1)
	2003			2002			2003		2002
Operations:
Net investment income (loss)	$	(51	)	$	(23	)	$	42	$	25		$	0
Net gain (loss) on investment securities		2,099			(624	)		2,198		(1,165	)		2
Net increase (decrease) in net assets resulting from operations		2,048			(647	)		2,240		(1,140	)		2
Capital Unit Transactions:
Proceeds from units sold (transferred)		3,243			4,843			3,348		4,084			0
Less cost of units redeemed:
Administrative charges		962			762			895		738			0
Policy loans		8			40			24		12			0
Surrender benefits		386			171			338		186			0
Death benefits		4			6			38		2			0
		1,360			979			1,295		938			0
Increase (decrease) in net assets from capital unit transactions		1,883			3,864			2,053		3,146			0
Net increase (decrease) in net assets		3,931			3,217			4,293		2,006			2
Depositor’s equity contribution (net redemption)		0			0			0		0			25
Net Assets:
Beginning of period		6,552			3,335			6,167		4,161			0
End of period	$	10,483		$	6,552		$	10,460	$	6,167		$	27

See accompanying notes.

F-31

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS

At December 31, 2003

Note 1—Organization and Summary of Significant Accounting Policies

The WRL Series Life Account (the “Life Account”), was established as a variable life insurance separate account of Western Reserve Life Assurance Co. of Ohio (“WRL”, or the “depositor”) and is registered as a unit investment trust under the Investment Company Act of 1940, as amended. The Life Account encompasses the following tax-deferred variable universal life Policies (the “Policies”) issued by WRL:

Class A:

WRL Financial Freedom Builder

WRL Freedom Elite

WRL Freedom Equity Protector

WRL Freedom Wealth Protector

WRL Freedom Elite Builder

WRL Freedom Elite Advisor

Class B:

WRL Xcelerator

The Life Account contains forty-six investment options referred to as subaccounts. Each subaccount invests exclusively in a corresponding Portfolio (the “Portfolio”) of a Series Fund, which collectively is referred to as the “Fund”. The WRL Series Life Account contains six funds (collectively referred to as the “Funds”). Each fund is a registered management investment company under the Investment Company Act of 1940, as amended.

Subaccount Investment by Fund:

AEGON/Transamerica Series Fund, Inc. (“ATSF”)

Transamerica Money Market

AEGON Bond

Janus Growth

Janus Global

LKCM Strategic Total Return

Van Kampen Emerging Growth

Alger Aggressive Growth

Federated Growth & Income

Transamerica Value Balanced

PBHG/NWQ Value Select

American Century International

GE U.S. Equity

Third Avenue Value

Clarion Real Estate Securities

Marsico Growth

Munder Net50

T. Rowe Price Equity Income

T. Rowe Price Small Cap

Salomon All Cap

PBHG Mid Cap Growth

Dreyfus Mid Cap

Great Companies-America^SM

Great Companies-Technology^SM

F-32

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Templeton Great Companies Global

Asset Allocation-Conservative Portfolio

Asset Allocation-Moderate Portfolio

Asset Allocation-Moderate Growth Portfolio

Asset Allocation-Growth Portfolio

PIMCO Total Return

Janus Balanced

Transamerica Convertible Securities

Transamerica Equity

Transamerica Growth Opportunities

Capital Guardian Value

Transamerica U.S. Government Securities

J.P. Morgan Enhanced Index

MFS High Yield

Capital Guardian U.S. Equity

Life Account classes A, and B invest in ATSF initial class shares.

Variable Insurance Products Fund (VIP) Service Class 2

Fidelity VIP Growth Opportunities Portfolio

Fidelity VIP Contrafund^® Portfolio

Fidelity VIP Equity-Income Portfolio

Fidelity VIP 500 Index Portfolio

Access Variable Insurance Trust

Access U.S. Government Money Market Portfolio

Potomac Dow 30 Plus Portfolio

Potomac OTC Plus Portfolio

Wells S&P REIT Index Portfolio

The following portfolio names have changed:

Date	Portfolio	Formerly
5/01/03	Asset Allocation-Conservative Portfolio	Conservative Asset Allocation
5/01/03	Asset Allocation-Moderate Portfolio	Moderate Asset Allocation
5/01/03	Asset Allocation-Moderate Growth Portfolio	Moderately Aggressive Asset Allocation
5/01/03	Asset Allocation-Growth Portfolio	Aggressive Asset Allocation
9/15/03	Templeton Great Companies Global	Great Companies-Global(2)

In accordance with the shareholder approved agreements and plans of reorganization, the following mergers of the underlying fund occurred within 2003:

Date	Acquiring Fund	Acquired Fund
Mergers of portfolios within the AEGON/Transamerica Series Fund, Inc.:
4/30/03	Alger Aggressive Growth	Value Line Aggressive Growth
4/30/03	Transamerica Equity	LKCM Capital Growth
4/30/03	American Century International	Gabelli Global Growth
4/30/03	T. Rowe Price Equity Income	T. Rowe Price Dividend Growth

F-33

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

The AEGON/Transamerica Series Fund, Inc. has entered into annually renewable investment advisory agreements for each Portfolio with AEGON/Transamerica Fund Advisers, Inc. (ATFA) as investment adviser. Costs incurred in connection with the advisory services rendered by ATFA are paid by each Portfolio. ATFA has entered into sub-advisory agreements with various management companies (“Sub-Advisers”), some of which are affiliates of WRL. Each Sub-Adviser is compensated directly by ATFA. The other Funds have entered into participation agreements for each Portfolio with WRL.

Each period reported on within the financial statements reflects a full twelve month period except as follows:

Subaccount	Inception Date
WRL Marsico Growth	07/01/1999
WRL Munder Net50	07/01/1999
WRL T. Rowe Price Equity Income	07/01/1999
WRL T. Rowe Price Small Cap	07/01/1999
WRL Salomon All Cap	07/01/1999
WRL Great Companies—AmericaSM	05/01/2000
WRL Great Companies—TechnologySM	05/01/2000
WRL Templeton Great Companies Global	09/01/2000
WRL Asset Allocation—Conservative Portfolio	05/01/2002
WRL Asset Allocation—Moderate Portfolio	05/01/2002
WRL Asset Allocation—Moderate Growth Portfolio	05/01/2002
WRL Asset Allocation—Growth Portfolio	05/01/2002
WRL PIMCO Total Return	05/01/2002
WRL Janus Balanced	05/01/2002
WRL Transamerica Convertible Securities	05/01/2002
WRL Transamerica Equity	05/01/2002
WRL Transamerica Growth Opportunities	05/01/2002
WRL Capital Guardian Value	05/01/2002
WRL Transamerica U.S. Government Securities	05/01/2002
WRL J.P. Morgan Enhanced Index	05/01/2002
WRL MFS High Yield	05/01/2003
Access U.S. Government Money Market Portfolio	05/01/2003
Potomac Dow 30 Plus Portfolio	05/01/2003
Potomac OTC Plus Portfolio	05/01/2003
Wells S&P REIT Index Portfolio	05/01/2003
WRL PBHG Mid Cap Growth	07/01/1999
WRL Dreyfus Mid Cap	07/01/1999
WRL Capital Guardian U.S. Equity	05/01/2002
Fidelity VIP Growth Opportunities Portfolio	05/01/2000
Fidelity VIP Contrafund® Portfolio	05/01/2000
Fidelity VIP Equity-Income Portfolio	05/01/2000
Fidelity VIP Index 500 Portfolio	11/01/2003

F-34

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

On May 1, 2003, WRL made initial contributions totaling $100,000 to the Life Account. The respective amounts of the contributions and units received are as follows:

Subaccount	Contribution		Units
WRL MFS High Yield	$	20,000	2,000
Access U.S. Government Money Market Portfolio		20,000	2,000
Potomac Dow 30 Plus Portfolio		20,000	2,000
Potomac OTC Plus Portfolio		20,000	2,000
Wells S&P REIT Index Portfolio		20,000	2,000

On November 1, 2003, WRL made initial contributions totaling $900,000 to the Life Account. The amounts of the contributions and units are as follows for Class B:

Subaccount	Contribution		Units
WRL Transamerica Money Market	$	25,000	2,500
WRL AEGON Bond		25,000	2,500
WRL Janus Growth		25,000	2,500
WRL Janus Global		25,000	2,500
WRL Van Kampen Emerging Growth		25,000	2,500
WRL Federated Growth & Income		25,000	2,500
WRL Transamerica Value Balanced		25,000	2,500
WRL PBHG Value Select		25,000	2,500
WRL Third Avenue Select		25,000	2,500
WRL Clarion Real Estate Securities		25,000	2,500
WRL Marisco Growth		25,000	2,500
WRL Munder Net50		25,000	2,500
WRL T. Rowe Price Equity Income		25,000	2,500
WRL T. Rowe Price Small Cap		25,000	2,500
WRL Salomon All Cap		25,000	2,500
WRL Great Companies-AmericaSM		25,000	2,500
WRL Great Companies-TechnologySM		25,000	2,500
WRL Templeton Great Companies Global		25,000	2,500
WRL Asset Allocation-Conservative Portfolio		25,000	2,500
WRL Asset Allocation-Moderate Portfolio		25,000	2,500
WRL Asset Allocation-Moderate Growth Portfolio		25,000	2,500
WRL Asset Allocation-Growth Portfolio		25,000	2,500
WRL PIMCO Total Return		25,000	2,500
WRL Janus Balanced		25,000	2,500
WRL Transamerica Convertible Securities		25,000	2,500
WRL Transamerica Equity		25,000	2,500
WRL Transamerica Growth Opportunities		25,000	2,500
WRL Capital Guardian Value		25,000	2,500
WRL Transamerica U.S. Government Securities		25,000	2,500
WRL J.P. Morgan Enhanced Index		25,000	2,500
WRL MFS High Yield		25,000	2,500
Access U.S. Government Money Market Portfolio		25,000	2,500
Potomac Dow 30 Plus Portfolio		25,000	2,500

F-35

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Subaccount	Contribution	Units
Potomac OTC Plus Portfolio	25,000	2,500
Well S&P REIT Index Portfolio	25,000	2,500
Fidelity VIP Index 500 Portfolio	25,000	2,500

The Life Account holds assets to support the benefits under certain flexible premium variable universal life insurance policies (the “Policies”) issued by WRL. The Life Account’s equity transactions are accounted for using the appropriate effective date at the corresponding accumulation unit value. The following significant accounting policies, which are in conformity with accounting principles generally accepted in the United States, have been consistently applied in the preparation of the Life Account Financial Statements. The preparation of the Financial Statements required management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates.

A. Valuation of Investments and Securities Transactions

Investments in the Funds’ shares are valued at the closing net asset value (“NAV”) per share of the underlying Portfolio, as determined by the Funds. Investment transactions are accounted for on the trade date at the Portfolio NAV next determined after receipt of sale or redemption orders without sales charges. Dividend income and capital gains distributions are recorded on the ex-dividend date. Effective on May 1, 2003, the method to account for the cost of investments sold was changed to the average-cost method, formerly using a first-in, first-out basis. The net effect on Statements of Operations is no change to net increase (decrease) in net assets resulting from operations.

B. Federal Income Taxes

The operations of the Life Account are a part of and are taxed with the total operations of WRL, which is taxed as a life insurance company under the Internal Revenue Code. Under the Internal Revenue Code law, the investment income of the Life Account, including realized and unrealized capital gains, is not taxable to WRL, as long as earnings are credited under the policies. Accordingly, no provision for Federal income taxes has been made.

Note 2—Expenses and Related Party Transactions

Charges are assessed by WRL in connection with the issuance and administration of the Policies.

A. Policy Charges

Under some forms of the Policies, a sales charge and premium taxes are deducted by WRL prior to allocation of policy owner payments to the subaccounts. Contingent surrender charges may also apply.

Under all forms of the Policy, monthly charges against policy cash values are made to compensate WRL for costs of insurance provided.

B. Life Account Charges

A daily charge as a percentage of average daily net assets is assessed to compensate WRL for assumption of mortality and expense risks for administrative services in connection with issuance and administration of the

F-36

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Policies. This charge (not assessed at the individual contract level) effectively reduces the value of a unit outstanding during the year. The following reflects the annual rate for daily charges as accessed by each Life Account class:

Class A	0.90	%
Class B	0.75	%

C. Related Party Transactions

ATFA is the investment adviser for the AEGON/Transamerica Series Fund, Inc. (“Fund”). The Fund has entered into annually renewable investment advisory agreements for each portfolio. The agreements provide for an advisory fee at the following annual rate to ATFA as a percentage of the average daily net assets of the portfolio.

Subaccount	Advisory Fee
Transamerica Money Market	0.35	%
AEGON Bond	0.45	%
Janus Growth	0.80	%
Janus Global	0.80	%
LKCM Strategic Total Return(1)	0.80	%
Van Kampen Emerging Growth	0.80	%
Alger Aggressive Growth	0.80	%
Federated Growth & Income	0.75	%
Transamerica Value Balanced	0.75	%
PBHG/NWQ Value Select	0.80	%
American Century International(2)	1.00	%
GE U.S. Equity	0.775	%
Third Avenue Value	0.80	%
Clarion Real Estate Securities	0.80	%
Marsico Growth(3)	0.80	%
Munder Net50	0.90	%
T. Rowe Price Equity Income	0.75	%
T. Rowe Price Small Cap	0.75	%
Salomon All Cap(4)	0.90	%
PBHG Mid Cap Growth(4)	0.90	%
Dreyfus Mid Cap(5)	0.85	%
Great Companies-AmericaSM	0.80	%
Great Companies-TechnologySM	0.80	%
Templeton Great Companies Global	0.80	%
Asset Allocation-Conservative Portfolio	0.10	%
Asset Allocation-Moderate Portfolio	0.10	%
Asset Allocation-Moderate Growth Portfolio	0.10	%
Asset Allocation-Growth Portfolio	0.10	%
PIMCO Total Return	0.70	%
Janus Balanced(6)	0.90	%
Transamerica Convertible Securities(7)	0.80	%
Transamerica Equity	0.75	%

F-37

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Subaccount	Advisory Fee
Transamerica Growth Opportunities	0.85	%
Capital Guardian Value(8)	0.85	%
Transamerica U.S. Government Securities	0.65	%
J.P. Morgan Enhanced Index	0.75	%
MFS High Yield	0.775	%
Capital Guardian U.S. Equity(8)	0.85	%

(1) AEGON/Transamerica Advisers receives compensation for its services at 0.80% for the first $250 million of the portfolio’s average daily net assets; 0.775% of assets over $250 million up to $500 million: 0.75% of assets over $500 million up to $750 million; 0.70% of assets over $750 million up to $1 billion; and 0.60% of assets in excess of $1 billion.

(2) AEGON/Transamerica Advisers receives compensation for its services at 1.00% for the first $50 million of the portfolio’s average daily net assets; 0.95% of assets over $50 million up to $150 million; 0.90% of assets over $150 million up to $500 million; 0.85% of assets over $500 million up to $1 billion; and 0.80% of assets in excess of $1 billion.

(3) AEGON/Transamerica Advisers receives compensation for its services at 0.80% for the first $250 million of the portfolio’s average daily net assets; 0.75% of assets over $250 million up to $500 million; 0.70% of assets over $500 million up to $1 billion; and 0.60% of assets in excess of $1 billion.

(4) AEGON/Transamerica Advisers receives compensation for its services at 0.90% for the first $100 million of the portfolio’s average daily net assets; and 0.80% of assets in excess of $100 million.

(5) AEGON/Transamerica Advisers receives compensation for its services at 0.85% for the first $100 million of the portfolio’s average daily net assets; and 0.80% of assets in excess of $100 million.

(6) AEGON/Transamerica Advisers receives compensation for its services at 0.90% for the first $500 million of the portfolio’s average daily net assets; 0.85% of assets over $500 million up to $1 billion; and 0.80% of assets in excess of $1 billion.

(7) AEGON/Transamerica Advisers receives compensation for its services at 0.80% for the first $500 million of the portfolio’s average daily net assets and 0.70% of assets in excess of $500 million.

(8) AEGON/Transamerica Advisers receives compensation for its services at 0.85% for the first $300 million of the portfolio’s average daily net assets; 0.80% of assets over $300 million up to $500 million; and 0.775% of assets in excess of $500 million.

AEGON/Transamerica Fund Services, Inc. (“ATFS”) provides the Fund with administrative and transfer agency services. ATFS is a wholly-owned subsidiary of WRL. ATFA is directly owned by WRL (78%) and AUSA Holding Company (22%) both of which are indirect wholly-owned subsidiaries of AEGON NV., a holding company organized under the laws of the Netherlands.

Note 3—Dividend Distributions

Dividends are not declared by the Life Account, since the increase in the value of the underlying investment in the Fund is reflected daily in the accumulation unit value used to calculate the equity value within the Life Account. Consequently, a dividend distribution by the underlying Fund does not change either the accumulation unit value or equity values within the Life Account.

F-38

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Note 4—Securities Transactions

Securities transactions for the year ended December 31, 2003 are as follows (in thousands):

Subaccount	Purchases of Securities		Proceeds from Sales of Securities
WRL Transamerica Money Market	$	38,107	$	73,260
WRL AEGON Bond		13,545		19,782
WRL Janus Growth		29,647		51,067
WRL Janus Global		8,465		24,646
WRL LKCM Strategic Total Return		3,851		8,366
WRL Van Kampen Emerging Growth		21,741		28,083
WRL Alger Aggressive Growth		22,343		20,268
WRL Federated Growth & Income		14,520		7,207
WRL Transamerica Value Balanced		5,353		6,312
WRL PBHG\NWQ Value Select		4,710		5,354
WRL American Century International		15,306		2,573
WRL GE U.S. Equity		4,336		3,645
WRL Third Avenue Value		8,367		4,157
WRL Clarion Real Estate Securities		7,677		4,147
WRL Marsico Growth		5,304		1,196
WRL Munder Net50		10,669		2,655
WRL T. Rowe Price Equity Income		2,956		682
WRL T. Rowe Price Small Cap		10,479		3,377
WRL Salomon All Cap		6,560		2,483
WRL PBHG Mid Cap Growth		6,574		3,436
WRL Dreyfus Mid Cap		4,284		1,765
WRL Great Companies-AmericaSM		6,547		3,871
WRL Great Companies-TechnologySM		8,618		2,960
WRL Templeton Great Companies Global		3,704		964
WRL Asset Allocation-Conservative Portfolio		7,896		3,089
WRL Asset Allocation-Moderate Portfolio		18,028		1,138
WRL Asset Allocation-Moderate Growth Portfolio		41,791		625
WRL Asset Allocation-Growth Portfolio		29,463		346
WRL PIMCO Total Return		6,317		4,798
WRL Janus Balanced		1,845		1,624
WRL Transamerica Convertible Securities		1,967		508
WRL Transamerica Equity		7,041		1,110
WRL Transamerica Growth Opportunities		3,429		220
WRL Capital Guardian Value		913		133
WRL Transamerica U.S. Government Securities		418		282
WRL J.P. Morgan Enhanced Index		784		88
WRL MFS High Yield		526		113
WRL Capital Guardian U.S. Equity		943		106
Access U.S. Government Money Market Portfolio		48,722		38,262
Potomac Dow 30 Plus Portfolio		326		157
Potomac OTC Plus Portfolio		39,092		32,669

F-39

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Subaccount	Purchases of Securities		Proceeds from Sales of Securities
Wells S&P REIT Index Portfolio	$	462	$	88
Fidelity VIP Growth Opportunities Portfolio		1,420		762
Fidelity VIP Contrafund® Portfolio		3,316		1,419
Fidelity VIP Equity-Income Portfolio		2,806		685
Fidelity VIP Index 500 Portfolio		25		0

F-40

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Note 5—Financial Highlights

	Year Ended		Accumulation Unit Value, Beginning of Year		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investment			Net Income (Loss) from Operations			Accumulation Unit Value, End of Year
WRL Transamerica Money Market Subaccount
Class A	12/31/2003		$	19.06	$	(0.02	)	$	0.00		$	(0.02	)	$	19.04
	12/31/2002			18.95		0.11			0.00			0.11			19.06
	12/31/2001			18.39		0.56			0.00			0.56			18.95
	12/31/2000			17.49		0.90			0.00			0.90			18.39
	12/31/1999			16.83		0.66			0.00			0.66			17.49
Class B	12/31/2003	(1)		10.00		0.00			0.00			0.00			10.00
WRL AEGON Bond Subaccount
Class A	12/31/2003			28.24		1.02			(0.07	)		0.95			29.19
	12/31/2002			25.91		0.82			1.51			2.33			28.24
	12/31/2001			24.19		(0.06	)		1.78			1.72			25.91
	12/31/2000			22.01		1.04			1.14			2.18			24.19
	12/31/1999			22.89		1.13			(2.01	)		(0.88	)		22.01
Class B	12/31/2003	(1)		10.00		(0.01	)		0.11			0.10			10.10
WRL Janus Growth Subaccount
Class A	12/31/2003			50.70		(0.52	)		16.15			15.63			66.33
	12/31/2002			73.01		(0.53	)		(21.78	)		(22.31	)		50.70
	12/31/2001			102.61		(0.73	)		(28.87	)		(29.60	)		73.01
	12/31/2000			145.70		16.41			(59.50	)		(43.09	)		102.61
	12/31/1999			92.07		25.03			28.60			53.63			145.70
Class B	12/31/2003	(1)		10.00		(0.01	)		0.52			0.51			10.51
WRL Janus Global Subaccount
Class A	12/31/2003			17.82		(0.17	)		4.12			3.95			21.77
	12/31/2002			24.31		0.37			(6.86	)		(6.49	)		17.82
	12/31/2001			31.79		0.00			(7.48	)		(7.48	)		24.31
	12/31/2000			38.91		7.93			(15.05	)		(7.12	)		31.79
	12/31/1999			22.94		2.44			13.53			15.97			38.91
Class B	12/31/2003	(1)		10.00		(0.01	)		0.67			0.66			10.66
WRL LKCM Strategic Total Return Subaccount
Class A	12/31/2003			18.71		0.36			3.66			4.02			22.73
	12/31/2002			21.10		0.42			(2.81	)		(2.39	)		18.71
	12/31/2001			21.77		(0.09	)		(0.58	)		(0.67	)		21.10
	12/31/2000			22.82		1.63			(2.68	)		(1.05	)		21.77
	12/31/1999			20.55		1.68			0.59			2.27			22.82
WRL Van Kampen Emerging Growth Subaccount
Class A	12/31/2003			24.91		(0.25	)		6.98			6.73			31.64
	12/31/2002			37.54		(0.25	)		(12.38	)		(12.63	)		24.91
	12/31/2001			56.74		(0.35	)		(18.85	)		(19.20	)		37.54
	12/31/2000			64.99		16.83			(25.08	)		(8.25	)		56.74
	12/31/1999			31.96		9.32			23.71			33.03			64.99
Class B	12/31/2003	(1)		10.00		(0.01	)		0.10			0.09			10.09

F-41

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

	Year Ended		Total Return		Net Assets at End of Year (in Thousands)		Investment Income Ratio		Expense Ratio
WRL Transamerica Money Market Subaccount
Class A	12/31/2003		(0.11	)%	$	58,117	0.11	%	0.90	%
	12/31/2002		0.54			93,388	0.53		0.90
	12/31/2001		3.05			82,417	2.80		0.90
	12/31/2000		5.17			60,279	5.05		0.90
	12/31/1999		3.92			56,070	3.87		0.90
Class B	12/31/2003	(1)	(0.01	)		45	0.11		0.75
WRL AEGON Bond Subaccount
Class A	12/31/2003		3.35			54,846	4.44		0.90
	12/31/2002		8.99			61,311	3.03		0.90
	12/31/2001		7.11			44,709	(0.24	)	0.90
	12/31/2000		9.90			25,935	4.58		0.90
	12/31/1999		(3.81	)		27,129	5.10		0.90
Class B	12/31/2003	(1)	1.00			25	0.00		0.75
WRL Janus Growth Subaccount
Class A	12/31/2003		30.82			600,794	0.00		0.90
	12/31/2002		(30.55	)		474,008	(0.90	)	0.90
	12/31/2001		(28.85	)		699,663	(0.90	)	0.90
	12/31/2000		(29.58	)		961,015	11.75		0.90
	12/31/1999		58.25			1,353,957	22.67		0.90
Class B	12/31/2003	(1)	5.09			26	0.00		0.75
WRL Janus Global Subaccount
Class A	12/31/2003		22.15			250,670	0.00		0.90
	12/31/2002		(26.69	)		218,765	1.78		0.90
	12/31/2001		23.53			313,912	0.01		0.90
	12/31/2000		(18.28	)		410,109	20.55		0.90
	12/31/1999		69.58			451,498	9.07		0.90
Class B	12/31/2003	(1)	6.65			27	0.00		0.75
WRL LKCM Strategic Total Return Subaccount
Class A	12/31/2003		21.52			89,992	2.69		0.90
	12/31/2002		(11.35	)		79,810	2.14		0.90
	12/31/2001		(3.06	)		95,331	(0.44	)	0.90
	12/31/2000		(4.62	)		98,466	7.43		0.90
	12/31/1999		11.07			106,665	7.93		0.90
WRL Van Kampen Emerging Growth Subaccount
Class A	12/31/2003		27.01			314,020	0.00		0.90
	12/31/2002		(33.66	)		250,959	(0.81	)	0.90
	12/31/2001		(33.83	)		386,903	(0.82	)	0.90
	12/31/2000		(12.70	)		580,202	23.62		0.90
	12/31/1999		103.33			608,130	23.19		0.90
Class B	12/31/2003	(1)	0.90			25	0.00		0.75

F-42

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

	Year Ended		Accumulation Unit Value, Beginning of Year		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investment			Net Income (Loss) from Operations			Accumulation Unit Value, End of Year
WRL Alger Aggressive Growth Subaccount
Class A	12/31/2003		$	16.37	$	(0.17	)	$	5.70		$	5.53		$	21.90
	12/31/2002			25.17		(0.18	)		(8.62	)		(8.80	)		16.37
	12/31/2001			30.40		(0.23	)		(5.00	)		(5.23	)		25.17
	12/31/2000			44.67		4.76			(19.03	)		(14.27	)		30.40
	12/31/1999			26.67		4.90			13.10			18.00			44.67
WRL Federated Growth & Income Subaccount
Class A	12/31/2003			22.86		0.85			5.03			5.88			28.74
	12/31/2002			22.85		1.20			(1.19	)		0.01			22.86
	12/31/2001			19.93		0.21			2.71			2.92			22.85
	12/31/2000			15.57		0.85			3.51			4.36			19.93
	12/31/1999			16.44		1.05			(1.92	)		(0.87	)		15.57
Class B	12/31/2003	(1)		10.00		(0.01	)		0.77			0.76			10.76
WRL Transamerica Value Balanced Subaccount
Class A	12/31/2003			15.77		0.37			2.65			3.02			18.79
	12/31/2002			18.47		0.47			(3.17	)		(2.70	)		15.77
	12/31/2001			18.19		0.10			0.18			0.28			18.47
	12/31/2000			15.66		1.20			1.33			2.53			18.19
	12/31/1999			16.74		0.41			(1.49	)		(1.08	)		15.66
Class B	12/31/2003	(1)		10.00		(0.01	)		0.37			0.36			10.36
WRL PBHG/NWQ Value Select Subaccount
Class A	12/31/2003			13.30		(0.01	)		3.81			3.80			17.10
	12/31/2002			15.64		0.19			(2.53	)		(2.34	)		13.30
	12/31/2001			16.07		(0.12	)		(0.31	)		(0.43	)		15.64
	12/31/2000			14.08		0.23			1.76			1.99			16.07
	12/31/1999			13.16		0.20			0.72			0.92			14.08
Class B	12/31/2003	(1)		10.00		(0.01	)		0.92			0.91			10.91
WRL American Century International Subaccount
Class A	12/31/2003			7.37		(0.07	)		1.85			1.78			9.15
	12/31/2002			9.43		(0.05	)		(2.01	)		(2.06	)		7.37
	12/31/2001			12.43		0.25			(3.25	)		(3.00	)		9.43
	12/31/2000			14.76		2.00			(4.33	)		(2.33	)		12.43
	12/31/1999			11.92		0.62			2.22			2.84			14.76
WRL GE U.S. Equity Subaccount
Class A	12/31/2003			12.70		(0.04	)		2.81			2.77			15.47
	12/31/2002			15.97		(0.06	)		(3.21	)		(3.27	)		12.70
	12/31/2001			17.69		(0.12	)		(1.60	)		(1.72	)		15.97
	12/31/2000			17.99		0.68			(0.98	)		(0.30	)		17.69
	12/31/1999			15.33		1.38			1.28			2.66			17.99

F-43

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

	Year Ended		Total Return		Net Assets at End of Year (in Thousands)		Investment Income Ratio		Expense Ratio
WRL Alger Aggressive Growth Subaccount
Class A	12/31/2003		33.78	%	$	224,970	0.00	%	0.90	%
	12/31/2002		(34.98	)		164,857	(0.90	)	0.90
	12/31/2001		(17.20	)		248,752	(0.90	)	0.90
	12/31/2000		(31.94	)		280,172	11.65		0.90
	12/31/1999		67.52			354,178	15.54		0.90
WRL Federated Growth & Income Subaccount
Class A	12/31/2003		25.71			102,251	4.27		0.90
	12/31/2002		0.06			79,210	5.21		0.90
	12/31/2001		14.67			57,831	0.95		0.90
	12/31/2000		28.01			26,883	5.00		0.90
	12/31/1999		(5.31	)		17,389	6.51		0.90
Class B	12/31/2003	(1)	7.62			43	0.00		0.75
WRL Transamerica Value Balanced Subaccount
Class A	12/31/2003		19.09			63,822	3.11		0.90
	12/31/2002		(14.59	)		55,762	2.86		0.90
	12/31/2001		1.54			41,934	0.55		0.90
	12/31/2000		16.16			34,213	7.33		0.90
	12/31/1999		(6.48	)		33,317	2.50		0.90
Class B	12/31/2003	(1)	3.63			26	0.00		0.75
WRL PBHG/NWQ Value Select Subaccount
Class A	12/31/2003		28.62			38,125	0.83		0.90
	12/31/2002		(14.98	)		30,289	1.28		0.90
	12/31/2001		(2.68	)		32,890	(0.75	)	0.90
	12/31/2000		14.17			28,888	1.58		0.90
	12/31/1999		6.98			26,678	1.42		0.90
Class B	12/31/2003	(1)	9.13			27	0.00		0.75
WRL American Century International Subaccount
Class A	12/31/2003		24.17			26,065	0.00		0.90
	12/31/2002		(21.89	)		7,974	(0.59	)	0.90
	12/31/2001		(24.12	)		8,183	2.40		0.90
	12/31/2000		(15.75	)		7,944	15.54		0.90
	12/31/1999		23.84			7,013	5.09		0.90
WRL GE U.S. Equity Subaccount
Class A	12/31/2003		21.86			33,502	0.60		0.90
	12/31/2002		(20.52	)		26,774	(0.44	)	0.90
	12/31/2001		(9.69	)		31,020	(0.72	)	0.90
	12/31/2000		(1.67	)		29,771	3.81		0.90
	12/31/1999		17.35			26,416	8.27		0.90

F-44

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

	Year Ended		Accumulation Unit Value, Beginning of Year		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investment			Net Income (Loss) from Operations			Accumulation Unit Value, End of Year
WRL Third Avenue Value Subaccount
Class A	12/31/2003		$	13.07	$	(0.07	)	$	4.77		$	4.70		$	17.77
	12/31/2002			14.96		0.13			(2.02	)		(1.89	)		13.07
	12/31/2001			14.22		(0.11	)		0.85			0.74			14.96
	12/31/2000			10.59		0.60			3.03			3.63			14.22
	12/31/1999			9.23		0.19			1.17			1.36			10.59
Class B	12/31/2003	(1)		10.00		(0.01	)		0.51			0.50			10.50
WRL Clarion Real Estate Securities Subaccount
Class A	12/31/2003			11.71		0.19			3.85			4.04			15.75
	12/31/2002			11.40		0.12			0.19			0.31			11.71
	12/31/2001			10.36		0.21			0.83			1.04			11.40
	12/31/2000			8.06		0.10			2.20			2.30			10.36
	12/31/1999			8.46		0.07			(0.47	)		(0.40	)		8.06
Class B	12/31/2003	(1)		10.00		(0.01	)		0.92			0.91			10.91
WRL Marsico Growth Subaccount
Class A	12/31/2003			6.43		(0.07	)		1.69			1.62			8.05
	12/31/2002			8.76		(0.06	)		(2.27	)		(2.33	)		6.43
	12/31/2001			10.29		(0.01	)		(1.52	)		(1.53	)		8.76
	12/31/2000			11.29		0.06			(1.06	)		(1.00	)		10.29
	12/31/1999	(1)		10.00		(0.05	)		1.34			1.29			11.29
Class B	12/31/2003	(1)		10.00		(0.01	)		0.10			0.09			10.09
WRL Munder Net50 Subaccount
Class A	12/31/2003			4.87		(0.06	)		3.23			3.17			8.04
	12/31/2002			7.98		(0.05	)		(3.06	)		(3.11	)		4.87
	12/31/2001			10.80		(0.03	)		(2.79	)		(2.82	)		7.98
	12/31/2000			10.92		0.22			(0.34	)		(0.12	)		10.80
	12/31/1999	(1)		10.00		0.76			0.16			0.92			10.92
Class B	12/31/2003	(1)		10.00		(0.01	)		0.14			0.13			10.13
WRL T. Rowe Price Equity Income Subaccount
Class A	12/31/2003			7.62		0.07			1.90			1.97			9.59
	12/31/2002			9.48		(0.03	)		(1.83	)		(1.86	)		7.62
	12/31/2001			9.98		(0.08	)		(0.42	)		(0.50	)		9.48
	12/31/2000			9.16		(0.04	)		0.86			0.82			9.98
	12/31/1999	(1)		10.00		(0.04	)		(0.80	)		(0.84	)		9.16
Class B	12/31/2003	(1)		10.00		(0.01	)		0.74			0.73			10.73
WRL T. Rowe Price Small Cap Subaccount
Class A	12/31/2003			7.20		(0.08	)		2.89			2.81			10.01
	12/31/2002			9.99		(0.07	)		(2.72	)		(2.79	)		7.20
	12/31/2001			11.17		(0.09	)		(1.09	)		(1.18	)		9.99
	12/31/2000			12.31		0.04			(1.18	)		(1.14	)		11.17
	12/31/1999	(1)		10.00		0.41			1.90			2.31			12.31
Class B	12/31/2003	(1)		10.00		(0.01	)		0.34			0.33			10.33

F-45

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

	Year Ended		Total Return		Net Assets at End of Year (in Thousands)		Investment Income Ratio		Expense Ratio
WRL Third Avenue Value Subaccount
Class A	12/31/2003		36.04	%	$	56,041	0.45	%	0.90	%
	12/31/2002		(12.66	)		37,656	0.92		0.90
	12/31/2001		5.22			34,345	(0.78	)	0.90
	12/31/2000		34.26			16,735	4.53		0.90
	12/31/1999		14.68			3,411	1.98		0.90
Class B	12/31/2003	(1)	4.96			26	0.00		0.75
WRL Clarion Real Estate Securities Subaccount
Class A	12/31/2003		34.53			29,571	2.69		0.90
	12/31/2002		2.67			19,564	0.99		0.90
	12/31/2001		10.06			7,899	1.92		0.90
	12/31/2000		28.46			2,476	1.07		0.90
	12/31/1999		(4.63	)		627	0.95		0.90
Class B	12/31/2003	(1)	9.06			35	0.00		0.75
WRL Marsico Growth Subaccount
Class A	12/31/2003		0.94			9,980	0.00		0.90
	12/31/2002		(26.64	)		4,464	(0.79	)	0.90
	12/31/2001		(14.86	)		3,750	(0.08	)	0.90
	12/31/2000		(8.84	)		1,627	0.59		0.90
	12/31/1999	(1)	12.91			977	(0.90	)	0.90
Class B	12/31/2003	(1)	0.90			25	0.00		0.75
WRL Munder Net50 Subaccount
Class A	12/31/2003		65.12			12,963	0.00		0.90
	12/31/2002		(38.97	)		2,439	(0.90	)	0.90
	12/31/2001		(26.09	)		2,804	(0.29	)	0.90
	12/31/2000		(1.15	)		862	2.00		0.90
	12/31/1999	(1)	9.23			344	15.66		0.90
Class B	12/31/2003	(1)	1.34			31	0.00		0.75
WRL T. Rowe Price Equity Income Subaccount
Class A	12/31/2003		25.73			8,160	1.79		0.90
	12/31/2002		(19.54	)		4,594	(0.38	)	0.90
	12/31/2001		(5.02	)		3,419	(0.90	)	0.90
	12/31/2000		8.89			985	(0.42	)	0.90
	12/31/1999	(1)	(8.37	)		501	(0.90	)	0.90
Class B	12/31/2003	(1)	7.35			40	0.00		0.75
WRL T. Rowe Price Small Cap Subaccount
Class A	12/31/2003		39.15			17,274	0.00		0.90
	12/31/2002		(28.00	)		6,667	(0.90	)	0.90
	12/31/2001		(10.52	)		6,832	(0.90	)	0.90
	12/31/2000		(9.27	)		2,568	0.29		0.90
	12/31/1999	(1)	23.09			925	8.13		0.90
Class B	12/31/2003	(1)	3.29			34	0.00		0.75

F-46

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

	Year Ended		Accumulation Unit Value, Beginning of Year		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investment			Net Income (Loss) from Operations			Accumulation Unit Value, End of Year
WRL Salomon All Cap Subaccount
Class A	12/31/2003		$	9.47	$	(0.05	)	$	3.27		$	3.22		$	12.69
	12/31/2002			12.70		0.02			(3.25	)		(3.23	)		9.47
	12/31/2001			12.55		0.11			0.04			0.15			12.70
	12/31/2000			10.70		0.23			1.62			1.85			12.55
	12/31/1999	(1)		10.00		0.40			0.30			0.70			10.70
Class B	12/31/2003	(1)		10.00		(0.01	)		0.64			0.63			10.63
WRL PBHG Mid Cap Growth Subaccount
Class A	12/31/2003			6.11		(0.06	)		1.70			1.64			7.75
	12/31/2002			8.61		(0.06	)		(2.44	)		(2.50	)		6.11
	12/31/2001			13.56		(0.09	)		(4.86	)		(4.95	)		8.61
	12/31/2000			15.98		0.04			(2.46	)		(2.42	)		13.56
	12/31/1999	(1)		10.00		0.04			5.94			5.98			15.98
WRL Dreyfus Mid Cap Subaccount
Class A	12/31/2003			9.35		(0.08	)		2.91			2.83			12.18
	12/31/2002			10.81		(0.09	)		(1.37	)		(1.46	)		9.35
	12/31/2001			11.35		0.05			(0.59	)		(0.54	)		10.81
	12/31/2000			10.14		0.23			0.98			1.21			11.35
	12/31/1999	(1)		10.00		(0.04	)		0.18			0.14			10.14
WRL Great Companies-AmericaSM Subaccount
Class A	12/31/2003			7.74		(0.04	)		1.86			1.82			9.56
	12/31/2002			9.84		(0.05	)		(2.05	)		(2.10	)		7.74
	12/31/2001			11.31		(0.05	)		(1.42	)		(1.47	)		9.84
	12/31/2000	(1)		10.00		(0.06	)		1.37			1.31			11.31
Class B	12/31/2003	(1)		10.00		(0.01	)		0.62			0.61			10.61
WRL Great Companies-TechnologySM Subaccount
Class A	12/31/2003			2.57		(0.03	)		1.30			1.27			3.84
	12/31/2002			4.19		(0.03	)		(1.59	)		(1.62	)		2.57
	12/31/2001			6.70		(0.04	)		(2.47	)		(2.51	)		4.19
	12/31/2000	(1)		10.00		(0.05	)		(3.25	)		(3.30	)		6.70
Class B	12/31/2003	(1)		10.00		(0.01	)		0.36			0.35			10.35
WRL Templeton Great Companies Global Subaccount
Class A	12/31/2003			5.46		(0.05	)		1.45			1.40			6.86
	12/31/2002			7.02		(0.05	)		(1.51	)		(1.56	)		5.46
	12/31/2001			8.52		(0.06	)		(1.44	)		(1.50	)		7.02
	12/31/2000	(1)		10.00		(0.03	)		(1.45	)		(1.48	)		8.52
Class B	12/31/2003	(1)		10.00		(0.01	)		0.74			0.73			10.73

F-47

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

	Year Ended		Total Return		Net Assets at End of Year (in Thousands)		Investment Income Ratio		Expense Ratio
WRL Salomon All Cap Subaccount
Class A	12/31/2003		33.95	%	$	41,702	0.39	%	0.90	%
	12/31/2002		(25.39	)		27,583	0.36		0.90
	12/31/2001		1.18			30,526	0.89		0.90
	12/31/2000		17.24			8,072	1.91		0.90
	12/31/1999	(1)	7.02			383	8.07		0.90
Class B	12/31/2003	(1)	6.31			27	0.00		0.75
WRL PBHG Mid Cap Growth Subaccount
Class A	12/31/2003		26.93			36,682	0.00		0.90
	12/31/2002		(29.03	)		26,001	(0.90	)	0.90
	12/31/2001		(36.50	)		32,867	(0.90	)	0.90
	12/31/2000		(15.16	)		39,702	0.25		0.90
	12/31/1999	(1)	59.78			5,065	0.62		0.90
WRL Dreyfus Mid Cap Subaccount
Class A	12/31/2003		30.25			15,227	0.11		0.90
	12/31/2002		(13.50	)		9,498	(0.85	)	0.90
	12/31/2001		(4.80	)		5,325	0.44		0.90
	12/31/2000		11.91			1,811	2.02		0.90
	12/31/1999	(1)	1.44			337	(0.90	)	0.90
WRL Great Companies-AmericaSM Subaccount
Class A	12/31/2003		23.56			48,098	0.46		0.90
	12/31/2002		(21.40	)		36,236	(0.62	)	0.90
	12/31/2001		(12.98	)		16,607	(0.56	)	0.90
	12/31/2000	(1)	13.12			8,491	(0.90	)	0.90
Class B	12/31/2003	(1)	6.06			27	0.00		0.75
WRL Great Companies-TechnologySM Subaccount
Class A	12/31/2003		49.61			14,346	0.00		0.90
	12/31/2002		(38.67	)		5,195	(0.90	)	0.90
	12/31/2001		(37.51	)		6,147	(0.90	)	0.90
	12/31/2000	(1)	(33.01	)		2,788	(0.90	)	0.90
Class B	12/31/2003	(1)	3.53			26	0.00		0.75
WRL Templeton Great Companies Global Subaccount
Class A	12/31/2003		25.60			8,175	0.13		0.90
	12/31/2002		(22.21	)		4,084	(0.85	)	0.90
	12/31/2001		(17.58	)		2,238	(0.90	)	0.90
	12/31/2000	(1)	(14.84	)		494	(0.90	)	0.90
Class B	12/31/2003	(1)	7.34			35	0.00		0.75

F-48

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

	Year Ended		Accumulation Unit Value, Beginning of Year		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investment			Net Income (Loss) from Operations			Accumulation Unit Value, End of Year
WRL Asset Allocation-Conservative Portfolio Subaccount
Class A	12/31/2003		$	9.04	$	(0.08	)	$	2.05		$	1.97		$	11.01
	12/31/2002	(1)		10.00		(0.05	)		(0.91	)		(0.96	)		9.04
Class B	12/31/2003	(1)		10.00		(0.01	)		0.40			0.39			10.39
WRL Asset Allocation-Moderate Portfolio Subaccount
Class A	12/31/2003			8.76		(0.08	)		2.16			2.08			10.84
	12/31/2002	(1)		10.00		(0.05	)		(1.19	)		(1.24	)		8.76
Class B	12/31/2003	(1)		10.00		(0.01	)		0.44			0.43			10.43
WRL Asset Allocation-Moderate Growth Portfolio Subaccount
Class A	12/31/2003			8.47		(0.07	)		2.27			2.20			10.67
	12/31/2002	(1)		10.00		(0.05	)		(1.48	)		(1.53	)		8.47
Class B	12/31/2003	(1)		10.00		(0.01	)		0.51			0.50			10.50
WRL Asset Allocation-Growth Portfolio Subaccount
Class A	12/31/2003			8.12		(0.07	)		2.48			2.41			10.53
	12/31/2002	(1)		10.00		(0.05	)		(1.83	)		(1.88	)		8.12
Class B	12/31/2003	(1)		10.00		(0.01	)		0.59			0.58			10.58
WRL PIMCO Total Return Subaccount
Class A	12/31/2003			10.56		0.03			0.39			0.42			10.98
	12/31/2002	(1)		10.00		(0.06	)		0.62			0.56			10.56
Class B	12/31/2003	(1)		10.00		(0.01	)		0.15			0.14			10.14
WRL Janus Balanced Subaccount
Class A	12/31/2003			9.43		(0.07	)		1.29			1.22			10.65
	12/31/2002	(1)		10.00		(0.05	)		(0.52	)		(0.57	)		9.43
Class B	12/31/2003	(1)		10.00		(0.01	)		0.38			0.37			10.37
WRL Transamerica Convertible Securities Subaccount
Class A	12/31/2003			9.26		(0.08	)		2.17			2.09			11.35
	12/31/2002	(1)		10.00		(0.05	)		(0.69	)		(0.74	)		9.26
Class B	12/31/2003	(1)		10.00		(0.01	)		0.28			0.27			10.27
WRL Transamerica Equity Subaccount
Class A	12/31/2003			8.53		(0.09	)		2.65			2.56			11.09
	12/31/2002	(1)		10.00		(0.05	)		(1.42	)		(1.47	)		8.53
Class B	12/31/2003	(1)		10.00		(0.01	)		0.50			0.49			10.49

F-49

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

	Year Ended		Total Return		Net Assets at End of Year (in Thousands)		Investment Income Ratio		Expense Ratio
WRL Asset Allocation-Conservative Portfolio Subaccount
Class A	12/31/2003		21.82	%	$	11,072	0.13	%	0.90	%
	12/31/2002	(1)	(9.65	)		4,376	(0.90	)	0.90
Class B	12/31/2003	(1)	3.88			26	0.00		0.75
WRL Asset Allocation-Moderate Portfolio Subaccount
Class A	12/31/2003		23.75			32,736	0.11		0.90
	12/31/2002	(1)	(12.43	)		10,778	(0.90	)	0.90
Class B	12/31/2003	(1)	4.34			26	0.00		0.75
WRL Asset Allocation-Moderate Growth Portfolio Subaccount
Class A	12/31/2003		26.03			65,864	0.15		0.90
	12/31/2002	(1)	(15.31	)		15,054	(0.90	)	0.90
Class B	12/31/2003	(1)	5.02			26	0.00		0.75
WRL Asset Allocation-Growth Portfolio Subaccount
Class A	12/31/2003		29.63			42,131	0.16		0.90
	12/31/2002	(1)	(18.79	)		6,751	(0.90	)	0.90
Class B	12/31/2003	(1)	5.83			26	0.00		0.75
WRL PIMCO Total Return Subaccount
Class A	12/31/2003		3.97			9,186	1.16		0.90
	12/31/2002	(1)	5.56			7,376	(0.90	)	0.90
Class B	12/31/2003	(1)	1.35			25	0.00		0.75
WRL Janus Balanced Subaccount
Class A	12/31/2003		12.88			2,967	0.19		0.90
	12/31/2002	(1)	(5.67	)		2,319	(0.90	)	0.90
Class B	12/31/2003	(1)	3.72			26	0.00		0.75
WRL Transamerica Convertible Securities Subaccount
Class A	12/31/2003		22.56			2,004	0.17		0.90
	12/31/2002	(1)	(7.36	)		311	(0.90	)	0.90
Class B	12/31/2003	(1)	2.73			31	0.00		0.75
WRL Transamerica Equity Subaccount
Class A	12/31/2003		30.05			10,463	0.00		0.90
	12/31/2002	(1)	(14.69	)		2,781	(0.90	)	0.90
Class B	12/31/2003	(1)	4.88			26	0.00		0.75

F-50

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

	Year Ended		Accumulation Unit Value, Beginning of Year		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investment			Net Income (Loss) from Operations			Accumulation Unit Value, End of Year
WRL Transamerica Growth Opportunities Subaccount
Class A	12/31/2003		$	7.92	$	(0.08	)	$	2.45		$	2.37		$	10.29
	12/31/2002	(1)		10.00		(0.04	)		(2.04	)		(2.08	)		7.92
Class B	12/31/2003	(1)		10.00		(0.01	)		0.50			0.49			10.49
WRL Capital Guardian Value Subaccount
Class A	12/31/2003			7.91		(0.01	)		2.65			2.64			10.55
	12/31/2002	(1)		10.00		0.39			(2.48	)		(2.09	)		7.91
Class B	12/31/2003	(1)		10.00		(0.01	)		0.82			0.81			10.81
WRL Transamerica U.S. Government Securities Subaccount
Class A	12/31/2003			10.47		0.15			0.06			0.21			10.68
	12/31/2002	(1)		10.00		0.00			0.47			0.47			10.47
Class B	12/31/2003	(1)		10.00		(0.01	)		0.10			0.09			10.09
WRL J.P. Morgan Enhanced Index Subaccount
Class A	12/31/2003			8.11		(0.04	)		2.30			2.26			10.37
	12/31/2002	(1)		10.00		(0.02	)		(1.87	)		(1.89	)		8.11
Class B	12/31/2003	(1)		10.00		(0.01	)		0.68			0.67			10.67
WRL MFS High Yield Subaccount
Class A	12/31/2003	(1)		10.00		(0.03	)		0.93			0.90			10.90
Class B	12/31/2003	(1)		10.00		(0.01	)		0.35			0.34			10.34
WRL Capital Guardian U.S. Equity Subaccount
Class A	12/31/2003			8.04		(0.07	)		2.90			2.83			10.87
	12/31/2002	(1)		10.00		(0.01	)		(1.95	)		(1.96	)		8.04

F-51

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

	Year Ended		Total Return		Net Assets at End of Year (in Thousands)		Investment Income Ratio		Expense Ratio
WRL Transamerica Growth Opportunities Subaccount
Class A	12/31/2003		30.04	%	$	4,407	0.00	%	0.90	%
	12/31/2002	(1)	(20.84	)		552	(0.90	)	0.90
Class B	12/31/2003	(1)	4.88			34	0.00		0.75
WRL Capital Guardian Value Subaccount
Class A	12/31/2003		33.38			1,104	0.74		0.90
	12/31/2002	(1)	(20.90	)		181	(0.90	)	0.90
Class B	12/31/2003	(1)	8.06			34	0.00		0.75
WRL Transamerica U.S. Government Securities Subaccount
Class A	12/31/2003		2.03			332	2.29		0.90
	12/31/2002	(1)	4.65			221	0.07		0.90
Class B	12/31/2003	(1)	0.93			25	0.00		0.75
WRL J.P. Morgan Enhanced Index Subaccount
Class A	12/31/2003		27.79			872	0.50		0.90
	12/31/2002	(1)	(18.85	)		50	(0.32	)	0.90
Class B	12/31/2003	(1)	6.74			27	0.00		0.75
WRL MFS High Yield Subaccount
Class A	12/31/2003	(1)	8.90			408	0.31		0.90
Class B	12/31/2003	(1)	3.40			26	0.00		0.75
WRL Capital Guardian U.S. Equity Subaccount
Class A	12/31/2003		35.28			1,120	0.14		0.90
	12/31/2002	(1)	(19.63	)		144	(0.15	)	0.90

F-52

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

	Year Ended		Accumulation Unit Value, Beginning of Year		Net Investment Income (Loss)			Net Realized and Unrealized Gain (Loss) on Investment			Net Income (Loss) from Operations			Accumulation Unit Value, End of Year
Access U.S. Government Money Market Portfolio Subaccount
Class A	12/31/2003	(1)	$	10.00	$	(0.06	)	$	0.00		$	(0.06	)	$	9.94
Class B	12/31/2003	(1)		10.00		(0.01	)		0.00			(0.01	)		9.99
Potomac Dow 30 Plus Portfolio Subaccount
Class A	12/31/2003	(1)		10.00		0.24			1.91			2.15			12.15
Class B	12/31/2003	(1)		10.00		0.11			0.71			0.82			10.82
Potomac OTC Plus Portfolio Subaccount
Class A	12/31/2003	(1)		10.00		0.52			2.00			2.52			12.52
Class B	12/31/2003	(1)		10.00		0.17			0.14			0.31			10.31
Wells S&P REIT Index Portfolio Subaccount
Class A	12/31/2003	(1)		10.00		0.98			1.26			2.24			12.24
Class B	12/31/2003	(1)		10.00		0.17			0.40			0.57			10.57
Fidelity VIP Growth Opportunities Portfolio Subaccount
Class A	12/31/2003			5.60		(0.03	)		1.61			1.58			7.18
	12/31/2002			7.25		(0.01	)		(1.64	)		(1.65	)		5.60
	12/31/2001			8.56		(0.05	)		(1.26	)		(1.31	)		7.25
	12/31/2000	(1)		10.00		(0.06	)		(1.38	)		(1.44	)		8.56
Fidelity VIP Contrafund® Portfolio Subaccount
Class A	12/31/2003			7.29		(0.05	)		2.03			1.98			9.27
	12/31/2002			8.14		(0.03	)		(0.82	)		(0.85	)		7.29
	12/31/2001			9.38		(0.04	)		(1.20	)		(1.24	)		8.14
	12/31/2000	(1)		10.00		(0.06	)		(0.56	)		(0.62	)		9.38
Fidelity VIP Equity-Income Portfolio Subaccount
Class A	12/31/2003			8.48		0.05			2.39			2.44			10.92
	12/31/2002			10.32		0.04			(1.88	)		(1.84	)		8.48
	12/31/2001			10.99		(0.04	)		(0.63	)		(0.67	)		10.32
	12/31/2000	(1)		10.00		(0.06	)		1.05			0.99			10.99
Fidelity VIP Index 500 Subaccount
Class B	12/31/2003	(1)		10.00		(0.01	)		0.61			0.60			10.60

F-53

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

	Year Ended		Total Return		Net Assets at End of Year (in Thousands)		Investment Income Ratio		Expense Ratio
Access U.S. Government Money Market Portfolio Subaccount
Class A	12/31/2003	(1)	(0.57	)%	$	12,071	0.00	%	0.90	%
Class B	12/31/2003	(1)	(0.13	)		25	0.00		0.75
Potomac Dow 30 Plus Portfolio Subaccount
Class A	12/31/2003	(1)	21.53			159	2.72		0.90
Class B	12/31/2003	(1)	8.17			27	1.20		0.75
Potomac OTC Plus Portfolio Subaccount
Class A	12/31/2003	(1)	25.17			5,360	4.97		0.90
Class B	12/31/2003	(1)	3.08			26	1.84		0.75
Wells S&P REIT Index Portfolio Subaccount
Class A	12/31/2003	(1)	22.39			352	9.08		0.90
Class B	12/31/2003	(1)	5.74			26	1.78		0.75
Fidelity VIP Growth Opportunities Portfolio Subaccount
Class A	12/31/2003		28.25			3,103	0.40		0.90
	12/31/2002		(22.70	)		1,845	(0.17	)	0.90
	12/31/2001		(15.40	)		1,397	(0.65	)	0.90
	12/31/2000	(1)	(14.36	)		562	(0.90	)	0.90
Fidelity VIP Contrafund® Portfolio Subaccount
Class A	12/31/2003		27.05			10,483	0.28		0.90
	12/31/2002		(10.41	)		6,552	(0.43	)	0.90
	12/31/2001		(13.25	)		3,335	(0.45	)	0.90
	12/31/2000	(1)	(6.16	)		1,030	(0.90	)	0.90
Fidelity VIP Equity-Income Portfolio Subaccount
Class A	12/31/2003		28.87			10,460	1.42		0.90
	12/31/2002		(17.89	)		6,167	0.46		0.90
	12/31/2001		(6.07	)		4,161	(0.35	)	0.90
	12/31/2000	(1)	9.91			307	(0.90	)	0.90
Fidelity VIP Index 500 Subaccount
Class B	12/31/2003	(1)	5.95			27	0.00		0.75

Per unit information has been computed using average units outstanding throughout each period. Total return and investment income ratios are not annualized for periods of less than one year. The ratio of income (loss) is represented as the dividends, excluding distributions of long-term capital gains, received by the Life Account to the average net assets. For the periods prior to December 31, 2003, the ratio represented net investment income (loss) as the dividends received, reduced for expenses paid by the Life Account, to average net assets and annualized for periods of less than one year. The expense ratio considers only the expenses borne directly by the Life Account and excludes expenses incurred directly by the underlying funds.

F-54

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Note 6—Equity Transactions

(All amounts in thousands)

Unit Activity:	Year Ended		Units Outstanding— Beginning of Year	Units Issued	Units Redeemed		Units Outstanding— End of Year
WRL Transamerica Money Market Subaccount
Class A	12/31/2003		4,901	4,365	(6,213	)	3,053
	12/31/2002		4,349	8,745	(8,193	)	4,901
Class B	12/31/2003	(1)	0	6	(1	)	5
WRL AEGON Bond Subaccount
Class A	12/31/2003		2,170	1,089	(1,380	)	1,879
	12/31/2002		1,725	1,543	(1,098	)	2,170
Class B	12/31/2003	(1)	0	3	0		3
WRL Janus Growth Subaccount
Class A	12/31/2003		9,348	2,688	(2,978	)	9,058
	12/31/2002		9,583	3,597	(3,832	)	9,348
Class B	12/31/2003	(1)	0	3	0		3
WRL Janus Global Subaccount
Class A	12/31/2003		12,274	3,301	(4,062	)	11,513
	12/31/2002		12,912	3,858	(4,496	)	12,274
Class B	12/31/2003	(1)	0	3	0		3
WRL LKCM Strategic Total Return Subaccount
Class A	12/31/2003		4,266	849	(1,156	)	3,959
	12/31/2002		4,517	1,138	(1,389	)	4,266
WRL Van Kampen Emerging Growth Subaccount
Class A	12/31/2003		10,076	3,295	(3,445	)	9,926
	12/31/2002		10,305	4,184	(4,413	)	10,076
Class B	12/31/2003	(1)	0	3	0		3
WRL Alger Aggressive Growth Subaccount
Class A	12/31/2003		10,072	3,959	(3,757	)	10,274
	12/31/2002		9,881	4,879	(4,688	)	10,072
WRL Federated Growth & Income Subaccount
Class A	12/31/2003		3,465	1,406	(1,314	)	3,557
	12/31/2002		2,531	2,434	(1,500	)	3,465
Class B	12/31/2003	(1)	0	4	0		4

F-55

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Capital Unit Transactions:	Year Ended		Proceeds from Units Issued		Cost of Units Redeemed			Increase (Decrease) in Net Assets from Capital Unit Transactions
WRL Transamerica Money Market Subaccount
Class A	12/31/2003		$	83,173	$	(118,374	)	$	(35,201	)
	12/31/2002			166,308		(155,807	)		10,501
Class B	12/31/2003	(1)		56		(12	)		44
WRL AEGON Bond Subaccount
Class A	12/31/2003			31,187		(39,675	)		(8,488	)
	12/31/2002			41,856		(29,563	)		12,293
Class B	12/31/2003	(1)		0		0			0
WRL Janus Growth Subaccount
Class A	12/31/2003			153,439		(170,377	)		(16,938	)
	12/31/2002			208,495		(218,915	)		(10,420	)
Class B	12/31/2003	(1)		0		0			0
WRL Janus Global Subaccount
Class A	12/31/2003			61,243		(75,527	)		(14,284	)
	12/31/2002			79,862		(92,031	)		(12,169	)
Class B	12/31/2003	(1)		0		0			0
WRL LKCM Strategic Total Return Subaccount
Class A	12/31/2003			16,835		(22,948	)		(6,113	)
	12/31/2002			22,468		(27,183	)		(4,715	)
WRL Van Kampen Emerging Growth Subaccount
Class A	12/31/2003			91,145		(95,072	)		(3,927	)
	12/31/2002			126,081		(131,706	)		(5,625	)
Class B	12/31/2003	(1)		0		0			0
WRL Alger Aggressive Growth Subaccount
Class A	12/31/2003			74,440		(70,627	)		3,813
	12/31/2002			96,403		(91,615	)		4,788
WRL Federated Growth & Income Subaccount
Class A	12/31/2003			35,214		(32,815	)		2,399
	12/31/2002			56,890		(34,500	)		22,390
Class B	12/31/2003	(1)		21		(5	)		16

F-56

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Unit Activity:	Year Ended		Units Outstanding—   Beginning of Year	Units Issued	Units Redeemed		Units Outstanding—   End of Year
WRL Transamerica Value Balanced Subaccount
Class A	12/31/2003		3,535	983	(1,121	)	3,397
	12/31/2002		2,270	2,440	(1,175	)	3,535
Class B	12/31/2003	(1)	0	3	0		3
WRL PBHG/NWQ Value Select Subaccount
Class A	12/31/2003		2,278	866	(915	)	2,229
	12/31/2002		2,103	1,061	(886	)	2,278
Class B	12/31/2003	(1)	0	3	0		3
WRL American Century International Subaccount
Class A	12/31/2003		1,083	2,820	(1,054	)	2,849
	12/31/2002		868	930	(715	)	1,083
WRL GE U.S. Equity Subaccount
Class A	12/31/2003		2,109	845	(789	)	2,165
	12/31/2002		1,942	1,000	(833	)	2,109
WRL Third Avenue Value Subaccount
Class A	12/31/2003		2,882	1,431	(1,160	)	3,153
	12/31/2002		2,296	2,107	(1,521	)	2,882
Class B	12/31/2003	(1)	0	3	0		3
WRL Clarion Real Estate Securities Subaccount
Class A	12/31/2003		1,671	1,202	(995	)	1,878
	12/31/2002		693	2,043	(1,065	)	1,671
Class B	12/31/2003	(1)	0	3	0		3
WRL Marsico Growth Subaccount
Class A	12/31/2003		694	1,027	(481	)	1,240
	12/31/2002		428	863	(597	)	694
Class B	12/31/2003	(1)	0	3	0		3
WRL Munder Net50 Subaccount
Class A	12/31/2003		501	2,104	(993	)	1,612
	12/31/2002		351	771	(621	)	501
Class B	12/31/2003	(1)	0	3	0		3

F-57

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Capital Unit Transactions:	Year Ended		Proceeds from Units Issued		Cost of Units Redeemed			Increase (Decrease) in Net Assets from Capital Unit Transactions
WRL Transamerica Value Balanced Subaccount
Class A	12/31/2003		$	16,507	$	(18,820	)	$	(2,313	)
	12/31/2002			41,747		(18,904	)		22,843
Class B	12/31/2003	(1)		0		0			0
WRL PBHG/NWQ Value Select Subaccount
Class A	12/31/2003			12,474		(12,998	)		(524	)
	12/31/2002			15,533		(12,638	)		2,895
Class B	12/31/2003	(1)		0		0			0
WRL American Century International Subaccount
Class A	12/31/2003			21,225		(8,332	)		12,893
	12/31/2002			7,895		(6,027	)		1,868
WRL GE U.S. Equity Subaccount
Class A	12/31/2003			11,466		(10,685	)		781
	12/31/2002			14,247		(11,638	)		2,609
WRL Third Avenue Value Subaccount
Class A	12/31/2003			21,181		(16,758	)		4,423
	12/31/2002			30,431		(21,040	)		9,391
Class B	12/31/2003	(1)		0		0			0
WRL Clarion Real Estate Securities Subaccount
Class A	12/31/2003			15,949		(13,028	)		2,921
	12/31/2002			24,403		(12,476	)		11,927
Class B	12/31/2003	(1)		9		(2	)		7
WRL Marsico Growth Subaccount
Class A	12/31/2003			7,499		(3,368	)		4,131
	12/31/2002			6,209		(4,281	)		1,928
Class B	12/31/2003	(1)		0		0			0
WRL Munder Net50 Subaccount
Class A	12/31/2003			14,489		(6,411	)		8,078
	12/31/2002			4,319		(3,585	)		734
Class B	12/31/2003	(1)		8		(2	)		6

F-58

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Unit Activity:	Year Ended		Units Outstanding— Beginning of Year	Units Issued	Units Redeemed		Units Outstanding— End of Year
WRL T. Rowe Price Equity Income Subaccount
Class A	12/31/2003		603	520	(272	)	851
	12/31/2002		361	529	(287	)	603
Class B	12/31/2003	(1)	0	4	0		4
WRL T. Rowe Price Small Cap Subaccount
Class A	12/31/2003		927	1,676	(878	)	1,725
	12/31/2002		684	1,055	(812	)	927
Class B	12/31/2003	(1)	0	3	0		3
WRL Salomon All Cap Subaccount
Class A	12/31/2003		2,912	1,610	(1,235	)	3,287
	12/31/2002		2,405	2,208	(1,701	)	2,912
Class B	12/31/2003	(1)	0	3	0		3
WRL PBHG Mid Cap Growth Subaccount
Class A	12/31/2003		4,256	2,426	(1,952	)	4,730
	12/31/2002		3,818	2,861	(2,423	)	4,256
WRL Dreyfus Mid Cap Subaccount
Class A	12/31/2003		1,016	742	(508	)	1,250
	12/31/2002		493	1,315	(792	)	1,016
WRL Great Companies-AmericaSM Subaccount
Class A	12/31/2003		4,683	2,288	(1,940	)	5,031
	12/31/2002	(1)	1,687	4,889	(1,893	)	4,683
Class B	12/31/2003	(1)	0	3	0		3
WRL Great Companies-TechnologySM Subaccount
Class A	12/31/2003		2,023	3,986	(2,274	)	3,735
	12/31/2002	(1)	1,468	2,408	(1,853	)	2,023
Class B	12/31/2003	(1)	0	3	0		3
WRL Templeton Great Companies Global Subaccount
Class A	12/31/2003		748	917	(472	)	1,193
	12/31/2002	(1)	319	861	(432	)	748
Class B	12/31/2003	(1)	0	3	0		3

F-59

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Capital Unit Transactions:	Year Ended		Proceeds from Units Issued		Cost of Units Redeemed			Increase (Decrease) in Net Assets from Capital Unit Transactions
WRL T. Rowe Price Equity Income Subaccount
Class A	12/31/2003		$	4,356	$	(2,227	)	$	2,129
	12/31/2002			4,485		(2,473	)		2,012
Class B	12/31/2003	(1)		16		(4	)		12
WRL T. Rowe Price Small Cap Subaccount
Class A	12/31/2003			14,528		(7,357	)		7,171
	12/31/2002			8,936		(6,716	)		2,220
Class B	12/31/2003	(1)		10		(2	)		8
WRL Salomon All Cap Subaccount
Class A	12/31/2003			17,212		(13,001	)		4,211
	12/31/2002			24,375		(17,908	)		6,467
Class B	12/31/2003	(1)		0		0			0
WRL PBHG Mid Cap Growth Subaccount
Class A	12/31/2003			16,771		(13,377	)		3,394
	12/31/2002			20,462		(17,215	)		3,247
WRL Dreyfus Mid Cap Subaccount
Class A	12/31/2003			7,842		(5,249	)		2,593
	12/31/2002			13,968		(7,970	)		5,998
WRL Great Companies-AmericaSM Subaccount
Class A	12/31/2003			19,126		(16,308	)		2,818
	12/31/2002			42,221		(15,742	)		26,479
Class B	12/31/2003	(1)		0		0			0
WRL Great Companies-TechnologySM Subaccount
Class A	12/31/2003			13,001		(7,328	)		5,673
	12/31/2002			7,827		(5,956	)		1,871
Class B	12/31/2003	(1)		0		0			0
WRL Templeton Great Companies Global Subaccount
Class A	12/31/2003			5,516		(2,756	)		2,760
	12/31/2002			5,234		(2,590	)		2,644
Class B	12/31/2003	(1)		10		(2	)		8

F-60

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Unit Activity:	Year Ended		Units Outstanding— Beginning of Year	Units Issued	Units Redeemed		Units Outstanding— End of Year
WRL Asset Allocation—Conservative Portfolio Subaccount
Class A	12/31/2003		484	1,138	(616	)	1,006
	12/31/2002	(1)	0	633	(149	)	484
Class B	12/31/2003	(1)	0	3	0		3
WRL Asset Allocation—Moderate Portfolio Subaccount
Class A	12/31/2003		1,231	2,911	(1,121	)	3,021
	12/31/2002	(1)	0	1,478	(247	)	1,231
Class B	12/31/2003	(1)	0	3	0		3
WRL Asset Allocation—Moderate Growth Portfolio Subaccount
Class A	12/31/2003		1,778	6,097	(1,704	)	6,171
	12/31/2002	(1)	0	2,083	(305	)	1,778
Class B	12/31/2003	(1)	0	3	0		3
WRL Asset Allocation—Growth Portfolio Subaccount
Class A	12/31/2003		831	4,187	(1,016	)	4,002
	12/31/2002	(1)	0	1,011	(180	)	831
Class B	12/31/2003	(1)	0	3	0		3
WRL PIMCO Total Return Subaccount
Class A	12/31/2003		699	1,030	(892	)	837
	12/31/2002	(1)	0	986	(287	)	699
Class B	12/31/2003	(1)	0	3	0		3
WRL Janus Balanced Subaccount
Class A	12/31/2003		246	266	(233	)	279
	12/31/2002	(1)	0	352	(106	)	246
Class B	12/31/2003	(1)	0	3	0		3
WRL Transamerica Convertible Securities Subaccount
Class A	12/31/2003		34	217	(74	)	177
	12/31/2002	(1)	0	43	(9	)	34
Class B	12/31/2003	(1)	0	3	0		3
WRL Transamerica Equity Subaccount
Class A	12/31/2003		326	1,004	(387	)	943
	12/31/2002	(1)	0	381	(55	)	326
Class B	12/31/2003	(1)	0	3	0		3

F-61

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Capital Unit Transactions:	Year Ended		Proceeds from Units Issued		Cost of Units Redeemed			Increase (Decrease) in Net Assets from Capital Unit Transactions
WRL Asset Allocation—Conservative Subaccount
Class A	12/31/2003		$	10,835	$	(6,096	)	$	4,739
	12/31/2002	(1)		5,700		(1,377	)		4,323
Class B	12/31/2003	(1)		0		0			0
WRL Asset Allocation—Moderate Subaccount
Class A	12/31/2003			27,774		(10,722	)		17,052
	12/31/2002	(1)		13,087		(2,206	)		10,881
Class B	12/31/2003	(1)		0		0			0
WRL Asset Allocation—Moderate Growth Subaccount
Class A	12/31/2003			57,353		(15,939	)		41,414
	12/31/2002	(1)		17,921		(2,607	)		15,314
Class B	12/31/2003	(1)		0		0			0
WRL Asset Allocation—Growth Subaccount
Class A	12/31/2003			38,530		(9,151	)		29,379
	12/31/2002	(1)		8,492		(1,499	)		6,993
Class B	12/31/2003	(1)		0		0			0
WRL PIMCO Total Return Subaccount
Class A	12/31/2003			11,070		(9,562	)		1,508
	12/31/2002	(1)		10,012		(2,965	)		7,047
Class B	12/31/2003	(1)		0		0			0
WRL Janus Balanced Subaccount
Class A	12/31/2003			2,580		(2,280	)		300
	12/31/2002	(1)		3,345		(1,013	)		2,332
Class B	12/31/2003	(1)		0		0			0
WRL Transamerica Convertible Securities Subaccount
Class A	12/31/2003			2,222		(761	)		1,461
	12/31/2002	(1)		406		(111	)		295
Class B	12/31/2003	(1)		7		(2	)		5
WRL Transamerica Equity Subaccount
Class A	12/31/2003			9,657		(3,690	)		5,967
	12/31/2002	(1)		3,311		(500	)		2,811
Class B	12/31/2003	(1)		0		0			0

F-62

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Unit Activity:	Year Ended		Units Outstanding— Beginning of Year	Units Issued	Units Redeemed		Units Outstanding— End of Year
WRL Transamerica Growth Opportunities Subaccount
Class A	12/31/2003		70	446	(87	)	429
	12/31/2002	(1)	0	89	(19	)	70
Class B	12/31/2003	(1)	0	3	0		3
WRL Capital Guardian Value Subaccount
Class A	12/31/2003		23	103	(21	)	105
	12/31/2002	(1)	0	37	(14	)	23
Class B	12/31/2003	(1)	0	3	(0	)	3
WRL Transamerica U.S. Government Securities Subaccount
Class A	12/31/2003		21	45	(35	)	31
	12/31/2002	(1)	0	22	(1	)	21
Class B	12/31/2003	(1)	0	3	0		3
WRL J.P. Morgan Enhanced Index Subaccount
Class A	12/31/2003		6	98	(20	)	84
	12/31/2002	(1)	0	6	0		6
Class B	12/31/2003	(1)	0	3	0		3
WRL MFS High Yield
Class A	12/31/2003	(1)	0	49	(12	)	37
Class B	12/31/2003	(1)	0	3	0		3
WRL Capital Guardian U.S. Equity Subaccount
Class A	12/31/2003		18	100	(15	)	103
	12/31/2002	(1)	0	27	(9	)	18

F-63

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Capital Unit Transactions:	Year Ended		Proceeds from Units Issued		Cost of Units Redeemed			Increase (Decrease) in Net Assets from Capital Unit Transactions
WRL Transamerica Growth Opportunities Subaccount
Class A	12/31/2003		$	3,995	$	(796	)	$	3,199
	12/31/2002	(1)		737		(181	)		556
Class B	12/31/2003	(1)		10		(2	)		8
WRL Capital Guardian Value Subaccount
Class A	12/31/2003			954		(197	)		757
	12/31/2002	(1)		336		(128	)		208
Class B	12/31/2003	(1)		8		(2	)		6
WRL Transamerica U.S. Government Securities Subaccount
Class A	12/31/2003			483		(350	)		133
	12/31/2002	(1)		231		(41	)		190
Class B	12/31/2003	(1)		0		0			0
WRL J.P. Morgan Enhanced Index Subaccount
Class A	12/31/2003			856		(181	)		675
	12/31/2002	(1)		58		(28	)		30
Class B	12/31/2003	(1)		0		0			0
WRL MFS High Yield
Class A	12/31/2003	(1)		489		(123	)		366
Class B	12/31/2003	(1)		0		0			0
WRL Capital Guardian U.S. Equity Subaccount
Class A	12/31/2003			993		(153	)		840
	12/31/2002	(1)		245		(90	)		155

F-64

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Unit Activity:	Year Ended		Units Outstanding— Beginning of Year	Units Issued	Units Redeemed		Units Outstanding— End of Year
Access U.S. Government Money Market Portfolio Subaccount
Class A	12/31/2003	(1)	0	5,474	(4,260	)	1,214
Class B	12/31/2003	(1)	0	3	0		3
Potomac Dow 30 Plus Portfolio Subaccount
Class A	12/31/2003	(1)	0	27	(14	)	13
Class B	12/31/2003	(1)	0	3	0		3
Potomac OTC Plus Portfolio Subaccount
Class A	12/31/2003	(1)	0	3,649	(3,221	)	428
Class B	12/31/2003	(1)	0	3	0		3
Wells S&P REIT Index Portfolio Subaccount
Class A	12/31/2003	(1)	0	40	(11	)	29
Class B	12/31/2003	(1)	0	3	0		3
Fidelity VIP Growth Opportunities Portfolio Subaccount
Class A	12/31/2003		329	340	(237	)	432
	12/31/2002		193	307	(171	)	329
Fidelity VIP Contrafund® Portfolio Subaccount
Class A	12/31/2003		898	729	(496	)	1,131
	12/31/2002		410	1,039	(551	)	898
Fidelity VIP Equity-Income Portfolio Subaccount
Class A	12/31/2003		728	566	(336	)	958
	12/31/2002		403	679	(354	)	728
Fidelity VIP Index 500 Portfolio Subaccount
Class B	12/31/2003	(1)	0	3	0		3

F-65

WRL SERIES LIFE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2003

Capital Unit Transactions:	Year Ended		Proceeds from Units Issued		Cost of Units Redeemed			Increase (Decrease) in Net Assets from Capital Unit Transactions
Access U.S. Government Money Market Portfolio
Class A	12/31/2003	(1)	$	54,530	$	(42,419	)	$	12,111
Class B	12/31/2003	(1)		0		0			0
Potomac Dow 30 Plus Portfolio
Class A	12/31/2003	(1)		283		(159	)		124
Class B	12/31/2003	(1)		0		0			0
Potomac OTC Plus Portfolio
Class A	12/31/2003	(1)		42,950		(38,321	)		4,629
Class B	12/31/2003	(1)		0		0			0
Wells S&P REIT Index Portfolio
Class A	12/31/2003	(1)		442		(119	)		323
Class B	12/31/2003	(1)		0		0			0
Fidelity VIP Growth Opportunities Portfolio
Class A	12/31/2003			2,106		(1,453	)		653
	12/31/2002			1,902		(1,071	)		831
Fidelity VIP Contrafund® Portfolio
Class A	12/31/2003			5,785		(3,902	)		1,883
	12/31/2002			8,090		(4,226	)		3,864
Fidelity VIP Equity-Income Subaccount
Class A	12/31/2003			5,119		(3,066	)		2,053
	12/31/2002			6,448		(3,302	)		3,146
Fidelity VIP Index 500 Subaccount
Class B	12/31/2003	(1)		0		0			0

F-66

Report of Independent Auditors

The Board of Directors

Western Reserve Life Assurance Co. of Ohio

We have audited the accompanying statutory-basis balance sheets of Western Reserve Life Assurance Co. of Ohio (an indirect wholly-owned subsidiary of AEGON N.V.) as of December 31, 2003 and 2002, 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, 2003. 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 auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

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 Department of the State of Ohio, whose practices differ from accounting principles generally accepted in the United States. The variances between such practices and accounting principles generally accepted in the United States 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 accounting principles generally accepted in the United States, the financial position of Western Reserve Life Assurance Co. of Ohio at December 31, 2003 and 2002, or the results of its operations or its cash flow for each of the three years in the period ended December 31, 2003.

However, in our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Western Reserve Life Assurance Co. of Ohio at December 31, 2003 and 2002, and the results of its operations and its cash flow for each of the three years in the period ended December 31, 2003, in conformity with accounting practices prescribed or permitted by the Insurance Department of the State of Ohio. 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, in 2002 Western Reserve Life Assurance Co. of Ohio changed various accounting policies to be in accordance with Actuarial Guideline 39.

As discussed in Note 2 to the financial statements, in 2001 Western Reserve Life Assurance Co. of Ohio changed various accounting policies to be in accordance with the revised NAIC Accounting Practices and Procedures Manual, as adopted by the Insurance Department of the State of Ohio.

As discussed in Note 8 to the financial statements, in 2001 Western Reserve Life Assurance Co. of Ohio changed the method used to value universal life and variable universal life policies.

/s/    ERNST & YOUNG LLP

Des Moines, Iowa

February 13, 2004

F-67

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

BALANCE SHEETS—Statutory Basis

(Dollars in Thousands, Except per Share Amounts)

	December 31
	2003		2002
Admitted assets
Cash and invested assets:
Bonds	$	724,633	$	312,147
Common stocks:
Affiliated entities (cost: 2003—$2,043 and 2002—$543)		14,546		16,649
Other (cost: 2003—$302 and 2002—$302)		646		302
Mortgage loans on real estate		9,668		10,884
Home office properties		41,817		42,654
Cash and short-term investments		70,716		405,560
Policy loans		268,892		275,938
Other invested assets		20,682		18,881
Total cash and invested assets		1,151,600		1,083,015
Net deferred income taxes		30,682		22,784
Premiums deferred and uncollected		1,939		3,844
Reinsurance receivable		5,290		1,883
Receivable from parent, subsidiaries and affiliates		23,760		1,494
Accrued investment income		7,626		3,586
Cash surrender value of life insurance policies		55,024		52,984
Other admitted assets		5,815		3,702
Separate account assets		8,116,308		6,501,089
Total admitted assets	$	9,398,044	$	7,674,381

See accompanying notes.

F-68

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

BALANCE SHEETS—Statutory Basis

(Dollars in Thousands, Except per Share Amounts)

	December 31
	2003			2002
Liabilities and capital and surplus
Liabilities:
Aggregate reserves for policies and contracts:
Life	$	425,296		$	417,994
Annuity		808,079			728,193
Life policy and contract claim reserves		12,939			12,974
Liability for deposit-type contracts		14,040			12,724
Other policyholders’ funds		34			56
Remittances and items not allocated		15,971			41,612
Reinsurance in unauthorized companies		—			1,133
Federal and foreign income taxes payable		13,016			29,649
Transfers to separate account due or accrued		(446,188	)		(393,754	)
Asset valuation reserve		6,505			9,604
Interest maintenance reserve		2,909			3,459
Funds held under coinsurance and other reinsurance treaties		29,936			34,726
Other liabilities		62,411			62,559
Separate account liabilities		8,108,413			6,497,146
Total liabilities		9,053,361			7,458,075
Capital and surplus:
Common stock, $1.00 par value, 3,000,000 shares authorized and 2,500,000 shares issued and outstanding		2,500			2,500
Paid-in surplus		150,107			150,107
Unassigned surplus		192,076			63,699
Total capital and surplus		344,683			216,306
Total liabilities and capital and surplus	$	9,398,044		$	7,674,381

See accompanying notes.

F-69

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

STATEMENTS OF OPERATIONS—Statutory Basis

(Dollars in Thousands)

	Year Ended December 31
	2003			2002			2001
Revenues:
Premiums and other considerations, net of reinsurance:
Life	$	553,345		$	611,194		$	653,398
Annuity		891,360			1,131,849			625,117
Net investment income		87,731			48,498			44,424
Amortization of interest maintenance reserve		952			1,080			1,440
Commissions and expense allowances on reinsurance ceded		(131	)		10,427			(10,789	)
Reserve adjustments on reinsurance ceded		7,151			51,453			11,846
Income from fees associated with investment management, administration and contract guarantees for separate accounts		88,477			89,854			108,673
Other income		6,092			5,698			4,540
		1,634,977			1,950,053			1,438,649
Benefits and expenses:
Benefits paid or provided for:
Life and accident and health		68,800			60,473			56,155
Surrender benefits		998,461			816,174			800,264
Other benefits		33,586			40,010			57,032
Increase in aggregate reserves for policies and contracts:
Life		7,302			18,807			10,100
Annuity		79,886			384,817			48,217
		1,188,035			1,320,281			971,768
Insurance expenses:
Commissions		133,578			167,582			176,023
General insurance expenses		98,778			111,330			110,808
Taxes, licenses and fees		15,750			20,571			18,714
Net transfers to separate accounts		20,393			344,773			216,797
Other expenses		1,163			507			523
		269,662			644,763			522,865
Total benefits and expenses		1,457,697			1,965,044			1,494,633
Gain (loss) from operations before dividends to policyholders, federal income tax expense (benefit) and net realized capital gains (losses) on investments		177,280			(14,991	)		(55,984	)
Dividends to policyholders		31			33			33
Gain (loss) from operations before federal income tax expense (benefit) and net realized capital gains (losses) on investments		177,249			(15,024	)		(56,017	)
Federal income tax expense (benefit)		55,430			(2,141	)		3,500
Income (loss) from operations before net realized capital gains (losses) on investments		121,819			(12,883	)		(59,517	)
Net realized capital gains (losses) on investments (net of related federal income taxes and amounts transferred to interest maintenance reserve)		(357	)		(1,387	)		100
Net income (loss)	$	121,462		$	(14,270	)		(59,417	)

See accompanying notes.

F-70

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS—Statutory Basis

(Dollars in Thousands)

	Common Stock		Paid-In Surplus		Unassigned Surplus			Total Capital and Surplus
Balance at January 1, 2001	$	2,500	$	120,107	$	23,537		$	146,144
Net loss		—		—		(59,417	)		(59,417	)
Capital contribution		—		30,000		—			30,000
Cumulative effect of change in accounting principles		—		—		12,312			12,312
Change in reserve on account of change in valuation basis		—		—		11,609			11,609
Change in net deferred income tax asset		—		—		(11,733	)		(11,733	)
Surplus effect of reinsurance transaction		—		—		11,851			11,851
Change in net unrealized capital gains and losses		—		—		(1,281	)		(1,281	)
Change in non-admitted assets		—		—		9,076			9,076
Change in asset valuation reserve		—		—		427			427
Change in surplus in separate accounts		—		—		97,374			97,374
Tax benefits on stock options exercised		—		—		1,363			1,363
Balance at December 31, 2001		2,500		150,107		95,118			247,725
Net loss		—		—		(14,270	)		(14,270	)
Change in net unrealized capital gains and losses		—		—		7,352			7,352
Change in non-admitted assets		—		—		(14,715	)		(14,715	)
Change in asset valuation reserve		—		—		(5,305	)		(5,305	)
Change in liability for reinsurance in unauthorized companies		—		—		(1,133	)		(1,133	)
Cumulative effect of change in accounting principles		—		—		(6,789	)		(6,789	)
Change in surplus in separate accounts		—		—		(1,072	)		(1,072	)
Change in net deferred income tax asset		—		—		29,670			29,670
Dividend to stockholder		—		—		(24,000	)		(24,000	)
Tax benefits on stock options exercised		—		—		28			28
Surplus effect of reinsurance transaction		—		—		(1,185	)		(1,185	)
Balance at December 31, 2002		2,500		150,107		63,699			216,306
Net income		—		—		121,462			121,462
Change in net unrealized capital gains and losses		—		—		(6,216	)		(6,216	)
Change in non-admitted assets		—		—		(8,855	)		(8,855	)
Change in asset valuation reserve		—		—		3,099			3,099
Change in liability for reinsurance in unauthorized companies		—		—		1,133			1,133
Change in surplus in separate accounts		—		—		2,084			2,084
Change in net deferred income tax asset		—		—		16,855			16,855
Surplus effect of reinsurance transaction		—		—		(1,185	)		(1,185	)
Balance at December 31, 2003	$	2,500	$	150,107	$	192,076		$	344,683

See accompanying notes.

F-71

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

STATEMENTS OF CASH FLOWS—Statutory Basis

(Dollars in Thousands)

	Year Ended December 31
	2003			2002			2001
Operating activities
Premiums collected, net of reinsurance	$	1,446,609		$	1,740,602		$	1,277,856
Net investment income		88,528			47,685			45,355
Miscellaneous income		98,059			158,186			126,297
Benefit and loss related payments		(1,104,098	)		(917,590	)		(912,222	)
Commissions, expenses paid and aggregate write-ins for deductions		(251,495	)		(293,555	)		(315,054	)
Net transfers to separate accounts and protected cell accounts		(74,921	)		(245,977	)		(135,990	)
Dividends paid to policyholders		(31	)		(34	)		(33	)
Federal and foreign income taxes received (paid)		(72,358	)		5,694			46,390
Net cash provided by operating activities		130,293			495,011			132,599
Investing activities
Proceeds from investments sold, matured or repaid:
Bonds		634,124			487,270			29,163
Stocks		—			100			—
Mortgage loans on real estate		1,218			3,288			282
Real estate		873			—			—
Other invested assets		—			7			—
Miscellaneous proceeds		—			102			—
Total investment proceeds		636,215			490,767			29,445
Cost of investments acquired:
Bonds		(1,051,086	)		(723,455	)		(14,445	)
Stocks		(1,500	)		(100	)		(300	)
Real estate		(35	)		(6	)		(13	)
Other invested assets		(4,870	)		(2,902	)		(12,394	)
Total cost of investments acquired		(1,057,491	)		(726,463	)		(27,152	)
Net decrease (increase) in policy loans		7,046			9,239			(843	)
Net cost of investments acquired		(1,050,445	)		(717,224	)		(27,995	)
Net cash provided by (used in) investing activities		(414,230	)		(226,457	)		1,450
Financing and miscellaneous activities
Cash provided (applied):
Capital and surplus paid in		—			—			30,000
Borrowed money		—			—			(71,400	)
Net deposits on deposit-type contracts and other insurance liabilities		853			(3,597	)		5,308
Dividends to stockholders		—			(24,000	)		—
Other cash provided (applied)		(51,760	)		23,523			17,658
Net cash used in financing and miscellaneous activities		(50,907	)		(4,074	)		(18,434	)
Net increase (decrease) in cash and short-term investments		(334,844	)		264,480			115,615
Cash and short-term investments at beginning of year		405,560			141,080			25,465
Cash and short-term investments at end of year	$	70,716		$	405,560		$	141,080

See accompanying notes.

F-72

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

December 31, 2003

1. Organization and Summary of Significant Accounting Policies

Organization

Western Reserve Life Assurance Co. of Ohio (the Company) is a stock life insurance company and is a wholly owned subsidiary of First AUSA Life Insurance Company which, in turn, is an indirect, wholly owned subsidiary of AEGON USA, Inc. (AEGON). AEGON is an indirect, wholly owned subsidiary of AEGON N.V., a holding company organized under the laws of The Netherlands.

Nature of Business

The Company operates predominantly in the variable universal life and variable annuity areas of the life insurance business. The Company is licensed in 49 states, District of Columbia, Puerto Rico and Guam. Sales of the Company’s products are through financial planners, independent representatives, financial institutions and stockbrokers. The majority of the Company’s new life insurance written and a portion of new annuities written are done through an affiliated marketing organization.

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 Department of the State of Ohio, 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 market value based on their rating by the National Association of Insurance Commissioners (NAIC); 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 capital and surplus for those designated as available-for-sale.

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. Prior to April 1, 2001 under GAAP, changes in prepayment assumptions were accounted for in the same manner. Effective April 1, 2001 for GAAP purposes, all securities, purchased or retained, that represent beneficial interests in securitized assets, 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 the discounted fair value. If high credit quality securities are adjusted, the retrospective method is used.

F-73

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

1. Organization and Summary of Significant Accounting Policies (continued)

Valuation allowances, if necessary, are established for mortgage loans 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, 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. 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 would be reported in the income statement on a pretax basis in the period that the assets giving rise to the gains or losses are sold.

The “asset valuation reserve” (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.

Nonadmitted Assets: Certain assets designated as “nonadmitted” are excluded from the accompanying balance sheets and are charged directly to unassigned surplus. Under GAAP, such assets are included in the balance sheets.

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 and benefits incurred represent the total of surrender and death benefits paid and the change in policy reserves. Premiums received and benefits incurred for annuity policies without mortality or morbidity risk are recorded using deposit accounting, and credited directly to an appropriate policy reserve account, without recognizing premium income or benefits paid. Under GAAP, premiums received in excess of policy charges would not be recognized as premium revenue and benefits would represent the excess of benefits paid over the policy account value and interest credited to the account values.

F-74

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

1. Organization and Summary of Significant Accounting Policies (continued)

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: A liability for reinsurance balances has been provided for unsecured policy reserves ceded to reinsurers not authorized to assume such business. Changes to those amounts 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 received rather than being deferred and amortized with deferred policy acquisition costs as required under GAAP.

Deferred Income Taxes: Deferred 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 tax assets expected to be realized within one year of the balance sheet date or 10% of capital and surplus excluding any net deferred tax assets, EDP equipment and operating software and any net positive goodwill, plus 3) the amount of remaining gross deferred tax assets that can be offset against existing gross deferred tax liabilities. The remaining deferred tax assets are nonadmitted. Deferred taxes do not include amounts for state taxes. Under GAAP, state taxes are included in the computation of deferred taxes, a deferred tax asset is recorded for the amount of gross deferred tax assets expected to be realized in future years, and a valuation allowance is established for deferred tax assets not expected to be realizable.

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 of less. Under GAAP, the corresponding caption of cash and cash equivalents include cash balances and investments with initial maturities of three months or less.

The effects of these variances have not been determined by the Company, but are presumed to be material.

Investments

Investments in bonds (except those to which the Securities Valuation Office of the NAIC has ascribed a value), mortgage loans on real estate and short-term investments are reported at cost adjusted for amortization of premiums and accrual of discounts. Amortization is computed using methods which result in a level yield over the expected life of the investment. The Company reviews its prepayment assumptions on mortgage and other asset-backed securities at regular intervals and adjusts amortization rates retrospectively when such assumptions are changed due to experience and/or expected future patterns. Common stocks of unaffiliated companies are carried at market, and the related unrealized capital gains or losses are reported in unassigned surplus. Common stocks of the Company’s wholly owned affiliates are recorded at the GAAP basis equity in net assets. Home office properties are reported at cost less allowances for depreciation. Depreciation is computed principally by the straight-line method. Policy loans are reported at unpaid principal. Other invested assets consist principally of

F-75

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

1. Organization and Summary of Significant Accounting Policies (continued)

investments in various joint ventures and are recorded at equity in underlying net assets. Other “admitted assets” are valued principally at cost.

Realized capital gains and losses are determined on the basis of specific identification and are recorded net of related federal income taxes. The AVR is established by the Company to provide for potential losses in the event of default by issuers of certain invested assets. These amounts are determined using a formula prescribed by the NAIC and are reported as a liability. The formula for the AVR provides for a corresponding adjustment for realized gains and losses.

The carrying values of all investments are reviewed on an ongoing basis for credit deterioration. If this review indicates a decline in fair value that is other than temporary, the carrying value of the investment is reduced to its fair value, and a specific writedown is taken. Such reductions in carrying value are recognized as realized losses on investments.

Under a formula prescribed by the NAIC, the Company defers, in the IMR, the portion of realized 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 security.

During 2003, 2002, and 2001, net realized capital gains (losses) of $402, $(322), and $367, respectively, were credited to the IMR rather than being immediately recognized in the statements of operations. Amortization of these net gains aggregated $952, $1,080, and $1,440, for the years ended December 31, 2003, 2002, and 2001, respectively.

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 real estate where rent is in arrears for more than three months. Further, income is not accrued when collection is uncertain. Investment income due and accrued of $44, $0 and $0 has been excluded for the years ended December 31, 2003, 2002, and 2001, respectively, with respect to such practices.

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 benefits incurred represent the total of surrender and death benefits paid and the change in policy reserves. These revenues are recognized when due. Premiums 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 income or benefits paid.

Aggregate Reserves for Policies

Life and annuity 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 required by law.

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 by formula.

F-76

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

1. Organization and Summary of Significant Accounting Policies (continued)

The aggregate policy reserves for life insurance policies are based principally upon the 1941, 1958, and 1980 Commissioners’ Standard Ordinary Mortality Tables. The reserves are calculated using interest rates ranging from 2.00 to 5.50 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.

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 life contingencies are equal to the present value of future payments assuming interest rates ranging from 4.00 to 11.25 percent and mortality rates, where appropriate, from a variety of tables.

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 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 statement 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.

Separate Accounts

Assets held in trust for purchases of variable universal life and variable 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 market. Income and gains and losses with respect to the assets in the separate accounts accrue to the benefit of the policyholders 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 (See notes 5 and 7). The Company received variable contract premiums of $1,240,215, $1,335,079, and $1,208,884 in 2003, 2002, and 2001, respectively. All variable account contracts are subject to discretionary withdrawal by the policyholder at the market value of the underlying assets less the current surrender charge. Separate account contract holders have no claim against the assets of the general account.

F-77

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

1. Organization and Summary of Significant Accounting Policies (continued)

Stock Option Plan and Stock Appreciation Rights Plans

Prior to 2002, 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. Beginning in 2002, AEGON N.V. offered stock appreciation rights to eligible employees which do not entitle them to the purchase of AEGON N.V. shares but provide the same financial benefits.

Reclassifications

Certain reclassifications have been made to the 2002 and 2001 financial statements to conform to the 2003 presentation.

2. Accounting Changes

The Company prepares its statutory financial statements in conformity with accounting practices prescribed or permitted by the State of Ohio. Effective January 1, 2001, the State of Ohio required that insurance companies domiciled in the State of Ohio prepare their statutory-basis financial statements in accordance with the NAIC Accounting Practices and Procedures Manual subject to any deviations prescribed or permitted by the State of Ohio insurance commissioner.

Accounting changes adopted to conform to the provisions of the NAIC Accounting Practices and Procedures Manual are reported as changes in accounting principles. The cumulative effect of changes in accounting principles is reported as an adjustment to unassigned surplus in the period of the change in accounting principle. The cumulative effect is the difference between the amount of capital and surplus at the beginning of the year and the amount of capital and surplus that would have been reported at that date if the new accounting principles had been applied retroactively for all prior periods. As a result of these changes, the Company reported a change in accounting principle, as an adjustment that increased capital and surplus, of $12,312 as of January 1, 2001. This amount included the establishment of deferred tax assets of $12,696, offset by the release of mortgage loan origination fees of $25 and the establishment of a vacation accrual of $359.

On December 31, 2002, the Company adopted the provisions of Actuarial Guideline 39 (“Guideline 39”). The purpose of Guideline 39 is to interpret the standards for the valuation of reserves for guaranteed living benefits included in variable deferred and immediate annuity contracts. The Company had previously provided reserves for such guarantees based on the accumulation of the amount charged to policyholders for these benefits. The cumulative effect of adopting Guideline 39 on December 31, 2002, was $6,789, which was charged directly to unassigned surplus as a change in accounting principle. See Note 8 regarding the conversion of the valuation system in 2001.

F-78

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

3. 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 and Short-Term Investments: The carrying amounts reported in the statutory-basis balance sheets for these instruments approximate their fair values.

Investment Securities: Fair values for bonds are based on quoted market prices, where available. For bonds 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 expected future cash flows using a current market rate applicable to the yield, credit quality, and maturity of the investments. The fair values for common stocks of unaffiliated entities are based on quoted market prices.

Mortgage Loans on Real Estate and Policy Loans: 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. The fair value of policy loans are assumed to equal their carrying value.

Separate Account Assets: The fair value of separate account assets are based on quoted market prices.

Investment Contracts: Fair values for the Company’s liabilities under investment-type insurance contracts 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.

Separate Account Annuity Liabilities: Separate account annuity liabilities approximate the market value of the separate account assets.

Fair values for the Company’s insurance contracts other than investment 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, which minimizes exposure to changing interest rates through the matching of investment maturities with amounts due under insurance contracts.

F-79

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

3. 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
	2003				2002
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Admitted assets
Cash and short-term investments	$	70,716	$	70,716	$	405,560	$	405,560
Bonds		724,633		735,591		312,147		318,874
Common stocks, other than affiliates		646		646		302		302
Mortgage loans on real estate		9,668		10,795		10,884		12,022
Policy loans		268,892		268,892		275,938		275,938
Separate account assets		8,116,308		8,116,308		6,501,089		6,501,089
Liabilities
Investment contract liabilities		822,119		819,715		740,917		759,322
Separate account annuity liabilities		5,400,842		5,400,842		4,464,513		4,464,513

4. Investments

The carrying amount and estimated fair value of investments in bonds are 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, 2003
Bonds:
United States Government and agencies	$	239,928	$	1,557	$	—	$	154	$	241,331
State, municipal and other government		3,595		319		—		—		3,914
Public utilities		31,628		1,266		—		5		32,889
Industrial and miscellaneous		222,029		8,358		138		883		229,366
Mortgage and other asset-backed securities		227,453		1,475		3		834		228,091
Total bonds	$	724,633	$	12,975	$	141	$	1,876	$	735,591

F-80

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

4. Investments (continued)

	Carrying Amount		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
December 31, 2002
Bonds:
United States Government and agencies	$	166,251	$	1,677	$	—	$	167,928
State, municipal and other government		3,601		314		—		3,915
Public utilities		6,974		351		—		7,325
Industrial and miscellaneous		81,468		5,291		1,746		85,013
Mortgage and other asset-backed securities		53,853		922		82		54,693
Total bonds	$	312,147	$	8,555	$	1,828	$	318,874

The estimated fair value of bonds with gross unrealized losses at December 31, 2003 is as follows:

	Losses 12 months or more		Losses less than 12 months		Total
December 31, 2003
Bonds:
United States Government and agencies	$	—	$	20,108	$	20,108
State, municipal and other government		—		—
Public utilities		—		2,984		2,984
Industrial and miscellaneous		381		46,853		47,234
Mortgage and other asset-backed securities		258		103,288		103,546
	$	639	$	173,233	$	173,872

The carrying amount and fair value of bonds at December 31, 2003, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.

	Carrying Amount		Estimated Fair Value
Due in one year or less	$	2,051	$	2,121
Due one through five years		372,462		378,280
Due five through ten years		107,509		110,664
Due after ten years		15,158		16,435
		497,180		507,500
Mortgage and other asset-backed securities		227,453		228,091
	$	724,633	$	735,591

The Company regularly monitors industry sectors and individual debt securities for signs of impairment, including length of time and extent to which the market value of debt securities has been less than cost; industry risk factors; financial condition and near-term prospects of the issuer; and nationally recognized credit rating agency rating changes. Additionally for asset-backed securities, cash flow trends and underlying levels of

F-81

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

4. Investments (continued)

collateral are monitored. A specific security is considered to be impaired when it is determined that it is probable that not all amounts due (both principal and interest) will be collected as scheduled. Consideration is also given to management’s intent and ability to hold a security until maturity or until fair value will recover.

A detail of net investment income is presented below:

	Year Ended December 31
	2003			2002			2001
Interest on bonds	$	27,431		$	9,357		$	7,050
Dividends from common stock of affiliated entities		40,033			16,921			18,495
Interest on mortgage loans		792			871			1,130
Rental income on investment properties		7,747			7,381			6,903
Interest on policy loans		16,592			17,364			17,746
Other investment income		2,020			3,308			(51	)
Gross investment income		94,615			55,202			51,273
Investment expenses		(6,884	)		(6,704	)		(6,849	)
Net investment income	$	87,731		$	48,498		$	44,424

Proceeds from sales and maturities of debt securities and related gross realized gains and losses were as follows:

	Year Ended December 31
	2003			2002			2001
Proceeds	$	634,124		$	487,270		$	29,163
Gross realized gains	$	447		$	2,119		$	637
Gross realized losses		(107	)		(3,955	)		—
Net realized gains (losses)	$	340		$	(1,836	)	$	637

At December 31, 2003, bonds with an aggregate carrying value of $3,093 were on deposit with certain state regulatory authorities or were restrictively held in bank custodial accounts for benefit of such state regulatory authorities, as required by statute.

F-82

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

4. Investments (continued)

Realized investment gains (losses) and changes in unrealized gains (losses) for investments are summarized below:

	Realized
	Year Ended December 31
	2003			2002			2001
Bonds	$	340		$	(1,836	)	$	637
Other invested assets		—			102			—
		340			(1,734	)		637
Tax benefit (expense)		(296	)		26			(170	)
Transfer to interest maintenance reserve		(401	)		321			(367	)
Net realized gains (losses)	$	(357	)	$	(1,387	)	$	100
	Changes in Unrealized
	Year Ended December 31
	2003			2002			2001
Common stocks	$	(3,259	)	$	10,576		$	1,559
Mortgage loans on real estate		—			350			86
Other invested assets		(2,957	)		(3,574	)		(2,926	)
Change in unrealized	$	(6,216	)	$	7,352		$	(1,281	)

Gross unrealized gains (losses) on common stocks were as follows:

	Unrealized
	December 31
	2003			2002
Unrealized gains	$	13,654		$	16,492
Unrealized losses		(807	)		(386	)
Net unrealized gains	$	12,847		$	16,106

During 2003, 2002 and 2001, the Company did not issue any mortgage loans. The Company requires all mortgages to carry fire insurance equal to the value of the underlying property.

During 2003, 2002, and 2001, no mortgage loans were foreclosed and transferred to real estate. At December 31, 2003 and 2002, the Company held a mortgage loan loss reserve in the asset valuation reserve of $92 and $123, respectively.

5. Reinsurance

The Company reinsures portions of 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 obligations under the reinsurance treaty.

F-83

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

5. Reinsurance (continued)

Premiums earned reflect the following reinsurance ceded amounts for the year ended December 31:

	Year Ended December 31
	2003			2002			2001
Direct premiums	$	1,504,347		$	1,854,568		$	1,369,720
Reinsurance ceded		(59,642	)		(111,525	)		(91,205	)
Net premiums earned	$	1,444,705		$	1,743,043		$	1,278,515

The Company received reinsurance recoveries in the amount of $30,055, $30,380, and $12,337 during 2003, 2002, and 2001, respectively. At December 31, 2003 and 2002, estimated amounts recoverable from reinsurers that have been deducted from policy and contract claim reserves totaled $4,534 and $3,209, respectively. The aggregate reserves for policies and contracts were reduced for reserve credits for reinsurance ceded at December 31, 2003 and 2002 of $72,516 and $119,561, respectively.

During 2001, the Company entered into a reinsurance transaction with Transamerica International Re (Bermuda) Ltd., an affiliate of the Company. Under the terms of this transaction, the Company ceded the obligation for future guaranteed minimum death benefits included in certain of its variable annuity contracts. The difference between the initial premiums ceded of $37,176 and the reserve credit taken of $55,408 was credited directly to unassigned surplus on a net of tax basis. Over the course of this reinsurance treaty, the experience of the underlying policies will be reflected as a reduction to the amount initially credited to surplus. During 2003 and 2002, the amount charged directly to unassigned surplus was $1,185. At December 31, 2003, the Company holds collateral in the form of letters of credit of $90,200.

6. Income Taxes

The main components of deferred tax amounts are as follows:

	December 31
	2003		2002
Deferred income tax assets:
§807(f) adjustment	$	261	$	1,593
Tax basis deferred acquisition costs		89,467		88,838
Reserves		106,540		100,307
Other		8,594		8,771
Total deferred income tax assets	$	204,862	$	199,509
Deferred income tax assets—nonadmitted	$	82,596	$	73,639
Deferred income tax liabilities:
§807(f) adjustment—liabilities		90,797		102,176
Other		787		910
Total deferred income tax liabilities	$	91,584	$	103,086

F-84

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

6. Income Taxes (continued)

The change in net deferred income tax assets and deferred income tax assets—nonadmitted are as follows:

	Year Ended December 31
	2003		2002
Change in net deferred income tax asset	$	16,855	$	29,670
Change in deferred income tax assets—nonadmitted		8,957		15,330

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 (benefit) and net realized capital gains (losses) on investments for the following reasons:

	Year Ended December 31
	2003			2002			2001
Income tax expense (benefit) computed at the federal statutory rate (35%)	$	62,037		$	(5,259	)	$	(19,606	)
Deferred acquisition costs—tax basis		4,149			11,920			7,570
Amortization of IMR		(333	)		(378	)		(504	)
Depreciation		(290	)		(413	)		(6	)
Dividends received deduction		(20,808	)		(9,863	)		(8,705	)
Low income housing credits		(3,150	)		(2,914	)		(1,944	)
Prior year under (over) accrual		(11,583	)		(27,856	)		3,340
Reinsurance transactions		(415	)		(415	)		4,148
Reserves		27,407			34,358			19,541
Other		(1,584	)		(1,321	)		(334	)
Federal income tax expense (benefit)	$	55,430		$	(2,141	)	$	3,500

For federal income tax purposes, the Company joins in a consolidated income tax return filing with its parent and other affiliated companies. Under the terms of a tax sharing agreement between the Company and it affiliates, the Company computes federal income tax expense as if it were filing a separate income tax return, except that tax credits and net operating loss carryforwards are determined on the basis of the consolidated group. Additionally, the alternative minimum tax is computed for the consolidated group and the resulting tax, if any, is allocated back to the separate companies on the basis of the separate companies’ alternative minimum taxable income.

Prior to 1984, as provided for under the Life insurance Company Tax Act of 1959, a portion of statutory income was not subject to current taxation but was accumulated for income tax purposes in a memorandum account referred to as the “policyholders’ surplus account” (PSA). No federal income taxes have been provided for in the financial statements on income deferred in the PSA ($293 at December 31, 2003). To the extent that dividends are paid from the amount accumulated in the PSA, net earnings would be reduced by the amount of tax required to be paid. Should the entire amount in the PSA account become taxable, the tax thereon computed at the current rates would amount to approximately $103.

The Company’s federal income tax returns have been examined by the Internal Revenue Service and the statute is closed through 1995. The examination fieldwork for 1996 through 1997 has been completed and a protest of findings has been filed with the Appeals Office of the Internal Revenue Service. An examination is underway for 1998 through 2000.

F-85

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

7. Policy and Contract Attributes

A portion of the Company’s policy reserves and other policyholders’ funds relate to liabilities established on a variety of the Company’s products, primarily separate accounts that are not subject to significant mortality or morbidity risk; however, 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 are summarized as follows:

	December 31
	2003				2002
	Amount		Percent of Total		Amount		Percent of Total
Subject to discretionary withdrawal with market value adjustment	$	11,308	0	%	$	14,509	0	%
Subject to discretionary withdrawal at book value less surrender charge		311,643	5	%		230,221	4	%
Subject to discretionary withdrawal at market value		5,400,842	86	%		4,464,409	84	%
Subject to discretionary withdrawal at book value (minimal or no charges or adjustments)		556,620	9	%		605,085	12	%
Not subject to discretionary withdrawal		13,556	0	%		14,235	0	%
		6,293,969	100	%		5,328,459	100	%
Less reinsurance ceded		62,146				113,923
Total policy reserves on annuities and deposit fund liabilities	$	6,231,823			$	5,214,536

A reconciliation of the amounts transferred to and from the separate accounts is presented below:

	Year Ended December 31
	2003		2002		2001
Transfers as reported in the summary of operations of the separate accounts statement:
Transfers to separate accounts	$	1,240,215	$	1,335,079	$	1,208,884
Transfers from separate accounts		1,221,216		990,726		1,107,157
Net transfers to separate accounts		18,999		344,353		101,727
Change in valuation adjustment		—		—		98,321
Other		1,394		420		16,749
Transfers as reported in the summary of operations of the life, accident and health annual statement	$	20,393	$	344,773	$	216,797

At December 31, 2003 and 2002, the Company had variable annuities with guaranteed living benefits as follows:

Year	Benefit and Type of Risk	Subjected Account Value		Amount of Reserve Held		Reinsurance Reserve Credit
2003	Guaranteed Minimum Income Benefit	$	1,648,000	$	13,600	$	4,000
2002	Guaranteed Minimum Income Benefit	$	921,683	$	8,469	$	—

F-86

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

7. Policy and Contract Attributes (continued)

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, 2003 and 2002, these assets (which are reported as premiums deferred and uncollected) and the amounts of the related gross premiums and loading, are as follows:

	Gross		Loading			Net
December 31, 2003
Ordinary direct renewal business	$	387	$	(126	)	$	513
Ordinary new business		1,337		(89	)		1,426
	$	1,724	$	(215	)	$	1,939
December 31, 2002
Ordinary direct renewal business	$	1,578	$	184		$	1,394
Ordinary new business		2,072		(378	)		2,450
	$	3,650	$	(194	)	$	3,844

8. Conversion of Valuation System

During 2001, the Company converted to a new reserve valuation system for universal life and variable universal life policies. The new valuation system, which provides for more precise calculations, caused general account reserves to decrease by $11,609 and separate account reserves to decrease by $98,321. These amounts were credited directly to unassigned surplus. The decrease in separate account reserves is included in the change in surplus in separate accounts in the 2001 Statement of Changes in Capital and Surplus.

9. Dividend Restrictions

The Company is subject to limitations, imposed by the State of Ohio, on the payment of dividends to its parent company. 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 statutory surplus as of the preceding December 31, or (b) statutory gain from operations before net realized capital gains 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 2004, without the prior approval of insurance regulatory authorities, is $121,819.

10. Capital and Surplus

Life/health insurance companies are subject to certain risk-based capital (RBC) requirements as specified by the NAIC. Under those requirements, the amount is to be determined based on the various risk factors related to it. At December 2003, the Company meets the RBC requirements.

11. Sales, Transfer, and Servicing of Financial Assets and Extinguishments of Liabilities

During 2003, 2002 and 2001, the Company sold $31,554, $33,160 and $17,515, respectively, of agent balances without recourse to Money Services, Inc., an affiliated company. The Company did not realize a gain or loss as a result of the sale.

F-87

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

12. Retirement and Compensation Plans

The Company’s employees participate in a qualified benefit 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 the Statement of Financial Accounting Standards No. 87 expense 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 $1,507, $1,734, and $1,634 for the years ended December 31, 2003, 2002, and 2001, respectively. The plan is subject to the reporting and disclosure requirements of the Employee Retirement and Income Security Act of 1974.

The Company’s employees also participate in a contributory 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 fifteen 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 $858, $967, and $1,100 for the years ended December 31, 2003, 2002, and 2001, respectively.

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 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, 2003, 2002, and 2001 was negligible. AEGON also sponsors an employee stock option plan/stock appreciation rights for employees of the Company 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 for 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 are charged to affiliates in accordance with an intercompany cost sharing arrangement. The Company expensed $153, $203, and $233 for the years ended December 31, 2003, 2002, and 2001, respectively.

13. Related Party Transactions

The Company shares certain officers, employees and general expenses with affiliated companies.

The Company receives data processing, investment advisory and management, marketing and administration services from certain affiliates. During 2003, 2002, and 2001, the Company paid $19,705, $20,371, and $16,904, respectively, for such services, which approximates their costs to the affiliates. The Company provides office space, marketing and administrative services to certain affiliates. During 2003, 2002, and 2001, the Company received $5,775, $3,673, and $6,752, respectively, for such services, which approximates their cost.

F-88

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

NOTES TO FINANCIAL STATEMENTS—Statutory Basis (continued)

(Dollars in Thousands)

13. Related Party Transactions (continued)

Receivables from and payables to affiliates and intercompany borrowings bear interest at the thirty-day commercial paper rate. During 2003, 2002, and 2001, the Company paid net interest of $435, $256, and $945, respectively, to affiliates.

In prior years, the Company purchased life insurance policies covering the lives of certain employees of the Company from an affiliate. At December 31, 2003 and 2002, the cash surrender value of these policies was $55,024 and $52,984, respectively.

14. Commitments and Contingencies

The Company is a party to legal proceedings incidental to its business. Although such litigation sometimes includes substantial demands for compensatory and punitive damages in addition to contract liability, it is management’s opinion that damages arising from such demands will not be material to the Company’s financial position.

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 has been based on the most recent information available from the National Organization of Life and Health Insurance Guaranty Association. 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 $3,423 and $3,424 and an offsetting premium tax benefit of $762 and $763 at December 31, 2003 and 2002, respectively, for its estimated share of future guaranty fund assessments related to several major insurer insolvencies. The guaranty fund expense was $24, $70, and $13 for the years ended December 31, 2003, 2002, and 2001, respectively.

The Company may lend securities to approved broker and other parties to earn additional income. The Company receives collateral against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of loaned securities is determined at the close of business and any additional required collateral is delivered to the Company on the next business day. Although risk is mitigated by collateral, the account could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them. At December 31, 2003 and 2002, the value of securities loaned amounted to $124,332 and $69,860, respectively.

Recently, there has been a significant increase in regulatory activity in the industry relating to numerous issues including market timing and late trading of shares in mutual funds and variable insurance products. Like many others in the industry, the Company has received requests for information from the Securities and Exchange Commission (SEC). The Company is cooperating fully with these regulators to provide the information they requested and does not expect any material findings.

F-89

Statutory-Basis Financial

Statement Schedules

F-90

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

Summary of Investments—Other Than

Investments in Related Parties

(Dollars in Thousands)

December 31, 2003

Schedule I

Type of Investment	Cost(1)		Fair Value		Amount at Which Shown in the Balance Sheet
Fixed maturities
Bonds:
United States Government and government agencies and authorities	$	240,046	$	241,456	$	240,046
States, municipalities, and political subdivisions		32,577		33,171		32,577
Foreign governments		3,091		3,382		3,091
Public utilities		31,628		32,889		31,628
All other corporate bonds		417,291		424,693		417,291
Total fixed maturities		724,633		735,591		724,633
Equity securities
Common stocks (unaffiliated):
Industrial, miscellaneous, and all other		302		646		646
Total equity securities		302		646		646
Mortgage loans on real estate		9,668				9,668
Home office properties		41,817				41,817
Policy loans		268,892				268,892
Cash and short-term investments		70,716				70,716
Other invested assets		20,682				20,682
Total investments	$	1,136,710			$	1,137,054

(1) Original cost of equity securities and, as to fixed maturities, original cost reduced by repayments and adjusted for amortization of premiums or accruals of discounts.

F-91

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

Supplementary Insurance Information

(Dollars in Thousands)

Schedule III

	Future Policy Benefits and Expenses		Policy and Contract Liabilities		Premium Revenue		Net Investment Income*
Year ended December 31, 2003
Individual life	$	412,473	$	12,763	$	552,849	$	31,348
Group life and health		12,823		176		496		944
Annuity		808,079		—		891,360		55,439
	$	1,233,375	$	12,939	$	1,444,705	$	87,731
Year ended December 31, 2002
Individual life	$	404,935	$	12,874	$	610,634	$	21,194
Group life and health		13,059		100		560		639
Annuity		728,193		—		1,131,849		26,665
	$	1,146,187	$	12,974	$	1,743,043	$	48,498
Year ended December 31, 2001
Individual life	$	386,965	$	14,219	$	652,626	$	14,014
Group life and health		12,222		135		772		731
Annuity		336,587		4		625,117		29,679
	$	735,774	$	14,358	$	1,278,515	$	44,424

	Benefits, Claims, Losses and Settlement Expenses		Other Operating Expenses*			Premium Written
Year ended December 31, 2003
Individual life	$	185,642	$	275,352		$	—
Group life and health		2,530		(769	)		863
Annuity		999,863		(4,921	)		—
	$	1,188,035	$	269,662		$	863
Year ended December 31, 2002
Individual life	$	176,010	$	484,535		$	—
Group life and health		5,626		(4,316	)		917
Annuity		1,138,645		164,544			—
	$	1,320,281	$	644,763		$	917
Year ended December 31, 2001
Individual life	$	167,912	$	529,090		$	—
Group life and health		1,226		422			1,030
Annuity		802,630		(6,647	)		—
	$	971,768	$	522,865		$	1,030

* 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.

F-92

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

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, 2003
Life insurance in force	$	79,220,097	$	25,368,242	$	—	$	53,851,855	0	%
Premiums:
Individual life	$	593,641	$	40,792	$	—	$	552,849	0	%
Group life and health		863		367				496	0	%
Annuity		909,843		18,483				891,360	0	%
	$	1,504,347	$	59,642	$	—	$	1,444,705	0	%
Year ended December 31, 2002
Life insurance in force	$	79,096,314	$	21,759,884	$	—	$	57,336,430	0	%
Premiums:
Individual life	$	653,642	$	43,008	$	—	$	610,634	0	%
Group life		917		357		—		560	0	%
Annuity		1,200,009		68,160		—		1,131,849	0	%
	$	1,854,568	$	111,525	$	—	$	1,743,043	0	%
Year ended December 31, 2001
Life insurance in force	$	78,786,575	$	17,837,374	$	—	$	60,949,201	0.0	%
Premiums:
Individual life	$	684,987	$	32,361	$	—	$	652,626	0.0	%
Group life		1,030		258		—		772	0.0
Annuity		683,703		58,586		—		625,117	0.0
	$	1,369,720	$	91,205	$	—	$	1,278,515	0.0	%

F-93

PART C - OTHER INFORMATION

Item 27.	Exhibits
	(a) Resolution of the Board of Directors of Western Reserve establishing the separate account (6)
	(b) Not Applicable
	(c) Distribution of Policies
	(i)       Master Service and Distribution Compliance Agreement (2)
	(ii)      Amendment to Master Service and Distribution Compliance Agreement (3)
	(iii)     Form of Broker/Dealer Supervisory and Service Agreement (3)
	(iv)     Principal Underwriting Agreement (3)
	(v)      First Amendment to Principal Underwriting Agreement (3)
	(vi)     Second Amendment to Principal Underwriting Agreement (15)
	(vii)    Third Amendment to Principal Underwriting Agreement (18)
	(d)   (i) Specimen Flexible Premium Variable Life Insurance Policy (1)
	(ii)    Endorsement (EL101) (3)
	(e) Application for Flexible Premium Variable Life Insurance Policy (13)
	(f)   (i) Second Amended Articles of Incorporation of Western Reserve (2)
	(ii)    Certificate of First Amendment to the Second Amended Articles of Incorporation of Western Reserve (5)
	(iii)  Amended Code of Regulations (By-Laws) of Western Reserve (2)
	(g) Reinsurance Contracts
	(i)     Reinsurance Treaty dated September 30, 2000 and Amendments Thereto (12)
	(ii)    Reinsurance Treaty dated July 1, 2002 and Amendments Thereto (12)
	(h)      (i)     Investment Advisory Agreement with the Fund (6)
	(ii)      Sub-Advisory Agreement (6)
	(iii)     Participation Agreement Among Variable Insurance Products Fund, Fidelity Distributors Corporation and Western Reserve Life Assurance Co. of Ohio dated June 14, 1999 (7)
	(iv)     Amendment No. 1 dated March 15, 2000 to Participation Agreement – Variable Insurance Products Fund (8)
	(v)      Second Amendment dated April 12, 2001 to Participation Agreement – Variable Insurance Products Fund (9)
	(vi)     Participation Agreement Among Variable Insurance Products Fund II, Fidelity Distributors Corporation and Western Reserve Life Assurance Co. of Ohio dated June 14, 1999 (7)
	(vii)    Amendment No. 1 dated March 15, 2000 to Participation Agreement – Variable Insurance Products Fund II (8)
	(viii)  Second Amendment dated April 12, 2001 to Participation Agreement – Variable Insurance Products Fund II (9)
	(ix)     Participation Agreement Among Variable Insurance Products Fund III, Fidelity Distributors Corporation and Western Reserve Life Assurance Co. of Ohio dated June 14, 1999 (7)
	(x)      Amendment No. 1 dated March 15, 2000 to Participation Agreement – Variable Insurance Products Fund III (8)
	(xi)     Second Amendment dated April 12, 2001 to Participation Agreement – Variable Insurance Products Fund III (9)
	(xii)    Third Amendment to Participation Agreement Among Variable Insurance Products Fund II, Fidelity Distributors Corporation and Western Reserve dated September 1, 2003 (15)
	(xiii)  Fourth Amendment to Participation Agreement Among Variable Insurance Products Fund II, Fidelity Distributors Corporation and Western Reserve dated December 1, 2003 (16)
	(xiv)   Participation Agreement between AEGON/Transamerica Series Fund, Inc. and Western Reserve dated February 21, 2001 and Amendments thereto (14)
	(xv)    Amendment No. 21 to Participation Agreement between AEGON/Transamerica Series Fund, Inc. and Western Reserve dated September 1, 2003 (15)

C-1

(xvi)   Amendment No. 22 to Participation Agreement between AEGON/Transamerica Series Fund, Inc. and Western Reserve dated December 1, 2003 (16)

(xvii) Amendment No. 23 to Participation Agreement between AEGON/Transamerica Series Fund, Inc. and Western Reserve dated May 1, 2004 (18)

(xviii)Amended and Restated Fund Participation Agreement Between Access Variable Insurance Trust and Western Reserve dated May 1, 2004 (18)

(i) Not Applicable

(j) Not Applicable

(k) Opinion and Consent of Thomas E. Pierpan, Esq. as to Legality of Securities Being Registered

(l)Opinion and Consent of Lorne Schinbein as to Actuarial Matters Pertaining to the Securities Being Registered

(m) Sample Hypothetical Illustration

(n) Other Opinions:

(i) Written Consent of Ernst & Young LLP

(o) Not Applicable

(p) Not Applicable

(q) Memorandum describing issuance, transfer and redemption procedures (4)

(r)   (i) Powers of Attorney (10)(11)

(ii)    Ron Wagley (17)

(iii)  Allan J. Hamilton (18)

(1) This exhibit was previously filed on the Initial Registration Statement to Form S-6 Registration Statement dated March 14, 1997 (File No. 333-23359) and is incorporated herein by reference.

(2) This exhibit was previously filed on Post-Effective Amendment No. 11 to Form N-4 Registration Statement dated April 20, 1998 (File No. 33-49556) and is incorporated herein by reference.

(3) This exhibit was previously filed on Post-Effective Amendment No. 4 to Form S-6 Registration Statement dated December 19, 1997 (File No. 333-23359) and is incorporated herein by reference.

(4) This exhibit was previously filed on Post-Effective Amendment No. 1 to Form S-6 Registration Statement dated December 19, 1997 (File No. 333-23359) and is incorporated herein by reference.

(5) This exhibit was previously filed on Post-Effective Amendment No. 5 to Form S-6 Registration Statement dated April 19, 2000 (File No. 333-23359) and is incorporated herein by reference.

(6) This exhibit was previously filed on Post-Effective Amendment No. 28 to Form N-1A Registration Statement dated April 28, 1997 (File No. 33-507) and is incorporated herein by reference.

(7) This exhibit was previously filed on the Initial Registration Statement to Form S-6 Registration Statement dated September 23, 1999 (File No. 333-57681) and is incorporated herein by reference.

(8) This exhibit was previously filed on Pre-Effective Amendment No. 1 to Form N-4 Registration Statement dated April 10, 2000 (File No. 333-93169) and is incorporated herein by reference.

(9) This exhibit was previously filed on Post-Effective Amendment No. 16 to Form S-6 Registration Statement dated April 16, 2001 (File No. 33-69138) and is incorporated herein by reference.

(10) This exhibit was previously filed on Post-Effective Amendment No. 3 to Form N-4 Registration Statement dated February 19, 2002 (File No. 333-82705) and is incorporated herein by reference.

(11) This exhibit was previously filed on Post-Effective Amendment No. 17 to Form S-6 Registration Statement dated October 30, 2001 (File No. 33-69138) and is incorporated herein by reference.

(12) This exhibit was previously filed on Pre-Effective Amendment No. 1 to Form N-6 Registration Statement dated January 31, 2003 (File No. 333-100993) and is incorporated herein by reference.

(13) This exhibit was previously filed on Post-Effective Amendment No. 1 to Form N-6 Registration Statement dated April 22, 2003 (File No. 333-100993) and is incorporated herein by reference.

(14) This exhibit was previously filed on the Initial Registration Statement to Form N-4 Registration Statement dated September 5, 2003 (File No. 333-108525) and is incorporated herein by reference.

(15) This exhibit was previously filed on Pre-Effective Amendment No. 1 to Form N-6 Registration Statement dated October 9, 2003 (File No. 333-107705) and is incorporated herein by reference.

(16) This exhibit was previously filed on the Initial Registration Statement to Form N-6 Registration Statement dated November 7, 2003 (File No. 333-110315) and is incorporated herein by reference.

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(17) This exhibit was previously filed on Post-Effective Amendment No. 1 to Form N-6 Registration Statement dated February 26, 2004 (File No. 333-107705) and is incorporated herein by reference.

(18) This exhibit was previously filed on Post-Effective Amendment No. 2 to Form N-6 Registration Statement dated April 16, 2004 (File No. 333-100993) and is incorporated herein by reference.

Item 28.        Directors and Officers of the Depositor

Name	Principal Business Address		Position and Offices with Depositor
Ron Wagley	(1	)	CHAIRMAN OF THE BOARD
Jerome C. Vahl	(2	)	DIRECTOR AND PRESIDENT
Brenda K. Clancy	(2	)	Director and Vice President
Paul Reaburn	(2	)	Director and Vice President
Kevin Bachmann	(3	)	Director and Executive Vice President
William H. Geiger	(3	)	Senior Vice President, Secretary, Corporate Counsel and Group Vice President – Compliance
Allan J. Hamilton	(3	)	Vice President, Treasurer, Chief Financial Officer and Controller

(1) 1150 South Olive Street, Los Angeles, California 90015

(2) 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499-0001

(3) 570 Carillon Parkway, St. Petersburg, Florida 33716

Item 29. Persons Controlled by or Under Common Control with the Depositor or Registrant

Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
AEGON N.V.	Netherlands	32.47% 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 Derivatives B.V.	Netherlands	100% AEGON N.V.	Holding Company
AEGON International N.V.	Netherlands	100% AEGON N.V.	Holding Company
The AEGON Trust Voting Trust Trustees: Donald J. Shepard Joseph B.M. Streppel Dennis Hersch	Delaware		Voting Trust
AEGON U.S. Holding Corporation	Delaware	225 shares of Series A Preferred Stock owned by Scottish Equitable Finance Limited	Holding company
AEGON DMS Holding B.V.	Netherlands	100% AEGON International N.V.	Holding company
JCPenney Financial & Marketing Services Group Ltd	Korea	100% AEGON DMS Holding B.V.	Marketing

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Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
JCPenney Direct Marketing Services Japan K.K.	Japan	100% AEGON DMS Holding B.V.	Marketing
Canadian Premier Holdings Ltd	Canada	100% AEGON DMS Holding B.V.	Holding company
Canadian Premier Life Insurance Company	Canada	100% Canadian Premier Holdings Ltd	Holding company
Legacy General Insurance Company	Canada	100% Canadian Premier Holdings Ltd.	Insurance
Cornerstone International Holdings Ltd	United Kingdom	100% AEGON DMS Holding B.V.	Holding company
Cornerstone International Marketing Ltd	United Kingdom	100% Cornerstone International Holding Ltd.	Marketing company
Stonebridge International Insurance Ltd	United Kingdom	100% Cornerstone International Holdings, Ltd.	Insurance company
JCPenney Direct Asia Pacific Pty Ltd	Australia	100% AEGON DMS Holding B.V.	Holding company
JCPenney Direct Service Asia Pacific Pty Ltd	Australia	100% JCPenney Direct Asia Pacific Pty Ltd	Operations company
JCPenney Insurance Marketing Asia Pacific Pty Ltd	Australia	100% JCPenney Direct Asia Pacific Pty Ltd	Marketing company
Short Hills Management Company	New Jersey	100% AEGON U.S. Holding Corporation	Insurance Agent
COPRA Reinsurance Company	New York	100% AEGON U.S. Holding Corporation	Reinsurance
AEGON Management Company	Indiana	100% AEGON U.S. Holding Corporation	Insurance holding company
AEGON U.S. Corporation	Iowa	100% AEGON U.S. Holding Corporation owns 10,000 shares (75.54%); AEGON USA, Inc. owns 3,238 shares (24.46%)	Holding company
Transamerica Corporation and subsidiaries (“TAC”)	Delaware	100% AEGON NV	Major interest in insurance and finance
AEGON USA, Inc.	Iowa	AEGON U.S. Holding Corporation; AEGON U.S. Corporation	Holding company
RCC North America, LLC	Delaware	100% AEGON USA, Inc.	Real estate

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Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
Transamerica Holding Company, LLC	Delaware	100% AEGON USA, Inc.	Holding Company
AEGON Funding Corp.	Delaware	100% Transamerica Holding Corporation LLC	Issue debt securities-net proceeds used to make loans to affiliates
First AUSA Life Insurance Company	Maryland	100% Transamerica Holding Company LLC	Insurance holding company
Transamerica Financial Life Insurance Company	New York	100% First AUSA Life Insurance Company	Insurance
Life Investors Insurance Company of America	Iowa	100% First AUSA Life Ins. Company	Insurance
Apple Partners of Iowa LLC	Iowa	58.13% Monumental Life Insurance Company; 41.87 Peoples Benefit Life Insurance Company	Apple production, packing, storage and sales
Life Investors Alliance, LLC	Delaware	100% LIICA	Purchase, own, and hold the equity interest of other entities
Transamerica Life Insurance Company	Iowa	100% Transamerica Holding Company LLC	Insurance
AEGON Financial Services Group, Inc.	Minnesota	100% Transamerica Life Insurance Co.	Marketing
AEGON Assignment Corporation of Kentucky	Kentucky	100% AEGON Financial Services Group, Inc.	Administrator of structured settlements
AEGON Assignment Corporation	Illinois	100% AEGON Financial Services Group, Inc.	Administrator of structured settlements
Transamerica Financial Institutions, Inc.	Minnesota	100% AEGON Financial Services Group, Inc.	Life insurance and underwriting services
Southwest Equity Life Ins. Co.	Arizona	100% of Common Voting Stock First AUSA Life Ins. Company	Insurance
Iowa Fidelity Life Insurance Co.	Arizona	100% of Common Voting Stock First AUSA Life Ins. Company	Insurance
Western Reserve Life Assurance Co. of Ohio	Ohio	100% First AUSA Life Ins. Company	Insurance
WRL Insurance Agency, Inc.	California	100% Western Reserve Life Assurance Co. of Ohio	Insurance Agency

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Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
WRL Insurance Agency of Alabama, Inc.	Alabama	100% WRL Insurance Agency, Inc.	Insurance Agency
WRL Insurance Agency of Massachusetts, Inc.	Massachusetts	100% WRL Insurance Agency, Inc.	Insurance Agency
WRL Insurance Agency of Nevada, Inc.	Nevada	100% WRL Insurance Agency, Inc.	Insurance Agency
WRL Insurance Agency of Wyoming	Wyoming	100% WRL Insurance Agency, Inc.	Insurance Agency
AEGON/Transamerica Series Fund, Inc.	Maryland	Various	Mutual Fund
AEGON/Transamerica Fund Advisors, Inc.	Florida	77% Western Reserve Life Assurance Co. of Ohio; 23% AUSA Holding Company	Registered investment adviser
AEGON/Transamerica Investors Services, Inc.	Florida	100% AUSA Holding Company	Shareholder services
World Financial Group Insurance Agency, Inc.	California	100% Western Reserve Life Assurance Co. of Ohio	Insurance agency
World Financial Group Insurance Agency of Alabama, Inc.	Alabama	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 Hawaii, Inc.	Hawaii	100% World Financial Group Insurance Agency, Inc.	Insurance Agency
World Financial Group Insurance Agency of Nevada, Inc.	Nevada	100% World Financial Group Insurance Agency, Inc.	Insurance Agency
World Financial Group Insurance Agency of New Mexico, Inc.	New Mexico	100% World Financial Group Insurance Agency, Inc.	Insurance Agency
World Financial Group Insurance Agency of Wyoming	Wyoming	100% World Financial Group Insurance Agency, Inc.	Insurance Agency
AEGON Equity Group, Inc.	Florida	100% Western Reserve Life Assurance Co. of Ohio	Insurance Agency
WFG Property & Casualty Insurance Agency, Inc.	Georgia	100% World Financial Group Insurance Agency, Inc.	Insurance

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Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
WFG Property & Casualty Insurance Agency of Alabama, Inc.	Alabama	100% WFG Property & Casualty Insurance Agency, Inc.	Insurance
WFG Property & Casualty Insurance Agency of California, Inc.	California	100% WFG Property & Casualty Insurance Agency, Inc.	Insurance
WFG Property & Casualty Insurance Agency of Mississippi, Inc.	Mississippi	100% WFG Property & Casualty Insurance Agency, Inc.	Insurance
WFG Property & Casualty Insurance Agency of Nevada, Inc.	Nevada	100% WFG Property & Casualty Insurance Agency, Inc.	Insurance
WFG Property & Casualty Insurance Agency of Wyoming, Inc.	Wyoming	100% WFG Property & Casualty Insurance Agency, Inc.	Insurance
Monumental General Casualty Co.	Maryland	100% First AUSA Life Ins. Company	Insurance
United Financial Services, Inc.	Maryland	100% First AUSA Life Ins. Company	General agency
Bankers Financial Life Ins. Co.	Arizona	100% First AUSA Life Ins. Company	Insurance
The Whitestone Corporation	Maryland	100% First AUSA Life Ins. Company	Insurance agency
Cadet Holding Corp.	Iowa	100% First AUSA Life Insurance Company	Holding company
Monumental General Life Insurance Company of Puerto Rico	Puerto Rico	51% First AUSA Life Insurance Company 49% Baldrich & Associates of Puerto Rico	Insurance
AUSA Holding Company	Maryland	100% Transamerica Holding Company, L.L.C.	Holding company
AEGON USA Investment Management, Inc.	Iowa	100% AUSA Holding Company	Investment Adviser
AEGON USA Securities, Inc.	Iowa	100% Transamerica Holding Company, L.L.C.	Broker-Dealer
Monumental General Insurance Group, Inc.	Maryland	100% AUSA Holding Company.	Holding company
Trip Mate Insurance Agency, Inc.	Kansas	100% Monumental General Insurance Group, Inc.	Sale/admin. of travel insurance

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Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
Monumental General Administrators, Inc.	Maryland	100% Monumental General Insurance Group, Inc.	Provides management srvcs. to unaffiliated third party administrator
National Association Management and Consultant Services, Inc.	Maryland	100% Monumental General Administrators, Inc.	Provides actuarial consulting services
Monumental General Mass Marketing, Inc.	Maryland	100% Monumental General Insurance Group, Inc.	Marketing arm for sale of mass marketed insurance coverages
Transamerica Capital, Inc.	California	100% AUSA Holding Co.	Broker/Dealer
Universal Benefits Corporation	Iowa	100% AUSA Holding Co.	Third party administrator
Investors Warranty of America, Inc.	Iowa	100% AUSA Holding Co.	Provider of automobile extended maintenance contracts
Massachusetts Fidelity Trust Co.	Iowa	100% AUSA Holding Co.	Trust company
Money Services, Inc.	Delaware	100% AUSA Holding Co.	Provides financial counseling for employees and agents of affiliated companies
ADB Corporation, L.L.C.	Delaware	100% Money Services, Inc.	Special purpose limited Liability company
ORBA Insurance Services, Inc.	California	40.15% Money Services, Inc.	Insurance agency
Great Companies L.L.C.	Iowa	30% Money Services, Inc.	Markets & sells mutual funds & individually managed accounts
AEGON USA Travel and Conference Services, LLC	Iowa	100% Money Services, Inc.	Travel and Conference Services
Roundit, Inc.	Maryland	50% AUSA Holding Co.	Financial services
Zahorik Company, Inc.	California	100% AUSA Holding Co.	Broker-Dealer
ZCI, Inc.	Alabama	100% Zahorik Company, Inc.	Insurance agency
Zahorik Texas, Inc.	Texas	100% Zahorik Company, Inc.	Insurance agency
Long, Miller & Associates, L.L.C.	California	33 1/3% AUSA Holding Co.	Insurance agency
AEGON Asset Management Services, Inc.	Delaware	100% AUSA Holding Co.	Registered investment advisor
World Group Securities, Inc.	Delaware	100% AEGON Asset Management Services, Inc.	Broker-Dealer

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Name	Jurisdiction of Incorporation	Percent of Voting Securities Owned	Business
World Financial Group, Inc.	Delaware	100% AEGON Asset Management Services, Inc.	Marketing
InterSecurities, Inc.	Delaware	100% AUSA Holding Co.	Broker-Dealer
IDEX Mutual Funds	Massachusetts	100% AEGON/Transamerica Fund Advisers, Inc.	Mutual fund
Diversified Investment Advisors, Inc.	Delaware	100% AUSA Holding Co.	Registered investment advisor
Diversified Investors Securities Corp.	Delaware	100% Diversified Investment Advisors, Inc.	Broker-Dealer
George Beram & Company, Inc.	Massachusetts	100% Diversified Investment Advisors, Inc.	Employee benefit and actuarial consulting
Creditor Resources, Inc.	Michigan	100% AUSA Holding Co.	Credit insurance
CRC Creditor Resources Canadian Dealer Network Inc.	Canada	100% Creditor Resources, Inc.	Insurance agency
Premier Solutions Group, Inc.	Maryland	100% Creditor Resources, Inc.	Insurance agency
AEGON USA Investment Management, LLC.	Iowa	100% Transamerica Holding Corporation LLC	Investment advisor
AEGON USA Realty Advisors, Inc.	Iowa	100% AUSA Holding Co.	Provides real estate administrative and real estate investment services
AEGON USA Real Estate Services, Inc.	Delaware	100% AEGON USA Realty Advisors, Inc.	Real estate and mortgage holding company
QSC Holding, Inc.	Delaware	100% AEGON USA Realty Advisors, Inc.	Real estate and financial software production and sales
Realty Information Systems, Inc.	Iowa	100% AEGON USA Realty Advisors, Inc	Information Systems for real estate investment management
Commonwealth General Corporation and subsidiaries	Delaware	100% AEGON U.S. Corporation	Holding company
Veterans Life Insurance Co.	Illinois	100% Transamerica Holding Company LLC	Insurance company
Peoples Benefit Services, Inc.	Pennsylvania	100% Veterans Life Ins. Co.	Special-purpose subsidiary

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Item 30.    Indemnification

Provisions exist under the Ohio General Corporation Law, the Second Amended Articles of Incorporation of Western Reserve and the Amended Code of Regulations of Western Reserve whereby Western Reserve may indemnify certain persons against certain payments incurred by such persons. The following excerpts contain the substance of these provisions.

Ohio General Corporation Law

Section 1701.13 Authority of corporation.

(E)(1) A corporation may indemnify or agree to indemnify any person who was or is a party or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, other than an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, or agent of another corporation (including a subsidiary of this corporation), domestic or foreign, nonprofit or for profit, partnership, joint venture, trust, or other enterprise, against expenses, including attorneys’ fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendre or its equivalent, shall not, of itself create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.

(2) A corporation may indemnify or agree to indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, or agent of another corporation, domestic or foreign, nonprofit or for profit, partnership, joint venture, trust, or other enterprise, against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any of the following:

(a) Any claim, issue, or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation unless, and only to the extent that the court of common pleas, or the court in which such action or suit was brought determines upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court of common pleas or such other court shall deem proper;

(b) Any action or suit in which the only liability asserted against a director is pursuant to section 1701.95 of the Revised Code.

(3) To the extent that a director, trustee, officer, employee, or agent has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in divisions (E)(1) and (2) of this section, or in defense of any claim, issue, or matter therein, he shall be indemnified against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection therewith.

(4) Any indemnification under divisions (E)(1) and (2) of this section, unless ordered by a court, shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, trustee, officer, employee, or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in divisions (E)(1) and (2) of this section. Such determination shall be made as follows:

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(a) By a majority vote of a quorum consisting of directors of the indemnifying corporation who were not and are not parties to or threatened with any such action, suit, or proceeding;

(b) If the quorum described in division (E)(4)(a) of this section is not obtainable or if a majority vote of a quorum of disinterested directors so directs, in a written opinion by independent legal counsel other than an attorney, or a firm having associated with it an attorney, who has been retained by or who has performed services for the corporation, or any person to be indemnified within the past five years;

(c) By the shareholders;

(d) By the court of common pleas or the court in which such action, suit, or proceeding was brought.

Any determination made by the disinterested directors under division (E)(4)(a) or by independent legal counsel under division (E)(4)(b) of this section shall be promptly communicated to the person who threatened or brought the action or suit by or in the right of the corporation under division (E)(2) of this section, and within ten days after receipt of such notification, such person shall have the right to petition the court of common pleas or the court in which such action or suit was brought to review the reasonableness of such determination.

(5)(a) Unless at the time of a director’s act or omission that is the subject of an action, suit or proceeding referred to in divisions (E)(1) and (2) of this section, the articles or the regulations of a corporation state by specific reference to this division that the provisions of this division do not apply to the corporation and unless the only liability asserted against a director in an action, suit, or proceeding referred to in divisions (E)(1) and (2) of this section is pursuant to section 1701.95 of the Revised Code, expenses, including attorney’s fees, incurred by a director in defending the action, suit, or proceeding shall be paid by the corporation as they are incurred, in advance of the final disposition of the action, suit, or proceeding upon receipt of an undertaking by or on behalf of the director in which he agrees to do both of the following:

(i) Repay such amount if it is proved by clear and convincing evidence in a court of competent jurisdiction that his action or failure to act involved an act or omission undertaken with deliberate intent to cause injury to the corporation or undertaken with reckless disregard for the best interests of the corporation;

(ii) Reasonably cooperate with the corporation concerning the action, suit, or proceeding.

(b) Expenses, including attorneys’ fees incurred by a director, trustee, officer, employee, or agent in defending any action, suit, or proceeding referred to in divisions (E)(1) and (2) of this section, may be paid by the corporation as they are incurred, in advance of the final disposition of the action, suit, or proceeding as authorized by the directors in the specific case upon receipt of an undertaking by or on behalf of the director, trustee, officer, employee, or agent to repay such amount, if it ultimately is determined that he is entitled to be indemnified by the corporation.

(6) The indemnification authorized by this section shall not be exclusive of, and shall be in addition to, any other rights granted to those seeking indemnification under the articles or the regulations or any agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, trustee, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

(7) A corporation may purchase and maintain insurance or furnish similar protection, including but not limited to trust funds, letters of credit, or self-insurance on behalf of or for any person who is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, or agent of another corporation, domestic or foreign, nonprofit or for profit, partnership, joint venture, trust, or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under this section. Insurance may be purchased from or maintained with a person in which the corporation has a financial interest.

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(8) The authority of a corporation to indemnify persons pursuant to divisions (E)(1) and (2) of this section does not limit the payment of expenses as they are incurred, indemnification, insurance, or other protection that may be provided pursuant to divisions (E)(5), (6), and (7) of this section. Divisions (E)(1) and (2) of this section do not create any obligation to repay or return payments made by the corporation pursuant to divisions (E)(5), (6), or (7).

(9) As used in this division, references to “corporation” include all constituent corporations in a consolidation or merger and the new or surviving corporation, so that any person who is or was a director, officer, employee, or agent of such a constituent corporation, or is or was serving at the request of such constituent corporation as a director, trustee, officer, employee or agent of another corporation, domestic or foreign, nonprofit or for profit, partnership, joint venture, trust, or other enterprise, shall stand in the same position under this section with respect to the new or surviving corporation as he would if he had served the new or surviving corporation in the same capacity.

Second Amended Articles of Incorporation of Western Reserve

ARTICLE EIGHTH

EIGHTH: (1) The corporation may indemnify or agree to indemnify any person who was or is a party or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, other than an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, or agent of another corporation (including a subsidiary of this corporation), domestic or foreign, nonprofit or for profit, partnership, joint venture, trust, or other enterprise, against expenses, including attorneys’ fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendre or its equivalent, shall not, of itself create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.

(2) The corporation may indemnify or agree to indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, or agent of another corporation (including a subsidiary of this corporation), domestic or foreign, nonprofit or for profit, partnership, joint venture, trust, or other enterprise against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation unless, and only to the extent that the court of common pleas, or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court of common pleas or such other court shall deem proper.

(3) To the extent that a director, trustee, officer, employee, or agent has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in sections (1) and (2) of this article, or in defense of any claim, issue, or matter therein, he shall be indemnified against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection therewith.

(4) Any indemnification under sections (1) and (2) of this article, unless ordered by a court, shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the

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director, trustee, officer, employee, or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in sections (1) and (2) of this article. Such determination shall be made (a) by a majority vote of a quorum consisting of directors of the indemnifying corporation who were not and are not parties to or threatened with any such action, suit, or proceeding, or (b) if such a quorum is not obtainable or if a majority vote of a quorum of disinterested directors so directs, in a written opinion by independent legal counsel other than an attorney, or a firm having associated with it an attorney, who has been retained by or who has performed services for the corporation, or any person to be indemnified within the past five years, or (c) by the shareholders, or (d) by the court of common pleas or the court in which such action, suit, or proceeding was brought. Any determination made by the disinterested directors under section (4)(a) or by independent legal counsel under section (4)(b) of this article shall be promptly communicated to the person who threatened or brought the action or suit by or in the right of the corporation under section (2) of this article, and within ten days after receipt of such notification, such person shall have the right to petition the court of common pleas or the court in which such action or suit was brought to review the reasonableness of such determination.

(5) Expenses, including attorneys’ fees incurred in defending any action, suit, or proceeding referred to in sections (1) and (2) of this article, may be paid by the corporation in advance of the final disposition of such action, suit, or proceeding as authorized by the directors in the specific case upon receipt of a written undertaking by or on behalf of the director, trustee, officer, employee, or agent to repay such amount, unless it shall ultimately be determined that he is entitled to be indemnified by the corporation as authorized in this article. If a majority vote of a quorum of disinterested directors so directs by resolution, said written undertaking need not be submitted to the corporation. Such a determination that a written undertaking need not be submitted to the corporation shall in no way affect the entitlement of indemnification as authorized by this article.

(6) The indemnification provided by this article shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under the articles or the regulations or any agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, trustee, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

(7) The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, or agent of another corporation (including a subsidiary of this corporation), domestic or foreign, nonprofit or for profit, partnership, joint venture, trust, or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under this section.

(8) As used in this section, references to “the corporation” include all constituent corporations in a consolidation or merger and the new or surviving corporation, so that any person who is or was a director, officer, employee, or agent of such a constituent corporation, or is or was serving at the request of such constituent corporation as a director, trustee, officer, employee or agent of another corporation (including a subsidiary of this corporation), domestic or foreign, nonprofit or for profit, partnership, joint venture, trust, or other enterprise shall stand in the same position under this article with respect to the new or surviving corporation as he would if he had served the new or surviving corporation in the same capacity.

(9) The foregoing provisions of this article do not apply to any proceeding against any trustee, investment manager or other fiduciary of an employee benefit plan in such person’s capacity as such, even though such person may also be an agent of this corporation. The corporation may indemnify such named fiduciaries of its employee benefit plans against all costs and expenses, judgments, fines, settlements or other amounts actually and reasonably incurred by or imposed upon said named fiduciary in connection with or arising out of any claim, demand, action, suit or proceeding in which the named fiduciary may be made a party by reason of being or having been a named fiduciary, to the same extent it indemnifies an agent of the corporation. To the extent that the corporation does not have the direct legal power to indemnify, the corporation may contract with the named fiduciaries of its employee benefit plans to indemnify them to the same extent as noted above. The corporation may purchase and maintain insurance on behalf of such named fiduciary covering any liability to the same extent that it contracts to indemnify.

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Amended Code of Regulations of Western Reserve

ARTICLE V

Indemnification of Directors and Officers

Each Director, officer and member of a committee of this Corporation, and any person who may have served at the request of this Corporation as a Director, officer or member of a committee of any other corporation in which this Corporation owns shares of capital stock or of which this Corporation is a creditor (and his heirs, executors and administrators) shall be indemnified by the Corporation against all expenses, costs, judgments, decrees, fines or penalties as provided by, and to the extent allowed by, Article Eighth of the Corporation’s Articles of Incorporation, as amended.

Rule 484 Undertaking

Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of Western Reserve pursuant to the foregoing provisions or otherwise, Western Reserve 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 Western Reserve of expenses incurred or paid by a director, officer or controlling person of Western Reserve in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Western Reserve 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 of 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 31. Principal Underwriter

(a) AFSG Securities Corporation (“AFSG”) is the principal underwriter for the Policies. AFSG currently serves as 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 L, Separate Account VL A, Legacy Builder Variable Life Separate Account, Separate Account VA K, and Separate Account VA P, Separate Account VAQ, Transamerica Corporate Separate Account Sixteen, Separate Account VA R, and Separate Account VA S of Transamerica Life Insurance Company; the Separate Account VA BNY, Separate Account C, Separate Account VA QNY, TFLIC Series Life Account, TFLIC Series Annuity Account and Separate Account VA-2LNY of Transamerica Financial Life Insurance Company; the Separate Account I, Separate Account II and Separate Account V of Peoples Benefit Life Insurance Company; the WRL Series Life Account, WRL Series Annuity Account, WRL Series Annuity Account B, Separate Account VA U, Separate Account VA V and WRL Series Life Corporate Account of Western Reserve Life Assurance Co. of Ohio; Separate Account VA-2L, Transamerica Occidental Life Separate Account VUL-3, Separate Account VA G, Separate Account VA H, Transamerica Occidental Life Separate Account VUL-4, Transamerica Occidental Life Separate Account VUL-5, and Transamerica Occidental Life Separate Account VUL-6 of Transamerica Occidental Life Insurance Company; and Separate Account VA-8 of Transamerica Life Insurance and Annuity Company.

(b) Directors and Officers of AFSG

Name	Principal Business Address		Position and Offices with Underwriter
Larry N. Norman	(1	)	Director and President
Anne M. Spaes	(1	)	Director and Vice President

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Lisa A. Wachendorf	(1	)	Director, Vice President and Chief Compliance Officer
John K. Carter	(2	)	Vice President
William G. Cummings	(2	)	Vice President
Thomas R. Moriarty	(2	)	Vice President
Frank A. Camp	(1	)	Secretary
Priscilla I. Hechler	(2	)	Assistant Vice President and Assistant Secretary
Thomas E. Pierpan	(2	)	Assistant Vice President and Assistant Secretary
Darin D. Smith	(1	)	Vice President and Assistant Secretary
Teresa L. Stolba	(1	)	Assistant Compliance Officer
Emily Bates	(3	)	Assistant Treasurer
Clifton W. Flenniken	(4	)	Assistant Treasurer
Carrie F. Bekker	(2	)	Assistant Vice President

(1) 4333 Edgewood Road, N.E., Cedar Rapids, IA 52499-0001

(2) 570 Carillon Parkway, St. Petersburg, FL 33716-1202

(3) 400 West Market Street, Louisville, Kentucky 40202

(4) 1111 North Charles Street, Baltimore, Maryland 21201

(c) Compensation to Principal Underwriter

Name of Principal Underwriter	Net Underwriting Discounts and Commissions	Compensation on Redemption	Brokerage Commissions			Commissions
AFSG Securities Corporation	0	0	$	67,236,938	(1)	0
	0	0	$	82,236,981	(2)	0
	0	0	$	104,819,449	(3)	0

(1) fiscal year 2003

(2) fiscal year 2002

(3) fiscal year 2001

Item 32.   Location of Accounts and Records

All accounts, books, or other documents required to be maintained by Section 31(a) of the 1940 Act and the rules promulgated thereunder are maintained by the Registrant through Western Reserve at 570 Carillon Parkway, St. Petersburg, Florida 33716, 4800 140^th Avenue North, Clearwater, Florida 33762 or 12855 Starkey Road, Largo, Florida 33773.

Item 33.   Management Services

Not Applicable

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Item 34.   Undertakings

Western Reserve hereby represents that the fees and charges deducted under the WRL Financial Freedom Builder Policies, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by Western Reserve.

Registrant promises to file a post-effective amendment to the Registration Statement as frequently as is necessary to ensure that the audited financial statements in the Registration Statement are never more than 16 months old for so long as payments under the variable life policies may be accepted.

Registrant furthermore agrees to include either as part of any application to purchase a Policy offered by the prospectus, a space that an applicant can check to request a Statement of Additional Information, or a post card or similar written communication affixed to or included in the prospectus that the applicant can remove to send for a Statement of Additional Information.

Registrant agrees to deliver any Statement of Additional Information and any financial statements required to be made available under this Form N-6 promptly upon written or oral request.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all the requirements for effectiveness of this Registration Statement under Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-Effective Amendment No. 10 to the Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of St. Petersburg, State of Florida, on this 23^rd day of April, 2004.

WRL SERIES LIFE ACCOUNT (Registrant)
By:	/s/ Ron Wagley
	Ron Wagley, Chairman of the Board of Western Reserve Life Assurance Co. of Ohio
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO (Depositor)
By:	/s/ Ron Wagley
	Ron Wagley, Chairman of the Board

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 10 to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/ Ron Wagley Ron Wagley */	Chairman of the Board	April 23, 2004
/s/ Jerome C. Vahl Jerome C. Vahl */	Director and President	April 23, 2004
/s/ Brenda K. Clancy Brenda K. Clancy */	Director and Vice President	April 23, 2004
/s/ Paul Reaburn Paul Reaburn */	Director and Vice President	April 23, 2004
/s/ Kevin Bachmann Kevin Bachmann	Director and Executive Vice President	April 23, 2004
/s/ Allan J. Hamilton Allan J. Hamilton	Vice President, Treasurer, Chief Financial Officer and Controller	April 23, 2004

*/ /s/ Priscilla I. Hechler

    Signed by Priscilla I. Hechler

    As Attorney in Fact

Exhibit Index

Exhibit No.	Description of Exhibit
27(k)	Opinion and Consent of Thomas E. Pierpan, Esq. as to Legality of Securities Being Registered
27(l)	Opinion and Consent of Lorne Schinbein as to Actuarial Matters Pertaining to the Securities Being Registered
27(m)	Sample Hypothetical Illustration
27(n)(i)	Written Consent of Ernst & Young LLP