AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                                                                        One Corporate Drive, Shelton, Connecticut 06484

This Prospectus  describes  American Skandia Advisor PlanSM NY, a flexible premium deferred annuity (the "Annuity") offered by American
Skandia Life Assurance  Corporation  ("American  Skandia",  "we", "our" or "us") to residents of the State of New York. The Annuity was
previously  offered in other  states.  The  Annuity  may be offered as an  individual  annuity  contract  or as an  interest in a group
annuity.  This  Prospectus  describes  the  important  features of the  Annuity  and what you should  consider  before  purchasing  the
Annuity.  We have also filed a Statement of Additional  Information that is available from us, without charge,  upon your request.  The
contents of the Statement of Additional  Information  are described on page 56. This  Prospectus  also describes two annuity  contracts
we no longer offer,  but for which we continue to accept  Purchase  Payments (see "Appendix C - Prior  Contracts").  Various rights and
benefits  may differ  between  states to meet  applicable  laws and/or  regulations.  In  particular,  please refer to Appendix D for a
description of certain  provisions  that apply to Annuities  sold to other than New York  residents.  Certain terms are  capitalized in
this Prospectus.  Those terms are either defined in the Glossary of Terms or in the context of the particular section.

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American  Skandia  offers  several  different  annuities  which your  investment  professional  may be authorized to offer to you. Each
annuity has different  features and benefits that may be appropriate  for you based on your financial  situation,  your age and how you
intend to use the annuity.  The different features and benefits include variations in death benefit  protection,  the ability to access
your  annuity's  account  value and the  charges  that you will be subject  to if you choose to  surrender  the  annuity.  The fees and
charges may also be different between each annuity.
=======================================================================================================================================

If you are purchasing the Annuity as a replacement  for existing  variable  annuity or variable life coverage,  you should consider any
surrender or penalty  charges you may incur when replacing your existing  coverage and that this Annuity may be subject to a contingent
deferred  sales charge if you elect to surrender  the Annuity or take a partial  withdrawal.  You should  consider  your need to access
the Annuity's Account Value and whether the annuity's liquidity features will satisfy that need.

WHY WOULD I CHOOSE TO PURCHASE THIS ANNUITY?
This  Annuity is  frequently  used for  retirement  planning  because it allows you to  accumulate  retirement  savings and also offers
annuity  payment  options when you are ready to begin  receiving  income.  The Annuity also offers one or more death  benefits that can
protect  your  retirement  savings  if you die  during a period of  declining  markets.  It may be used as an  investment  vehicle  for
"qualified"  investments,  including  an IRA,  SEP-IRA,  Roth  IRA or Tax  Sheltered  Annuity  (or  403(b)).  It may also be used as an
investment  vehicle for  "non-qualified"  investments.  The Annuity allows you to invest your money in a number of variable  investment
options as well as in one or more fixed investment options.

When an Annuity is purchased as a  "non-qualified"  investment,  you generally are not taxed on any investment  gains the Annuity earns
until you make a withdrawal or begin to receive annuity payments.  This feature,  referred to as  "tax-deferral",  can be beneficial to
the growth of your  Account  Value  because  money that would  otherwise be needed to pay taxes on  investment  gains each year remains
invested and can earn additional money.  However,  because the Annuity is designed for long-term  retirement savings, a 10% penalty tax
may be applied on withdrawals  you make before you reach age 59 1/2.  Annuities  purchased as a  non-qualified  investment are not subject
to the maximum  contribution  limits that may apply to a qualified  investment,  and are not subject to required minimum  distributions
after age 701/2.


When an Annuity is purchased as a "qualified"  investment,  you should consider that the Annuity does not provide any tax advantages in
addition to the  preferential  treatment  already  available  through your retirement plan under the Internal  Revenue Code. An Annuity
may offer features and benefits in addition to providing tax deferral that other  investment  vehicles may not offer,  including  death
benefit  protection for your  beneficiaries,  lifetime  income options,  and the ability to make transfers  between  numerous  variable
investment  options  offered  under the  Annuity.  You should  consult  with your  investment  professional  as to whether  the overall
benefits and costs of the Annuity are appropriate considering your overall financial plan.
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These  annuities are NOT deposits or obligations  of, or issued,  guaranteed or endorsed by, any bank, are NOT insured or guaranteed by
the U.S.  government,  the Federal Deposit Insurance  Corporation  (FDIC), the Federal Reserve Board or any other agency. An investment
in this annuity involves investment risks, including possible loss of value.
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THESE  SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE  COMMISSION OR ANY STATE  SECURITIES  COMMISSION
NOR  HAS  THE  COMMISSION  OR ANY  STATE  SECURITIES  COMMISSION  PASSED  UPON  THE  ACCURACY  OR  ADEQUACY  OF  THIS  PROSPECTUS.  ANY
REPRESENTATION  TO THE CONTRARY IS A CRIMINAL  OFFENSE.  PLEASE READ THIS  PROSPECTUS  AND THE CURRENT  PROSPECTUS  FOR THE  UNDERLYING
MUTUAL FUNDS.  KEEP THEM FOR FUTURE REFERENCE.
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                                             FOR FURTHER INFORMATION CALL 1-800-766-4530.
Prospectus Dated May 1, 2002                                                  Statement of Additional Information Dated: May 1, 2002
revised effective November 18, 2002                                                              revised effective November 18, 2002
ASAP-PROS- (11/2002)

                             PLEASE SEE OUR PRIVACY POLICY ATTACHED TO THE BACK COVER OF THIS PROSPECTUS.




WHAT ARE SOME OF THE KEY FEATURES OF THIS ANNUITY?


|X|      This  Annuity is a "flexible  premium  deferred  annuity."  It is called  "flexible  premium"  because  you have  considerable
       flexibility in the timing and amount of premium  payments.  Generally,  investors "defer" receiving annuity payments until after
       an accumulation period.
|X|      This Annuity  offers both variable and fixed  investment  options.  If you allocate your Account Value to variable  investment
       options, the value of your Annuity will vary daily to reflect the investment  performance of the underlying  investment options.
       Fixed  investment  options of different  durations are offered that are guaranteed by us, but may have a Market Value Adjustment
       if you withdraw or transfer your Account Value before the Maturity Date.
|X|      The Annuity  features two distinct phases - the  accumulation  period and the payout period.  During the  accumulation  period
       your Account Value is allocated to one or more  investment  options.  The variable  investment  options,  each a Sub-account  of
       American  Skandia Life Assurance  Corporation  Variable  Account B, invest in an underlying  mutual fund  portfolio.  Currently,
       portfolios of the following  underlying  mutual funds are being offered:  American  Skandia Trust,  Montgomery  Variable Series,
       Wells Fargo Variable Trust, Rydex Variable Trust,  INVESCO Variable  Investment Funds,  Inc.,  Evergreen Variable Annuity Trust,
       ProFunds VP, First Defined Portfolio Fund LLC and The Prudential Series Fund, Inc.
|X|      During the payout period,  commonly called  "annuitization,"  you can elect to receive annuity  payments (1) for life; (2) for
       life with a guaranteed  minimum number of payments;  (3) based on joint lives;  or (4) for a guaranteed  number of payments.  We
       currently make annuity payments available on a fixed or variable basis.
|X|      This  Annuity  offers a death  benefit that steps up on each 5th  anniversary  of the issue date until age 85. On or after age
       85, the death benefit is equal to the Account Value without application of any market value adjustment.
|X|      You are  allowed to  withdraw a limited  amount of money from your  Annuity on an annual  basis  without  any  charges.  Other
       product features allow you to access your Account Value as necessary, although a charge may apply.
|X|      Transfers  between  investment  options are tax-free.  You may make twenty  transfers each year free of charge.  We also offer
       several programs that enable you to manage your Account Value as your financial needs and investment performance change.

HOW DO I PURCHASE THIS ANNUITY?
We sell the Annuity  through  licensed,  registered  investment  professionals.  You must complete an application  and submit a minimum
initial  purchase  payment of $10,000 (for  non-qualified  contracts) or $2,000 (for qualified  contracts).  We may allow you to make a
lower initial  purchase  payment  provided you establish a bank drafting  program under which purchase  payments  received in the first
Annuity  Year total at least  $10,000 or $2,000 as  applicable.  There is no age  restriction  to purchase the  Annuity.  However,  the
Death Benefit provides greater protection for persons under age 85.








                                                           TABLE OF CONTENTS


Glossary of Terms..................................................................................................................5


Summary of Contract Fees and Charges...............................................................................................6


Expense Examples...................................................................................................................9


Investment Options................................................................................................................12

   WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS?.............................................................12
   WHAT ARE THE FIXED INVESTMENT OPTIONS?.........................................................................................27

Fees and Charges..................................................................................................................27

   WHAT ARE THE CONTRACT FEES AND CHARGES?........................................................................................27
   WHAT CHARGES APPLY SOLELY TO THE VARIABLE INVESTMENT OPTIONS?..................................................................28
   WHAT CHARGES ARE ASSESSED BY THE PORTFOLIOS?...................................................................................28
   WHAT CHARGES APPLY TO THE FIXED ALLOCATIONS?...................................................................................28
   WHAT CHARGES APPLY IF I CHOOSE AN ANNUITY PAYMENT OPTION?......................................................................29
   EXCEPTIONS/REDUCTIONS TO FEES AND CHARGES......................................................................................29

Purchasing Your Annuity...........................................................................................................29

   WHAT ARE OUR REQUIREMENTS FOR PURCHASING THE ANNUITY?..........................................................................29

Managing Your Annuity.............................................................................................................30

   MAY I CHANGE THE OWNER, ANNUITANT AND BENEFICIARY DESIGNATIONS?................................................................30
   MAY I RETURN THE ANNUITY IF I CHANGE MY MIND?..................................................................................30
   MAY I MAKE ADDITIONAL PURCHASE PAYMENTS?.......................................................................................30
   MAY I MAKE SCHEDULED PAYMENTS DIRECTLY FROM MY BANK ACCOUNT?...................................................................31
   MAY I MAKE PURCHASE PAYMENTS THROUGH A SALARY REDUCTION PROGRAM?...............................................................31

Managing Your Account Value.......................................................................................................31

   HOW AND WHEN ARE PURCHASE PAYMENTS INVESTED?...................................................................................31
   ARE THERE RESTRICTIONS OR CHARGES ON TRANSFERS BETWEEN INVESTMENT OPTIONS?.....................................................31
   DO YOU OFFER DOLLAR COST AVERAGING?............................................................................................32
   DO YOU OFFER ANY AUTOMATIC REBALANCING PROGRAMS?...............................................................................32
   DO YOU OFFER PROGRAMS DESIGNED TO GUARANTEE A "RETURN OF PREMIUM" AT A FUTURE DATE?............................................32
   MAY I AUTHORIZE MY INVESTMENT PROFESSIONAL TO MANAGE MY ACCOUNT?...............................................................33
   HOW DO THE FIXED INVESTMENT OPTIONS WORK?......................................................................................33
   HOW DO YOU DETERMINE RATES FOR FIXED ALLOCATIONS?..............................................................................34
   HOW DOES THE MARKET VALUE ADJUSTMENT WORK?.....................................................................................34
   WHAT HAPPENS WHEN MY GUARANTEE PERIOD MATURES?.................................................................................35

Access To Account Value...........................................................................................................35

   WHAT TYPES OF DISTRIBUTIONS ARE AVAILABLE TO ME?...............................................................................35
   ARE THERE TAX IMPLICATIONS FOR DISTRIBUTIONS?..................................................................................35
   CAN I WITHDRAW A PORTION OF MY ANNUITY?........................................................................................36
   HOW MUCH CAN I WITHDRAW AS A FREE WITHDRAWAL?..................................................................................36
   IS THERE A CHARGE FOR A PARTIAL WITHDRAWAL?....................................................................................37
   CAN I MAKE PERIODIC WITHDRAWALS FROM THE ANNUITY DURING THE ACCUMULATION PERIOD?...............................................37
   DO YOU OFFER A PROGRAM FOR WITHDRAWALS UNDER SECTION 72(T) OF THE INTERNAL REVENUE CODE?.......................................37
   WHAT ARE MINIMUM DISTRIBUTIONS AND WHEN WOULD I NEED TO MAKE THEM?.............................................................38
   CAN I SURRENDER MY ANNUITY FOR ITS VALUE?......................................................................................38
   WHAT TYPES OF ANNUITY OPTIONS ARE AVAILABLE?...................................................................................38
   HOW AND WHEN DO I CHOOSE THE ANNUITY PAYMENT OPTION?...........................................................................39
   HOW ARE ANNUITY PAYMENTS CALCULATED?...........................................................................................40

Death Benefit.....................................................................................................................41

   WHAT TRIGGERS THE PAYMENT OF A DEATH BENEFIT?..................................................................................41
   AMERICAN SKANDIA'S ANNUITY REWARDS.............................................................................................41
   PAYMENT OF DEATH BENEFITS......................................................................................................42

Valuing Your Investment...........................................................................................................43

   HOW IS MY ACCOUNT VALUE DETERMINED?............................................................................................43
   WHAT IS THE SURRENDER VALUE OF MY ANNUITY?.....................................................................................43
   HOW AND WHEN DO YOU VALUE THE SUB-ACCOUNTS?....................................................................................43
   HOW DO YOU VALUE FIXED ALLOCATIONS?............................................................................................44
   WHEN DO YOU PROCESS AND VALUE TRANSACTIONS?....................................................................................44

Tax Considerations................................................................................................................45

   WHAT ARE SOME OF THE FEDERAL TAX CONSIDERATIONS OF THIS ANNUITY?...............................................................45
   HOW ARE AMERICAN SKANDIA AND THE SEPARATE ACCOUNTS TAXED?......................................................................45
   IN GENERAL, HOW ARE ANNUITIES TAXED?...........................................................................................45
   HOW ARE DISTRIBUTIONS TAXED?...................................................................................................45
   WHAT TAX CONSIDERATIONS ARE THERE FOR TAX-QUALIFIED RETIREMENT PLANS OR QUALIFIED
     CONTRACTS?...................................................................................................................47
   HOW ARE DISTRIBUTIONS FROM QUALIFIED CONTRACTS TAXED?..........................................................................48
   GENERAL TAX CONSIDERATIONS.....................................................................................................49

General Information...............................................................................................................50

   HOW WILL I RECEIVE STATEMENTS AND REPORTS?.....................................................................................50
   WHO IS AMERICAN SKANDIA?.......................................................................................................50
   WHAT ARE SEPARATE ACCOUNTS?....................................................................................................50
   WHAT IS THE LEGAL STRUCTURE OF THE UNDERLYING FUNDS?...........................................................................52
   WHO DISTRIBUTES ANNUITIES OFFERED BY AMERICAN SKANDIA?.........................................................................52
   AVAILABLE INFORMATION..........................................................................................................54
   INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE................................................................................54
   HOW TO CONTACT US..............................................................................................................54
   INDEMNIFICATION................................................................................................................55
   LEGAL PROCEEDINGS..............................................................................................................55
   CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION............................................................................56

Appendix A - Financial Information About American Skandia..........................................................................1

   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS...........................................3
   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK......................................................................7

AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN SKANDIA LIFE ASSURANCE CORPORATION..........................................10

   Report of Independent Auditors.................................................................................................11

Appendix B - Condensed Financial Information About Separate Account B..............................................................1


Appendix C-1: PSA Prior Contract...................................................................................................1


Appendix C-2: Alliance Capital Navigator Prior Contract............................................................................6


Appendix D - Sale of Contracts Outside of the State of New York....................................................................1







                                                           GLOSSARY OF TERMS

Many terms used  within this  Prospectus  are  described  within the text where they  appear.  The  description  of those terms are not
repeated in this Glossary of Terms.

Account  Value:  The value of each  allocation to a Sub-account  or a Fixed  Allocation  prior to the Annuity Date,  plus any earnings,
and/or less any losses,  distributions  and  charges.  The  Account  Value is  calculated  before we assess any  applicable  Contingent
Deferred Sales Charge  ("CDSC")  and/or any Annual  Maintenance  Fee. The Account Value is determined  separately for each  Sub-account
and for each Fixed  Allocation,  and then totaled to determine  the Account  Value for your entire  Annuity.  The Account Value of each
Fixed Allocation on other than its Maturity Date may be calculated using a market value adjustment.

Annuitization:  The  application of Account Value to one of the available  annuity  options to begin  receiving  periodic  payments for
life, for a guaranteed minimum number of payments or for life with a guaranteed minimum number of payments.

Annuity Date: The date you choose for annuity payments to commence.  A maximum Annuity Date may apply.

Annuity Year: A 12-month period commencing on the Issue Date of the Annuity and each successive 12-month period thereafter.

Code: The Internal Revenue Code of 1986, as amended from time to time.

Fixed  Allocation:  An  allocation of Account  Value that is to be credited a fixed rate of interest for a specified  Guarantee  Period
during the accumulation period.

Guarantee Period: A period of time during the accumulation period where we credit a fixed rate of interest on a Fixed Allocation.

Interim  Value:  The value of a Fixed  Allocation on any date other than the Maturity  Date.  The Interim Value is equal to the initial
value  allocated to the Fixed  Allocation  plus all  interest  credited to the Fixed  Allocation  as of the date  calculated,  less any
transfers or withdrawals from the Fixed Allocation.

Issue Date: The effective date of your Annuity.

MVA: A market value  adjustment used in the  determination  of Account Value of each Fixed  Allocation on a day more than 30 days prior
to the Maturity Date of such Fixed Allocation.

Owner:  With an Annuity  issued as an individual  annuity  contract,  the Owner is either an eligible  entity or person named as having
ownership  rights in relation to the Annuity.  With an Annuity  issued as a  certificate  under a group annuity  contract,  the "Owner"
refers to the person or entity who has the rights and benefits designated as to the "Participant" in the certificate.

Surrender  Value:  The value of your Annuity  available upon surrender prior to the Annuity Date. It equals the Account Value as of the
date we price the surrender minus any applicable CDSC, Annual Maintenance Fee, Tax Charge and the charge for any optional benefits.

Unit:  A measure used to calculate your Account Value in a Sub-account during the accumulation period.

Valuation  Day:  Every day the New York Stock  Exchange is open for trading or any other day the  Securities  and  Exchange  Commission
requires mutual funds or unit investment trusts to be valued.





SUMMARY OF CONTRACT FEES AND CHARGES

Below is a summary of the fees and expenses we charge for the Annuity.  Some  charges are  assessed  against your Annuity  while others
are assessed against assets  allocated to the variable  investment  options.  The charges that are assessed against the Annuity include
the Contingent  Deferred Sales Charge,  Annual  Maintenance Fee,  Transfer Fee and the Tax Charge.  The charge that is assessed against
the variable  investment options is the Insurance Charge,  which is the combination of a mortality and expense risk charge and a charge
for administration of the Annuity.  Each underlying mutual fund portfolio assesses a charge for investment  management,  other expenses
and with some mutual funds, a 12b-1 charge.  The prospectus for each underlying  mutual fund provides more detailed  information  about
the  expenses for the  underlying  mutual  funds.  In certain  states,  a premium tax charge may be  applicable.  All of these fees and
expenses are described in more detail within this Prospectus.

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                                                       YOUR TRANSACTION EXPENSES
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------------------------------- ----------------------------------------------------------------- --------------------------------------
                                                        Amount Deducted/
------------------------------                       Description Of Charge                                    When Deducted
         Fee/Expense
------------------------------- ----------------------------------------------------------------- --------------------------------------
------------------------------- -------- ------- ------- -------- ------- ------- ------- ------- --------------------------------------
                                Yr. 1    Yr. 2   Yr. 3    Yr. 4   Yr. 5   Yr. 6   Yr. 7   Yr. 8+
                                                                                                            Upon Surrender or
Contingent Deferred Sales                                                                                  Partial Withdrawal
Charge

------------------------------- -------- ------- ------- -------- ------- ------- ------- ------- --------------------------------------
------------------------------- -------- ------- ------- -------- ------- ------- ------- ------- --------------------------------------
                                 7.5%     6.5%    5.5%    4.5%     3.5%    2.5%    1.5%    0.0%

------------------------------- -------- ------- ------- -------- ------- ------- ------- -------
------------------------------- -----------------------------------------------------------------
                                     The charge is a percentage of each applicable Purchase
                                  Payment. The period is measured from the date each Purchase
                                                     Payment is allocated.
------------------------------- ----------------------------------------------------------------- --------------------------------------
------------------------------- ----------------------------------------------------------------- --------------------------------------
Annual Maintenance Fee                       Smaller of $30 or 2% of Account Value                      Annually on the Annuity's
                                                                                                   anniversary date or upon surrender
------------------------------- ----------------------------------------------------------------- --------------------------------------
-------------------------------
Transfer Fee                                                 $10.00                               After the 20th transfer each Annuity
                                                                                                                  Year
------------------------------- ----------------------------------------------------------------- --------------------------------------
------------------------------- ----------------------------------------------------------------- --------------------------------------
Tax Charge                         Depends on the requirements of the applicable jurisdiction                    Various

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


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                                                  ANNUAL CHARGES OF THE SUB-ACCOUNTS
                                 (as a percentage of the average daily net assets of the Sub-accounts)
------------------------------- ----------------------------------------------------------------- --------------------------------------
Mortality & Expense Risk
Charge                                                       1.25%
                                                                                                                  Daily
Administration Charge                                        0.15%

Total  Annual  Charges  of the          1.40% per year of the value of each Sub-account              Applies to Variable Investment
Sub-accounts*                                                                                                 Options only
------------------------------- ----------------------------------------------------------------- --------------------------------------
*  The combination of the Mortality and Expense Risk Charges and Administration Charge is referred to as the "Insurance Charge"
elsewhere in this Prospectus.


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                                           Underlying Mutual Fund Portfolio Annual Expenses
                               (as a percentage of the average net assets of the underlying Portfolios)
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The following are the investment  management fees, other expenses,  12b-1 fees (if applicable),  and the total annual expenses for each
underlying  mutual  fund  ("Portfolio")  as of  December  31,  2001,  except as noted.  Each  figure is stated as a  percentage  of the
underlying  Portfolio's  average daily net assets. For certain of the underlying  Portfolios,  a portion of the management fee is being
waived and/or other  expenses are being  partially  reimbursed.  "N/A"  indicates  that no portion of the  management  fee and/or other
expenses is being waived and/or  reimbursed.  The "Net Annual Portfolio  Operating  Expenses" reflect the combination of the underlying
Portfolio's  investment  management  fee,  other expenses and any 12b-1 fees,  net of any fee waivers and expense  reimbursements.  The
following  expenses are deducted by the underlying  Portfolio  before it provides  American Skandia with the daily net asset value. Any
footnotes  about  expenses  appear after the list of all the  Portfolios.  The  underlying  Portfolio  information  was provided by the
underlying  mutual funds and has not been  independently  verified by us. See the prospectuses or statements of additional  information
of the underlying  Portfolios for further details.  The current  prospectus and statement of additional  information for the underlying
Portfolios can be obtained by calling 1-800-766-4530.

------------------------------------------------- --------------- ------------- -------------- ------------- ------------ -------------
                                                    Management     Other         12b-1 Fees    Total Annual   Fee          Net
                                                       Fees         Expenses                    Portfolio    Waivers       Annual
              UNDERLYING PORTFOLIO                                                              Operating    and           Portfolio
                                                                                                 Expenses    Expense       Operating
                                                                                                             Reimburse-mentExpenses

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

American Skandia Trust: 1
  AST Strong International Equity                     0.87%          0.22%          0.05%         1.14%          N/A         1.14%
  AST William Blair International Growth 5            1.00%          0.22%          0.02%         1.24%         0.10%        1.14%
  AST American Century International Growth           1.00%          0.28%          0.00%         1.28%          N/A         1.28%
  AST DeAM International Equity                       1.00%          0.32%          0.00%         1.32%         0.15%        1.17%
  AST MFS Global Equity                               1.00%          0.40%          0.00%         1.40%          N/A         1.40%
  AST PBHG Small-Cap Growth                           0.90%          0.23%          0.03%         1.16%          N/A         1.16%
  AST DeAM Small-Cap Growth                           0.95%          0.19%          0.03%         1.17%         0.01%        1.16%
  AST Federated Aggressive Growth                     0.95%          0.83%          0.00%         1.78%         0.43%        1.35%
  AST Goldman Sachs Small-Cap Value                   0.95%          0.16%          0.07%         1.18%          N/A         1.18%
  AST Gabelli Small-Cap Value                         0.90%          0.18%          0.00%         1.08%          N/A         1.08%
  AST DeAM Small-Cap Value 2                          0.95%          0.22%          0.02%         1.19%         0.15%        1.04%
  AST Goldman Sachs Mid-Cap Growth 5                  1.00%          0.26%          0.08%         1.34%         0.10%        1.24%
  AST Neuberger Berman Mid-Cap Growth                 0.90%          0.18%          0.04%         1.12%          N/A         1.12%
  AST Neuberger Berman Mid-Cap Value                  0.90%          0.16%          0.16%         1.22%          N/A         1.22%
  AST Alger All-Cap Growth                            0.95%          0.16%          0.09%         1.20%          N/A         1.20%
  AST Gabelli All-Cap Value                           0.95%          0.24%          0.01%         1.20%          N/A         1.20%
  AST T. Rowe Price Natural Resources                 0.90%          0.20%          0.01%         1.11%          N/A         1.11%
  AST Alliance Growth                                 0.90%          0.19%          0.04%         1.13%          N/A         1.13%
  AST MFS Growth                                      0.90%          0.17%          0.04%         1.11%          N/A         1.11%
  AST Marsico Capital Growth                          0.90%          0.16%          0.02%         1.08%         0.02%        1.06%
  AST Goldman Sachs Concentrated Growth 5             0.90%          0.14%          0.03%         1.07%         0.06%        1.01%
  AST DeAM Large-Cap Growth 2                         0.85%          0.22%          0.02%         1.09%         0.10%        0.99%
  AST DeAM Large-Cap Value                            0.85%          0.22%          0.02%         1.09%         0.10%        0.99%
  AST Alliance/Bernstein Growth + Value               0.90%          0.55%          0.00%         1.45%         0.10%        1.35%
  AST Sanford Bernstein Core Value                    0.75%          0.40%          0.00%         1.15%          N/A         1.15%
  AST Cohen & Steers Realty                           1.00%          0.19%          0.02%         1.21%          N/A         1.21%
  AST Sanford Bernstein Managed Index 500             0.60%          0.16%          0.02%         0.78%          N/A         0.78%
  AST American Century Income & Growth                0.75%          0.19%          0.00%         0.94%          N/A         0.94%
  AST Alliance Growth and Income                      0.75%          0.14%          0.07%         0.96%         0.02%        0.94%
  AST MFS Growth with Income                          0.90%          0.18%          0.03%         1.11%          N/A         1.11%
  AST INVESCO Capital Income                          0.75%          0.16%          0.01%         0.92%         0.01%        0.91%
  AST DeAM Global Allocation                          0.10%          0.17%          0.00%         0.27%          N/A         0.27%
  AST American Century Strategic Balanced             0.85%          0.23%          0.00%         1.08%          N/A         1.08%
  AST T. Rowe Price Asset Allocation                  0.85%          0.25%          0.00%         1.10%          N/A         1.10%
  AST T. Rowe Price Global Bond                       0.80%          0.28%          0.00%         1.08%          N/A         1.08%
  AST Federated High Yield                            0.75%          0.20%          0.00%         0.95%          N/A         0.95%
  AST Lord Abbett Bond-Debenture                      0.80%          0.30%          0.00%         1.10%          N/A         1.10%
  AST DeAM Bond 2                                     0.85%          0.22%          0.00%         1.07%         0.15%        0.92%
  AST PIMCO Total Return Bond                         0.65%          0.16%          0.00%         0.81%         0.02%        0.79%
  AST PIMCO Limited Maturity Bond                     0.65%          0.18%          0.00%         0.83%          N/A         0.83%
  AST Money Market                                    0.50%          0.14%          0.00%         0.64%         0.05%        0.59%

Montgomery Variable Series:
  Emerging Markets                                    1.25%          0.42%            N/A          1.67%         N/A         1.67%

Wells Fargo Variable Trust:
  Equity Value                                        0.55%          0.36%          0.25%         1.16%         0.16%        1.00%
  Equity Income                                       0.55%          0.43%          0.25%         1.23%         0.23%        1.00%

Rydex Variable Trust:
  Nova                                                 0.75%         0.70%            N/A          1.45%          N/A         1.45%
  Ursa                                                 0.75%         0.70%            N/A          1.45%          N/A         1.45%
  OTC                                                  0.90%         0.99%            N/A          1.89%          N/A         1.89%
------------------------------------------------- --------------- ------------- -------------- ------------- ------------ -------------

------------------------------------------------- --------------- ------------- -------------- ------------- ------------ -------------
                                                    Management     Other         12b-1 Fees    Total Annual   Fee          Net
                                                       Fees         Expenses                    Portfolio    Waivers       Annual
              UNDERLYING PORTFOLIO                                                              Operating    and           Portfolio
                                                                                                 Expenses    Expense       Operating
                                                                                                             Reimburse-mentExpenses

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

INVESCO Variable Investment Funds, Inc.:
  Dynamics                                             0.75%         0.33%            N/A          1.08%          N/A         1.08%
  Technology                                           0.75%         0.32%            N/A          1.07%          N/A         1.07%
  Health Sciences                                      0.75%         0.31%            N/A          1.06%          N/A         1.06%
  Financial Services                                   0.75%         0.32%            N/A          1.07%          N/A         1.07%
  Telecommunications                                   0.75%         0.34%            N/A          1.09%          N/A         1.09%

Evergreen Variable Annuity Trust:
  Global Leaders                                       0.87%         0.28%            N/A          1.15%         0.15%        1.00%
  Special Equity                                       0.92%         0.23%            N/A          1.15%         0.12%        1.03%
  Omega                                                0.52%         0.20%            N/A          0.72%          N/A         0.72%

ProFund VP:
  Europe 30                                            0.75%         0.89%           0.25%         1.89%          N/A         1.89%
  Asia 30 3                                            0.75%         0.94%           0.25%         1.94%          N/A         1.94%
  Japan 3                                              0.75%         0.94%           0.25%         1.94%          N/A         1.94%
  Banks 3                                              0.75%         0.96%           0.25%         1.96%          N/A         1.96%
  Basic Materials 3                                    0.75%         0.96%           0.25%         1.96%          N/A         1.96%
  Biotechnology                                        0.75%         1.03%           0.25%         2.03%         0.05%        1.98%
  Consumer Cyclical 3                                  0.75%         0.96%           0.25%         1.96%          N/A         1.96%
  Consumer Non-Cyclical 3                              0.75%         0.96%           0.25%         1.96%          N/A         1.96%
  Energy                                               0.75%         1.05%           0.25%         2.05%         0.07%        1.98%
  Financial                                            0.75%         1.10%           0.25%         2.10%         0.12%        1.98%
  Healthcare                                           0.75%         1.06%           0.25%         2.06%         0.08%        1.98%
  Industrial 3                                         0.75%         0.96%           0.25%         1.96%          N/A         1.96%
  Internet 3                                           0.75%         0.96%           0.25%         1.96%          N/A         1.96%
  Pharmaceuticals 3                                    0.75%         0.96%           0.25%         1.96%          N/A         1.96%
  Precious Metals 3                                    0.75%         0.96%           0.25%         1.96%          N/A         1.96%
  Real Estate                                          0.75%         0.99%           0.25%         1.99%         0.01%        1.98%
  Semiconductor 3                                      0.75%         0.96%           0.25%         1.96%          N/A         1.96%
  Technology                                           0.75%         1.10%           0.25%         2.10%         0.12%        1.98%
  Telecommunications                                   0.75%         1.17%           0.25%         2.17%         0.19%        1.98%
  Utilities                                            0.75%         1.05%           0.25%         2.05%         0.07%        1.98%
  Bull                                                 0.75%         1.25%           0.25%         2.25%         0.27%        1.98%
  Bear                                                 0.75%         0.89%           0.25%         1.89%          N/A         1.89%
  Bull Plus                                            0.75%         0.94%           0.25%         1.94%          N/A         1.94%
  OTC                                                  0.75%         0.91%           0.25%         1.91%          N/A         1.91%
  Short OTC 3                                          0.75%         0.95%           0.25%         1.95%          N/A         1.95%
  UltraOTC                                             0.75%         0.95%           0.25%         1.95%          N/A         1.95%
  Mid-Cap Value 3                                      0.75%         0.96%           0.25%         1.96%          N/A         1.96%
  Mid-Cap Growth 3                                     0.75%         0.96%           0.25%         1.96%          N/A         1.96%
  UltraMid-Cap 3                                       0.75%         0.97%           0.25%         1.97%          N/A         1.97%
  Small-Cap Value 3                                    0.75%         0.97%           0.25%         1.97%          N/A         1.97%
  Small-Cap Growth 3                                   0.75%         0.97%           0.25%         1.97%          N/A         1.97%
  UltraSmall-Cap                                       0.75%         1.11%           0.25%         2.11%         0.13%        1.98%
  U.S. Government Plus 3                               0.50%         0.95%           0.25%         1.70%          N/A         1.70%
  Rising Rates Opportunity 3                           0.75%         0.95%           0.25%         1.95%          N/A         1.95%

First Defined Portfolio Fund LLC:
  First Trust(R)10 Uncommon Values 4                   0.60%          2.47%          0.25%         3.32%         1.95%        1.37%

The Prudential Series Fund, Inc.:
SP Jennison International Growth                      0.85%          1.16%          0.25%         2.26%         0.62%        1.64%
------------------------------------------------- --------------- ------------- -------------- ------------- ------------ -------------

1        The  Investment  Manager of  American  Skandia  Trust (the  "Trust")  has agreed to  reimburse  and/or  waive fees for certain
     Portfolios until at least April 30, 2003. The caption "Total Annual Portfolio  Operating  Expenses"  reflects the Portfolios' fees
     and expenses before such waivers and  reimbursements,  while the caption "Net Annual Portfolio  Operating  Expenses"  reflects the
     effect of such waivers and  reimbursements.  The Trust adopted a Distribution Plan (the  "Distribution  Plan") under Rule 12b-1 of
     the Investment Company Act of 1940 to permit an affiliate of the Trust's  Investment  Manager to receive brokerage  commissions in
     connection  with purchases and sales of securities  held by Portfolios of the Trust,  and to use these  commissions to promote the
     sale of shares of such  Portfolios.  While the  brokerage  commission  rates and amounts  paid by the various  Portfolios  are not
     expected to increase as a result of the Distribution Plan, the staff of the Securities and Exchange  Commission takes the position
     that commission amounts received under the Distribution Plan should be reflected as distribution  expenses of the Portfolios.  The
     Distribution Fee estimates are derived and annualized from data regarding  commission amounts directed under the Distribution Plan
     for the fiscal year ended December 31, 2001.  Although there are no maximum amounts allowable,  actual commission amounts directed
     under the  Distribution  Plan will vary and the amounts  directed  during the last full fiscal year of the Plan's  operations  may
     differ from the amounts listed in the above chart.
2        These  Portfolios  commenced  operations  on May 1, 2002.  "Other  Expenses"  and "12b-1  Fees"  shown are based on  estimated
     amounts for the fiscal year ending December 31, 2002.
3        These Portfolios  commenced  operations on May 1, 2002.  "Other Expenses" shown are based on estimated  amounts for the fiscal
     year ending December 31, 2002.
4        Included  in the charge  for Other  Expenses  is a fee of 0.325% of  average  daily net  assets  paid to  American  Skandia to
     reimburse it for  administrative  costs. The investment  advisor has agreed to waive fees and reimburse expenses through September
     30, 2003 in order to prevent Total Annual Portfolio Operating Expenses (excluding  brokerage expenses and extraordinary  expenses)
     from exceeding 1.47% of the average daily net asset value of the respective Portfolio.

5    Net Annual Portfolio Operating Expenses reflect fee waivers and expense reimbursements in effect as of November 11, 2002.

EXPENSE EXAMPLES
These  examples  are  designed to assist you in  understanding  the various  costs and  expenses  you will incur with the Annuity  over
certain periods of time based on specific  assumptions.  The examples reflect the Insurance Charge,  Contingent  Deferred Sales Charges
(when  applicable),  the  Annual  Maintenance  Fee (when  applicable)  and the  charges  deducted  by the  underlying  Portfolios.  The
Securities and Exchange Commission ("SEC") requires these examples.

Below are examples  showing what you would pay in expenses at the end of the stated time periods for each  Sub-account had you invested
$1,000 in the Annuity and received a 5% annual return on assets.

The  examples  shown  assume  that:  (a) you only  allocate  Account  Value to the  Sub-accounts,  not to a Fixed  Allocation;  (b) the
Insurance  Charge is assessed as 1.40% per year;  (c) the Annual  Maintenance  Fee (when  applicable)  is reflected  as an  asset-based
charge based on an assumed  average  contract size; (d) you make no withdrawals of Account Value during the period shown;  (e) you make
no  transfers,  withdrawals,  surrender  or other  transactions  for which we charge a fee during the period  shown;  (f) no tax charge
applies;  and (g) the  expenses  for the  underlying  Portfolios  reflect the  continued  waiver of fees or  reimbursement  of expenses
throughout each period shown (refer to the "Net Annual Portfolio Operating  Expenses," in the section entitled  "Underlying Mutual Fund
Portfolio Annual Expenses").  Amounts shown in the examples are rounded to the nearest dollar.

THE EXAMPLES ARE  ILLUSTRATIVE  ONLY - THEY SHOULD NOT BE  CONSIDERED A  REPRESENTATION  OF PAST OR FUTURE  EXPENSES OF THE  UNDERLYING
MUTUAL FUNDS OR THEIR PORTFOLIOS - ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.








-----------------------------------------------------------------------------------------------------------------------------------------
                                                                  Expense Examples
                                                  (amounts shown are rounded to the nearest dollar)
-----------------------------------------------------------------------------------------------------------------------------------------

                                       ---------------------------------------------- ------- -----------------------------------------
                                       If you  surrender  your Annuity at the end of           If you do not  surrender  your  Annuity
                                       the  applicable  time  period,  you would pay           at  the  end  of  the  applicable  time
                                       the   following    expenses   on   a   $1,000           period   or   begin   taking    annuity
                                       investment,  assuming  5%  annual  return  on           payments  at such  time,  you would pay
                                       assets:                                                 the  following  expenses  on  a  $1,000
                                                                                               investment,  assuming 5% annual  return
                                                                                               on assets:
                                       ---------------------------------------------- ------- -----------------------------------------



After:                                                                                 After:
-------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
Sub-Account:                                 1 Year    3 Years    5 Years   10 Years          1 Year     3 Years    5 Years   10 Years
-------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
AST Strong International Equity                102        137       174        294               27         82        139        294
AST William Blair International Growth         102        137       174        294               27         82        139        294
AST American Century International Growth      103        141       181        308               28         86        146        308
AST DeAM International Equity                  102        137       175        297               27         82        140        297
AST MFS Global Equity                          104        144       187        319               29         89        152        319
AST PBHG Small-Cap Growth                      102        137       175        297               27         82        140        297
AST DeAM Small-Cap Growth                      102        137       175        297               27         82        140        297
AST Federated Aggressive Growth                104        143       184        314               29         88        149        314
AST Goldman Sachs Small-Cap Value              102        138       176        298               27         83        141        298
AST Gabelli Small-Cap Value                    101        134       170        287               26         79        135        287
AST DeAM Small-Cap Value                       101        134       169        284               26         79        134        284
AST Goldman Sachs Mid-Cap Growth               103        140       179        304               28         85        144        304
AST Neuberger Berman Mid-Cap Growth            101        136       173        292               26         81        138        292
AST Neuberger Berman Mid-Cap Value             102        139       178        301               27         84        143        301
AST Alger All-Cap Growth                       102        138       177        300               27         83        142        300
AST Gabelli All-Cap Value                      102        138       177        300               27         83        142        300
AST T. Rowe Price Natural Resources            101        135       172        290               26         80        137        290
AST Alliance Growth                            101        136       173        293               26         81        138        293
AST MFS Growth                                 101        135       172        290               26         80        137        290
AST Marsico Capital Growth                     101        134       170        287               26         79        135        287
AST Goldman Sachs Concentrated Growth          100        132       167        280               25         77        132        280
AST DeAM Large-Cap Growth                      100        132       166        278               25         77        131        278
AST DeAM Large-Cap Value                       100        132       166        278               25         77        131        278
AST Alliance/Bernstein Growth + Value          104        143       184        314               29         88        149        314
AST Sanford Bernstein Core Value               102        137       174        294               27         82        139        294
AST Cohen & Steers Realty                      102        138       177        300               27         83        142        300
AST Sanford Bernstein Managed Index 500         98        125       155        257               23         70        120        257
AST American Century Income & Growth            99        130       163        273               24         75        128        273
AST Alliance Growth and Income                  99        130       163        273               24         75        128        273
AST MFS Growth with Income                     101        135       172        290               26         80        137        290
AST INVESCO Capital Income                      99        129       162        270               24         74        127        270
AST DeAM Global Allocation                      93        110       129        204               18         55         94        204
AST American Century Strategic Balanced        101        134       170        287               26         79        135        287
AST T. Rowe Price Asset Allocation             101        135       172        290               26         80        137        290
AST T. Rowe Price Global Bond                  101        134       170        287               26         79        135        287
AST Federated High Yield                       100        131       164        275               25         76        129        275
AST Lord Abbett Bond-Debenture                 101        135       172        290               26         80        137        290
AST DeAM Bond                                   99        129       162        271               24         74        127        271
AST PIMCO Total Return Bond                     98        126       156        258               23         71        121        258
AST PIMCO Limited Maturity Bond                 98        127       158        262               23         72        123        262
AST Money Market                                96        119       145        237               21         64        110        237

MV Emerging Markets                            107        152       200        345               32         97        165        345

WFVT Equity Value                              100        132       167        280               25         77        132        280
WFVT Equity Income                             100        132       167        280               25         77        132        280

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







After:                                                                                 After:
-------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
Sub-Account:                                 1 Year    3 Years    5 Years   10 Years          1 Year     3 Years    5 Years   10 Years
-------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
Rydex Nova                                     105        146       189        324               30         91        154        324
Rydex Ursa                                     105        146       189        324               30         91        154        324
Rydex OTC                                      109        159       211        365               34         104       176        365

INVESCO VIF Dynamics                           101        134       170        287               26         79        135        287
INVESCO VIF Technology                         101        134       170        287               26         79        135        287
INVESCO VIF Health Sciences                    101        134       170        287               26         79        135        287
INVESCO VIF Financial Services                 101        134       170        287               26         79        135        287
INVESCO VIF Telecommunications                 101        135       171        288               26         80        136        288

Evergreen VA Global Leaders                    100        132       167        280               25         77        132        280
Evergreen VA Special Equity                    100        133       168        283               25         78        133        283
Evergreen VA Omega                              97        123       152        250               22         68        117        250

ProFund VP Europe 30                           109        159       211        365               34         104       176        365
ProFund VP Asia 30                             110        161       214        370               35         106       179        370
ProFund VP Japan                               110        161       214        370               35         106       179        370
ProFund VP Banks                               110        161       214        372               35         106       179        372
ProFund VP Basic Materials                     110        161       214        372               35         106       179        372
ProFund VP Biotechnology                       110        162       216        375               35         107       181        375
ProFund VP Consumer Cyclical                   110        161       214        372               35         106       179        372
ProFund VP Consumer Non-Cyclical               110        161       214        372               35         106       179        372
ProFund VP Energy                              110        162       216        375               35         107       181        375
ProFund VP Financial                           110        162       216        375               35         107       181        375
ProFund VP Healthcare                          110        162       216        375               35         107       181        375
ProFund VP Industrial                          110        161       214        372               35         106       179        372
ProFund VP Internet                            110        161       214        372               35         106       179        372
ProFund VP Pharmaceuticals                     110        161       214        372               35         106       179        372
ProFund VP Precious Metals                     110        161       214        372               35         106       179        372
ProFund VP Real Estate                         110        162       216        375               35         107       181        375
ProFund VP Semiconductor                       110        161       214        372               35         106       179        372
ProFund VP Technology                          110        162       216        375               35         107       181        375
ProFund VP Telecommunications                  110        162       216        375               35         107       181        375
ProFund VP Utilities                           110        162       216        375               35         107       181        375
ProFund VP Bull                                110        162       216        375               35         107       181        375
ProFund VP Bear                                109        159       211        365               34         104       176        365
ProFund VP Bull Plus                           110        161       214        370               35         106       179        370
ProFund VP OTC                                 109        159       211        367               34         104       176        367
ProFund VP Short OTC                           110        161       214        371               35         106       179        371
ProFund VP UltraOTC                            110        161       214        371               35         106       179        371
ProFund VP Mid-Cap Value                       110        161       214        372               35         106       179        372
ProFund VP Mid-Cap Growth                      110        161       214        372               35         106       179        372
ProFund VP UltraMid-Cap                        110        162       216        375               35         107       181        375
ProFund VP Small-Cap Value                     110        162       216        375               35         107       181        375
ProFund VP Small-Cap Growth                    110        162       216        375               35         107       181        375
ProFund VP UltraSmall-Cap                      110        162       216        375               35         107       181        375
ProFund VP U.S. Government Plus                107        153       201        347               32         98        166        347
ProFund VP Rising Rates Opportunity            110        161       214        371               35         106       179        371

First Trust(R)10 Uncommon Values                104        143       185        317               29         88        150        317

SP Jennison International Growth               107        152       199        343               32         97        164        343
-------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------






INVESTMENT OPTIONS

WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS?

Each variable  investment  option is a Sub-account of American  Skandia Life Assurance  Corporation  Variable  Account B (see "What are
Separate Accounts" for more detailed  information.) Each Sub-account  invests  exclusively in one Portfolio.  You should carefully read
the  prospectus for any Portfolio in which you are  interested.  The following  chart  classifies  each of the Portfolios  based on our
assessment of their  investment  style (as of the date of this  Prospectus).  The chart also provides a description of each Portfolio's
investment  objective  (in  italics)  and a short,  summary  description  of their key  policies  to assist  you in  determining  which
Portfolios may be of interest to you.  There is no guarantee that any underlying Portfolio will meet its investment objective.

The name of the  advisor/sub-advisor  for each Portfolio  appears next to the  description.  Those  Portfolios  whose name includes the
prefix "AST" are  Portfolios of American  Skandia  Trust.  The  investment  manager for AST is American  Skandia  Investment  Services,
Incorporated,  an affiliated  company of American Skandia.  However,  a sub-advisor,  as noted below, is engaged to conduct  day-to-day
investment decisions.


The Portfolios are not publicly traded mutual funds.  They are only available as investment  options in variable annuity  contracts and
variable life insurance  policies issued by insurance  companies,  or in some cases, to  participants in certain  qualified  retirement
plans.  However,  some of the  Portfolios  available as  Sub-accounts  under the Annuity are managed by the same  portfolio  advisor or
sub-advisor  as a retail  mutual fund of the same or similar  name that the  Portfolio  may have been modeled  after at its  inception.
Certain  retail mutual funds may also have been modeled after a Portfolio.  While the  investment  objective and policies of the retail
mutual funds and the Portfolios may be substantially  similar,  the actual  investments will differ to varying degrees.  Differences in
the  performance  of the funds can be expected,  and in some cases could be  substantial.  You should not compare the  performance of a
publicly  traded  mutual fund with the  performance  of any  similarly  named  Portfolio  offered as a  Sub-account.  Details about the
investment  objectives,  policies,  risks,  costs and  management of the Portfolios  are found in the  prospectuses  for the underlying
mutual  funds.  The current  prospectus  and statement of  additional  information  for the  underlying  Portfolios  can be obtained by
calling 1-800-766-4530.

=======================================================================================================================================
Effective  March 16, 2001, the Nova,  Ursa and OTC portfolios of Rydex Variable Trust will no longer be offered as  Sub-accounts  under
the Annuity.  Owners of Annuities  issued on or after March 16, 2001 will not be allowed to allocate  Account  Value to the Rydex Nova,
Rydex  Ursa or Rydex OTC  Sub-accounts.  Except as noted  below,  Owners of  Annuities  issued  before  March 16,  2001,  and/or  their
authorized  investment  professionals,  will no longer be able to allocate  additional  Account Value or make  transfers into the Rydex
Nova, Rydex Ursa or Rydex OTC  Sub-accounts.  Annuity Owners and/or their  authorized  investment  professionals  who elect to transfer
Account  Value out of the Rydex  Sub-accounts  on or after March 16, 2001 will not be allowed to transfer  Account Value into the Rydex
Sub-accounts  at a later date.  Bank drafting,  dollar cost averaging,  asset  allocation and rebalancing  programs that were effective
before March 16, 2001 and included one or more of the Rydex  Sub-accounts  will be allowed to continue.  However,  no changes involving
the Rydex Sub-accounts may be made to such programs.
=======================================================================================================================================


=======================================================================================================================================
Effective  close of business  June 28, 2002,  the AST Goldman Sachs  Small-Cap  Value  portfolio is no longer  offered as a Sub-account
under the Annuity,  except as noted below.  Annuity  contracts with Account Value  allocated to the AST Goldman Sachs  Small-Cap  Value
Sub-account on or before June 28, 2002 may continue to allocate  Account Value and make transfers into the AST Goldman Sachs  Small-Cap
Value  Sub-account,  including  any bank  drafting,  dollar cost  averaging,  asset  allocation  and  rebalancing  programs.  Owners of
Annuities  issued  after June 28,  2002 will not be  allowed  to  allocate  Account  Value to the AST  Goldman  Sachs  Small-Cap  Value
Sub-account.

The AST Goldman Sachs  Small-Cap  Value  Sub-account  may be offered to new Owners at some future date;  however,  at the present time,
American Skandia has no intention to do so.
=======================================================================================================================================

Please refer to Appendix B for certain required financial information related to the historical performance of the Sub-accounts.








------------------- ------------------------------------------------------------------------------------------------ -----------------------
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                         PORTFOLIO
       TYPE                                                                                                                 ADVISOR/
                                                                                                                          SUB-ADVISOR
                    ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
  INTER-NATIONAL    AST Strong International Equity (f/k/a AST AIM International  Equity):  seeks long-term capital
                    growth by investing in a diversified  portfolio of international  equity securities the issuers
                    of which are  considered to have strong  earnings  momentum.  The  Portfolio  seeks to meet its
                    objective by investing,  under normal market conditions,  at least 80% of its total assets in a
                    diversified  portfolio  of equity  securities  of  companies  located or operating in developed
      EQUITY        non-U.S.  countries  and emerging  markets of the world.  The  Sub-advisor  intends to focus on
                    companies  with an  above-average  potential  for  long-term  growth  and  attractive  relative      Strong Capital
                    valuations.  The Sub-advisor  selects companies based on five key factors:  growth,  valuation,     Management, Inc.
                    management, risk and sentiment.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
  INTER-NATIONAL    AST William Blair  International  Growth (f/k/a AST Janus  Overseas  Growth):  seeks  long-term
                    growth of capital.  The  Portfolio  pursues its  objective  primarily  through  investments  in
                    equity  securities  of issuers  located  outside  the United  States.  The  Portfolio  normally
                    invests at least 80% of its total assets in securities of issuers from at least five  different
      EQUITY        countries,  excluding the United States.  The Portfolio invests primarily in companies selected
                    for their growth  potential.  Securities are generally  selected  without regard to any defined     William Blair &
                    allocation among countries,  geographic regions or industry sectors, or other similar selection     Company, L.L.C.
                    procedure.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
  INTER-NATIONAL    AST American Century  International  Growth:  seeks capital growth.  The Portfolio will seek to
                    achieve its investment  objective by investing  primarily in equity securities of international
                    companies  that the  Sub-advisor  believes  will  increase  in value  over time.  Under  normal
                    conditions,  the  Portfolio  will  invest at least 65% of its  assets in equity  securities  of
                    issuers from at least three  countries  outside of the United States.  The  Sub-advisor  uses a
      EQUITY        growth  investment  strategy it developed  that looks for  companies  with earnings and revenue
                    growth.  The  Sub-advisor  will  consider  a  number  of other  factors  in  making  investment     American Century
                    selections,  including the prospects for relative  economic  growth among countries or regions,        Investment
                    economic and political  conditions,  expected inflation rates,  currency exchange  fluctuations     Management, Inc.
                    and tax considerations.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST DeAM  International  Equity  (f/k/a AST  Founders  Passport):  seeks  capital  growth.  The
                    Portfolio  pursues its  objective  by  investing at least 80% of its total assets in the equity
                    securities of companies in developed non-U.S.  countries that are represented in the MSCI EAFE(R)
  INTER-NATIONAL    Index.  The  target of this  Portfolio  is to track the  performance  of the MSCI  EAFE(R)Index      Deutsche Asset
      EQUITY        within 4% with normal deviation  expected of 1%. The Sub-advisor  considers a number of factors     Management, Inc.
                    in  determining  whether  to invest  in a stock,  including  earnings  growth  rate,  analysts'
                    estimates of future earnings and industry-relative price multiples.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST MFS Global Equity:  seeks capital growth.  Under normal circumstances the Portfolio invests
                    at least 80% of its assets in equity securities of U.S. and foreign issuers  (including issuers      Massachusetts
  GLOBAL EQUITY     in developing  countries).  The Portfolio  generally seeks to purchase  securities of companies    Financial Services
                    with relatively large market capitalizations relative to the market in which they are traded.           Company
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST PBHG  Small-Cap  Growth  (f/k/a AST Janus  Small-Cap  Growth):  seeks capital  growth.  The
                    Portfolio  pursues its objective by normally  investing at least 80% of its total assets in the
 SMALL CAP GROWTH   common stocks of  small-sized  companies,  whose market  capitalizations  are similar to market     Pilgrim Baxter &
                    capitalizations  of the  companies  in  the  Russell  2000(R)Index.  Following  the  change  in     Associates, Ltd.
                    sub-advisor, the AST PBHG Small-Cap Growth sub-account is now re-opened to all Contract Owners.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
 SMALL CAP GROWTH   AST DeAM  Small-Cap  Growth  (f/k/a AST Scudder  Small-Cap  Growth):  seeks  maximum  growth of
                    investors'  capital  from a portfolio  of growth  stocks of smaller  companies.  The  Portfolio
                    pursues its  objective  by normally  investing  at least 80% of its total  assets in the equity
                    securities  of  small-sized   companies  included  in  the  Russell  2000  Growth(R)Index.  The
                    Sub-advisor  employs  an  investment  strategy  designed  to  maintain  a  portfolio  of equity      Deutsche Asset
                    securities  which  approximates  the market risk of those  stocks  included in the Russell 2000     Management, Inc.
                    Growth(R)Index, but which attempts to outperform the Russell 2000 Growth(R)Index.
------------------- ------------------------------------------------------------------------------------------------ -----------------------


------------------- ------------------------------------------------------------------------------------------------ -----------------------
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                         PORTFOLIO
       TYPE                                                                                                                 ADVISOR/
                                                                                                                          SUB-ADVISOR
                    ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
    SMALL CAP       AST Federated  Aggressive  Growth:  seeks capital growth.  The Portfolio pursues its investment
                    objective by investing  in equity  securities  of companies  offering  superior  prospects  for
                    earnings  growth.  The Portfolio  focuses its  investments on the equity  securities of smaller
                    companies,  but it is not  subject to any  specific  market  capitalization  requirements.  The   Federated Investment
      GROWTH        Portfolio may invest in foreign issuers through American Depositary  Receipts.  The Portfolio's   Counseling/Federated
                    strategies with respect to security analysis,  market  capitalization and sector allocation are    Global Investment
                    designed to produce a portfolio of stocks whose long-term  growth  prospects are  significantly     Management Corp.
                    above those of the S&P 500 Index.
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------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Goldman Sachs Small-Cap Value:  seeks long-term  capital  appreciation.  The Portfolio will
                    seek its objective through  investments  primarily in equity securities that are believed to be
                    undervalued in the marketplace.  The Portfolio  primarily seeks companies that are small-sized,
                    based on the value of their outstanding stock.  Specifically,  under normal  circumstances,  at
                    least 65% of the Portfolio's  total assets will be invested in common stocks issued by smaller,
 SMALL CAP VALUE    less well-known  companies (with market  capitalizations of less than $4 billion at the time of   Goldman Sachs Asset
                    investment).                                                                                           Management
                    Effective  July 31, 2002,  the Portfolio will have a  non-fundamental  policy to invest,  under
                    normal  circumstances,  at  least  80% of the  value  of its  assets  in  small  capitalization
                    companies.  The 80%  investment  requirement  applies  at the time the  Portfolio  invests  its
                    assets.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
 SMALL CAP VALUE    AST Gabelli Small-Cap Value:  seeks to provide long-term capital growth by investing  primarily
                    in  small-capitalization  stocks that appear to be  undervalued.  The  Portfolio  will normally
                    invest at least  65% of its total  assets in  stocks  and  equity-related  securities  of small
                    companies  ($1  billion  or less in market  capitalization).  Reflecting  a value  approach  to
                    investing,  the Portfolio  will seek the stocks of companies  whose current stock prices do not
                    appear to adequately reflect their underlying value as measured by assets,  earnings, cash flow
                    or business franchises.
                    Effective  July 31, 2002,  the Portfolio will have a  non-fundamental  policy to invest,  under          GAMCO
                    normal  circumstances,  at  least  80% of the  value  of its  assets  in  small  capitalization     Investors, Inc.
                    companies.  Effective  September  30, 2002,  the stated  market  capitalization  range has been
                    increased to $1.5 billion or less.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
 SMALL CAP VALUE    AST DeAM Small-Cap Value:  seeks maximum growth of investors'  capital.  The Portfolio  pursues
                    its objective by normally  investing at least 80% of its total assets in the equity  securities
                    of small-sized  companies  included in the Russell 2000(R)Value Index.  The Sub-advisor  employs
                    an  investment   strategy   designed  to  maintain  a  portfolio  of  equity  securities  which      Deutsche Asset
                    approximates  the market risk of those stocks  included in the Russell  2000(R)Value Index,  but     Management, Inc.
                    which attempts to outperform the Russell 2000(R)Value Index.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
  MID-CAP GROWTH    AST Goldman Sachs Mid-Cap  Growth (f/k/a AST Janus Mid-Cap  Growth):  seeks  long-term  capital
                    growth.  The  Portfolio  pursues its  investment  objective,  by investing  primarily in equity
                    securities  selected for their growth  potential,  and normally invests at least 80% of its net   Goldman Sachs Asset
                    assets in medium-sized  companies.  For purposes of the Portfolio,  medium-sized  companies are        Management
                    those whose market  capitalizations  (measured at the time of investment) fall within the range
                    of companies  in the  Standard & Poor's  MidCap 400 Index.  The  Sub-advisor  seeks to identify
                    individual  companies with earnings  growth  potential that may not be recognized by the market
                    at large.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
  MID-CAP GROWTH    AST Neuberger  Berman Mid-Cap  Growth:  seeks capital growth.  Under normal market  conditions,
                    the Portfolio  primarily invests at least 80% of its net assets in the common stocks of mid-cap
                    companies.  For purposes of the Portfolio,  companies with equity market  capitalizations  that
                    fall within the range of the Russell Midcap(R)Index,  at the time of investment,  are considered     Neuberger Berman
                    mid-cap  companies.  Some of the  Portfolio's  assets  may be  invested  in the  securities  of        Management
                    large-cap companies as well as in small-cap  companies.  The Sub-advisor looks for fast-growing       Incorporated
                    companies that are in new or rapidly evolving industries.
------------------- ------------------------------------------------------------------------------------------------ -----------------------


------------------- ------------------------------------------------------------------------------------------------ -----------------------
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                         PORTFOLIO
       TYPE                                                                                                                 ADVISOR/
                                                                                                                          SUB-ADVISOR
                    ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
   MID-CAP VALUE    AST Neuberger Berman Mid-Cap Value: seeks capital growth.  Under normal market conditions,  the
                    Portfolio  primarily  invests at least 80% of its net  assets in the  common  stocks of mid-cap
                    companies.  For purposes of the Portfolio,  companies with equity market  capitalizations  that
                    fall within the range of the Russell  Midcap(R)Index at the time of investment  are  considered
                    mid-cap  companies.  Some of the  Portfolio's  assets  may be  invested  in the  securities  of     Neuberger Berman
                    large-cap  companies as well as in small-cap  companies.  Under the Portfolio's  value-oriented        Management
                    investment  approach,  the Sub-advisor looks for well-managed  companies whose stock prices are       Incorporated
                    undervalued and that may rise in price before other investors realize their worth.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
      ALL-CAP       AST Alger All-Cap Growth:  seeks long-term  capital growth.  The Portfolio invests primarily in
                    equity securities,  such as common or preferred stocks, that are listed on U.S. exchanges or in
                    the  over-the-counter  market.  The Portfolio may invest in the equity  securities of companies
      GROWTH        of all sizes,  and may emphasize  either  larger or smaller  companies at a given time based on        Fred Alger
                    the Sub-advisor's assessment of particular companies and market conditions.                         Management, Inc.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Gabelli  All-Cap  Value:  seeks  capital  growth.  The  Portfolio  pursues its objective by
                    investing primarily in readily marketable equity securities including common stocks,  preferred
                    stocks and  securities  that may be converted at a later time into common stock.  The Portfolio
      ALL-CAP       may invest in the  securities  of companies of all sizes,  and may  emphasize  either larger or
       VALUE        smaller  companies  at a  given  time  based  on the  Sub-advisor's  assessment  of  particular  GAMCO Investors, Inc.
                    companies and market  conditions.  The Portfolio  focuses on companies that appear  underpriced
                    relative  to their  private  market  value  ("PMV").  PMV is the  value  that  the  Portfolio's
                    Sub-advisor believes informed investors would be willing to pay for a company.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST T. Rowe Price Natural  Resources:  seeks  long-term  capital growth  primarily  through the
                    common stocks of companies  that own or develop  natural  resources  (such as energy  products,
                    precious  metals and forest  products)  and other basic  commodities.  The  Portfolio  normally
                    invests  primarily (at least 80% of its total assets) in the common stocks of natural  resource
      SECTOR        companies whose earnings and tangible  assets could benefit from  accelerating  inflation.  The      T. Rowe Price
                    Portfolio looks for companies that have the ability to expand production,  to maintain superior     Associates, Inc.
                    exploration  programs  and  production   facilities,   and  the  potential  to  accumulate  new
                    resources.  At least 50% of Portfolio assets will be invested in U.S. securities,  up to 50% of
                    total assets also may be invested in foreign securities.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Alliance  Growth:  seeks long-term  capital growth.  The Portfolio  invests at least 80% of
                    its total assets in the equity  securities of a limited  number of large,  carefully  selected,
                    high-quality  U.S.  companies  that are judged  likely to  achieve  superior  earnings  growth.
 LARGE CAP GROWTH   Normally,  about 40-60  companies will be  represented in the Portfolio,  with the 25 companies     Alliance Capital
                    most  highly  regarded  by  the  Sub-advisor  usually  constituting  approximately  70%  of the     Management, L.P.
                    Portfolio's  net assets.  An emphasis is placed on identifying  companies  whose  substantially
                    above average prospective earnings growth is not fully reflected in current market valuations.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
 LARGE CAP GROWTH   AST MFS  Growth:  seeks  long-term  capital  growth  and future  income.  Under  normal  market
                    conditions,  the  Portfolio  invests  at least 80% of its total  assets  in common  stocks  and
                    related securities,  such as preferred stocks,  convertible securities and depositary receipts,
                    of companies that the  Sub-advisor  believes offer better than average  prospects for long-term      Massachusetts
                    growth.  The Sub-advisor seeks to purchase  securities of companies that it considers  well-run    Financial Services
                    and  poised  for  growth.  The  Portfolio  may  invest up to 35% of its net  assets in  foreign         Company
                    securities.
------------------- ------------------------------------------------------------------------------------------------ -----------------------


------------------- ------------------------------------------------------------------------------------------------ -----------------------
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                         PORTFOLIO
       TYPE                                                                                                                 ADVISOR/
                                                                                                                          SUB-ADVISOR
                    ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
 LARGE CAP GROWTH   AST Marsico  Capital  Growth:  seeks capital  growth.  Income  realization is not an investment
                    objective  and  any  income  realized  on  the  Portfolio's  investments,  therefore,  will  be
                    incidental to the Portfolio's  objective.  The Portfolio will pursue its objective by investing
                    primarily in common stocks of larger,  more  established  companies.  In selecting  investments
                    for the Portfolio,  the Sub-advisor uses an approach that combines "top down" economic analysis
                    with "bottom up" stock selection.  The "top down" approach identifies  sectors,  industries and
                    companies that should benefit from the trends the  Sub-advisor  has observed.  The  Sub-advisor     Marsico Capital
                    then looks for individual  companies with earnings growth  potential that may not be recognized     Management, LLC
                    by the market at large, a "bottom up" stock selection.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Goldman Sachs Concentrated  Growth (f/k/a AST JanCap Growth):  seeks growth of capital in a
                    manner  consistent  with  the  preservation  of  capital.   Realization  of  income  is  not  a
                    significant  investment  consideration and any income realized on the Portfolio's  investments,
                    therefore,  will be  incidental to the  Portfolio's  objective.  The Portfolio  will pursue its
 LARGE CAP GROWTH   objective  by investing  primarily  in equity  securities  of  companies  that the  Sub-advisor   Goldman Sachs Asset
                    believes are experiencing  favorable demand for their products and services,  and which operate        Management
                    in a favorable  competitive  and  regulatory  environment.  The  Sub-advisor  seeks to identify
                    individual  companies with earnings  growth  potential that may not be recognized by the market
                    at large.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST DeAM  Large-Cap  Growth:  seeks  maximum  growth of capital by  investing  primarily in the
                    growth stocks of larger companies.  The Portfolio  pursues its objective by normally  investing
                    at least 80% of its total assets in the equity securities of large-sized  companies included in
 LARGE CAP GROWTH   the Russell 1000(R)Growth Index.  The  Sub-advisor  employs an investment  strategy  designed to      Deutsche Asset
                    maintain a portfolio of equity  securities  which  approximates the market risk of those stocks     Management, Inc.
                    included in the Russell 1000(R)Growth Index,  but which attempts to outperform the Russell 1000(R)
                    Growth Index through active stock selection.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST DeAM Large-Cap Value (f/k/a AST Janus Strategic Value):  seeks maximum growth of capital by
                    investing  primarily  in the value  stocks of  larger  companies.  The  Portfolio  pursues  its
                    objective by normally  investing at least 80% of its total assets in the equity  securities  of
  LARGE CAP VALUE   large-sized  companies  included in the Russell 1000(R)Value Index.  The Sub-advisor  employs an      Deutsche Asset
                    investment  strategy designed to maintain a portfolio of equity  securities which  approximates     Management, Inc.
                    the market risk of those stocks  included in the Russell 1000(R)Value Index,  but which attempts
                    to outperform the Russell 1000(R)Value Index through active stock selection.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
    LARGE CAP       AST Alliance/Bernstein  Growth + Value: seeks capital growth by investing  approximately 50% of
                    its assets in growth  stocks of large  companies and  approximately  50% of its assets in value
                    stocks of large  companies.  The Portfolio will invest primarily in commons tocks of large U.S.
                    companies  included in the Russell  1000(R)Index (the "Russell  1000(R)").  The Russell 1000(R)is a
                    market  capitalization-weighted  index that measures the  performance of the 1,000 largest U.S.
                    companies.  Normally,  about 60-85  companies will be represented in the Portfolio,  with 25-35
      BLEND         companies  primarily from the Russell 1000(R)Growth Index constituting  approximately 50% of the
                    Portfolio's  net assets and 35-50  companies  primarily  from the  Russell  1000(R)Value  Index     Alliance Capital
                    constituting  the  remainder  of  the  Portfolio's  net  assets.   There  will  be  a  periodic     Management, L.P.
                    rebalancing  of each  segment's  assets  to take  account  of market  fluctuations  in order to
                    maintain the approximately equal allocation.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
  LARGE CAP VALUE   AST Sanford  Bernstein Core Value:  seeks  long-term  capital growth by investing  primarily in   Sanford C. Bernstein
                    common stocks.  The  Sub-advisor  expects that the majority of the  Portfolio's  assets will be
                    invested in the common stocks of large  companies  that appear to be  undervalued.  Among other
                    things, the Portfolio seeks to identify compelling buying opportunities  created when companies
                    are undervalued on the basis of investor  reactions to near-term problems or circumstances even
                    though their long-term  prospects  remain sound. The Sub-advisor  seeks to identify  individual        & Co., LLC
                    companies with earnings growth potential that may not be recognized by the market at large.
------------------- ------------------------------------------------------------------------------------------------ -----------------------


------------------- ------------------------------------------------------------------------------------------------ -----------------------
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                         PORTFOLIO
       TYPE                                                                                                                 ADVISOR/
                                                                                                                          SUB-ADVISOR
                    ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
   REAL ESTATE      AST Cohen & Steers Realty:  seeks to maximize  total return  through  investment in real estate
                    securities.  The  Portfolio  pursues  its  investment  objective  by  investing,  under  normal
                    circumstances,  at least 80% of its net assets in  securities  of real  estate  issuers.  Under
                    normal  circumstances,  the Portfolio will invest substantially all of its assets in the equity
      (REIT)        securities of real estate companies,  i.e., a company that derives at least 50% of its revenues      Cohen & Steers
                    from the ownership,  construction,  financing, management or sale of real estate or that has at   Capital Management,
                    least  50% of its  assets in real  estate.  Real  estate  companies  may  include  real  estate           Inc.
                    investment trusts or REITs.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Sanford Bernstein Managed Index 500: will invest, under normal circumstances,  at least 80%
                    of its net assets in  securities  included in the Standard & Poor's 500  Composite  Stock Price
                    Index  (the  "S&P(R)500 ").  The  Portfolio  seeks  to  outperform  the S&P 500  through  stock
                    selection  resulting  in  different  weightings  of common  stocks  relative to the index.  The
                    Portfolio will invest  primarily in the common stocks of companies  included in the S&P 500. In
                    seeking  to  outperform  the S&P  500,  the  Sub-advisor  starts  with a  portfolio  of  stocks
  MANAGED INDEX     representative  of the holdings of the index.  It then uses a set of  fundamental  quantitative   Sanford C. Bernstein
                    criteria  that are designed to indicate  whether a particular  stock will  predictably  perform        & Co., LLC
                    better or worse than the S&P 500. Based on these criteria,  the Sub-advisor  determines whether
                    the  Portfolio  should  over-weight,  under-weight  or hold a  neutral  position  in the  stock
                    relative  to the  proportion  of the S&P 500  that  the  stock  represents.  In  addition,  the
                    Sub-advisor  also  may  determine  that  based on the  quantitative  criteria,  certain  equity
                    securities that are not included in the S&P 500 should be held by the Portfolio.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST American  Century Income & Growth:  seeks capital growth with current income as a secondary
                    objective.  The Portfolio  invests  primarily in common stocks that offer potential for capital
      GROWTH        growth,  and may,  consistent  with its  investment  objective,  invest  in stocks  that  offer     American Century
       AND          potential for current income.  The  Sub-advisor  utilizes a quantitative  management  technique        Investment
      INCOME        with a goal of building an equity  portfolio  that  provides  better  returns  than the S&P 500     Management, Inc.
                    Index without taking on significant  additional risk and while  attempting to create a dividend
                    yield that will be greater than the S&P 500 Index.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Alliance Growth and Income:  seeks long-term  growth of capital and income while attempting
                    to avoid excessive  fluctuations in market value. The Portfolio  normally will invest in common
      GROWTH        stocks  (and  securities   convertible  into  common  stocks).  The  Sub-advisor  will  take  a
       AND          value-oriented  approach,  in that it will  try to keep  the  Portfolio's  assets  invested  in     Alliance Capital
      INCOME        securities that are selling at reasonable  valuations in relation to their fundamental business     Management, L.P.
                    prospects.  The  stocks  that the  Portfolio  will  normally  invest in are  those of  seasoned
                    companies.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST MFS Growth with  Income:  seeks long term growth of capital  with a secondary  objective to
                    seek  reasonable  current  income.  Under normal market  conditions,  the Portfolio  invests at
                    least 65% of its total  assets in common  stocks  and  related  securities,  such as  preferred
      GROWTH        stocks,  convertible  securities  and  depositary  receipts.  The stocks in which the Portfolio      Massachusetts
       AND          invests  generally  will pay  dividends.  While the  Portfolio  may invest in  companies of any    Financial Services
      INCOME        size, the Portfolio generally focuses on companies with larger market  capitalizations that the         Company
                    Sub-advisor  believes have  sustainable  growth  prospects and attractive  valuations  based on
                    current and  expected  earnings  or cash flow.  The  Portfolio  may invest up to 20% of its net
                    assets in foreign securities.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
  EQUITY INCOME     AST INVESCO Capital Income (f/k/a AST INVESCO Equity Income):  seeks capital growth and current
                    income  while  following  sound  investment  practices.  The  Portfolio  seeks to  achieve  its
                    objective by investing in  securities  that are expected to produce  relatively  high levels of
                    income and consistent,  stable returns.  The Portfolio normally will invest at least 65% of its
                    assets in  dividend-paying  common and preferred stocks of domestic and foreign issuers.  Up to   INVESCO Funds Group,
                    30% of the  Portfolio's  assets may be  invested in equity  securities  that do not pay regular           Inc.
                    dividends.
------------------- ------------------------------------------------------------------------------------------------ -----------------------

------------------- ------------------------------------------------------------------------------------------------ -----------------------
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                         PORTFOLIO
       TYPE                                                                                                                 ADVISOR/
                                                                                                                          SUB-ADVISOR
                    ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
     BALANCED       AST DeAM Global  Allocation  (f/k/a AST AIM  Balanced):  seeks a high level of total  return by
                    investing  primarily in a diversified  portfolio of mutual funds. The Portfolio  initially will
                    invest  in  equity  securities  and in  fixed  income  securities  as  well as  other  open-end
                    management  investment  companies  affiliated  with the  Sub-advisor.  The  Portfolio  also may
                    diversify its assets by investing in several other AST  Portfolios  ("Underlying  Portfolios").
                    The Portfolio seeks to achieve its investment objective by investing in different  combinations
                    of  the  Underlying  Portfolios  and  equity  and  fixed-income  securities.  Once  assets  are      Deutsche Asset
                    allocated  to AST  Portfolios,  the  Portfolio  is expected to be invested in at least six such     Management, Inc.
                    Underlying  Portfolios at any time. It is expected that the  investment  objectives of such AST
                    Portfolios will be diversified.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST  American  Century  Strategic  Balanced:  seeks  capital  growth and  current  income.  The
                    Sub-advisor  intends  to  maintain  approximately  60%  of the  Portfolio's  assets  in  equity
                    securities and the remainder in bonds and other fixed income  securities.  Both the Portfolio's     American Century
     BALANCED       equity and fixed  income  investments  will  fluctuate  in value.  The equity  securities  will        Investment
                    fluctuate  depending on the  performance of the companies that issued them,  general market and     Management, Inc.
                    economic  conditions,  and investor  confidence.  The fixed income investments will be affected
                    primarily by rising or falling interest rates and the credit quality of the issuers.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
ASSET ALLOCA-TION   AST T. Rowe Price Asset Allocation:  seeks a high level of total return by investing  primarily
                    in a  diversified  portfolio  of fixed income and equity  securities.  The  Portfolio  normally
                    invests  approximately  60% of its total  assets in equity  securities  and 40% in fixed income
                    securities.  The Sub-advisor  concentrates common stock investments in larger, more established
                    companies,  but the  Portfolio may include small and  medium-sized  companies  with good growth      T. Rowe Price
                    prospects.  The fixed income portion of the Portfolio will be allocated among  investment grade     Associates, Inc.
                    securities, high yield or "junk" bonds, foreign high quality debt securities and cash reserves.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
   GLOBAL BOND      AST T. Rowe Price Global  Bond:  seeks to provide  high  current  income and capital  growth by
                    investing  in  high-quality  foreign and U.S.  dollar-denominated  bonds.  The  Portfolio  will
                    invest at least 80% of its total  assets in all types of high  quality  bonds  including  those
                    issued  or  guaranteed  by U.S.  or  foreign  governments  or  their  agencies  and by  foreign
                    authorities,  provinces and  municipalities  as well as investment  grade  corporate  bonds and
                    mortgage and  asset-backed  securities of U.S. and foreign  issuers.  The  Portfolio  generally
                    invests in countries where the combination of fixed-income  returns and currency exchange rates      T. Rowe Price
                    appears attractive,  or, if the currency trend is unfavorable,  where the Sub-advisor  believes   International, Inc.
                    that the currency risk can be minimized  through  hedging.  The Portfolio may also invest up to
                    20% of its assets in the aggregate in below  investment-grade,  high-risk bonds ("junk bonds").
                    In addition,  the  Portfolio may invest up to 30% of its assets in  mortgage-backed  (including
                    derivatives,  such as collateralized mortgage obligations and stripped mortgage securities) and
                    asset-backed securities.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
 HIGH YIELD BOND    AST Federated  High Yield:  seeks high current  income by investing  primarily in a diversified
                    portfolio of fixed income  securities.  The Portfolio will invest at least 80% of its assets in
                    fixed  income  securities  rated BBB and below.  These  fixed  income  securities  may  include
                    preferred  stocks,   convertible  securities,   bonds,   debentures,   notes,  equipment  lease
                    certificates  and equipment trust  certificates.  A fund that invests  primarily in lower-rated
                    fixed  income  securities  will be subject to greater risk and share price  fluctuation  than a   Federated Investment
                    typical  fixed income fund,  and may be subject to an amount of risk that is  comparable  to or        Counseling
                    greater than many equity funds.
------------------- ------------------------------------------------------------------------------------------------ -----------------------






------------------- ------------------------------------------------------------------------------------------------ -----------------------
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                         PORTFOLIO
       TYPE                                                                                                                 ADVISOR/
                                                                                                                          SUB-ADVISOR
                    ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
       BOND         AST Lord Abbett  Bond-Debenture:  seeks high  current  income and the  opportunity  for capital    Lord, Abbett & Co.
                    appreciation  to produce a high total  return.  To pursue its  objective,  the  Portfolio  will
                    invest,  under  normal  circumstances,  at least 80% of the value of its assets in fixed income
                    securities and normally  invests  primarily in high yield and investment grade debt securities,
                    securities  convertible  in common stock and  preferred  stocks.  The  Portfolio  may find good
                    value in high yield  securities,  sometimes  called  "lower-rated  bonds" or "junk  bonds," and
                    frequently  may have more than half of its assets  invested in those  securities.  At least 20%
                    of the  Portfolio's  assets  must be  invested  in any  combination  of  investment  grade debt
                    securities,  U.S.  Government  securities  and cash  equivalents.  The  Portfolio may also make
                    significant  investments  in  mortgage-backed  securities.  Although the  Portfolio  expects to
                    maintain  a  weighted  average  maturity  in the  range of seven to nine  years,  there  are no
                    restrictions on the overall Portfolio or on individual securities.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST DeAM Bond:  seeks a high level of income,  consistent  with the  preservation  of  capital.
                    Under  normal  circumstances,  the  Portfolio  invests  at least  80% of its  total  assets  in
                    intermediate-term  U.S.  Treasury,   corporate,   mortgage-backed  and  asset-backed,   taxable
       BOND         municipal and tax-exempt  municipal bonds. The Portfolio  invests primarily in investment grade      Deutsche Asset
                    fixed  income  securities  rated  within  the  top  three  rating  categories  of a  nationally     Management, Inc.
                    recognized  rating  organization.  Fixed  income  securities  may be issued by U.S. and foreign
                    corporations or entities including banks and various government entities.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
       BOND         AST PIMCO Total Return Bond:  seeks to maximize total return  consistent  with  preservation of
                    capital  and  prudent  investment  management.  The  Portfolio  will  invest  in a  diversified
                    portfolio of fixed-income  securities of varying maturities.  The average portfolio duration of
                    the  Portfolio  generally  will  vary  within a three-  to  six-year  time  frame  based on the    Pacific Investment
                    Sub-advisor's forecast for interest rates.                                                         Management Company
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
       BOND         AST PIMCO Limited  Maturity Bond: seeks to maximize total return  consistent with  preservation
                    of capital  and prudent  investment  management.  The  Portfolio  will invest in a  diversified
                    portfolio of fixed-income  securities of varying maturities.  The average portfolio duration of
                    the  Portfolio  generally  will  vary  within  a one- to  three-year  time  frame  based on the    Pacific Investment
                    Sub-advisor's forecast for interest rates.                                                         Management Company
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
   MONEY MARKET     AST Money Market:  seeks to maximize current income and maintain high levels of liquidity.  The      Wells Capital
                    Portfolio  attempts to  accomplish  its  objective by  maintaining  a  dollar-weighted  average     Management, Inc.
                    maturity  of not  more  than 90 days  and by  investing  in  securities  which  have  effective
                    maturities of not more than 397 days.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
 EMERGING MARKETS   Montgomery  Variable Series - Emerging  Markets:  seeks long-term capital  appreciation,  under
                    normal  conditions  by investing at least 65% of its total assets in stocks of companies of any
                    size based in the world's  developing  economies.  Under  normal  conditions,  investments  are
                    maintained  in at least six  countries at all times and no more than 35% of total assets in any
                    single  one of them.  Effective  July 31,  2002,  the  Portfolio  will seek  long-term  capital     Montgomery Asset
                    appreciation  under normal  conditions  by investing at least 80% of its total assets in stocks     Management, LLC
                    of companies of any size based in the world's developing economies.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
 LARGE CAP EQUITY   WFVT Equity Value:  seeks long-term  capital  appreciation and  above-average  dividend income.
                    The  Portfolio  pursues its  objective by  investing  primarily  in equity  securities  of U.S.
                    companies  with strong  return  potential  based on current  market  valuations.  Under  normal
                    circumstances,  the Portfolio  invests at least 80% of its assets in equity securities with the    Wells Fargo Funds
                    same  characteristics  as common stocks, and in preferred stocks,  warrants,  and securities of     Management, LLC
                    foreign companies through ADRs and similar investments.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
  EQUITY INCOME     WFVT Equity Income:  seeks long-term capital  appreciation and  above-average  dividend income.
                    The  Portfolio  pursues its  objective  primarily by  investing in the common  stocks of large,
                    domestic companies with  above-average  return potential based on current market valuations and
                    above-average  dividend income. Under normal market conditions,  the Portfolio invests at least    Wells Fargo Funds
                    80% of its total assets in income producing  equity  securities and in issues of companies with     Management, LLC
                    market capitalizations of $3 billion or more.
------------------- ------------------------------------------------------------------------------------------------ -----------------------






------------------- ------------------------------------------------------------------------------------------------ -----------------------
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                         PORTFOLIO
       TYPE                                                                                                                 ADVISOR/
                                                                                                                          SUB-ADVISOR
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
   STRATEGIC OR     Rydex Variable  Trust - Nova:  seeks to provide  investment  returns that are 150% of the daily
                    price movement of the S&P 500 Composite Stock Price Index by investing to a significant  extent
                    in futures  contracts and options on securities,  futures  contracts and stock indexes.  If the
     TACTICAL       Portfolio  meets its  objective  the value of its shares  will tend to  increase by 150% of the  Rydex Global Advisers
   ALLOCA-TION      daily  value of any  increase  in the S&P 500  Index.  However,  when the  value of the S&P 500  (f/k/a PADCO Advisors
                    Index declines,  the value of its shares should also decrease by 150% of the daily value of any        II, Inc.)
                    decrease in the S&P 500 Index.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
   STRATEGIC OR     Rydex Variable Trust - Ursa: seeks to provide investment results that will inversely  correlate
                    (e.g.  be the  opposite)  to the  performance  of the S&P 500  Composite  Stock  Price Index by
                    investing to a  significant  extent in futures  contracts  and options on  securities,  futures
                    contracts  and stock  indexes.  The  Portfolio  will  generally  not  invest in the  securities
     TACTICAL       included in the S&P 500 Index.  If the  Portfolio  meets its  objective the value of its shares  Rydex Global Advisers
   ALLOCA-TION      will tend to  increase  when the value of the S&P 500 Index is  decreasing.  However,  when the  (f/k/a PADCO Advisors
                    value of the S&P 500  Index is  increasing,  the  value of its  shares  should  decrease  by an        II, Inc.)
                    inversely proportional amount.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    Rydex Variable Trust - OTC: seeks to provide  investment results that correspond to a benchmark
                    for over-the-counter  securities,  currently the NASDAQ 100 Index(TM), by investing principally in
                    the  securities  of companies  included in that Index.  The  Portfolio may also invest in other
   STRATEGIC OR     instruments  whose  performance is expected to correspond to that of the Index,  and may engage  Rydex Global Advisers
     TACTICAL       in futures and options  transactions.  If the  Portfolio  meets its  objective the value of its  (f/k/a PADCO Advisors
   ALLOCA-TION      shares will tend to increase by the amount of the  increase in the NASDAQ 100 Index(TM).  However,        II, Inc.)
                    when the value of the NASDAQ 100 Index(TM)declines,  the value of its shares should also decrease
                    by the amount of the decrease in the value of the Index(TM).
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
  MID-CAP EQUITY    INVESCO  Variable  Investment  Funds -  Dynamics:  seek  capital  appreciation.  The  Portfolio
                    normally  invests at least 65% of its assets in common  stocks of  mid-sized  companies - those
                    companies that are included in the Russell  Midcap Growth Index at the time of purchase,  or if
                    not  included  in that Index,  have  market  capitalizations  of between  $2.5  billion and $15
                    billion at the time of purchase.  The core of the Portfolio's  investments are in securities of
                    established  companies  that are leaders in attractive  growth markets with a history of strong
                    returns.  The  remainder of the  Portfolio  is invested in  securities  of companies  that show   INVESCO Funds Group,
                    accelerating  growth,  driven by product cycles,  favorable industry or sector conditions,  and           Inc.
                    other  factors  that the  investment  advisor  believes  will lead to rapid  sales or  earnings
                    growth.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
      SECTOR        INVESCO  Variable  Investment  Funds - Technology:  seeks capital  appreciation.  The Portfolio
                    normally  invests  at least  80% of its  assets in the  equity  securities  and  equity-related
                    instruments of companies engaged in technology-related  industries.  These include, but are not
                    limited  to,  applied  technology,  biotechnology,   communications,   computers,  electronics,   INVESCO Funds Group,
                    Internet, IT services and consulting,  software,  telecommunication  equipment and services, IT           Inc.
                    infrastructure and networking companies.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
      SECTOR        INVESCO  Variable  Investment  Funds  -  Health  Sciences:  seeks  capital  appreciation.   The
                    Portfolio  normally  invests at least 80% of its assets in the equity  securities  of companies
                    that  develop,  produce or  distribute  products  or  services  related to health  care.  These
                    companies  include,  but are not limited to,  medical  equipment or supplies,  pharmaceuticals,
                    biotechnology and healthcare  providers and service companies.  The investment advisor attempts   INVESCO Funds Group,
                    to blend  well-established  healthcare  firms with  faster-growing,  more  dynamic  health care           Inc.
                    companies.
------------------- ------------------------------------------------------------------------------------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
      SECTOR        INVESCO  Variable  Investment  Funds - Financial  Services:  seeks  capital  appreciation.  The
                    Portfolio  normally  invests at least 80% of its assets in the equity  securities  of companies
                    involved in the financial  services sector.  These companies  include,  but are not limited to,
                    banks (regional and  money-centers),  insurance  companies  (life,  property and casualty,  and
                    multiline),  investment and  miscellaneous  industries  (asset  managers,  brokerage firms, and
                    government-sponsored  agencies) and suppliers to financial services  companies.  The investment
                    advisor seeks  companies which it believes can grow their revenues and earnings in a variety of   INVESCO Funds Group,
                    interest  rate  environments  - although  securities  prices of  financial  services  companies           Inc.
                    generally are interest rate-sensitive.
------------------- ------------------------------------------------------------------------------------------------ -----------------------






------------------- ------------------------------------------------------------------------------------------------ -----------------------
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                         PORTFOLIO
       TYPE                                                                                                                 ADVISOR/
                                                                                                                          SUB-ADVISOR
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
      SECTOR        INVESCO  Variable  Investment  Funds -  Telecommunications:  seeks  capital  appreciation.  The
                    Portfolio  normally  invests at least 65% (80%  effective  July 31,  2002) of its assets in the
                    equity  securities  of  companies  that are  engaged in the design,  development,  manufacture,
                    distribution,  or sale of  communications  services  and  equipment,  and  companies  that  are
                    involved in supplying equipment or services to such companies.  The  telecommunications  sector
                    includes  companies  that  offer  telephone  services,   wireless   communications,   satellite
                    communications,  television and movie programming,  broadcasting and Internet access. Normally,   INVESCO Funds Group,
                    the  Portfolio  will  invest  primarily  in  companies  located  in at  least  three  different           Inc.
                    countries, although U.S. issuers will often dominate the holdings.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    Evergreen VA Global Leaders:  seeks to provide  investors with long-term  capital  growth.  The
                    Portfolio  normally  invests as least 65% of its assets in a diversified  portfolio of U.S. and
                    non-U.S.   equity  securities  of  companies  located  in  the  world's  major   industrialized
                    countries.  The Portfolio  will invest in no less than three  countries,  which may include the
  GLOBAL EQUITY     U.S.,  but may invest more than 25% of its assets in one country.  The  Portfolio  invests only   Evergreen Investment
                    in the best 100 companies,  which are selected by the  investment  advisor based on qualitative   Management Company,
                    and  quantitative  criteria  such as high  return on  equity,  consistent  earnings  growth and           LLC
                    established market presence.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
-------------------
 SMALL CAP EQUITY   Evergreen VA Special Equity:  seeks capital  growth.  The Portfolio  normally  invests at least
                    80% of its assets in common  stocks of small  U.S.  companies  (i.e.,  companies  whose  market
                    capitalizations  fall within the range of the Russell  2000(R)Index,  at the time of  purchase).
                    The remaining 20% of the  Portfolio's  assets may be represented by cash or invested in various   Evergreen Investment
                    cash  equivalents.  The Portfolio's  advisor selects stocks of companies which it believes have   Management Company,
                    the potential for accelerated growth in earnings and price.                                               LLC
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
  MID-CAP EQUITY    Evergreen VA Omega:  seeks long-term capital growth.  The Portfolio invests primarily in common
                    stocks and  securities  convertible  into  common  stocks of U.S.  companies  across all market
                    capitalizations.  The  Portfolio  utilizes the  fully-managed  investment  concept  whereby the
                    Portfolio's  manager  will  continuously  review the  Portfolio's  holdings  in light of market
                    conditions,  business  developments  and  economic  trends.  During  this review  process,  the
                    Portfolio's  manager  seeks to identify and invest in industries  that are growing  faster than   Evergreen Investment
                    the economy.  The Portfolio  invests in companies of all sizes. The continuous  review may lead   Management Company,
                    to high portfolio  turnover,  but that will not limit investment  decisions.  The Portfolio may           LLC
                    also invest up to 25% of its assets in foreign securities.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
  INTER-NATIONAL




------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund  VP  Europe  30:  seeks  daily  investment  results,  before  fees and  expenses,  that   ProFund Advisors LLC
                    correspond to the daily  performance of the ProFunds  Europe 30 Index.  The ProFunds  Europe 30
                    Index,  created by ProFund Advisors,  is composed of the 30 European companies whose securities
                    are traded on U.S.  exchanges or on the NASDAQ as ADRs with the highest market  capitalization,
                    as determined annually.
                    ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------

------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
  INTER-NATIONAL    ProFund VP Asia 30: seeks daily investment results,  before fees and expenses,  that correspond   ProFund Advisors LLC
                    to the daily  performance  of the ProFunds Asia 30 Index.  The ProFunds Asia 30 Index,  created
                    by ProFund  Advisors,  is composed of 30 of the companies  located in the Asia/Pacific  region,
                    except  Japan with the  highest  market  capitalization,  whose  securities  are traded on U.S.
      EQUITY        exchanges as  depository  receipts or ordinary  shares.  The  component  stocks of the ProFunds
                    Asia 30 Index are  determined  based on the market  capitalization  of each  company  and their
                    relative weights are determined based on the modified market capitalization.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
  INTER-NATIONAL    ProFund VP Japan: seeks daily investment results,  before fees and expenses, that correspond to   ProFund Advisors LLC
                    the daily  performance  of the Nikkei  225 Stock  Average.  The  Nikkei 225 Stock  Average is a
                    price-weighted  index of 225 large,  actively  traded Japanese stocks traded on the Tokyo Stock
      EQUITY        Exchange.  Since the Japanese markets are not open when this Portfolio  values its shares,  its
                    success in meeting its  investment  objective is  determined by comparing its daily return on a
                    given day with the daily performance of related futures contracts traded in the United States.
------------------- ------------------------------------------------------------------------------------------------ -----------------------






------------------- ------------------------------------------------------------------------------------------------ -----------------------
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                         PORTFOLIO
       TYPE                                                                                                                 ADVISOR/
                                                                                                                          SUB-ADVISOR
                    ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
      SECTOR        ProFund VP Banks: seeks daily investment results,  before fees and expenses, that correspond to   ProFund Advisors LLC
                    the daily  performance  of the Dow Jones  U.S.  Banks  Sector  Index.  The Index  measures  the
                    performance of the banking  economic  sector of the U.S.  equity market.  This industry  covers
                    the banking industry,  including regional banks and savings and loans, but excluding investment
                    and merchant banks. The Portfolio  primarily  invests in banking  companies,  or in instruments
                    that provide exposure to these companies.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP Basic Materials:  seeks daily  investment  results,  before fees and expenses,  that
                    correspond to the daily  performance of the Dow Jones U.S. Basic  Materials  Sector Index.  The
                    Index  measures the  performance  of the basic  materials  economic  sector of the U.S.  equity
      SECTOR        market.  The Portfolio  primarily invests in basic material  companies,  or in instruments that   ProFund Advisors LLC
                    provide  exposure  to these  companies,  including  companies  involved  in the  production  of
                    aluminum,  chemicals,  commodities,  chemical specialty products, forest products,  non-ferrous
                    mining products, paper products, precious metals and steel.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP  Biotechnology:  seeks daily  investment  results,  before fees and  expenses,  that
                    correspond  to the daily  performance  of the Dow Jones  U.S.  Biotechnology  Index.  The Index
                    measures the performance of the biotechnology  sector of the U.S. equity market.  The Portfolio
      SECTOR        invests primarily in biotechnology  companies, or in instruments that provide exposure to these   ProFund Advisors LLC
                    companies,   including  companies  engaged  in  genetic  research,  and/or  the  marketing  and
                    development  of  recombinant  DNA  products.  Companies  represented  in  this  sector  include
                    companies that may be newly formed and that have relatively small market capitalizations.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP Consumer Cyclical:  seeks daily investment results,  before fees and expenses,  that
                    correspond to the daily  performance of the Dow Jones U.S.  Consumer Cyclical Sector Index. The
                    Index measures the  performance of the consumer  cyclical  economic  sector of the U.S.  equity
                    market.  The Portfolio  primarily  invests in consumer  cyclical  companies,  or in instruments
                    that provide exposure to these companies,  including  airlines,  auto  manufacturers,  tire and
      SECTOR        rubber  manufacturers,  auto parts suppliers,  casinos,  toy manufacturers,  restaurant chains,   ProFund Advisors LLC
                    home  construction  companies,  lodging  chains,  broadline  retailers,   specialty  retailers,
                    footwear  and  clothing/fabric   manufacturers,   and  media  companies,  such  as  advertising
                    companies,  entertainment and leisure companies,  consumer electronic  companies,  broadcasters
                    and publishers.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP Consumer  Non-Cyclical:  seeks daily investment  results,  before fees and expenses,
                    that correspond to the daily  performance of the Dow Jones U.S.  Consumer  Non-Cyclical  Sector
                    Index. The Index measures the performance of the consumer  non-cyclical  economic sector of the
                    U.S. equity market. The Portfolio invests primarily in consumer non-cyclical  companies,  or in
      SECTOR        instruments  that  provide  exposure to these  companies,  including  distillers  and  brewers,   ProFund Advisors LLC
                    producers  of soft  drinks,  consumer  service  companies,  durable and  non-durable  household
                    product manufacturers,  cosmetic companies, food retailers,  other food companies,  tobacco and
                    agricultural companies.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
      SECTOR        ProFund VP Energy:  seeks daily investment results,  before fees and expenses,  that correspond   ProFund Advisors LLC
                    to the daily  performance  of the Dow Jones U.S.  Energy Sector Index.  The Index  measures the
                    performance of the energy sector of the U.S.  equity market.  The Portfolio  invests  primarily
                    in energy companies, or in instruments that provide exposure to these companies,  including oil
                    equipment and services companies, oil-major, oil-secondary and pipelines.
------------------- ------------------------------------------------------------------------------------------------ -----------------------






------------------- ------------------------------------------------------------------------------------------------ -----------------------
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                         PORTFOLIO
       TYPE                                                                                                                 ADVISOR/
                                                                                                                          SUB-ADVISOR
------------------- ------------------------------------------------------------------------------------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
      SECTOR        ProFund  VP  Financial:  seeks  daily  investment  results,  before  fees  and  expenses,  that   ProFund Advisors LLC
                    correspond to the daily  performance of the Dow Jones U.S.  Financial  Sector Index.  The Index
                    measures the performance of the financial  services  economic sector of the U.S. equity market.
                    The  Portfolio  invests  primarily  in  securities  of  financial  services  companies,  or  in
                    instruments  that  provide  exposure  to  these  companies,  including  regional  banks,  major
                    international  banks,  insurance  companies,  companies that invest,  directly or indirectly in
                    real estate,  Fannie Mae,  credit card insurers,  check cashing  companies,  mortgage  lenders,
                    investment  advisors,  savings and loans,  savings banks,  thrifts,  building  associations and
                    societies,  credit unions, securities broker-dealers,  investment banks, merchant banks, online
                    brokers, publicly traded stock exchanges and specialty finance companies.
------------------- ------------------------------------------------------------------------------------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
      SECTOR        ProFund  VP  Healthcare:  seeks  daily  investment  results,  before  fees and  expenses,  that   ProFund Advisors LLC
                    correspond to the daily  performance of the Dow Jones U.S.  Healthcare  Sector Index. The Index
                    measures the  performance of the  healthcare  sector of the U.S.  equity market.  The Portfolio
                    invests  primarily in  securities  of  healthcare  companies,  or in  instruments  that provide
                    exposure to these  companies,  including  health care  providers,  biotechnology  companies and
                    manufacturers of medical supplies, advanced medical devices and pharmaceuticals.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
      SECTOR        ProFund  VP  Industrial:  seeks  daily  investment  results,  before  fees and  expenses,  that   ProFund Advisors LLC
                    correspond to the daily  performance of the Dow Jones U.S.  Industrial  Sector Index. The Index
                    measures the  performance of the  industrial  sector of the U.S.  equity market.  The Portfolio
                    primarily  invests in industrial  companies,  or in instruments  that provide exposure to these
                    companies,  including aerospace and defense companies, advanced industrial companies, equipment
                    manufacturers,  air freight companies,  building material  manufacturers,  packaging companies,
                    manufacturers  of  electrical   components  and  equipment,   heavy   construction   companies,
                    manufacturers of heavy machinery,  industrial services companies,  industrial companies, marine
                    transportation companies, railroads, shipbuilders and trucking companies.
------------------- ------------------------------------------------------------------------------------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
      SECTOR        ProFund VP Internet:  seeks daily investment results, before fees and expenses, that correspond   ProFund Advisors LLC
                    to the  daily  performance  of the Dow Jones  U.S.  Internet  Index.  The  Index  measures  the
                    performance  of  companies  in the U.S.  equity  markets  that  generate  the majority of their
                    revenues  from the  Internet.  The  Portfolio  primarily  invests in internet  companies  or in
                    instruments  that provide  exposure to these  companies,  including  companies  that derive the
                    majority of their revenues from providing goods and/or services  through an open network,  such
                    as a web site or from  providing  access to the  Internet  or  providing  enabling  services to
                    people using the Internet.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
      SECTOR        ProFund VP  Pharmaceuticals:  seeks daily investment  results,  before fees and expenses,  that   ProFund Advisors LLC
                    correspond to the daily  performance of the Dow Jones U.S.  Pharmaceuticals  Sector Index.  The
                    Index measures the performance of the  pharmaceuticals  sector of the U.S.  equity market.  The
                    Portfolio  primarily  invests in  pharmaceutical  companies,  or in  instruments  that  provide
                    exposure to these companies,  including makers of prescription and  over-the-counter  drugs, as
                    well as companies engaged in contract drug research.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
      SECTOR        ProFund VP Precious Metals:  seeks daily  investment  results,  before fees and expenses,  that   ProFund Advisors LLC
                    correspond to the daily  performance  of the  Philadelphia  Stock Exchange Gold & Silver Index.
                    The Index measures the  performance of the precious  metals  economic sector of the U.S. equity
                    market.  The  Portfolio  primarily  invests  in  gold  and  silver  mining  companies,   or  in
                    instruments that provide exposure to these companies.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
      SECTOR        ProFund VP Real  Estate:  seeks  daily  investment  results,  before  fees and  expenses,  that   ProFund Advisors LLC
                    correspond  to the daily  performance  of the Dow  Jones  U.S.  Real  Estate  Index.  The Index
                    measures the  performance of the real estate  industry  sector of the U.S.  equity market.  The
                    Portfolio invests  primarily in real estate companies,  or in instruments that provide exposure
                    to these  companies,  including hotel and resort  companies and real estate  investment  trusts
                    (REITs) that invest in apartments,  office and retail properties.  REITs are passive investment
                    vehicles that invest primarily in income-producing  real estate or real estate related loans or
                    interests.
------------------- ------------------------------------------------------------------------------------------------ -----------------------






------------------- ------------------------------------------------------------------------------------------------ -----------------------
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                         PORTFOLIO
       TYPE                                                                                                                 ADVISOR/
                                                                                                                          SUB-ADVISOR
------------------- ------------------------------------------------------------------------------------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
      SECTOR        ProFund VP  Semiconductor:  seeks daily  investment  results,  before fees and  expenses,  that   ProFund Advisors LLC
                    correspond  to the daily  performance  of the Dow Jones  U.S.  Semiconductor  Index.  The Index
                    measures the performance of the semiconductor  sector of the U.S. equity market.  The Portfolio
                    primarily  invests  in  companies  engaged  in  the  production  of  semiconductors  and  other
                    integrated  chips, as well as other related  products such as circuit boards and mother boards,
                    or in  instruments  that  provide  exposure to these  companies.  The  Portfolio  may invest in
                    companies that may be newly-formed and that have relatively small market capitalizations.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
      SECTOR        ProFund  VP  Technology:  seeks  daily  investment  results,  before  fees and  expenses,  that   ProFund Advisors LLC
                    correspond to the daily  performance of the Dow Jones U.S.  Technology  Sector Index. The Index
                    measures the  performance of the  technology  sector of the U.S.  equity market.  The Portfolio
                    invests  primarily in technology  companies,  or in instruments  that provide exposure to these
                    companies,  including  companies  involved in the  development  and  production  of  technology
                    products,   including   computer   hardware   and   software,   telecommunications   equipment,
                    microcomputer   components,   integrated  computer  circuits  and  office  equipment  utilizing
                    technology.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
      SECTOR        ProFund VP Telecommunications:  seeks daily investment results,  before fees and expenses, that   ProFund Advisors LLC
                    correspond to the daily performance of the Dow Jones U.S.  Telecommunications Sector Index. The
                    Index measures the  performance  of the  telecommunications  sector of the U.S.  equity market.
                    The  Portfolio  invests  primarily in  telecommunications  companies,  or in  instruments  that
                    provide  exposure  to  these  companies,  including  fixed  line  communications  and  wireless
                    communications companies.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund  VP  Utilities:  seeks  daily  investment  results,  before  fees  and  expenses,  that
                    correspond to the daily  performance of the Dow Jones U.S.  Utilities  Sector Index.  The Index
      SECTOR        measures the  performance  of the utilities  sector of the U.S.  equity  market.  The Portfolio   ProFund Advisors LLC
                    invests  primarily in utility  companies,  or in  instruments  that  provide  exposure to these
                    companies, including electric utilities, gas utilities and water utilities.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
--------------------------------------------------------------------------------------------------------------------------------------------
THE PROFUND VP PORTFOLIOS  DESCRIBED  BELOW ARE AVAILABLE AS  SUB-ACCOUNTS  TO ALL ANNUITY  OWNERS.  EACH  PORTFOLIO  PURSUES AN INVESTMENT
STRATEGY THAT SEEKS TO PROVIDE DAILY  INVESTMENT  RESULTS,  BEFORE FEES AND EXPENSES,  THAT MATCH A WIDELY  FOLLOWED  INDEX,  INCREASE BY A
SPECIFIED FACTOR RELATIVE TO THE INDEX,  MATCH THE INVERSE OF THE INDEX OR THE INVERSE OF THE INDEX MULTIPLIED BY A SPECIFIED  FACTOR.  THE
INVESTMENT  STRATEGY OF SOME OF THE PORTFOLIOS MAY MAGNIFY (BOTH POSITIVELY AND NEGATIVELY) THE DAILY INVESTMENT  RESULTS OF THE APPLICABLE
INDEX.  IT IS RECOMMENDED  THAT ONLY THOSE ANNUITY OWNERS WHO ENGAGE A FINANCIAL  ADVISOR TO ALLOCATE THEIR ACCOUNT VALUE USING A STRATEGIC
OR TACTICAL  ASSET  ALLOCATION  STRATEGY  INVEST IN THESE  PORTFOLIOS.  WE HAVE  ARRANGED THE  PORTFOLIOS  BASED ON THE INDEX ON WHICH IT'S
INVESTMENT STRATEGY IS BASED.
--------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------
The S&P 500 Index(R)is a widely  used  measure of large U.S.  company  stock  performance.  It  consists  of the common  stocks of 500 major
corporations  selected by Standard & Poor's(R)for their size and the frequency and ease with which their stocks trade,  reflecting  the full
range and diversity of the U.S. economy.
--------------------------------------------------------------------------------------------------------------------------------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP Bull: seeks daily investment results,  before fees and expenses,  that correspond to   ProFund Advisors LLC
     S&P 500        the daily performance of the S&P 500(R)Index.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
     S&P 500        ProFund VP Bear: seeks daily investment results,  before fees and expenses,  that correspond to   ProFund Advisors LLC
                    the inverse  (opposite)  of the daily  performance  of the S&P 500(R)Index.  If the Portfolio is
                    successful  in meeting its  objective,  the net asset value of the  Portfolio's  shares  should
                    increase in  proportion  to any daily  decrease in the level of the S&P 500(R).  Conversely,  the
                    Portfolio's  net asset value should  decrease in proportion to any daily  increase in the level
                    of the S&P 500 Index(R).
------------------- ------------------------------------------------------------------------------------------------ -----------------------






------------------- ------------------------------------------------------------------------------------------------ -----------------------
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                         PORTFOLIO
       TYPE                                                                                                                 ADVISOR/
                                                                                                                          SUB-ADVISOR
------------------- ------------------------------------------------------------------------------------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
     S&P 500        ProFund  VP Bull  Plus:  seeks  daily  investment  results,  before  fees  and  expenses,  that   ProFund Advisors LLC
                    correspond  to one and a half times  (150%) the daily  performance  of the S&P 500(R)Index.  If
                    the Portfolio is successful in meeting its objective,  it should gain  approximately  one and a
                    half  times as much as the S&P 500(R)Index  when the  prices of the  securities  in the S&P 500(R)
                    Index rise on a given day and should lose  approximately one and a half times as much when such
                    prices decline on a given day.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
--------------------------------------------------------------------------------------------------------------------------------------------
The NASDAQ 100 Index(TM)contains 100 of the largest market capitalization and most active non-financial domestic and international  companies
listed on the NASDAQ Stock Market based on market capitalization.
--------------------------------------------------------------------------------------------------------------------------------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
    NASDAQ 100      ProFund VP OTC: seeks daily investment  results,  before fees and expenses,  that correspond to   ProFund Advisors LLC
                    the daily performance of the NASDAQ 100 Index(TM).
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
    NASDAQ 100      ProFund  VP  Short  OTC:  seeks  daily  investment  results,  before  fees and  expenses,  that   ProFund Advisors LLC
                    correspond to the inverse  (opposite)  of the daily  performance  of the NASDAQ 100(TM)Index.  If
                    the  Portfolio is  successful  in meeting its  objective,  the net asset value of the Portfolio
                    shares  should  increase in  proportion  to any daily  decrease in the level of the NASDAQ 100(TM)
                    Index.  Conversely,  the net  asset  value  of  shares  of the  Portfolio  should  decrease  in
                    proportion to any daily increase in the level of the NASDAQ 100(TM)Index.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
    NASDAQ 100      ProFund VP UltraOTC:  seeks daily investment results, before fees and expenses, that correspond   ProFund Advisors LLC
                    to  twice  (200%)  the  daily  performance  of the  NASDAQ  100(TM)Index.  If the  Portfolio  is
                    successful in meeting its objective,  it should gain approximately  twice as much as the growth
                    oriented  NASDAQ 100(TM)Index when the prices of the securities in that index rise on a given day
                    and should lose approximately twice as much when such prices decline on that day.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
--------------------------------------------------------------------------------------------------------------------------------------------
The S&P MidCap 400 Index(R)is a widely used measure of medium capitalized U.S. company stock  performance.  It consists of the common stocks
of 400 major corporations selected by Standard & Poor's(R)for their market size, industry group  representation,  and the frequency and ease
with which their stocks trade, reflecting the full range and diversity of the U.S. economy.
--------------------------------------------------------------------------------------------------------------------------------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
  S&P MIDCAP 400    ProFund VP Mid-Cap  Value:  seeks daily  investment  results,  before fees and  expenses,  that   ProFund Advisors LLC
                    correspond  to the  daily  performance  of the  S&P  MidCap  400/Barra  Value  Index(R).  The S&P
                    MidCap400/Barra  Value  Index(R)is a  capitalization-weighted  index that  comprises  all of the
                    stocks in the S&P MidCap 400 Index(R)that have low price-to-book ratios.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP Mid-Cap  Growth:  seeks daily  investment  results,  before fees and expenses,  that
                    correspond to the daily  performance of the S&P MidCap 400/Barra Growth Index(R).  The S&P MidCap
  S&P MIDCAP 400    400/Barra Growth Index(R)is a capitalization-weighted  index that comprises all of the stocks in   ProFund Advisors LLC
                    the S&P MidCap 400 Index(R)that have high price-to-book ratios.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP  UltraMid-Cap:  seeks  daily  investment  results,  before fees and  expenses,  that
                    correspond  to twice  (200%)  the  daily  performance  of the S&P  MidCap  400  Index(R).  If the
                    Portfolio is successful in meeting its objective,  it should gain  approximately  twice as much
  S&P MIDCAP 400    as the S&P  MidCap 400 Index(R)when the prices of the  securities  in the S&P MidCap 400 Index(R) ProFund Advisors LLC
                    rise on a given day and should lose  approximately  twice as much when such prices decline on a
                    given day.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
--------------------------------------------------------------------------------------------------------------------------------------------
The S&P SmallCap 600 Index(R)is an unmanaged index comprising 600 domestic stocks, with a market  capitalization valued at under one billion
dollars,  chosen for market size, liquidity,  and industry group representation.  The index comprises stocks from the industrial,  utility,
financial, and transportation sectors, reflecting the full range and diversity of the U.S. economy.
--------------------------------------------------------------------------------------------------------------------------------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
 S&P SMALLCAP 600   ProFund VP Small-Cap Value:  seeks daily  investment  results,  before fees and expenses,  that   ProFund Advisors LLC
                    correspond  to the daily  performance  of the S&P  SmallCap  600/Barra  Value  Index(R).  The S&P
                    SmallCap  600/Barra Value Index(R)is a  capitalization-weighted  index that comprises all of the
                    stocks in the S&P SmallCap 600 Index(R)that have low price-to-book ratios.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
 S&P SMALLCAP 600   ProFund VP Small-Cap Growth:  seeks daily investment  results,  before fees and expenses,  that   ProFund Advisors LLC
                    correspond  to the daily  performance  of the S&P SmallCap  600/Barra  Growth  Index(R).  The S&P
                    SmallCap 600/Barra Growth Index(R)is a  capitalization-weighted  index that comprises all of the
                    stocks in the S&P SmallCap 600 Index(R)that have high price-to-book ratios.
------------------- ------------------------------------------------------------------------------------------------ -----------------------






--------------------- ------------------------------------------------------------------------------------------------ ---------------------
       STYLE/                                         INVESTMENT OBJECTIVES/POLICIES                                        PORTFOLIO
        TYPE                                                                                                                 ADVISOR/
                                                                                                                           SUB-ADVISOR
--------------------- ------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------
The Russell  2000 Index(R)is an  unmanaged  index  consisting  of 2,000 small  company  common  stocks.  The Russell  2000 Index(R)comprises
approximately 2000 of the smallest U.S. domiciled publicly traded common stocks that are included in the Russell 3000 Index(R).
--------------------------------------------------------------------------------------------------------------------------------------------
--------------------- ------------------------------------------------------------------------------------------------ ---------------------
    RUSSELL 2000      ProFund VP UltraSmall-Cap (f/k/a ProFund VP SmallCap):  seeks daily investment results,  before  ProFund Advisors LLC
                      fees and expenses,  that correspond to twice (200%) the daily  performance of the Russell 2000(R)
                      Index.  If the Portfolio is successful in meeting its objective,  it should gain  approximately
                      twice as much as the Russell 2000 Index(R)when the prices of the  securities  in that index rise
                      on a given day and should lose  approximately  twice as much when such  prices  decline on that
                      day.
--------------------- ------------------------------------------------------------------------------------------------ ---------------------
                      ------------------------------------------------------------------------------------------------ ---------------------
  U.S. GOV'T BOND     ProFund VP U.S.  Government  Plus: seeks daily  investment  results,  before fees and expenses,  ProFund Advisors LLC
                      that  correspond to 125% of the daily price  movement of the most recently  issued 30-year U.S.
                      Treasury Bond.
--------------------- ------------------------------------------------------------------------------------------------ ---------------------
                      ------------------------------------------------------------------------------------------------ ---------------------
  U.S. GOV'T BOND     ProFund VP Rising Rates Opportunity:  seeks daily investment results, before fees and expenses,  ProFund Advisors LLC
                      that  correspond  to 125% of the inverse  (opposite)  of the daily  price  movement of the most
                      recently  issued  30-year U.S.  Treasury  Bond.  If the  Portfolio is successful in meeting its
                      objective,  the net asset value of the Portfolio's  shares should decrease in proportion to any
                      daily increase in the price of the 30-year U.S. Treasury Bond on a given day.  Conversely,  the
                      net asset value of shares of the Portfolio  should increase in proportion to any daily decrease
                      in the price of the 30-year U.S. Treasury Bond on a given day.
--------------------- ------------------------------------------------------------------------------------------------ ---------------------
--------------------------------------------------------------------------------------------------------------------------------------------
The First Trust(R)10 Uncommon Values Portfolio of the First Defined  Portfolio Fund LLC invests in the securities of a relatively few number
of issuers.  Since the assets of the  Portfolio  are invested in a limited  number of issuers,  the net asset value of the Portfolio may be
more susceptible to a single adverse economic,  political or regulatory occurrence.  The Portfolio may also be subject to additional market
risk due to its policy of investing  based on an investment  strategy and generally not buying or selling  securities in response to market
fluctuations.  The  Portfolio's  relative lack of diversity and limited  ongoing  management may subject Owners to greater market risk than
other portfolios.
--------------------------------------------------------------------------------------------------------------------------------------------
--------------------- ------------------------------------------------------------------------------------------------ ---------------------
     LARGE CAP        First Trust(R)10 Uncommon  Values:  seeks to provide  above-average  capital  appreciation.  The
                      Portfolio  seeks to achieve its  objective  by  investing  primarily  in the ten common  stocks
                      selected by the Investment  Policy Committee of Lehman Brothers Inc.  ("Lehman  Brothers") with
                      the assistance of the Research  Department of Lehman  Brothers which, in their opinion have the
       BLEND          greatest  potential for capital  appreciation  during the next year. The stocks included in the      First Trust
                      Portfolio  are adjusted  annually on or about July 1st in  accordance  with the  selections  of     Advisors L.P.
                      Lehman Brothers.
--------------------- ------------------------------------------------------------------------------------------------ ---------------------
                      ------------------------------------------------------------------------------------------------ ---------------------
       INTER-         The  Prudential  Series  Fund,  Inc.  - SP  Jennison  International  Growth:  seeks to  provide
                      long-term   growth  of  capital.   The   Portfolio   pursues  its  objective  by  investing  in
                      equity-related  securities of foreign  issuers that the  Sub-advisor  believes will increase in
                      value over a period of years.  The  Portfolio  invests  primarily  in the common stock of large
                      and  medium-sized  foreign  companies.  Under normal  circumstances,  the Portfolio  invests at
  NATIONAL EQUITY     least 65% of its total  assets in common  stock of foreign  companies  operating or based in at       Prudential
                      least five different  countries.  The Portfolio  looks  primarily for stocks of companies whose    Investments LLC/
                      earnings are growing at a faster rate than other companies and that have  above-average  actual  Jennison Associates
                      and  potential  earnings  growth  over  the long  term and  strong  financial  and  operational          LLC
                      characteristics.
--------------------- ------------------------------------------------------------------------------------------------ ---------------------

"Standard & Poor's(R),"  "S&P(R)," "S&P 500(R),"  "Standard & Poor's 500," and "500" are trademarks of the  McGraw-Hill  Companies,  Inc. and
have been licensed for use by American Skandia Investment Services,  Incorporated.  The Portfolio is not sponsored,  endorsed,  sold or
promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the Portfolio.

The First Trust(R)10 Uncommon  Values  portfolio is not  sponsored  or created by Lehman  Brothers,  Inc.  ("Lehman  Brothers").  Lehman
Brothers' only  relationship  to First Trust is the licensing of certain  trademarks and trade names of Lehman  Brothers and of the "10
Uncommon  Values" which is determined,  composed and calculated by Lehman Brothers without regard to First Trust or the First Trust(R)10
Uncommon Values portfolio.

Dow Jones has no  relationship  to the ProFunds VP, other than the licensing of the Dow Jones sector  indices and its service marks for
use in  connection  with the  ProFunds  VP. The  ProFunds VP are not  sponsored,  endorsed,  sold,  or promoted by Standard & Poor's or
NASDAQ, and neither Standard & Poor's nor NASDAQ makes any representations regarding the advisability of investing in the ProFunds VP.

WHAT ARE THE FIXED INVESTMENT OPTIONS?
We offer fixed investment options of different  durations during the accumulation  period.  These "Fixed Allocations" earn a guaranteed
fixed rate of interest  for a specified  period of time,  called the  "Guarantee  Period." In most states,  we offer Fixed  Allocations
with  Guarantee  Periods  from 1 to 10 years.  We may also offer  special  purpose  Fixed  Allocations  for use with  certain  optional
investment  programs.  We guarantee  the fixed rate for the entire  Guarantee  Period.  However,  if you  withdraw or transfer  Account
Value before the end of the Guarantee  Period,  we will adjust the value of your  withdrawal or transfer  based on a formula,  called a
"Market Value  Adjustment." The Market Value  Adjustment can either be positive or negative,  depending on the rates that are currently
being  credited  on Fixed  Allocations.  Please  refer to the  section  entitled  "How does the Market  Value  Adjustment  Work?" for a
description  of the  formula  along with  examples  of how it is  calculated.  You may  allocate  Account  Value to more than one Fixed
Allocation at a time.

Fixed  Allocations may not be available in all states.  Availability of Fixed  Allocations is subject to change and may differ by state
and by the  annuity  product  you  purchase.  Please  call  American  Skandia at  1-800-766-4530  to  determine  availability  of Fixed
Allocations in your state and for your annuity product.

FEES AND CHARGES

WHAT ARE THE CONTRACT FEES AND CHARGES?

Contingent  Deferred Sales Charge:  We do not deduct a sales charge from Purchase  Payments you make to your Annuity.  However,  we may
deduct a  Contingent  Deferred  Sales Charge or CDSC if you  surrender  your  Annuity or when you make a partial  withdrawal.  The CDSC
reimburses us for expenses  related to sales and  distribution of the Annuity,  including  commissions,  marketing  materials and other
promotional  expenses.  The CDSC is  calculated as a percentage of your Purchase  Payment  being  surrendered  or withdrawn  during the
applicable  Annuity Year. For purposes of calculating  the CDSC, we consider the year following the date we receive a Purchase  Payment
as Year 1. The amount of the CDSC  applicable  to each  Purchase  Payment  decreases  over time,  measured  from the date the  Purchase
Payment is applied.  The CDSC percentages are shown below.

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

                           YEARS                1      2      3      4      5     6      7     8+
                           ------------------ ------- ----- ------ ------ ------ ----- ------ ------
                           ------------------ ------- ----- ------ ------ ------ ----- ------ ------

                           CHARGE (%)          7.5    6.5    5.5    4.5    3.5   2.5    1.5     0
                           ------------------ ------- ----- ------ ------ ------ ----- ------ ------

Each  Purchase  Payment  has its own CDSC  period.  When you make a  withdrawal,  we assume that the oldest  Purchase  Payment is being
withdrawn  first so that the lowest CDSC is deducted from the amount  withdrawn.  After seven (7) complete years from the date you make
a Purchase Payment,  no CDSC will be assessed if you withdraw or surrender that Purchase Payment.  Under certain  circumstances you can
withdraw a limited amount of Account Value without paying a CDSC.  This is referred to as a "Free  Withdrawal."  Free  Withdrawals  are
not treated as a withdrawal  of Purchase  Payments for  purposes of  calculating  the CDSC on a  subsequent  withdrawal  or  surrender.
Withdrawals of amounts  greater than the maximum Free  Withdrawal  amount are treated as a withdrawal of Purchase  Payments and will be
assessed a CDSC. For purposes of calculating  the CDSC on a surrender or a partial  withdrawal,  the Purchase  Payments being withdrawn
may be greater than your remaining  Account Value or the amount of your  withdrawal  request.  This is most likely to occur if you have
made prior  withdrawals  under the Free  Withdrawal  provision  or if your Account  Value has declined in value due to negative  market
performance.

We may waive the CDSC when taking a Minimum  Distribution from an Annuity purchased as a "qualified"  investment.  Free Withdrawals and
Minimum Distributions are each explained more fully in the section entitled "Access to Your Account Value".


Exceptions to the Contingent Deferred Sales Charge
To the extent  permitted by law, we do not apply the CDSC  provision on Annuities  owned by a member of the designated  class:  (a) any
parent company, affiliate or subsidiary of ours; (b) an officer, director,  employee, retiree, sales representative,  or in the case of
an affiliated  broker-dealer,  registered  representative of such company; (c) a director,  officer or trustee of any underlying mutual
fund; (d) a director,  officer or employee of any investment  manager,  sub-advisor,  transfer  agent,  custodian,  auditing,  legal or
administrative services provider that is providing investment management,  advisory,  transfer agency,  custodianship,  auditing, legal
and/or  administrative  services to an  underlying  mutual fund or any  affiliate of such firm;  (e) a director,  officer,  employee or
registered  representative  of a  broker-dealer  or insurance  agency that has a then  current  selling  agreement  with us and/or with
American Skandia Marketing,  Incorporated;  (f) a director,  officer, employee or authorized representative of any firm providing us or
our affiliates with regular legal, actuarial, auditing,  underwriting,  claims, administrative,  computer support, marketing, office or
other  services;  (g) the then current  spouse of any such person noted in (b) through (f),  above;  (h) the parents of any such person
noted in (b) through  (g),  above;  (i) the  child(ren)  or other legal  dependent  under the age of 21 of any such person noted in (b)
through (h) above; and (j) the siblings of any such persons noted in (b) through (h) above.

You must  notify  us at the time you  apply for an  Annuity  if you are a member  of the  designated  class.  American  Skandia  is not
responsible  for  monitoring  whether you qualify as a member of the designated  class.  If you fail to inform us that you qualify as a
member of the designated class, your Annuity will not be eligible for this exception to the CDSC.

Annual  Maintenance Fee: During the accumulation  period we deduct an Annual  Maintenance Fee. The Annual  Maintenance Fee is $30.00 or
2% of your Account Value invested in the variable  investment  options,  whichever is less.  This fee will be deducted  annually on the
anniversary  of the Issue Date of your Annuity or, if you surrender  your Annuity  during the Annuity Year,  the fee is deducted at the
time of surrender.  We may increase the Annual  Maintenance  Fee.  However,  any increase will only apply to Annuities issued after the
date of the increase.

Transfer Fee:  Currently,  you may make twenty (20) free transfers between  investment options each Annuity Year. We will charge $10.00
for each  transfer  after the  twentieth in each Annuity Year.  We do not consider  transfers  made as part of a dollar cost  averaging
program when we count the twenty free  transfers.  Transfers  made as part of a  rebalancing,  market timing or third party  investment
advisory  service will be subject to the  twenty-transfer  limit.  However,  all transfers  made on the same day will be treated as one
(1)  transfer.  Renewals or transfers of Account Value from a Fixed  Allocation  at the end of its Guarantee  Period are not subject to
the  Transfer Fee and are not counted  toward the twenty free  transfers.  We may reduce the number of free  transfers  allowable  each
Annuity Year (subject to a minimum of eight) without  charging a Transfer Fee unless you make use of electronic  means to transmit your
transfer  requests.  We may eliminate the Transfer Fee for transfer  requests  transmitted  electronically  or through other means that
reduce our processing costs.

Tax  Charges:  Several  states  and some  municipalities  charge  premium  taxes or  similar  taxes.  The  amount of tax will vary from
jurisdiction  to  jurisdiction  and is subject to change.  The tax charge  currently  ranges up to 3 1/2%.  We  generally  will deduct the
amount of tax payable at the time the tax is  imposed,  but may also decide to deduct tax  charges  from each  Purchase  Payment at the
time of a  withdrawal  or  surrender  of your Annuity or at the time you elect to begin  receiving  annuity  payments.  We may assess a
charge against the Sub-accounts and the Fixed Allocations equal to any taxes which may be imposed upon the separate accounts.

WHAT CHARGES APPLY SOLELY TO THE VARIABLE INVESTMENT OPTIONS?


Insurance  Charge:  We deduct an Insurance Charge daily against the average daily assets allocated to the  Sub-accounts.  The Insurance
Charge is the combination of the Mortality & Expense Risk Charge (1.25%) and the  Administration  Charge  (0.15%).  The total charge is
equal to 1.40% on an annual  basis.  The  Insurance  Charge is intended to  compensate  American  Skandia for  providing  the insurance
benefits under the Annuity,  including the Annuity's death benefit that provides  guaranteed benefits to your beneficiaries even if the
market  declines and the risk that  persons we guarantee  annuity  payments to will live longer than our  assumptions.  The charge also
covers  administrative  costs  associated  with providing the Annuity  benefits,  including  preparation of the contract,  confirmation
statements,  annual account  statements and annual reports,  legal and accounting fees as well as various  related  expenses.  Finally,
the charge covers the risk that our  assumptions  about the mortality  risks and expenses  under this Annuity are incorrect and that we
have agreed not to increase  these  charges over time  despite our actual  costs.  We may  increase the portion of the total  Insurance
Charge that is deducted for  administrative  costs;  however,  any increase  will only apply to Annuities  issued after the date of the
increase.

American  Skandia may make a profit on the  Insurance  Charge if, over time,  the actual cost of  providing  the  guaranteed  insurance
obligations  under the  Annuity  are less than the amount we deduct  for the  Insurance  Charge.  To the extent we make a profit on the
Insurance Charge,  such profit may be used for any other corporate  purpose,  including payment of other expenses that American Skandia
incurs in promoting, distributing, issuing and administering the Annuity.

The  Insurance  Charge  is not  deducted  against  assets  allocated  to a Fixed  Allocation.  However,  the  amount we credit to Fixed
Allocations may also reflect similar assumptions about the insurance guarantees provided under the Annuity.

WHAT CHARGES ARE ASSESSED BY THE PORTFOLIOS?
We do not assess any charges  directly  against the  Portfolios.  However,  each  Portfolio  charges a total annual fee comprised of an
investment  management fee,  operating  expenses and any distribution and service (12b-1) fees that may apply.  These fees are deducted
daily by each  Portfolio  before it provides  American  Skandia  with the net asset value as of the close of  business  each day.  More
detailed  information  about fees and charges can be found in the  prospectuses  for the  Portfolios.  Please  also see  "Service  Fees
Payable by Underlying Funds".

WHAT CHARGES APPLY TO THE FIXED ALLOCATIONS?
No specific fee or expenses are deducted  when  determining  the rate we credit to a Fixed  Allocation.  However,  for some of the same
reasons that we deduct the Insurance  Charge  against  Account Value  allocated to the  Sub-accounts,  we also take into  consideration
mortality,  expense,  administration,  profit and other factors in determining the interest rates we credit to Fixed  Allocations.  Any
CDSC or Tax Charge  applies to amounts that are taken from the variable  investment  options or the Fixed  Allocations.  A Market Value
Adjustment may also apply to transfers, certain withdrawals, surrender or annuitization from a Fixed Allocation.

WHAT CHARGES APPLY IF I CHOOSE AN ANNUITY PAYMENT OPTION?
In certain  states a tax is due if and when you exercise  your right to receive  periodic  annuity  payments.  The amount  payable will
depend on the applicable  jurisdiction and on the annuity payment option you select.  If you select a fixed payment option,  the amount
of each fixed  payment  will depend on the Account  Value of your Annuity when you elected to  annuitize.  There is no specific  charge
deducted from these payments;  however,  the amount of each annuity payment reflects  assumptions about our insurance expenses.  If you
select a  variable  payment  option  that we may offer,  then the amount of your  benefits  will  reflect  changes in the value of your
Annuity and will continue to be subject to an insurance charge.

EXCEPTIONS/REDUCTIONS TO FEES AND CHARGES
We may reduce or  eliminate  certain  fees and  charges  or alter the manner in which the  particular  fee or charge is  deducted.  For
example,  we may  reduce  the  amount of the CDSC or the  length of time it  applies,  reduce or  eliminate  the  amount of the  Annual
Maintenance Fee or reduce the portion of the total Insurance  Charge that is deducted as an  Administration  Charge.  Generally,  these
types of  changes  will be based on a  reduction  to our  sales,  maintenance  or  administrative  expenses  due to the  nature  of the
individual  or group  purchasing  the Annuity.  Some of the factors we might  consider in making such a decision  are: (a) the size and
type of group;  (b) the number of Annuities  purchased by an Owner;  (c) the amount of Purchase  Payments or  likelihood  of additional
Purchase  Payments;  and/or (d) other  transactions where sales,  maintenance or administrative  expenses are likely to be reduced.  We
will not discriminate  unfairly between Annuity  purchasers if and when we reduce the portion of the Insurance Charge attributed to the
charge covering administrative costs.

PURCHASING YOUR ANNUITY

WHAT ARE OUR REQUIREMENTS FOR PURCHASING THE ANNUITY?

Initial  Purchase  Payment:  You must make a minimum initial  Purchase  Payment of $10,000.  The minimum initial  Purchase  Payment for
annuities  designed to qualify for special tax treatment  under the Code is $2,000.  However,  if you decide to make  payments  under a
systematic  investment or "bank drafting"  program,  we will accept a lower initial Purchase  Payment  provided that,  within the first
Annuity Year, you make at least $10,000 (for non-qualified contracts) or $2,000 (for qualified contracts) in total Purchase Payments.

Where  allowed by law,  initial  Purchase  Payments in excess of  $1,000,000  require our approval  prior to  acceptance.  We may apply
certain limitations and/or  restrictions on the Annuity as a condition of our acceptance,  including limiting the liquidity features or
the Death Benefit protection provided under the Annuity,  limiting the right to make additional Purchase Payments,  changing the number
of transfers  allowable under the Annuity or restricting the Sub-accounts  that are available.  Other limitations  and/or  restrictions
may apply.

Except as noted below,  Purchase  Payments  must be  submitted  by check drawn on a U.S.  bank,  in U.S.  dollars,  and made payable to
American  Skandia.  Purchase  Payments  may  also  be  submitted  via  1035  exchange  or  direct  transfer  of  funds.  Under  certain
circumstances,  Purchase  Payments may be  transmitted  to American  Skandia via wiring funds  through your  investment  professional's
broker-dealer  firm.  Additional  Purchase  Payments may also be applied to your Annuity under an  arrangement  called "bank  drafting"
where you  authorize  us to  deduct  money  directly  from your bank  account.  We may  reject  any  payment  if it is  received  in an
unacceptable form.  Our acceptance of a check is subject to our ability to collect funds.

Age  Restrictions:  There is no age restriction to purchase the Annuity.  However,  the Death Benefit provides  greater  protection for
persons under age 85. You should  consider your need to access your Account  Value and whether the  Annuity's  liquidity  features will
satisfy that need.  If you take a  distribution  prior to age 591/2, you may be subject to a 10% penalty in addition to ordinary  income
taxes on any gain.

Owner, Annuitant and Beneficiary Designations: On your Application, we will ask you to name the Owner(s), Annuitant and one or more
Beneficiaries for your Annuity.

|X|      Owner:  The  Owner(s)  holds all  rights  under the  Annuity.  You may name  more than one Owner in which  case all  ownership
         -----
       rights are held jointly.  However,  this Annuity does not provide a right of survivorship.  Refer to the Glossary of Terms for a
       complete description of the term "Owner."
|X|      Annuitant:  The  Annuitant  is the person we agree to make  annuity  payments  to and upon whose life we continue to make such
         ---------
       payments.  You must name an Annuitant who is a natural  person.  We do not accept a designation of joint  Annuitants  during the
       accumulation  period. Where allowed by law, you may name one or more Contingent  Annuitants.  A Contingent Annuitant will become
       the Annuitant if the Annuitant dies before the Annuity Date.  Please refer to the discussion of  "Considerations  for Contingent
       Annuitants" in the Tax Considerations section of the Prospectus.
|X|      Beneficiary:  The  Beneficiary  is the person(s) or entity you name to receive the death  benefit.  If no beneficiary is named
         -----------
       the death benefit will be paid to you or your estate.

Your right to make certain  designations  may be limited if your Annuity is to be used as an IRA or other  "qualified"  investment that
is given  beneficial  tax  treatment  under  the Code.  You  should  seek  competent  tax  advice on the  income,  estate  and gift tax
implications of your designations.

MANAGING YOUR ANNUITY

MAY I CHANGE THE OWNER, ANNUITANT AND BENEFICIARY DESIGNATIONS?
You may change the Owner,  Annuitant  and  Beneficiary  designations  by sending us a request in writing.  Where  allowed by law,  such
changes will be subject to our acceptance.  Some of the changes we will not accept include, but are not limited to:
|X|      a new Owner  subsequent to the death of the Owner or the first of any joint Owners to die,  except where a  spouse-Beneficiary
     has become the Owner as a result of an Owner's death;
|X|      a new Owner or Annuitant who does not meet our current underwriting guidelines;
|X|      a new Annuitant subsequent to the Annuity Date;
|X|      for "non-qualified" investments, a new Annuitant prior to the Annuity Date if the Annuity is owned by an entity; and
|X|      a change in Beneficiary if the Owner had previously made the designation irrevocable.

Spousal Owners/Spousal Beneficiaries
If an Annuity is co-owned by spouses,  we will assume that the sole primary  Beneficiary  is the  surviving  spouse unless you elect an
alternative  Beneficiary  designation.  Unless  you elect an  alternative  Beneficiary  designation,  upon the death of either  spousal
Owner,  the  surviving  spouse may elect to assume  ownership of the Annuity  instead of taking the Death  Benefit  payment.  The Death
Benefit  that  would  have been  payable  will be the new  Account  Value of the  Annuity  as of the date of due proof of death and any
required proof of a spousal  relationship.  As of the date the assumption is effective,  the surviving  spouse will have all the rights
and benefits that would be available  under the Annuity to a new purchaser of the same  attained age. For purposes of  determining  any
future Death Benefit for the  beneficiary  of the surviving  spouse,  the new Account Value will be considered as the initial  Purchase
Payment.  No CDSC  will  apply to the new  Account  Value.  However,  any  additional  Purchase  Payments  applied  after  the date the
assumption is effective will be subject to all provisions of the Annuity, including the CDSC when applicable.

Spousal Contingent Annuitant
If the Annuity is owned by an entity and the  surviving  spouse is named as a Contingent  Annuitant,  upon the death of the  Annuitant,
the surviving  spouse will become the  Annuitant.  No Death Benefit is payable upon the death of the  Annuitant.  However,  the Account
Value of the Annuity as of the date of due proof of death of the Annuitant  (and any required proof of the spousal  relationship)  will
reflect the amount that would have been payable had a Death Benefit been paid.

MAY I RETURN THE ANNUITY IF I CHANGE MY MIND?
If after  purchasing  your  Annuity  you change  your mind and decide that you do not want it, you may return it to us within a certain
period  of time  known as a right to  cancel  period.  This is often  referred  to as a  "free-look."  The  right to  cancel  period is
twenty-one  (21) days,  measured from the time that you received your Annuity.  If you are exercising your right to return the Annuity,
notice by mail is  effective on being  postmarked,  properly  addressed  and postage  prepaid.  If you return the Annuity to the agent,
other than by mail, the effective date of the right to cancel will be the date the Annuity is received by the agent.

If you exercise your right to return your Annuity, we will calculate the amount to be refunded to you as follows:

For amounts allocated to the Variable Investment  Options,  we will refund your Account Value plus any fees or charges deducted,  as of
---------------------------------------------------------
the date the cancellation request is either postmarked or returned to the agent.

For amounts allocated to the Fixed Investment Options, we will refund the greater of:
-----------------------------------------------------
|X|      the Purchase Payment, less any withdrawals; or
|X|      the current Account Value plus any fees or charges deducted,  as of the date the cancellation  request is either postmarked or
     returned to the agent.

The amount refunded may be higher or lower than your original Purchase Payment and you bear the investment risk during this period.

MAY I MAKE ADDITIONAL PURCHASE PAYMENTS?
The minimum amount that we accept as an additional  Purchase  Payment is $100 unless you participate in American  Skandia's  Systematic
Investment Plan or a periodic  purchase payment program.  We will allocate any additional  Purchase Payments you make according to your
most recent allocation instructions, unless you request new allocations when you submit a new Purchase Payment.

MAY I MAKE SCHEDULED PAYMENTS DIRECTLY FROM MY BANK ACCOUNT?
You can make  additional  Purchase  Payments to your  Annuity by  authorizing  us to deduct money  directly  from your bank account and
              ----------
applying it to your  Annuity.  This type of program is often  called  "bank  drafting".  We call our bank  drafting  program  "American
Skandia's  Systematic  Investment Plan." Purchase Payments made through bank drafting may only be allocated to the variable  investment
options when  applied.  Bank  drafting  allows you to invest in your  Annuity with a lower  initial  Purchase  Payment,  as long as you
authorize  payments  that will equal at least  $10,000 or $2,000 (as  applicable)  during the first 12 months of your  Annuity.  We may
suspend or cancel bank drafting  privileges if sufficient  funds are not available  from the  applicable  financial  institution on any
date that a transaction is scheduled to occur.

MAY I MAKE PURCHASE PAYMENTS THROUGH A SALARY REDUCTION PROGRAM?
These types of programs are only available with certain types of qualified  investments.  If your employer sponsors such a program,  we
may agree to accept  periodic  Purchase  Payments  through  a salary  reduction  program  as long as the  allocations  are made only to
variable  investment  options  and the  periodic  Purchase  Payments  received  in the first year total at least  $10,000 or $2,000 (as
applicable).

MANAGING YOUR ACCOUNT VALUE

HOW AND WHEN ARE PURCHASE PAYMENTS INVESTED?
(See "Valuing Your Investment" for a description of our procedure for pricing initial and subsequent Purchase Payments.)

Initial  Purchase  Payment:  Once we accept your  application,  we invest your net Purchase  Payment in the  Annuity.  The net Purchase
Payment is your initial  Purchase  Payment  minus any tax charges  that may apply.  On your  application  we ask you to provide us with
instructions  for allocating your Account Value.  You can allocate  Account Value to one or more variable  investment  options or Fixed
Allocations.

In those states where we are required to return your Purchase  Payment if you exercise  your right to return the Annuity,  we initially
allocate all amounts that you choose to allocate to the variable  investment  options to the AST Money Market  Sub-account.  At the end
of the right to cancel period we will reallocate your Account Value according to your most recent allocation instructions.

Subsequent  Purchase  Payments:  We will  allocate  any  additional  Purchase  Payments you make  according to your current  allocation
instructions.  If any rebalancing or asset allocation  programs are in effect,  the allocation  should conform with such a program.  We
assume  that your  current  allocation  instructions  are  valid  for  subsequent  Purchase  Payments  until you make a change to those
allocations or request new allocations when you submit a new Purchase Payment.

ARE THERE RESTRICTIONS OR CHARGES ON TRANSFERS BETWEEN INVESTMENT OPTIONS?
During the accumulation  period you may transfer  Account Value between  investment  options.  Transfers are not subject to taxation on
any gain.  We currently  limit the number of  Sub-accounts  you can invest in at any one time to twenty (20).  However,  you can invest
in an unlimited  number of Fixed  Allocations.  We may require a minimum of $500 in each  Sub-account you allocate  Account Value to at
the time of any  allocation or transfer.  If you request a transfer and, as a result of the transfer,  there would be less than $500 in
the Sub-account,  we may transfer the remaining Account Value in the Sub-account pro rata to the other investment  options to which you
transferred.

We  may  impose  specific  restrictions  on  financial  transactions  for  certain  Portfolios  based  on  the  Portfolio's  investment
restrictions.  Currently,  any purchase,  redemption or transfer involving the Rydex or ProFunds VP Sub-accounts must be received by us
no later than one hour prior to any announced closing of the applicable  securities exchange (generally,  3:00 p.m. Eastern time) to be
processed  on the  current  Valuation  Day.  The  "cut-off"  time for such  financial  transactions  involving  a Rydex or  ProFunds VP
Sub-account will be extended to1/2hour prior to any announced closing  (generally,  3:30 p.m. Eastern time) for transactions  submitted
electronically through American Skandia's Internet website (www.americanskandia.com).

Currently,  we charge $10.00 for each transfer  after the twentieth  (20th) in each Annuity Year,  including  transfers made as part of
any  rebalancing,  market timing,  asset  allocation or similar program which you have  authorized.  Transfers made as part of a dollar
cost  averaging  program do not count  toward the twenty free  transfer  limit.  Renewals or  transfers  of Account  Value from a Fixed
Allocation  at the end of its  Guarantee  Period are not subject to the  transfer  charge.  We may reduce the number of free  transfers
allowable  each Annuity Year (subject to a minimum of eight)  without  charging a Transfer Fee unless you make use of electronic  means
to transmit your transfer  requests.  We may eliminate the Transfer Fee for transfer  requests  transmitted  electronically  or through
other means that reduce our processing costs.

We reserve the right to limit the number of transfers  in any Annuity  Year for all  existing or new Owners.  We also reserve the right
to limit the number of  transfers  in any Annuity  Year or to refuse any  transfer  request  for an Owner or certain  Owners if: (a) we
believe that  excessive  trading or a specific  transfer  request or group of transfer  requests may have a detrimental  effect on Unit
Values or the share prices of the  Portfolios;  or (b) we are informed by one or more of the Portfolios that the purchase or redemption
of  shares  must be  restricted  because  of  excessive  trading  or a  specific  transfer  or group of  transfers  is deemed to have a
detrimental  effect on the share prices of affected  Portfolios.  Without  limiting the above, the most likely scenario where either of
the above could occur would be if the  aggregate  amount of a trade or trades  represented a relatively  large  proportion of the total
assets of a  particular  Portfolio.  Under such a  circumstance,  we will process  transfers  according to our rules then in effect and
provide notice if the transfer request was denied.  If a transfer request is denied, a new transfer request may be required.

DO YOU OFFER DOLLAR COST AVERAGING?
Yes. We offer Dollar Cost Averaging during the accumulation  period.  Dollar Cost Averaging  allows you to  systematically  transfer an
amount  each month from one  investment  option to one or more other  investment  options.  You can choose to transfer  earnings  only,
principal plus earnings or a flat dollar amount.  Dollar Cost Averaging  allows you to invest  regularly each month,  regardless of the
current unit value (or price) of the  Sub-account(s)  you invest in. This  enables you to purchase  more units when the market price is
low and fewer units when the market price is high.  This may result in a lower  average cost of units over time.  However,  there is no
guarantee  that  Dollar Cost  Averaging  will result in a profit or protect  against a loss in a declining  market.  We do not deduct a
charge for participating in a Dollar Cost Averaging program.

You must have a minimum Account Value of at least $10,000 to enroll in a Dollar Cost Averaging program.

You can Dollar Cost Average from variable  investment  options or Fixed  Allocations.  Dollar Cost Averaging from Fixed  Allocations is
subject to a number of rules that include, but are not limited to the following:
|X|      You may only use Fixed Allocations with Guarantee Periods of 1, 2 or 3 years.
|X|      You may only Dollar Cost Average  earnings or principal plus earnings.  If transferring  principal plus earnings,  the program
     must be designed to last the entire Guarantee Period for the Fixed Allocation.
|X|      Dollar Cost Averaging transfers from Fixed Allocations are not subject to a Market Value Adjustment.

NOTE:  When a Dollar  Cost  Averaging  program is  established  from a Fixed  Allocation,  the fixed rate of interest we credit to your
Account  Value is applied to a  declining  balance due to the  transfers  of Account  Value to the  Sub-accounts  during the  Guarantee
Period.  This will reduce the effective rate of return on the Fixed Allocation over the Guarantee Period.

DO YOU OFFER ANY AUTOMATIC REBALANCING PROGRAMS?
Yes.  During the  accumulation  period,  we offer  automatic  rebalancing  among the variable  investment  options you choose.  You can
choose  to have your  Account  Value  rebalanced  quarterly,  semi-annually,  or  annually.  On the  appropriate  date,  your  variable
investment  options are rebalanced to the allocation  percentages you request.  For example,  over time the performance of the variable
investment  options  will  differ,  causing  your  percentage  allocations  to shift.  With  automatic  rebalancing,  we  transfer  the
appropriate  amount  from the  "overweighted"  Sub-accounts  to the  "underweighted"  Sub-accounts  to return your  allocations  to the
percentages  you  request.  If you request a transfer  from or into any  variable  investment  option  participating  in the  automatic
rebalancing  program,  we will assume that you wish to change your rebalancing  percentages as well, and will automatically  adjust the
rebalancing percentages in accordance with the transfer unless we receive alternate instructions from you.

You must have a minimum Account Value of at least $10,000 to enroll in automatic  rebalancing.  All  rebalancing  transfers made on the
same day as part of an automatic  rebalancing  program are  considered as one transfer when counting the number of transfers  each year
toward the maximum number of free transfers. We do not deduct a charge for participating in an automatic rebalancing program.

DO YOU OFFER PROGRAMS DESIGNED TO GUARANTEE A "RETURN OF PREMIUM" AT A FUTURE DATE?
Yes.  We offer a  program  for  investors  who wish to  invest in the  variable  investment  options  but also  wish to  protect  their
principal,  at least as of a specific  date in the future.  You may not want to use this program if you expect to begin taking  annuity
payments before the program would be completed.

Balanced Investment Program
We offer a balanced  investment  program  where a portion of your Account  Value is allocated to a Fixed  Allocation  and the remaining
Account Value is allocated to the variable  investment  options that you select.  When you enroll in the Balanced  Investment  Program,
you choose the  duration  that you wish the  program to last.  This  determines  the  duration  of the  Guarantee  Period for the Fixed
Allocation.  Based on the fixed rate for the  Guarantee  Period  chosen,  we calculate  the portion of your Account  Value that must be
allocated to the Fixed Allocation to grow to a specific  "principal amount" (such as your initial Purchase  Payment).  We determine the
amount  based on the rates then in effect for the  Guarantee  Period you  choose.  If you  continue  the  program  until the end of the
Guarantee  Period and make no withdrawals or transfers,  at the end of the Guarantee  Period,  the Fixed  Allocation will have grown to
equal the  "principal  amount".  Withdrawals  or  transfers  from the Fixed  Allocation  before the end of the  Guarantee  Period  will
terminate  the program and may be subject to a Market Value  Adjustment.  You can transfer the Account  Value that is not  allocated to
the Fixed  Allocation  between any of the  Sub-accounts  available  under the  Annuity.  Account  Value you  allocate  to the  variable
investment  options  is  subject  to market  fluctuations  and may  increase  or  decrease  in  value.  We do not  deduct a charge  for
participating in the Balanced Investment Program.

         Example
         Assume you invest  $100,000.  You choose a 10-year program and allocate a portion of your Account Value to a Fixed  Allocation
         with a 10-year  Guarantee Period.  The rate for the 10-year  Guarantee Period is 5.33%*.  Based on the fixed interest rate for
         the Guarantee  Period chosen,  the factor is 0.594948 for  determining how much of your Account Value will be allocated to the
         Fixed  Allocation.  That means that  $59,495  will be  allocated  to the Fixed  Allocation  and the  remaining  Account  Value
         ($41,505)  will be  allocated to the variable  investment  options.  Assuming  that you do not make any  withdrawals  from the
         Fixed  Allocation,  it will grow to $100,000 at the end of the Guarantee  Period. Of course we cannot predict the value of the
         remaining Account Value that was allocated to the variable investment options.

*        The rate in this example is hypothetical and may not reflect the current rate for Guarantee Periods of this duration.

MAY I AUTHORIZE MY INVESTMENT PROFESSIONAL TO MANAGE MY ACCOUNT?
Yes.  You may  authorize  your  investment  professional  to direct the  allocation  of your  Account  Value and to  request  financial
transactions  between  investment  options while you are living,  subject to our rules. You must contact us immediately if and when you
revoke such authority.  We will not be responsible for acting on instructions  from your investment  professional if you fail to inform
us that such person's  authority has been revoked.  We may also suspend,  cancel or limit these  privileges at any time. We will notify
you if we do.

We or an affiliate of ours may provide administrative support to licensed,  registered investment  professionals or investment advisors
who you authorize to make financial  transactions on your behalf.  These investment  professionals may be firms or persons who also are
appointed by us as authorized  sellers of the Annuity.  However,  we do not offer advice about how to allocate your Account Value under
any  circumstance.  Any  investment  professionals  you engage to provide  advice  and/or make  transfers  for you is not acting on our
behalf.  We are not  responsible for any  recommendations  such investment  professionals  make, any market timing or asset  allocation
programs they choose to follow or any specific transfers they make on your behalf.

We may require  investment  professionals  or investment  advisors,  who are authorized by multiple  contract  owners to make financial
transactions,  to enter into an  administrative  agreement with American  Skandia as a condition of our accepting  transactions on your
behalf.  The  administrative  agreement may impose  limitations on the investment  professional's  or investment  advisor's  ability to
request  financial  transactions on your behalf.  These  limitations  are intended to minimize the detrimental  impact of an investment
professional  who is in a position to  transfer  large  amounts of money for  multiple  clients in a  particular  Portfolio  or type of
portfolio or to comply with specific  restrictions or limitations  imposed by a Portfolio(s) on American  Skandia.  The  administrative
agreement  may limit  the  available  investment  options,  require  advance  notice of large  transactions,  or impose  other  trading
limitations on your investment  professional.  Your  investment  professional  will be informed of all such  restrictions on an ongoing
basis.  We may also require that your  investment  professional  transmit  all  financial  transactions  using the  electronic  trading
functionality  available  through our Internet  website  (www.americanskandia.com).  Limitations  that we may impose on your investment
professional or investment advisor under the terms of the  administrative  agreement do not apply to financial  transactions  requested
by an Owner on their own behalf, except as otherwise described in this Prospectus.

HOW DO THE FIXED INVESTMENT OPTIONS WORK?

We credit  the fixed  interest  rate to the Fixed  Allocation  throughout  a set  period of time  called a  "Guarantee  Period."  Fixed
Allocations  currently are offered with Guarantee  Periods from 1 to 10 years.  We may make Fixed  Allocations  of different  durations
available in the future,  including Fixed Allocations  offered  exclusively for use with certain optional  investment  programs.  Fixed
Allocations  may not be available in all states and may not always be available for all Guarantee  Periods  depending on market factors
and other considerations.

The interest  rate credited to a Fixed  Allocation  is the rate in effect when the  Guarantee  Period begins and does not change during
the Guarantee  Period.  The rates are an effective annual rate of interest.  We determine the interest rates for the various  Guarantee
Periods.  At the time that we confirm  your Fixed  Allocation,  we will  advise  you of the  interest  rate in effect and the date your
Fixed  Allocation  matures.  We may change the rates we credit new Fixed  Allocations at any time. Any change in interest rate does not
affect  Fixed  Allocations  that  were in  effect  before  the date of the  change.  To  inquire  as to the  current  rates  for  Fixed
Allocations, please call 1-800-766-4530.

A Guarantee Period for a Fixed Allocation begins:
|X|      when all or part of a net Purchase Payment is allocated to that particular Guarantee Period;
|X|      upon transfer of any of your Account Value to a Fixed Allocation for that particular Guarantee Period; or
|X|      when you "renew" a Fixed Allocation by electing a new Guarantee Period.

HOW DO YOU DETERMINE RATES FOR FIXED ALLOCATIONS?
We do not have a specific  formula for  determining  the fixed  interest rates for Fixed  Allocations.  Generally the interest rates we
offer for Fixed  Allocations  will reflect the  investment  returns  available on the types of investments we make to support our fixed
rate  guarantees.  These  investment  types may include  cash,  debt  securities  guaranteed by the United  States  government  and its
agencies and  instrumentalities,  money market  instruments,  corporate debt obligations of different  durations,  private  placements,
asset-backed  obligations  and municipal  bonds.  In  determining  rates we also  consider  factors such as the length of the Guarantee
Period for the Fixed  Allocation,  regulatory  and tax  requirements,  liquidity  of the markets for the type of  investments  we make,
commissions,  administrative  and investment  expenses,  our insurance  risks in relation to the Fixed  Allocations,  general  economic
trends and  competition.  Some of these  considerations  are similar to those we consider in determining  the Insurance  Charge that we
deduct from Account Value allocated to the Sub-accounts.

We will credit  interest on a new Fixed  Allocation  in an existing  Annuity at a rate not less than the rate we are then  crediting to
Fixed Allocations for the same Guarantee Period selected by new Annuity purchasers in the same class.

The  interest  rate we  credit  for a  Fixed  Allocation  is  subject  to a  minimum.  Please  refer  to the  Statement  of  Additional
Information.  In certain states the interest rate may be subject to a minimum under state law or regulation.

HOW DOES THE MARKET VALUE ADJUSTMENT WORK?
If you transfer or withdraw  Account Value from a Fixed  Allocation more than 30 days before the end of its Guarantee  Period,  we will
adjust the value of your  investment  based on a formula,  called a "Market Value  Adjustment"  or "MVA".  The Market Value  Adjustment
formula  compares the interest  rates credited for Fixed  Allocations  at the time you invested,  to interest rates being credited when
you make a transfer or  withdrawal.  The amount of any Market Value  Adjustment  can be either  positive or negative,  depending on the
rates that are currently  being  credited on Fixed  Allocations.  In certain  states the amount of any Market Value  Adjustment  may be
limited  under  state law or  regulation.  If your  Annuity is governed by the laws of that state,  any Market  Value  Adjustment  that
applies will be subject to our rules for complying with such law or regulation.

MVA Formula
The MVA formula is applied  separately to each Fixed  Allocation to determine the Account Value of the Fixed Allocation on a particular
date.  The formula is as follows:

                                                          [(1+I) / (1+J)]N/12

                                                                where:

                  I is the fixed  interest  rate we  guaranteed  to credit to the Fixed  Allocation as of its starting
                  date;

                  J is the fixed  interest  rate for your class of annuities at the time of the  withdrawal  for a new
                                                                                                                   ---
                  Fixed  Allocation  with a Guarantee  Period equal to the remaining  number of years in your original
                  Guarantee Period;

                  N is the number of months remaining in the original Guarantee Period.

No MVA applies in  determining a Fixed  Allocation's  Account Value for the 30 days prior to the Maturity Date. If the
transfer or withdrawal does not occur on the yearly or monthly  anniversary of the beginning of the Fixed  Allocation,
the numbers used in `J' and `N' will be rounded to the next highest integer.

MVA Examples
The following hypothetical examples show the effect of the MVA in determining Account Value.  Assume the following:
|X|      You allocate $50,000 into a Fixed Allocation with a Guarantee Period of 5 years.
|X|      The interest rate for your Fixed Allocation is 5.0% (I = 5.0%).
|X|      You make no  withdrawals  or transfers  until you decided to withdraw  the entire Fixed  Allocation  after  exactly  three (3)
         years, therefore 24 months remain before the Maturity Date (N = 24).







Example of Positive MVA
Assume that at the time you request the withdrawal,  the fixed interest rate for a new Fixed  Allocation with a Guarantee  Period of 24
months is 3.5% (J = 3.5%).  Based on these assumptions, the MVA would be calculated as follows:

                                       MVA Factor = [(1+I)/(I+J]N/12 = [1.05/1.035]2 = 1.029196
                                                      Interim Value = $57,881.25
                                  Account Value after MVA = Interim Value X MVA Factor = $59,571.15.

Example of Negative MVA
Assume that at the time you request the withdrawal,  the fixed interest rate for a new Fixed  Allocation with a Guarantee  Period of 24
months is 6.0% (J = 6.0%).  Based on these assumptions, the MVA would be calculated as follows:

                                       MVA Factor = [(1+I)/(1+J]N/12 = [1.05/1.060)]2 = 0.981221
                                                      Interim Value = $57,881.25
                                  Account Value after MVA = Interim Value X MVA Factor = $56,794.30.

WHAT HAPPENS WHEN MY GUARANTEE PERIOD MATURES?
The "Maturity  Date" for a Fixed  Allocation  is the last day of the  Guarantee  Period.  Before the Maturity  Date,  you may choose to
renew the Fixed  Allocation  for a new Guarantee  Period of the same or different  length or you may transfer all or part of that Fixed
Allocation's  Account  Value to  another  Fixed  Allocation  or to one or more  Sub-accounts.  You are not  allowed  to renew any Fixed
Allocation  if the  Maturity  Date is within 30 days of the date we will apply your Account  Value to  determine  the amount of Annuity
payments on the Annuity  Date.  We will  notify you at least 45 days and not more than 60 days before the end of the  Guarantee  Period
about the fixed  interest  rates that we are  currently  crediting to all Fixed  Allocations  that are being  offered.  The rates being
credited  to Fixed  Allocations  may  change  before  the  Maturity  Date.  We will not  charge  a MVA if you  choose  to renew a Fixed
Allocation  within 30 days prior to the Maturity  Date or transfer the Account  Value of the Fixed  Allocation  to one or more variable
investment options.

ACCESS TO ACCOUNT VALUE

WHAT TYPES OF DISTRIBUTIONS ARE AVAILABLE TO ME?
During the  accumulation  period you can access your Account Value  through  Partial  Withdrawals,  Systematic  Withdrawals,  and where
required for tax  purposes,  Minimum  Distributions.  You can also  surrender  your Annuity at any time. We may deduct a portion of the
Account Value being  withdrawn or  surrendered  as a CDSC. If you  surrender  your Annuity,  in addition to any CDSC, we may deduct the
Annual  Maintenance  Fee,  any Tax Charge  that  applies and the charge for any  optional  benefits.  We may also apply a Market  Value
Adjustment  to any Fixed  Allocations.  Certain  amounts  may be  available  to you each  Annuity  Year that are not subject to a CDSC.
These are called "Free Withdrawals." In addition,  under certain  circumstances,  we may waive the CDSC for withdrawals made to satisfy
Minimum  Distribution  requirements.  Unless you notify us  differently,  withdrawals  are taken pro-rata based on the Account Value in
the investment  options at the time we receive your withdrawal  request.  Each of these types of  distributions is described more fully
below.

ARE THERE TAX IMPLICATIONS FOR DISTRIBUTIONS?
(For more information, see "Tax Considerations")

During the Accumulation Period
A distribution  during the  accumulation  period is deemed to come first from any "gain" in your Annuity and second as a return of your
"tax  basis",  if any.  Distributions  from your  Annuity  are  generally  subject to  ordinary  income  taxation  on the amount of any
investment  gain unless the  distribution  qualifies as a non-taxable  exchange or transfer.  If you take a  distribution  prior to the
taxpayer's  age 59 1/2, you may be subject to a 10% penalty in addition to ordinary  income  taxes on any gain.  You may wish to consult a
professional tax advisor for advice before requesting a distribution.

During the Annuitization Period
During the  annuitization  period,  a portion of each annuity payment is taxed as ordinary income at the tax rate you are subject to at
the time of the payment.  The Code and  regulations  have  "exclusionary  rules" that we use to determine  what portion of each annuity
payment  should  be  treated  as a  return  of any tax  basis  you have in the  Annuity.  Once the tax  basis in the  Annuity  has been
distributed,  the  remaining  annuity  payments  are  taxable as  ordinary  income.  The tax basis in the  Annuity  may be based on the
tax-basis from a prior contract in the case of a 1035 exchange or other qualifying transfer.






CAN I WITHDRAW A PORTION OF MY ANNUITY?
Yes, you can make a withdrawal during the accumulation period.

|X|      To meet liquidity  needs,  you can withdraw a limited amount from your Annuity during each of Annuity Years 1-7 without a CDSC
         being  applied.  We call this the "Free  Withdrawal"  amount.  The Free  Withdrawal  amount is not  available if you choose to
         surrender  your  Annuity.  Amounts  withdrawn  as a Free  Withdrawal  do not  reduce  the amount of CDSC that may apply upon a
         subsequent withdrawal or surrender of the Annuity.  The minimum Free Withdrawal you may request is $100.

|X|      You can also make  withdrawals  in excess of the Free  Withdrawal  amount.  We call this a  "Partial  Withdrawal."  The amount
         that you may withdraw will depend on the Annuity's  Surrender  Value. The Surrender Value is equal to your Account Value minus
         any  CDSC,  the  Annual  Maintenance  Fee,  the Tax  Charge  and any  Market  Value  Adjustment  that may  apply to any  Fixed
         Allocations.  After any Partial  Withdrawal,  your Annuity must have a Surrender Value of at least $1,000, or we may treat the
         Partial  Withdrawal  request as a request to fully surrender your Annuity.  The minimum Partial  Withdrawal you may request is
         $100.

When we determine if a CDSC applies to Partial  Withdrawals and Systematic  Withdrawals,  we will first determine what, if any, amounts
qualify as a Free  Withdrawal.  Those amounts are not subject to the CDSC.  Partial  Withdrawals  or Systematic  Withdrawals of amounts
greater than the maximum Free Withdrawal amount will be subject to a CDSC.

You may request a withdrawal  for an exact dollar  amount after  deduction  of any CDSC that  applies  (called a "net  withdrawal")  or
request a gross  withdrawal  from which we will deduct any CDSC that  applies,  resulting  in less money being  payable to you than the
amount you  requested.  If you  request a net  withdrawal,  the amount  deducted  from your  Account  Value to pay the CDSC may also be
subject to a CDSC.

Partial Withdrawals may also be available following annuitization but only if you choose certain annuity payment options.


To  request  the forms  necessary  to make a  withdrawal  from your  Annuity,  call  1-800-766-4530  or visit our  Internet  Website at
www.americanskandia.com.

HOW MUCH CAN I WITHDRAW AS A FREE WITHDRAWAL?
The Free  Withdrawal  provision  that  applies to your  Annuity  depends on whether  your  Annuity is used as a funding  vehicle  for a
qualified  plan under Section 401 of the Code. As of the date of this  Prospectus,  we are no longer  offering the Annuity for use with
Section 401 plans.

All Annuities (except Section 401 plans)
The maximum Free Withdrawal amount during any Annuity Year is the greater of:
|X|      the "Growth" in the Annuity; or
|X|      10% of Purchase  Payments that, as of the date of the withdrawal,  have been invested for less than the CDSC period (with your
     Annuity, seven (7) years).  The 10% amount is not cumulative.

Section 401 plans only
The maximum Free Withdrawal amount during any Annuity Year is the greater of:
|X|      the "Growth" in the Annuity; or
|X|      20% of Purchase  Payments that, as of the date of the withdrawal,  have been invested for less than the CDSC period (with your
     Annuity, seven (7) years).  The 10% amount is not cumulative.

"Growth"  equals the current  Account  Value less all Purchase  Payments that have been invested for less than the CDSC period and have
not been previously withdrawn.

NOTE: Free  withdrawals do not reduce the amount of any CDSC that would apply upon a partial  withdrawal or subsequent  surrender.  The
minimum Free Withdrawal you may request is $100.

Examples
Assume you make an initial Purchase  Payment of $10,000 and make no additional  Purchase  Payments.  Assume that in Annuity Year 2, due
to positive  investment  performance,  your  Account  Value is $11,500.  Your maximum  Free  Withdrawal  amount would be the greater of
Growth (Account Value minus Purchase  Payments = $1,500) or 10% of Purchase  Payments  ($1,000).  Your maximum Free  Withdrawal  amount
would therefore be $1,500.

Further  assume that in your third  Annuity  Year,  you choose to  surrender  your  Annuity.  Assume that after taking your $1,500 Free
Withdrawal in Year 2, your Account Value has  increased to $12,000 due to positive  investment  performance.  Upon  surrender,  we will
deduct a CDSC of 5.5% based on the number of years that your  Purchase  Payment  has been  invested  times the amount of your  Purchase
Payment that has not been  previously  withdrawn  (5.5% of $10,000 = $550).  The amount of the previous Free Withdrawal was not subject
to a CDSC when  withdrawn.  Therefore,  upon  surrender,  the amount of the entire  Purchase  Payment is subject to the CDSC. You would
receive $11,450 minus the Annual Maintenance Fee.

When we determine if a CDSC applies to Partial  Withdrawals and Systematic  Withdrawals,  we will first determine what, if any, amounts
qualify as a Free  Withdrawal.  Those  amounts are not subject to the CDSC.  Partial  Withdrawal  or  Systematic  Withdrawal of amounts
greater than the maximum Free Withdrawal amount will be subject to a CDSC.

IS THERE A CHARGE FOR A PARTIAL WITHDRAWAL?
A CDSC may be  assessed  against a Partial  Withdrawal  during the  accumulation  period.  Whether a CDSC  applies and the amount to be
charged  depends on whether  the  Partial  Withdrawal  exceeds  any Free  Withdrawal  amount  and, if so, the number of years that have
elapsed since the Purchase Payment being withdrawn has been invested in the Annuity.

1.       If you request a Partial  Withdrawal  we determine if the amount you  requested  is available as a Free  Withdrawal  (in which
     case it would not be subject to a CDSC);

2.   If the amount requested exceeds the available Free Withdrawal amount:
|X|      First,  we withdraw the amount from Purchase  Payments  that have been invested for longer than the CDSC period,  if any (with
         your Annuity, seven (7) years);
|X|      Second,  we withdraw  the  remaining  amount from the  Purchase  Payments  that are still  subject to a CDSC.  We withdraw the
         "oldest" of your Purchase Payments first so that the lowest CDSC will apply to the amount withdrawn.

     Any CDSC will only apply to the amount withdrawn that exceeds the Free Withdrawal amount.

     For purposes of calculating  the CDSC on a partial  withdrawal,  the Purchase  Payments  being  withdrawn may be greater than your
     remaining  Account  Value or the  amount  of your  withdrawal  request.  This is most  likely  to occur  if you  have  made  prior
     withdrawals under the Free Withdrawal provision or if your Account Value has declined in value due to negative market performance.

3.   If the amount  requested  exceeds the amounts  available  under Item #2 above,  we withdraw  the  remaining  amount from any other
     Account Value.

CAN I MAKE PERIODIC WITHDRAWALS FROM THE ANNUITY DURING THE ACCUMULATION PERIOD?
Yes. We call these "Systematic  Withdrawals."  You can receive  Systematic  Withdrawals of earnings only,  principal plus earnings or a
flat dollar amount.  Systematic  Withdrawals  may be subject to a CDSC. We will determine  whether a CDSC applies and the amount in the
same way as we would for a Partial Withdrawal.

Systematic  Withdrawals can be made from Account Value allocated to the variable  investment options or Fixed  Allocations.  Generally,
Systematic  Withdrawals from Fixed Allocations are limited to earnings accrued after the program of Systematic  Withdrawals  begins, or
payments of fixed dollar  amounts that do not exceed such  earnings.  Systematic  Withdrawals  are  available on a monthly,  quarterly,
semi-annual  or annual  basis.  The  Surrender  Value of your  Annuity  must be at least  $20,000  before we will  allow you to begin a
program of Systematic Withdrawals.

The minimum  amount for each  Systematic  Withdrawal  is $100.  If any  scheduled  Systematic  Withdrawal is for less than $100, we may
postpone the withdrawal and add the expected amount to the amount that is to be withdrawn on the next scheduled Systematic Withdrawal.

DO YOU OFFER A PROGRAM FOR WITHDRAWALS UNDER SECTION 72(t) OF THE INTERNAL REVENUE CODE?
Yes. If your Annuity is used as a funding vehicle for certain  retirement  plans that receive special tax treatment under Sections 401,
403(b) or 408 of the Code,  Section  72(t) of the Code may provide an exception to the 10% penalty tax on  distributions  made prior to
age 59 1/2if you elect to receive  distributions as a series of "substantially  equal periodic  payments".  Distributions  received under
this  provision  in any Annuity  Year that exceed the maximum  amount  available  as a free  withdrawal  will be subject to a CDSC.  To
request a program  that  complies  with Section  72(t),  you must provide us with  certain  required  information  in writing on a form
acceptable to us. We may require  advance  notice to allow us to calculate  the amount of 72(t)  withdrawals.  The  Surrender  Value of
your Annuity must be at least $20,000  before we will allow you to begin a program for  withdrawals  under Section  72(t).  The minimum
amount for any such withdrawal is $100.

You may also annuitize  your contract and begin  receiving  payments for the remainder of your life (or life  expectancy) as a means of
receiving income payments before age 59 1/2that are not subject to the 10% penalty.

WHAT ARE MINIMUM DISTRIBUTIONS AND WHEN WOULD I NEED TO MAKE THEM?
(See "Tax Considerations" for a further discussion of Minimum Distributions.)

Minimum  Distributions  are a type of Systematic  Withdrawal we allow to meet distribution  requirements  under Sections 401, 403(b) or
408 of the Code.  Under the Code,  you may be required to begin  receiving  periodic  amounts from your Annuity.  In such case, we will
allow you to make  Systematic  Withdrawals  in amounts that satisfy the minimum  distribution  rules under the Code. We do not assess a
CDSC on Minimum  Distributions  from your Annuity if you are required by law to take such  Minimum  Distributions  from your Annuity at
the time it is taken.  However,  a CDSC may be  assessed  on that  portion of a  Systematic  Withdrawal  that is taken to  satisfy  the
minimum  distribution  requirements  in relation to other  savings or  investment  plans under  other  qualified  retirement  plans not
maintained with American Skandia.

The amount of the required Minimum  Distribution for your particular  situation may depend on other annuities,  savings or investments.
We will only  calculate  the amount of your required  Minimum  Distribution  based on the value of your  Annuity.  We require three (3)
days advance  written notice to calculate and process the amount of your  payments.  You may elect to have Minimum  Distributions  paid
out monthly,  quarterly,  semi-annually or annually.  The $100 minimum that applies to Systematic Withdrawals does not apply to Minimum
Distributions.

You may also annuitize  your contract and begin  receiving  payments for the remainder of your life (or life  expectancy) as a means of
receiving income payments and satisfying the Minimum Distribution requirements under the Code.

CAN I SURRENDER MY ANNUITY FOR ITS VALUE?
Yes.  During the  accumulation  period you can  surrender  your Annuity at any time.  Upon  surrender,  you will receive the  Surrender
Value.  Upon surrender of your Annuity, you will no longer have any rights under the Annuity.

For purposes of calculating the CDSC on surrender,  the Purchase  Payments being  withdrawn may be greater than your remaining  Account
Value or the  amount  of your  withdrawal  request.  This is most  likely to occur if you have made  prior  withdrawals  under the Free
Withdrawal provision or if your Account Value has declined in value due to negative market performance.

Under certain annuity payment options, you may be allowed to surrender your Annuity for its then current value.


To request the forms necessary to surrender your Annuity, call 1-800-766-4530 or visit our Internet Website at
www.americanskandia.com.

WHAT TYPES OF ANNUITY OPTIONS ARE AVAILABLE?
We currently make annuity  options  available that provide fixed annuity  payments,  variable  payments or adjustable  payments.  Fixed
options  provide the same  amount with each  payment.  Variable  options  generally  provide a payment  which may  increase or decrease
depending on the investment  performance of the  Sub-accounts.  However,  currently,  we also make a variable payment option that has a
guarantee  feature.  Adjustable  options provide a fixed payment that is periodically  adjusted based on current  interest rates. We do
not guarantee to make any annuity payment options  available in the future.  For additional  information on annuity payment options you
may request a Statement of Additional Information.

When you  purchase an Annuity,  or at a later date,  you may choose an Annuity  Date,  an annuity  option and the  frequency of annuity
payments.  You may change your  choices up to 30 days before the  Annuity  Date.  A maximum  Annuity  Date may be required by law.  Any
change to these  options must be in writing.  The Annuity Date may depend on the annuity  option you choose.  Certain  annuity  options
may not be available depending on the age of the Annuitant.

Certain of these annuity  options may be available to  Beneficiaries  who choose to receive the Death  Benefit  proceeds as a series of
payments instead of a lump sum payment.

Option 1
--------
Payments for Life:  Under this option,  income is payable  periodically  until the death of the "key life".  The "key life" (as used in
this section) is the person or persons upon whose life annuity  payments are based. No additional  annuity  payments are made after the
death of the key life.  Since no minimum number of payments is guaranteed,  this option offers the largest amount of periodic  payments
of the life  contingent  annuity  options.  It is possible  that only one  payment  will be payable if the death of the key life occurs
before the date the second  payment was due,  and no other  payments  nor death  benefits  would be payable.  This Option is  currently
available on a fixed or variable basis.  Under this option, you cannot make a partial or full surrender of the annuity.

Option 2
--------
Payments  Based on Joint Lives:  Under this option,  income is payable  periodically  during the joint  lifetime of two key lives,  and
thereafter  during the remaining  lifetime of the survivor,  ceasing with the last payment prior to the  survivor's  death.  No minimum
number of payments is  guaranteed  under this option.  It is possible that only one payment will be payable if the death of all the key
lives occurs  before the date the second  payment was due, and no other  payments or death  benefits  would be payable.  This Option is
currently available on a fixed or variable basis.  Under this option, you cannot make a partial or full surrender of the annuity.

Option 3
--------
Payments for Life with a Certain  Period:  Under this option,  income is payable until the death of the key life.  However,  if the key
life dies before the end of the period selected (5, 10 or 15 years),  the remaining  payments are paid to the Beneficiary until the end
of such  period.  This Option is  currently  available  on a fixed or variable  basis.  If you elect to receive  payments on a variable
basis under this  option,  you can request  partial or full  surrender  of the annuity and receive its then current cash value (if any)
subject to our rules.

Option 4
--------
Fixed Payments for a Certain Period:  Under this option,  income is payable  periodically for a specified number of years. If the payee
dies  before the end of the  specified  number of years,  the  remaining  payments  are paid to the  Beneficiary  until the end of such
period.  Note that under this option,  payments are not based on any  assumptions of life  expectancy.  Therefore,  that portion of the
Insurance  Charge  assessed to cover the risk that key lives outlive our  expectations  provides no benefit to an Owner  selecting this
option.  Under this option, you cannot make a partial or full surrender of the annuity.

Option 5
--------
Variable Payments for Life with a Cash Value:  Under this option,  benefits are payable  periodically  until the death of the key life.
Benefits may increase or decrease  depending  on the  investment  performance  of the  Sub-accounts.  This option has a cash value that
also  varies  with the  investment  performance  of the  Sub-account.  The cash value  provides a "cushion"  from  volatile  investment
performance so that negative  investment  performance  does not  automatically  result in a decrease in the annuity payment each month,
and positive  investment  performance  does not  automatically  result in an increase in the annuity  payment  each month.  The cushion
generally  "stabilizes"  monthly annuity payments.  Any cash value remaining on the death of the key life is paid to the Beneficiary in
a lump sum or as periodic  payments.  Under this option,  you can request partial or full surrender of the annuity and receive its then
current cash value (if any) subject to our rules.

Option 6
--------
Variable  Payments for Life with a Cash Value and Guarantee:  Under this option,  benefits are payable as described in Option 5; except
                                                                                                                                 ------
that,  while the key life is alive,  the annuity  payment will not be less than a guaranteed  amount,  which  generally is equal to the
first annuity  payment.  We charge an additional  amount for this guarantee.  Under this option,  any cash value remaining on the death
of the key life is paid to the Beneficiary in a lump sum or as periodic  payments.  Under this option,  you can request partial or full
surrender of the annuity and receive its then current cash value (if any) subject to our rules.

We may make additional annuity payment options available in the future.

HOW AND WHEN DO I CHOOSE THE ANNUITY PAYMENT OPTION?
Unless  prohibited  by law, we require that you elect either a life annuity or an annuity with a certain  period of at least 5 years if
any CDSC would apply were you to surrender your Annuity on the Annuity Date.  Therefore,  making a purchase  payment within seven years
of the Annuity Date limits your annuity  payment  options.  Certain  annuity  payment options may not be available if your Annuity Date
occurs during the period that a CDSC would apply.

If you have not provided us with your Annuity Date or annuity payment option in writing, then:
|X|      the Annuity Date will be the first day of the calendar month following the later of the Annuitant's 85th birthday or the
     fifth anniversary of our receipt of your request to purchase an Annuity; and
|X|      the annuity payments, where allowed by law, will be calculated on a fixed basis under Option 3, Payments for Life with 10
     years certain.






HOW ARE ANNUITY PAYMENTS CALCULATED?

Fixed Annuity Payments (Options 1-4)
If you choose to receive fixed annuity payments,  you will receive equal  fixed-dollar  payments  throughout the period you select. The
amount of the fixed payment will vary depending on the annuity payment option and payment  frequency you select.  Generally,  the first
annuity  payment is  determined  by  multiplying  the  Account  Value,  minus any state  premium  taxes  that may apply,  by the factor
determined  from our table of annuity  rates.  The table of annuity rates differs based on the type of annuity chosen and the frequency
of payment  selected.  Our rates will not be less than our guaranteed  minimum rates.  These guaranteed  minimum rates are derived from
the 1983a  Individual  Annuity  Mortality  Table with an assumed  interest rate of 3% per annum.  Where  required by law or regulation,
such  annuity  table will have  rates that do not differ  according  to the gender of the key life.  Otherwise,  the rates will  differ
according to the gender of the key life.

Variable Annuity Payments
We offer three  different  types of variable  annuity  payment  options.  The first annuity  payment will be calculated  based upon the
assumed  investment  return  ("AIR").  You  select the AIR  before we start to make  annuity  payments.  You will not  receive  annuity
payments  until you choose an AIR.  The  remaining  annuity  payments  will  fluctuate  based on the  performance  of the  Sub-accounts
relative to the AIR,  as well as,  other  factors  described  below.  The greater the AIR,  the greater the first  annuity  payment.  A
higher AIR may result in smaller  potential  growth in the annuity  payments.  A lower AIR results in a lower initial annuity  payment.
Within payment options 1-3, if the Sub-accounts  you choose perform exactly the same as the AIR, then subsequent  annuity payments will
be the same as the first  annuity  payment.  If the  Sub-accounts  you choose  perform  better than the AIR,  then  subsequent  annuity
payments will be higher than the first annuity  payment.  If the  Sub-accounts  you choose perform worse than the AIR, then  subsequent
annuity  payments will be lower than the first.  Within payment  options 5 and 6, the cash value for the Annuitant  (while alive) and a
variable  period of time during which annuity  payments will be made whether or not the Annuitant is still alive are adjusted  based on
the  performance of the  Sub-accounts  relative to the AIR;  however,  subsequent  annuity  payments do not always increase or decrease
based on the performance of the Sub-accounts relative to the AIR.


|X|      Variable Payments (Options 1-3)
         -----------------
         We calculate  each annuity  payment  amount by  multiplying  the number of units  scheduled to be redeemed under a schedule of
         units for each  Sub-account by the Unit Value of each  Sub-account  on the annuity  payment date. We determine the schedule of
         units  based on your  Account  Value  (minus any premium tax that  applies) at the time you elect to begin  receiving  annuity
         payments.  The schedule of units will vary based on the annuity  payment  option  selected,  the length of any certain  period
         (if  applicable),  the  Annuitant's  age and gender (if annuity  payments are due for the life of the  Annuitant) and the Unit
         Value of the Sub-accounts  you initially  selected on the Issue Date. The calculation is performed for each  Sub-account,  and
         the sum of the Sub-account  calculations equals the amount of your annuity payment.  Other than to fund annuity payments,  the
         number  of units  allocated  to each  Sub-account  will not  change  unless  you  transfer  among the  Sub-accounts  or make a
         withdrawal (if allowed).  You can select one of three AIRs for these options: 3%, 5% or 7%.

|X|      Stabilized Variable Payments (Option 5)
         ----------------------------
         This option  provides  guaranteed  payments for life, a cash value for the Annuitant  (while  alive) and a variable  period of
         time during which  annuity  payments  will be made  whether or not the  Annuitant  is still  alive.  We calculate  the initial
                                                                                                                                -------
         annuity  payment  amount by  multiplying  the number of units  scheduled to be redeemed  under a schedule of units by the Unit
         Values  determined on the  annuitization  date. The schedule of units is established  for each  Sub-account  you choose on the
         annuitization  date based on the applicable  benchmark  rate,  meaning the AIR, and the annuity  factors.  The annuity factors
         reflect our  assumptions  regarding  the costs we expect to bear in  guaranteeing  payments for the lives of the Annuitant and
         will depend on the benchmark  rate,  the  annuitant's  attained age and gender (where  permitted).  Unlike  variable  payments
         (described  above) where each payment can vary based on Sub-account  performance,  this payment option  cushions the immediate
         impact of Sub-account  performance  by adjusting the length of the time during which annuity  payments will be made whether or
         not the Annuitant is alive while generally  maintaining a level annuity payment amount.  Sub-account  performance that exceeds
         a benchmark rate will generally  extend this time period,  while  Sub-account  performance  that is less than a benchmark rate
         will generally  shorten the period.  If the period reaches zero and the Annuitant is still alive,  Annuity Payments  continue,
         however,  the annuity  payment  amount will vary  depending  on  Sub-account  performance,  similar to  conventional  variable
         payments.  The AIR for this option is 4%.

|X|      Stabilized Variable Payments with a Guaranteed Minimum (Option 6)
         ------------------------------------------------------
         This option provides  guaranteed  payments for life in the same manner as Stabilized  Variable Payments  (described above). In
         addition to the  stabilization  feature,  this option also guarantees that variable annuity payments will not be less than the
         initial annuity payment amount regardless of Sub-account performance.  The AIR for this option is 3%.

The variable  annuity  payment  options are described in greater detail in a separate  prospectus  which will be provided to you at the
time you elect one of the variable annuity payment options.

Adjustable Annuity Payments
We may make an adjustable  annuity payment option  available.  Adjustable  annuity  payments are calculated  similarly to fixed annuity
payments except that on every fifth (5th) anniversary of receiving  annuity payments,  the annuity payment amount is adjusted upward or
downward  depending on the rate we are currently  crediting to annuity payments.  The adjustment in the annuity payment amount does not
affect the duration of remaining annuity payments, only the amount of each payment.

DEATH BENEFIT

WHAT TRIGGERS THE PAYMENT OF A DEATH BENEFIT?

The Annuity  provides a Death Benefit  during its  accumulation  period.  The Insurance  Charge we deduct daily from your Account Value
allocated to the  Sub-accounts  is used, in part, to pay us for the risk we assume in providing the Death Benefit  guarantee  under the
Annuity.  If the Annuity is owned by one or more natural  persons,  the Death  Benefit is payable upon the first death of an Owner.  If
the Annuity is owned by an entity,  the Death Benefit is payable upon the Annuitant's  death, if there is no Contingent  Annuitant.  If
a Contingent  Annuitant was designated before the Annuitant's  death and the Annuitant dies, then the Contingent  Annuitant becomes the
Annuitant  and a Death  Benefit  will not be paid at that time.  The person upon whose  death the Death  Benefit is paid is referred to
below as the "decedent."

The amount of the Death Benefit may be reduced by the amount of any remaining Contingent Deferred Sales Charge if the decedent was
age 75 or older at the time of death.

The Death Benefit depends on the decedent's age on the date of death:

         If death occurs before the decedent's age 85:  The Death Benefit is the greatest of:

|X|      The sum of your Account Value in the variable investment options and your Interim Value in the Fixed Allocations;
|X|      The sum of all Purchase Payments less the sum of all withdrawals;
|X|      The Account  Value on the later of the Issue Date of the Annuity and each fifth  anniversary  of the Issue Date of the Annuity
               immediately  preceding the date of death,  plus the sum of all Purchase  Payments less the sum of all withdrawals,  made
               subsequent to such anniversary.

         If death  occurs when the  decedent is age 85 or older:  The Death  Benefit is the sum of your  Account  Value in the variable
         investment options and your Interim Value in the fixed allocations.

AMERICAN SKANDIA'S ANNUITY REWARDS

What is the Annuity Rewards benefit?
The  Annuity  Rewards  benefit  offers  Owners the  ability to capture  any market  gains  since the Issue Date of their  Annuity as an
enhancement  to their current Death Benefit so their  Beneficiaries  will not receive less than the Annuity's  value as of the date the
Owner elects the benefit.  Under the Annuity  Rewards  benefit,  American  Skandia  guarantees  that the Death Benefit will not be less
than:

         your Account  Value in the variable  investment  options plus the Interim Value in any Fixed  Allocations  as of the effective
                  date of the Owner's election

         MINUS any proportional withdrawals* following the date of election
         -----

         PLUS any additional Purchase Payments applied to the Annuity following the date of election.
         ----

*    "Proportional  withdrawals"  are determined by calculating  the percentage of the Account Value that each  withdrawal  represented
     when withdrawn.  For example,  a withdrawal of 50% of your Account Value would be treated as a 50% reduction in the amount payable
     under the Death Benefit.

The Annuity  Rewards Death Benefit  enhancement  does not affect the basic Death Benefit  calculation  under the Annuity.  If the Death
Benefit amount payable under your  Annuity's  basic Death Benefit is greater than the enhanced Death Benefit under the Annuity  Rewards
benefit on the date the Death Benefit is calculated, your Beneficiary will receive the higher amount.

Who is eligible for the Annuity Rewards benefit?
Owners can elect the Annuity  Rewards Death Benefit  enhancement  following the seventh (7th)  anniversary of the Annuity's Issue Date.
However,  the election is subject to the  requirement  that their  Account  Value on the election  date is greater than the amount that
would be payable to their  Beneficiary  under the Death  Benefit  provided  under the Annuity as of the election  date.  If an Owner is
ineligible when he or she applies for the optional  benefit,  the Owner can elect the Annuity Rewards Death Benefit  enhancement on any
subsequent  date if they  otherwise  qualify.  The  election  must occur before  annuity  payments  begin.  An Owner can only elect the
Annuity  Rewards  Death  Benefit  enhancement  once.  There is no  additional  charge for electing the Annuity  Rewards  Death  Benefit
enhancement.

PAYMENT OF DEATH BENEFITS

Payment of Death Benefit to Beneficiary
Except in the case of a spousal Beneficiary, in the event of your death, the death benefit must be distributed:
|X|      as a lump sum amount at any time within five (5) years of the date of death; or
|X|      as a series  of  annuity  payments  not  extending  beyond  the life  expectancy  of the  Beneficiary  or over the life of the
         Beneficiary.  Payments under this option must begin within one year of the date of death.

Unless you have made an election  prior to death benefit  proceeds  becoming due, a Beneficiary  can elect to receive the Death Benefit
proceeds as a series of fixed annuity  payments  (annuity  payment options 1-4) or as a series of variable  annuity  payments  (annuity
payment options 1-3 or 5 and 6).  See the section entitled "What Types of Annuity Options are Available."

Spousal Beneficiary - Assumption of Annuity
You may name your  spouse as your  Beneficiary.  If you and your  spouse  own the  Annuity  jointly,  we assume  that the sole  primary
Beneficiary  will be the surviving  spouse unless you elect an  alternative  Beneficiary  designation.  Unless you elect an alternative
Beneficiary  designation,  the spouse  Beneficiary  may elect to assume  ownership of the Annuity  instead of taking the Death  Benefit
payment.  Any Death Benefit  (including any optional Death  Benefits) that would have been payable to the  Beneficiary  will become the
new Account  Value as of the date we receive due proof of death and any required  proof of a spousal  relationship.  As of the date the
assumption is  effective,  the  surviving  spouse will have all the rights and benefits that would be available  under the Annuity to a
new  purchaser of the same  attained  age. For purposes of  determining  any future Death  Benefit for the  surviving  spouse,  the new
Account  Value  will be  considered  as the  initial  Purchase  Payment.  No CDSC will apply to the new  Account  Value.  However,  any
additional  Purchase  Payments  applied after the date the  assumption is effective  will be subject to all  provisions of the Annuity,
including any CDSC that may apply to the additional Purchase Payments.

See the section  entitled  "Managing  Your  Annuity - Spousal  Contingent  Annuitant"  for a discussion  of the  treatment of a spousal
Contingent Annuitant in the case of the death of the Annuitant in an entity owned Annuity.

IRA Beneficiary Continuation Option
The Code  provides  for  alternative  death  benefit  payment  options  when an Annuity is used as an IRA,  403(b) or other  "qualified
investment"  that requires  Minimum  Distributions.  Upon the Owner's death under an IRA,  403(b) or other  "qualified  investment",  a
Beneficiary may generally elect to continue the Annuity and receive  Minimum  Distributions  under the Annuity instead of receiving the
death  benefit in a single  payment.  The available  payment  options will depend on whether the Owner died on or before the date he or
she was required to begin receiving Minimum Distributions under the Code and whether the Beneficiary is the surviving spouse.

|X|      If death occurs before the date Minimum  Distributions  must begin under the Code, the Death Benefit can be paid out in either
         a lump sum, within five years from the date of death,  or over the life or life  expectancy of the designated  Beneficiary (as
         long as  payments  begin  by  December  31st of the  year  following  the  year  of  death).  However,  if the  spouse  is the
         Beneficiary,  the Death Benefit can be paid out over the life or life  expectancy  of the spouse with such payments  beginning
         no earlier  than  December  31st of the year  following  the year of death or December  31st of the year in which the deceased
         would have reached age 70 1/2, which ever is later.

|X|      If death occurs after the date Minimum  Distributions  must begin under the Code,  the Death Benefit must be paid out at least
         as rapidly as under the method then in effect.

A Beneficiary  has the  flexibility to take out more each year than required under the Minimum  Distribution  rules.  Until  withdrawn,
amounts in an IRA,  403(b) or other  "qualified  investment"  continue  to be tax  deferred.  Amounts  withdrawn  each year,  including
amounts  that are  required  to be  withdrawn  under the Minimum  Distribution  rules,  are  subject to tax.  You may wish to consult a
professional  tax  advisor for tax advice as to your  particular  situation.  See the  section  entitled  "How are  Distributions  From
Qualified Contracts Taxed? - Minimum Distributions after age 70 1/2."






Upon election of this IRA Beneficiary Continuation option:

|X|      the Annuity contract will be continued in the Owner's name, for the benefit of the Beneficiary.
|X|      the Account  Value will be equal to any Death  Benefit  that would have been  payable to the  Beneficiary  if they had taken a
              lump sum distribution.
|X|      the Beneficiary may request  transfers among  Sub-accounts,  subject to the same limitations and restrictions  that applied to
              the Owner.  NOTE: The Sub-accounts offered under the IRA Beneficiary Continuation option may be limited.
|X|      no additional Purchase Payments can be applied to the Annuity.
|X|      the basic Death Benefit will no longer apply to the Beneficiary.
|X|      the Beneficiary can request a withdrawal of all or a portion of the Account Value at any time without application of a CDSC.
|X|      upon the death of the  Beneficiary,  any  remaining  Account  Value will be paid in a lump sum to the  person(s)  named by the
              Beneficiary.
|X|      all amounts in the Annuity must be paid out to the Beneficiary according to the Minimum Distribution rules described above.

Please contact  American  Skandia for additional  information on the  availability,  restrictions  and limitations that will apply to a
Beneficiary under the IRA Beneficiary Continuation option.

Are there any exceptions to these rules for paying the Death Benefit?
Yes, there are exceptions  that apply no matter how your Death Benefit is calculated.  There are exceptions to the Death Benefit if the
decedent  was not the Owner or Annuitant  as of the Issue Date and did not become the Owner or  Annuitant  due to the prior  Owner's or
Annuitant's  death.  Any minimum  Death  Benefit that applies  will be  suspended  for a two-year  period from the date he or she first
became Owner or  Annuitant.  After the two-year  suspension  period is  completed,  the Death Benefit is the same as if this person had
been an Owner or Annuitant on the Issue Date.


When do you determine the Death Benefit?
We determine the amount of the Death Benefit as of the date we receive "due proof of death",  any  instructions we require to determine
the method of payment and any other  written  representations  we require to determine  the proper  payment of the Death Benefit to all
Beneficiaries.  "Due proof of death" may include a certified  copy of a death  certificate,  a certified copy of a decree of a court of
competent  jurisdiction as to the finding of death or other  satisfactory  proof of death.  Upon our receipt of "due proof of death" we
automatically  transfer  the Death  Benefit to the AST Money Market  Sub-account  until we further  determine  the universe of eligible
Beneficiaries.  Once the universe of eligible  Beneficiaries  has been  determined  each eligible  Beneficiary  may allocate his or her
eligible share of the Death Benefit to the Sub-accounts according to our rules.

Each  Beneficiary  must make an election as to the method they wish to receive their portion of the Death  Benefit.  Absent an election
of a Death Benefit payment  method,  no Death Benefit can be paid to the  Beneficiary.  We may require  written  acknowledgment  of all
named  Beneficiaries  before we can pay the Death  Benefit.  During the period  from the date of death  until we receive  all  required
paper work, the amount of the Death Benefit may be subject to market fluctuations.


VALUING YOUR INVESTMENT

HOW IS MY ACCOUNT VALUE DETERMINED?
During the  accumulation  period,  the Annuity has an Account Value.  The Account Value is determined  separately for each  Sub-account
allocation and for each Fixed  Allocation.  The Account Value is the sum of the values of each Sub-account  allocation and the value of
each Fixed  Allocation.  The Account  Value does not reflect any CDSC that may apply to a withdrawal  or  surrender.  When  determining
the Account  Value on a day more than 30 days prior to a Fixed  Allocation's  Maturity  Date,  the Account Value may include any Market
Value Adjustment that would apply to a Fixed Allocation (if withdrawn or transferred) on that day.

WHAT IS THE SURRENDER VALUE OF MY ANNUITY?
The Surrender Value of your Annuity is the value  available to you on any day during the  accumulation  period.  The Surrender Value is
equal to your  Account  Value minus any CDSC and the Annual  Maintenance  Fee. The  Surrender  Value will also include any Market Value
Adjustment that may apply.

HOW AND WHEN DO YOU VALUE THE SUB-ACCOUNTS?
When you allocate Account Value to a Sub-Account,  you are purchasing units of the Sub-account.  Each Sub-account  invests  exclusively
in shares of an underlying  Portfolio.  The value of the Units fluctuate with the market  fluctuations of the Portfolios.  The value of
the Units also reflect the daily accrual for the Insurance Charge.

Each  Valuation  Day,  we  determine  the price for a Unit of each  Sub-account,  called the "Unit  Price."  The Unit Price is used for
determining  the  value of  transactions  involving  Units of the  Sub-accounts.  We  determine  the  number of Units  involved  in any
transaction by dividing the dollar value of the transaction by the Unit Price of the Sub-account as of the Valuation Day.

Example
Assume you allocate  $5,000 to a  Sub-account.  On the Valuation  Day you make the  allocation,  the Unit Price is $14.83.  Your $5,000
buys 337.154 Units of the  Sub-account.  Assume that later,  you wish to transfer $3,000 of your Account Value out of that  Sub-account
and into  another  Sub-account.  On the  Valuation  Day you  request  the  transfer,  the Unit Price of the  original  Sub-account  has
increased to $16.79.  To transfer  $3,000,  we sell 178.677  Units at the current Unit Price,  leaving you 158.477  Units.  We then buy
$3,000 of Units of the new Sub-account at the Unit Price of $17.83.  You would then have 168.255 Units of the new Sub-account.

HOW DO YOU VALUE FIXED ALLOCATIONS?
During the Guarantee  Period,  we use the concept of an Interim  Value.  The Interim Value can be calculated on any day and is equal to
the initial value  allocated to a Fixed  Allocation plus all interest  credited to a Fixed  Allocation as of the date  calculated.  The
Interim  Value does not include the impact of any Market  Value  Adjustment.  If you made any  transfers  or  withdrawals  from a Fixed
Allocation,  the Interim  Value will reflect the  withdrawal of those  amounts and any interest  credited to those amounts  before they
were  withdrawn.  To determine the Account Value of a Fixed  Allocation on any day other than its Maturity Date or within 30 days prior
to its Maturity Date, we multiply the Account Value of the Fixed Allocation times the Market Value Adjustment factor.

WHEN DO YOU PROCESS AND VALUE TRANSACTIONS?
American  Skandia is generally open to process  financial  transactions  on those days that the New York Stock Exchange  (NYSE) is open
for trading.  There may be  circumstances  where the NYSE does not open on a regularly  scheduled  date or time or closes at an earlier
time  than  scheduled  (normally  4:00 p.m.  EST).  Financial  transactions  requested  before  the  close of the NYSE  which  meet our
requirements  will be  processed  according  to the value next  determined  following  the close of  business.  Financial  transactions
requested  on a  non-business  day or after the close of the NYSE  will be  processed  based on the  value  next  computed  on the next
business day. There may be  circumstances  when the opening or closing time of the NYSE is different than other major stock  exchanges,
such as NASDAQ or the American Stock  Exchange.  Under such  circumstances,  the closing time of the NYSE will be used when valuing and
processing transactions.

There may be circumstances where the NYSE is open, however,  due to inclement weather,  natural disaster or other circumstances  beyond
our control,  our offices may be closed or our business  processing  capabilities may be restricted.  Under those  circumstances,  your
Account  Value may  fluctuate  based on  changes in the Unit  Values,  but you may not be able to  transfer  Account  Value,  or make a
purchase or redemption request.

The NYSE is closed on the following  nationally  recognized  holidays:  New Year's Day, Martin Luther King, Jr. Day,  Presidents'  Day,
Good Friday,  Memorial  Day,  Independence  Day,  Labor Day,  Thanksgiving,  and  Christmas.  On those  dates,  we will not process any
financial transactions involving purchase or redemption orders.

American Skandia will also not process financial transactions involving purchase or redemption orders or transfers on any day that:
|X|      trading on the NYSE is restricted;
|X|      an emergency exists making redemption or valuation of securities held in the separate account impractical; or
|X|      the SEC, by order, permits the suspension or postponement for the protection of security holders.

Initial Purchase  Payments:  We are required to allocate your initial  Purchase  Payment to the Sub-accounts  within two (2) days after
we receive all of our  requirements  to issue the  Annuity.  If we do not have all the required  information  to allow us to issue your
Annuity,  we may retain the Purchase Payment while we try to reach you or your  representative  to obtain all of our  requirements.  If
we are unable to obtain all of our required  information  within five (5) days,  we are required to return the Purchase  Payment to you
at that time,  unless you  specifically  consent to our retaining the Purchase Payment while we gather the required  information.  Once
we obtain the required  information,  we will invest the Purchase Payment and issue the Annuity within two (2) days.  During any period
that we are trying to obtain the required information, your money is not invested.

Additional  Purchase  Payments:  We will apply any  additional  Purchase  Payments on the  Valuation  Day that we receive the  Purchase
Payment with satisfactory allocation instructions.

Scheduled  Transactions:  "Scheduled"  transactions include transfers under a Dollar Cost Averaging,  rebalancing,  or asset allocation
program,  Systematic  Withdrawals,  Minimum  Distributions or annuity payments.  Scheduled  transactions are processed and valued as of
the date they are  scheduled,  unless the scheduled day is not a Valuation  Day. In that case,  the  transaction  will be processed and
valued on Valuation Day prior to the scheduled transaction date.

Unscheduled  Transactions:  "Unscheduled"  transactions include any other non-scheduled  transfers and requests for Partial Withdrawals
or Free  Withdrawals or Surrenders.  Unscheduled  transactions  are processed and valued as of the Valuation Day we receive the request
at our Office and have all of the required information.

Death Benefits:  Death Benefit claims require our review and evaluation  before  processing.  We price such transactions as of the date
we receive at our Office all supporting documentation we require for such transactions and that are satisfactory to us.

Transactions in Rydex and ProFunds VP Sub-accounts:  Generally,  purchase or redemption orders or transfer requests must be received by
us by no later than the close of the NYSE to be processed on the current  Valuation Day.  However,  any purchase or redemption order or
transfer request  involving the Rydex or ProFunds VP Sub-accounts  must be received by us no later than one hour prior to any announced
closing of the applicable  securities  exchange  (generally,  3:00 p.m. Eastern time) to be processed on the current Valuation Day. The
"cut-off" time for such  financial  transactions  involving a Rydex or ProFunds VP Sub-account  will be extended to1/2hour prior to any
announced closing (generally,  3:30 p.m. Eastern time) for transactions  submitted  electronically  through American Skandia's Internet
website  (www.americanskandia.com).  You cannot  request a transaction  involving the purchase,  redemption or transfer of Units in one
of the Rydex or ProFunds VP  Sub-accounts  between the applicable  "cut-off" time and 4:00 p.m.  Transactions  received after 4:00 p.m.
will be treated as received by us on the next Valuation Day.

TAX CONSIDERATIONS

WHAT ARE SOME OF THE FEDERAL TAX CONSIDERATIONS OF THIS ANNUITY?
Following  is a brief  summary of some of the Federal tax  considerations  relating to this  Annuity.  However,  since the tax laws are
complex and tax  consequences are affected by your individual  circumstances,  this summary of our  interpretation  of the relevant tax
laws is not intended to be fully  comprehensive  nor is it intended as tax advice.  Therefore,  you may wish to consult a  professional
tax advisor for tax advice as to your particular situation.

HOW ARE AMERICAN SKANDIA AND THE SEPARATE ACCOUNTS TAXED?
The Separate  Accounts are taxed as part of American  Skandia.  American  Skandia is taxed as a life  insurance  company  under Part I,
subchapter L of the Code.  No taxes are due on interest,  dividends and  short-term  or long-term  capital gains earned by the Separate
Accounts with respect to the Annuities.

IN GENERAL, HOW ARE ANNUITIES TAXED?
Section 72 of the Code governs the taxation of annuities in general.  Taxation of the Annuity will depend in large part on:

1.       whether the Annuity is used by:
|X|      a qualified  pension plan,  profit sharing plan or other retirement  arrangement that is eligible for special  treatment under
         the Code (for purposes of this discussion, a "Qualified Contract"); or
|X|      an individual or a corporation, trust or partnership (a "Non-qualified Contract"); and

2.       whether the Owner is:
|X|      an individual person or persons; or
|X|      an entity including a corporation, trust or partnership.

Individual  Ownership:  If one or more  individuals own an Annuity,  the Owner of the Annuity is generally not taxed on any increase in
the  value of the  Annuity  until an  amount is  received  (a  "distribution").  This is  commonly  referred  to as "tax  deferral".  A
distribution  can be in the form of a lump sum payment  including  payment of a Death Benefit,  or in annuity payments under one of the
annuity payment options.  Certain other transactions may qualify as a distribution and be subject to taxation.

Entity  Ownership:  If the  Annuity is owned by an entity and is not a Qualified  Contract,  generally  the Owner of the  Annuity  must
currently  include any increase in the value of the Annuity during a tax year in its gross income.  An exception from current  taxation
applies for annuities  held by an employer with respect to a terminated  tax-qualified  retirement  plan, a trust holding an annuity as
an agent for a natural person,  or by a decedent's  estate by reason of the death of the decedent.  A tax-exempt entity for Federal tax
purposes may not be subject to income tax as a result of this provision.

HOW ARE DISTRIBUTIONS TAXED?
Distributions from an Annuity are taxed as ordinary income and not as capital gains.

Distributions  Before  Annuitization:  Distributions  received before annuity payments begin are generally treated as coming first from
"income on the contract" and then as a return of the  "investment  in the  contract".  The amount of any  distribution  that is treated
as receipt of "income on the  contract" is  includible  in the  taxpayer's  gross  income and taxable in the year it is  received.  The
amount of any distribution treated as a return of the "investment in the contract" is not includible in gross income.

|X|      "Income on the contract" is calculated by  subtracting  the taxpayer's  "investment in the contract" from the aggregate  value
     of all "related contracts" (discussed below).
|X|      "Investment  in the  contract"  is  equal  to  total  purchase  payments  for  all  "related  contracts"  minus  any  previous
     distributions  or  portions  of such  distributions  from such  "related  contracts"  that were not  includible  in gross  income.
     "Investment  in the contract" may be affected by whether an annuity or any "related  contract" was purchased as part of a tax-free
     exchange of life insurance,  endowment,  or annuity contracts under Section 1035 of the Code. The "investment in the contract" for
     a Qualified Contract will be considered zero for tax reporting purposes.

Distributions  After  Annuitization:  A portion of each  annuity  payment  received  on or after the  Annuity  Date will  generally  be
taxable.  The taxable  portion of each annuity  payment is determined by a formula which  establishes the ratio that the "investment in
the contract"  bears to the total value of annuity  payments to be made.  This is called the  "exclusion  ratio." The investment in the
contract is excluded from gross income.  Any portion of an annuity  payment  received that exceeds the exclusion ratio will be entirely
includible in gross income.  The formula for  determining  the exclusion  ratio differs  between fixed and variable  annuity  payments.
When annuity  payments  cease because of the death of the person upon whose life  payments are based and, as of the date of death,  the
amount of annuity  payments  excluded from taxable income by the exclusion ratio does not exceed the "investment in the contract," then
the remaining portion of unrecovered investment may be allowed as a deduction on the decedent's final income tax return.


Penalty  Tax on  Distributions:  Generally,  any  distribution  from an  annuity  not used in  conjunction  with a  Qualified  Contract
(Qualified  Contracts  are  discussed  below) is  subject to a penalty  equal to 10% of the amount  includible  in gross  income.  This
penalty does not apply to certain distributions, including:
|X|      Distributions made on or after the taxpayer has attained age 591/2;
|X|      Distributions made on or after the death of the contract owner, or, if the owner is an entity, the death of the annuitant;
|X|      Distributions attributable to the taxpayer's becoming disabled;
|X|      Distributions  which are part of a series of  substantially  equal periodic  payments for the life (or life expectancy) of the
         taxpayer or the joint lives (or joint life expectancies) of the taxpayer and the taxpayer's designated beneficiary;
|X|      Distributions of amounts which are treated as "investments in the contract" made prior to August 14, 1982;
|X|      Payments under an immediate annuity as defined in the Code;
|X|      Distributions under a qualified funding asset under Code Section 130(d); or
|X|      Distributions  from an annuity  purchased by an employer on the  termination  of a qualified  pension plan that is held by the
         employer until the employee separates from service.

Special  rules  applicable to "related  contracts":  Contracts  issued by the same insurer to the same  contract  owner within the same
calendar year (other than certain contracts owned in connection with a tax-qualified  retirement  arrangement) are to be treated as one
annuity  contract  when  determining  the  taxation of  distributions  before  annuitization.  We refer to these  contracts as "related
contracts."  In  situations  involving  related  contracts we believe that the values under such  contracts  and the  investment in the
contracts will be added together to determine the proper taxation of a distribution  from any one contract  described under the section
"Distributions before  Annuitization."  Generally,  distributions will be treated as coming first from income on the contract until all
of the income on all such  related  contracts is  withdrawn,  and then as a return of the  investment  in the  contract.  There is some
uncertainty  regarding the manner in which the Internal  Revenue  Service would view related  contracts  when one or more contracts are
immediate  annuities or are contracts that have been annuitized.  The Internal Revenue Service has not issued guidance  clarifying this
issue as of the date of this Prospectus.  You are particularly cautioned to seek advice from your own tax advisor on this matter.

Special concerns regarding  "substantially equal periodic payments":  (also known as "72(t)" or "72(q)" distributions) Any modification
to a program of distributions  which are part of a series of substantially  equal periodic  payments that occur before the later of the
taxpayer  reaching age 59 1/2or five (5) years from the first of such  payments will result in the  requirement  to pay the 10% premature
distribution  penalty that would have been due had the payments  been treated as subject to the 10% premature  distribution  penalty in
the years received,  plus interest.  This does not apply when the  modification is by reason of death or disability.  American  Skandia
does not currently support a section 72(q) program.

Special concerns  regarding  immediate  annuities:  The Internal Revenue Service has ruled that the immediate  annuity exception to the
10% penalty  described above under "Penalty Tax on Distributions"  for  "non-qualified"  immediate  annuities as defined under the Code
may not apply to annuity payments under a contract  recognized as an immediate  annuity under state insurance law obtained  pursuant to
an exchange of a contract if: (a) purchase  payments for the exchanged  contract were contributed or deemed to be contributed more than
one year prior to the annuity starting date under the immediate  annuity;  and (b) the annuity payments under the immediate  annuity do
not meet the requirements of any other exception to the 10% penalty.

Special rules in relation to tax-free  exchanges under Section 1035:  Section 1035 of the Code permits certain tax-free  exchanges of a
life  insurance,  annuity or  endowment  contract  for an annuity.  If an annuity is  purchased  through a tax-free  exchange of a life
insurance,  annuity or endowment  contract that was purchased  prior to August 14, 1982, then any  distributions  other than as annuity
payments will be considered to come:
|X|      First, from the amount of "investment in the contract" made prior to August 14, 1982 and exchanged into the annuity;
|X|      Then,  from any  "income on the  contract"  that is  attributable  to the  purchase  payments  made  prior to August 14,  1982
       (including income on such original purchase payments after the exchange);
|X|      Then, from any remaining "income on the contract"; and
|X|      Lastly, from the amount of any "investment in the contract" made after August 13, 1982.

Therefore,  to the extent a  distribution  is equal to or less than the  remaining  investment in the contract made prior to August 14,
1982,  such  amounts are not  included  in taxable  income.  Further,  distributions  received  that are  considered  to be a return of
investment on the contract from purchase  payments  made prior to August 14, 1982,  such  distributions  are not subject to the 10% tax
penalty.  In all other respects,  the general  provisions of the Code apply to distributions from annuities obtained as part of such an
exchange.

Partial  surrenders may be treated in the same way as tax-free 1035 exchanges of entire contracts,  therefore avoiding current taxation
of any gains in the  contract as well as the 10% IRS tax penalty on pre-age 59 1/2withdrawals.  The IRS has  reserved the right to treat
transactions it considers  abusive as ineligible for this favorable partial 1035 exchange  treatment.  We do not know what transactions
may be  considered  abusive.  For example,  we do not know how the IRS may view early  withdrawals  or  annuitizations  after a partial
exchange.  As of the date of this  prospectus,  we will  treat a partial  surrender  of this type  involving  a  non-qualified  annuity
contract as a "tax-free"  exchange for future tax  reporting  purposes,  except to the extent that we, as a reporting  and  withholding
agent,  believe that we would be expected to deem the transaction to be abusive.  However,  some insurance  companies may not recognize
these partial  surrenders as tax-free  exchanges and may report them as taxable  distributions to the extent of any gain distributed as
well as  subjecting  the taxable  portion of the  distribution  to the 10% IRS early  distribution  penalty.  We  strongly  urge you to
discuss any transaction of this type with your tax advisor before proceeding with the transaction.

There is no guidance from the Internal  Revenue  Service as to whether a partial  exchange from a life  insurance  contract is eligible
for  non-recognition  treatment  under  Section 1035 of the Code. We will  continue to report a partial  surrender of a life  insurance
policy as subject to current  taxation to the extent of any gain. In addition,  please be cautioned that no specific  guidance has been
provided as to the impact of such a transaction on the remaining life insurance  policy,  particularly as to the subsequent  methods to
be used to test for compliance  under the Code for both the  definition of life  insurance and the  definition of a modified  endowment
contract.

Special  Considerations  for  Purchasers  of the  Enhanced  Beneficiary  Protection  Optional  Death  Benefit:  As of the  date of this
Prospectus,  it is our understanding  that the charges related to the optional Death Benefit are not subject to current taxation and we
will not report them as such.  However,  the IRS could take the position  that these charges  should be treated as partial  withdrawals
subject  to  current  taxation  to the extent of any gain and,  if  applicable,  the 10% tax  penalty.  We reserve  the right to report
charges for the optional Death Benefit as partial  withdrawals if we, as a reporting and  withholding  agent,  believe that we would be
expected to report them as such.

WHAT TAX CONSIDERATIONS ARE THERE FOR TAX-QUALIFIED RETIREMENT PLANS OR QUALIFIED CONTRACTS?
An annuity may be suitable as a funding  vehicle for various  types of  tax-qualified  retirement  plans.  We have  provided  summaries
below of the types of tax-qualified  retirement plans with which we may issue an Annuity.  These summaries provide general  information
about the tax rules and are not  intended to be complete  discussions.  The tax rules  regarding  qualified  plans are  complex.  These
rules may include  limitations on contributions and restrictions on distributions,  including  additional taxation of distributions and
additional  penalties.  The terms and conditions of the  tax-qualified  retirement plan may impose other  limitations and  restrictions
that are in addition to the terms of the  Annuity.  The  application  of these rules  depends on  individual  facts and  circumstances.
Before  purchasing an Annuity for use in a qualified  plan,  you should obtain  competent tax advice,  both as to the tax treatment and
suitability  of such an  investment.  American  Skandia  does not offer all of its  annuities  to all of these  types of  tax-qualified
retirement plans.


Economic  Growth and Tax Relief  Reconciliation  Act  (EGTRRA):  Certain  states do not conform to the pension  provisions  included in
EGTRRA.  We  recommend  that you  consult  with your tax advisor to  determine  the status of your  state's  statutes as they relate to
EGTRRA and your tax qualified retirement plan.

Corporate  Pension  and  Profit-sharing  Plans:  Annuities  may be used to fund  employee  benefits  of various  corporate  pension and
profit-sharing  plans  established by corporate  employers under Section 401(a) of the Code including  401(k) plans.  Contributions  to
such plans are not taxable to the employee  until  distributions  are made from the retirement  plan.  The Code imposes  limitations on
the  amount  that may be  contributed  and the  timing of  distributions.  The tax  treatment  of  distributions  is subject to special
provisions of the Code,  and also depends on the design of the specific  retirement  plan.  There are also special  requirements  as to
participation, nondiscrimination, vesting and nonforfeitability of interests.

H.R.  10 Plans:  Annuities  may also be used to fund  benefits  of  retirement  plans  established  by  self-employed  individuals  for
themselves  and their  employees.  These are commonly  known as "H.R.  10 Plans" or "Keogh  Plans".  These plans are subject to most of
the same types of limitations and requirements as retirement  plans  established by corporations.  However,  the exact  limitations and
requirements may differ from those for corporate plans.

Tax Sheltered  Annuities:  Under Section 403(b) of the Code, a tax sheltered annuity ("TSA") is a contract into which contributions may
be made by certain  qualifying  employers  such as public schools and certain  charitable,  educational  and  scientific  organizations
specified  in Section  501(c)(3)  for the  benefit of their  employees.  Such  contributions  are not  taxable  to the  employee  until
distributions  are made from the TSA.  The Code  imposes  limits  on  contributions,  transfers  and  distributions.  Nondiscrimination
requirements also apply.

Section 457 Plans:  Under Section 457 of the Code,  deferred  compensation  plans  established  by  governmental  and certain other tax
exempt employers for their employees may invest in annuity  contracts.  The Code limits  contributions and  distributions,  and imposes
eligibility  requirements as well.  Contributions  are not taxable to employees until distributed from the plan.  However,  plan assets
remain the  property of the  employer  and are subject to the claims of the  employer's  general  creditors  until such assets are made
available to participants or their beneficiaries.

Individual  Retirement  Arrangements  or "IRAs":  Section  408 of the Code  allows  eligible  individuals  to  maintain  an  individual
retirement  account or individual  retirement  annuity ("IRA").  IRAs are subject to limitations on the amount that may be contributed,
the  contributions  that may be deducted  from  taxable  income,  the persons who may be eligible to establish an IRA and the time when
distributions  must  commence.  Further,  an Annuity may be  established  with  "roll-over"  distributions  from certain  tax-qualified
retirement plans and maintain the tax-deferred status of these amounts.

Roth  IRAs:  A form of IRA is also  available  called  a "Roth  IRA".  Contributions  to a Roth  IRA are not tax  deductible.  However,
distributions  from a Roth IRA are free from  Federal  income  taxes and are not  subject to the 10%  penalty tax if five (5) tax years
have passed since the first  contribution  was made or any conversion from a traditional IRA was made and the  distribution is made (a)
                                                                                                      ---
once the taxpayer is age 59 1/2or older,  (b) upon the death or disability of the taxpayer,  or (c) for qualified  first-time  home buyer
expenses,  subject to certain  limitations.  Distributions  from a Roth IRA that are not  "qualified" as described above may be subject
to Federal income and penalty taxes.

Purchasers  of IRAs  and  Roth  IRAs  will  receive  a  special  disclosure  document,  which  describes  limitations  on  eligibility,
contributions,  transferability  and distributions.  It also describes the conditions under which distributions from IRAs and qualified
plans may be rolled over or transferred into an IRA or another  qualified plan, on a tax-deferred  basis and the conditions under which
distributions from traditional IRAs may be rolled over to, or the traditional IRA itself may be converted into, a Roth IRA.

SEP IRAs:  Eligible  employers  that  meet  specified  criteria  may  establish  Simplified  Employee  Pensions  or SEP IRAs.  Employer
contributions  that may be made to employee  SEP IRAs are larger than the amounts  that may be  contributed  to other IRAs,  and may be
deductible to the employer.


HOW ARE DISTRIBUTIONS FROM QUALIFIED CONTRACTS TAXED?
Distributions  from  Qualified  Contracts  are  generally  taxed under  Section 72 of the Code.  Under these  rules,  a portion of each
distribution  may be  excludable  from income.  The  excludable  amount is the  proportion  of a  distribution  representing  after-tax
contributions.  Generally,  a 10% penalty tax applies to the taxable portion of a distribution from a Qualified  Contract made prior to
age 59 1/2.  However, the 10% penalty tax does not apply when the distribution:
|X|      is part of a properly executed transfer to another IRA or another eligible qualified account;
|X|      is subsequent to the death or  disability  of the taxpayer (for this purpose  disability is as defined in Section  72(m)(7) of
         the Code);
|X|      is part of a series of substantially  equal periodic  payments to be paid not less frequently than annually for the taxpayer's
         life or life expectancy or for the joint lives or life expectancies of the taxpayer and a designated beneficiary;
|X|      is subsequent to a separation from service after the taxpayer attains age 55*;
|X|      does not exceed the employee's allowable deduction in that tax year for medical care;
|X|      is made to an alternate payee pursuant to a qualified domestic relations order*;
|X|      is made pursuant to an IRS levy;
|X|      is made to pay qualified acquisition costs for a first time home purchase (IRA only);
|X|      is made to pay qualified higher education expenses (IRA only); and
|X|      is not more than the cost of your medical insurance (IRA only).

The exceptions above which are followed by an asterisk (*) do not apply to IRAs.  Certain other exceptions may be available.

Minimum  Distributions  after age 70 1/2: A participant's  interest in a Qualified Contract must generally be distributed,  or begin to be
distributed, by the "required beginning date".  This is April 1st of the calendar year following the later of:
|X|      the calendar year in which the individual attains age 70 1/2; or
|X|      the calendar year in which the individual  retires from service with the employer  sponsoring the plan. The retirement  option
      is not available to IRAs.


The IRS has released Treasury regulations  containing new Minimum Distribution rules. For Minimum  Distributions  required in 2002, the
individual  may utilize the 2002 Final  Regulations,  the 2001  Proposed  Regulations  or the 1987  Proposed  Regulations.  For Minimum
Distributions  required in 2003 and later,  individuals are required to use the rules under the 2002 Final Regulations.  The 2002 Final
Regulations contain a provision which could increase the amount of minimum  distributions  required for certain individuals.  Under the
2002 Final  Regulations,  individuals are required to include in their annuity contract value the actuarial value of any other benefits
that will be provided  under the annuity.  We and other annuity  providers are currently  seeking  clarification  of this new rule. You
should consult your tax adviser to determine the impact of this rule on your Minimum Distributions.

Under the new Minimum  Distribution  rules, a uniform life expectancy  table will be utilized by all  participants  except those with a
spouse who is more than ten (10) years younger than the  participant.  In that case,  the new rules permit the  participant  to utilize
the  actual  life  expectancies  of the  participant  and the  spouse.  In most  cases,  the  beneficiary  may be  changed  during  the
participant's  lifetime with no affect on the Minimum  Distributions.  At death, the designated  Beneficiary may generally take Minimum
Distributions over his/her life expectancy or in a lump sum.

If the amount  distributed is less than the minimum required  distribution for the year, the participant is subject to a 50% tax on the
amount  that was not  properly  distributed.  Because of the many  recent  changes  to the  Minimum  Distribution  rules,  we  strongly
encourage you to consult with your tax advisor for more detailed information.

GENERAL TAX CONSIDERATIONS

Diversification:  Section 817(h) of the Code provides that a variable annuity  contract,  in order to qualify as an annuity,  must have
an "adequately  diversified"  segregated  asset account  (including  investments  in a mutual fund by the  segregated  asset account of
insurance  companies).  If the  diversification  requirements  under the Code are not met and the annuity is not treated as an annuity,
the taxpayer  will be subject to income tax on the annual gain in the contract.  The Treasury  Department's  regulations  prescribe the
diversification  requirements for variable annuity contracts.  We expect the underlying mutual fund portfolios to comply with the terms
of these regulations.

Transfers Between Investment  Options:  Transfers between investment options are not subject to taxation.  The Treasury  Department may
promulgate  guidelines  under which a variable  annuity will not be treated as an annuity for tax  purposes if persons  with  ownership
rights have  excessive  control over the  investments  underlying  such variable  annuity.  Such  guidelines may or may not address the
number of investment options or the number of transfers between  investment  options offered under a variable annuity.  It is not known
whether such  guidelines,  if in fact  promulgated,  would have  retroactive  effect.  It is also not known what effect,  if any,  such
guidelines may have on transfers  between the investment  options of the Annuity offered pursuant to this Prospectus.  We will take any
action, including modifications to your Annuity or the Sub-accounts, required to comply with such guidelines if promulgated.

Federal Income Tax  Withholding:  Section 3405 of the Code provides for Federal income tax withholding on the portion of a distribution
which is  includible  in the gross  income of the  recipient.  Amounts  to be  withheld  depend  upon the  nature of the  distribution.
However,  under most  circumstances  a  recipient  may elect not to have income  taxes  withheld  or have  income  taxes  withheld at a
different rate by filing a completed election form with us.

Certain distributions,  known as eligible rollover  distributions,  from Qualified Contracts,  are subject to automatic 20% withholding
for Federal income taxes.  The following distributions are not eligible rollover distributions and not subject to 20% withholding:
|X|      any portion of a distribution paid as a Minimum Distribution;
|X|      direct transfers to the trustee of another retirement plan;
|X|      distributions from an individual retirement account or individual retirement annuity;
|X|      distributions  made as  substantially  equal  periodic  payments for the life or life  expectancy  of the  participant  in the
     retirement plan or the life or life expectancy of such participant and his or her designated beneficiary under such plan;
|X|      distributions that are part of a series of substantial periodic payments pursuant to Section 72(q) or 72(t) of the Code; and
|X|      certain other distributions where automatic 20% withholding may not apply.

Loans,  Assignments and Pledges:  Any amount received directly or indirectly as a loan from, or any assignment or pledge of any portion
of the value  of, an  annuity  before  annuity  payments  have  begun is  treated  as a  distribution  subject  to  taxation  under the
distribution  rules set forth above.  Any gain in an annuity on or after the  assignment or pledge of an entire  annuity and while such
assignment  or pledge  remains in effect is treated as "income on the  contract" in the year in which it is earned.  For  annuities not
issued as Qualified  Contracts,  the cost basis of the annuity is increased by the amount of any  assignment  or pledge  includible  in
gross  income.  The cost basis is not affected by any  repayment of any loan for which the annuity is  collateral  or by payment of any
interest thereon.

Gifts:  The gift of an annuity to someone other than the spouse of the owner (or former spouse  incident to a divorce) is treated,  for
income tax purposes, as a distribution.

Estate and Gift Tax  Considerations:  You should obtain competent tax advice with respect to possible federal and state estate and gift
tax consequences flowing from the ownership and transfer of annuities.

Generation-Skipping  Transfers:  Under the Code certain taxes may be due when all or part of an annuity is  transferred  to, or a death
benefit is paid to, an  individual  two or more  generations  younger than the contract  holder.  These  generation-skipping  transfers
generally  include those subject to federal estate or gift tax rules.  There is an aggregate $1.1 million  exemption from taxes for all
such  transfers.  We may be required to determine  whether a transaction  is a direct skip as defined in the Code and the amount of the
resulting  tax. We will  deduct  from your  Annuity or from any  applicable  payment  treated as a direct skip any amount of tax we are
required to pay.

Considerations for Contingent  Annuitants:  There may be adverse tax consequences if a contingent  annuitant succeeds an annuitant when
the Annuity is owned by a trust that is neither tax exempt nor qualifies for preferred  treatment  under certain  sections of the Code.
In general,  the Code is designed to prevent indefinite  deferral of tax.  Continuing the benefit of tax deferral by naming one or more
contingent  annuitants when the Annuity is owned by a non-qualified  trust might be deemed an attempt to extend the tax deferral for an
indefinite  period.  Therefore,  adverse tax treatment may depend on the terms of the trust, who is named as contingent  annuitant,  as
well as the  particular  facts and  circumstances.  You should  consult your tax advisor  before  naming a contingent  annuitant if you
expect to use an Annuity in such a fashion.

GENERAL INFORMATION

HOW WILL I RECEIVE STATEMENTS AND REPORTS?
We send any  statements and reports  required by applicable  law or regulation to you at your last known address of record.  You should
therefore  give us prompt  notice of any address  change.  We reserve  the right,  to the extent  permitted  by law and subject to your
prior consent, to provide any prospectus, prospectus supplements,  confirmations,  statements and reports required by applicable law or
regulation to you through our Internet Website at  http://www.americanskandia.com  or any other electronic means,  including  diskettes
or CD ROMs.  We send a  confirmation  statement  to you each  time a  transaction  is made  affecting  Account  Value,  such as  making
additional  Purchase  Payments,  transfers,  exchanges  or  withdrawals.  We also send  quarterly  statements  detailing  the  activity
affecting your Annuity during the calendar quarter.  We may confirm regularly  scheduled  transactions,  such as the Annual Maintenance
Fee,  in  quarterly  statements  instead of  confirming  them  immediately.  You  should  review the  information  in these  statements
carefully.  You may request additional reports.  We reserve the right to charge up to $50 for each such additional report.

Any errors or  corrections on  transactions  for your Annuity must be reported to us at our Office as soon as possible to assure proper
accounting to your Annuity.  For  transactions  that are confirmed  immediately,  we assume all  transactions  are accurate  unless you
notify us  otherwise  within 30 days from the date you receive the  confirmation.  For  transactions  that are first  confirmed  on the
quarterly  statement,  we assume all  transactions  are  accurate  unless you  notify us within 30 days from the date you  receive  the
quarterly  statement.  All transactions  confirmed  immediately or by quarterly statement are deemed conclusive after the applicable 30
day period. We may also send an annual report and a semi-annual  report  containing  applicable  financial  statements for the Separate
Account and the Portfolios,  as of December 31 and June 30,  respectively,  to Owners or, with your prior consent,  make such documents
available electronically through our Internet Website or other electronic means.


WHO IS AMERICAN SKANDIA?
American  Skandia Life Assurance  Corporation  ("American  Skandia") is a stock life insurance  company  domiciled in Connecticut  with
licenses in all 50 states,  the  District of Columbia  and Puerto  Rico.  American  Skandia is a  wholly-owned  subsidiary  of American
Skandia,  Inc., whose ultimate parent is Skandia  Insurance  Company Ltd., a Swedish company.  American Skandia markets its products to
broker-dealers  and financial  planners  through an internal field marketing  staff. In addition,  American Skandia markets through and
in conjunction with financial institutions such as banks that are permitted directly, or through affiliates, to sell annuities.

American Skandia is in the business of issuing variable annuity and variable life insurance contracts.  American Skandia currently
offers the following products: (a) flexible premium deferred annuities and single premium fixed deferred annuities that are
registered with the SEC; (b) certain other fixed deferred annuities that are not registered with the SEC; (c) both fixed and variable
immediate adjustable annuities; and (d) a single premium variable life insurance policy that is registered with the SEC.  No company
other than American Skandia has any legal responsibility to pay amounts that it owes under its variable annuity and variable life
insurance contracts.


WHAT ARE SEPARATE ACCOUNTS?
The  separate  accounts are where  American  Skandia sets aside and invests the assets of some of our  annuities.  In the  accumulation
period,  assets  supporting  Account Values of the Annuities are held in a separate account  established under the laws of the State of
Connecticut.  We are the legal  owner of assets in the  separate  accounts.  In the payout  period,  assets  supporting  fixed  annuity
payments and any adjustable  annuity payments we make available are held in our general  account.  Assets  supporting  variable annuity
payment options may be invested in our separate  accounts.  Income,  gains and losses from assets allocated to these separate  accounts
are credited to or charged against each such separate  account without regard to other income,  gains or losses of American  Skandia or
of any other of our separate  accounts.  These assets may only be charged with  liabilities  which arise from the  Annuities  issued by
American  Skandia.  The amount of our obligation in relation to allocations to the Sub-accounts is based on the investment  performance
of such Sub-accounts.  However, the obligations themselves are our general corporate obligations.

Separate Account B
During the accumulation  period, the assets supporting  obligations based on allocations to the variable investment options are held in
Sub-accounts of American  Skandia Life Assurance  Corporation  Variable  Account B, also referred to as "Separate  Account B". Separate
Account B was  established  by us pursuant to  Connecticut  law on November  25,  1987.  Separate  Account B also holds assets of other
annuities issued by us with values and benefits that vary according to the investment performance of Separate Account B.

Separate  Account B  consists  of  multiple  Sub-accounts.  Each  Sub-account  invests  only in a single  mutual  fund or  mutual  fund
portfolio.  The name of each Sub-account generally  corresponds to the name of the underlying  Portfolio.  Each Sub-account in Separate
Account B may have several  different  Unit Prices to reflect the Insurance  Charge and the charges for any optional  benefits that may
be offered under this Annuity and other annuities  issued by us through  Separate  Account B. Separate Account B is registered with the
SEC under the Investment  Company Act of 1940  ("Investment  Company Act") as a unit  investment  trust,  which is a type of investment
company.  The SEC does not supervise investment policies, management or practices of Separate Account B.

Prior to November 18, 2002,  Separate  Account B was organized as a single  separate  account with six different  Sub-account  classes,
each of which was registered as a distinct unit investment trust under the Investment  Company Act.  Effective  November 18, 2002, each
Sub-account  class of Separate  Account B will be  consolidated  into the unit  investment  trust formerly named American  Skandia Life
Assurance  Corporation  Variable Account B (Class 1 Sub-accounts),  which will  subsequently be renamed American Skandia Life Assurance
Corporation  Variable  Account B. Each  Sub-account  of Separate  Account B will have  multiple Unit Prices to reflect the daily charge
deducted for each  combination  of the applicable  Insurance  Charge,  Distribution  Charge (when  applicable)  and the charge for each
optional  benefit offered under Annuity  contracts  funded through  Separate  Account B. The  consolidation  of Separate Account B will
have no impact on Annuity Owners.

We reserve the right to make changes to the  Sub-accounts  available  under the Annuity as we determine  appropriate.  We may offer new
Sub-accounts,  eliminate  Sub-accounts,  or combine  Sub-accounts at our sole discretion.  We may also close Sub-accounts to additional
Purchase  Payments on existing  Annuity  contracts or close  Sub-accounts  for Annuities  purchased on or after specified dates. We may
also substitute an underlying  mutual fund or portfolio of an underlying  mutual fund for another  underlying  mutual fund or portfolio
of an  underlying  mutual fund,  subject to our receipt of any  exemptive  relief that we are  required to obtain under the  Investment
Company Act.  We will notify Owners of changes we make to the Sub-accounts available under the Annuity.

Values and benefits based on allocations to the Sub-accounts  will vary with the investment  performance of the underlying mutual funds
or fund  portfolios,  as applicable.  We do not guarantee the investment  results of any  Sub-account.  Your Account Value allocated to
the  Sub-accounts  may increase or decrease.  You bear the entire  investment  risk.  There is no assurance  that the Account  Value of
your Annuity will equal or be greater than the total of the Purchase Payments you make to us.

Separate Account D
During the  accumulation  period,  assets  supporting our  obligations  based on Fixed  Allocations  are held in American  Skandia Life
Assurance  Corporation  Separate Account D, also referred to as "Separate  Account D". Such obligations are based on the fixed interest
rates we credit to Fixed  Allocations  and the terms of the Annuities.  These  obligations do not depend on the investment  performance
of the assets in Separate Account D.  Separate Account D was established by us pursuant to Connecticut law.

There are no units in  Separate  Account  D. The Fixed  Allocations  are  guaranteed  by our  general  account.  An  Annuity  Owner who
allocates  a portion of their  Account  Value to  Separate  Account D does not  participate  in the  investment  gain or loss on assets
maintained  in  Separate  Account  D. Such gain or loss  accrues  solely  to us.  We  retain  the risk that the value of the  assets in
Separate  Account D may drop below the  reserves and other  liabilities  we must  maintain.  Should the value of the assets in Separate
Account D drop below the reserve and other  liabilities  we must  maintain in relation to the  annuities  supported by such assets,  we
will transfer  assets from our general account to Separate  Account D to make up the  difference.  We have the right to transfer to our
general  account any assets of Separate  Account D in excess of such  reserves and other  liabilities.  We maintain  assets in Separate
Account D supporting a number of annuities we offer.






We currently employ  investment  managers to manage the assets  maintained in Separate Account D. Each manager we employ is responsible
for  investment  management  of a different  portion of Separate  Account D. From time to time  additional  investment  managers may be
employed or investment  managers may cease being  employed.  We are under no obligation to employ or continue to employ any  investment
manager(s) and have sole discretion over the investment managers we retain.

We are not  obligated to invest  according to specific  guidelines  or strategies  except as may be required by  Connecticut  and other
state insurance laws.

WHAT IS THE LEGAL STRUCTURE OF THE UNDERLYING FUNDS?
Each underlying  mutual fund is registered as an open-end  management  investment  company under the Investment  Company Act. Shares of
the  underlying  mutual fund  portfolios  are sold to separate  accounts of life  insurance  companies  offering  variable  annuity and
variable life insurance products.  The shares may also be sold directly to qualified pension and retirement plans.

Voting Rights
We are the legal owner of the shares of the underlying  mutual funds in which the Sub-accounts  invest.  However,  under SEC rules, you
have voting rights in relation to Account Value  maintained in the  Sub-accounts.  If an underlying  mutual fund  portfolio  requests a
vote of  shareholders,  we will vote our shares  based on  instructions  received  from Owners with  Account  Value  allocated  to that
Sub-account.  Owners  have the right to vote an amount  equal to the number of shares  attributable  to their  contracts.  If we do not
receive voting  instructions in relation to certain  shares,  we will vote those shares in the same manner and proportion as the shares
for which we have  received  instructions.  We will furnish  those  Owners who have Account  Value  allocated  to a  Sub-account  whose
underlying  mutual fund  portfolio has requested a "proxy" vote with proxy  materials and the necessary  forms to provide us with their
voting  instructions.  Generally,  you will be asked to provide instructions for us to vote on matters such as changes in a fundamental
investment  strategy,  adoption of a new investment advisory  agreement,  or matters relating to the structure of the underlying mutual
fund that require a vote of shareholders.

American  Skandia  Trust (the  "Trust")  has  obtained an  exemption  from the  Securities  and  Exchange  Commission  that permits its
investment adviser, American Skandia Investment Services,  Incorporated ("ASISI"),  subject to approval by the Board of Trustees of the
Trust, to change sub-advisors for a Portfolio and to enter into new sub-advisory  agreements,  without obtaining  shareholder  approval
of the changes.  This exemption (which is similar to exemptions  granted to other investment  companies that are organized in a similar
manner as the Trust) is  intended  to  facilitate  the  efficient  supervision  and  management  of the  sub-advisors  by ASISI and the
Trustees.  The Trust is required,  under the terms of the exemption,  to provide certain  information to  shareholders  following these
types of changes.

Material Conflicts
It is possible  that  differences  may occur  between  companies  that offer  shares of an  underlying  mutual fund  portfolio to their
respective  separate  accounts  issuing  variable  annuities  and/or  variable  life  insurance  products.  Differences  may also occur
surrounding  the offering of an underlying  mutual fund portfolio to variable life insurance  policies and variable  annuity  contracts
that we offer. Under certain  circumstances,  these differences could be considered  "material  conflicts," in which case we would take
necessary  action to protect  persons with voting rights under our variable  annuity  contracts and variable  life  insurance  policies
against persons with voting rights under other insurance  companies'  variable  insurance  products.  If a "material  conflict" were to
arise between owners of variable  annuity  contracts and variable life insurance  policies issued by us we would take necessary  action
to treat  such  persons  equitably  in  resolving  the  conflict.  "Material  conflicts"  could  arise  due to  differences  in  voting
instructions  between owners of variable life insurance and variable annuity contracts of the same or different  companies.  We monitor
any potential conflicts that may exist.

Service Fees Payable by Underlying Funds
American  Skandia or our affiliates have entered into  agreements with the investment  adviser or distributor of many of the underlying
Portfolios.  Under the terms of these agreements,  American Skandia provides  administrative and support services to the Portfolios for
which a fee is paid that is generally based on a percentage of the average assets  allocated to the Portfolios  under the Annuity.  Any
fees payable will be  consistent  with the  services  rendered or the expected  cost  savings  resulting  from the  arrangement.  These
agreements may be different for each underlying mutual fund whose portfolios are offered as Sub-accounts.

WHO DISTRIBUTES ANNUITIES OFFERED BY AMERICAN SKANDIA?
American  Skandia  Marketing,  Incorporated  ("ASM"),  a wholly-owned  subsidiary of American  Skandia,  Inc., is the  distributor  and
principal  underwriter of the securities  offered through this prospectus.  ASM acts as the distributor of a number of annuity and life
insurance  products we offer and both  American  Skandia  Trust and American  Skandia  Advisor  Funds,  Inc., a family of retail mutual
funds. ASM also acts as an introducing  broker-dealer  through which it receives a portion of brokerage  commissions in connection with
purchases and sales of  securities  held by portfolios  of American  Skandia Trust which are offered as underlying  investment  options
under the Annuity.

ASM's principal  business  address is One Corporate Drive,  Shelton,  Connecticut  06484. ASM is registered as broker-dealer  under the
Securities Exchange Act of 1934 ("Exchange Act") and is a member of the National Association of Securities Dealers, Inc. ("NASD").

The  Annuity is offered on a  continuous  basis.  ASM enters into  distribution  agreements  with  independent  broker-dealers  who are
registered under the Exchange Act and with entities that may offer the Annuity but are exempt from  registration.  Applications for the
Annuity are solicited by registered  representatives of those firms. Such  representatives  will also be our appointed insurance agents
under state insurance law.  In addition, ASM may offer the Annuity directly to potential purchasers.

Compensation is paid to firms on sales of the Annuity according to one or more schedules.  The individual  representative  will receive
a portion of the  compensation,  depending on the practice of the firm.  Compensation  is generally  based on a percentage  of Purchase
Payments  made, up to a maximum of 7.0%.  Alternative  compensation  schedules are  available  that provide a lower initial  commission
plus ongoing annual  compensation  based on all or a portion of Account Value. We may also provide  compensation for providing  ongoing
service to you in relation to the  Annuity.  Commissions  and other  compensation  paid in relation to the Annuity do not result in any
additional charge to you or to the Separate Account.

In addition,  firms may receive separate compensation or reimbursement for, among other things, training of sales personnel,  marketing
or other  services  they provide to us or our  affiliates.  We or ASM may enter into  compensation  arrangements  with  certain  firms.
These  arrangements  will  not be  offered  to all  firms  and the  terms of such  arrangements  may  differ  between  firms.  Any such
compensation  will be paid by us or ASM and will not result in any  additional  charge to you.  To the extent  permitted  by NASD rules
and other applicable laws and regulations,  ASM may pay or allow other promotional  incentives or payments in the form of cash or other
compensation.

Advertising:  We may advertise certain  information  regarding the performance of the investment  options.  Details on how we calculate
performance  for the  Sub-accounts  are found in the  Statement of Additional  Information.  This  information  may help you review the
performance of the investment  options and provide a basis for comparison  with other  annuities.  This  information may be less useful
when comparing the  performance of the investment  options with other savings or investment  vehicles.  Such other  investments may not
provide some of the benefits of annuities,  or may not be designed for long-term  investment  purposes.  Additionally  other savings or
investment vehicles may not be receive the beneficial tax treatment given to annuities under the Code.


We may advertise the  performance  of the  Portfolios in the form of "Standard" and  "Non-standard"  Total Returns  calculated for each
Sub-account.  "Standard  Total Return" figures assume a hypothetical  initial  investment of $1,000  allocated to a Sub-account  during
the most recent,  one, five and ten year periods (or since the inception date that the Portfolio has been offered as a Sub-account,  if
less).  "Standard Total Return"  figures assume that the applicable  Insurance  Charge and the Annual  Maintenance Fee are deducted and
that the Annuity is  surrendered  at the end of the applicable  period,  meaning that any  Contingent  Deferred Sales Charge that would
apply upon  surrender is also  deducted.  "Non-standard  Total Return"  figures  include any  performance  figures that do not meet the
SEC's rules for Standard Total Returns.  Non-standard  Total Returns are calculated in the same manner as  standardized  returns except
that the figures may not reflect  all fees and  charges.  In  particular,  they may assume no  surrender  at the end of the  applicable
period so that the CDSC does not apply.  Standard and  Non-standard  Total Returns will not reflect the additional  asset-based  charge
that is deducted when you elect any optional  benefit (if  applicable).  The additional cost  associated with any optional  benefit you
elected will reduce your performance.  Non-standard Total Returns must be accompanied by Standard Total Returns.

Some of the underlying  Portfolios existed prior to the inception of these  Sub-accounts.  Performance quoted in advertising  regarding
such  Sub-accounts may indicate  periods during which the Sub-accounts  have been in existence but prior to the initial offering of the
Annuities,  or  periods  during  which  the  underlying  Portfolios  have  been in  existence,  but the  Sub-accounts  have  not.  Such
hypothetical  historical  performance  is calculated  using the same  assumptions  employed in  calculating  actual  performance  since
inception  of the  Sub-accounts.  Hypothetical  historical  performance  of the  underlying  Portfolios  prior to the  existence of the
Sub-accounts may only be presented as Non-standard Total Returns.


We may advertise the performance of money market-type  Sub-accounts  using a measure of the "current and effective yield".  The current
yield of a money  market-type  Sub-account is calculated  based upon the previous  seven-day  period ending on the date of calculation.
The effective yield of a money  market-type  Sub-account  reflects the  reinvestment of net income earned daily on the assets of such a
Sub-account.  The current and effective  yields reflect the Insurance  Charge and the charge for any optional  benefit (if  applicable)
deducted against the Sub-account.  In a low interest rate environment,  yields for money market-type  Sub-accounts,  after deduction of
the Insurance  Charge,  and the charge for any optional benefit (if applicable) may be negative even though the yield (before deducting
for such charges) is positive.  Current and effective yield  information  will fluctuate.  This information may not provide a basis for
comparisons  with deposits in banks or other  institutions  which pay a fixed yield over a stated  period of time,  or with  investment
companies  which do not serve as underlying  mutual funds for variable  annuities  and/or do not have  additional  asset-based  charges
deducted for the insurance protection provided by the Annuity.

Performance  information on the  Sub-accounts is based on past performance  only and is not an indication or  representation  of future
performance.  Performance of the Sub-accounts is not fixed.  Actual  performance will depend on the type,  quality and, for some of the
Sub-accounts,  the  maturities  of the  investments  held by the  underlying  mutual funds or  portfolios  and upon  prevailing  market
conditions and the response of the underlying  mutual funds to such conditions.  Actual  performance will also depend on changes in the
expenses of the underlying mutual funds or portfolios.  Such changes are reflected,  in turn, in the Sub-accounts  which invest in such
underlying  mutual fund or portfolio.  In addition,  the total amount of asset-based  charges  assessed  against each  Sub-account will
affect performance.

The information we may advertise  regarding the Fixed  Allocations may include the then current  interest rates we are crediting to new
Fixed  Allocations.  Information  on current rates will be as of the date  specified in such  advertisement.  Rates will be included in
advertisements  to the extent  permitted by law. Given that the actual rates  applicable to any Fixed  Allocation are as of the date of
any such Fixed  Allocation's  Guarantee Period begins, the rate credited to a Fixed Allocation may be more or less than those quoted in
an advertisement.

Advertisements  we distribute  may also compare the  performance  of our  Sub-accounts  with:  (a) certain  unmanaged  market  indices,
including  but not limited to the Dow Jones  Industrial  Average,  the Standard & Poor's 500, the NASDAQ 100, the Shearson  Lehman Bond
Index, the Frank Russell non-U.S.  Universal Mean, the Morgan Stanley Capital  International  Index of Europe, Asia and Far East Funds,
and the Morgan Stanley Capital  International World Index; and/or (b) other management  investment companies with investment objectives
similar to the mutual  fund or  portfolio  underlying  the  Sub-accounts  being  compared.  This may include  the  performance  ranking
assigned by various publications,  including but not limited to the Wall Street Journal,  Forbes,  Fortune,  Money, Barron's,  Business
Week, USA Today and statistical  services,  including but not limited to Lipper Analytical Services Mutual Funds Survey, Lipper Annuity
and Closed End Survey,  the Variable  Annuity  Research Data Survey,  SEI, the  Morningstar  Mutual Fund Sourcebook and the Morningstar
Variable Annuity/Life Sourcebook.

American  Skandia Life Assurance  Corporation  may advertise its rankings  and/or ratings by independent  financial  ratings  services.
Such  rankings may help you in  evaluating  our ability to meet our  obligations  in relation to Fixed  Allocations,  pay minimum death
benefits,  pay annuity  payments or  administer  Annuities.  Such rankings and ratings do not reflect or relate to the  performance  of
Separate Account B.

AVAILABLE INFORMATION
A  Statement  of  Additional  Information  is  available  from us without  charge upon your  request.  This  Prospectus  is part of the
registration  statement we filed with the SEC regarding this offering.  Additional  information on us and this offering is available in
those  registration  statements and the exhibits  thereto.  You may obtain copies of these  materials at the prescribed  rates from the
SEC's Public Reference Section, 450 Fifth Street N.W., Washington,  D.C., 20549. You may inspect and copy those registration statements
and exhibits thereto at the SEC's public reference  facilities at the above address,  Room 1024, and at the SEC's Regional Offices, The
Woolworth  Building,  233 Broadway,  New York, NY and 175 W. Jackson  Boulevard,  Suite 900, Chicago,  IL. These documents,  as well as
documents  incorporated  by  reference,  may  also be  obtained  through  the  SEC's  Internet  Website  (http://www.sec.gov)  for this
registration statement as well as for other registrants that file electronically with the SEC.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
To the extent and only to the extent that any statement in a document  incorporated  by reference  into this  Prospectus is modified or
superseded by a statement in this  Prospectus or in a later-filed  document,  such statement is hereby deemed so modified or superseded
and not part of this  Prospectus.  The Annual Report on Form 10-K for the year ended December 31, 2001 previously  filed by the Company
with the SEC under the Exchange Act is incorporated by reference in this Prospectus.

We will furnish you without charge a copy of any or all of the documents  incorporated by reference in this  Prospectus,  including any
exhibits to such  documents  which have been  specifically  incorporated  by  reference.  We will do so upon receipt of your written or
oral request.


HOW TO CONTACT US
You can contact us by:
|X|      calling Skandia's Telephone Automated Response System (STARS) at 1-800-766-4530.
|X|      writing to us via regular mail at American Skandia - Variable Annuities,  P.O. Box 7040,  Bridgeport,  Connecticut  06601-7040
       OR for express mail American Skandia - Variable  Annuities,  One Corporate Drive,  Shelton,  Connecticut 06484. NOTE: Failure to
       send mail to the proper address may result in a delay in our receiving and processing your request.
|X|      sending an email to customerservice@skandia.com or visiting our Internet Website at www.americanskandia.com
|X|      accessing information about your Annuity through our Internet Website at www.americanskandia.com

You can obtain account information through Skandia's  Telephone Automated Response System (STARS) and at  www.americanskandia.com,  our
Internet  Website.  Our Customer  Service  representatives  are also available  during  business hours to provide you with  information
about your account.  You can request  certain  transactions  through our  telephone  voice  response  system,  our Internet  Website or
through a customer service  representative.  You can provide authorization for a third party,  including your  attorney-in-fact  acting
pursuant to a power of attorney or an investment  professional,  to access your account information and perform certain transactions on
your  account.  You will need to complete a form  provided by us which  identifies  those  transactions  that you wish to authorize via
telephonic  and  electronic  means and whether you wish to  authorize a third party to perform any such  transactions.  We require that
you or your  representative  provide proper  identification  before performing  transactions over the telephone or through our Internet
Website.  This may include a Personal  Identification  Number  (PIN) that will be provided to you upon issue of your Annuity or you may
establish or change your PIN through STARS and at  www.americanskandia.com,  our Internet  Website.  Any third party that you authorize
to perform financial transactions on your account will be assigned a PIN for your account.

Transactions  requested via telephone are recorded.  To the extent  permitted by law, we will not be responsible for any claims,  loss,
liability  or  expense  in  connection  with a  transaction  requested  by  telephone  or  other  electronic  means if we acted on such
transaction  instructions after following  reasonable  procedures to identify those persons authorized to perform  transactions on your
Annuity  using  verification  methods  which may include a request for your Social  Security  number,  PIN or other form of  electronic
identification.  We may be liable for losses due to unauthorized or fraudulent instructions if we did not follow such procedures.

American Skandia does not guarantee access to telephonic,  facsimile,  Internet or any other electronic  information or that we will be
able to accept  transaction  instructions  via such means at all times.  Regular and/or express mail will be the only means by which we
will accept  transaction  instructions when telephonic,  facsimile,  Internet or any other electronic means are unavailable or delayed.
American  Skandia  reserves  the  right to limit,  restrict  or  terminate  telephonic,  facsimile,  Internet  or any other  electronic
transaction privileges at any time.

INDEMNIFICATION
Insofar as  indemnification  for  liabilities  arising  under the  Securities  Act of 1933 (the  "Securities  Act") may be permitted to
directors,  officers or persons controlling the registrant pursuant to the foregoing provisions,  the registrant has been informed that
in the  opinion  of the SEC such  indemnification  is  against  public  policy as  expressed  in the  Securities  Act and is  therefore
unenforceable.

LEGAL PROCEEDINGS
As of the date of this  Prospectus,  American  Skandia and its  affiliates  are not  involved in any legal  proceedings  outside of the
ordinary  course of business.  American  Skandia and its  affiliates are involved in pending and  threatened  legal  proceedings in the
normal  course of its business,  however,  we do not  anticipate  that the outcome of any such legal  proceedings  will have a material
adverse  affect  on the  Separate  Account,  or  American  Skandia's  ability  to meet its  obligations  under the  Annuity,  or on the
distribution of the Annuity.







CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
The following are the contents of the Statement of Additional Information:


General Information about American Skandia
|X|      American Skandia Life Assurance Corporation
|X|      American Skandia Life Assurance Corporation Variable Account B
|X|      American Skandia Life Assurance Corporation Separate Account D

Principal Underwriter/Distributor - American Skandia Marketing, Incorporated

How Performance Data is Calculated
|X|      Current and Effective Yield
|X|      Total Return

How the Unit Price is Determined

Additional Information on Fixed Allocations
|X|      How We Calculate the Market Value Adjustment

General Information
|X|      Voting Rights
|X|      Modification
|X|      Deferral of Transactions
|X|      Misstatement of Age or Sex
|X|      Ending the Offer

Annuitization

Independent Auditors

Legal Experts


Financial Statements
|X|      Appendix A - American Skandia Life Assurance Corporation Variable Account B

A-35







                                       APPENDIX A - FINANCIAL INFORMATION ABOUT AMERICAN SKANDIA







SELECTED FINANCIAL DATA

The following table summarizes information with respect to the operations of the Company:

(table in thousands)                                         For the Year Ended December 31,
                                              2001          2000           1999          1998          1997
                                              ----          ----           ----          ----          ----
STATEMENT OF OPERATIONS DATA
Revenues:
Annuity and life insurance charges and fee$*   378,693  $    424,578   $    289,989  $    186,211  $    121,158
Fee income                                     111,196       130,610         83,243        50,839        27,593
Net investment income                           20,126        11,656         10,441        11,130         8,181
Premium income and other revenues                3,368         4,778          3,688         1,360         1,082
                                          ------------  ------------   ------------  ------------  ------------

Total revenues                            $    513,383  $    571,622   $    387,361  $    249,540  $    158,014
                                          ============  ============   ============  ============  ============

Benefits and Expenses:
Annuity and life insurance benefits       $      1,955  $        751   $        612  $        558  $      2,033
Change in annuity and life insurance
     policy reserves                           (39,898)       45,018          3,078         1,053            37
Cost of minimum death benefit                        -             -          2,945         5,144         4,545
reinsurance
Return credited to contractowners               16,833         9,046         (1,639)       (8,930)       (2,018)
Underwriting, acquisition and other
     insurance expenses                        420,802       335,213        206,350       167,790        90,496
Interest expense                                73,424        85,998         69,502        41,004        24,895
                                          ------------  ------------   ------------  ------------  ------------

Total benefits and expenses               $    473,116  $    476,026   $    280,848  $    206,619  $    119,988
                                          ============  ============   ============  ============  ============

Income tax expense                        $      7,168  $     30,779   $     30,344  $      8,154  $     10,478
                                          ============  ============   ============  ============  ============

Net income                                $     33,099  $     64,817   $     76,169  $     34,767  $     27,548
                                          ============  ============   ============  ============  ============

STATEMENT OF FINANCIAL CONDITION DATA
Total Assets                              $ 28,036,860  $ 31,702,705   $ 30,881,579  $ 18,848,273  $ 12,894,290
                                          ============  ============   ============  ============  ============

Future fees payable to parent             $    797,055  $    934,410   $    576,034  $    368,978  $    233,034
                                          ============  ============   ============  ============  ============

Surplus Notes                             $    144,000  $    159,000   $    179,000  $    193,000  $    213,000
                                          ============  ============   ============  ============  ============

Shareholder's Equity                      $    577,668  $    496,911   $    359,434  $    250,417  $    184,421
                                          ============  ============   ============  ============  ============

*        On annuity and life insurance  sales of $3,834,167,  $8,216,167,  $6,862,968,  $4,159,662,  and  $3,697,990,  during the years
     ended December 31, 2001,  2000,  1999, 1998 and 1997,  respectively,  with  contractowner  assets under management of $26,017,847,
     $29,751,822, $29,396,693, $17,854,761, and $12,119,191, as of December 31, 2001, 2000, 1999, 1998, and 1997, respectively.





MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's  Discussion  and  Analysis  of  Financial  Condition  and Results of  Operations  should be read in  conjunction  with the
consolidated financial statements and the notes thereto and Item 6, Selected Financial Data.

Results of Operations
---------------------

Annuity and life  insurance  sales  decreased  53% in 2001 to  $3,834,167,000  as compared to a 20%  increase in 2000.  The decrease in
sales in 2001 was consistent with the general decline in sales  throughout the variable annuity  industry,  attributed in large part to
the decline in the equity  markets.  The sales growth in 2000 was driven by  significant  sales volume in the first quarter of 2000 due
to the strong  equity market  performance.  However,  the decline in the equity  markets  during the  remainder of the year  negatively
impacted  sales as the first quarter level of sales was not  sustained.  The Company has announced its intention to focus on the growth
of its core variable annuity business,  with a continuing focus on increasing sales through innovative product development  activities,
the expansion of its wholesaling  force through  recruitment and retention of top producers,  and providing  consistently good customer
service.

Average assets under management totaled  $27,020,489,000 in 2001,  $31,413,809,000 in 2000 and $21,984,759,000 in 1999,  representing a
decrease  of 14% in 2001 and an  increase  of 46% in 2000.  As a result of the  decrease  in sales  volume  and  average  assets  under
management,  annuity and life  insurance  charges and fees decreased 11% in 2001, as compared to an increase of 46% in 2000. Fee income
generated from transfer agency-type and investment support activities decreased 15% in 2001 and increased 57% in 2000.

Net  investment  income  increased 73% in 2001  compared to 2000 and  increased 12% in 2000 compared to 1999.  The increase in 2001 was
primarily  due to a higher  level of fixed  maturity  investments  in support  of the  Company's  risk-based  capital  objectives.  The
increase in 2000 was primarily due to the higher level of fixed maturity  investments  partially  offset by $6,939,000 of  amortization
of premiums paid on derivative  instruments.  Excluding the derivative  amortization,  net investment income increased 62% in 2000 as a
result of increased fixed maturity investments in support of the Company's risk-based capital objectives.

Premium income  represents  premiums  earned on the sale of ancillary  contracts such as immediate  annuities with life  contingencies,
supplementary  contracts  with life  contingencies  and certain life  insurance  products.  Sales of these  products  will  increase or
decrease over time depending on the payout elections of the  policyholders.  Management  expects  supplementary  contracts to grow over
time with the maturing of the core business lines.

Net realized  investment gains totaled  $928,000 in 2001,  compared to losses of $688,000 in 2000. The gross gain in 2001 was partially
offset  by  losses  on  securities  in the  fixed  maturity  portfolio.  The most  significant  loss was  $2,636,000  related  to Enron
securities.  In addition net realized  losses were  incurred due to  redemption's  of mutual fund  holdings in support of the Company's
non-qualified  deferred  compensation  program.  The  change  from  1999 to 2000  was  primarily  due to  realized  losses  on sales of
securities  in the fixed  maturity  portfolio.  These  losses  were  partially  offset  by  realized  gains on sales of fixed  maturity
investments and mutual funds.

The change in annuity policy reserves  includes  changes in reserves  related to annuity  contracts with mortality risks as well as the
company's  guaranteed  minimum death benefit ("GMDB")  liability.  The GMDB reserve decreased  $43,984,000 in 2001, as the result of an
update of certain reserve  assumptions  during 2001 to reflect more realistic  expectations as to risks inherent in the GMDB liability.
These changes reduced the GMDB liability  significantly.  Previous  assumptions had been based on statutory valuation  principles as an
approximation for accounting  principles  generally  accepted in the United States ("U.S.  GAAP"). In addition,  future mortality rates
have been  lowered  to reflect  favorable  past  experience.  This  decrease  in 2001  compares  to an  increase  in GMDB  reserves  of
$44,186,000 in 2000.

Certain  assumptions  were also updated in the calculation of the deferred  acquisition cost asset,  however,  offsetting the resulting
increase in earnings and equity as a result of changes in the GMDB  liability.  The  amortization of such costs are determined in large
part by changes in the  expectations of future gross profits of the variable annuity  business.  In 2001, the decline in equity markets
resulted in a significantly lower estimate of future gross profits, thereby increasing the expenses recognized through amortization.

In 1999,  the  Company  began to develop a program  utilizing  equity put  options to manage the risks  embedded in the GMDB in annuity
contracts that would result from  significant  declines in the equity  markets.  Prior to the  implementation  of the hedge  strategies
utilizing equity put options,  the Company had reinsured  substantially all of its exposure on the GMDB liability.  The reinsurance was
terminated during the second quarter of 1999 as the reinsurer exited this market.

Return  credited to  contractowners  consists of revenues on the  variable  and market  value  adjusted  annuities  and  variable  life
insurance,  offset by the benefit  payments and changes in reserves  required on this business.  Market value adjusted annuity activity
has the largest impact on this benefit.  In 2001 and 2000, the Separate  Account  investment  returns on the assets  supporting  market
value adjusted  annuities were less than the expected returns as calculated in the reserves,  contributing to the significant  increase
in the return credited to  contractholders  benefit.  In addition,  this benefit  increased as a result of the amortization of unearned
Performance  Advantage  target value  credits,  which  increased  $12,814,581  in 2001 over 2000 due  primarily  to increased  sales of
products  containing this feature.  Other  significant  contributors to the change from 2000 to 2001 include  guaranteed  minimum death
benefit payments on variable  annuities,  which were driven up due to the market declines in 2001,  totaling $2,569,000 net of gains on
equity put options as well as increased costs associated with processing of backdated financial transactions.

Underwriting, acquisition and other insurance expenses for 2001, 2000 and 1999 were as follows:

                 (table in thousands)                        2001               2000              1999
                                                             ----               ----              ----
Commissions and purchase credits                           $ 238,847         $ 393,494      $     358,279
General operating expenses                                   167,044           252,206            214,269
Acquisition costs deferred during the year                  (209,136)         (495,103)          (450,059)
Acquisition costs amortized during the year                  224,047           184,616             83,861
                                                           ---------         ---------          ---------
Net amortization of deferred acquisition costs                14,911          (310,487)          (366,198)
                                                           ---------         ----------         ----------
Underwriting, acquisition and other insurance
     expenses                                              $ 420,802         $ 335,213          $ 206,350
                                                           =========         =========          =========

Underwriting,  acquisition and other insurance  expenses  increased 26% and 62% in 2001 and 2000,  respectively.  Lower sales and asset
levels in 2001 led to a 39% decease in commissions and purchase  credits.  Partially  offsetting this decline,  the company  launched a
commission  promotion  program  during 2001,  which  increased  commissions  as a percentage of new sales.  Increased  commissions  and
purchase credits reflect the increase in sales in both 2000 and 1999.

General  operating  expenses  decreased 34% from 2000 as a result of lower  sales-based  compensation  and expense  reduction  programs
implemented  in 2001 (see  Note 18 to the  consolidated  financial  statements).  In  addition,  variable  compensation  and  long-term
incentive  plan expense have  decreased  due to the slowdown in sales and decline in equity  markets.  Significant  investments  in new
product development and Internet-based technology contributed to general operating expense increases in both 2001 and 2000.

The company  updated  certain  assumptions  in the  calculation  of expected gross profits used to develop  deferred  acquisition  cost
amortization  rates to reflect more recent  experience and current equity market  conditions.  As a result of this the  amortization of
such costs increased significantly over the year 2000.

The  amortization of acquisition  costs increased  substantially  in 2000 compared to 1999 as the associated costs from record sales in
late 1999 and early 2000 were recognized in accordance with profit and expense recognition models under U.S. GAAP.

Interest  expense  decreased  $12,574,000  in 2001 as a result of the  reduction in borrowing and  increased  $16,496,000  in 2000 as a
result of additional securitized financing  transactions,  which consist of the transfer of rights to receive future fees to ASI, which
fees  collateralize  notes issued in private  placements by ASI through  special  purpose trusts  ("securitization  transactions").  In
addition,  the Company paid down surplus notes on December 3, 2001 and December 10, 2000 of $15,000,000 and  $20,000,000  respectively.
Surplus notes outstanding as of December 31, 2001 and 2000 totaled $144,000,000 and $159,000,000, respectively.

The  effective  income  tax rates for the years  ended  December  31,  2001,  2000 and 1999 were 18%,  32% and 28%,  respectively.  The
effective  rate is lower  than the  corporate  rate of 35% due to  permanent  differences,  with the most  significant  item  being the
dividend  received  deduction.  Management  believes  that,  based on the taxable  income  produced  in the past two years,  as well as
continued  growth in annuity  sales,  the Company will produce  sufficient  taxable  income in future years to realize its deferred tax
assets.

The Company  generated net income after tax of $33,099,000,  $64,817,000 and $76,169,000 in 2001, 2000 and 1999,  respectively.  Equity
market volatility  during 2001 directly  impacted  revenues,  sales and ultimately  expenses for the company.  Revenues were lower than
expected due to the  significant  drop in sales year over year,  as well as the  negative  performance  of the mutual funds  underlying
annuity and insurance  contracts.  Benefits  were higher than expected due to the death claims paid in excess of the account  values of
the specific  contracts due to GMDB  provisions in such contracts.  Expenses were  relatively  higher compared to sales and assets than
in prior periods.  Expense  reduction  programs were implemented  during the year to better match expenses incurred with sales activity
and  management  of the book of  business.  Revenue  increases in 2000 were more than offset by higher  benefits  and  expenses  driven
primarily  from the  increase  in the  reserve  requirement  related  to the GMDB as a result of the  decline  in the  equity  markets.
Investments in new product development and technology also contributed to the increase in expenses.

The Company  considers  Mexico an emerging  market and has invested in the Skandia Vida  operations  with the expectation of generating
profits from long-term  savings  products in future years.  As such,  Skandia Vida has generated net losses of  $2,619,000,  $2,540,000
and $2,523,000 for the years ended December 31, 2001, 2000 and 1999, respectively.

Total assets  declined 12% in 2001 as a direct result of the decrease in separate  account  assets.  Separate  account assets  declined
consistent with the drop in the equity market, offset in part by new net sales activity.

Liabilities  declined 12% in 2001 as a result of several  factors.  Reserves and Separate Account  liabilities  required to support the
annuity and life insurance  business  declined  consistent  with market valuing of the underlying  assets as well as the changes in the
GMDB  reserve.  Payable to affiliate  increased  due to borrowing  from ASI to support  temporary  operating  cash needs.  Reduction in
Future Fees Payable to ASI declined,  consistent  with the  securitization  transaction  cash flow realized on the designated  block of
contracts.






Significant Accounting Policies
-------------------------------

For information on the Company's significant  accounting policies, see Notes to Consolidated  Financial Statements.  Specifically,  for
Deferred  Acquisition  Costs, see Note 21, for Separate  Accounts,  see Note 20 and for the Company's employee profit sharing programs,
see Note 13.

Liquidity and Capital Resources
-------------------------------

The Company's liquidity requirement was met by cash from insurance operations, investment activities and borrowings from ASI.

In 2001,  the Company had net positive  operating  cash flow as a result of increased  cash from  insurance  operations and a decreased
acquisition  cost cash flow strain due to the  reduction  in sales  activity.  In 2000,  the  majority of the  operating  cash  outflow
resulted  from the sale of variable  annuity and variable life products  that carry a contingent  deferred  sales charge.  This type of
product causes a temporary cash strain in that 100% of the proceeds are invested in separate  accounts  supporting the product  leaving
a cash (but not capital)  strain caused by the  acquisition  cost for the new business.  This cash strain  required the Company to look
beyond the cash made  available by  insurance  operations  and  investments  of the Company to financing in the form of surplus  notes,
capital contributions, cash advances, securitization transactions and modified coinsurance reinsurance arrangements:

During 2001 and 2000, the Company received  $45,500,000 and $69,000,000,  respectively,  from ASI to support the solvency capital needs
and anticipated  growth in business of its U.S.  operations.  In addition,  the Company received  $2,500,000 and $2,450,000 from ASI in
2001 and 2000, respectively, to support its investment in Skandia Vida.

In 2001, in anticipation of more permanent  financing,  the Company received  approximately  $100,000,000  from ASI in the form of cash
advances.  These amounts are reported as Payable to Affiliates in the Consolidated Statements of Financial Condition.

Funds  received  from new  securitization  transactions  amounted to  $476,288,000  in 2000 (see Note 8 to the  consolidated  financial
statements).

During 2001 and 2000,  the Company  extended its  reinsurance  agreements.  The Company also entered into a reinsurance  agreement with
SICL in 2000.  The  reinsurance  agreements are modified  coinsurance  arrangements  where the reinsurer  shares in the experience of a
specific book of business.

The Company  expects the continued use of reinsurance and  securitization  transactions  to fund the cash strain  anticipated  from the
acquisition costs on future years' sales volume.

As of December 31, 2001 and 2000,  shareholder's  equity  totaled  $577,668,000  and  $496,911,000,  respectively.  The increases  were
driven by the previously mentioned capital contributions received from ASI and net income from operations.

The Company has long-term surplus notes and short-term borrowings from ASI.  No dividends have been paid to ASI.

The National  Association of Insurance  Commissioners  ("NAIC") requires insurance  companies to report  information  regarding minimum
Risk Based Capital ("RBC")  requirements.  These  requirements  are intended to allow insurance  regulators to identify  companies that
may need  regulatory  attention.  The RBC model law requires  that  insurance  companies  apply various  factors to asset,  premium and
reserve items,  all of which have inherent risks. The formula includes  components for asset risk,  insurance risk,  interest rate risk
and business  risk.  The Company has complied  with the NAIC's RBC reporting  requirements  and has total  adjusted  capital well above
required capital.






Effects of Inflation
--------------------

The rate of inflation has not had a significant effect on the Company's financial statements.

Outlook
-------

The Company  believes  that it is well  positioned to retain and enhance its position as a leading  provider of financial  products for
long-term  savings and retirement  purposes as well as to address the economic impact of premature death,  estate planning concerns and
supplemental  retirement  needs.  The  Company  has  renewed  its focus on its core  variable  annuity  business,  offering  innovative
long-term  savings and income  products,  strengthening  its wholesaling  efforts and providing  consistently  good customer service in
order to gain market share and improve profitability in an increasingly competitive market.

The  Gramm-Leach-Bliley  Act of 1999 (the Financial Services  Modernization Act) permits affiliation among banks,  securities firms and
insurance  companies.  This  legislative  change has created  opportunities  for  continued  consolidation  in the  financial  services
industry and increased competition as large companies offer a wide array of financial products and services.

Various other legislative  initiatives could impact the Company such as pension reform,  capital gains and estate tax changes,  privacy
standards and Internet  regulation.  Additional pension reform may change current tax deferral rules and allow increased  contributions
to retirement plans,  which may lead to higher  investments in tax-deferred  products and create growth  opportunities for the Company.
A capital gains tax reduction may cause  tax-deferred  products to be less attractive to consumers,  which could  adversely  impact the
Company.  New privacy  standards  and  Internet  regulation  may impact the  Company's  strategic  initiatives,  especially  related to
potential business relationships with web-based technology providers.

Forward Looking Information
---------------------------

The Private  Securities  Litigation  Reform Act of 1995 (the "1995 Act") provides a "safe harbor" for  forward-looking  statements,  so
long as those  statements are identified as  forward-looking,  and the statements are accompanied by meaningful  cautionary  statements
that identify  important  factors that could cause actual results to differ  materially from those discussed in the statement.  We want
to take advantage of these safe harbor provisions.

Certain  information  contained in the  Management's  Discussion  and  Analysis of Financial  Condition  and Results of  Operations  is
forward-looking within the meaning of the 1995 Act or Securities and Exchange Commission rules.

These forward-looking  statements rely on a number of assumptions  concerning future events, and are subject to a number of significant
uncertainties  and results to differ  materially  from these  statements.  You should not put undue  reliance on these  forward-looking
statements.  We disclaim  any  intention  or  obligation  to update or revise  forward-looking  statements,  whether as a result of new
information, future events or otherwise.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to potential  fluctuations in earnings and the fair value of certain of its assets and  liabilities,  as well as
variations in expected cash flows due to changes in market  interest  rates and equity  prices.  The  following  discussion  focuses on
specific  exposures  the Company has to interest rate and equity price risk and describes  strategies  used to manage these risks,  and
includes  "forward-looking  statements"  that involve  risk and  uncertainties.  The  discussion  is limited to  financial  instruments
subject to market risks and is not intended to be a complete discussion of all of the risks to which the Company is exposed.






Interest Rate Risk
------------------

Fluctuations in interest rates can potentially  impact the Company's  profitability and cash flows. At December 31, 2001, 97% of assets
held under management by the Company are in non-guaranteed  Separate Accounts for which the Company's  exposure is not significant,  as
the  contractowner  assumes  substantially  all the  investment  risk.  On the  remaining  3% of assets,  the  interest  rate risk from
contracts that carry interest rate exposure is managed through an  asset/liability  matching  program which takes into account the risk
variables of the insurance liabilities supported by the assets.

At December 31, 2001,  the Company held fixed  maturity  investments  in its general  account that are sensitive to changes in interest
rates.  These  securities are held in support of the Company's fixed immediate  annuities,  fixed  supplementary  contracts,  the fixed
investment  option offered in its variable life insurance  contracts,  and in support of the Company's  target  solvency  capital.  The
Company has a conservative  investment  philosophy with regard to these  investments.  All  investments are investment  grade corporate
securities, government agency or U.S. government securities.

The  Company's  deferred  annuity  products  offer a fixed option which  subjects the Company to interest  rate risk.  The fixed option
guarantees a fixed rate of interest for a period of time  selected by the  contractowner.  Guarantee  period  options  available  range
from one to ten years.  Withdrawal  of funds,  or transfer of funds to variable  investment  options,  before the end of the  guarantee
period subjects the  contractowner to a market value adjustment  ("MVA").  In the event of rising interest rates,  which make the fixed
maturity  securities  underlying the guarantee  less valuable,  the MVA could be negative.  In the event of declining  interest  rates,
which make the fixed maturity  securities  underlying the guarantee more valuable,  the MVA could be positive.  The resulting  increase
or decrease in the value of the fixed option,  from  calculation of the MVA,  should  substantially  offset the increase or decrease in
the market value of the securities  underlying the guarantee.  The Company  maintains  strict  asset/liability  matching to enable this
offset.  However,  the Company still takes on the default risk for the underlying  securities,  the interest rate risk of  reinvestment
of interest payments and the risk of failing to maintain the asset/liability matching program with respect to duration and convexity.

Liabilities  held in the  Company's  guaranteed  separate  account  as of  December  31,  2001  totaled  $1,092,944,000.  Fixed  income
investments  supporting those liabilities had a fair value of  $1,092,944,000.  The Company  performed a sensitivity  analysis on these
interest-sensitive  liabilities  and assets at December 31, 2001.  The analysis  showed that an immediate  decrease of 100 basis points
in interest  rates would  result in a net  increase in  liabilities  and the  corresponding  assets of  approximately  $37,300,000  and
$41,500,000,  respectively.  An analysis of a 100 basis point  decline in interest  rates at December 31, 2000 showed a net increase in
interest-sensitive liabilities and the corresponding assets of approximately $39,800,000 and $39,900,000, respectively.

Equity Market Exposure
----------------------

The primary  equity  market risk to the Company  comes from the nature of the variable  annuity and variable  life products sold by the
Company.  Various fees and charges  earned are  substantially  derived as a percentage of the market value of assets under  management.
In a market  decline,  this income  would be reduced.  This could be further  compounded  by customer  withdrawals,  net of  applicable
surrender  charge  revenues,  partially  offset by transfers to the fixed option  discussed above. A 10% decline in the market value of
the assets under  management at December 31, 2001,  sustained  throughout  2002,  would result in an approximate drop in related annual
fee income of  $49,727,000.  This result was not  materially  different  than the result  obtained  from the  analysis  performed as of
December 31, 2000.

Another  equity market risk exposure of the Company  relates to the  guaranteed  minimum  death benefit  liability.  Declines in equity
markets and,  correspondingly,  the performance of the mutual funds underlying the Company's products,  increase the guaranteed minimum
death benefit liabilities.  As discussed in Note 2E of the consolidated  financial statements,  the Company uses derivative instruments
to hedge against the risk of significant  decreases in equity markets.  Prior to the  implementation of this program,  the Company used
reinsurance to mitigate this risk.

The  Company  has a small  portfolio  of equity  investments  consisting  of mutual  funds,  which are held in  support  of a  deferred
compensation  program. In the event of a decline in market values of underlying  securities,  the value of the portfolio would decline;
however the accrued benefits payable under the related deferred compensation program would decline by a corresponding amount.

Estimates  of interest  rate risk and equity  price risk were  obtained  using  computer  models that take into  consideration  various
assumptions  about the future.  Given the uncertainty of future interest rate movements,  volatility in the equity markets and consumer
behavior, actual results may vary from those predicted by the Company's models.













                                             AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
















Report of Independent Auditors

To the Board of Directors and Shareholder of
    American Skandia Life Assurance Corporation
Shelton, Connecticut

We have audited the  consolidated  statements of financial  condition of American  Skandia Life  Assurance  Corporation  (the "Company"
which is a wholly-owned  subsidiary of Skandia Insurance  Company Ltd.) as of December 31, 2001 and 2000, and the related  consolidated
statements  of income,  shareholder's  equity and cash flows for each of the three years in the period ended  December 31, 2001.  These
consolidated  financial statements are the responsibility of the Company's  management.  Our responsibility is to express an opinion on
these consolidated 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.  An audit also includes assessing the accounting principles used and significant  estimates made by management,  as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly,  in all material  respects,  the  consolidated  financial
position  of American  Skandia  Life  Assurance  Corporation  at December  31,  2001 and 2000,  and the  consolidated  results of their
operations  and their cash flows for each of the three years in the period  ended  December  31,  2001 in  conformity  with  accounting
principles generally accepted in the United States.

As discussed in Note 2, the Company adopted Financial Accounting Standards (FAS) No. 133, Accounting for Derivative Instruments and
Hedging Activities.


/s/ Ernst & Young LLP
------------------------------------

Hartford, Connecticut
February 2, 2002






                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                            Consolidated Statements of Financial Condition
                                                         (table in thousands)

                                                                           As of December 31,
                                                                          2001            2000
                                                                          ----            ----
ASSETS
------
Investments:
   Fixed maturities - at fair value                                  $       362,831 $       285,708
   Equity securities - at fair value                                          45,083          20,402
   Derivative instruments                                                      5,525           3,015
   Policy loans                                                                6,559           3,746
                                                                     --------------- ---------------

     Total investments                                                       419,998         312,871

Cash and cash equivalents                                                     32,231          76,499
Accrued investment income                                                      4,737           5,209
Deferred acquisition costs                                                 1,383,281       1,398,192
Reinsurance receivable                                                         5,863           3,642
Receivable from affiliates                                                     3,283           3,327
Income tax receivable                                                         30,537          34,620
State insurance licenses                                                       3,963           4,113
Fixed assets                                                                  20,734          10,737
Other assets                                                                  96,967          96,403
Separate account assets                                                   26,038,549      29,757,092
                                                                     --------------- ---------------

     Total assets                                                    $    28,040,143 $    31,702,705
                                                                     =============== ===============

LIABILITIES AND SHAREHOLDER'S EQUITY
------------------------------------
Liabilities:
Reserves for future insurance policy and contract benefits           $        89,740 $       135,545
Drafts outstanding                                                            64,438          63,758
Accounts payable and accrued expenses                                        160,261         137,040
Deferred income taxes                                                         54,980           8,949
Payable to affiliates                                                        103,452               -
Future fees payable to American Skandia, Inc. ("ASI")                        797,055         934,410
Short-term borrowing                                                          10,000          10,000
Surplus notes                                                                144,000         159,000
Separate account liabilities                                              26,038,549      29,757,092
                                                                     --------------- ---------------

     Total Liabilities                                                    27,462,475      31,205,794
                                                                     --------------- ---------------

Shareholder's equity:
Common stock, $100 par value, 25,000 shares authorized,
   issued and outstanding                                                      2,500           2,500
Additional paid-in capital                                                   335,329         287,329
Retained earnings                                                            239,078         205,979
Accumulated other comprehensive income                                           761           1,103
                                                                     --------------- ---------------

     Total Shareholder's equity                                              577,668         496,911
                                                                     --------------- ---------------

     Total liabilities and shareholder's equity                      $    28,040,143 $    31,702,705
                                                                     =============== ===============

                                            See notes to consolidated financial statements.




                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                                   Consolidated Statements of Income
                                                         (tables in thousands)

                                                                       For the Year Ended December 31,
                                                                      2001          2000           1999
                                                                      ----          ----           ----

REVENUES
--------

Annuity and life insurance charges and fees                       $    378,693  $    424,578  $    289,989
Fee income                                                             111,196       130,610        83,243
Net investment income                                                   20,126        11,656        10,441
Premium income                                                           1,218         3,118         1,278
Net realized capital gains (losses)                                        928          (688)          578
Other                                                                    1,222         2,348         1,832
                                                                  ------------  ------------  ------------

   Total revenues                                                      513,383       571,622       387,361
                                                                  ------------  ------------  ------------


EXPENSES
--------

Benefits:
   Annuity and life insurance benefits                                   1,955           751           612
   Change in annuity and life insurance policy reserves                (39,898)       45,018         3,078
   Cost of minimum death benefit reinsurance                                 -             -         2,945
   Return credited to contractowners                                    16,833         9,046        (1,639)
                                                                  ------------  ------------  -------------

                                                                       (21,110)       54,815         4,996

Other:
   Underwriting, acquisition and other insurance
     expenses                                                          420,802       335,213       206,350
   Interest expense                                                     73,424        85,998        69,502
                                                                  ------------  ------------  ------------

                                                                       494,226       421,211       275,852
                                                                  ------------  ------------  ------------

   Total benefits and expenses                                         473,116       476,026       280,848
                                                                  ------------  ------------  ------------

     Income from operations before income tax                           40,267        95,596       106,513

       Income tax expense                                                7,168        30,779        30,344
                                                                  ------------  ------------  ------------

         Net income                                               $     33,099  $     64,817  $     76,169
                                                                  ============  ============  ============


                                            See notes to consolidated financial statements.





                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                            Consolidated Statements of Shareholder's Equity
                                                         (table in thousands)

                                                                  For the Year Ended December 31,
                                                               2001             2000             1999
                                                               ----             ----             ----

Common stock:
   Beginning balance                                        $     2,500      $     2,500      $     2,000
   Increase in par value                                              -                -              500
                                                            -----------      -----------      -----------

     Ending balance                                               2,500            2,500            2,500
                                                            -----------      -----------      -----------

Additional paid in capital:
   Beginning balance                                            287,329          215,879          179,889
   Transferred to common stock                                        -                -             (500)
   Additional contributions                                      48,000           71,450           36,490
                                                            -----------      -----------      -----------

     Ending balance                                             335,329          287,329          215,879
                                                            -----------      -----------      -----------

Retained earnings:
   Beginning balance                                            205,979          141,162           64,993
   Net income                                                    33,099           64,817           76,169
                                                            -----------      -----------      -----------

     Ending balance                                             239,078          205,979          141,162
                                                            -----------      -----------      -----------

Accumulated other comprehensive income (loss):
   Beginning balance                                              1,103             (107)           3,535
   Other comprehensive income                                      (342)           1,210           (3,642)
                                                            ------------     -----------      ------------

     Ending balance                                                 761            1,103             (107)
                                                            -----------      -----------      ------------

       Total shareholder's equity                           $   577,668      $   496,911      $   359,434
                                                            ===========      ===========      ===========


                                            See notes to consolidated financial statements.





                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                                 Consolidated Statements of Cash Flows
                                                         (table in thousands)

                                                                          For the Year Ended December 31,
                                                                           2001        2000        1999
                                                                           ----        ----        ----
Cash flow from operating activities:
   Net income                                                           $    33,099 $    64,817 $    76,169
   Adjustments to reconcile net income to net
     cash provided by (used in) operating activities:
     Amortization and depreciation                                            1,833       7,565       1,495
     Deferred tax expense                                                    46,215      60,023     (10,903)
     (Decrease) increase in policy reserves                                 (34,679)     50,892       4,367
     Increase (decrease) in payable to affiliates, net                      103,496     (72,063)     69,897
     Change in income tax receivable                                          4,083     (58,888)     17,611
     Increase in other assets                                                  (564)    (59,987)    (32,954)
     Decrease in accrued investment income                                      472      (1,155)     (1,174)
     (Increase) decrease in reinsurance receivable                           (2,221)        420         129
     Net decrease (increase) in deferred acquisition costs                   14,911    (310,487)   (366,198)
     Increase (decrease) in accounts payable and accrued
expenses                                                                     23,221     (21,550)     66,763
     Increase in drafts outstanding                                             680      12,699      22,118
     Investment losses (gains) on derivatives                                 2,902      (3,435)      3,749
     Net realized capital (gains) losses on investments                        (928)        688        (578)
                                                                        ----------------------- ------------
       Net cash provided by (used in) operating activities                  192,520    (330,461)   (149,509)
                                                                        ----------- ------------------------

Cash flow from investing activities:
     Purchase of fixed maturity investments                                (462,820)   (380,737)    (99,250)
     Proceeds from sale and maturity of fixed
       maturity investments                                                 390,816     303,736      36,226
     Purchase of derivatives                                                (66,487)     (6,722)     (4,974)
     Proceeds from exercise of derivative instruments                        61,075           -           -
     Purchase of shares in equity securities                                (55,430)    (18,136)    (17,703)
     Proceeds from sale of shares in equity securities                       25,228       8,345      14,657
     Purchase of fixed assets                                               (10,773)     (7,348)     (3,178)
     Increase in policy loans                                                (2,813)     (2,476)       (701)
                                                                        ------------------------------------
       Net cash used in investing activities                               (121,204)   (103,338)    (74,923)
                                                                        ------------------------------------

Cash flow from financing activities:
     Capital contribution from parent                                        48,000      71,450      36,490
     Repayment of surplus notes                                             (15,000)    (20,000)    (14,000)
     (Decrease) increase in future fees payable to ASI, net                (137,355)    358,376     207,056
     Net (withdrawals) deposits (from) to contractowner accounts            (11,126)     11,361       5,872
                                                                        -----------------------------------
       Net cash (used in) provided by financing activities                 (115,481)    421,187     235,418
                                                                        ----------------------- -----------

       Net (decrease) increase in cash and cash equivalents                 (44,165)    (12,612)     10,986
       Cash and cash equivalents at beginning of period                      76,499      89,212      77,525
       Change in foreign currency translation, net                             (103)       (101)        701
                                                                        -----------------------------------
       Cash and cash equivalents at end of period                       $    32,231 $    76,499 $    89,212
                                                                        =========== =========== ===========
     Income taxes (received) paid                                       $   (43,130)$    29,644 $    23,637
                                                                        ======================= ===========
     Interest paid                                                      $    43,843 $    85,551 $    69,697
                                                                        ===========  ========== ===========
                                            See notes to consolidated financial statements.





                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                              Notes to Consolidated Financial Statements
                                                           December 31, 2001


1.       ORGANIZATION AND OPERATION

         American Skandia Life Assurance  Corporation (the "Company") is a wholly-owned  subsidiary of American  Skandia,  Inc. ("ASI")
         whose ultimate parent is Skandia Insurance Company Ltd., ("SICL") a Swedish Corporation.

         The Company develops  long-term  savings and retirement  products which are distributed  through its affiliated  broker/dealer
         company,  American Skandia  Marketing,  Incorporated  ("ASM").  The Company  currently issues variable and term life insurance
         and variable,  fixed,  market value adjusted  deferred and immediate  annuities for individuals,  groups and qualified pension
         plans.  The Company has  announced  its  intention to focus on its core  variable  annuity  business by exiting the  qualified
         pension plan market and limiting its variable  life  insurance  offerings to single  premium  products,  as well as term life.
         The Company does not expect to incur any significant costs to exit these businesses.

         The Company has 99.9% ownership in Skandia Vida, S.A. de C.V.  ("Skandia  Vida"),  which is a life insurance company domiciled
         in Mexico.  Skandia Vida had total  shareholder's  equity of approximately  $4,179,000 and $4,402,000 as of December 31, 2001,
         and 2000,  respectively.  The Company  considers  Mexico an emerging  market and has invested in the Skandia  Vida  operations
         with the  expectation  of  generating  profits from  long-term  savings  products in future years.  As such,  Skandia Vida has
         generated net losses of approximately $2,619,000, $2,540,000 and $2,523,000 in 2001, 2000 and 1999, respectively.


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         A.       Basis of Reporting
                  ------------------

                  The  accompanying  consolidated  financial  statements have been prepared in conformity  with  accounting  principles
                  generally  accepted in the United States ("U.S.  GAAP").  Intercompany  transactions and balances between the Company
                  and Skandia Vida have been eliminated in consolidation.

                  Certain reclassifications have been made to prior year amounts to conform with current year presentation.

         B.       New Accounting Standard
                  -----------------------

                  Effective January 1, 2001, the Company adopted Statement of Financial  Accounting  Standards No. 133, "Accounting for
                  Derivative  Instruments  and Hedging  Activities,"  as amended by SFAS 137 and SFAS 138  (collectively  "SFAS  133").
                  Derivative  instruments held by the Company consist of equity option contracts  utilized to manage the economic risks
                  associated with the guaranteed  minimum death benefits  ("GMDB").  These  derivative  instruments are carried at fair
                  value.  Realized and unrealized  gains and losses are reported in the  Consolidated  Statement of Income,  consistent
                  with the item being hedged,  as a component of return  credited to  contractowners.  The adoption of SFAS No. 133 did
                  not have a material effect on the Company's financial statements.






                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

                  Effective  April 1, 2001, the Company  adopted the Emerging  Issues Task Force ("EITF") Issue 99-20,  "Recognition of
                  Interest  Income and  Impairment on Purchased and Retained  Beneficial  Interests in Securitized  Financial  Assets."
                  Under the consensus,  investors in certain asset-backed  securities are required to record changes in their estimated
                  yield on a prospective  basis and to evaluate these  securities for an other than temporary  decline in value. If the
                  fair value of the  asset-backed  security has declined below its carrying  amount and the decline is determined to be
                  other than  temporary,  the security is written  down to fair value.  The adoption of EITF Issue 99-20 did not have a
                  significant effect on the Company's financial statements.

         C.       Future Accounting Standard
                  --------------------------

                  In July 2001, the Financial Accounting  Standards Board ("FASB") issued Statement of Financial Accounting  Standards.
                  No. 142  "Accounting  for Goodwill  and  Intangible  Assets."  ("SFAS  142").  Under the new  standard,  goodwill and
                  intangible  assets  deemed to have  indefinite  lives  will no  longer be  amortized  but will be  subject  to annual
                  impairment  tests in accordance  with the new standard.  Other  intangible  assets will continue to be amortized over
                  their useful lives.

                  The Company will apply the new rules on the  accounting  for goodwill and other  intangible  assets  beginning in the
                  first quarter of 2002. The Company is still assessing the impact of the new standard,  however,  the adoption of SFAS
                  142 is not expected to have a significant impact on the Company's financial statements.

         D.       Investments
                  -----------

                  The Company has classified its fixed maturity  investments as  available-for-sale  and, as such,  they are carried at
                  fair value with changes in unrealized gains and losses reported as a component of other comprehensive income.

                  The Company has classified its mutual fund investments held in support of a deferred  compensation plan (see Note 13)
                  as  available-for-sale.  Such  investments  are  carried at fair value with  changes in  unrealized  gains and losses
                  reported as a component of other comprehensive income.

                  Policy loans are carried at their unpaid principal balances.

                  Realized gains and losses on disposal of investments  are  determined by the specific  identification  method and are
                  included in revenues.

         E.       Derivative Instruments
                  ----------------------

                  The Company uses derivative  instruments which consist of equity option contracts for risk management  purposes,  and
                  not for trading or  speculation.  The Company  economically  hedges the GMDB  exposure  associated  with market value
                  fluctuations.





                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

                  Based on criteria  described in SFAS 133, the Company's hedges do not qualify as "effective"  hedges and,  therefore,
                  hedge accounting may not be applied.  Accordingly,  the derivative investments are carried at fair value with changes
                  in unrealized  gains and losses being recorded in income.  As such, both realized and unrealized gains and losses are
                  reported in the Consolidated  Statements of Income,  consistent with the item being hedged,  as a component of return
                  credited to contractowners.

         F.       Cash Equivalents
                  ----------------

                  The Company considers all highly liquid time deposits,  commercial paper and money market mutual funds purchased with
                  a maturity at date of acquisition of three months or less to be cash equivalents.

         G.       Fair Values of Financial Instruments
                  ------------------------------------

                  The methods and assumptions used to determine the fair value of financial instruments are as follows:

                  Fair values of fixed  maturities  with active markets are based on quoted market prices.  For fixed  maturities  that
                  trade in less active markets, fair values are obtained from an independent pricing service.

                  Fair values of equity securities are based on quoted market prices.

                  The fair value of derivative instruments is determined based on the current value of the underlying index.

                  The carrying value of cash and cash equivalents (cost)  approximates fair value due to the short-term nature of these
                  investments.

                  The carrying value of short-term  borrowings  (cost)  approximates  fair value due to the short-term  nature of these
                  liabilities.

                  Fair values of certain  financial  instruments,  such as future fees payable to ASI and surplus notes are not readily
                  determinable and are excluded from fair value disclosure requirements.

         H.       State Insurance Licenses
                  ------------------------

                  Licenses to do business in all states have been  capitalized  and reflected at the purchase price of $6,000,000  less
                  accumulated amortization.  The cost of the licenses is being amortized on a straight-line basis over 40 years.





                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

         I.       Software Capitalization
                  -----------------------

                  The Company  capitalizes  certain  costs  associated  with  internal  use  software in  accordance  with the American
                  Institute  of  Certified  Public  Accountants  Statement  of  Position  98-1,  "Accounting  for the Costs of Software
                  Developed or Obtained for Internal  Use" ("SOP 98-1").  SOP 98-1,  which was adopted  prospectively  as of January 1,
                  1999,  requires the  capitalization of certain costs incurred in connection with developing or obtaining internal use
                  software.  Prior to the  adoption of SOP 98-1,  the Company  expensed all  internal  use  software  related  costs as
                  incurred.  Details of the capitalized  software costs, which are included in fixed assets,  and related  amortization
                  for the years ended December 31, are as follows:

                  (table in thousands)                                  2001          2000         1999
                                                                        ----          ----         ----
                  Balance at beginning of year                        $    7,212   $    2,920    $        -
                  Software costs capitalized during the year               5,210        4,804         3,035
                  Software costs amortized during the year               (2,660)        (512)         (115)
                                                                     -----------  -----------   -----------
                  Balance at end of year                              $    9,762   $    7,212    $    2,920
                                                                     ===========  ===========   ===========

                  Capitalized software costs are amortized on a straight-line basis over three years.

         J.       Income Taxes
                  ------------

                  The Company is  included in the  consolidated  federal  income tax return  filed by Skandia  U.S.  Inc.  and its U.S.
                  subsidiaries.  In  accordance  with the tax sharing  agreement,  the federal  income tax  provision  is computed on a
                  separate return basis as adjusted for consolidated  items.  Pursuant to the terms of this agreement,  the Company has
                  the right to recover  the value of losses  utilized  by the  consolidated  group in the year of  utilization.  To the
                  extent the Company  generates  income in future years,  the Company is entitled to offset future taxes on that income
                  through the application of its loss carryforward generated in the current year.

                  Deferred  income taxes reflect the net tax effects of temporary  differences  between the carrying  amounts of assets
                  and liabilities for financial reporting purposes and the amounts used for income tax purposes.

         K.       Recognition of Revenue and Contract Benefits
                  --------------------------------------------

                  Revenues  for variable  deferred  annuity  contracts  consist of charges  against  contractowner  account  values for
                  mortality and expense risks,  administration  fees,  surrender  charges and an annual  maintenance  fee per contract.
                  Benefit reserves for variable annuity contracts  represent the account value of the contracts and are included in the
                  separate  account  liabilities.  Fee  income  from  mutual  fund  organizations  is  realized  based on assets  under
                  management.





                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

                  Revenues for variable immediate annuity and supplementary  contracts with and without life  contingencies  consist of
                  certain charges against  contractowner  account values including mortality and expense risks and administration fees.
                  Benefit  reserves for variable  immediate  annuity  contracts  represent  the account  value of the contracts and are
                  included in the separate account  liabilities.  Revenues for market value adjusted fixed annuity contracts consist of
                  separate  account  investment  income reduced by benefit payments and changes in reserves in support of contractowner
                  obligations,  all of which are included in return credited to  contractowners.  Benefit  reserves for these contracts
                  represent  the  account  value  of the  contracts,  and are  included  in the  general  account  reserve  for  future
                  contractowner benefits to the extent in excess of the separate account assets.

                  Revenues for fixed immediate  annuity and fixed  supplementary  contracts without life  contingencies  consist of net
                  investment income.  Revenues for fixed immediate annuity contracts with life contingencies  consist of single premium
                  payments  recognized as annuity  considerations  when  received.  Benefit  reserves for these  contracts are based on
                  applicable  actuarial  standards with assumed  interest rates that vary by issue year.  Assumed interest rates ranged
                  from 6.25% to 8.25% at December 31, 2001 and 2000.

                  Revenues for variable life insurance contracts consist of charges against  contractowner account values for mortality
                  and expense risk fees,  administration  fees, cost of insurance fees, taxes and surrender charges.  Certain contracts
                  also include  charges  against  premium to pay state premium  taxes.  Benefit  reserves for variable  life  insurance
                  contracts represent the account value of the contracts and are included in the separate account liabilities.

         L.       Deferred Acquisition Costs
                  --------------------------

                  The costs of acquiring new business,  which vary with and are  primarily  related to the  production of new business,
                  are being deferred,  net of reinsurance.  These costs include  commissions,  costs of contract issuance,  and certain
                  selling  expenses  that vary with  production.  These costs are being  amortized  generally in proportion to expected
                  gross  profits  from  surrender  charges,  policy and asset  based  fees and  mortality  and  expense  margins.  This
                  amortization is adjusted  retrospectively  and prospectively when estimates of current and future gross profits to be
                  realized from a group of products are revised.






                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

                  Details of the deferred acquisition costs and related amortization for the years ended December 31, are as follows:

                  (in thousands)                                   2001           2000            1999
                                                                   ----           ----            ----
                  Balance at beginning of year                $  1,398,192    $  1,087,705   $    721,507
                  Acquisition costs deferred during the year
                                                                   209,136         495,103        450,059
                  Acquisition costs amortized during the
                       year                                       (224,047)       (184,616)       (83,861)
                                                              -------------   -------------  -------------
                  Balance at end of year                      $  1,383,281    $  1,398,192   $  1,087,705
                                                              ============    ============   ============


         M.       Reinsurance
                  -----------

                  The Company cedes reinsurance  under modified  co-insurance  arrangements.  These  reinsurance  arrangements  provide
                  additional  capacity for growth in supporting the cash flow strain from the Company's  variable  annuity and variable
                  life insurance business.  The reinsurance is effected under quota share contracts.

                  The Company  reinsured its exposure to market  fluctuations  associated  with its GMDB liability in the first half of
                  1999.  Under this  reinsurance  agreement,  the Company ceded premiums of  approximately  $2,945,000;  received claim
                  reimbursements of approximately $242,000;  and, recorded a decrease in ceded reserves of approximately  $2,763,000 in
                  1999.

At December 31, 2001 and 2000, in accordance with the provisions of modified coinsurance agreements, the Company accrued approximately $7,733,000
                  and $4,339,000, respectively, for amounts receivable from favorable reinsurance experience on certain blocks of
                  variable annuity business.

         N.       Translation of Foreign Currency
                  -------------------------------

The financial position and results of operations of Skandia Vida are measured using local currency as the functional currency.  Assets and
                  liabilities are translated at the exchange rate in effect at each year-end.  Statements of income and changes in
                  shareholder's equity accounts are translated at the average rate prevailing during the year.  Translation
                  adjustments arising from the use of differing exchange rates from period to period are reported as a component of
                  other comprehensive income.

         O.       Separate Accounts
                  -----------------

                  Assets and  liabilities  in Separate  Accounts are included as separate  captions in the  consolidated  statements of
                  financial  condition.  Separate Account assets consist  principally of long term bonds,  investments in mutual funds,
                  short-term  securities and cash and cash  equivalents,  all of which are carried at fair value.  The  investments are
                  managed predominately through the Company's investment advisory affiliate,





                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

                  American  Skandia  Investment  Services,  Inc.  ("ASISI"),  utilizing  various  fund  managers as  sub-advisors.  The
                  remaining  investments are managed by independent  investment  firms. The  contractowner  has the option of directing
                  funds to a wide variety of investment  options,  most of which invest in mutual  funds.  The  investment  risk on the
                  variable portion of a contract is borne by the contractowner.  Fixed options with minimum  guaranteed  interest rates
                  are also  available.  The Company  bears the credit risk  associated  with the  investments  that support these fixed
                  options.

                  Included in Separate Account liabilities are reserves of approximately  $1,092,944,000 and $1,059,987,000 at December
                  31, 2001 and 2000,  respectively,  relating to annuity  contracts for which the  contractowner  is guaranteed a fixed
                  rate of return.  Separate Account assets of approximately  $1,092,944,000 and $1,059,987,000 at December 31, 2001 and
                  2000, respectively,  consisting of long term bonds, short-term securities, transfers due from the general account and
                  cash and cash equivalents are held in support of these annuity obligations, pursuant to state regulation.

         P.       Estimates
                  ---------

                  The  preparation of financial  statements in conformity  with U.S. GAAP requires that  management  make estimates and
                  assumptions  that affect the reported  amount of assets and  liabilities at the date of the financial  statements and
                  the reported  amounts of revenues and expenses  during the  reporting  period.  The more  significant  estimates  and
                  assumptions are related to deferred  acquisition  costs and involve policy lapses,  investment return and maintenance
                  expenses.  Actual results could differ from those estimates.

3.       COMPREHENSIVE INCOME

         The components of comprehensive income, net of tax, for the years ended December 31 were as follows:

         (table in thousands)                                                 2001        2000       1999
                                                                              ----        ----       ----
         Net income                                                        $  33,099  $  64,817   $  76,169
         Other comprehensive income:
            Unrealized investment losses on available sale securities
                                                                                (448)    (1,681)     (3,438)
            Reclassification adjustment for realized losses (gains)
              included in investment income                                      173      2,957        (660)
                                                                           ---------  ---------   ----------
            Net unrealized gains (losses) on securities                         (275)     1,276      (4,098)
            Foreign currency translation                                         (67)       (66)        456
                                                                           ---------- ----------  ---------
         Other comprehensive (loss) income                                      (342)     1,210      (3,642)
                                                                           ---------- ---------   ----------
         Comprehensive income                                              $  32,757  $  66,027   $  72,527
                                                                           =========  =========   =========








                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)

3.       COMPREHENSIVE INCOME (continued)

         Other  comprehensive  (loss) income is shown net of tax (benefit) expense of approximately  ($184) thousand,  $651 thousand and
         ($1,961) thousand for 2001, 2000 and 1999 respectively.

         The components of accumulated other comprehensive income, net of tax, as of December 31 were as follows:

         (table in thousands)                                                  2001         2000
                                                                               ----         ----
         Unrealized investment gains                                           $  746    $  1,021
         Foreign currency translation                                              15          82
                                                                               ------    --------
         Accumulated other comprehensive income                                $  761    $  1,103
                                                                               ======    ========

4.       INVESTMENTS

         The amortized cost,  gross  unrealized gains and losses and estimated fair value of fixed maturities and investments in equity
         securities  as of  December  31,  2001 and 2000 are shown  below.  All  securities  held at  December  31,  2001 and 2000 were
         publicly traded.

         Investments in fixed maturities as of December 31, 2001 consisted of the following:

                                                                     Gross          Gross
                                                    Amortized     Unrealized     Unrealized      Estimated
         (table in thousands)                         Cost           Gains         Losses       Fair Value
                                                      ----           -----         ------       ----------
         U.S. Government obligations                 $198,136         $2,869          $(413)      $200,592
         Obligations of state and political
           subdivisions                                   252              8              -            260
         Corporate securities                         158,494          4,051           (566)       161,979
                                                      -------          -----           -----       -------
              Totals                                 $356,882         $6,928          $(979)      $362,831
                                                     ========         ======          ======      ========


         The  amortized  cost and fair value of fixed  maturities,  by  contractual  maturity,  at December  31, 2001 are shown  below.
         Actual maturities may differ from contractual maturities due to call or prepayment provisions.

                                                       Amortized
         (table in thousands)                             Cost      Fair Value
                                                          ----      ----------
         Due in one year or less                      $    14,755   $    14,784
         Due after one through five years                 232,199       235,845
         Due after five through ten years                  92,984        94,289
         Due after ten years                               16,944        17,913
                                                      -----------   -----------
           Total                                      $   356,882   $   362,831
                                                      ===========   ===========






                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)


4.       INVESTMENTS (continued)

         Investments in fixed maturities as of December 31, 2000 consisted of the following:

                                                                     Gross          Gross
                                                    Amortized     Unrealized     Unrealized      Estimated
         (table in thousands)                         Cost           Gains         Losses       Fair Value
                                                      ----           -----         ------       ----------
         U.S. Government obligations              $    206,041   $      4,445   $        (11)  $    210,475
         Foreign government obligations                  2,791            195              -          2,986
         Obligations of state and political
              subdivisions                                 253              1              -            254
         Corporate securities                           72,237          1,565         (1,809)        71,993
                                                  ------------   ------------   -------------  ------------
              Totals                              $    281,322   $      6,206   $     (1,820)  $    285,708
                                                  ============   ============   =============  ============

         Proceeds from sales of fixed  maturities  during 2001, 2000 and 1999 and were  approximately  $386,816,000,  $302,632,000  and
         $32,196,000,  respectively.  Proceeds from maturities  during 2001, 2000 and 1999 were  approximately  $4,000,000,  $1,104,000
         and $4,030,000,  respectively.  The cost, gross unrealized  gains/losses and fair value of investments in equity securities at
         December 31are shown below:

         (table in thousands)                              Gross          Gross
                                                        Unrealized     Unrealized        Fair
                                            Cost           Gains         Losses          Value
                                            ----           -----         ------          -----
         2001                             $  49,886       $   122       $(4,925)       $45,083
         2000                             $  23,218       $   372       $(3,188)       $20,402

         Net realized investment gains (losses) were as follows for the years ended December 31:

         (table in thousands)                             2001          2000           1999
                                                          ----          ----           ----
         Fixed maturities:
           Gross gains                                  $  7,597      $  1,002       $    253
           Gross losses                                   (4,387)       (3,450)          (228)

         Investment in equity securities:
           Gross gains                                     1,910         1,913            990
           Gross losses                                   (4,192)         (153)          (437)
                                                        ---------     ---------      ---------
              Totals                                    $    928      $   (688)      $    578
                                                        ========      =========      ========







                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)


5.       NET INVESTMENT INCOME

         The sources of net investment income for the years ended December 31 were as follows:

         (table in thousands)                             2001          2000           1999
                                                          ----          ----           ----
         Fixed maturities                              $  18,788     $  13,502      $   9,461
         Cash and cash equivalents                           773         5,154          2,159
         Investment in equity securities                     622            99             32
         Policy loans                                        244            97             31
         Derivative instruments                                -        (6,939)        (1,036)
                                                      ----------    -----------    -----------
         Total investment income                          20,427        11,913         10,647
         Investment expenses                                (301)         (257)          (206)
                                                      -----------   -----------    -----------
         Net investment income                         $  20,126     $  11,656      $  10,441
                                                       ==========    ============   =========



6.       INCOME TAXES

         The significant components of income tax expense for the years ended December 31 were as follows:

         (table in thousands)                             2001          2000           1999
                                                          ----          ----           ----
         Current tax (benefit) expense                $   (39,047)  $   (29,244)   $    41,248
         Deferred tax expense (benefit)                    46,215        60,023        (10,904)
                                                      -----------   -----------    ------------
           Total income tax expense                   $     7,168   $    30,779    $    30,344
                                                      ===========   ===========    ===========


         Deferred tax assets (liabilities) include the following at December 31:

         (table in thousands)                              2001          2000
                                                           ----          ----
         Deferred tax assets:
           GAAP to tax reserve differences             $   241,503   $   382,826
           Future fees payable to ASI                       63,240             -
           Deferred compensation                            20,520        17,869
           Net operating loss carryforward                  14,372             -
           Surplus notes interest                            9,040         5,536
           AMT credit carryforward                           5,451             -
           Other                                             1,114           907
                                                       -----------   -----------
              Total deferred tax assets                    355,240       407,138
                                                       -----------   -----------

         Deferred tax liabilities:
           Deferred acquisition costs                     (404,758)     (411,417)
           Internal use software                            (3,417)       (2,524)
           Policy fees                                      (1,634)       (1,551)
           Net unrealized gains                               (411)         (595)
              Total deferred tax liabilities              (410,220)     (416,087)
                                                       ------------  ------------
                Net deferred tax asset (liability)     $   (54,980)  $    (8,949)
                                                       ============  ============






                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)


6.       INCOME TAXES (continued)

         The income tax expense was  different  from the amount  computed by applying the federal  statutory tax rate of 35% to pre-tax
         income from continuing operations as follows:

         (table in thousands)                                          2001          2000          1999
                                                                       ----          ----          ----
         Income (loss) before taxes
           Domestic                                                $   42,886    $   98,136    $  109,036
           Foreign                                                     (2,619)       (2,540)       (2,523)
                                                                   -----------   -----------   -----------
           Total                                                       40,267        95,596       106,513
           Income tax rate                                                 35%           35%           35%
                                                                   -----------   -----------   -----------
         Tax expense at federal statutory income tax rate              14,094        33,459        37,280

         Tax effect of:
           Dividend received deduction                                 (8,400)       (7,350)       (9,572)
           Losses of foreign subsidiary                                   917           889           883
           Meals and entertainment                                        603           841           664
           State income taxes                                             (62)         (524)        1,071
           Other                                                           16         3,464            18
                                                                   ----------    ----------    ----------
              Income tax expense                                   $    7,168    $   30,779    $   30,344
                                                                   ==========    ==========    ==========

         The Company's net operating loss carryforwards, totaling approximately $41,063,000 at December 31, 2001, will expire in 2016.

7.       COST ALLOCATION AGREEMENTS WITH AFFILIATES

         Certain  operating costs  (including  personnel,  rental of office space,  furniture,  and equipment) have been charged to the
         Company at cost by American Skandia Information  Services and Technology  Corporation  ("ASIST"),  an affiliated company.  The
         Company  has also  charged  operating  costs to several of its  affiliates.  The total cost to the Company for these items was
         approximately  $6,179,000,  $13,974,000 and $11,136,000 in 2001, 2000 and 1999, respectively.  Income received for these items
         was approximately $13,166,000, $11,186,000 and $3,919,000 in 2001, 2000 and 1999, respectively.

         Beginning in 1999,  the Company was  reimbursed by ASM for certain  distribution  related costs  associated  with the sales of
         business  through an investment  firm where ASM serves as an introducing  broker dealer.  Under this  agreement,  the expenses
         reimbursed  were  approximately  $6,391,000,  $5,842,000 and $1,441,000 in 2001, 2000 and 1999,  respectively.  As of December
         31, 2001 and 2000, amounts receivable under this agreement were approximately $639,000 and $492,000, respectively.





                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)


8.       FUTURE FEES PAYABLE TO ASI

         In a series of  transactions  with ASI,  the  Company  transferred  certain  rights to  receive a portion  of future  fees and
         contract charges expected to be realized on designated blocks of deferred annuity contracts.

         The proceeds  from the  transfers  have been recorded as a liability  and are being  amortized  over the  remaining  surrender
         charge  period of the  designated  contracts  using the  interest  method.  The Company did not  transfer the right to receive
         future fees and charges after the expiration of the surrender charge period.

         In  connection  with  these  transactions,  ASI,  through  special  purpose  trusts,  issued  collateralized  notes in private
         placements, which are secured by the rights to receive future fees and charges purchased from the Company.

         Under the terms of the Purchase  Agreements,  the rights transferred provide for ASI to receive a percentage (60%, 80% or 100%
         depending  on the  underlying  commission  option) of future  mortality  and expense  charges and  contingent  deferred  sales
         charges,  after reinsurance,  expected to be realized over the remaining  surrender charge period of the designated  contracts
         (generally 6 to 8 years).

         Payments,  representing  fees  and  charges  in  the  aggregate  amount,  of  approximately  $207,731,000,   $219,454,000  and
         $131,420,000  were  made  by  the  Company  to  ASI in  2001,  2000  and  1999,  respectively.  Related  interest  expense  of
         approximately  $59,873,000,  $70,667,000  and $52,840,000 has been included in the statement of income for 2001, 2000 and1999,
         respectively.

         The  Commissioner  of the State of  Connecticut  has approved the transfer of future fees and charges;  however,  in the event
         that the Company becomes subject to an order of liquidation or  rehabilitation,  the  Commissioner has the ability to stop the
         payments due to ASI under the Purchase Agreement subject to certain terms and conditions.





                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)


8.       FUTURE FEES PAYABLE TO ASI (continued)

         The present values of the transactions as of the respective effective date were as follows:

                           Closing      Effective       Contract Issue        Discount       Present
        Transaction         Date          Date              Period              Rate          Value
        -----------         ----          ----              ------              ----          -----

           1996-1          12/17/96        9/1/96        1/1/94 - 6/30/96       7.5%           $50,221
           1997-1           7/23/97        6/1/97        3/1/96 - 4/30/97       7.5%            58,767
           1997-2          12/30/97       12/1/97        5/1/95 - 12/31/96      7.5%            77,552
           1997-3          12/30/97       12/1/97        5/1/96 - 10/31/97      7.5%            58,193
           1998-1           6/30/98        6/1/98        1/1/97 - 5/31/98       7.5%            61,180
           1998-2          11/10/98       10/1/98        5/1/97 - 8/31/98       7.0%            68,573
           1998-3          12/30/98       12/1/98        7/1/96 - 10/31/98      7.0%            40,128
           1999-1           6/23/99        6/1/99        4/1/94 - 4/30/99       7.5%           120,632
           1999-2          12/14/99       10/1/99       11/1/98 - 7/31/99       7.5%           145,078
           2000-1           3/22/00        2/1/00        8/1/99 - 1/31/00       7.5%           169,459
           2000-2           7/18/00        6/1/00        2/1/00 - 4/30/00      7.25%            92,399
           2000-3          12/28/00       12/1/00        5/1/00 - 10/31/00     7.25%           107,291
           2000-4          12/28/00       12/1/00        1/1/98 - 10/31/00     7.25%           107,139


         Expected payments of future fees payable to ASI as of December 31, 2001 are as follows:

           (table in thousands)           Year             Amount
                                          ----             ------

                                          2002      $   175,357
                                          2003          171,345
                                          2004          156,842
                                          2005          132,702
                                          2006          102,188
                                          2007           50,821
                                          2008            7,800
                                                    -----------
                                          Total         $797,055
                                                        ========






                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)


9.       LEASES

         The Company  leases office space under a lease  agreement  established  in 1989 with ASIST.  The Company  entered into a lease
         agreement for office space in  Westminster,  Colorado,  effective  January 1, 2001.  Lease expense for 2001, 2000 and 1999 was
         approximately  $8,404,000,  $6,593,000 and $5,003,000,  respectively.  Future minimum lease payments per year and in aggregate
         as of December 31, 2001 are as follows:

              (table in thousands)       2002                          $   7,913
                                         2003                              8,087
                                         2004                              8,570
                                         2005                              8,609
                                         2006                              8,698
                                         2007 and thereafter              41,711
                                                                       ---------
                                         Total                         $  83,588
                                                                       =========


10.      RESTRICTED ASSETS

         To comply with certain state insurance  departments'  requirements,  the Company  maintains  cash,  bonds and notes on deposit
         with  various  states.  The carrying  value of these  deposits  amounted to  approximately  $4,822,000  and  $4,636,000  as of
         December 31, 2001 and 2000,  respectively.  These deposits are required to be maintained for the protection of  contractowners
         within the individual states.

11.      RETAINED EARNINGS AND DIVIDEND RESTRICTIONS

         Statutory  basis  shareholder's  equity was  approximately  $226,780,000  and  $342,804,000  at  December  31,  2001 and 2000,
         respectively.

         The Company incurred statutory basis net losses for 2001 of approximately  $121,957,000 due primarily to significant  declines
         in the equity  markets  during the year as well as increased  levels of  operating  expenses  relative to revenues.  Statutory
         basis net income for 2000 was $11,550,000, as compared to losses of $17,672,000 in 1999.

         Under various state insurance  laws, the maximum amount of dividends that can be paid to  shareholders  without prior approval
         of the state insurance  department is subject to restrictions  relating to statutory surplus and net gain from operations.  At
         December 31, 2001, no amounts may be distributed without prior approval.

         On November 8, 1999,  the Board of Directors  authorized  the Company to increase the par value of its capital  stock from $80
         per share to $100 per share in order to comply  with  minimum  capital  levels as  required by the  California  Department  of
         Insurance.  This transaction  resulted in a corresponding  decrease in paid in and contributed  surplus of $500,000 and had no
         effect on capital and surplus.





                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)

12.      STATUTORY ACCOUNTING PRACTICES

         The Company  prepares its statutory basis  financial  statements in accordance  with  accounting  practices  prescribed by the
         State of Connecticut  Insurance  Department.  Prescribed  statutory  accounting practices include publications of the National
         Association of Insurance Commissioners (NAIC), as well as state laws, regulations and general administrative rules.

         The NAIC adopted the  Codification of Statutory  Accounting  Principles  (Codification)  in March 1998. The effective date for
         codification  was January 1, 2001. The Company's  state of domicile,  Connecticut,  has adopted  codification  and the Company
         has made the necessary changes in its statutory  accounting and reporting required for  implementation.  The overall impact of
         adopting  codification  was a one-time,  cumulative  change in accounting  benefit recorded  directly in statutory  surplus of
         approximately $12,047,000.

         In addition,  during 2001, based on a recommendation from the State of Connecticut Insurance  Department,  the Company changed
         its statutory  method of  accounting  for its liability  associated  with  securitized  variable  annuity fees.  Under the new
         method of  accounting,  the liability for  securitized  fees is established  consistent  with the method of accounting for the
         liability  associated with variable annuity fees ceded under reinsurance  contracts.  This equates to the statutory  liability
         at any valuation  date being equal to the  Commissioners  Annuity  Reserve  Valuation  Method  (CARVM)  offset  related to the
         securitized  contracts.  The impact of this change in  accounting,  representing  the  difference in the liability  calculated
         under the old  method  versus  the new  method as of  January  1,  2001,  was  reported  as a  cumulative  effect of change in
         accounting benefit recorded directly in statutory surplus of approximately $20,215,000.


13.      EMPLOYEE BENEFITS

         The Company has a 401(k) plan for which  substantially  all employees are eligible.  Under this plan,  the Company  provides a
         50% match on employees'  contributions up to 6% of an employee's  salary (for an aggregate match of up to 3% of the employee's
         salary).  Additionally,  the Company may contribute  additional  amounts based on  profitability of the Company and certain of
         its affiliates.  Company  contributions to this plan on behalf of the participants were approximately  $2,738,000,  $3,734,000
         and $3,164,000 in 2001, 2000 and 1999, respectively.

         The Company has a deferred  compensation  plan,  which is available to the field marketing staff and certain other  employees.
         Company contributions to this plan on behalf of the participants were approximately  $345,000,  $399,000 and $193,000 in 2001,
         2000 and 1999, respectively.





                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)

13.      EMPLOYEE BENEFITS (continued)

         The  Company  and  certain  affiliates  cooperatively  have a  long-term  incentive  program  under which units are awarded to
         executive  officers  and other  personnel.  The Company and  certain  affiliates  also have a profit  sharing  program,  which
         benefits all employees  below the officer level.  These  programs  consist of multiple  plans with new plans  instituted  each
         year.  Generally,  participants  must remain  employed by the Company or its  affiliates at the time such units are payable in
         order to  receive  any  payments  under  the  programs.  The  accrued  liability  representing  the  value of these  units was
         approximately  $13,645,000  and  $31,632,000  as of December 31, 2001 and 2000,  respectively.  Payments  under these programs
         were approximately $8,377,000, $13,542,000, and $4,079,000 in 2001, 2000 and 1999, respectively.

14.      REINSURANCE

         The  Company  cedes  insurance  to other  insurers in order to limit its risk  exposure.  Such  transfer  does not relieve the
         Company of its primary  liability and, as such,  failure of reinsurers to honor their obligation could result in losses to the
         Company.  The Company reduces this risk by evaluating the financial condition and credit worthiness of reinsurers.

         The effect of reinsurance for the 2001, 2000 and 1999 was as follows:

         (table in thousands)

        2001                                                             Gross         Ceded           Net
        ----                                                             -----         -----           ---
        Annuity and life insurance charges and fees                  $   430,913    $   (52,220)  $   378,693
        Change in annuity and life insurance policy reserves         $   (35,835)   $    (4,063)  $   (39,898)
        Return credited to contractowners                            $    16,741    $        92   $    16,833


        2000
        ----
        Annuity and life insurance charges and fees                  $   477,802    $   (53,224)  $   424,578
        Change in annuity and life insurance policy reserves         $    45,784    $      (766)  $    45,018
        Return credited to contractowners                            $    13,607    $    (4,561)  $     9,046


        1999
        ----
        Annuity and life insurance charges and fees                  $   326,670    $   (36,681)  $   289,989
        Change in annuity and life insurance policy reserves         $     4,151    $    (1,073)  $     3,078
        Return credited to contractowners                            $    (1,382)   $      (257)  $    (1,639)

         In December 2000, the Company entered into a modified  coinsurance  agreement with SICL covering certain  contracts issued since
         January  1996.  The impact of this  treaty to the  Company was a pre tax loss of  approximately  $4,917,000  in 2001 and pre tax
         income  of  approximately  $7,067,453  in 2000.  At  December  31,  2001 and 2000,  approximately  $12,983,000  and  $6,109,000,
         respectively, was payable to SICL under this agreement.





                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)


15.      SURPLUS NOTES

         The Company has issued  surplus  notes to ASI in exchange  for cash.  Surplus  notes  outstanding  as of December 31, 2001 and
         2000, and interest expense for 2001, 2000 and 1999 were as follows:

                                                     Liability as of
         (table in thousands)                         December 31,                    Interest Expense
                                   Interest                                            For the Years
            Note Issue Date          Rate          2001          2000          2001         2000         1999
         ----------------------    ---------     ----------    ----------    ---------    ---------    ---------
         ----------------------    ---------     ----------

         February 18, 1994           7.28%               -             -             -          732          738
         March 28, 1994              7.90%               -             -             -          794          801
         September 30, 1994          9.13%               -        15,000         1,282        1,392        1,389
         December 28, 1994           9.78%               -             -             -            -        1,308
         December 19, 1995           7.52%          10,000        10,000           763          765          762
         December 20, 1995           7.49%          15,000        15,000         1,139        1,142        1,139
         December 22, 1995           7.47%           9,000         9,000           682          684          682
         June 28, 1996               8.41%          40,000        40,000         3,411        3,420        3,411
         December 30, 1996           8.03%          70,000        70,000         5,699        5,715        5,698
                                                 ----------    ----------    ---------    ---------    ---------
                                                 ----------    ----------    ---------    ---------    ---------

         Total                                    $144,000      $159,000       $12,976      $14,644      $15,928
                                                 ==========    ==========    =========    =========    =========

         On December 3, 2001, a surplus note,  dated  September 30, 1994, for  $15,000,000  was repaid.  On December 27, 2000,  surplus
         notes for $10,000,000,  dated February 18, 1994, and $10,000,000,  dated March 28, 1994, were repaid.  On December 10, 1999, a
         surplus note, dated December 28, 1994, for $14,000,000 was repaid.  All surplus notes mature seven years from the issue date.

         Payment of interest and repayment of principal for these notes is subject to certain  conditions  and require  approval by the
         Insurance  Commissioner  of the  State  of  Connecticut.  At  December  31,  2001  and  2000,  approximately  $25,829,000  and
         $15,816,000, respectively, of accrued interest on surplus notes was not approved for payment under these criteria.


16.      SHORT-TERM BORROWING

         The  Company had a  $10,000,000  short-term  loan  payable to ASI at  December  31, 2001 and 2000 as part of a revolving  loan
         agreement.  The loan has an interest rate of 3.67% and matures on March 12, 2002.  The total related  interest  expense to the
         Company was  approximately  $522,000,  $687,000 and $585,000 in 2001, 2000 and 1999,  respectively.  Accrued  interest payable
         was approximately $113,000 and $222,000 as of December 31, 2001 and 2000, respectively.





                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)


17.      CONTRACT WITHDRAWAL PROVISIONS

         Approximately 99% of the Company's separate account  liabilities are subject to discretionary  withdrawal by contractowners at
         market value or with market value  adjustment.  Separate account assets,  which are carried at fair value, are adequate to pay
         such  withdrawals,  which are generally  subject to surrender  charges  ranging from 10% to 1% for contracts held less than 10
         years.

18.      RESTRUCTURING CHARGES

         On March 22,  2001,  and  December 3, 2001,  the  Company  announced  separate  plans to reduce  expenses to better  align its
         operating  infrastructure  with the current investment market  environment.  As part of the two plans, the Company's workforce
         was  reduced by  approximately  140  positions  and 115  positions,  respectively,  affecting  substantially  all areas of the
         Company.  Estimated pre-tax severance  benefits of approximately  $8,500,000 have been charged against 2001 operations related
         to these  reductions.  These  charges  have  been  reported  in the  Consolidated  Statements  of  Income  as a  component  of
         Underwriting,  Acquisition  and Other  Insurance  Expenses.  As of December 31, 2001, the remaining  restructuring  liability,
         relating primarily to the December 3, 2001 plan, was approximately $4,104,000.

19.      COMMITMENTS AND CONTINGENT LIABILITIES

         As of the date of this filing,  the Company is not  involved in any legal  proceedings  outside of the ordinary  course of its
         business  operations.  The Company is involved in pending and  threatened  legal  proceedings  in the  ordinary  course of its
         business  operations.  While the outcome of these legal  proceedings  cannot be determined at this time,  after  consideration
         of the defenses  available to the Company,  applicable  insurance coverage and any related reserves  established,  these legal
         proceedings are not expected to result in liability for amounts material to the financial  condition of the Company,  although
         they may adversely affect results of operations in future periods.

20.      SEGMENT REPORTING

         In recent years,  in order to complete the array of products  offered by the Company and its affiliates to meet a wide variety
         of financial planning,  the Company developed variable life insurance and qualified  retirement plan annuity products.  Assets
         under  management  and sales for products  other than  variable  annuities  have not been  significant  enough to warrant full
         segment  disclosures as required by SFAS 131,  "Disclosures about Segments of an Enterprise and Related  Information," and the
         Company  does not  anticipate  that they will do so in the  future  due to a change in the  Company's  strategy.  On March 15,
         2002,  the Company  announced  that it will no longer  accept new  business  for the funding of  qualified  retirement  plans,
         effective  July 31, 2002 and will not accept  applications  for it's flexible  premium  variable  insurance  products that are
         signed  after  April 1, 2002 or  received  after  April 15,  2002.  The  Company  intends  to  continue  to accept  additional
         contributions  to existing  qualified  plans,  to service and accept  additional  premiums for its existing  flexible  premium
         variable insurance contracts, and to continue to offer and sell its single premium variable life insurance products.






                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)


21.      QUARTERLY FINANCIAL DATA (UNAUDITED)

         The following table summarizes information with respect to the operations of the Company on a quarterly basis:

                 (table in thousands)                                Three Months Ended
                                                  ----------------------------------------------------------
                          2001                      March 31       June 30       Sept. 30        Dec. 31
                                                    --------       -------       --------        -------
        Premiums and other insurance
          revenues                                 $   131,096   $   128,665    $   114,714    $   117,854
        Net investment income*                           5,381         4,997          5,006          4,742
        Net realized capital gains (losses)              1,902           373            376         (1,723)
                                                  ------------  ------------   ------------   -------------
        Total revenues                                 138,379       134,035        120,096        120,873
        Benefits and expenses*                         122,940       110,644        115,313        124,219
                                                  ------------  ------------   ------------   ------------
        Pre-tax net income                              15,439        23,391          4,783         (3,346)
        Income taxes                                     4,034         7,451           (480)        (3,837)
                                                  ------------  ------------   -------------  -------------
        Net income                                 $    11,405   $    15,940    $     5,263    $       491
                                                  ============  ============   ============   ============

        *     For the quarters  ended March 31,  2001,  June 30, 2001 and  September  30,  2001,  the Company had  reported  investment
              performance   associated  with  its  derivatives  as  net  investment   income.   The  above   presentation   reflects  a
              reclassification of these amounts to benefits and expenses.

                 (table in thousands)                                Three Months Ended
                                                  ----------------------------------------------------------
                          2000                      March 31       June 30       Sept. 30        Dec. 31
                                                    --------       -------       --------        -------
        Premiums and other insurance
          revenues                                 $   137,255   $   139,317    $   147,923    $   136,159
        Net investment income                            2,876         3,628          4,186            966
        Net realized capital gains (losses)                729        (1,436)          (858)           877
                                                  ------------  -------------  -------------  ------------
        Total revenues                                 140,860       141,509        151,251        138,002
        Benefits and expenses                          106,641       121,356        137,514        110,515
                                                  ------------  ------------   ------------   ------------
        Pre-tax net income                              34,219        20,153         13,737         27,487
        Income taxes                                    10,038         5,225          3,167         12,349
                                                  ------------  ------------   ------------   ------------
        Net income                                 $    24,181   $    14,928    $    10,570    $    15,138
                                                  ============  ============   ============   ============






                                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                     (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements (continued)


21.      QUARTERLY FINANCIAL DATA (UNAUDITED) (continued)


                 (table in thousands)                                Three Months Ended
                                                  ----------------------------------------------------------
                          1999                      March 31       June 30       Sept. 30        Dec. 31
                                                    --------       -------       --------        -------
        Premiums and other insurance
          revenues                                 $    78,509   $    88,435    $    97,955    $   111,443
        Net investment income                            2,654         2,842          2,735          2,210
        Net realized capital gains                         295            25            206             52
        Total revenues                                  81,458        91,302        100,896        113,705
        Benefits and expenses                           64,204        67,803         71,597         77,244
        Pre-tax net income                              17,254        23,499         29,299         36,461
        Income taxes                                     3,844         7,142          7,898         11,460
        Net income                                 $    13,410   $    16,357    $    21,401    $    25,001
                                                  ============  ============   ============   ============







B-9

                                 Appendix B - Condensed Financial Information About Separate Account B


Separate  Account B  consists  of  multiple  Sub-accounts.  Each  Sub-account  invests  only in a single  mutual  fund or  mutual  fund
portfolio.  All or some of these  Sub-accounts  are available as investment  options for other variable  annuities we offer pursuant to
different prospectuses.

Unit Prices And Numbers Of Units:  The  following  table shows:  (a) the Unit Price,  as of the dates  shown,  for Units in each of the
Sub-accounts of Separate  Account B that are being offered  pursuant to this  Prospectus;  and (b) the number of Units  outstanding for
each  such  Sub-account  as of the  dates  shown.  The  year in  which  operations  commenced  in each  such  Sub-account  is  noted in
parentheses.  To the extent a Sub-account  commenced  operations during a particular calendar year, the Unit Price as of the end of the
period  reflects only the partial year results from the  commencement  of operations  until December 31st of the  applicable  year. The
portfolios  in which a particular  Sub-account  invests may or may not have  commenced  operations  prior to the date such  Sub-account
commenced  operations.  The  initial  offering  price  for each  Sub-account  was  $10.00.  Unit  Prices  and Units  are  provided  for
sub-accounts that commenced operations prior to January 1, 2002.

Beginning  November 18, 2002,  multiple Unit Prices will be calculated for each  Sub-account of Separate Account B to reflect the daily
charge  deducted  for each  combination  of the  applicable  Insurance  Charge,  and the charge for any  optional  benefit  that may be
available under this Annuity.

                                                                       Year Ended December 31,
-------------------------------------------------------------------------------------------------------------------------------------------
                           2001          2000        1999        1998       1997       1996       1995        1994       1993      1992
-------------------------------------------------------------------------------------------------------------------------------------------
AST Strong
International Equity 1
(1989)
Unit Price                    $24.28        31.88       43.99      27.18      22.95      19.70       18.23      16.80      16.60     12.37
Number of Units           17,388,860   19,112,622  16,903,883 17,748,560 17,534,233 17,220,688  14,393,137 14,043,215  9,063,464 1,948,773
                                                                                                                                 ----------
-------------------------------------------------------------------------------------------------------------------------------------------
AST Janus Overseas
Growth
(1997)
Unit Price                    $13.54        17.96       24.16      13.41      11.70          -           -          -          -         -
Number of Units           40,507,419   57,327,711  61,117,418 43,711,763 21,405,891          -           -          -          -         -
                                                                                                                                 ----------
-------------------------------------------------------------------------------------------------------------------------------------------
AST American Century
International Growth 2
(1997)
Unit Price                    $12.85        17.92       21.66      13.30      11.35          -           -          -          -         -
Number of Units           37,487,425   17,007,352   6,855,601  5,670,336  2,857,188          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
AST DeAM
International Equity 3
(1994)
Unit Price                    $10.77        16.12       23.45      12.54      11.46      11.39       10.23          -          -         -
Number of Units           13,627,264   16,245,805   8,818,599  9,207,623  9,988,104  9,922,698   2,601,283          -          -         -
                                                                                                                                 ----------
-------------------------------------------------------------------------------------------------------------------------------------------
AST MFS Global
Equity
(1999)
Unit Price                     $8.94        10.08       11.01          -          -          -           -          -          -         -
Number of Units            5,806,567    2,803,013     116,756          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
AST PBHG Small-Cap
Growth 4
(1994)
Unit Price                    $19.84        21.51       42.08      17.64      17.28      16.54       13.97      10.69          -         -
Number of Units           23,048,821   25,535,093  32,134,969 15,003,001 14,662,728 12,282,211   6,076,373  2,575,105          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
AST DeAM Small-
Cap Growth 5
(1999)
Unit Price                     $8.46        11.98       15.37          -          -          -           -          -          -         -
Number of Units           60,703,791   63,621,279  53,349,003          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------





                                                                       Year Ended December 31,
-------------------------------------------------------------------------------------------------------------------------------------------
                           2001          2000        1999        1998       1997       1996       1995        1994       1993      1992
-------------------------------------------------------------------------------------------------------------------------------------------
AST Federated
Aggressive Growth
(2000)
Unit Price                     $7.10         9.08           -          -          -          -           -          -          -         -
Number of Units            6,499,066      196,575           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
AST Goldman Sachs
Small-Cap Value 6
(1998)
Unit Price                    $15.12        13.95       10.57       9.85          -          -           -          -          -         -
Number of Units           26,220,860   15,193,053   6,597,544  4,081,870          -          -           -          -          -         -
                                                                                                                                 ----------
-------------------------------------------------------------------------------------------------------------------------------------------
AST Gabelli Small-Cap
Value 7
(1997)
Unit Price                    $14.08        13.35       11.11      11.20      12.70          -           -          -          -         -
Number of Units           35,483,530   23,298,524  21,340,168 24,700,211 14,612,510          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
AST Janus Mid-Cap
Growth
(2000)
Unit Price                     $3.88         6.58           -          -          -          -           -          -          -         -
Number of Units           17,045,776    9,426,102           -          -          -          -           -          -          -         -
                                                                                                                                 ----------
-------------------------------------------------------------------------------------------------------------------------------------------
AST Neuberger
Berman
Mid-Cap Growth 8
(1994)
Unit Price                    $18.95        25.90       28.58      19.15      16.10      13.99       12.20       9.94          -         -
Number of Units           25,717,164   26,517,850  13,460,525 13,389,289 11,293,799  9,563,858   3,658,836    301,267          -         -
                                                                                                                                 ----------
-------------------------------------------------------------------------------------------------------------------------------------------
AST Neuberger
Berman
Mid-Cap Value 9
(1993)
Unit Price                    $20.16        21.09       16.78      16.10      16.72      13.41       12.20       9.81      10.69         -
Number of Units           47,298,313   44,558,699  37,864,586 16,410,121 11,745,440  9,062,152   8,642,186  7,177,232  5,390,887         -
                                                                                                                                 ----------
-------------------------------------------------------------------------------------------------------------------------------------------
AST Alger All-Cap
Growth
(2000)
Unit Price                     $5.54         6.74           -          -          -          -           -          -          -         -
Number of Units          125,442,916   28,229,631           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
AST Gabelli All-Cap
Value
(2000)
Unit Price                     $9.71        10.06           -          -          -          -           -          -          -         -
Number of Units           14,934,570    1,273,094           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price
Natural Resources
(1995)
Unit Price                    $19.71        19.86       15.88      12.57      14.46      14.19       11.01          -          -         -
Number of Units            6,565,088    6,520,983   6,201,327  5,697,453  7,550,076  6,061,852     808,605          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------





                                                                       Year Ended December 31,
-------------------------------------------------------------------------------------------------------------------------------------------
                           2001          2000        1999        1998       1997       1996       1995        1994       1993      1992
                                                                                                                                 ----------
-------------------------------------------------------------------------------------------------------------------------------------------
AST Alliance
Growth 10
(1996)
Unit Price                    $14.61        17.38       20.44      15.48      12.33      10.89           -          -          -         -
Number of Units           29,478,257   25,796,792  17,059,819 19,009,242 18,736,994  4,324,161           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
AST MFS Growth
(1999)
Unit Price                     $8.02        10.38       11.27          -          -          -           -          -          -         -
Number of Units          117,716,242    7,515,486     409,467          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 ----------
AST Marsico Capital
Growth
(1997)
Unit Price                    $13.74        17.81       21.06      14.00      10.03          -           -          -          -         -
Number of Units           85,895,802   94,627,691  78,684,943 40,757,449    714,309          -           -          -          -         -
                                                                                                                                 ----------
-------------------------------------------------------------------------------------------------------------------------------------------
AST JanCap Growth
(1992)
Unit Price                    $27.71        41.14       60.44      39.54      23.83      18.79       14.85      10.91      11.59     10.51
Number of Units           84,116,221   99,250,773  94,850,623 80,631,598 62,486,302 46,779,164  28,662,737 22,354,170 13,603,637 1,476,139
                                                                                                                                 ----------
-------------------------------------------------------------------------------------------------------------------------------------------
AST DeAM Large-Cap
Value 11
(2000)
Unit Price                     $9.15         9.82           -          -          -          -           -          -          -         -
Number of Units            4,575,558      586,058           -          -          -          -           -          -          -         -
                                                                                                                                 ----------
-------------------------------------------------------------------------------------------------------------------------------------------
AST Alliance/Bernstein
Growth + Value 12
(2001)
Unit Price                     $9.63            -           -          -          -          -           -          -          -         -
Number of Units            3,351,836            -           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
AST Sanford Bernstein
Core Value 12
(2001)
Unit Price                    $10.04            -           -          -          -          -           -          -          -         -
Number of Units            4,207,869            -           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
AST Cohen & Steers
Realty
(1998)
Unit Price                    $10.54        10.39        8.35       8.28          -          -           -          -          -         -
Number of Units           12,268,426   11,891,188   6,224,365  3,771,461          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
AST Sanford Bernstein
Managed Index 500 13
(1998)
Unit Price                    $12.03        13.55       15.08      12.61          -          -           -          -          -         -
Number of Units           48,018,721   48,835,089  39,825,951 22,421,754          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
AST American Century
Income & Growth 14
(1997)
Unit Price                    $12.86        14.24       16.19      13.35      12.06          -           -          -          -         -
Number of Units           27,386,278   32,388,202  21,361,995 13,845,190  9,523,815          -           -          -          -         -
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                                                                       Year Ended December 31,
-------------------------------------------------------------------------------------------------------------------------------------------
                           2001          2000        1999        1998       1997       1996       1995        1994       1993      1992
                                                                                                                                 ----------
-------------------------------------------------------------------------------------------------------------------------------------------
AST Alliance Growth
and Income 15
(1992)
Unit Price                    $28.18        28.72       27.60      24.11      21.74      17.79       15.22      11.98      11.88     10.60
Number of Units           63,123,316   53,536,296  52,766,579 47,979,349 42,197,002 28,937,085  18,411,759  7,479,449  4,058,228   956,949
-------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 ----------
AST MFS Growth with
Income
(1999)
Unit Price                     $8.64        10.36       10.49          -          -          -           -          -          -         -
Number of Units           11,896,688    6,937,627     741,323          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 ----------
AST INVESCO Capital
Income 16
(1994)
Unit Price                    $19.84        22.01       21.31      19.34      17.31      14.23       12.33       9.61          -         -
Number of Units           48,595,962   50,171,495  46,660,160 40,994,187 33,420,274 23,592,226  13,883,712  6,633,333          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
AST DeAM Global
Allocation 17
(1993)
Unit Price                    $17.39        19.98       21.19      17.78      15.98      13.70       12.49      10.34      10.47         -
Number of Units           26,641,422   30,290,413  23,102,272 22,634,344 22,109,373 20,691,852  20,163,848 13,986,604  8,743,758         -
-------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 ----------
AST American Century
Strategic Balanced
(1997)
Unit Price                    $13.50        14.23       14.90      13.37      11.18          -           -          -          -         -
Number of Units           14,369,895   14,498,180  13,944,535  6,714,065  2,560,866          -           -          -          -         -
                                                                                                                                 ----------
-------------------------------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price
Asset Allocation
(1994)
Unit Price                    $18.15        19.33       19.70      18.12      15.53      13.30       11.92       9.80          -         -
Number of Units           17,579,107   19,704,198  22,002,028 18,469,315 13,524,781  8,863,840   4,868,956  2,320,063          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price
Global Bond 18
(1994)
Unit Price                    $10.62        10.49       10.69      11.82      10.45      10.98       10.51       9.59          -         -
Number of Units            9,668,062   11,219,503  12,533,037 12,007,692 12,089,872  8,667,712   4,186,695  1,562,364          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
AST Federated High
Yield
(1994)
Unit Price                    $12.64        12.80       14.38      14.30      14.13      12.62       11.27       9.56          -         -
Number of Units           39,130,467   36,914,825  41,588,401 40,170,144 29,663,242 15,460,522   6,915,158  2,106,791          -         -
                                                                                                                                 ----------
-------------------------------------------------------------------------------------------------------------------------------------------
AST Lord Abbett
Bond-Debenture
(2000)
Unit Price                    $10.28        10.12           -          -          -          -           -          -          -         -
Number of Units            5,506,982      650,253           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
AST PIMCO Total
Return Bond
(1994)
Unit Price                    $15.46        14.40       13.09      13.43      12.44      11.48       11.26       9.61          -         -
Number of Units           99,028,465   82,545,240  73,530,507 64,224,618 44,098,036 29,921,643  19,061,840  4,577,708          -         -
-------------------------------------------------------------------------------------------------------------------------------------------

                                                                       Year Ended December 31,
-------------------------------------------------------------------------------------------------------------------------------------------
                           2001          2000        1999        1998       1997       1996       1995        1994       1993      1992
-------------------------------------------------------------------------------------------------------------------------------------------
AST PIMCO Limited
Maturity Bond
(1995)
Unit Price                    $13.61        12.79       11.96      11.73      11.26      10.62       10.37          -          -         -
Number of Units           42,410,807   31,046,956  32,560,943 28,863,932 25,008,310 18,894,375  15,058,644          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
AST Money Market
(1992)
Unit Price                    $13.24        12.94       12.38      12.00      11.57      11.16       10.77      10.35      10.12     10.01
Number of Units          184,612,059  172,493,206 187,609,708 75,855,442 66,869,998 42,435,169  30,564,442 27,491,389 11,422,783   457,872

The Montgomery
Variable Series - MV
Emerging Markets
(1996)
Unit Price                     $6.50         7.09       10.06       6.19      10.05      10.25           -          -          -         -
Number of Units           14,095,135   12,899,472  12,060,036 10,534,383 10,371,104  2,360,940           -          -          -         -

Wells Fargo Variable
Trust - Equity Value
(1998)
Unit Price                     $8.83         9.56        9.17       9.53         -           -          -           -          -         -
Number of Units            3,705,869    4,442,888   2,826,839  1,148,849         -           -          -           -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
Wells Fargo Variable
Trust - Equity Income
(1999)
Unit Price                     $9.37        10.05        9.96          -          -          -           -          -          -         -
Number of Units            1,019,937      502,986     136,006          -          -          -           -          -          -         -

Rydex Variable Trust
-
Nova
(1999)                         $6.41         8.50       10.82          -          -          -           -          -          -         -
Unit Price                 3,990,618   14,799,352   5,474,129          -          -          -           -          -          -         -
Number of Units
-------------------------------------------------------------------------------------------------------------------------------------------
Rydex Variable Trust
-
Ursa
(1999)                        $12.05        10.62        9.28          -          -          -           -          -          -         -
Unit Price                   351,487    2,269,599   1,803,669          -          -          -           -          -          -         -
Number of Units
-------------------------------------------------------------------------------------------------------------------------------------------
Rydex Variable Trust
-
OTC
(1999)                         $6.65        10.40       17.07          -          -          -           -          -          -         -
Unit Price                15,866,046   32,179,793  18,520,440          -          -          -           -          -          -         -
Number of Units

INVESCO VIF -
Dynamics
(1999)
Unit Price                     $8.98        13.23       13.91          -          -          -           -          -          -         -
Number of Units           13,391,660   11,409,827   2,022,585          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------





                                                                       Year Ended December 31,
-------------------------------------------------------------------------------------------------------------------------------------------
                           2001          2000        1999        1998       1997       1996       1995        1994       1993      1992
-------------------------------------------------------------------------------------------------------------------------------------------
INVESCO VIF -
Technology
(1999)
Unit Price                     $6.66        12.48       16.52          -          -          -           -          -          -         -
Number of Units           26,652,622   29,491,113   4,622,242          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
INVESCO VIF -
Health Sciences
(1999)
Unit Price                    $12.58        14.59       11.34          -          -          -           -          -          -         -
Number of Units           17,419,141   19,381,405     786,518          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
INVESCO VIF -
Financial Services
(1999)
Unit Price                    $12.48        14.04       11.41          -          -          -           -          -          -         -
Number of Units           11,612,048   14,091,636     759,104          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
INVESCO VIF -
Telecommunications
(1999)
Unit Price                     $5.01        11.05       15.17          -          -          -           -          -          -         -
Number of Units           13,553,158   17,856,118   4,184,526          -          -          -           -          -          -         -

Evergreen VA - Global
Leaders
(1999)
Unit Price                     $9.00        10.55       11.72          -          -          -           -          -          -         -
Number of Units            1,520,376      887,758      23,101          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
Evergreen VA -
Special Equity
(1999)
Unit Price                     $9.98        11.01       12.19          -          -          -           -          -          -         -
Number of Units            2,540,062    1,731,145     152,342          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
Evergreen VA - Omega
(2000)
Unit Price                     $6.71         7.98           -          -          -          -           -          -          -         -
Number of Units            2,585,848    1,637,475           -          -          -          -           -          -          -         -

ProFund VP -
Europe 30
(1999)
Unit Price                     $7.87        10.52       12.24          -          -          -           -          -          -         -
Number of Units            5,711,763    2,327,562     273,963          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
ProFund VP -
UltraSmall-Cap 19
(1999)
Unit Price                     $8.37         9.18       11.96          -          -          -           -          -          -         -
Number of Units           10,010,482    3,258,574     813,904          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
ProFund VP -OTC 20
(2001)
Unit Price                     $5.77            -           -          -          -          -           -          -          -         -
Number of Units           11,681,189            -           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------





                                                                       Year Ended December 31,
-------------------------------------------------------------------------------------------------------------------------------------------
                           2001          2000        1999        1998       1997       1996       1995        1994       1993      1992
-------------------------------------------------------------------------------------------------------------------------------------------
ProFund VP -
UltraOTC
(1999)
Unit Price                     $1.91         6.19       23.58          -          -          -           -          -          -         -
Number of Units           50,124,696   17,597,528   2,906,024          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
ProFund VP - Bear 20
(2001)
Unit Price                    $11.54            -           -          -          -          -           -          -          -         -
Number of Units            3,059,897            -           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
ProFund VP -
Bull Plus 20
(2001)
Unit Price                     $7.47            -           -          -          -          -           -          -          -         -
Number of Units            7,628,819            -           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
ProFund VP -
Biotechnology 20
(2001)
Unit Price                     $8.37            -           -          -          -          -           -          -          -         -
Number of Units            5,093,235            -           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
ProFund VP - Energy 20
(2001)
Unit Price                     $9.19            -           -          -          -          -           -          -          -         -
Number of Units            2,299,149            -           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
ProFund VP -
Financial 20
(2001)
Unit Price                     $9.22            -           -          -          -          -           -          -          -         -
Number of Units            2,154,106            -           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
ProFund VP -
Healthcare 20
(2001)
Unit Price                     $9.35            -           -          -          -          -           -          -          -         -
Number of Units            3,489,097            -           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
ProFund VP -
Real Estate 20
(2001)
Unit Price                    $10.76            -           -          -          -          -           -          -          -         -
Number of Units            3,592,834            -           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------------------
ProFund VP -
Technology 20
(2001)
Unit Price                     $5.91            -           -          -          -          -           -          -          -         -
Number of Units            2,524,295            -           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------
ProFund VP -
Telecommunications 20
(2001)
Unit Price                     $7.10            -           -          -          -          -           -          -          -         -
Number of Units              583,065            -           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------





                                                                       Year Ended December 31,
-------------------------------------------------------------------------------------------------------------------------------------------
                           2001          2000        1999        1998       1997       1996       1995        1994       1993      1992
-------------------------------------------------------------------------------------------------------------------------------------------
ProFund VP -
Utilities 20
(2001)
Unit Price                     $8.12            -           -          -          -          -           -          -          -         -
Number of Units            1,589,344            -           -          -          -          -           -          -          -         -

First Trust(R)10
Uncommon Values
(2000)
Unit Price                     $4.72         7.43           -          -          -          -           -          -          -         -
Number of Units            2,255,266    2,690,435           -          -          -          -           -          -          -         -

Prudential - SP
Jennison
International
Growth 21
(2001)
Unit Price                     $7.39            -           -          -          -          -           -          -          -         -
Number of Units              273,843            -           -          -          -          -           -          -          -         -
-------------------------------------------------------------------------------------------------------------------------------------------


1.       Effective  December 10, 2001,  Strong Capital  Management,  Inc.  became  Sub-advisor of the Portfolio.  Prior to December 10,
     2001, A I M Capital Management,  Inc. served as Sub-advisor of the Portfolio,  then named "AST AIM International  Equity." Between
     October 15, 1996 and May 3, 1999,  Putnam  Investment  Management,  Inc.  served as Sub-advisor of the Portfolio,  then named "AST
     Putnam  International  Equity." Prior to October 15, 1996,  Seligman  Henderson Co. served as  Sub-advisor of the Portfolio,  then
     named "Seligman Henderson International Equity Portfolio."
2.       This  Portfolio  reflects  the  addition of the net assets of the AST  American  Century  International  Growth  Portfolio  II
     ("Portfolio II") as a result of the merger between the Portfolio and Portfolio II.
3.       Effective May 1, 2002,  Deutsche Asset Management,  Inc. became Sub-advisor of the Portfolio.  Prior to May 1, 2002,  Founders
     Asset  Management,  Inc. served as Sub-advisor of the Portfolio,  then named "AST Founders  Passport."  Prior to October 15, 1996,
     Seligman Henderson Co. served as Sub-advisor of the Portfolio, then named "Seligman Henderson International Small Cap Portfolio."
4.       Effective  September 17, 2001, Pilgrim Baxter & Associates,  Ltd. became Sub-advisor of the Portfolio.  Prior to September 17,
     2001,  Janus Capital  Corporation  served as  Sub-advisor  of the  Portfolio,  then named "AST Janus  Small-Cap  Growth." Prior to
     December  31,  1998,  Founders  Asset  Management,  LLC served as  Sub-advisor  of the  Portfolio,  then named  "Founders  Capital
     Appreciation Portfolio."
5.       Effective  December 10, 2001,  Deutsche Asset  Management,  Inc.  became  Sub-advisor of the Portfolio.  Prior to December 10,
     2001,  Zurich  Scudder  Investments,  Inc.  served as  Sub-advisor  of the  Portfolio,  then named "AST Scudder  Small-Cap  Growth
     Portfolio".  Prior to May 1, 2001, the Portfolio was named "AST Kemper Small-Cap Growth Portfolio."
6.       Effective May 1, 2001,  Goldman Sachs Asset  Management  became  Sub-advisor  of the  Portfolio.  Prior to May 1, 2001,  Lord,
     Abbett & Co. served as Sub-advisor of the Portfolio, then named "AST Lord Abbett Small Cap Value."
7.       Effective  October 23, 2000, GAMCO  Investors,  Inc. became  Sub-advisor of the Portfolio.  Prior to October 23, 2000, T. Rowe
     Price Associates, Inc. served as Sub-advisor of the Portfolio, then named "AST T. Rowe Price Small Company Value Portfolio."
8.       Effective May 1, 1998,  Neuberger Berman Management,  Inc. became  Sub-advisor of the Portfolio.  Prior to May 1, 1998, Berger
     Associates, Inc. served as Sub-advisor of the Portfolio, then named "Berger Capital Growth Portfolio."
9.       Effective  May 1,  1998,  Neuberger  Berman  Management,  Inc.  became  Sub-advisor  of the  Portfolio.  Prior to May 1, 1998,
     Federated Investment Counseling served as Sub-advisor of the Portfolio, then named "Federated Utility Income Portfolio."
10.      Effective May 1, 2000,  Alliance Capital Management,  L.P. became Sub-advisor of the Portfolio.  Between December 31, 1998 and
     May 1, 2000,  OppenheimerFunds,  Inc.  served as  Sub-advisor  of the  Portfolio,  then named "AST  Oppenheimer  Large-Cap  Growth
     Portfolio." Prior to December 31, 1998,  Robertson,  Stephens & Company Investment  Management,  L.P. served as Sub-advisor of the
     Portfolio, then named "Robertson Stephens Value + Growth Portfolio."
11.      Effective May 1, 2002,  Deutsche Asset  Management,  Inc.  became  Sub-advisor of the Portfolio.  Prior to May 1, 2002,  Janus
     Capital Corporation served as Sub-advisor of the Portfolio, then named "AST Janus Strategic Value."
12.      These Portfolios commenced operations on May 1, 2001.
13.      Effective May 1, 2000,  Sanford C. Bernstein & Co., Inc. became  Sub-advisor of the Portfolio.  Prior to May 1, 2000,  Bankers
     Trust Company served as Sub-advisor of the Portfolio, then named "AST Bankers Trust Managed Index 500 Portfolio."
14.      Effective May 3, 1999,  American Century  Investment  Management,  Inc. became  Sub-advisor of the Portfolio.  Between October
     15, 1996 and May 3, 1999, Putnam Investment Management,  Inc. served as Sub-advisor of the Portfolio, then named "AST Putnam Value
     Growth & Income."
15.      Effective May 1, 2000,  Alliance Capital  Management,  L.P. became  Sub-advisor of the Portfolio.  Prior to May 1, 2000, Lord,
     Abbett & Co. served as Sub-advisor of the Portfolio, then named "AST Lord Abbett Growth and Income Portfolio."
16.      Effective July 1, 2002, the AST INVESCO Equity Income portfolio changed its name to AST INVESCO Capital Income.
17.      Effective May 1, 2002,  Deutsche Asset  Management,  Inc.  became  Sub-advisor  of the Portfolio.  Prior to May 1, 2002, A I M
     Capital Management,  Inc. served as Sub-advisor of the Portfolio,  then named "AST AIM Balanced." Between October 15, 1996 and May
     3, 1999, Putnam  Investment  Management,  Inc. served as Sub-advisor of the Portfolio,  then named "AST Putnam Balanced." Prior to
     October 15, 1996, Phoenix Investment Counsel, Inc. served as Sub-advisor of the Portfolio,  then named "AST Phoenix Balanced Asset
     Portfolio."
18.      Effective August 8, 2000, T. Rowe Price  International,  Inc. became Sub-advisor of the Portfolio.  Effective May 1, 2000, the
     name of the  Portfolio  was  changed  to the  "AST  T.  Rowe  Price  Global  Bond".  Effective  May 1,  1996,  Rowe  Price-Fleming
     International,  Inc.  became  Sub-advisor  of the  Portfolio.  Prior to May 1,  1996,  Scudder,  Stevens & Clark,  Inc.  served as
     Sub-advisor of the Portfolio, then named "AST Scudder International Bond Portfolio."
19.      Prior to May 1, 2000, ProFund VP UltraSmall-Cap was named "ProFund VP Small Cap" and sought daily investment results that
     corresponded to the performance of the Russell 2000(R)Index.
20.      These Portfolios were first offered as Sub-accounts on January 22, 2001.
21.      This Portfolio was first offered as a Sub-account on April 15, 2001.

                                                   APPENDIX C-1: PSA PRIOR CONTRACT


---------------------------------------------------------------------------------------------------------------------------------------
Between  September,  1988 and May,  1994,  American  Skandia  issued a variable  annuity under the marketing  name  "LifeVest  Personal
Security  Annuity" or "PSA".  The contract is no longer being issued.  However,  we continue to accept  additional  Purchase  Payments.
Assets supporting the PSA contracts are maintained in Sub-accounts of Separate Account B.
---------------------------------------------------------------------------------------------------------------------------------------

The  principle  differences  between the American  Skandia  Advisors Plan or "ASAP"  contract  offered by this  Prospectus  and the PSA
contract are described  below.  In addition,  while ASAP may be offered as either an individual  contract or as coverage  under a group
annuity, PSA was only offered as an individual contract.

GLOSSARY OF TERMS
Some of the definitions used in the PSA contract are slightly different from the definitions used in ASAP contract.

The  definition  of "Account  Value" in this  Prospectus is the same as the  definition  of "Cash Value" in the former PSA  Prospectus,
except for the  inclusion of  information  relating to fixed  investment  options that are not  available in the PSA  contracts and the
reference to additional amounts applied to Purchase Payments.

The definition of "Issue Date" in this Prospectus is the same as the definition of "Contract Date" in the former PSA Prospectus.

The definition of "Purchase  Payment" in this Prospectus is not defined in the former PSA  prospectus,  but the term is the same as the
term "premium" or "premium payment" that was used in the former PSA Prospectus.

The following defined terms in this Prospectus  relating to the Fixed Allocation are not applicable:  "Fixed  Allocation,  " "Guarantee
Period," "Interim Value," "MVA," and "Maturity Date."

The defined  term  "Owner" in this  Prospectus  clarifies  the meaning of that term in relation to group  annuity  sales.  This was not
applicable to PSA.

INVESTMENT OPTIONS
The PSA contracts do not offer Fixed Allocations.  Therefore, any discussion of Fixed Allocations,  Market Value Adjustments,  Separate
Account D or any programs, definitions or features that relate to or refer to Fixed Allocations do not apply to PSA Owners.

FEES AND CHARGES
The  contingent  deferred  sales load for PSA originally was 6.0% for 6 years.  It  subsequently  was changed for PSA contracts  issued
from May, 1991 (or later, if required by law) to:

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

                           YEARS                1      2      3      4      5     6      7     8+
                           ------------------ ------- ----- ------ ------ ------ ----- ------ ------
                           ------------------ ------- ----- ------ ------ ------ ----- ------ ------

                           CHARGE (%)          7.0    6.0    5.0    4.0    3.0   2.0    1.0     0
                           ------------------ ------- ----- ------ ------ ------ ----- ------ ------

The  Annual  Maintenance  Fee for PSA is $30,  which is  deducted  annually  to cover the cost of  maintaining  and  administering  the
contracts.  Before  annuity  payments  commence,  this fee is deducted at the end of each contract  year or on  surrender,  if earlier.
During the annuitization  period, if a variable  annuitization  option is elected,  this fee is deducted from each Annuity payment on a
pro-rata basis.

The administrative and maintenance fees for PSA are fixed and cannot be changed.

There is currently no "Transfer Fee"  applicable to the PSA contract,  however,  we reserve the right to charge up to the lesser of our
actual costs in effecting  such  transfers or the maximum  allowed under state law for transfers in excess of 20 in any contract  year.
Currently, that maximum is $10.00 per transfer.

PURCHASING YOUR ANNUITY
The minimum initial purchase  payment for PSA is $5,000 and minimum  subsequent  payments are $1,000,  or less where required by law or
regulation,  and may be paid at any time before the earlier of (1) the Annuity  Date,  and (2) the contract  anniversary  following the
earlier of your or the Annuitant's 85th birthday.

Both the Owner and the  Annuitant,  if  different  from the  Owner,  must be less than 85 years of age on the Issue  Date under the PSA
contract.

EXPENSE EXAMPLES
----------------------------------------------------------------------------------------------------------------------------------------
                                                                  Expense Examples
                                                 (amounts shown are rounded to the nearest dollar)
----------------------------------------------------------------------------------------------------------------------------------------

The Expense Examples for the PSA contract are as follows:

                                       ---------------------------------------------- -------- ---------------------------------------
                                       If you surrender  your contract at the end of           If you do not surrender  your contract
                                       the  applicable  time  period,  you would pay           you would pay the  following  expenses
                                       the   following    expenses   on   a   $1,000           on a $1,000  investment,  assuming  5%
                                       investment,  assuming  5%  annual  return  on           annual return on assets:
                                       assets:
                                       ---------------------------------------------- -------- ---------------------------------------



After:                                                                                 After:
-------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
Sub-Account:                                 1 Year    3 Years    5 Years   10 Years          1 Year     3 Years    5 Years   10 Years
-------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
AST Strong International Equity                 97        132       169        294               27         82        139        294
AST William Blair International Growth          97        132       169        294               27         82        139        294
AST American Century International Growth       98        136       176        308               28         86        146        308
AST DeAM International Equity                   97        133       171        298               27         83        141        298
AST MFS Global Equity                           99        139       182        320               29         89        152        320
AST PBHG Small-Cap Growth                       97        132       170        297               27         82        140        297
AST DeAM Small-Cap Growth                       97        132       170        297               27         82        140        297
AST Federated Aggressive Growth                 99        138       180        315               29         88        150        315
AST Goldman Sachs Small-Cap Value               97        133       171        298               27         83        141        298
AST Gabelli Small-Cap Value                     96        130       166        288               26         80        136        288
AST DeAM Small-Cap Value                        96        129       164        285               26         79        134        285
AST Goldman Sachs Mid-Cap Growth                98        135       174        304               28         85        144        304
AST Neuberger Berman Mid-Cap Growth             96        131       168        293               26         81        138        293
AST Neuberger Berman Mid-Cap Value              97        134       173        303               27         84        143        303
AST Alger All-Cap Growth                        97        133       172        300               27         83        142        300
AST Gabelli All-Cap Value                       97        133       172        300               27         83        142        300
AST T. Rowe Price Natural Resources             96        131       168        291               26         81        138        291
AST Alliance Growth                             97        132       169        294               27         82        139        294
AST MFS Growth                                  96        131       168        291               26         81        138        291
AST Marsico Capital Growth                      96        129       165        287               26         79        135        287
AST Goldman Sachs Concentrated Growth           95        128       163        282               25         78        133        282
AST DeAM Large-Cap Growth                       95        127       162        280               25         77        132        280
AST DeAM Large-Cap Value                        95        127       162        280               25         77        132        280
AST Alliance/Bernstein Growth + Value           99        138       180        315               29         88        150        315
AST Sanford Bernstein Core Value                97        132       170        296               27         82        140        296
AST Cohen & Steers Realty                       97        134       173        301               27         84        143        301
AST Sanford Bernstein Managed Index 500         93        121       151        258               23         71        121        258
AST American Century Income & Growth            95        126       159        275               25         76        129        275
AST Alliance Growth and Income                  95        126       159        275               25         76        129        275
AST MFS Growth with Income                      96        131       168        291               26         81        138        291
AST INVESCO Capital Income                      94        124       157        270               24         74        127        270
AST DeAM Global Allocation                      88        105       124        204               18         55         94        204
AST American Century Strategic Balanced         96        130       166        288               26         80        136        288
AST T. Rowe Price Asset Allocation              96        130       167        290               26         80        137        290
AST T. Rowe Price Global Bond                   96        130       166        288               26         80        136        288
AST Federated High Yield                        95        126       160        276               25         76        130        276
AST Lord Abbett Bond-Debenture                  96        130       167        290               26         80        137        290
AST DeAM Bond                                   94        125       158        273               24         75        128        273
AST PIMCO Total Return Bond                     93        121       152        260               23         71        122        260
AST PIMCO Limited Maturity Bond                 93        122       153        263               23         72        123        263
AST Money Market                                91        115       141        238               21         65        111        238

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







After:                                                                                 After:
----------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
Sub-Account:                                 1 Year    3 Years    5 Years   10 Years          1 Year     3 Years    5 Years   10 Years
-------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
MV Emerging Markets                            102        148       196        346               32         98        166        346

WFVT Equity Value                               95        127       162        280               25         77        132        280
WFVT Equity Income                              95        127       162        280               25         77        132        280

Rydex Nova                                     100        141       185        325               30         91        155        325
Rydex Ursa                                     100        141       185        325               30         91        155        325
Rydex OTC                                      104        154       206        366               34         104       176        366

INVESCO VIF Dynamics                            96        130       166        288               26         80        136        288
INVESCO VIF Technology                          96        129       165        287               26         79        135        287
INVESCO VIF Health Sciences                     96        129       165        287               26         79        135        287
INVESCO VIF Financial Services                  96        129       165        287               26         79        135        287
INVESCO VIF Telecommunications                  96        130       167        290               26         80        137        290

Evergreen VA Global Leaders                     95        127       162        280               25         77        132        280
Evergreen VA Special Equity                     96        129       164        284               26         79        134        284
Evergreen VA Omega                              92        119       148        252               22         69        118        252

ProFund VP Europe 30                           104        154       206        366               34         104       176        366
ProFund VP Asia 30                             105        156       209        371               35         106       179        371
ProFund VP Japan                               105        156       209        371               35         106       179        371
ProFund VP Banks                               105        157       211        375               35         107       181        375
ProFund VP Basic Materials                     105        157       211        375               35         107       181        375
ProFund VP Biotechnology                       105        157       211        375               35         107       181        375
ProFund VP Consumer Cyclical                   105        157       211        375               35         107       181        375
ProFund VP Consumer Non-Cyclical               105        157       211        375               35         107       181        375
ProFund VP Energy                              105        157       211        375               35         107       181        375
ProFund VP Financial                           105        157       211        375               35         107       181        375
ProFund VP Healthcare                          105        157       211        375               35         107       181        375
ProFund VP Industrial                          105        157       211        375               35         107       181        375
ProFund VP Internet                            105        157       211        375               35         107       181        375
ProFund VP Pharmaceuticals                     105        157       211        375               35         107       181        375
ProFund VP Precious Metals                     105        157       211        375               35         107       181        375
ProFund VP Real Estate                         105        157       211        375               35         107       181        375
ProFund VP Semiconductor                       105        157       211        375               35         107       181        375
ProFund VP Technology                          105        157       211        375               35         107       181        375
ProFund VP Telecommunications                  105        157       211        375               35         107       181        375
ProFund VP Utilities                           105        157       211        375               35         107       181        375
ProFund VP Bull                                105        157       211        375               35         107       181        375
ProFund VP Bear                                104        154       206        366               34         104       176        366
ProFund VP Bull Plus                           105        156       209        371               35         106       179        371
ProFund VP OTC                                 105        156       209        370               35         106       179        370
ProFund VP Short OTC                           105        156       209        371               35         106       179        371
ProFund VP UltraOTC                            105        156       209        371               35         106       179        371
ProFund VP Mid-Cap Value                       105        157       211        375               35         107       181        375
ProFund VP Mid-Cap Growth                      105        157       211        375               35         107       181        375
ProFund VP UltraMid-Cap                        105        157       211        375               35         107       181        375
ProFund VP Small-Cap Value                     105        157       211        375               35         107       181        375
ProFund VP Small-Cap Growth                    105        157       211        375               35         107       181        375
ProFund VP UltraSmall-Cap                      105        157       211        375               35         107       181        375
ProFund VP U.S. Government Plus                102        148       197        349               32         98        167        349
ProFund VP Rising Rates Opportunity            105        156       209        371               35         106       179        371

First Trust(R)10 Uncommon Values                 99        139       181        318               29         89        151        318

SP Jennison International Growth               102        147       194        343               32         97        164        343
-------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------

MANAGING YOUR ACCOUNT VALUE
THE FOLLOWING SECTION IS ADDED:
Additional Amounts on Qualifying Purchase Payments (formerly referred to as "Breakpoints")
Under certain  circumstances  we may credit  Additional  Amounts to your Annuity if you submit a large  initial or subsequent  Purchase
Payment.  Each Purchase Payment must qualify  separately to receive any Additional  Amounts.  As of the date of this  Prospectus,  such
Additional  Amounts are currently  being  offered.  However,  we may modify,  suspend or terminate this program at any time at our sole
discretion.  Any Additional Amounts are provided from our general account.

Additional  Amounts are payable as a percentage of the qualifying  Purchase  Payment made to your Annuity  according to the breakpoints
shown below:

                          ----------------------------------------------- ---------------------------
                                         Purchase Payment                     Additional Amount*
                          ----------------------------------------------- ---------------------------
                          ----------------------------------------------- ---------------------------
                          At least $500,000 but less than $1,000,000                1.25%
                          ----------------------------------------------- ---------------------------
                          ----------------------------------------------- ---------------------------
                          Between $1,000,000  and $4,999,999                        3.00%
                          ----------------------------------------------- ---------------------------
                          ----------------------------------------------- ---------------------------
                          $5,000,000 or greater                                     3.75%
                          ----------------------------------------------- ---------------------------
                           * as a percentage of the Purchase Payment.

Additional Amounts are not offered on Purchase Payments of less than $500,000.

How are Additional Amounts applied to my Account Value?
Any  Additional  Amounts are allocated to your Account  Value at the time the  qualifying  Purchase  Payment is applied to your Account
Value.  Additional Amounts are allocated to the investment options in the same ratio as the applicable Purchase Payment is applied.

Special Treatment of Additional Amounts
|X|      Any  Additional  Amounts  applied to your Annuity can be  recovered  by American  Skandia.  If you elect to  "free-look"  your
     Annuity, the amount returned to you will not include any Additional Amounts.
|X|      We do not consider Additional Amounts to be "investment in the contract" for income tax purposes.
|X|      You may not withdraw  any  Additional  Amounts  under the Free  Withdrawal  provision  without  assessment  of the  contingent
     deferred sales charge  (see "Can I make withdrawal from my Annuity without a CDSC?").

Additional Amounts applied to estimated Purchase Payments
Under certain  circumstances,  we may consider two or more separate  Purchase  Payments as if they had been  submitted at the same time
when  determining the percentage to apply based on the breakpoints  described  above. To make use of this procedure,  often referred to
as a "letter of intent",  you must provide evidence of your intention to submit the cumulative  additional  Purchase  Payments within a
13-month  period.  A letter  of intent  must be  provided  to us prior to the Issue  Date to be  effective.  Acceptance  of a letter of
intent is at our sole discretion and may be subject to restrictions as to the minimum initial  Purchase  Payment that must be submitted
to receive the next higher breakpoint.

Failure  to inform us that you  intend to submit  two or more  large  Purchase  Payments  within a  13-month  period may result in your
Annuity being credited no Additional Amounts or fewer Additional Amounts than would otherwise be credited to your Annuity.

If you submit a letter of intent and receive Additional Amounts that otherwise would not have applied BUT do not submit the required
Purchase Payments during the 13-month period as required by your letter of intent, we may recover any Additional Amounts pro-rata
from the investment options based on your Account Values as of the date we act to recover the Additional Amounts.  If the amount of
the recovery exceeds your then current Surrender Value, we will recover all remaining Account Value and terminate your Annuity.

Balanced Investment Program
The section  entitled "Do you offer programs  designed to guarantee a "Return of Premium" at a future date?"  (formerly  referred to as
Balanced Investment Program") is not available under PSA.

ACCESS TO ACCOUNT VALUE

Partial Surrenders
The minimum amount of any partial surrender (partial withdrawal) under a PSA contract is $500.






THE FOLLOWING SECTION IS ADDED:
WHAT IS A MEDICALLY-RELATED SURRENDER AND HOW DO I QUALIFY?
Where  permitted by law,  you may request to surrender  your  Annuity  prior to the Annuity Date without  application  of any CDSC upon
occurrence of a medically-related "Contingency Event".  The amount payable will be your Account Value.

This waiver of any applicable CDSC is subject to our rules, including but not limited to the following:
|X|      the Annuitant must be alive as of the date we pay the proceeds of such surrender request;
|X|      if the Owner is one or more natural persons, all such Owners must also be alive at such time; and
|X|      we must receive  satisfactory  proof of the Annuitant's  confinement in a Medical Care Facility or Fatal Illness in writing on
     a form satisfactory to us.

For contracts issued before May 1, 1996 a "Contingency Event" occurs if the Annuitant is:
|X|      first  confined in a "Medical  Care  Facility"  while your Annuity is in force and remains  confined for at least 90 days in a
       row; or
|X|      first diagnosed as having a "Fatal Illness" while your Annuity is in force.

For contracts  issued on or after May 1, 1996,  and where allowed by law, the Annuitant must have been named or any change of Annuitant
must have been accepted by us, prior to the "Contingency Event" described above in order to qualify for a medically-related surrender.

The  definitions  of "Medical Care  Facility" and "Fatal  Illness," as well as additional  terms and  conditions,  are provided in your
Annuity.  Specific details and definitions in relation to this benefit may differ in certain jurisdictions.

ANNUITY OPTIONS/ANNUITY PAYMENTS
The section  referred to as "Annuity  Payments" in the ASAP  Prospectus  is similar to the section  entitled  "Annuity  Options" in the
prior PSA  prospectus  except as follows:  1) the term "key life" in the ASAP  Prospectus  is the same as the term "payee" in the prior
PSA  Prospectus;  2) the amount of the first monthly  payment per $1,000 of value  obtained  from the annuity  tables which are derived
from the 1983a Individual  Annuity  Mortality Table with ages set back one year for males and two years for females and with an assumed
interest rate of 4% per annum;  and 3) a variable annuity option is available,  and if it is selected,  the amount of the first monthly
annuity  payment,  as described above, is divided by the Unit Price(s) for the appropriate  Sub-account(s)  as of the close of business
on the fifth  business  day  preceding  the  Annuity  Date in order to  determine  the  number of  Annuity  Units for each  Sub-account
represented by the first payment.

DEATH BENEFITS
The death  benefit for PSA is the greater of the Account  Value or 100% of the premium  payments  less all amounts  surrendered.  It is
payable in the event of the Owner's death or the  Annuitant's  death (if there is no Contingent  Annuitant) if occurring both (a) prior
to the Annuity Date, and (b) before the contract  anniversary  following the earlier of the Owner's or the  Annuitant's  85th birthday.
The death benefit at any later date prior to the Annuity date is the Account Value.

GENERAL INFORMATION

PERFORMANCE INFORMATION
Performance information in relation to PSA contracts is set forth in the Statement of Additional Information.






                                        Appendix C-2: Alliance Capital Navigator Prior Contract

---------------------------------------------------------------------------------------------------------------------------------------
Between 1992 and 1996 American  Skandia issued a variable annuity under the marketing name "Alliance  Capital  Navigator" or "ACN". The
contract  is no longer  being  issued.  However,  we  continue  to accept  additional  Purchase  Payments.  Assets  supporting  the ACN
contracts are maintained in Sub-accounts of Separate Account B.
---------------------------------------------------------------------------------------------------------------------------------------

The  principle  differences  between the American  Skandia  Advisors Plan or "ASAP"  contract  offered by this  Prospectus  and the ACN
contract are described below:

The  "Underlying  Mutual Fund Portfolio  Annual  Expenses" for the portfolios of American  Skandia Trust  contained in this  Prospectus
apply to all ACN Annuity Owners.

The "Expense Examples" that relate to the portfolios of American Skandia Trust contained in this Prospectus apply to all ACN Annuity
Owners.

Only those Portfolios of American Skandia Trust shown in the section entitled "What are the Investment Objectives and Policies of the
Portfolios" in this Prospectus are offered to ACN Annuity Owners.

SUMMARY OF CONTRACT FEES AND CHARGES
The following chart is added to this section:


------------------------------------------------------------------------------------------- --------------------- ----------------------
                                    OPTIONAL BENEFITS                                         Optional Benefit     Total Annual Charge
                                                                                                   Charge         (including Insurance
                                                                                                                         Charge)
------------------------------------------------------------------------------------------- --------------------- ----------------------
------------------------------------------------------------------------------------------- --------------------- ----------------------
GUARANTEED RETURN OPTION                                                                                                  1.65%
We offer a program  that  guarantees  a  "return  of  premium"  at a future  date,  while     0.25% of average
allowing you to allocate all or a portion of your Account  Value to the  Sub-accounts  of   daily net assets of
your choice.                                                                                  the Sub-accounts
------------------------------------------------------------------------------------------- --------------------- ----------------------

EXPENSE EXAMPLES
Expense  examples  are  provided  for the  basic  Annuity  contract  and for the basic  Annuity  contract  assuming  that you elect the
Guaranteed Return Option.  The charge for the Guaranteed Return Option is reflected as a charge equal to 0.25% and is deducted daily.








---------------------------------------- ---------------------------------- ---------------------------------
These   Examples   assume  you  do  not    No Optional Benefits Elected             If you elect GRO
surrender  your  Annuity  at the end of
the applicable period or you annuitize
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
AST Strong International Equity            27       82      139      294      29      89       152     319
AST William Blair International Growth     27       82      139      294      29      89       152     319
AST American Century International         28       86      146      308      31      94       159     333
Growth
AST DeAM International Equity              27       83      141      298      29      90       153     321
AST MFS Global Equity                      29       89      152      320      32      97       164     343
AST PBHG Small-Cap Growth                  27       82      140      297      29      90       153     321
AST DeAM Small-Cap Growth                  27       82      140      297      29      90       153     321
AST Federated Aggressive Growth            29       88      150      315      31      95       162     339
AST Goldman Sachs Small Cap Value          27       83      141      298      30      91       154     324
AST Gabelli Small-Cap Value                26       80      136      288      29      88       149     314
AST DeAM Small-Cap Value                   26       79      134      285      28      86       147     310
AST Goldman Sachs Mid-Cap Growth           28       85      144      304      30      92       157     329
AST Neuberger Berman Mid-Cap Growth        26       81      138      293      29      89       151     318
AST Neuberger Berman Mid-Cap Value         27       84      143      303      30      92       156     328
AST Alger All-Cap Growth                   27       83      142      300      30      91       155     325
AST Gabelli All-Cap Value                  27       83      142      300      30      91       155     325
AST T.Rowe Price Natural Resources         26       81      138      291      29      88       150     317
AST Alliance Growth                        27       82      139      294      29      89       151     318
AST MFS Growth                             26       81      138      291      29      88       150     317
AST Marsico Capital Growth                 26       79      135      287      28      87       148     311
AST Goldman Sachs Concentrated Growth      25       77      132      280      28      85       144     305
AST DeAM Large-Cap Growth                  25       77      132      280      28      85       144     304
AST DeAM Large-Cap Value                   25       77      132      280      28      85       144     304
AST Alliance/Bernstein Growth + Value      29       88      150      315      31      95       162     339
AST Sanford Bernstein Core Value           27       82      140      296      29      89       152     320
AST Cohen & Steers Realty                  27       84      143      301      30      91       155     325
AST Sanford Bernstein Managed Index 500    23       71      121      258      26      79       134     284
AST American Century Income & Growth       25       76      129      275      27      83       142     300
AST Alliance Growth and Income             25       76      129      275      27      83       142     300
AST MFS Growth with Income                 26       81      138      291      29      88       150     317
AST INVESCO Capital Income                 24       74      127      270      27      82       140     297
AST DeAM Global Allocation                 18       55      94       204      20      62       107     230
AST American Century Strategic Balanced    26       80      136      288      29      88       149     314
AST T. Rowe Price Asset Allocation         26       80      137      290      29      88       150     315
AST T. Rowe Price Global Bond              26       80      136      288      29      88       149     314
AST Federated High Yield                   25       76      130      276      27      83       142     300
AST Lord Abbett Bond-Debenture             26       80      137      290      29      88       150     315
AST DeAM Bond                              24       75      128      273      27      83       141     298
AST PIMCO Total Return Bond                23       71      122      260      26      79       134     285
AST PIMCO Limited Maturity Bond            23       72      123      263      26      80       136     288
AST Money Market                           21       65      111      238      24      73       124     265
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------


---------------------------------------- ---------------------------------- ---------------------------------
These  Examples  assume  you  surrender    No Optional Benefits Elected             If you elect GRO
your   Annuity   at  the   end  of  the
applicable period
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
AST Strong International Equity            102     142      179      294     104      149      192     319
AST William Blair International Growth     102     137      174      294     104      142      187     319
AST American Century International         103     146      186      308     106      154      199     333
Growth
AST DeAM International Equity              102     143      181      298     104      150      193     321
AST MFS Global Equity                      104     149      192      320     107      157      204     343
AST PBHG Small-Cap Growth                  102     142      180      297     104      150      193     321
AST DeAM Small-Cap Growth                  102     142      180      297     104      150      193     321
AST Federated Aggressive Growth            104     148      190      315     106      155      202     339
AST Goldman Sachs Small Cap Value          102     143      181      298     105      151      194     324
AST Gabelli Small-Cap Value                101     140      176      288     104      148      189     314
AST DeAM Small-Cap Value                   101     139      174      285     103      146      187     310
AST Goldman Sachs Mid-Cap Growth           103     140      179      304     105      147      192     329
AST Neuberger Berman Mid-Cap Growth        101     141      178      293     104      149      191     318
AST Neuberger Berman Mid-Cap Value         102     144      183      303     105      152      196     328
AST Alger All-Cap Growth                   102     143      182      300     105      151      195     325
AST Gabelli All-Cap Value                  102     143      182      300     105      151      195     325
AST T.Rowe Price Natural Resources         101     141      178      291     104      148      190     317
AST Alliance Growth                        102     142      179      294     104      149      191     318
AST MFS Growth                             101     141      178      291     104      148      190     317
AST Marsico Capital Growth                 101     139      175      287     103      147      188     311
AST Goldman Sachs Concentrated Growth      100     132      167      280     103      139      179     305
AST DeAM Large-Cap Growth                  100     137      172      280     103      145      184     304
AST DeAM Large-Cap Value                   100     137      172      280     103      145      184     304
AST Alliance/Bernstein Growth + Value      104     148      190      315     106      155      202     339
AST Sanford Bernstein Core Value           102     142      180      296     104      149      192     320
AST Cohen & Steers Realty                  102     144      183      301     105      151      195     325
AST Sanford Bernstein Managed Index 500    98      131      161      258     101      139      174     284
AST American Century Income & Growth       100     136      169      275     102      143      182     300
AST Alliance Growth and Income             100     136      169      275     102      143      182     300
AST MFS Growth with Income                 101     141      178      291     104      148      190     317
AST INVESCO Capital Income                 99      134      167      270     102      142      180     297
AST DeAM Global Allocation                 93      115      134      204      95      122      147     230
AST American Century Strategic Balanced    101     140      176      288     104      148      189     314
AST T. Rowe Price Asset Allocation         101     140      177      290     104      148      190     315
AST T. Rowe Price Global Bond              101     140      176      288     104      148      189     314
AST Federated High Yield                   100     136      170      276     102      143      182     300
AST Lord Abbett Bond-Debenture             101     140      177      290     104      148      190     315
AST DeAM Bond                              99      135      168      273     102      143      181     298
AST PIMCO Total Return Bond                98      131      162      260     101      139      174     285
AST PIMCO Limited Maturity Bond            98      132      163      263     101      140      176     288
AST Money Market                           96      125      151      238      99      133      164     265
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------

FEES AND CHARGES
Exceptions to the Contingent Deferred Sales Charge
The following underlined sentence is added to this section:


We do not apply the CDSC  provision  on  Annuities  owned by a member of the  designated  class,  including:  (a) any  parent  company,
affiliate or subsidiary of ours; (b) an officer,  director,  employee,  retiree, sales representative,  or in the case of an affiliated
broker-dealer,  registered  representative  of such company;  (c) a director,  officer or trustee of any underlying  mutual fund; (d) a
director,  officer or employee of any investment manager,  sub-advisor,  transfer agent, custodian,  auditing,  legal or administrative
services  provider  that is  providing  investment  management,  advisory,  transfer  agency,  custodianship,  auditing,  legal  and/or
administrative  services to an underlying  mutual fund or any affiliate of such firm; (e) a director,  officer,  employee or registered
representative  of a broker-dealer or insurance  agency that has a then current selling  agreement with us and/or with American Skandia
Marketing,  Incorporated;  (f) a director,  officer,  employee or authorized  representative of any firm providing us or our affiliates
with regular legal, actuarial, auditing, underwriting,  claims, administrative,  computer support, marketing, office or other services;
(g) the then  current  spouse of any such  person  noted in (b) through  (f),  above;  (h) the parents of any such person  noted in (b)
through (g),  above;  (i) the child(ren) or other legal  dependent under the age of 21 of any such person noted in (b) through (h); and
(j) the  siblings  of any such  persons  noted in (b)  through (h) above.  We will not  provide  any  Additional  Amounts for any such
                                                                           ------------------------------------------------------------
contracts (see "Additional Amounts on Qualifying Purchase Payments").
---------------------------------------------------------------------

You must notify us at the time you apply for an Annuity if you are a member of the designated class.  American Skandia is not
responsible for monitoring whether you qualify as a member of the designated class.  If you fail to inform us that you qualify as a
member of the designated class, your Annuity will not be eligible for this exception to the CDSC.


Optional  Benefits:  If you elect to purchase the Guaranteed  Return Option,  we will deduct an additional charge on a daily basis from
your Account Value  allocated to the  Sub-accounts.  The additional  charge is included in the daily  calculation of the Unit Price for
each  Sub-account.  Please refer to the section entitled  "Managing Your Account Value - Do you offer programs  designed to guarantee a
"return of premium" at a future date?" for a description of the charge for the Guaranteed Return Option.

MANAGING YOUR ANNUITY
THE FOLLOWING SECTION IS ADDED:
Additional Amounts on Qualifying Purchase Payments (formerly referred to as "Breakpoints")
Under certain  circumstances  we may credit  Additional  Amounts to your Annuity if you submit a large  initial or subsequent  Purchase
Payment.  Each Purchase Payment must qualify  separately to receive any Additional  Amounts.  As of the date of this  Prospectus,  such
Additional  Amounts are currently  being  offered.  However,  we may modify,  suspend or terminate this program at any time at our sole
discretion.  Any Additional Amounts are provided from our general account.

Additional  Amounts are payable as a percentage of the qualifying  Purchase  Payment made to your Annuity  according to the breakpoints
shown below:

                      --------------------------------------------- -------------------------
                                    Purchase Payment                Additional Amount*
                      --------------------------------------------- -------------------------
                      --------------------------------------------- -------------------------
                      Between $1,000,000  and $4,999,999                     3.00%
                      --------------------------------------------- -------------------------
                      --------------------------------------------- -------------------------
                      $5,000,000 or greater                                  3.75%
                      --------------------------------------------- -------------------------
                          * as a percentage of the Purchase Payment.

Additional Amounts are not offered on Purchase Payments of less than $1 million.

How are Additional Amounts applied to my Account Value?
Any  Additional  Amounts are allocated to your Account  Value at the time the  qualifying  Purchase  Payment is applied to your Account
Value.  Additional Amounts are allocated to the investment options in the same ratio as the applicable Purchase Payment is applied.

Special Treatment of Additional Amounts
|X|      Any  Additional  Amounts  applied to your Annuity can be  recovered  by American  Skandia.  If you elect to  "free-look"  your
     Annuity, the amount returned to you will not include any Additional Amounts.
|X|      We do not consider Additional Amounts to be "investment in the contract" for income tax purposes.
|X|      You may not withdraw  any  Additional  Amounts  under the Free  Withdrawal  provision  without  assessment  of the  contingent
     deferred sales charge  (see "Can I make withdrawal from my Annuity without a CDSC?").

Additional Amounts applied to estimated Purchase Payments
Under certain  circumstances,  we may consider two or more separate  Purchase  Payments as if they had been  submitted at the same time
when  determining the percentage to apply based on the breakpoints  described  above. To make use of this procedure,  often referred to
as a "letter of intent",  you must provide evidence of your intention to submit the cumulative  additional  Purchase  Payments within a
13-month  period.  A letter  of intent  must be  provided  to us prior to the Issue  Date to be  effective.  Acceptance  of a letter of
intent is at our sole discretion and may be subject to restrictions as to the minimum initial  Purchase  Payment that must be submitted
to receive the next higher breakpoint.

Failure  to inform us that you  intend to submit  two or more  large  Purchase  Payments  within a  13-month  period may result in your
Annuity being credited no Additional Amounts or fewer Additional Amounts than would otherwise be credited to your Annuity.

If you submit a letter of intent and receive Additional Amounts that otherwise would not have applied BUT do not submit the required
Purchase Payments during the 13-month period as required by your letter of intent, we may recover any Additional Amounts pro-rata
from the investment options based on your Account Values as of the date we act to recover the Additional Amounts.  If the amount of
the recovery exceeds your then current Surrender Value, we will recover all remaining Account Value and terminate your Annuity.

MANAGING YOUR ANNUITY

The  following  section is added under the section  entitled  "Do you Offer  Programs  Designed to Guarantee a 'Return of Premium' at a
Future Date?"

Guaranteed Return Option (GRO)SM
We also offer a  seven-year  program  where we monitor your Account  Value daily and  systematically  transfer  amounts  between  Fixed
Allocations  and the variable  investment  options you choose.  American  Skandia  guarantees that at the end of the seventh (7th) year
from  commencement  of the program (or any program  restart  date),  you will receive no less than your  Account  Value on the date you
elected to  participate  in the program  ("commencement  value").  On the program  maturity  date,  if your Account  Value is below the
commencement  value,  American Skandia will apply additional  amounts to your Annuity so that it is equal to commencement value or your
Account  Value on the date you elect to restart the program  duration.  Any amounts  added to your  Annuity  will be applied to the AST
Money  Market  Sub-account,  unless you provide us with  alternative  instructions.  We will  notify you of any  amounts  added to your
Annuity  under the program.  We do not  consider  amounts  added to your  Annuity to be  "investment  in the  contract"  for income tax
purposes.

Account  Value is only  transferred  to and  maintained  in Fixed  Allocations  to the  extent we, in our sole  discretion,  deem it is
                  ----
necessary  to support our  guarantee  under the  program.  This differs  from the  Balanced  Investment  Program  where a set amount is
allocated to a Fixed  Allocation  regardless of the  performance of the  underlying  Sub-accounts.  With the Guaranteed  Return Option,
your Annuity is able to participate in the upside potential of the Sub-accounts  while only  transferring  amounts to Fixed Allocations
to protect against  significant  market downturns.  NOTE: If a significant  amount of your Account Value is systematically  transferred
to Fixed Allocations  during prolonged market declines,  less of your Account Value may be immediately  available to participate in the
upside potential of the Sub-accounts if there is a subsequent market recovery.

Each  business day we monitor the  performance  of your Account Value to determine  whether it is greater  than,  equal to or below our
"reallocation  trigger",  described  below.  Based on the performance of the  Sub-accounts in which you choose to allocate your Account
Value  relative to the  reallocation  trigger,  we may transfer  some or all of your Account Value to or from a Fixed  Allocation.  You
have  complete  discretion  over the  allocation  of your Account  Value that remains  allocated  in the variable  investment  options.
However, we reserve the right to restrict certain Portfolios if you participate in the program.

|X|      Account Value greater than or equal to reallocation  trigger:  Your Account Value in the variable  investment  options remains
              allocated according to your most recent  instructions.  If a portion of Account Value was previously allocated to a Fixed
              Allocation,  those amounts may be transferred  from the Fixed  Allocation  and  re-allocated  to the variable  investment
              options pro-rata according to your current allocations.  A Market Value Adjustment will apply.

|X|      Account Value below reallocation  trigger:  A portion of your Account Value in the variable  investment options is transferred
              to a new Fixed Allocation.  These amounts are transferred on a pro-rata basis from the variable investment  options.  The
              new Fixed Allocation will have a Guarantee Period equal to the remaining  duration in the Guaranteed  Return Option.  The
              Account Value applied to the new Fixed  Allocation  will be credited with the fixed interest rate then being applied to a
              new Fixed Allocation of the next higher yearly  duration.  The Account Value will remain invested in the Fixed Allocation
              until the maturity date of the program  unless,  at an earlier date,  your Account Value is at or above the  reallocation
              trigger and amounts can be transferred to the variable  investment  options (as described  above) while  maintaining  the
              guarantee protection under the program.


American  Skandia uses an  allocation  mechanism  based on  assumptions  of expected and maximum  market  volatility  to determine  the
reallocation  trigger.  The  allocation  mechanism is used to determine the allocation of Account Value between Fixed  Allocations  and
the Sub-accounts you choose.  American  Skandia reserves the right to change the allocation  mechanism and the reallocation  trigger at
its  discretion,  subject to regulatory  approval  where  required.  Any change to the  allocation  mechanism  and/or the  reallocation
trigger will only apply to programs that begin after the change is effective.

Program Termination
The Guaranteed  Return Option will  terminate on its maturity  date. You can elect to participate in a new Guaranteed  Return Option or
re-allocate  your  Account  Value at that time.  Upon  termination,  any  Account  Value  allocated  to the Fixed  Allocations  will be
transferred to the AST Money Market Sub-account, unless you provide us with alternative instructions.






Special Considerations under the Guaranteed Return Option
This program is subject to certain rules and restrictions, including, but not limited to the following:
|X|      You may  terminate  the  Guaranteed  Return  Option at any  time.  American  Skandia  does not  provide  any  guarantees  upon
     termination of the program.
|X|      Withdrawals  from your  Annuity  while the  program  is in effect  will  reduce the  guaranteed  amount  under the  program in
     proportion  to your  Account  Value at the time of the  withdrawal.  Withdrawals  will be subject to all other  provisions  of the
     Annuity, including any Contingent Deferred Sales Charge or Market Value Adjustment that would apply.
|X|      Additional  Purchase Payments applied to the Annuity while the program is in effect will only increase the amount  guaranteed;
     however, all or a portion of any additional Purchase Payments may be allocated to the Fixed Allocations.
|X|      Annuity Owners cannot  transfer  Account Value to or from a Fixed  Allocation  while  participating  in the program and cannot
     participate in any dollar cost averaging program that transfers  Account Value from a Fixed Allocation to the variable  investment
     options.
|X|      Transfers  from Fixed  Allocations  will be subject to the Market Value  Adjustment  formula under the Annuity;  however,  the
     0.10%  "cushion"  feature of the formula will not apply. A Market Value  Adjustment may be either  positive or negative.  Transfer
     amounts will be taken from the most recently applied Fixed Allocation.
|X|      Transfers from the  Sub-accounts to Fixed  Allocations or from Fixed  Allocations to the  Sub-accounts  under the program will
     not count toward the maximum number of free transfers allowable under the Annuity.
|X|      The Guaranteed  Return Option will terminate:  (a) upon the death of the Owner or the Annuitant (in an entity owned contract);
     and (b) as of the date Account Value is applied to begin annuity payments.
|X|      You can elect to  restart  the seven (7) year  program  duration  on any  anniversary  of the Issue Date of the  Annuity.  The
     Account Value on the date the restart is effective  will become the new  commencement  value.  You can only elect the program once
     per Annuity Year.


Charges under the Program
We deduct a charge  equal to 0.25% per year to  participate  in the  Guaranteed  Return  Option.  The annual  charge is deducted  daily
against your Account  Value  allocated to the  Sub-accounts.  Account  Value  allocated to Fixed  Allocations  under the program is not
subject to the charge.  The charge is  deducted  to  compensate  American  Skandia  for:  (a) the risk that your  Account  Value on the
maturity date of the program is less than the amount guaranteed; and (b) administration of the program.

-----------------------------------------------------------------------------------------------------------------------------------
     Effective  November 18, 2002,  American Skandia changed the manner in which the annual charge for the Guaranteed Return Option
     is deducted to the method  described  above.  The annual  charge for the  Guaranteed  Return Option for Owners who elected the
     benefit between May 1, 2001 and November 15, 2002 is deducted annually,  in arrears,  according to the prospectus in effect as
     of the date the program  was  elected.  Owners who  terminate  and then  re-elect  the  Guaranteed  Return  Option or elect to
     restart the  Guaranteed  Return  Option at any time after  November  18, 2002 will be subject to the charge  method  described
     above.
-----------------------------------------------------------------------------------------------------------------------------------

DEATH BENEFITS
The Death Benefit depends on the decedent's age on the date of death:

         If death occurs before the decedent's age 85:  The Death Benefit is the greatest of:

|X|      The sum of your Account Value in the variable investment options and your Interim Value in the Fixed Allocations;
|X|      The sum of all Purchase  Payments each  increasing  daily at an interest rate of 5% per year minus the sum of all  withdrawals
               each  increasing  daily,  from the date of each  withdrawal,  at an interest  rate of 5% per year to the Owner's date of
               death, but not to exceed 200% of the difference  between the sum of all Purchase Payments and the sum of all withdrawals
               as of the Owner's date of death.

         If death occurs when the decedent is age 85 or older:  The Death Benefit is the Surrender Value, where allowed by law.

The amount of the Death  Benefit may be reduced by the amount of any  remaining  Contingent  Deferred  Sales Charge if the decedent was
age 75 or older at the time of death.

VALUING YOUR INVESTMENT


HOW AND WHEN DO YOU VALUE THE SUB-ACCOUNTS?
When you allocate Account Value to a Sub-account,  you are purchasing units of the Sub-account.  Each Sub-account  invests  exclusively
in shares of an underlying  Portfolio.  The value of the Units  fluctuates with the market  fluctuations  of the Portfolios.  The value
of the Units also reflects the daily accrual for the  Insurance  Charge and if you elected the optional  benefit whose annual charge is
deducted daily,  the additional  charge made for such benefit.  There may be different Unit Prices for each  Sub-account to reflect the
Insurance  Charge  and the charge  for any  optional  benefit.  The Unit  Price for the Units you  purchase  will be based on the total
charges for the benefits  that apply to your  Annuity.  See the section  entitled  "What  Happens to My Units When There is a Change in
Daily Asset-Based  Charges?" for a detailed  discussion of how Units are purchased and redeemed to reflect changes in the daily charges
that apply to your Annuity.

Each  Valuation  Day,  we  determine  the price for a Unit of each  Sub-account,  called the "Unit  Price."  The Unit Price is used for
determining  the  value of  transactions  involving  Units of the  Sub-accounts.  We  determine  the  number of Units  involved  in any
transaction by dividing the dollar value of the transaction by the Unit Price of the Sub-account as of the Valuation Day.

Example
Assume you allocate  $5,000 to a  Sub-account.  On the Valuation  Day you make the  allocation,  the Unit Price is $14.83.  Your $5,000
buys 337.154 Units of the  Sub-account.  Assume that later,  you wish to transfer $3,000 of your Account Value out of that  Sub-account
and into  another  Sub-account.  On the  Valuation  Day you  request  the  transfer,  the Unit Price of the  original  Sub-account  has
increased to $16.79.  To transfer  $3,000,  we sell 178.677  Units at the current Unit Price,  leaving you 158.477  Units.  We then buy
$3,000 of Units of the new Sub-account at the Unit Price of $17.83.  You would then have 168.255 Units of the new Sub-account.


WHAT HAPPENS TO MY UNITS WHEN THERE IS A CHANGE IN DAILY ASSET-BASED CHARGES?

Termination of Optional Benefit:  If you terminate the Guaranteed  Return Option program,  we will no longer deduct the charge we apply
to purchase the optional  benefit.  On the date the charge no longer  applies,  your Annuity will become  subject to a different  daily
asset-based  charge.  We will process a transaction  where your Account Value  allocated to the  Sub-accounts  will be used to purchase
new Units of the  Sub-accounts  that reflect the Insurance  Charge,  but not the charge for the optional  program that you  terminated.
The number of Units  attributed  to your  Annuity will be decreased  and the Unit Price of each unit of the  Sub-accounts  in which you
invested  will be increased.  The  adjustment  in the number of Units and Unit Price will not affect your Account  Value.  Beginning on
that date, your Account Value will be determined based on the change in the value of Units that reflect the Insurance Charge.

GENERAL INFORMATION

WHO DISTRIBUTES ANNUITIES OFFERED BY AMERICAN SKANDIA?

The following paragraph replaces the second paragraph under the "Advertising" section:

Advertising:
Standard and  Non-standard  Total Returns will not reflect  charges that apply to the  Guaranteed  Return Option.  The additional  cost
associated with the optional benefit you elected will reduce your performance.

PERFORMANCE INFORMATION
Performance information in the Sub-accounts that are currently available is set forth in the Statement of Additional Information.







D-1


                                    Appendix D - Sale of Contracts Outside of the State of New York

---------------------------------------------------------------------------------------------------------------------------------------
American  Skandia  previously  offered  the  Annuity to  residents  outside of the State of New York.  The  Annuity is no longer  being
offered outside of New York.  However,  we continue to accept additional  Purchase  Payments.  Owners who purchased the Annuity outside
of New York are subject to its terms as described in the Prospectus and as modified below.
---------------------------------------------------------------------------------------------------------------------------------------

SUMMARY OF CONTRACT FEES AND CHARGES
The following chart is added to this section:


------------------------------------------------------------------------------------------- --------------------- ----------------------
                                    OPTIONAL BENEFITS                                         Optional Benefit     Total Annual Charge
                                                                                                   Charge         (including Insurance
                                                                                                                         Charge)
------------------------------------------------------------------------------------------- --------------------- ----------------------
------------------------------------------------------------------------------------------- --------------------- ----------------------
GUARANTEED RETURN OPTION                                                                                                  1.65%
We offer a program  that  guarantees  a  "return  of  premium"  at a future  date,  while     0.25% of average
allowing you to allocate all or a portion of your Account  Value to the  Sub-accounts  of   daily net assets of
your choice.                                                                                  the Sub-accounts
------------------------------------------------------------------------------------------- --------------------- ----------------------

EXPENSE EXAMPLES
Expense  examples  are  provided  for the  basic  Annuity  contract  and for the basic  Annuity  contract  assuming  that you elect the
Guaranteed Return Option.  The charge for the Guaranteed Return Option is reflected as a charge equal to 0.25% and is deducted daily.


---------------------------------------- ---------------------------------- ---------------------------------
These   Examples   assume  you  do  not    No Optional Benefits Elected             If you elect GRO
surrender  your  Annuity  at the end of
the applicable period or you annuitize
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
AST Strong International Equity            27       82      139      294      29      89       152     319
AST William Blair International Growth     27       82      139      294      29      89       152     319
AST American Century International         28       86      146      308      31      94       159     333
Growth
AST DeAM International Equity              27       83      141      298      29      90       153     321
AST MFS Global Equity                      29       89      152      320      32      97       164     343
AST PBHG Small-Cap Growth                  27       82      140      297      29      90       153     321
AST DeAM Small-Cap Growth                  27       82      140      297      29      90       153     321
AST Federated Aggressive Growth            29       88      150      315      31      95       162     339
AST Goldman Sachs Small Cap Value          27       83      141      298      30      91       154     324
AST Gabelli Small-Cap Value                26       80      136      288      29      88       149     314
AST DeAM Small-Cap Value                   26       79      134      285      28      86       147     310
AST Goldman Sachs Mid-Cap Growth           28       85      144      304      30      92       157     329
AST Neuberger Berman Mid-Cap Growth        26       81      138      293      29      89       151     318
AST Neuberger Berman Mid-Cap Value         27       84      143      303      30      92       156     328
AST Alger All-Cap Growth                   27       83      142      300      30      91       155     325
AST Gabelli All-Cap Value                  27       83      142      300      30      91       155     325
AST T.Rowe Price Natural Resources         26       81      138      291      29      88       150     317
AST Alliance Growth                        27       82      139      294      29      89       151     318
AST MFS Growth                             26       81      138      291      29      88       150     317
AST Marsico Capital Growth                 26       79      135      287      28      87       148     311
AST Goldman Sachs Concentrated Growth      25       78      133      282      28      85       145     307
AST DeAM Large-Cap Growth                  25       77      132      280      28      85       144     304
AST DeAM Large-Cap Value                   25       77      132      280      28      85       144     304
AST Alliance/Bernstein Growth + Value      29       88      150      315      31      95       162     339
AST Sanford Bernstein Core Value           27       82      140      296      29      89       152     320
AST Cohen & Steers Realty                  27       84      143      301      30      91       155     325
AST Sanford Bernstein Managed Index 500    23       71      121      258      26      79       134     284
AST American Century Income & Growth       25       76      129      275      27      83       142     300
AST Alliance Growth and Income             25       76      129      275      27      83       142     300
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------

---------------------------------------- ---------------------------------- ---------------------------------
These   Examples   assume  you  do  not    No Optional Benefits Elected             If you elect GRO
surrender  your  Annuity  at the end of
the applicable period or you annuitize
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
AST MFS Growth with Income                 26       81      138      291      29      88       150     317
AST INVESCO Capital Income                 24       74      127      270      27      82       140     297
AST DeAM Global Allocation                 18       55      94       204      20      62       107     230
AST American Century Strategic Balanced    26       80      136      288      29      88       149     314
AST T. Rowe Price Asset Allocation         26       80      137      290      29      88       150     315
AST T. Rowe Price Global Bond              26       80      136      288      29      88       149     314
AST Federated High Yield                   25       76      130      276      27      83       142     300
AST Lord Abbett Bond-Debenture             26       80      137      290      29      88       150     315
AST DeAM Bond                              24       75      128      273      27      83       141     298
AST PIMCO Total Return Bond                23       71      122      260      26      79       134     285
AST PIMCO Limited Maturity Bond            23       72      123      263      26      80       136     288
AST Money Market                           21       65      111      238      24      73       124     265

MV Emerging Markets                        32       98      166      346      35      106      179     370

WFVT Equity Value                          25       77      132      280      28      85       145     306
WFVT Equity Income                         25       77      132      280      28      85       145     306

Rydex Nova                                 30       91      155      325      32      98       167     349
Rydex Ursa                                 30       91      155      325      32      98       167     349
Rydex OTC                                  34      104      176      366      37      112      189     390

INVESCO VIF Dynamics                       26       80      136      288      29      88       149     314
INVESCO VIF Technology                     26       79      135      287      28      87       148     312
INVESCO VIF Health Sciences                26       79      135      287      28      87       148     311
INVESCO VIF Financial Services             26       79      135      287      28      87       148     312
INVESCO VIF Telecommunications             26       80      137      290      29      88       149     314

Evergreen VA Global Leaders                25       77      132      280      28      85       145     306
Evergreen VA Special Equity                26       79      134      284      28      86       146     308
Evergreen VA Omega                         22       69      118      252      25      76       130     277

ProFund VP Europe 30                       34      104      176      366      37      112      189     390
ProFund VP Asia 30                         35      106      179      371      37      113      191     394
ProFund VP Japan                           35      106      179      371      37      113      191     394
ProFund VP Banks                           35      107      181      375      38      114      192     396
ProFund VP Basic Materials                 35      107      181      375      38      114      192     396
ProFund VP Biotechnology                   35      107      181      375      38      115      194     398
ProFund VP Consumer Cyclical               35      107      181      375      38      114      192     396
ProFund VP Consumer Non-Cyclical           35      107      181      375      38      114      192     396
ProFund VP Energy                          35      107      181      375      38      115      194     398
ProFund VP Financial                       35      107      181      375      38      115      194     398
ProFund VP Healthcare                      35      107      181      375      38      115      194     398
ProFund VP Industrial                      35      107      181      375      38      114      192     396
ProFund VP Internet                        35      107      181      375      38      114      192     396
ProFund VP Pharmaceuticals                 35      107      181      375      38      114      192     396
ProFund VP Precious Metals                 35      107      181      375      38      114      192     396
ProFund VP Real Estate                     35      107      181      375      38      115      194     398
ProFund VP Semiconductor                   35      107      181      375      38      114      192     396
ProFund VP Technology                      35      107      181      375      38      115      194     398
ProFund VP Telecommunications              35      107      181      375      38      115      194     398
ProFund VP Utilities                       35      107      181      375      38      115      194     398
ProFund VP Bull                            35      107      181      375      38      115      194     398
ProFund VP Bear                            34      104      176      366      37      112      189     390
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------






---------------------------------------- ---------------------------------- ---------------------------------
These   Examples   assume  you  do  not    No Optional Benefits Elected             If you elect GRO
surrender  your  Annuity  at the end of
the applicable period or you annuitize
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
ProFund VP Bull Plus                       35      106      179      371      37      113      191     394
ProFund VP OTC                             35      106      179      370      37      112      189     390
ProFund VP Short OTC                       35      106      179      371      37      113      191     395
ProFund VP UltraOTC                        35      106      179      371      37      113      191     395
ProFund VP Mid-Cap Value                   35      107      181      375      38      114      192     396
ProFund VP Mid-Cap Growth                  35      107      181      375      38      114      192     396
ProFund VP UltraMid-Cap                    35      107      181      375      38      115      193     397
ProFund VP Small-Cap Value                 35      107      181      375      38      115      193     397
ProFund VP Small-Cap Growth                35      107      181      375      38      115      193     397
ProFund VP UltraSmall-Cap                  35      107      181      375      38      115      194     398
ProFund VP U.S. Government Plus            32       98      167      349      35      106      179     372
ProFund VP Rising Rates Opportunity        35      106      179      371      37      113      191     395

First Trust(R)10 Uncommon Values            29       89      151      318      32      97       164     342

SP Jennison International Growth           32       97      164      343      34      104      176     366
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------



---------------------------------------- ---------------------------------- ---------------------------------
These  Examples  assume  you  surrender    No Optional Benefits Elected             If you elect GRO
your   Annuity   at  the   end  of  the
applicable period or you annuitize
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
AST Strong International Equity            102     142      179      294     104      149      192     319
AST William Blair International Growth     102     142      179      294     104      149      192     319
AST American Century International         103     146      186      308     106      154      199     333
Growth
AST DeAM International Equity              102     143      181      298     104      150      193     321
AST MFS Global Equity                      104     149      192      320     107      157      204     343
AST PBHG Small-Cap Growth                  102     142      180      297     104      150      193     321
AST DeAM Small-Cap Growth                  102     142      180      297     104      150      193     321
AST Federated Aggressive Growth            104     148      190      315     106      155      202     339
AST Goldman Sachs Small Cap Value          102     143      181      298     105      151      194     324
AST Gabelli Small-Cap Value                101     140      176      288     104      148      189     314
AST DeAM Small-Cap Value                   101     139      174      285     103      146      187     310
AST Goldman Sachs Mid-Cap Growth           103     145      184      304     105      152      197     329
AST Neuberger Berman Mid-Cap Growth        101     141      178      293     104      149      191     318
AST Neuberger Berman Mid-Cap Value         102     144      183      303     105      152      196     328
AST Alger All-Cap Growth                   102     143      182      300     105      151      195     325
AST Gabelli All-Cap Value                  102     143      182      300     105      151      195     325
AST T.Rowe Price Natural Resources         101     141      178      291     104      148      190     317
AST Alliance Growth                        102     142      179      294     104      149      191     318
AST MFS Growth                             101     141      178      291     104      148      190     317
AST Marsico Capital Growth                 101     139      175      287     103      147      188     311
AST Goldman Sachs Concentrated Growth      100     138      173      282     103      145      185     307
AST DeAM Large-Cap Growth                  100     137      172      280     103      145      184     304
AST DeAM Large-Cap Value                   100     137      172      280     103      145      184     304
AST Alliance/Bernstein Growth + Value      104     148      190      315     106      155      202     339
AST Sanford Bernstein Core Value           102     142      180      296     104      149      192     320
AST Cohen & Steers Realty                  102     144      183      301     105      151      195     325
AST Sanford Bernstein Managed Index 500    98      131      161      258     101      139      174     284
AST American Century Income & Growth       100     136      169      275     102      143      182     300
AST Alliance Growth and Income             100     136      169      275     102      143      182     300
AST MFS Growth with Income                 101     141      178      291     104      148      190     317
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------

---------------------------------------- ---------------------------------- ---------------------------------
These  Examples  assume  you  surrender    No Optional Benefits Elected             If you elect GRO
your   Annuity   at  the   end  of  the
applicable period or you annuitize
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
AST INVESCO Capital Income                 99      134      167      270     102      142      180     297
AST DeAM Global Allocation                 93      115      134      204      95      122      147     230
AST American Century Strategic Balanced    101     140      176      288     104      148      189     314
AST T. Rowe Price Asset Allocation         101     140      177      290     104      148      190     315
AST T. Rowe Price Global Bond              101     140      176      288     104      148      189     314
AST Federated High Yield                   100     136      170      276     102      143      182     300
AST Lord Abbett Bond-Debenture             101     140      177      290     104      148      190     315
AST DeAM Bond                              99      135      168      273     102      143      181     298
AST PIMCO Total Return Bond                98      131      162      260     101      139      174     285
AST PIMCO Limited Maturity Bond            98      132      163      263     101      140      176     288
AST Money Market                           96      125      151      238      99      133      164     265

MV Emerging Markets                        107     158      206      346     110      166      219     370

WFVT Equity Value                          100     137      172      280     103      145      185     306
WFVT Equity Income                         100     137      172      280     103      145      185     306

Rydex Nova                                 105     151      195      325     107      158      207     349
Rydex Ursa                                 105     151      195      325     107      158      207     349
Rydex OTC                                  109     164      216      366     112      172      229     390

INVESCO VIF Dynamics                       101     140      176      288     104      148      189     314
INVESCO VIF Technology                     101     139      175      287     103      147      188     312
INVESCO VIF Health Sciences                101     139      175      287     103      147      188     311
INVESCO VIF Financial Services             101     139      175      287     103      147      188     312
INVESCO VIF Telecommunications             101     140      177      290     104      148      189     314

Evergreen VA Global Leaders                100     137      172      280     103      145      185     306
Evergreen VA Special Equity                101     139      174      284     103      146      186     308
Evergreen VA Omega                         97      129      158      252     100      136      170     277

ProFund VP Europe 30                       109     164      216      366     112      172      229     390
ProFund VP Asia 30                         110     166      219      371     112      173      231     394
ProFund VP Japan                           110     166      219      371     112      173      231     394
ProFund VP Banks                           110     167      221      375     113      174      232     396
ProFund VP Basic Materials                 110     167      221      375     113      174      232     396
ProFund VP Biotechnology                   110     167      221      375     113      175      234     398
ProFund VP Consumer Cyclical               110     167      221      375     113      174      232     396
ProFund VP Consumer Non-Cyclical           110     167      221      375     113      174      232     396
ProFund VP Energy                          110     167      221      375     113      175      234     398
ProFund VP Financial                       110     167      221      375     113      175      234     398
ProFund VP Healthcare                      110     167      221      375     113      175      234     398
ProFund VP Industrial                      110     167      221      375     113      174      232     396
ProFund VP Internet                        110     167      221      375     113      174      232     396
ProFund VP Pharmaceuticals                 110     167      221      375     113      174      232     396
ProFund VP Precious Metals                 110     167      221      375     113      174      232     396
ProFund VP Real Estate                     110     167      221      375     113      175      234     398
ProFund VP Semiconductor                   110     167      221      375     113      174      232     396
ProFund VP Technology                      110     167      221      375     113      175      234     398
ProFund VP Telecommunications              110     167      221      375     113      175      234     398
ProFund VP Utilities                       110     167      221      375     113      175      234     398
ProFund VP Bull                            110     167      221      375     113      175      234     398
ProFund VP Bear                            109     164      216      366     112      172      229     390
ProFund VP Bull Plus                       110     166      219      371     112      173      231     394
ProFund VP OTC                             110     166      219      370     112      172      229     390
ProFund VP Short OTC                       110     166      219      371     112      173      231     395
ProFund VP UltraOTC                        110     166      219      371     112      173      231     395
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------






---------------------------------------- ---------------------------------- ---------------------------------
These  Examples  assume  you  surrender    No Optional Benefits Elected             If you elect GRO
your   Annuity   at  the   end  of  the
applicable period or you annuitize
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
ProFund VP Mid-Cap Value                   110     167      221      375     113      174      232     396
ProFund VP Mid-Cap Growth                  110     167      221      375     113      174      232     396
ProFund VP UltraMid-Cap                    110     167      221      375     113      175      233     397
ProFund VP Small-Cap Value                 110     167      221      375     113      175      233     397
ProFund VP Small-Cap Growth                110     167      221      375     113      175      233     397
ProFund VP UltraSmall-Cap                  110     167      221      375     113      175      234     398
ProFund VP U.S. Government Plus            107     158      207      349     110      166      219     372
ProFund VP Rising Rates Opportunity        110     166      219      371     112      173      231     395

First Trust(R)10 Uncommon Values            104     149      191      318     107      157      204     342

SP Jennison International Growth           107     157      204      343     109      164      216     366
---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------


FEES AND CHARGES
Contingent Deferred Sales Charge:

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

                           YEARS                1      2      3      4      5     6      7     8+
                           ------------------ ------- ----- ------ ------ ------ ----- ------ ------
                           ------------------ ------- ----- ------ ------ ------ ----- ------ ------

                           CHARGE (%)          7.5    7.0    6.0    5.0    4.0   3.0    2.0     0
                           ------------------ ------- ----- ------ ------ ------ ----- ------ ------

Exceptions to the Contingent Deferred Sales Charge
The following underlined sentence is added to this section:

We do not apply the CDSC  provision on Annuities  owned by: (a) any parent  company,  affiliate or subsidiary of ours;  (b) an officer,
director,  employee,  retiree, sales representative,  or in the case of an affiliated broker-dealer,  registered representative of such
company;  (c) a director,  officer or trustee of any  underlying  mutual fund;  (d) a director,  officer or employee of any  investment
manager,  sub-advisor,  transfer agent,  custodian,  auditing,  legal or administrative  services provider that is providing investment
management,  advisory, transfer agency,  custodianship,  auditing, legal and/or administrative services to an underlying mutual fund or
any affiliate of such firm; (e) a director,  officer,  employee or registered  representative  of a broker-dealer  or insurance  agency
that has a then current  selling  agreement with us and/or with American  Skandia  Marketing,  Incorporated;  (f) a director,  officer,
employee  or  authorized  representative  of  any  firm  providing  us or our  affiliates  with  regular  legal,  actuarial,  auditing,
underwriting,  claims,  administrative,  computer support, marketing, office or other services; (g) the then current spouse of any such
person noted in (b) through (f),  above;  (h) the parents of any such person noted in (b) through (g),  above;  (i) the  child(ren)  or
other legal  dependent  under the age of 21 of any such person noted in (b) through (h); and (j) the siblings of any such persons noted
in (b) through (h) above.


Optional  Benefits:  If you elect to purchase the Guaranteed  Return Option,  we will deduct an additional charge on a daily basis from
your Account Value  allocated to the  Sub-accounts.  The additional  charge is included in the daily  calculation of the Unit Price for
each  Sub-account.  Please refer to the section entitled  "Managing Your Account Value - Do you offer programs  designed to guarantee a
"return of premium" at a future date?" for a description of the charge for the Guaranteed Return Option.

MANAGING YOUR ANNUITY
MAY I RETURN THE ANNUITY IF I CHANGE MY MIND?
1.       Depending on the state in which you purchased your Annuity, the free-look period may be ten (10) days, twenty-one (21) days
     or longer, measured from the time that you received your Annuity.

2.       The section of the provision regarding when notice of free-look is effective is deleted.

3.       The section regarding the amount to be refunded is as follows:
     If you free-look your Annuity,  we will refund your current Account Value minus any Additional  Amounts we applied to your Annuity
     based on your  Purchase  Payments  plus any tax  charge  deducted.  (see  "Additional  Amounts  on  Qualifying  Purchase  Payments
     (Breakpoints)").  This amount may be higher or lower than your original  Purchase  Payment.  Certain states require that we return
     your current  Account  Value or the amount of your initial  Purchase  Payment,  whichever is greater.  The same rule applies to an
     Annuity that is purchased  as an IRA. In those  states  where we are  required to return the greater of your  Purchase  Payment or
     Account  Value,  we will  allocate your Account Value to the AST Money Market  Sub-account  during the free-look  period and for a
     reasonable additional amount of time to allow for delivery of your Annuity.

THE FOLLOWING SECTION IS ADDED:
Additional Amounts on Qualifying Purchase Payments (formerly referred to as "Breakpoints")
Under certain  circumstances  we may credit  Additional  Amounts to your Annuity if you submit a large  initial or subsequent  Purchase
Payment.  Each Purchase Payment must qualify  separately to receive any Additional  Amounts.  As of the date of this  Prospectus,  such
Additional  Amounts are currently  being  offered.  However,  we may modify,  suspend or terminate this program at any time at our sole
discretion.  Any Additional Amounts are provided from our general account.

Additional  Amounts are payable as a percentage of the qualifying  Purchase  Payment made to your Annuity  according to the breakpoints
shown below:

                      --------------------------------------------- -------------------------
                                    Purchase Payment                   Additional Amount*
                      --------------------------------------------- -------------------------
                      --------------------------------------------- -------------------------
                      Between $1,000,000  and $4,999,999                     3.00%
                      --------------------------------------------- -------------------------
                      --------------------------------------------- -------------------------
                      $5,000,000 or greater                                  3.75%
                      --------------------------------------------- -------------------------
                          * as a percentage of the Purchase Payment.

Additional Amounts are not offered on Purchase Payments of less than $1 million.

How are Additional Amounts applied to my Account Value?
Any  Additional  Amounts are allocated to your Account  Value at the time the  qualifying  Purchase  Payment is applied to your Account
Value.  Additional Amounts are allocated to the investment options in the same ratio as the applicable Purchase Payment is applied.

Special Treatment of Additional Amounts
|X|      Any  Additional  Amounts  applied to your Annuity can be  recovered  by American  Skandia.  If you elect to  "free-look"  your
     Annuity, the amount returned to you will not include any Additional Amounts.
|X|      We do not consider Additional Amounts to be "investment in the contract" for income tax purposes.
|X|      You may not withdraw  any  Additional  Amounts  under the Free  Withdrawal  provision  without  assessment  of the  contingent
     deferred sales charge  (see "Can I make withdrawal from my Annuity without a CDSC?").

Additional Amounts applied to estimated Purchase Payments
Under certain  circumstances,  we may consider two or more separate  Purchase  Payments as if they had been  submitted at the same time
when  determining the percentage to apply based on the breakpoints  described  above. To make use of this procedure,  often referred to
as a "letter of intent",  you must provide evidence of your intention to submit the cumulative  additional  Purchase  Payments within a
13-month  period.  A letter  of intent  must be  provided  to us prior to the Issue  Date to be  effective.  Acceptance  of a letter of
intent is at our sole discretion and may be subject to restrictions as to the minimum initial  Purchase  Payment that must be submitted
to receive the next higher breakpoint.

Failure  to inform us that you  intend to submit  two or more  large  Purchase  Payments  within a  13-month  period may result in your
Annuity being credited no Additional Amounts or fewer Additional Amounts than would otherwise be credited to your Annuity.

If you submit a letter of intent and receive Additional Amounts that otherwise would not have applied BUT do not submit the required
Purchase Payments during the 13-month period as required by your letter of intent, we may recover any Additional Amounts pro-rata
from the investment options based on your Account Values as of the date we act to recover the Additional Amounts.  If the amount of
the recovery exceeds your then current Surrender Value, we will recover all remaining Account Value and terminate your Annuity.

MANAGING YOUR ACCOUNT VALUE


The Guaranteed  Return Option  described in Appendix C-1 is available to Annuity Owners.  Please refer to pages C-10 through C-11 for a
description of the Guaranteed Return Option program.

HOW DO THE FIXED INVESTMENT OPTIONS WORK?
The following paragraph is added to this section:

To the extent  permitted by law, we may  increase  interest  rates  offered to a class of Owners who choose to  participate  in various
services we make  available.  Any such program is at our sole  discretion.  This may include,  but is not limited to,  Owners who elect
to use dollar cost averaging from Fixed  Allocations  (see "Do You Offer Dollar Cost  Averaging?") or the balanced  investment  program
(see "Do you offer programs designed to guarantee a "Return of Premium" at a future date?").

WHAT HAPPENS WHEN MY GUARANTEE PERIOD MATURES?
The language  regarding the 30 days prior to the Maturity Date is deleted for the language  regarding  renewals and for the rates being
credited to Fixed Allocations.

ACCESS TO ACCOUNT VALUE

IS THERE A CHARGE FOR A PARTIAL WITHDRAWAL?
The following provision is added to this section:

4.   If the amount requested  exceeds  Purchase  Payments still subject to a CDSC we withdraw the remaining amount from other surrender
     value due to Additional Amounts on Qualifying Purchase Payments.

HOW MUCH CAN I WITHDRAW AS A FREE WITHDRAWAL?
The following paragraph replaces the paragraph under this section beginning " `Growth' equals":

"Growth"  equals the current  Account  Value less all Purchase  Payments that have been invested for less than the CDSC period and have
not been  previously  withdrawn.  "Growth"  does not include any  additional  amounts we applied to your Annuity based on your Purchase
Payments (see "Breakpoints").

THE FOLLOWING SECTION IS ADDED:
WHAT IS A MEDICALLY-RELATED SURRENDER AND HOW DO I QUALIFY?
Where  permitted by law, you may request to surrender your Annuity for its Account Value prior to the Annuity Date without  application
of any CDSC upon occurrence of a medically-related "Contingency Event".

This waiver of any applicable CDSC is subject to our rules, including but not limited to the following:
|X|      the Annuitant must be alive as of the date we pay the proceeds of such surrender request;
|X|      if the Owner is one or more natural persons, all such Owners must also be alive at such time;
|X|      we must receive  satisfactory  proof of the Annuitant's  confinement in a Medical Care Facility or Fatal Illness in writing on
     a form satisfactory to us; and
|X|      this benefit is not available if the total Purchase  Payments  received  exceed  $500,000 for all annuities  issued by us with
     this benefit where the same person is named as Annuitant.

For contracts issued before May 1, 1996, a "Contingency Event" occurs if the Annuitant is:
|X|      first  confined in a "Medical  Care  Facility"  while your Annuity is in force and remains  confined for at least 90 days in a
       row; or
|X|      first diagnosed as having a "Fatal Illness" while your Annuity is in force.

For  contracts  issued on or after May 1, 1996,  and where  allowed by law,  the  Annuitant  must have been named or any changes of the
Annuitant  must  have  been  accepted  by  us,  prior  to  the  "Contingency  Event"  described  above,  in  order  to  qualify  for  a
medically-related surrender.

The  definitions  of "Medical Care  Facility" and "Fatal  Illness," as well as additional  terms and  conditions,  are provided in your
Annuity.  Specific details and definitions in relation to this benefit may differ in certain jurisdictions.

WHAT TYPES OF ANNUITY PAYMENT OPTIONS ARE AVAILABLE UPON ANNUITIZATION?
The following section is amended as follows:

You may choose an Annuity Date, an annuity  option and the  frequency of annuity  payments when you purchase an Annuity,  or at a later
date.  You may change  your  choices up to 30 days  before the  Annuity  Date.  Any change to these  options  must be in  writing.  The
Annuity  Date must be the first or the  fifteenth  day of a  calendar  month.  A  maximum  Annuity  Date may be  required  by law.  For
Annuities  issued in  Pennsylvania,  the Annuity Date may not exceed the first day of the calendar month following the Annuitant's 90th
birthday.  Additionally  for  Annuities  issued in  Pennsylvania,  if we do not receive an election In Writing the Annuity  Date is the
first day of the calendar month  following the  Annuitant's  90th birthday and the Annuity  payments will commence under Option 2 below
and will be fixed monthly payments with 10 years certain.

You may choose an Annuity Date, an annuity  option and the  frequency of annuity  payments when you purchase an Annuity,  or at a later
date.  You may change  your  choices up to 30 days  before the  Annuity  Date.  Any change to these  options  must be in  writing.  The
Annuity  Date must be the first or the  fifteenth  day of a  calendar  month.  The  Annuity  Date may not  exceed  the first day of the
calendar month following the Annuitant's 90th birthday.

HOW ARE ANNUITY PAYMENTS CALCULATED?
The following sentence is deleted from the paragraph:

This 3% interest rate is 4% for Annuities issued prior to the date we implemented the change.

DEATH BENEFITS
The Death Benefit depends on the decedent's age on the date of death:

         If death occurs before the decedent's age 85:  The Death Benefit is the greatest of:

|X|      The sum of your Account Value in the variable investment options and your Interim Value in the Fixed Allocations;
|X|      The sum of all Purchase  Payments each  increasing  daily at an interest rate of 5% per year minus the sum of all  withdrawals
               each  increasing  daily,  from the date of each  withdrawal,  at an interest  rate of 5% per year to the Owner's date of
               death, but not to exceed 200% of the difference  between the sum of all Purchase Payments and the sum of all withdrawals
               as of the Owner's date of death.

         If death occurs when the decedent is age 85 or older:  The Death Benefit is the Surrender Value, where allowed by law.

The amount of the Death  Benefit may be reduced by the amount of any  remaining  Contingent  Deferred  Sales Charge if the decedent was
age 75 or older at the time of death.

VALUING YOUR INVESTMENT


HOW AND WHEN DO YOU VALUE THE SUB-ACCOUNTS?
When you allocate Account Value to a Sub-account,  you are purchasing units of the Sub-account.  Each Sub-account  invests  exclusively
in shares of an underlying  Portfolio.  The value of the Units  fluctuates with the market  fluctuations  of the Portfolios.  The value
of the Units also reflects the daily accrual for the  Insurance  Charge and if you elected the optional  benefit whose annual charge is
deducted daily,  the additional  charge made for such benefit.  There may be different Unit Prices for each  Sub-account to reflect the
Insurance  Charge  and the charge  for any  optional  benefit.  The Unit  Price for the Units you  purchase  will be based on the total
charges for the benefits  that apply to your  Annuity.  See the section  entitled  "What  Happens to My Units When There is a Change in
Daily Asset-Based  Charges?" for a detailed  discussion of how Units are purchased and redeemed to reflect changes in the daily charges
that apply to your Annuity.

Each  Valuation  Day,  we  determine  the price for a Unit of each  Sub-account,  called the "Unit  Price."  The Unit Price is used for
determining  the  value of  transactions  involving  Units of the  Sub-accounts.  We  determine  the  number of Units  involved  in any
transaction by dividing the dollar value of the transaction by the Unit Price of the Sub-account as of the Valuation Day.

Example
Assume you allocate  $5,000 to a  Sub-account.  On the Valuation  Day you make the  allocation,  the Unit Price is $14.83.  Your $5,000
buys 337.154 Units of the  Sub-account.  Assume that later,  you wish to transfer $3,000 of your Account Value out of that  Sub-account
and into  another  Sub-account.  On the  Valuation  Day you  request  the  transfer,  the Unit Price of the  original  Sub-account  has
increased to $16.79.  To transfer  $3,000,  we sell 178.677  Units at the current Unit Price,  leaving you 158.477  Units.  We then buy
$3,000 of Units of the new Sub-account at the Unit Price of $17.83.  You would then have 168.255 Units of the new Sub-account.

WHEN DO YOUR PROCESS AND VALUE TRANSACTIONS?
The following paragraph replaces the paragraph titled "Death Benefits" under this section:

Medically-related Surrenders & Death Benefits:  Medically-related surrender requests and death benefit claims require our review and
evaluation before processing.  We price such transactions as of the date we receive at our Office all materials we require for such
transaction and that are satisfactory to us.


WHAT HAPPENS TO MY UNITS WHEN THERE IS A CHANGE IN DAILY ASSET-BASED CHARGES?

Termination of Optional Benefit:  If you terminate the Guaranteed  Return Option program,  we will no longer deduct the charge we apply
to purchase the optional  benefit.  On the date the charge no longer  applies,  your Annuity will become  subject to a different  daily
asset-based  charge.  We will process a transaction  where your Account Value  allocated to the  Sub-accounts  will be used to purchase
new Units of the  Sub-accounts  that reflect the Insurance  Charge,  but not the charge for the optional  program that you  terminated.
The number of Units  attributed  to your  Annuity will be decreased  and the Unit Price of each unit of the  Sub-accounts  in which you
invested  will be increased.  The  adjustment  in the number of Units and Unit Price will not affect your Account  Value.  Beginning on
that date, your Account Value will be determined based on the change in the value of Units that reflect the Insurance Charge.

GENERAL INFORMATION

WHO DISTRIBUTES ANNUITIES OFFERED BY AMERICAN SKANDIA?

The following paragraph replaces the second paragraph under the "Advertising" section:

Advertising:
Standard and  Non-standard  Total Returns will not reflect  charges that apply to the  Guaranteed  Return Option.  The additional  cost
associated with the optional benefit you elected will reduce your performance.

PERFORMANCE INFORMATION
Performance information in the Sub-accounts that are currently available is set forth in the Statement of Additional Information.


















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                  PLEASE SEND ME A STATEMENT  OF  ADDITIONAL  INFORMATION  THAT  CONTAINS  FURTHER  DETAILS  ABOUT THE
                  AMERICAN SKANDIA ANNUITY DESCRIBED IN PROSPECTUS ASAP-PROS (11/2002).
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Variable Annuity Issued by:                                                                  Variable Annuity Distributed by:


AMERICAN SKANDIA LIFE                                                                                      AMERICAN SKANDIA
ASSURANCE CORPORATION                                                                               MARKETING, INCORPORATED
One Corporate Drive                                                                                     One Corporate Drive
Shelton, Connecticut 06484                                                                       Shelton, Connecticut 06484
Telephone: 1-800-766-4530                                                                           Telephone: 203-926-1888
http://www.americanskandia.com                                                               http://www.americanskandia.com

                                                          MAILING ADDRESSES:


                                                 AMERICAN SKANDIA - VARIABLE ANNUITIES
                                                             P.O. Box 7040
                                                       Bridgeport, CT 06601-7040



                                                             EXPRESS MAIL:
                                                 AMERICAN SKANDIA - VARIABLE ANNUITIES
                                                          One Corporate Drive
                                                           Shelton, CT 06484