GOLDEN AMERICAN LIFE INSURANCE CO /NY/ - 10-K Annual Report

Back to GetFilings.com

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the fiscal year ended December 31, 1997.

Commission file number 33-87272

GOLDEN AMERICAN LIFE INSURANCE COMPANY

(Exact name of registrant as specified in its charter)

Delaware 41-0991508
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

1001 Jefferson Street, Suite 400
Wilmington, Delaware 19801
(Address of principal executive offices) (Zip Code)

Registrant's Telephone Number, including area code : (302) 576-3400

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered
N/A
________________________________________________________________________________

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ].

As of March 27, 1998, 250,000 shares of Common Stock, $10 Par Value, are
issued and outstanding.

NOTE: WHEREAS GOLDEN AMERICAN LIFE INSURANCE COMPANY MEETS THE CONDITIONS SET
FORTH IN GENERAL INSTRUCTION I (1)(a) AND (b) OF FORM 10K, THIS FORM IS BEING
FILED WITH THE REDUCED DISCLOSURE FORMAT.

DOCUMENTS INCORPORATED BY REFERENCE

PART I
ITEM 1. BUSINESS

OVERVIEW

Golden American Life Insurance Company ("Golden American"), a wholly owned
subsidiary of Equitable of Iowa Companies, Inc., is a stock life insurance
company organized under the laws of the State of Delaware. Golden American
offers variable insurance products and is authorized to do business in the
District of Columbia and all states except New York. Golden American's
wholly owned life insurance subsidiary, First Golden American Life Insurance
Company of New York ("First Golden," and collectively with Golden American,
the "Company"), became licensed as a life insurance company under the laws of
the State of New York on January 2, 1997 and the State of Delaware on
December 23, 1997, and has since received regulatory product approvals to
sell insurance products in these states. See Note 9 of the financial
statements for further information regarding related party transactions.

On October 24, 1997, PFHI Holdings, Inc. ("PFHI"), a Delaware corporation,
acquired all of the outstanding capital stock of Equitable of Iowa Companies
("Equitable") pursuant to the terms of the Agreement and Plan of Merger among
Equitable, PFHI, and ING Groep N.V. ("ING"). PFHI is a wholly owned
subsidiary of ING, a global financial services holding company based in The
Netherlands. As a result of the merger, Equitable was merged into PFHI which
was simultaneously renamed Equitable of Iowa Companies, Inc. ("EIC"). Refer
to Note 5 of the financial statements for additional information regarding
the merger.

PRODUCTS

The Company offers a portfolio of variable products designed to meet customer
needs for tax-advantaged methods of saving for retirement and protection from
unexpected death. Longer life expectancies, an aging population and growing
concern over the stability and availability of the Social Security system
have made retirement planning a priority. The target market for all products
is individuals and families throughout the United States.

VARIABLE ANNUITIES: Variable annuities are long-term savings vehicles in
which Contractholder premiums (purchase payments) are recorded and maintained
in a general account or a separate account established as a registered unit
investment trust. The Company offers seven variable annuity products. Funds
on deposit in the Company's variable annuity fixed and separate accounts at
December 31, 1997 totaled $488.4 million and $1.6 billion respectively.

Variable annuities provide the Company with fee based revenues including
charges for mortality and expense risk, contract administration and surrender
charges which are charged to the Contractholder's account. In addition, some
contracts provide for a distribution fee collected for a limited number of
years after each premium deposit.

VARIABLE LIFE INSURANCE PRODUCTS: Variable life products are fund-linked
life products wherein the Contractholder accepts the investment risk in
exchange for the potential of a higher rate of return. The Company offers two
variable life products. Funds on deposit in the variable life separate and
general accounts at December 31, 1997 totaled $49.2 million. Variable life
insurance provides fee based revenues to the Company from product charges for
mortality and expense risk, cost of insurance, contract administration,
surrender charges and distribution fees.

MARKETING AND DISTRIBUTION

The Company continued to expand its distribution systems during 1997. Broad-
based distribution networks are key to realizing a growing share of the
retirement savings marketplace. The principal distributors of the Company's
variable products include national and regional stock brokerage firms, life
insurance companies with captive agency sales forces and independent NASD
firms with licensed registered representatives.

MARKETING OPPORTUNITIES: In January 1997, the Company received a certificate
of authority to do business in New York by establishing First Golden American
Life Insurance Company of New York. The New York marketing effort began with
sales of variable products. Entry into this market provides considerable
growth opportunities for the Company. In addition, as a result of the merger
with ING, growth opportunities exist by utilizing ING's owned broker/dealer
network and developing cross-selling agreements with affiliated companies.

BUSINESS ENVIRONMENT

The current business and regulatory environment remains challenging for the
insurance industry. The variable annuity competitive environment is intense
and is dominated by a number of large variable product companies with strong
distribution, name recognition and wholesaling capabilities. Increasing
competition from traditional insurance carriers as well as banks and mutual
fund companies offers consumers many choices. However, overall demand for
variable products remains strong for several reasons including: strong stock
market performance over the last 4 years; relatively low interest rates; an
aging U.S. population that is increasingly concerned about retirement and
estate planning, as well as maintaining their standard of living in
retirement; potential reductions in government and employer-provided benefits
at retirement as well as lower public confidence in the adequacy of those
benefits.

REGULATION

The Company's life insurance operations are conducted in a highly regulated
environment. Both Golden American and First Golden are subject to the
insurance laws of the state in which each is organized and of the other
jurisdictions in which they transact business. The primary regulator of the
Golden American insurance operations is the Commissioner of Insurance for the
State of Delaware. First Golden is subject to the regulation of the
Superintendent of Insurance for the State of New York. See Item 7,
Management's Discussion and Analysis of Financial Condition.

ITEM 2. PROPERTIES

The Company's business operations are performed in leased facilities located
at 1001 Jefferson Street, Wilmington, Delaware and 230 Park Avenue in New
York, New York. Property and equipment primarily represent leasehold
improvements, office furniture and equipment and capitalized computer
software and are not considered to be significant to the Company's overall
operations. Property and equipment are reported at cost less allowances for
depreciation.

ITEM 3. LEGAL PROCEEDINGS

In the ordinary course of business, the Company is engaged in certain
litigation, none of which management believes is material.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Information called for by this item is omitted pursuant to General
Instruction I. (2) (c) of Form 10-K.

PART II.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

The Registrant is a wholly owned subsidiary of Equitable of Iowa Companies,
Inc. There is no public trading market for the Registrant's common stock.

Golden American is required to maintain a minimum total statutory-basis
capital and surplus of not less than $5 million under the provisions of the
insurance laws of certain states in which it is presently licensed to sell
insurance products. The ability of Golden American to pay dividends to its
parent is restricted because prior approval of insurance regulatory
authorities is required for payment of dividends to the stockholder which
exceed an annual limitation. During 1998, Golden American cannot pay
dividends to its parent without prior approval of statutory authorities.
Golden American did not pay common stock dividends during 1997 or 1996.

Under the provisions of the insurance laws of the State of New York, First
Golden cannot distribute any dividends to its stockholders unless a notice of
its intention to declare a dividend and amount of the dividend has been filed
not less than thirty days in advance of the proposed declaration. The
superintendent may disapprove the distribution by giving written notice to
First Golden within thirty days after the filing should the superintendent
find that the financial condition of First Golden does not warrant the
distribution. First Golden did not pay common stock dividends during 1997 or
1996.

ITEM 6. SELECTED FINANCIAL DATA

Information called for by this item is omitted pursuant to General
Instruction I. (2)(a) of Form 10-K.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS.

The purpose of this section is to discuss and analyze the Company's
consolidated results of operations. In addition, some analysis and
information regarding financial condition and liquidity and capital resources
has also been provided. This analysis should be read in conjunction with the
consolidated financial statements and related notes which appear elsewhere in
this report. The Company reports financial results on a consolidated basis.
The consolidated financial statements include the accounts of Golden American
Life Insurance Company ("Golden American") and its wholly owned subsidiary,
First Golden American Life Insurance Company of New York ("First Golden," and
collectively with Golden American, the "Company").

RESULTS OF OPERATIONS
_____________________

MERGER

On October 23, 1997, Equitable of Iowa Companies ("Equitable") shareholders
approved the Agreement and Plan of Merger ("Merger Agreement") dated as of
July 7, 1997, among Equitable, PFHI Holdings, Inc. ("PFHI"), and ING Groep
N.V. ("ING"). On October 24, 1997, PFHI, a Delaware corporation, acquired
all of the outstanding capital stock of Equitable pursuant to the Merger
Agreement. PFHI is a wholly owned subsidiary of ING, a global financial
services holding company based in The Netherlands. Equitable, an Iowa
corporation, in turn owned all the outstanding capital stock of Equitable
Life Insurance Company of Iowa ("Equitable Life") and Golden American and
their wholly owned subsidiaries. Equitable also owned all the outstanding
capital stock of Locust Street Securities, Inc., Equitable Investment
Services, Inc., Directed Services, Inc. ("DSI"), Equitable of Iowa Companies
Capital Trust, Equitable of Iowa Companies Capital Trust II and Equitable of
Iowa Securities Network, Inc. In exchange for the outstanding capital stock
of Equitable, ING paid total consideration of approximately $2.1 billion in
cash and stock plus the assumption of approximately $400 million in debt
according to the Merger Agreement. As a result of the merger, Equitable of
Iowa Companies was merged into PFHI which was simultaneously renamed
Equitable of Iowa Companies, Inc. ("EIC" or "Parent"), a Delaware
corporation.

For financial statement purposes, the change in control of the Company
through the ING merger with EIC, was accounted for as a purchase effective
October 25, 1997. This merger resulted in a new basis of accounting
reflecting estimated fair values of assets and liabilities at that date. As
a result, the Company's financial statements for the period subsequent to
October 24, 1997, are presented on the Post-Merger new basis of accounting.

The purchase price was allocated to the companies mentioned previously.
Goodwill of $1.4 billion was established for the excess of the merger cost
over the fair value of the assets and liabilities of EIC with $151.1 million
pushed down to the Company. The allocation of the purchase price to the
Company was $227.5 million. The cost of the acquisition is preliminary as it
relates to estimated expenses, and as a result, the allocation of the
purchase price to the Company may change. Goodwill resulting from the merger
is being amortized over 40 years on a straight-line basis. The carrying
value will be reviewed periodically for any indication of impairment in
value.

CHANGE IN CONTROL - ACQUISITION

On August 13, 1996, Equitable acquired all of the outstanding capital stock
of BT Variable, Inc. ("BT Variable") and its wholly owned subsidiaries Golden
American and DSI. Subsequent to the acquisition, the BT Variable, Inc. name
was changed to EIC Variable, Inc. On April 30, 1997, EIC Variable, Inc. was
liquidated and its investments in Golden American and DSI were transferred to
Equitable while the remainder of its net assets were contributed to Golden
American. On December 30, 1997, EIC Variable, Inc. was dissolved.

For financial statement purposes, the change in control of Golden American
through the acquisition of BT Variable was accounted for as a purchase
acquisition effective August 14, 1996. This acquisition resulted in a new
basis of accounting reflecting estimated fair values of assets and
liabilities at that date. As a result, the Company's financial statements
for the period August 14, 1996 through October 24, 1997, are presented on the
Post-Acquisition basis of accounting and for August 13, 1996 and prior
periods are presented on the Pre-Acquisition basis of accounting.

The purchase price was allocated to the three companies purchased - BT
Variable, DSI, and Golden American. Goodwill of $41.1 million was established
for the excess of the acquisition cost over the fair value of the assets and
liabilities and pushed down to Golden American. The acquisition cost was
preliminary with respect to the final settlement of taxes with Bankers Trust
Company and estimated expenses. At June 30, 1997, goodwill was increased by
$1.8 million to adjust the value of a receivable existing at that date. The
allocation of the purchase price to Golden American was approximately $139.9
million. Goodwill resulting from the acquisition was being amortized over 25
years on a straight-line basis.

The following analysis combines Post-Merger and Post-Acquisition activity for
1997 and Post-Acquisition and Pre-Acquisition activity for 1996 for
comparison purposes. Such a comparison does not recognize the impact of the
purchase accounting and goodwill amortization except for the periods after
August 13, 1996.

PREMIUMS

POST-MERGER COMBINED POST-ACQUISITION
__________________________________________________________
For the period | For the year | For the period
October 25, 1997 | ended | January 1, 1997
through | December 31, 1997 | through
December 31, 1997 | Combined | October 24, 1997
_________________________________________| __________________| _________________
(Dollars in millions)
| |
Variable annuity | |
premiums: | |
Separate account $111.0 | $291.2 | $180.2
Fixed account 60.9 | 318.0 | 257.1
___________________| __________________| _________________
171.9 | 609.2 | 437.3
Variable life premiums 1.2 | 15.6 | 14.4
___________________| __________________| _________________
Total premiums $173.1 | $624.8 | $451.7
==========================================================

POST-ACQUISITION COMBINED PRE-ACQUISITION
__________________________________________________________
For the period | For the year | For the period
August 14, 1996 | ended | January 1, 1996
through | December 31, 1996 | through
December 31, 1996 | Combined | August 13, 1996
_________________________________________| __________________| _________________
(Dollars in millions)
| |
Variable annuity | |
premiums: | |
Separate account $51.0 | $182.4 | $131.4
Fixed account 118.3 | 245.3 | 127.0
___________________| __________________| _________________
169.3 | 427.7 | 258.4
Variable life premiums 3.6 | 14.1 | 10.5
___________________| __________________| _________________
Total premiums $172.9 | $441.8 | $268.9
==========================================================

Variable annuity separate account and variable life premiums increased 59.6%
and 10.1%, respectively in 1997. During 1997, stock market returns, a
relatively low interest rate environment and flat yield curve have made
returns provided by variable annuities and mutual funds more attractive than
fixed rate products such as certificates of deposits and fixed annuities. The
fixed account portion of the Company's variable annuity premiums increased
29.7% in 1997 due to the Company's marketing emphasis on fixed rates during
the second and third quarters. Premiums, net of reinsurance, for variable
products from six significant broker/dealers for the year ended December 31,
1997, totaled $445.3 million, or 71% of premiums ($298.0 million or 67% from
two significant broker/dealers for the year ended December 31, 1996).

REVENUES

POST-MERGER COMBINED POST-ACQUISITION
__________________________________________________________
For the period | For the year| For the period
October 25, 1997 | ended| January 1, 1997
through | December 31, 1997| through
December 31, 1997 | Combined| October 24, 1997
_________________________________________| _________________| __________________
(Dollars in millions)
| |
Annuity and interest | |
sensitive life | |
product charges $3.8 | $22.1 | $18.3
Management fee revenue 0.5 | 2.8 | 2.3
Net investment income 5.1 | 26.8 | 21.7
Realized gains (losses) | |
on investments -- | 0.1 | 0.1
Other income 0.3 | 0.7 | 0.4
___________________| _________________| __________________
$9.7 | $52.5 | $42.8
==========================================================

POST-ACQUISITION COMBINED PRE-ACQUISITION
__________________________________________________________
For the period | For the year| For the period
August 14, 1996 | ended| January 1, 1996
through | December 31, 1996| through
December 31, 1996 | Combined| August 13, 1996
_________________________________________| _________________| __________________
(Dollars in millions)
| |
Annuity and interest | |
sensitive life | |
product charges $8.8 | $21.0 | $12.2
Management fee revenue 0.9 | 2.3 | 1.4
Net investment income 5.8 | 10.8 | 5.0
Realized gains (losses) | |
on investments -- | (0.4)| (0.4)
Other income 0.5 | 0.6 | 0.1
___________________| _________________| __________________
$16.0 | $34.3 | $18.3
==========================================================

Total revenues increased 53.3%, or $18.2 million, to $52.5 million in 1997.
Annuity and interest sensitive life product charges increased 5.2%, or $1.1
million in 1997 due to additional fees earned from the increasing block of
business under management in the Separate Accounts and an increase in the
collection of surrender charges.

Golden American provides certain managerial and supervisory services to DSI.
This fee, calculated as a percentage of average assets in the variable
separate accounts, was $2.8 million for 1997 and $2.3 million for 1996.

Net investment income increased 148.3%, or $16.0 million, to $26.8 million in
1997 from $10.8 million in 1996 due to growth in invested assets. During
1997, the Company had net realized gains on the disposal of investments,
which were the result of voluntary sales, of $0.1 million compared to net
realized losses of $0.4 million in 1996.

EXPENSES

POST-MERGER COMBINED POST-ACQUISITION
_______________________________________________________
For the period| For the year| For the period
October 25, 1997| ended| January 1, 1997
through| December 31, 1997| through
December 31, 1997| Combined| October 24, 1997
_________________________________________| _________________| _________________
(Dollars in millions)
| |
Insurance benefits | |
and expenses: | |
Annuity and interest | |
sensitive life benefits: | |
Interest credited to | |
account balances $7.4 | $26.7 | $19.3
Benefit claims incurred | |
in excess of account | |
balances -- | 0.1 | 0.1
Underwriting, acquisition | |
and insurance expenses: | |
Commissions 9.4 | 36.3 | 26.9
General expenses 3.4 | 17.3 | 13.9
Insurance taxes 0.5 | 2.3 | 1.8
Policy acquisition costs | |
deferred (13.7)| (42.7)| (29.0)
Amortization: | |
Deferred policy | |
acquisition costs 0.9 | 2.6 | 1.7
Present value of in | |
force acquired 0.9 | 6.1 | 5.2
Goodwill 0.6 | 2.0 | 1.4
_________________| _________________| _________________
$9.4 | $50.7 | $41.3
=======================================================

POST-ACQUISITION COMBINED PRE-ACQUISITION
_______________________________________________________
For the period| For the year| For the period
August 14, 1996| ended| January 1, 1996
through| December 31, 1996| through
December 31, 1996| Combined| August 13, 1996
_________________________________________| _________________| _________________
(Dollars in millions)
| |
Insurance benefits | |
and expenses: | |
Annuity and interest | |
sensitive life benefits: | |
Interest credited to | |
account balances $5.7 | $10.1 | $4.4
Benefit claims incurred | |
in excess of account | |
balances 1.3 | 2.2 | 0.9
Underwriting, acquisition | |
and insurance expenses: | |
Commissions 9.9 | 26.5 | 16.6
General expenses 5.9 | 15.3 | 9.4
Insurance taxes 0.7 | 1.9 | 1.2
Policy acquisition costs | |
deferred (11.7)| (31.0)| (19.3)
Amortization: | |
Deferred policy | |
acquisition costs 0.2 | 2.6 | 2.4
Present value of in | |
force acquired 2.7 | 3.7 | 1.0
Goodwill 0.6 | 0.6 | --
_________________| _________________| _________________
$15.3 | $31.9 | $16.6
=======================================================

Total insurance benefits and expenses increased 59.3%, or $18.8 million, in
1997 from $31.9 million in 1996. Interest credited to account balances
increased 164.4%, or $16.6 million, in 1997 as a result of higher account
balances associated with the Company's fixed account option within its
variable products.

Commissions increased 37.3%, or $9.8 million, in 1997 from $26.5 million in
1996. Insurance taxes increased 23.3%, or $0.4 million, in 1997 from $1.9
million in 1996. Increases and decreases in commissions and insurance taxes
are generally related to changes in the level of variable product sales.
Insurance taxes are also impacted by several other factors which include an
increase in FICA taxes primarily due to bonuses and an increase in state
licenses and fees. Most costs incurred as the result of new sales have been
deferred, thus having very little impact on earnings.

General expenses increased 12.6%, or $2.0 million, in 1997 from $15.3 million
in 1996 due in part to certain expenses associated with the merger occurring
on October 24, 1997. In addition, the Company uses a network of wholesalers
to distribute its products and the salaries of these wholesalers are included
in general expenses. The portion of these salaries and related expenses
which vary with sales production levels are deferred, thus having little
impact on earnings. This increase in general expenses was partially offset
by reimbursements received from Equitable Life, an affiliate, for certain
advisory, computer and other resources and services provided by Golden
American. Management expects general expenses to continue to increase in
1998 as a result of the emphasis on expanding the salaried wholesaler
distribution network.

During the second quarter of 1997, present value of in force acquired
("PVIF") was unlocked by $2.3 million to reflect narrower current spreads
than the gross profit model assumed. The Company's deferred policy
acquisition costs ("DPAC"), previous balance of PVIF and unearned revenue
reserve, as of the merger date, were eliminated and an asset of $44.3 million
representing PVIF was established for all policies in force at the merger
date. The amortization of PVIF and DPAC increased $2.4 million, or 37.1%, in
1997. Based on current conditions and assumptions as to the impact of future
events on acquired policies in force, the expected approximate net
amoritization for the next five years, relating to the PVIF as of December
31, 1997, is $6.2 million in 1998, $6.0 million in 1999, $5.6 million in
2000, $5.0 million in 2001 and $4.2 million in 2002. Certain expense
estimates inherent in the cost of the merger may change resulting in changes
of the allocation of the purchase price. If changes occur, the impact could
result in changes to PVIF and the related amortization and deferred taxes.
Actual amortization may vary based upon changes in assumptions and
experience. The elimination of the unearned revenue reserve related to in
force acquired at the merger/acquisition dates will result in lower annuity
and interest sensitive life product charges compared to pre-merger/pre-
acquisition levels.

Amortization of goodwill for the year ended December 31, 1997 totaled $2.0
million compared to $0.6 million for the year ended December 31, 1996.
Goodwill resulting from the merger is being amortized on a straight-line
basis over 40 years and is expected to total approximately $3.8 million
annually.

Interest expense on the $25 million surplus note issued December 1996 was
$2.0 million for the year ended December 31, 1997. Interest on any line of
credit borrowings was charged at the rate of Equitable's monthly average
aggregate cost of short-term funds plus 1.00%. During 1997, the Company paid
$0.6 million to Equitable for interest on the line of credit.

NET INCOME

Net income on a combined basis for 1997 was $0.3 million, a decrease of $3.2
million, or 91.4%, from 1996.

FINANCIAL CONDITION
___________________

RATINGS

During 1997, the Company's ratings were upgraded by A.M. Best from A to A+
and by Duff & Phelps from AA to AA+.

INVESTMENTS

The financial statement carrying value and amortized cost basis of the
Company's total investments each increased 65.1% in 1997. All of the
Company's investments, other than mortgage loans, are carried at fair value
in the Company's financial statements. As such, growth in the carrying value
of the Company's investment portfolio included changes in unrealized
appreciation and depreciation of fixed maturity and equity securities as well
as growth in the cost basis of these securities. Growth in the cost basis of
the Company's investment portfolio resulted from the investment of premiums
from the sale of the Company's fixed account option and the effect of
purchase accounting establishing a new cost basis at market value at the
merger date. The Company manages the growth of its insurance operations in
order to maintain adequate capital ratios.

To support the fixed account option of the Company's variable insurance
products, cash flow was invested primarily in fixed maturity securities and
mortgage loans. At December 31, 1997, the Company's investment portfolio at
amortized cost was $519.6 million with a yield of 6.7% and carrying value of
$520.2 million.

FIXED MATURITY SECURITIES: At December 31, 1997, the Company had fixed
maturities with an amortized cost of $413.3 million and an estimated fair
value of $414.4 million. The individual securities in the Company's fixed
maturities portfolio (at amortized cost) include investment grade securities
($368.0 million or 89.1%), which include securities issued by the U.S.
Government, its agencies and corporations that are rated at least BBB- by
Standard & Poor's Rating Services ("Standard & Poor's"), and below investment
grade securities ($41.4 million or 10.0%), which are securities issued by
corporations that are rated BB+ to B- by Standard & Poor's. Securities not
rated by Standard & Poor's had a National Association of Insurance
Commissioners ("NAIC") rating of 1, 3 or 4 ($3.9 million or 0.9%).

The Company classifies 100% of its securities as available for sale. Net
unrealized appreciation of fixed maturity securities of $1.1 million was
comprised of gross appreciation of $1.4 million and gross depreciation of
$0.3 million. Net unrealized holding gains on these securities, net of
adjustments to DPAC, PVIF and deferred income taxes, increased stockholder's
equity by $0.6 million at December 31, 1997.

The Company began investing in below investment grade securities during 1996.
At December 31, 1997, the amortized cost value of the Company's total
investment in below investment grade securities was $41.4 million, or 8.0%,
of the Company's investment portfolio. The Company intends to purchase
additional below investment grade securities, but it does not expect the
percentage of its portfolio invested in such securities to exceed 10% of its
investment portfolio. At December 31, 1997, the yield at amortized cost on
the Company's below investment grade portfolio was 7.9% compared to 6.3% for
the Company's investment grade corporate bond portfolio. The Company
estimates the fair value of its below investment grade portfolio was $41.3
million, or 99.9% of amortized cost value, at December 31, 1997.

Below investment grade securities have different characteristics than
investment grade corporate debt securities. Risk of loss upon default by the
borrower is significantly greater with respect to below investment grade
securities than with other corporate debt securities. Below investment grade
securities are generally unsecured and are often subordinated to other
creditors of the issuer. Also, issuers of below investment grade securities
usually have higher levels of debt and are more sensitive to adverse economic
conditions, such as recession or increasing interest rates, than are issuers
of investment grade securities. The Company attempts to reduce the overall
risk in its below investment grade portfolio, as in all of its investments,
through careful credit analysis, strict investment policy guidelines, and
diversification by company and by industry.

The Company analyzes its investment portfolio, including below investment
grade securities, at least quarterly in order to determine if its ability to
realize its carrying value on any investment has been impaired. For debt and
equity securities, if impairment in value is determined to be other than
temporary (i.e. if it is probable the Company will be unable to collect all
amounts due according to the contractual terms of the security), the cost
basis of the impaired security is written down to fair value, which becomes
the security's new cost basis. The amount of the write-down is included in
earnings as a realized loss. Future events may occur, or additional or
updated information may be received, which may necessitate future write-downs
of securities in the Company's portfolio. Significant write-downs in the
carrying value of investments could materially adversely affect the Company's
net income in future periods.

In 1997, fixed maturity securities designated as available for sale with a
combined amortized cost of $49.3 million were called or repaid by their
issuers. In total, net pre-tax gains from sales, calls and repayments of
fixed maturity investments amounted to $0.2 million in 1997.

At December 31, 1997, no fixed maturity securities were deemed to have
impairments in value that are other than temporary. The Company's fixed
maturity investment portfolio had a combined yield at amortized cost of 6.7%
at December 31, 1997.

EQUITY SECURITIES: At December 31, 1997, the Company owned equity securities
with a combined cost of $4.4 million and an estimated fair value of $3.9
million. Gross unrealized depreciation of equity securities totaled $0.5
million. Equity securities are comprised primarily of the Company's
investment in shares of the mutual funds underlying the Company's registered
separate accounts.

MORTGAGE LOANS: Mortgage loans represent 16.4% of the Company's investment
portfolio at amoritized cost. Mortgages outstanding were $85.1 million at
December 31, 1997 with an estimated fair value of $86.3 million. The
Company's mortgage loan portfolio includes 50 loans with an average size of
$1.7 million and average seasoning of 1.1 years if weighted by the number of
loans, and 1.2 years if weighted by mortgage loan carrying values. The
Company's mortgage loans are typically secured by occupied buildings in major
metropolitan locations and not speculative developments, and are diversified
by type of property and geographic location. At December 31, 1997, the yield
on the Company's mortgage loan portfolio was 7.4%.

At December 31, 1997, no mortgage loans were delinquent by 90 days or more.
The Company does not expect to incur material losses from its mortgage loan
portfolio. The Company's loan investment strategy is consistent with other
life insurance subsidiaries of its ultimate parent, EIC. EIC has experienced
a historically low default rate in its mortgage loan portfolio and has been
able to recover 95.9% of the principal amount of problem mortgages resolved
in the last three years.

At December 31, 1997, the Company had no investments in default. The Company
estimates its total investment portfolio, excluding policy loans, had a fair
value approximately equal to 100.4% of its amortized cost value for
accounting purposes at December 31, 1997.

OTHER ASSETS

Accrued investment income increased $2.3 million during 1997 due to an
increase in the overall size of the portfolio resulting from the investment
of premiums allocated to the fixed account option of the Company's variable
products.

DPAC represents certain deferred costs of acquiring new insurance business,
principally commissions and other expenses related to the production of new
business subsequent to the merger. The Company's DPAC and previous balance
of PVIF, were eliminated as of the merger and acquisition dates, and an asset
representing PVIF was established for all policies in force at the merger and
acquisition dates. PVIF is amortized into income in proportion to the
expected gross profits of the in force acquired in a manner similar to DPAC
amortization. At December 31, 1997, the Company had DPAC and PVIF balances of
$12.8 million and $43.2 million, respectively.

Goodwill totaling $151.1 million and $41.1 million as adjusted, representing
the excess of the acquisition cost over the fair value of net assets
acquired, was established at the merger and acquisition dates, respectively.
At June 30, 1997, goodwill was increased by $1.8 million to adjust the value
of a receivable existing at the acquisition date.

At December 31, 1997, the Company had $1.6 billion of separate account assets
compared to $1.2 billion at December 31, 1996. The increase in separate
account assets is due to growth in sales of the Company's variable separate
account products and market appreciation.

At December 31, 1997, the Company had total assets of $2.4 billion, an
increase of 45.8% over total assets at December 31, 1996.

LIABILITIES

In conjunction with the volume of variable insurance sales, the Company's
total liabilities increased $681.1 million, or 44.3%, during 1997 and totaled
$2.2 billion at December 31, 1997. Future policy benefits for annuity and
interest sensitive life products increased $220.0 million, or 77.1%, to
$505.3 million reflecting premium growth in the Company's fixed account
option of its variable products. Premium growth and market appreciation, net
of redemptions, also accounted for the $438.9 million, or 36.4%, increase in
separate account liabilities to $1.6 billion at December 31, 1997. As of the
merger and acquisition dates, the Company's existing unearned revenue
reserves were eliminated. This treatment corresponds with the treatment of
PVIF.

Golden American maintained a line of credit agreement with Equitable to
facilitate the handling of unusual and/or unanticipated short-term cash
requirements. Under the agreement, which became effective December 1, 1996
and expired on December 31, 1997, Golden American could borrow up to $25
million. At December 31, 1997, $24.1 million was outstanding under this
agreement. The outstanding balance was repaid by a capital contribution.

On December 17, 1996, Golden American issued a $25 million, 8.25% surplus
note to Equitable which matures on December 17, 2026.

EQUITY

Additional paid-in capital increased $87.6 million, or 63.8% to $225.0
million at December 31, 1997 primarily due to the revaluation of net assets
as a result of the merger.

The effects of inflation and changing prices on the Company are not material
since insurance assets and liabilities are both primarily monetary and remain
in balance. An effect of inflation, which has been low in recent years, is a
decline in purchasing power when monetary assets exceed monetary liabilities.

LIQUIDITY AND CAPITAL RESOURCES
_______________________________

The liquidity requirements of the Company are met by cash flow from variable
insurance premiums, investment income and maturities of fixed maturity
investments and mortgage loans. The Company primarily uses funds for the
payment of insurance benefits, commissions, operating expenses and the
purchase of new investments.

The Company's home office operations are currently housed in leased locations
in Wilmington, Delaware and New York, New York. The Company intends to spend
approximately $5.6 million on capital needs for 1998.

The Company intends to continue growing its operations. Future growth in the
Company's operations will require additional capital. The Company believes
it will be able to fund the capital required for projected new business
primarily with future capital contributions from its Parent. On February 28,
1998, Golden American received a capital contribution from EIC of $18.75
million.

The ability of Golden American to pay dividends to its Parent is restricted
because prior approval of insurance regulatory authorities is required for
payment of dividends to the stockholder which exceed an annual limitation.
During 1998, Golden American cannot pay dividends to its Parent without prior
approval of statutory authorities. The Company has maintained adequate
statutory capital and surplus and has not used surplus relief or financial
reinsurance, which have come under scrutiny by many state insurance
departments.

Under the provisions of the insurance laws of the State of New York, First
Golden cannot distribute any dividends to its stockholders unless a notice of
its intention to declare a dividend and amount of the dividend has been filed
not less than thirty days in advance of the proposed declaration. The
superintendent may disapprove the distribution by giving written notice to
First Golden within thirty days after the filing should the superintendent
find that the financial condition of First Golden does not warrant the
distribution.

The NAIC's risk-based capital requirements require insurance companies to
calculate and report information under a risk-based capital formula. These
requirements are intended to allow insurance regulators to identify
inadequately capitalized insurance companies based upon the type and mixture
of risks inherent in the Company's operations. The formula includes
components for asset risk, liability risk, interest rate exposure and other
factors. The Company has complied with the NAIC's risk-based capital
reporting requirements. Amounts reported indicate that the Company has total
adjusted capital well above all required capital levels.

YEAR 2000 PROJECT: Based on a study of its computer software and hardware,
the Company has determined its exposure to the Year 2000 change of the
century date issue. Management believes the Company's systems are or will be
substantially compliant by Year 2000 and has engaged external consultants to
validate this assumption. Golden American has spent approximately $2,000 in
1997 related to the external consultants' analysis. The projected cost for
the external consultants analysis is approximately $130,000 to $170,000. The
only system known to be affected by this issue is a system maintained by an
affiliate who will incur the related costs to make the system compliant. To
mitigate the effect of outside influences and other dependencies relative to
the Year 2000, the Company will continue to contact significant customers,
suppliers and other third parties. To the extent these third parties would
be unable to transact business in the Year 2000 and thereafter, the Company's
operations could be adversely affected.

SURPLUS NOTE: On December 17, 1996, Golden American issued a surplus note in
the amount of $25 million to Equitable. The note matures on December 17,
2026 and will accrue interest of 8.25% per annum until paid. The note and
accrued interest thereon shall be subordinate to payments due to policyholders,
claimant and beneficiary claims, as well as debts owed to all other classes of
debtors of Golden American. Any payment of principal made shall be subject to
the prior approval of the Delaware Insurance Commissioner. On December 17,
1996, Golden American contributed the $25 million to First Golden acquiring
200,000 shares of common stock (100% of shares outstanding) of First Golden.

RECIPROCAL LOAN AGREEMENT: Golden American maintains a reciprocal loan
agreement with ING America Insurance Holdings, Inc. ("ING America"), a
Delaware corporation and affiliate of EIC, to facilitate the handling of
unusual and/or unanticipated short-term cash requirements. Under this
agreement, which became effective January 1, 1998 and expires on December 31,
2007, Golden American and ING America can borrow up to $65 million from one
another.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
_________________________________________________________

Any forward-looking statement contained herein or in any other oral or
written statement by the Company or any of its officers, directors or
employees is qualified by the fact that actual results of the Company may
differ materially from such statement due to the following important factors,
among other risks and uncertainties inherent in the Company's business:

1. Prevailing interest rate levels and stock market performance which may
affect the ability of the Company to sell its products, the market value
of the Company's investments and the lapse rate of the Company's policies,
notwithstanding product design features intended to enhance persistency of
the Company's products.

2. Changes in the federal income tax laws and regulations which may affect the
relative tax advantages of the Company's products.

3. Changes in the regulation of financial services, including bank sales and
underwriting of insurance products, which may affect the competitive
environment for the Company's products.

4. Increasing competition in the sale of the Company's products.

5. Other factors affecting the performance of the Company, including, but
not limited to, potential market conduct claims, litigation, insurance
industry insolvencies, investment performance of the underlying
portfolios of the variable products, variable product design and sales
volume by significant sellers of the Company's variable products.

REPORT OF INDEPENDENT AUDITORS
______________________________________________________________________________

The Board of Directors and Stockholder
Golden American Life Insurance Company

We have audited the accompanying consolidated balance sheets of Golden
American Life Insurance Company as of December 31, 1997 and 1996, and the
related consolidated statements of income, changes in stockholder's equity,
and cash flows for the periods from October 25, 1997 through December 31,
1997, January 1, 1997 through October 24, 1997, August 14, 1996 through
December 31, 1996, and January 1, 1996 through August 13, 1996, and the year
ended December 31, 1995. Our audits also included the financial statements
schedules listed in the Index at Item 14(a). These financial statements and
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Golden American Life Insurance Company at December 31, 1997 and 1996, and
the consolidated results of their operations and their cash flows for the
periods from October 25, 1997 through December 31, 1997, January 1, 1997
through October 24, 1997, August 14, 1996 through December 31, 1996, and
January 1, 1996 through August 13, 1996, and the year ended December 31,
1995, in conformity with generally accepted accounting principles. Also, in
our opinion, the related financial statement schedules, when considered in
relation to the basic financial statements taken as a whole, present fairly
in all material respects the information set forth therein.

s/Ernst & Young LLP

Des Moines, Iowa
February 12, 1998

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)

POST-MERGER POST-ACQUISITION
______________________________________
December 31, 1997 | December 31, 1996
___________________| _________________
|
ASSETS |
|
Investments: |
Fixed maturities, available for sale, |
at fair value (cost: 1997 - $413,288; |
1996 - $275,153) $414,401 | $275,563
Equity securities, at fair value |
(cost: 1997 - $4,437; 1996 - $36) 3,904 | 33
Mortgage loans on real estate 85,093 | 31,459
Policy loans 8,832 | 4,634
Short-term investments 14,460 | 12,631
___________________| _________________
Total investments 526,690 | 324,320
|
Cash and cash equivalents 21,039 | 5,839
|
Due from affiliates 827 | --
|
Accrued investment income 6,423 | 4,139
|
Deferred policy acquisition costs 12,752 | 11,468
|
Present value of in force acquired 43,174 | 83,051
|
Current income taxes recoverable 272 | --
|
Deferred income tax asset 36,230 | --
|
Property and equipment, less allowances |
for depreciation of $97 in 1997 and |
$63 in 1996 1,567 | 699
|
Goodwill, less accumulated amortization |
of $630 in 1997 and $589 in 1996 150,497 | 38,665
|
Other assets 195 | 2,471
|
Separate account assets 1,646,169 | 1,207,247
___________________| _________________
Total assets $2,445,835 | $1,677,899
===================| =================

See accompanying notes.
CONSOLIDATED BALANCE SHEETS - CONTINUED
(Dollars in thousands, except per share data)

POST-MERGER POST-ACQUISITION
______________________________________
December 31, 1997 | December 31, 1996
___________________| _________________
|
LIABILITIES AND STOCKHOLDER'S EQUITY |
|
Policy liabilities and accruals: |
Future policy benefits: |
Annuity and interest sensitive life |
products $505,304 | $285,287
Unearned revenue reserve 1,189 | 2,063
Other policy claims and benefits 10 | --
___________________| _________________
506,503 | 287,350
|
Deferred income tax liability -- | 365
Line of credit with affiliate 24,059 | --
Surplus note 25,000 | 25,000
Due to affiliates 80 | 1,504
Other liabilities 16,711 | 15,949
Separate account liabilities 1,646,169 | 1,207,247
___________________| _________________
2,218,522 | 1,537,415
|
Commitments and contingencies |
|
Stockholder's equity: |
Common stock, par value $10 per share, |
authorized, issued and outstanding |
250,000 shares 2,500 | 2,500
Additional paid-in capital 224,997 | 137,372
Unrealized appreciation (depreciation) |
of securities at fair value 241 | 262
Retained earnings (deficit) (425)| 350
___________________| _________________
Total stockholder's equity 227,313 | 140,484
___________________| _________________
Total liabilities and stockholder's |
equity $2,445,835 | $1,677,899
===================| =================

See accompanying notes.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands)

POST-MERGER POST-ACQUISITION
___________________________________
For the period | For the period
October 25, 1997 | January 1, 1997
through | through
December 31, 1997 |October 24, 1997
__________________|________________
|
|
Revenues: |
Annuity and interest sensitive life |
product charges $3,834 | $18,288
Management fee revenue 508 | 2,262
Net investment income 5,127 | 21,656
Realized gains (losses) on investments 15 | 151
Other income 236 | 426
__________________|________________
9,720 | 42,783
|
|
Insurance benefits and expenses: |
Annuity and interest sensitive life benefits: |
Interest credited to account balances 7,413 | 19,276
Benefit claims incurred in excess of |
account balances -- | 125
Underwriting, acquisition and insurance |
expenses: |
Commissions 9,437 | 26,818
General expenses 3,350 | 13,907
Insurance taxes 450 | 1,889
Policy acquisition costs deferred (13,678)| (29,003)
Amortization: |
Deferred policy acquisition costs 892 | 1,674
Present value of in force acquired 948 | 5,225
Goodwill 630 | 1,398
__________________|________________
9,442 | 41,309
|
Interest expense 557 | 2,082
__________________|________________
9,999 | 43,391
__________________|________________
Income (loss) before income taxes (279)| (608)
|
Income taxes 146 | (1,337)
__________________|________________
|
Net income (loss) ($425)| $729
==================|================

See accompanying notes.
CONSOLIDATED STATEMENTS OF INCOME - CONTINUED
(Dollars in thousands)

POST-ACQUISITION PRE-ACQUISITION
____________________________________
For the period | For the period
August 14, 1996 | January 1, 1996
through | through
December 31, 1996 | August 13, 1996
__________________| ________________
|
|
Revenues: |
Annuity and interest sensitive life |
product charges $8,768 | $12,259
Management fee revenue 877 | 1,390
Net investment income 5,795 | 4,990
Realized gains (losses) on investments 42 | (420)
Other income 486 | 70
__________________| ________________
15,968 | 18,289
|
|
Insurance benefits and expenses: |
Annuity and interest sensitive life benefits: |
Interest credited to account balances 5,741 | 4,355
Benefit claims incurred in excess of |
account balances 1,262 | 915
Underwriting, acquisition and insurance |
expenses: |
Commissions 9,866 | 16,549
General expenses 5,906 | 9,422
Insurance taxes 672 | 1,225
Policy acquisition costs deferred (11,712)| (19,300)
Amortization: |
Deferred policy acquisition costs 244 | 2,436
Present value of in force acquired 2,745 | 951
Goodwill 589 | --
__________________| ________________
15,313 | 16,553
|
Interest expense 85 | --
__________________| ________________
15,398 | 16,553
__________________| ________________
Income (loss) before income taxes 570 | 1,736
|
Income taxes 220 | (1,463)
__________________| ________________
|
Net income (loss) $350 | $3,199
==================| ================

See accompanying notes.
CONSOLIDATED STATEMENTS OF INCOME - CONTINUED
(Dollars in thousands)

PRE-ACQUISITION
__________________
For the year ended
December 31, 1995
__________________

Revenues:
Annuity and interest sensitive life
product charges $18,388
Management fee revenue 987
Net investment income 2,818
Realized gains (losses) on investments 297
Other income 63
__________________
22,553

Insurance benefits and expenses:
Annuity and interest sensitive life benefits:
Interest credited to account balances 1,322
Benefit claims incurred in excess of
account balances 1,824
Underwriting, acquisition and insurance
expenses:
Commissions 7,983
General expenses 12,650
Insurance taxes 952
Policy acquisition costs deferred (9,804)
Amortization:
Deferred policy acquisition costs 2,710
Present value of in force acquired 1,552
Goodwill --
__________________
19,189

Interest expense --
__________________
19,189
__________________
Income (loss) before income taxes 3,364

Income taxes --
__________________
Net income (loss) $3,364
==================

See accompanying notes.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(Dollars in thousands)

Unreal-
ized
Appre-
ciation
(Depre-
ciation)
Addi- of Total
Redeemable tional Securities Retained Stock-
Common Preferred Paid-In at Earnings holder's
Stock Stock Capital Fair Value (Deficit) Equity
__________________________________________________________

PRE-ACQUISITION
__________________________________________________________

Balance at
January 1, 1995 $2,500 $50,000 $37,086 ($1) ($79) $89,506
Contribution of
capital -- -- 7,944 -- -- 7,944
Net income -- -- -- -- 3,364 3,364
Preferred stock
dividends -- -- -- -- (3,348) (3,348)
Unrealized apprecia-
tion of securities
at fair value -- -- -- 659 -- 659
__________________________________________________________
Balance at
December 31, 1995 2,500 50,000 45,030 658 (63) 98,125
Net income -- -- -- -- 3,199 3,199
Preferred stock
dividends -- -- -- -- (719) (719)
Unrealized deprecia-
tion of securities
at fair value -- -- -- (1,175) -- (1,175)
__________________________________________________________
Balance at
August 13, 1996 $2,500 $50,000 $45,030 ($517) $2,417 $99,430
==========================================================

See accompanying notes.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY - CONTINUED
(Dollars in thousands)

Unreal-
ized
Appre-
ciation
(Depre-
ciation)
Addi- of Total
Redeemable tional Securities Retained Stock-
Common Preferred Paid-In at Earnings holder's
Stock Stock Capital Fair Value (Deficit) Equity
__________________________________________________________

POST-ACQUISITION
__________________________________________________________

Balance at
August 14, 1996 $2,500 $50,000 $87,372 -- -- $139,872
Contribution of
preferred stock
to additional
paid-in capital -- (50,000) 50,000 -- -- --
Net income -- -- -- -- $350 350
Unrealized apprecia-
tion of securities
at fair value -- -- -- $262 -- 262
__________________________________________________________
Balance at
December 31, 1996 2,500 -- 137,372 262 350 140,484
Contribution of
capital -- -- 1,121 -- -- 1,121
Net income -- -- -- -- 729 729
Unrealized apprecia-
tion of securities
at fair value -- -- -- 1,543 -- 1,543
__________________________________________________________
Balance at
October 24, 1997 $2,500 -- $138,493 $1,805 $1,079 $143,877
==========================================================

POST-MERGER
__________________________________________________________
Balance at
October 25, 1997 $2,500 -- $224,997 -- -- $227,497
Net loss -- -- -- -- ($425) (425)
Unrealized apprecia-
tion of securities
at fair value -- -- -- $241 -- 241
__________________________________________________________
Balance at
December 31, 1997 $2,500 -- $224,997 $241 ($425) $227,313
==========================================================

See accompanying notes.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)

POST-MERGER POST-ACQUISITION
________________________________________
For the period | For the period
October 25, 1997 | January 1, 1997
through | through
December 31, 1997 | October 24, 1997
___________________| ___________________
|
OPERATING ACTIVITIES |
Net income (loss) ($425)| $729
Adjustments to reconcile net income (loss) |
to net cash provided by (used in) |
operations: |
Adjustments related to annuity and |
interest sensitive life products: |
Change in annuity and interest |
sensitive life product reserves 7,361 | 19,177
Change in unearned revenues 1,189 | 3,292
Decrease (increase) in accrued |
investment income 1,205 | (3,489)
Policy acquisition costs deferred (13,678)| (29,003)
Amortization of deferred policy |
acquisition costs 892 | 1,674
Amortization of present value of in |
force acquired 948 | 5,225
Change in other assets, other |
liabilities and accrued income taxes 4,205 | (8,944)
Provision for depreciation and |
amortization 1,299 | 3,203
Provision for deferred income taxes 146 | 316
Realized (gains) losses on investments (15)| (151)
___________________| ___________________
Net cash provided by (used in) |
operating activities 3,127 | (7,971)
|
INVESTING ACTIVITIES |
Sale, maturity or repayment of |
investments: |
Fixed maturities - available for sale 9,871 | 39,622
Mortgage loans on real estate 1,644 | 5,828
Short-term investments - net -- | 11,415
___________________| ___________________
11,515 | 56,865
Acquisition of investments: |
Fixed maturities - available for sale (29,596)| (155,173)
Equity securities (1)| (4,865)
Mortgage loans on real estate (14,209)| (44,481)
Policy loans - net (328)| (3,870)
Short-term investments - net (13,244)| --
___________________| ___________________
(57,378)| (208,389)

See accompanying notes.
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Dollars in thousands)

POST-MERGER POST-ACQUISITION
________________________________________
For the period | For the period
October 25, 1997 | January 1, 1997
through | through
December 31, 1997 | October 24, 1997
___________________| ___________________
|
INVESTING ACTIVITIES - CONTINUED |
Funds held in escrow pursuant to |
an Exchange Agreement -- | --
Purchase of property and equipment ($252)| ($875)
___________________| ___________________
Net cash used in investing activities (46,115)| (152,399)
|
FINANCING ACTIVITIES |
Proceeds from issuance of surplus note -- | --
Proceeds from line of credit borrowings 10,119 | 97,124
Repayment of line of credit borrowings (2,207)| (80,977)
Receipts from annuity and interest |
sensitive life policies credited |
to policyholder account balances 62,306 | 261,549
Return of policyholder account balances |
on annuity and interest sensitive |
life policies (6,350)| (13,931)
Net reallocations to Separate |
Accounts (17,017)| (93,069)
Contributions of capital by Parent -- | 1,011
Dividends paid on preferred stock -- | --
___________________| ___________________
Net cash provided by financing |
activities 46,851 | 171,707
___________________| ___________________
Increase (decrease) in cash and |
cash equivalents 3,863 | 11,337
|
Cash and cash equivalents at |
beginning of period 17,176 | 5,839
___________________| ___________________
Cash and cash equivalents at end |
of period $21,039 | $17,176
===================| ===================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid during the period for:
Interest $295 $1,912
Income taxes -- 283

Non-cash financing activities:
Contribution of property, plant and equipment
from EIC Variable, Inc. net of $353 of
accumulated depreciation -- 110

See accompanying notes.
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Dollars in thousands)

POST-ACQUISITION PRE-ACQUISITION
________________________________________
For the period | For the period
August 14, 1996 | January 1, 1996
through | through
December 31, 1996 | August 13, 1996
___________________| ___________________
|
OPERATING ACTIVITIES |
Net income (loss) $350 | $3,199
Adjustments to reconcile net income (loss) |
to net cash provided by (used in) |
operations: |
Adjustments related to annuity and |
interest sensitive life products: |
Change in annuity and interest |
sensitive life product reserves 5,106 | 4,472
Change in unearned revenues 2,063 | 2,084
Decrease (increase) in accrued |
investment income (877)| (2,494)
Policy acquisition costs deferred (11,712)| (19,300)
Amortization of deferred policy |
acquisition costs 244 | 2,436
Amortization of present value of in |
force acquired 2,745 | 951
Change in other assets, other |
liabilities and accrued income taxes (96)| 4,672
Provision for depreciation and |
amortization 1,242 | 703
Provision for deferred income taxes 220 | (1,463)
Realized (gains) losses on investments (42)| 420
___________________| ___________________
Net cash provided by (used in) |
operating activities (757)| (4,320)
|
|
INVESTING ACTIVITIES |
Sale, maturity or repayment of |
investments: |
Fixed maturities - available for sale 47,453 | 55,091
Mortgage loans on real estate 40 | --
Short-term investments - net 2,629 | 354
___________________| ___________________
50,122 | 55,445
Acquisition of investments: |
Fixed maturities - available for sale (147,170)| (184,589)
Equity securities (5)| --
Mortgage loans on real estate (31,499)| --
Policy loans - net (637)| (1,977)
Short-term investments - net -- | --
___________________| ___________________
(179,311)| (186,566)

See accompanying notes.
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Dollars in thousands)

POST-ACQUISITION PRE-ACQUISITION
_____________________________________
For the period | For the period
August 14, 1996 | January 1, 1996
through | through
December 31, 1996 | August 13, 1996
__________________| _________________
|
INVESTING ACTIVITIES - CONTINUED |
Funds held in escrow pursuant to |
an Exchange Agreement -- | --
Purchase of property and equipment ($137)| --
__________________| _________________
Net cash used in investing activities (129,326)| ($131,121)
|
FINANCING ACTIVITIES |
Proceeds from issuance of surplus note 25,000 | --
Proceeds from line of credit borrowings -- | --
Repayment of line of credit borrowings -- | --
Receipts from annuity and interest |
sensitive life policies credited |
to policyholder account balances 116,819 | 149,750
Return of policyholder account balances |
on annuity and interest sensitive |
life policies (3,315)| (2,695)
Net reallocations to Separate |
Accounts (10,237)| (8,286)
Contributions of capital by Parent -- | --
Dividends paid on preferred stock -- | (719)
__________________| _________________
Net cash provided by financing |
activities 128,267 | 138,050
__________________| _________________
Increase (decrease) in cash and |
cash equivalents (1,816)| 2,609
|
Cash and cash equivalents at |
beginning of period 7,655 | 5,046
__________________| _________________
Cash and cash equivalents at end |
of period $5,839 | $7,655
==================| =================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid during the period for:
Interest -- --
Income taxes -- --

Non-cash financing activities:
Contribution of property, plant and equipment
from EIC Variable, Inc. net of $353 of
accumulated depreciation -- --

See accompanying notes.
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Dollars in thousands)

PRE-ACQUISITION
_________________
For the year
ended
December 31, 1995
_________________

OPERATING ACTIVITIES
Net income (loss) $3,364
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operations:
Adjustments related to annuity and
interest sensitive life products:
Change in annuity and interest
sensitive life product reserves 4,664
Change in unearned revenues 4,949
Decrease (increase) in accrued
investment income (676)
Policy acquisition costs deferred (9,804)
Amortization of deferred policy
acquisition costs 2,710
Amortization of present value of in
force acquired 1,552
Change in other assets, other
liabilities and accrued income taxes 4,686
Provision for depreciation and
amortization (142)
Provision for deferred income taxes --
Realized (gains) losses on investments (297)
_________________
Net cash provided by (used in)
operating activities 11,006

INVESTING ACTIVITIES
Sale, maturity or repayment of
investments:
Fixed maturities - available for sale 24,026
Mortgage loans on real estate --
Short-term investments - net --
_________________
24,026
Acquisition of investments:
Fixed maturities - available for sale (61,723)
Equity securities (10)
Mortgage loans on real estate --
Policy loans - net (1,508)
Short-term investments - net (1,681)
_________________
(64,922)

See accompanying notes.
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Dollars in thousands)

PRE-ACQUISITION
_________________
For the year
ended
December 31, 1995
_________________

INVESTING ACTIVITIES - CONTINUED
Funds held in escrow pursuant to
an Exchange Agreement ($1,242)
Purchase of property and equipment --
_________________
Net cash used in investing activities (42,138)

FINANCING ACTIVITIES
Proceeds from issuance of surplus note --
Proceeds from line of credit borrowings --
Repayment of line of credit borrowings --
Receipts from annuity and interest
sensitive life policies credited
to policyholder account balances 29,501
Return of policyholder account balances
on annuity and interest sensitive
life policies (1,543)
Net reallocations to Separate
Accounts --
Contributions of capital by Parent 7,944
Dividends paid on preferred stock (3,348)
_________________
Net cash provided by financing
activities 32,554
_________________
Increase (decrease) in cash and
cash equivalents 1,422

Cash and cash equivalents at
beginning of period 3,624
_________________
Cash and cash equivalents at end
of period $5,046
=================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid during the period for:
Interest --
Income taxes --

Non-cash financing activities:
Contribution of property, plant and equipment
from EIC Variable, Inc. net of $353 of
accumulated depreciation --

See accompanying notes.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997

1. SIGNIFICANT ACCOUNTING POLICIES
______________________________________________________________________________

CONSOLIDATION
The consolidated financial statements include Golden American Life Insurance
Company ("Golden American") and its wholly owned subsidiary, First Golden
American Life Insurance Company of New York ("First Golden," and with Golden
American collectively, the "Company"). All significant intercompany accounts
and transactions have been eliminated.

ORGANIZATION
Golden American, a wholly owned subsidiary of Equitable of Iowa Companies,
Inc., offers variable insurance products and is licensed as a life insurance
company in the District of Columbia and all states except New York. On January
2, 1997 and December 23, 1997, First Golden became licensed to sell insurance
products in New York and Delaware, respectively. The Company's products are
marketed by broker/dealers, financial institutions and insurance agents. The
Company's primary customers are individuals and families.

On October 24, 1997, PFHI Holding, Inc. ("PFHI"), a Delaware corporation,
acquired all of the outstanding capital stock of Equitable of Iowa Companies
("Equitable"), pursuant to the terms of the Agreement and Plan of Merger
("Merger Agreement") among Equitable, PFHI, and ING Groep N.V. ("ING"). PFHI
is a wholly owned subsidiary of ING, a global financial services holding
company based in The Netherlands. As a result of the merger, Equitable was
merged into PFHI which was simultaneously renamed Equitable of Iowa Companies,
Inc. ("EIC" or the "Parent"), a Delaware corporation. See Note 5 for
additional information regarding the merger.

On August 13, 1996, Equitable acquired all of the outstanding capital stock of
EIC Variable, Inc. (formerly known as BT Variable, Inc.) and its wholly owned
subsidiaries, Golden American and Directed Services, Inc. ("DSI") from
Whitewood Properties Corporation ("Whitewood") pursuant to the terms of a
Stock Purchase Agreement between Equitable and Whitewood (the "Purchase
Agreement"). On April 30, 1997, EIC Variable, Inc. was liquidated and its
investments in Golden American and DSI were transferred to Equitable, while
the remainder of its net assets were contributed to Golden American. On
December 30, 1997, EIC Variable, Inc. was dissolved. See Note 6 for additional
information regarding the acquisition.

For financial statement purposes, the merger was accounted for as a purchase
effective October 25, 1997 and the change in control of Golden American through
the acquisition of BT Variable was accounted for as a purchase effective August
14, 1996. The merger and acquisition resulted in new bases of accounting
reflecting estimated fair values of assets and liabilities at their respective
dates. As a result, the Company's financial statements for the period
subsequent to October 24, 1997, are presented on the Post-Merger new basis of
accounting, for the period August 14, 1996 through October 24, 1997, are
presented on the Post-Acquisition basis of accounting, and for August 13, 1996
and prior periods are presented on the Pre-Acquisition basis of accounting.

INVESTMENTS
FIXED MATURITIES: Statement of Financial Accounting Standards ("SFAS") No.
115, "Accounting for Certain Investments in Debt and Equity Securities,"
requires fixed maturity securities to be designated as either "available for
sale," "held for investment" or "trading." Sales of fixed maturities
designated as "available for sale" are not restricted by SFAS No. 115.
Available for sale securities are reported at fair value and unrealized gains
and losses on these securities are included directly in stockholder's
equity, after adjustment for related changes in deferred policy acquisition
costs ("DPAC"), present value of in force acquired ("PVIF"), policy reserves
and deferred income taxes. At December 31, 1997 and 1996, all of the Company's
fixed maturity securities are designated as available for sale although the
Company is not precluded from designating fixed maturity securities as held for
investment or trading at some future date.

Securities determined to have a decline in value that is other than temporary
are written down to estimated fair value which becomes the security's new cost
basis by a charge to realized losses in the Company's Statement of Income.
Premiums and discounts are amortized/accrued utilizing the scientific interest
method which results in a constant yield over the security's expected life.
Amortization/accrual of premiums and discounts on mortgage-backed securities
incorporates a prepayment assumption to estimate the securities' expected
lives.

EQUITY SECURITIES: Equity securities are reported at estimated fair value if
readily marketable. The change in unrealized appreciation and depreciation of
marketable equity securities (net of related deferred income taxes, if any) is
included directly in stockholder's equity. Equity securities determined to
have a decline in value that is other than temporary are written down to
estimated fair value which becomes the security's new cost basis by a charge
to realized losses in the Company's Statement of Income.

MORTGAGE LOANS: Mortgage loans on real estate are reported at cost adjusted
for amortization of premiums and accrual of discounts. If the value of any
mortgage loan is determined to be impaired (i.e., when it is probable the
Company will be unable to collect all amounts due according to the contractual
terms of the loan agreement), the carrying value of the mortgage loan is
reduced to the present value of expected future cash flows from the loan,
discounted at the loan's effective interest rate, or to the loan's observable
market price, or the fair value of the underlying collateral. The carrying
value of impaired loans is reduced by the establishment of a valuation
allowance which is adjusted at each reporting date for significant changes in
the calculated value of the loan. Changes in this valuation allowance are
charged or credited to income.

OTHER INVESTMENTS: Policy loans are reported at unpaid principal. Short-term
investments are reported at cost adjusted for amortization of premiums and
accrual of discounts.

FAIR VALUES: Estimated fair values, as reported herein, of publicly traded
fixed maturity securities are as reported by an independent pricing service.
Fair values of conventional mortgage-backed securities not actively traded
in a liquid market are estimated using a third party pricing system. This
pricing system uses a matrix calculation assuming a spread over U.S. Treasury
bonds based upon the expected average lives of the securities. Fair values
of private placement bonds are estimated using a matrix that assumes a spread
(based on interest rates and a risk assessment of the bonds) over U.S.
Treasury bonds. Estimated fair values of equity securities which consists of
the Company's investment in its registered separate accounts are based upon
the quoted fair value of the securities comprising the individual portfolios
underlying the separate accounts. Realized gains and losses are determined on
the basis of specific identification and average cost methods for manager
initiated and issuer initiated disposals, respectively.

CASH AND CASH EQUIVALENTS
For purposes of the consolidated statement of cash flows, the Company considers
all demand deposits and interest-bearing accounts not related to the investment
function to be cash equivalents. All interest-bearing accounts classified as
cash equivalents have original maturities of three months or less.

DEFERRED POLICY ACQUISITION COSTS
Certain costs of acquiring new insurance business, principally commissions and
other expenses related to the production of new business, have been deferred.
Acquisition costs for variable annuity and variable life products are being
amortized generally in proportion to the present value (using the assumed
crediting rate) of expected future gross profits. This amortization is
"unlocked" when the Company revises its estimate of current or future gross
profits to be realized from a group of products. DPAC is adjusted to reflect
the pro forma impact of unrealized gains and losses on fixed maturity
securities the Company has designated as "available for sale" under SFAS No.
115.

PRESENT VALUE OF IN FORCE ACQUIRED
As a result of the merger and the acquisition, a portion of the acquisition
cost related to each transaction was allocated to the right to receive
future cash flows from existing insurance contracts. This allocated cost
represents the PVIF which reflects the value of those purchased policies
calculated by discounting actuarially determined expected future cash flows
at the discount rate determined by the purchaser. Amortization of PVIF is
charged to expense in proportion to expected gross profits. This
amortization is "unlocked" when the Company revises its estimate of current
or future gross profits to be realized from the insurance contracts acquired.
PVIF is adjusted to reflect the pro forma impact of unrealized gains (losses)
on available for sale fixed maturities. See Notes 5 and 6 for additional
information on PVIF resulting from the merger and acquisition.

PROPERTY AND EQUIPMENT
Property and equipment primarily represent leasehold improvements, office
furniture and equipment and capitalized computer software and are not
considered to be significant to the Company's overall operations. Property
and equipment are reported at cost less allowances for depreciation.
Depreciation expense is computed primarily on the basis of the straight-line
method over the estimated useful lives of the assets.

GOODWILL
Goodwill was established as a result of the merger discussed previously and is
being amortized over 40 years on a straight-line basis. Goodwill established
as a result of the acquisition discussed above was being amortized over 25
years on a straight-line basis. See Notes 5 and 6 for additional information
on the merger and acquisition.

FUTURE POLICY BENEFITS
Future policy benefits for fixed interest divisions of the variable products
are established utilizing the retrospective deposit accounting method. Policy
reserves represent the premiums received plus accumulated interest, less
mortality and administration charges. Interest credited to these policies
ranged from 3.30% to 8.25% during 1997. The unearned revenue reserve
represents unearned distribution fees discussed below. These distribution
fees have been deferred and are amortized over the life of the contract in
proportion to its expected gross profits.

SEPARATE ACCOUNTS
Assets and liabilities of the separate accounts reported in the accompanying
balance sheets represent funds that are separately administered principally
for variable annuity and variable life contracts. Contractholders, rather than
the Company, bear the investment risk for variable products. At the direction
of the Contractholders, the separate accounts invest the premiums from the
sale of variable annuity and variable life products in shares of specified
mutual funds. The assets and liabilities of the separate accounts are clearly
identified and segregated from other assets and liabilities of the Company.
The portion of the separate account assets applicable to variable annuity and
variable life contracts cannot be charged with liabilities arising out of any
other business the Company may conduct.

Variable separate account assets carried at fair value of the underlying
investments generally represent Contractholder investment values maintained
in the accounts. Variable separate account liabilities represent account
balances for the variable annuity and variable life contracts invested in the
separate accounts. Net investment income and realized and unrealized capital
gains and losses related to separate account assets are not reflected in the
accompanying Statements of Income.

Product charges recorded by the Company from variable annuity and variable
life products consist of charges applicable to each contract for mortality and
expense risk, cost of insurance, contract administration and surrender charges.
In addition, some variable annuity and all variable life contracts provide for
a distribution fee collected for a limited number of years after each premium
deposit. Revenue recognition of collected distribution fees is amortized over
the life of the contract in proportion to its expected gross profits. The
balance of unrecognized revenue related to the distribution fees is reported
as an unearned revenue reserve.

DEFERRED INCOME TAXES
Deferred tax assets or liabilities are computed based on the difference
between the financial statement and income tax bases of assets and
liabilities using the enacted marginal tax rate. Deferred tax assets or
liabilities are adjusted to reflect the pro forma impact of unrealized gains
and losses on equity securities and fixed maturity securities the Company has
designated as available for sale under SFAS No. 115. Changes in deferred tax
assets or liabilities resulting from this SFAS No. 115 adjustment are charged
or credited directly to stockholder's equity. Deferred income tax expenses
or credits reflected in the Company's Statement of Income are based on the
changes in the deferred tax asset or liability from period to period
(excluding the SFAS No. 115 adjustment).

DIVIDEND RESTRICTIONS
The Company's ability to pay dividends to its parent is restricted because
prior approval of insurance regulatory authorities is required for payment of
dividends to the stockholder which exceed an annual limitation. During 1998,
Golden American cannot pay dividends to its parent without prior approval of
statutory authorities. The Company has maintained adequate statutory capital
and surplus and has not used surplus relief or financial reinsurance, which
have come under scrutiny by many state insurance departments.

Under the provisions of the insurance laws of the State of New York, First
Golden cannot distribute any dividends to its stockholders unless a notice of
its intention to declare a dividend and amount of the dividend has been filed
not less than thirty days in advance of the proposed declaration. The
superintendent may disapprove the distribution by giving written notice to
First Golden within thirty days after the filing should the superintendent
find that the financial condition of First Golden does not warrant the
distribution.

USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
affecting the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.

Management is required to utilize historical experience and assumptions about
future events and circumstances in order to develop estimates of material
reported amounts and disclosures. Included among the material (or potentially
material) reported amounts and disclosures that require extensive use of
estimates and assumptions are (1) estimates of fair values of investments in
securities and other financial instruments, as well as fair values of
policyholder liabilities, (2) policyholder liabilities, (3) deferred policy
acquisition costs and present value of in force acquired, (4) fair values of
assets and liabilities recorded as a result of merger and acquisition
transactions, (5) asset valuation allowances, (6) guaranty fund assessment
accruals, (7) deferred tax benefits (liabilities) and (8) estimates for
commitments and contingencies including legal matters, if a liability is
anticipated and can be reasonably estimated. Estimates and assumptions
regarding all of the preceding are inherently subject to change and are
reassessed periodically. Changes in estimates and assumptions could
materially impact the financial statements.

2. BASIS OF FINANCIAL REPORTING
______________________________________________________________________________

The financial statements of the Company differ from related statutory-basis
financial statements principally as follows: (1) acquisition costs of
acquiring new business are deferred and amortized over the life of the
policies rather than charged to operations as incurred; (2) an asset
representing the present value of future cash flows from insurance
contracts acquired was established as a result of the merger/acquisition and
is amortized and charged to expense; (3) future policy benefit reserves for
the fixed interest divisions of the variable products are based on full
account values, rather than the greater of cash surrender value or amounts
derived from discounting methodologies utilizing statutory interest rates;
(4) reserves are reported before reduction for reserve credits related to
reinsurance ceded and a receivable is established, net of an allowance for
uncollectible amounts, for these credits rather than presented net of these
credits; (5) fixed maturity investments are designated as "available for
sale" and valued at fair value with unrealized appreciation/depreciation,
net of adjustments to deferred income taxes (if applicable), present value of
in force acquired and deferred policy acquisition costs, credited/charged
directly to stockholder's equity rather than valued at amortized cost;
(6) the carrying value of fixed maturity securities is reduced to fair value
by a charge to realized losses in the Statement of Income when declines in
carrying value are judged to be other than temporary, rather than through the
establishment of a formula-determined statutory investment reserve (carried as
a liability), changes in which are charged directly to surplus; (7) deferred
income taxes are provided for the difference between the financial statement
and income tax bases of assets and liabilities; (8) net realized gains or
losses attributed to changes in the level of interest rates in the market are
recognized when the sale is completed rather than deferred and amortized over
the remaining life of the fixed maturity security; (9) a liability is
established for anticipated guaranty fund assessments, net of related
anticipated premium tax credits, rather than capitalized when assessed and
amortized in accordance with procedures permitted by insurance regulatory
authorities; (10) revenues for variable annuity and variable life products
consist of policy charges for the cost of insurance, policy administration
charges, amortization of policy initiation fees and surrender charges assessed
rather than premiums received; (11) the financial statements of Golden
American's wholly owned subsidiary are consolidated rather than recorded at the
equity in net assets; (12) surplus notes are reported as liabilities rather
than as surplus; and (13) assets and liabilities are restated to fair values
when a change in ownership occurs, with provisions for goodwill and other
intangible assets, rather than continuing to be presented at historical cost.

Net loss for Golden American as determined in accordance with statutory
accounting practices was $428,000 in 1997, $9,188,000 in 1996 and $4,117,000
in 1995. Total statutory capital and surplus was $76,914,000 at December 31,
1997 and $80,430,000 at December 31, 1996.

3. INVESTMENT OPERATIONS
______________________________________________________________________________

INVESTMENT RESULTS
Major categories of net investment income are summarized below:

POST-MERGER POST-ACQUISITION
________________________________________________________
For the period| For the period For the period
October 25, 1997| January 1, 1997 August 14, 1996
through| through through
December 31, 1997| October 24, 1997 December 31, 1996
__________________| ____________________________________
(Dollars in thousands)
|
Fixed maturities $4,443 | $18,488 $5,083
Equity securities 3 | -- 103
Mortgage loans on real |
estate 879 | 3,070 203
Policy loans 59 | 482 78
Short-term investments 129 | 443 441
Other, net (154)| 24 2
Funds held in escrow -- | -- --
__________________| ____________________________________
Gross investment income 5,359 | 22,507 5,910
Less investment expenses (232)| (851) (115)
__________________| ____________________________________
Net investment income $5,127 | $21,656 $5,795
==================| ====================================

PRE-ACQUISITION
_____________________________________
For the period |
January 1, 1996 | For the year
through | ended
August 13, 1996 | December 31, 1995
__________________| _________________
(Dollars in thousands)
|
Fixed maturities $4,507 | $1,610
Equity securities -- | --
Mortgage loans on real |
estate -- | --
Policy loans 73 | 56
Short-term investments 341 | 899
Other, net 22 | 148
Funds held in escrow 145 | 166
__________________| _________________
Gross investment income 5,088 | 2,879
Less investment expenses (98)| (61)
__________________| _________________
Net investment income $4,990 | $2,818
==================| =================

Realized gains (losses) on investments are as follows:

POST-MERGER POST-ACQUISITION
________________________________________________________
For the period| For the period For the period
October 25, 1997| January 1, 1997 August 14, 1996
through| through through
December 31, 1997| October 24, 1997 December 31, 1996
__________________| ____________________________________
(Dollars in thousands)
|
Fixed maturities, |
available for sale $25 | $151 $42
Mortgage loans (10)| -- --
__________________| ____________________________________
Realized gains (losses) |
on investments $15 | $151 $42
========================================================

PRE-ACQUISITION
_____________________________________
For the period |
January 1, 1996 | For the year
through | ended
August 13, 1996 | December 31, 1995
__________________| _________________
(Dollars in thousands)
|
Fixed maturities, |
available for sale ($420)| $297
Mortgage loans -- | --
__________________| _________________
Realized gains (losses) |
on investments ($420)| $297
=====================================

The change in unrealized appreciation (depreciation) on securities at
fair value is as follows:

POST-MERGER POST-ACQUISITION
________________________________________________________
For the period | For the period For the period
October 25, 1997 | January 1, 1997 August 14, 1996
through | through through
December 31, | October 24, December 31,
1997 | 1997 1996
__________________| ____________________________________
(Dollars in thousands)
|
Fixed maturities: |
Available for sale $1,113 | $4,607 $410
Held for investment -- | -- --
Equity securities (533)| (465) (3)
__________________| ____________________________________
Unrealized appreciation |
(depreciation) of |
securities $580 | $4,142 $407
========================================================

PRE-ACQUISITION
_____________________________________
For the period |
January 1, 1996 | For the year
through | ended
August 13, 1996 | December 31, 1995
__________________| _________________
(Dollars in thousands)
|
Fixed maturities: |
Available for sale ($2,087)| $958
Held for investment -- | 90
Equity securities 1 | 3
__________________| _________________
Unrealized appreciation |
(depreciation) of |
securities ($2,086)| $1,051
=====================================

At December 31, 1997 and December 31, 1996, amortized cost, gross unrealized
gains and losses and estimated fair values of fixed maturity securities, all
of which are designated as available for sale, are as follows:

Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
_______________________________________________
(Dollars in thousands)
December 31, 1997 POST-MERGER
______________________________________________________________________________

U.S. government and
governmental agencies
and authorities:
Mortgage-backed securities $62,988 $155 ($10) $63,133
Other 5,705 5 (1) 5,709
Foreign governments 2,062 -- (9) 2,053
Public utilities 25,899 49 (4) 25,944
Investment grade corporate 219,526 926 (32) 220,420
Below investment grade
corporate 41,355 186 (210) 41,331
Mortgage-backed securities 55,753 78 (20) 55,811
_______________________________________________
Total $413,288 $1,399 ($286) $414,401
===============================================

December 31, 1996 POST-ACQUISITION
______________________________________________________________________________
U.S. government and
governmental agencies
and authorities:
Mortgage-backed securities $70,902 $122 ($247) $70,777
Other 3,082 2 (4) 3,080
Public utilities 35,893 193 (38) 36,048
Investment grade corporate 134,487 586 (466) 134,607
Below investment grade
corporate 25,921 249 (56) 26,114
Mortgage-backed securities 4,868 69 -- 4,937
_______________________________________________
Total $275,153 $1,221 ($811) $275,563
===============================================

At December 31, 1997, net unrealized investment gains on fixed maturities
designated as available for sale totaled $1,113,000. This appreciation caused
an increase to stockholder's equity of $587,000 at December 31, 1997 (net of
deferred income taxes of $316,000, an adjustment of $35,000 to DPAC and PVIF
of $175,000). Short-term investments with maturities of 30 days or less have
been excluded from the above schedules. Amortized cost approximates fair value
for these securities.

Amortized cost and estimated fair value of fixed maturities designated as
available for sale, by contractual maturity, at December 31, 1997, are shown
below. Expected maturities will differ from contractual maturities because
borrowers may have the right to call or prepay obligations with or without
call or prepayment penalties.

POST-MERGER
_____________________________
Estimated
Amortized Fair
December 31, 1997 Cost Value
_____________________________________________________________________________
(Dollars in thousands)

Due within one year $26,261 $26,239
Due after one year through five years 198,249 198,781
Due after five years through ten years 70,037 70,437
_____________ _____________
294,547 295,457
Mortgage-backed securities 118,741 118,944
_____________ _____________
Total $413,288 $414,401
============= =============

An analysis of sales, maturities and principal repayments of the Company's
fixed maturities portfolio is as follows:

Gross Gross Proceeds
Amortized Realized Realized from
Cost Gains Losses Sale
______________________________________________________________________________
(Dollars in thousands)

For the period October 25,
1997 through
December 31, 1997:
Scheduled principal
repayments, calls and
tenders $6,708 $2 -- $6,710
Sales 3,138 23 -- 3,161
______________________________________________________
Total $9,846 $25 -- $9,871
======================================================
For the period January 1,
1997 through October 24,
1997:
Scheduled principal
repayments, calls and
tenders $25,419 -- -- $25,419
Sales 14,052 $153 ($2) 14,203
______________________________________________________
Total $39,471 $153 ($2) $39,622
======================================================
For the period August 14,
1996 through
December 31, 1996:
Scheduled principal
repayments, calls and
tenders $1,612 -- -- $1,612
Sales 45,799 $115 ($73) 45,841
______________________________________________________
Total $47,411 $115 ($73) $47,453
======================================================
For the period January 1,
1996 through August 13,
1996:
Scheduled principal
repayments, calls and
tenders $1,801 -- -- $1,801
Sales 53,710 $152 ($572) 53,290
______________________________________________________
Total $55,511 $152 ($572) $55,091
======================================================
Year ended December 31,
1995:
Scheduled principal
repayments, calls and
tenders $20,279 $305 ($16) $20,568
Sales 3,450 8 -- 3,458
______________________________________________________
Total $23,729 $313 ($16) $24,026
======================================================

INVESTMENT VALUATION ANALYSIS: The Company analyzes its investment portfolio
at least quarterly in order to determine if the carrying value of any of its
investments has been impaired. The carrying value of debt and equity
securities is written down to fair value by a charge to realized losses when
an impairment in value appears to be other than temporary. During 1997 and
1996, no investments were identified as having an impairment other than
temporary.

INVESTMENTS ON DEPOSIT: At December 31, 1997 and 1996, affidavits of deposits
covering bonds with a par value of $6,605,000 were on deposit with regulatory
authorities pursuant to certain statutory requirements.

INVESTMENT DIVERSIFICATIONS: The Company's investment policies related to its
investment portfolio require diversification by asset type, company and
industry and set limits on the amount which can be invested in an individual
issuer. Such policies are at least as restrictive as those set forth by
regulatory authorities. The following percentages relate to holdings at
December 31, 1997 and December 31, 1996. Fixed maturity investments included
investments in basic industrials (30% in 1997 and 1996), financial companies
(24% in 1997, 18% in 1996), various government bonds and government or agency
mortgage-backed securities (17% in 1997 and 27% in 1996) and public utilities
(7% in 1997, 13% in 1996). Mortgage loans on real estate have been analyzed
by geographical location with concentrations by state identified as Utah (13%
in 1997, 4% in 1996), California (12% in 1997, 7% in 1996), and Georgia (11%
in 1997, 17% in 1996). There are no other concentrations of mortgage loans in
any state exceeding ten percent at December 31, 1997 and 1996. Mortgage loans
on real estate have also been analyzed by collateral type with significant
concentrations identified in office buildings (43% in 1997, 36% in 1996),
industrial buildings (33% in 1997, 31% in 1996), retail facilities (15% in
1997, 6% in 1996) and multi-family residential buildings (9% in 1997, 27% in
1996). Equity securities and investments accounted for by the equity method
are not significant to the Company's overall investment portfolio.

No investment in any person or its affiliates (other than bonds issued by
agencies of the United States government) exceeded ten percent of
stockholder's equity at December 31, 1997.

4. FAIR VALUES OF FINANCIAL INSTRUMENTS
______________________________________________________________________________

SFAS No. 107, "Disclosures about Fair Value of Financial Instruments,"
requires disclosure of estimated fair value of all financial instruments,
including both assets and liabilities recognized and not recognized in a
Company's balance sheet, unless specifically exempted. SFAS No. 119,
"Disclosure about Derivative Financial Instruments and Fair Value of Financial
Instruments," requires additional disclosures about derivative financial
instruments. Most of the Company's investments, investment contracts and debt
fall within the standards' definition of a financial instrument. Fair values
for the Company's insurance contracts other than investment contracts are not
required to be disclosed. In cases where quoted market prices are not
available, estimated fair values are based on estimates using present value or
other valuation techniques. Those techniques are significantly affected by
the assumptions used, including the discount rate and estimates of future cash
flows. Accounting, actuarial and regulatory bodies are continuing to study the
methodologies to be used in developing fair value information, particularly as
it relates to such things as liabilities for insurance contracts. Accordingly,
care should be exercised in deriving conclusions about the Company's business
or financial condition based on the information presented herein.

The Company closely monitors the composition and yield of its invested assets,
the duration and interest credited on insurance liabilities and resulting
interest spreads and timing of cash flows. These amounts are taken into
consideration in the Company's overall management of interest rate risk, which
attempts to minimize exposure to changing interest rates through the matching
of investment cash flows with amounts expected to be due under insurance
contracts. As discussed below, the Company has used discount rates in its
determination of fair values for its liabilities which are consistent with
market yields for related assets. The use of the asset market yield is
consistent with management's opinion that the risks inherent in its asset and
liability portfolios are similar. This assumption, however, might not result
in values consistent with those obtained through an actuarial appraisal of the
Company's business or values that might arise in a negotiated transaction.

The following compares carrying values as shown for financial reporting
purposes with estimated fair values:

December 31 1997 1996
_______________________________________________________________________________
(Dollars in thousands) |
Estimated | Estimated
Carrying Fair | Carrying Fair
Value Value | Value Value
___________ ___________| ___________ ___________
|
ASSETS |
Fixed maturities, available |
for sale $414,401 $414,401 | $275,563 $275,563
Equity securities 3,904 3,904 | 33 33
Mortgage loans on real estate 85,093 86,348 | 31,459 30,979
Policy loans 8,832 8,832 | 4,634 4,634
Short-term investments 14,460 14,460 | 12,631 12,631
Cash and cash equivalents 21,039 21,039 | 5,839 5,839
Separate account assets 1,646,169 1,646,169 | 1,207,247 1,207,247
|
LIABILITIES |
Annuity products 493,181 431,859 | 280,076 253,012
Surplus note 25,000 28,837 | 25,000 28,878
Separate account liabilities 1,646,169 1,443,458 | 1,207,247 1,119,158
|

The following methods and assumptions were used by the Company in estimating
fair values.

FIXED MATURITIES: Estimated fair values of publicly traded securities are as
reported by an independent pricing service. Estimated fair values of
conventional mortgage-backed securities not actively traded in a liquid market
are estimated using a third party pricing system. This pricing system uses a
matrix calculation assuming a spread over U.S. Treasury bonds based upon the
expected average lives of the securities.

EQUITY SECURITIES: Estimated fair values of equity securities, which consist
of the Company's investment in the portfolios underlying its separate accounts,
are based upon the quoted fair value of the individual securities comprising
the individual portfolios underlying the separate accounts. For equity
securities not actively traded, estimated fair values are based upon values of
issues of comparable yield and quality.

MORTGAGE LOANS ON REAL ESTATE: Fair values are estimated by discounting
expected cash flows, using interest rates currently offered for similar
loans.

POLICY LOANS: Carrying values approximate the estimated fair value for
policy loans.

SHORT-TERM INVESTMENTS AND CASH AND CASH EQUIVALENTS: Carrying values
reported in the Company's historical cost basis balance sheet approximate
estimated fair value for these instruments, due to their short-term nature.

SEPARATE ACCOUNT ASSETS: Separate account assets are based upon the quoted
fair values of the individual securities in the separate accounts.

ANNUITY PRODUCTS: Estimated fair values of the Company's liabilities for
future policy benefits for the fixed interest division of the variable annuity
products and for supplemental contracts without life contingencies are based
upon discounted cash flow calculations. Cash flows of future policy benefits
are discounted using the market yield rate of the assets supporting these
liabilities.

SURPLUS NOTE: Estimated fair value of the Company's surplus note was based
upon discounted future cash flows using a discount rate approximating the
Company's return on invested assets.

SEPARATE ACCOUNT LIABILITIES: Separate account liabilities are reported at
full account value in the Company's historical cost balance sheet.
Estimated fair values of separate account liabilities are based upon
assumptions using an estimated long-term average market rate of return to
discount future cash flows. The reduction in fair values for separate
account liabilities reflect the present value of future revenue from product
charges, distribution fees or surrender charges.

5. MERGER
______________________________________________________________________________

TRANSACTION: On October 23, 1997, Equitable shareholders approved the Merger
Agreement dated as of July 7, 1997, among Equitable, PFHI and ING. On October
24, 1997, PFHI, a Delaware corporation, acquired all of the outstanding
capital stock of Equitable pursuant to the Merger Agreement. PFHI is a wholly
owned subsidiary of ING, a global financial services holding company based in
The Netherlands. Equitable, an Iowa corporation, in turn, owned all the
outstanding capital stock of Equitable Life Insurance Company of Iowa
("Equitable Life") and Golden American and their wholly owned subsidiaries.
Equitable also owned all the outstanding capital stock of Locust Street
Securities, Inc. ("LSSI"), Equitable Investment Services, Inc., DSI, Equitable
of Iowa Companies Capital Trust, Equitable of Iowa Companies Capital Trust II
and Equitable of Iowa Securities Network, Inc. In exchange for the outstanding
capital stock of Equitable, ING paid total consideration of approximately $2.1
billion in cash and stock plus the assumption of approximately $400 million
in debt according to the Merger Agreement. As a result of the merger,
Equitable was merged into PFHI which was simultaneously renamed Equitable of
Iowa Companies, Inc. ("EIC" or the "Parent"), a Delaware corporation. All
costs of the merger, including expenses to terminate certain benefit plans,
were paid by the Parent.

ACCOUNTING TREATMENT: The merger was accounted for as a purchase resulting
in a new basis of accounting, reflecting estimated fair values for assets
and liabilities at October 24, 1997. The purchase price was allocated to EIC
and its subsidiaries. Goodwill was established for the excess of the merger
cost over the fair value of the net assets and pushed down to EIC and its
subsidiaries including Golden American and First Golden. The merger cost is
preliminary with respect to estimated expenses and, as a result, the PVIF and
related amortization and deferred taxes may change. The allocation of the
purchase price to the Company was approximately $227,497,000. The amount of
goodwill allocated to the Company relating to the merger was $151,127,000 at
the merger date and is being amortized over 40 years on a straight-line basis.
The carrying value of goodwill will be reviewed periodically for any
indication of impairment in value. The Company's DPAC, previous balance of
PVIF and unearned revenue reserve, as of the merger date, were eliminated
and an asset of $44,297,000 representing PVIF was established for all policies
in force at the merger date.

PRESENT VALUE OF IN FORCE ACQUIRED: As part of the merger, a portion of the
acquisition cost was allocated to the right to receive future cash flows from
insurance contracts existing with the Company at the date of merger. This
allocated cost represents the present value of in force acquired reflecting
the value of those purchased policies calculated by discounting the
actuarially determined expected future cash flow at the discount rate
determined by ING.

An analysis of the PVIF asset is as follows:

POST-MERGER
________________________
For the period
October 25, 1997
through
December 31, 1997
________________________
(Dollars in thousands)

Beginning balance $44,297
Imputed interest 1,004
Amortization (1,952)
Adjustment for unrealized gains
on available for sale securities (175)
________________________
Ending balance $43,174
========================

Interest is imputed on the unamortized balance of PVIF at a rate of 7.03% for
the period October 25, 1997 through December 31, 1997. The amortization of
PVIF net of imputed interest is charged to expense. PVIF is also adjusted for
the unrealized gains (losses) on available for sale securities; such changes
are included directly in stockholder's equity. Based on current conditions
and assumptions as to the impact of future events on acquired policies in
force, the expected approximate net amoritization for the next five years,
relating to the PVIF as of December 31, 1997, is $6,200,000 in 1998,
$6,000,000 in 1999, $5,600,000 in 2000, $5,000,000 in 2001 and $4,200,000 in
2002. Actual amortization may vary based upon final purchase price allocation
and changes in assumptions and experience.

6. ACQUISITION
______________________________________________________________________________

TRANSACTION: On August 13, 1996, Equitable acquired all of the outstanding
capital stock of BT Variable from Whitewood, a wholly owned subsidiary of
Bankers Trust Company ("Bankers Trust"), pursuant to the terms of the
Purchase Agreement dated as of May 3, 1996 between Equitable and Whitewood.
In exchange for the outstanding capital stock of BT Variable, Equitable paid
the sum of $93,000,000 in cash to Whitewood in accordance with the terms of
the Purchase Agreement. Equitable also paid the sum of $51,000,000 in cash to
Bankers Trust to retire certain debt owed by BT Variable to Bankers Trust
pursuant to a revolving credit arrangement. Subsequent to the acquisition,
the BT Variable, Inc. name was changed to EIC Variable, Inc. At April 30,
1997, EIC Variable, Inc. was liquidated and its investments in Golden American
and DSI were transferred to Equitable, while the remainder of its net assets
were contributed to Golden American. On December 30, 1997, EIC Variable, Inc.
was dissolved.

ACCOUNTING TREATMENT: The acquisition was accounted for as a purchase
resulting in a new basis of accounting, which reflected estimated fair
values for assets and liabilities at August 13, 1996. The purchase price
was allocated to the three companies purchased - BT Variable, DSI and Golden
American. Goodwill was established for the excess of the acquisition cost
over the fair value of the net assets acquired and pushed down to Golden
American. The allocation of the purchase price to the Company was
approximately $139,872,000. The amount of goodwill relating to the
acquisition was $41,113,000 and was amortized over 25 years on a straight-line
basis until the October 24, 1997 merger with ING. The Company's DPAC, previous
balance of PVIF and unearned revenue reserve, as of the merger date, were
eliminated and an asset of $85,796,000 representing PVIF was established for
all policies in force at the acquisition date.

PRESENT VALUE OF IN FORCE ACQUIRED: As part of the acquisition, a portion of
the acquisition cost was allocated to the right to receive future cash flows
from the insurance contracts existing with the Company at the date of
acquisition. This allocated cost represents the present value of in force
acquired reflecting the value of those purchased policies calculated by
discounting the actuarially determined expected future cash flows at the
discount rate determined by Equitable.

An analysis of the PVIF asset is as follows:

POST-ACQUISITION PRE-ACQUISITION
_________________________________________________
For the For the | For the
period period | period
January August | January For the
1, 1997 14, 1996 | 1, 1996 year
through through | through ended
October December | August December
24, 1997 31, 1996 | 13, 1996 31, 1995
_______________________| ________________________
(Dollars in thousands)
|
Beginning balance $83,051 $85,796 | $6,057 $7,620
Imputed interest 5,138 2,465 | 273 548
Amortization (10,363) (5,210)| (1,224) (2,100)
Adjustment for unrealized |
gains (losses) on available |
for sale securities (373) -- | 11 (11)
_______________________| ________________________
Ending balance $77,453 $83,051 | $5,117 $6,057
=================================================

Pre-Acquisition PVIF represents the remaining value assigned to in force
contracts when Bankers Trust purchased Golden American from Mutual Benefit
Life Insurance Company in Rehabilitation ("Mutual Benefit") on September
30, 1992.

Interest was imputed on the unamortized balance of PVIF at rates of 7.70%
to 7.80% for the period August 14, 1996 through October 24, 1997. The
amortization of PVIF net of imputed interest was charged to expense. PVIF
was also adjusted for the unrealized gains (losses) on available for sale
securities; such changes were included directly in stockholder's equity.

7. INCOME TAXES
______________________________________________________________________________

The Company will file a consolidated federal income tax return with its wholly
owned life insurance subsidiary. Under the Internal Revenue Code, a newly
acquired insurance company cannot file as part of its parent's consolidated
tax return for 5 years.

At December 31, 1997, Golden American has net operating loss ("NOL")
carryforwards for federal income tax purposes of approximately $8,697,000.
Approximately $5,094,000 and $3,603,000 of these NOL carryforwards are
available to offset future taxable income of the Company through the years 2011
and 2012, respectively.

INCOME TAX EXPENSE
Income tax expense (benefit) included in the consolidated financial statements
is as follows:

POST-MERGER POST-ACQUISITION PRE-ACQUISITION
_____________________________________________________________________
For the | For the For the | For the
period | period period | period
October 25, | January 1, August 14, | January 1,
1997 | 1997 1996 | 1996 For the
through | through through | through year ended
December 31, | October 24, December 31, | August 13, December 31,
1997 | 1997 1996 | 1996 1995
_____________| __________________________| __________________________
(Dollars in thousands)
| |
Current -- | $12 -- | -- --
Deferred $146 | (1,349) $220 | ($1,463) --
_____________| __________________________| __________________________
$146 | ($1,337) $220 | ($1,463) --
=====================================================================

The effective tax rate on income (loss) before income taxes is different from
the prevailing federal income tax rate. A reconciliation of this difference
is as follows:

POST-MERGER POST-ACQUISITION PRE-ACQUISITION
_______________________________________________________
For the | For the For the | For the
period | period period | period
October | January August | January
25, 1997 | 1, 1997 14, 1996 | 1, 1996 For the
through | through through | through year ended
December | October December | August December
31, 1997 | 24, 1997 31, 1996 | 13, 1996 31, 1995
___________| ____________________| ____________________
(Dollars in thousands)
| |
Income (loss) | |
before income taxes ($279)| ($608) $570 | $1,736 $3,364
===========| ====================| ====================
Income tax | |
(benefit) at federal | |
statutory rate ($98)| ($213) $200 | $607 $1,177
Tax effect (decrease) of: | |
Realization of NOL | |
carryforwards -- | -- -- | (1,214) --
Dividends received | |
deduction -- | -- -- | -- (350)
Goodwill amortization 220 | -- -- | -- --
Compensatory stock | |
option and restricted | |
stock expense -- | (1,011) -- | -- --
Other items 24 | (113) 20 | -- 17
Valuation allowance -- | -- -- | (856) (844)
___________| ____________________| ____________________
Income tax expense | |
(benefit) $146 | ($1,337) $220 | ($1,463) $--
=======================================================

DEFERRED INCOME TAXES
The tax effect of temporary differences giving rise to the Company's deferred
income tax assets and liabilities at December 31, 1997 and 1996 is as follows:

POST-MERGER POST-ACQUISITION
___________________________________
December 31 1997 | 1996
____________________________________________________________ | ________________
(Dollars in thousands)
|
Deferred tax assets: |
Future policy benefits $27,399 | $19,102
Deferred policy acquisition costs 4,558 | 1,985
Goodwill 17,620 | 5,918
Net operating loss carryforwards 3,044 | 1,653
Other 1,548 | 235
________________ | ________________
54,169 | 28,893
Deferred tax liabilities: |
Unrealized appreciation (depreciation) |
of securities at fair value (130) | (145)
Fixed maturity securities (1,665) | --
Present value of in force acquired (15,172) | (29,068)
Other (972) | (45)
________________ | ________________
(17,939) | (29,258)
________________ | ________________
Deferred income tax asset (liability) $36,230 | ($365)
===================================

The Company is required to establish a "valuation allowance" for any portion
of the deferred tax assets that management believes will not be realized. In
the opinion of management, it is more likely than not that the Company will
realize the benefit of the deferred tax assets, and, therefore, no such
valuation allowance has been established.

8. RETIREMENT PLANS
______________________________________________________________________________

DEFINED BENEFIT PLANS

In 1997, the Company was allocated their share of the pension liability
associated with their employees. The Company's employees are covered by the
employee retirement plan of an affiliate, Equitable Life. The benefits are
based on years of service and the employee's average annual compensation
during the last five years of employment. Further, Equitable Life sponsors a
defined contribution plan that is qualified under Internal Revenue Code Section
401(k). The Company's funding and accounting policies are consistent with the
funding requirements of Federal law and regulations.

The following table sets forth the plan's funded status and amounts recognized
in the Company's consolidated balance sheet:

POST-MERGER
_______________________
December 31, 1997
_______________________
(Dollars in thousands)

Accumulated benefit obligation $579
=======================

Plan assets at fair value, primarily bonds, common
stocks, mortgage loans and short-term investments --
Projected benefit obligation for service rendered to date $956
_______________________
Pension liability $956
=======================

Net periodic pension cost included the following components:

POST-MERGER POST-ACQUISITION
______________________________________
For the period | For the period
October 25, 1997 | January 1, 1997
through | through
December 31, 1997 | October 24, 1997
__________________| __________________
(Dollars in thousands)
|
Service cost-benefits earned |
during the period $114 | $568
Interest cost on projected |
benefit obligation 10 | 15
Net amortization and deferral -- | 1
__________________| __________________
Net periodic pension cost $124 | $584
======================================

The discount rate and rate of increase in future compensation levels used in
determining the actuarial present value of the projected benefit obligation
were 7.25% and 5.00%, respectively, at December 31, 1997. The average
expected long term rate of return on plan assets was 9.00% in 1997.

9. RELATED PARTY TRANSACTIONS
______________________________________________________________________________

DSI acts as the principal underwriter (as defined in the Securities Act of
1933 and the Investment Company Act of 1940, as amended) of the variable
insurance products issued by the Company which as of December 31, 1997 are
sold primarily through six broker/dealer institutions. For the periods
October 25, 1997, through December 31, 1997 and January 1, 1997 through
October 24, 1997, the Company paid commissions to DSI totaling $9,931,000
and $26,419,000, respectively ($9,995,000 for the period August 14, 1996
through December 31, 1996 and $17,070,000 for the period January 1, 1996
through August 13, 1996). For the year ended December 31, 1995 commissions
paid by Golden American to DSI aggregated $8,440,000.

Golden American provides certain managerial and supervisory services to DSI.
Beginning in 1995, this fee was calculated as a percentage of average assets
in the variable separate accounts. For the periods October 25, 1997 through
December 31, 1997 and January 1, 1997 through October 24, 1997, the fee was
$508,000 and $2,262,000, respectively. For the periods August 14, 1996
through December 31, 1996 and January 1, 1996 through August 13, 1996 the
fee was $877,000 and $1,390,000, respectively. This fee was $987,000 for 1995.

The Company has a service agreement with Equitable Investment Services, Inc.
("EISI"), an affiliate, in which EISI provides investment management services.
Payments for these services totaled $200,000, $768,000 and $72,000 for the
periods October 25, 1997 through December 31, 1997, January 1, 1997 through
October 24, 1997 and August 14, 1996 through December 31, 1996, respectively.

Golden American has a guaranty agreement with Equitable Life. In consideration
of an annual fee, payable June 30, Equitable Life guarantees to Golden American
that it will make funds available, if needed, to Golden American to pay the
contractual claims made under the provisions of Golden American's life
insurance and annuity contracts. The agreement is not, and nothing contained
therein or done pursuant thereto by Equitable Life shall be deemed to
constitute, a direct or indirect guaranty by Equitable Life of the payment of
any debt or other obligation, indebtedness or liability, of any kind or
character whatsoever, of Golden American. The agreement does not guarantee the
value of the underlying assets held in separate accounts in which funds of
variable life insurance and variable annuity policies have been invested. The
calculation of the annual fee is based on risk based capital. As Golden
American's risk based capital level was above required amounts, no annual fee
was payable.

Golden American provides certain advisory, computer and other resources and
services to Equitable Life. Revenues for these services which reduced general
expenses incurred by Golden American totaled $1,338,000 and $2,992,000 for
the periods October 25, 1997 through December 31, 1997 and January 1, 1997
through October 24, 1997, respectively. No services were provided by Golden
American in 1996.

The Company has a service agreement with Equitable Life in which Equitable Life
provides administrative and financial related services. For the period October
25, 1997 through December 31, 1997 and January 1, 1997 through October 24,
1997, the Company incurred expenses of $13,000 and $16,000, respectively,
under this agreement.

The Company had premiums, net of reinsurance, for variable products from six
significant broker/dealers for the year ended December 31, 1997, that
totaled $445,300,000, or 71% of premiums ($298,000,000 or 67% from two
significant broker/dealers for the year ended December 31, 1996). Included in
these amounts are premiums for 1997 of $26.2 million from LSSI, an affiliate.

SURPLUS NOTE: On December 17, 1996, Golden American issued an 8.25% surplus
note in the amount of $25,000,000 to Equitable. The note matures on December
17, 2026. The note and accrued interest thereon shall be subordinate to
payments due to policyholders, claimant and beneficiary claims, as well as
debts owed to all other classes of debtors of Golden American. Any payment of
principal made shall be subject to the prior approval of the Delaware Insurance
Commissioner. Golden American incurred interest totaling $344,000 and
$1,720,000 for the period October 25, 1997 through December 31, 1997 and
January 1, 1997 through October 24, 1997, respectively. On December 17, 1996,
Golden American contributed the $25,000,000 to First Golden acquiring 200,000
shares of common stock (100% of outstanding stock) of First Golden.

RECIPROCAL LOAN AGREEMENT: Golden American maintains a reciprocal loan
agreement with ING America Insurance Holdings, Inc. ("ING America"), a
Delaware corporation, and affiliate of EIC, to facilitate the handling of
unusual and/or unanticipated short-term cash requirements. Under this
agreement, which became effective January 1, 1998 and expires December 31,
2007, Golden American and ING America can borrow up to $65,000,000 from one
another. Interest on any Golden American borrowings is charged at the rate of
ING America's cost of funds for the interest period plus 0.15%. Interest
on any ING America borrowings is charged at a rate based on the prevailing
interest rate of U.S. commercial paper available for purchase with a similar
arrangement.

LINE OF CREDIT: Golden American maintained a line of credit agreement with
Equitable to facilitate the handling of unusual and/or unanticipated short-term
cash requirements. Under this agreement which became effective December 1, 1996
and expired December 31, 1997, Golden American could borrow up to $25,000,000.
Interest on any borrowings was charged at the rate of Equitable's monthly
average aggregate cost of short-term funds plus 1.00%. Under this agreement,
the Company incurred interest expense of $213,000 for the period October 25,
1997 through December 31, 1997, $362,000 for the period January 1, 1997 through
October 24, 1997, and $85,000 for the period August 14, 1996 through December
31, 1996. At December 31, 1997, $24,059,000 was outstanding under this
agreement. The outstanding balance was repaid by a capital contribution.

STOCKHOLDER'S EQUITY: On September 23, 1996, EIC Variable, Inc. contributed
$50,000,000 of Preferred Stock to the Company's additional paid-in capital.

10. COMMITMENTS AND CONTINGENCIES
______________________________________________________________________________

CONTINGENT LIABILITY: In a transaction that closed on September 30, 1992,
Bankers Trust acquired from Mutual Benefit, in accordance with the terms of an
Exchange Agreement, all of the issued and outstanding capital stock of Golden
American and DSI and certain related assets for consideration with an
aggregate value of $13,200,000 and contributed them to BT Variable. The
transaction involved settlement of pre-existing claims of Bankers Trust
against Mutual Benefit. The ultimate value of these claims has not yet been
determined by the Superior Court of New Jersey and, prior to August 13, 1996,
was contingently supported by a $5,000,000 note payable from Golden American
and a $6,000,000 letter of credit from Bankers Trust. Bankers Trust had
estimated that the contingent liability due from Golden American amounted to
$439,000 at August 13, 1996. At August 13, 1996 the balance of the escrow
account established to fund the contingent liability was $4,293,000.

On August 13, 1996, Bankers Trust made a cash payment to Golden American in
an amount equal to the balance of the escrow account less the $439,000
contingent liability discussed above. In exchange, Golden American
irrevocably assigned to Bankers Trust all of Golden American's rights to
receive any amounts to be disbursed from the escrow account in accordance
with the terms of the Exchange Agreement. Bankers Trust also irrevocably
agreed to make all payments becoming due under the Golden American note and
to indemnify Golden American for any liability arising from the note.

REINSURANCE: At December 31, 1997, the Company had reinsurance treaties with
five unaffiliated reinsurers covering a significant portion of the mortality
risks under its variable contracts. The Company remains liable to the extent
its reinsurers do not meet their obligations under the reinsurance agreements.
Reinsurance in force for life mortality risks were $96,686,000 and $58,368,000
at December 31, 1997 and 1996. At December 31, 1997, the Company has a net
payable of $11,000 for reserve credits, reinsurance claims or other receivables
from these reinsurers comprised of $240,000 for claims recoverable from
reinsurers and a payable of $251,000 for reinsurance premiums. Included in the
accompanying financial statements are net considerations to reinsurers of
$326,000, $1,871,000, $875,000, $600,000 and $2,800,000 and net policy benefits
recoveries of $461,000, $1,021,000, $654,000, $1,267,000 and $3,500,000 for the
periods October 25, 1997 through December 31, 1997, January 1, 1997 through
October 24, 1997, August 14, 1996 through December 31, 1996, and January 1,
1996 through August 13, 1996 and the year ended 1995, respectively.

Effective June 1, 1994, Golden American entered into a modified coinsurance
agreement with an unaffiliated reinsurer. The accompanying financial
statements are presented net of the effects of the treaty which increased
income by $265,000, $335,000, $10,000 and $56,000 for the periods October
25, 1997 through December 31, 1997, January 1, 1997 through October 24, 1997,
August 14, 1996 through December 31, 1996 and January 1, 1996 through
August 13, 1996, respectively. In 1995, net income was reduced by $109,000.

GUARANTY FUND ASSESSMENTS: Assessments are levied on the Company by life and
health guaranty associations in most states in which the Company is licensed
to cover losses of policyholders of insolvent or rehabilitated insurers. In
some states, these assessments can be partially recovered through a reduction
in future premium taxes. The Company cannot predict whether and to what
extent legislative initiatives may affect the right to offset. Based upon
information currently available from the National Organization of Life and
Health Insurance Guaranty Associations (NOLHGA), the Company believes that
it is probable these insolvencies will result in future assessments which
could be material to the Company's financial statements if the Company's
reserve is not sufficient. The Company regularly reviews its reserve for
these insolvencies and updates its reserve based upon the Company's
interpretation of information from the NOLHGA annual report. The associated
cost for a particular insurance company can vary significantly based upon
its fixed account premium volume by line of business and state premium levels
as well as its potential for premium tax offset. Accordingly, the Company
accrued and charged to expense an additional $141,000 for the period October
25, 1997 through December 31, 1997, $446,000 for the period January 1, 1997
through October 24, 1997, $291,000 for the period August 14, 1996 through
December 31, 1996 and $480,000 for the period January 1, 1996 through August
13, 1996. At December 31, 1997, the Company has an undiscounted reserve of
$1,358,000 to cover estimated future assessments (net of related anticipated
premium tax credits) and has established an asset totaling $238,000 for
assessments paid which may be recoverable through future premium tax offsets.
The Company believes this reserve is sufficient to cover expected future
insurance guaranty fund assessments, based upon previous premiums, and known
insolvencies at this time.

LITIGATION: In the ordinary course of business, the Company is engaged in
litigation, none of which management believes is material.

VULNERABILITY FROM CONCENTRATIONS: The Company has various concentrations in
its investment portfolio (see Note 3 for further information). The Company's
asset growth, net investment income and cash flow are primarily generated from
the sale of variable products and associated future policy benefits and
separate account liabilities. A significant portion of the Company's sales is
generated by six broker/dealers. Substantial changes in tax laws that would
make these products less attractive to consumers, extreme fluctuations in
interest rates or stock market returns which may result in higher lapse
experience than assumed, could cause a severe impact to the Company's
financial condition.

OTHER COMMITMENTS: At December 31, 1997, outstanding commitments to fund
mortgage loans on real estate totaled $1,825,000.

YEAR 2000 (UNAUDITED): Based on a study of its computer software and
hardware, the Company has determined its exposure to the Year 2000 change of
the century date issue. Management believes the Company's systems are or
will be substantially compliant by Year 2000 and has engaged external
consultants to validate this assumption. Golden American has spent
approximately $2,000 in 1997 related to the external consultants' analysis.
The projected cost to the Company for the external consultants' analysis is
approximately $130,000 to $170,000. The only system known to be affected by
this issue is a system maintained by an affiliate who will incur the related
costs to make the system compliant. To mitigate the effect of outside
influences and other dependencies relative to the Year 2000, the Company will
be contacting significant customers, suppliers and other third parties. To
the extent these third parties would be unable to transact business in the
Year 2000 and thereafter, the Company's operations could be adversely affected.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

PART III.

ITEMS 10 - 13.

Information called for by items 10 through 13 of this part is omitted
pursuant to General Instruction I. (2)(c) of Form 10-K.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1) and (a)(2) Financial statements and schedules

The following consolidated financial statements of Golden American Life
Insurance Company are included in Item 8:

Balance sheets - December 31, 1997 and 1996
Statements of income - For the periods October 25, 1997 through
December 31, 1997, January 1, 1997 through October 24, 1997,
August 14, 1996 through December 31, 1996, January 1, 1996
through August 13, 1996 and for the year ended December 31, 1995
Statements of stockholder's equity - For the periods October 25,
1997 through December 31, 1997, January 1, 1997 through October
24, 1997, August 14, 1996 through December 31, 1996, January 1,
1996 through August 13, 1996 and for the year ended December 31,
1995
Statements of cash flows - For the periods October 25, 1997 through
December 31, 1997, January 1, 1997 through October 24, 1997, August
14, 1996 through December 31, 1996, January 1, 1996 through August
13, 1996 and for the year ended December 31, 1995
Notes to financial statements

The following consolidated financial statement schedules of Golden American
Life Insurance Company are included in Item 14(d):

Schedule I - Summary of investments - other than investments in
related parties
Schedule III - Supplementary insurance information
Schedule IV - Reinsurance

All other schedules required by Article 7 of Regulation S-X are not required
under the related instructions or are inapplicable and therefore have been
omitted.

(a)(3), and (c) Exhibits

Exhibits filed are listed in the attached exhibit index.

(b) No reports on Form 8-K were filed for the quarter ended December 31, 1997.

ITEM 14(D). SCHEDULES

SCHEDULE I
SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES
(Dollars in thousands)

Balance
Sheet
December 31, 1997 Cost 1 Value Amount
_______________________________________________________________________________

TYPE OF INVESTMENT
Fixed maturities, available for sale:
Bonds:
United States government and govern-
mental agencies and authorities $68,693 $68,842 $68,842
Foreign governments 2,062 2,053 2,053
Public utilities 25,899 25,944 25,944
Investment grade corporate 219,526 220,420 220,420
Below investment grade corporate 41,355 41,331 41,331
Mortgage-backed securities 55,753 55,811 55,811
___________ ___________ ___________
Total fixed maturities, available
for sale 413,288 414,401 414,401

Equity securities:
Common stocks: industrial, mis-
cellaneous and all other 4,437 3,904 3,904

Mortgage loans on real estate 85,093 85,093
Policy loans 8,832 8,832
Short-term investments 14,460 14,460
___________ ___________
Total investments $526,110 $526,690
=========== ===========

Note 1: Cost is defined as original cost for stocks and other invested assets,
amortized cost for bonds and unpaid principal for policy loans and
mortgage loans on real estate, adjusted for amortization of premiums
and accrual of discounts.

SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION
(Dollars in thousands)

Column Column Column Column Column Column
A B C D E F
________________________________________________________________________________
Future
Policy Other
De- Benefits, Policy
ferred Losses, Claims Insur-
Policy Claims Un- and ance
Acqui- and earned Bene- Premiums
sition Loss Revenue fits and
Segment Costs Expenses Reserve Payable Charges
________________________________________________________________________________
POST-MERGER
________________________________________________________________________________

Period October 25, 1997
through December 31, 1997:

Life insurance $12,752 $505,304 $1,189 $10 $3,834

POST-ACQUISITION
________________________________________________________________________________
Period January 1, 1997
through October 24, 1997:

Life insurance N/A N/A N/A N/A 18,288

Period August 14, 1996
through December 31, 1996:

Life insurance 11,468 285,287 2,063 -- 8,768

PRE-ACQUISITION
________________________________________________________________________________
Period January 1, 1996
through August 13, 1996:

Life insurance N/A N/A N/A N/A 12,259

Year ended December 31, 1995:

Life insurance 67,314 33,673 6,556 -- 18,388

SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION - CONTINUED
(Dollars in thousands)

Column Column Column Column Column Column
A G H I J K
________________________________________________________________________________

Amorti-
Benefits zation
Claims, of
Losses Deferred
Net and Policy Other
Invest- Settle- Acqui- Operat-
ment ment sition ing Premiums
Segment Income Expenses Costs Expenses Written
________________________________________________________________________________
POST-MERGER
________________________________________________________________________________

Period October 25, 1997
through December 31, 1997:

Life insurance $5,127 $7,413 $892 $1,137 --

POST-ACQUISITION
________________________________________________________________________________
Period January 1, 1997
through October 24, 1997:

Life insurance 21,656 19,401 1,674 20,234 --

Period August 14, 1996
through December 31, 1996:

Life insurance 5,795 7,003 244 8,066 --

PRE-ACQUISITION
________________________________________________________________________________
Period January 1, 1996
through August 13, 1996:

Life insurance 4,990 5,270 2,436 8,847 --

Year ended December 31, 1995:

Life insurance 2,818 3,146 2,710 13,333 --

SCHEDULE IV
REINSURANCE

Column A Column B Column C Column D Column E Column F
_______________________________________________________________________________
Assumed Percentage
Ceded to from of Amount
Gross Other Other Net Assumed
Amount Companies Companies Amount to Net
_______________________________________________________________________________

At December 31, 1997:
Life insurance in
force $149,842,000 $96,686,000 -- $53,156,000 --
============= ============ ========= ============ ==========
At December 31, 1996:
Life insurance in
force $86,192,000 $58,368,000 -- $27,824,000 --
============= ============ ========= ============ ==========
At December 31, 1995:
Life insurance in
force $38,383,000 $24,709,000 -- $13,674,000 --
============= ============ ========= ============ ==========

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

GOLDEN AMERICAN LIFE INSURANCE COMPANY
(Registrant)

DATE: March 30, 1998 By /s/Terry L. Kendall
_________________________
Terry L. Kendall
President

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signatures Title
_________________________ _________________________________

s/Terry L. Kendall President, Chief Executive
_________________________ Officer, and Director
Terry L. Kendall
(principal executive officer)

s/Paul E. Larson Director
_________________________
Paul E. Larson

s/Susan B. Watson Senior Vice President, Chief
_________________________ Financial Officer and
Susan B. Watson Director
(principal financial officer)

March 30, 1998
s/Frederick S. Hubbell Director
_________________________
Frederick S. Hubbell

s/Myles R. Tashman Executive Vice President,
_________________________ General Counsel, Secretary and
Myles R. Tashman Director

s/Beth B. Neppl Vice President Human Resources
_________________________ and Director
Beth B. Neppl

s/Michellen A. Wildin Assistant Vice President and
_________________________ Chief Accounting Officer
Michellen A. Wildin
(principal accounting officer)

INDEX

Exhibits to Annual Report on Form 10-K
Year ended December 31, 1997
GOLDEN AMERICAN LIFE INSURANCE COMPANY

2 PLAN OF ACQUISITION
(a) Stock Purchase Agreement dated as of May 3, 1996, between
Equitable and Whitewood Properties Corp. (incorporated by
reference from Exhibit 2 in Equitable's Form 8-K filed August 28,
1996)

(b) Agreement and Plan of Merger dated as of July 7, 1997 among ING
Groep N.V., PFHI Holdings, Inc., and Equitable (incorporated by
reference from Exhibit 2 in Equitable's From 8-K filed July 11,
1997)

3 ARTICLES OF INCORPORATION AND BY-LAWS
(a) Articles of Incorporation of Golden American Life Insurance
Company ("Registrant") (incorporated by reference from Amendment
No. 9 to Registrant's Registration Statement of Form S-1 filed
with the Securities and Exchange Commission ("the SEC") on
February 17, 1998 (File No. 33-87272))

(b)(i) By-laws of Golden American Life Insurance Company (incorporated
by reference from Amendment No. 9 to Registrant's Registration
Statement on Form S-1 filed with the SEC on February 17, 1998
(File No. 33-87272))

(ii) By-laws of Golden American Life Insurance Company, as amended
(incorporated by reference from Amendment No. 9 to the
Registrant's Registration Statement on Form S-1 filed with the
SEC on February 17, 1998 (File No. 33-87272))

(iii) Certificate of Amendment of the By-laws of MB Variable Life
Insurance Company, as amended (incorporated by reference from
Amendment No. 9 to Registrant's Registration Statement on Form
S-1 filed with the SEC on February 17, 1998 (File No. 33-87272))

(iv) By-laws of Golden American Life Insurance Company, as amended
(12/21/93) (incorporated by reference from Amendment No. 9 to
Registrant's Registration Statement on Form S-1 filed with the
SEC on February 17, 1998 (File No. 33-87272))

4 INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES
(a) Individual Deferred Combination Variable and Fixed Annuity
Contract (incorporated by reference from Exhibit 4(e) to Amendment
No. 4 of Registrant's Registration Statement on Form S-1 filed
with the SEC on or about May 1, 1996 (File No. 33-87272))

(b) Discretionary Group Deferred Combination Variable Annuity Contract
(incorporated by reference from Exhibit 4(f) to Amendment No. 4 of
Registrant's Registration Statement on Form S-1 filed with the SEC
on or about May 1, 1996 (File No. 33-87272))

(c) Individual Deferred Variable Annuity Contract (incorporated by
reference from Exhibit 4(g) to Amendment No. 4 of Registrant's
Registration Statement on Form S-1 filed with the SEC on or about
May 1, 1996 (File No. 33-87272))

INDEX

Exhibits to Annual Report on Form 10-K
Year ended December 31, 1997
GOLDEN AMERICAN LIFE INSURANCE COMPANY

(d) Individual Deferred Combination Variable and Fixed Annuity
Application (incorporated by reference from Exhibit 4(k)to
Amendment No. 4 of Registrant's Registration Statement on Form
S-1 filed with the SEC on or about May 1, 1996
(File No. 33-87272))

(e) Group Deferred Combination Variable and Fixed Annuity Enrollment
Form (incorporated by reference from Exhibit 4(l) to Amendment
No. 4 of Registrant's Registration Statement on Form S-1 filed
with the SEC on or about May 1, 1996 (File No. 33-87272))

(f) Individual Deferred Variable Annuity Application (incorporated by
reference from Exhibit 4(m) to Amendment No. 4 of Registrant's
Registration Statement on Form S-1 filed with the SEC on or about
May 1, 1996 (File No. 33-87272))

(g) Individual Deferred Variable and Fixed Annuity Contract
(incorporated by reference from Exhibit 4(a) to Amendment No. 2
to a Registration Statement for Golden American filed with the
SEC on February 12, 1998 (File No. 333-28765))

(h) Group Deferred Variable and Fixed Annuity Contract Individual
Deferred Variable and Fixed Annuity Contract (incorporated by
reference from Exhibit 4(b) to Amendment No. 2 to a Registration
Statement for Golden American filed with the SEC on February 12,
1998 (File No. 333-28765))

(i) Individual Deferred Variable Annuity Contract (incorporated by
reference from Exhibit 4(c) to Amendment No. 2 to a Registrant
Statement for Golden American filed with the SEC on February 12,
1998 (File No. 333-28765))

(j) Individual Deferred Combination Variable and Fixed Annuity
Application (incorporated by reference from Exhibit 4(e) to
Amendment No. 1 to a Registration Statement for Golden American
filed with the SEC on September 24, 1997 (File No. 333-28765))

(k) Group Deferred Combination Variable and Fixed Annuity Enrollment
Form (incorporated by reference from Exhibit 4(f) to Amendment
No. 1 of a Registration Statement for Golden American filed with
the SEC on September 24, 1997 (File No. 333-28765))

(l) Individual Deferred Variable Annuity Application Group Deferred
Combination Variable and Fixed Annuity Enrollment Form
(incorporated by reference from Exhibit 4(g) to Amendment No. 1
to a Registration Statement for Golden American filed with the
SEC on September 24, 1997 (File No. 333-28765))

(m) Individual Deferred Variable and Fixed Annuity Contract
(incorporated by reference from Exhibit 4(a) to Amendment No. 2
to a Registration Statement for Golden American filed with the
SEC on February 12, 1998 (File No. 333-28681))

INDEX

Exhibits to Annual Report on Form 10-K
Year ended December 31, 1997
GOLDEN AMERICAN LIFE INSURANCE COMPANY

(n) Group Deferred Variable and Fixed Annuity Contract Individual
Deferred Variable and Fixed Annuity Contract (incorporated by
reference from Exhibit 4(b) to Amendment No. 2 to a
Registration Statement for Golden American filed with the SEC
on February 12, 1998 (File No. 333-28681))

(o) Individual Deferred Variable Annuity Contract (incorporated
by reference from Exhibit 4(c) to Amendment No. 2 to a
Registration Statement for Golden American filed with the SEC
on February 12, 1998 (File No. 333-28681))

(p) Individual Deferred Combination Variable and Fixed Annuity
Application (incorporated by reference from Exhibit 4(e) to
Amendment No. 1 to a Registration Statement for Golden American
filed with the SEC on September 24, 1997 (File No. 333-28681))

(q) Group Deferred Combination Variable and Fixed Annuity Enrollment
Form (incorporated by reference from Exhibit 4(f) to Amendment
No. 1 to a Registration Statement for Golden American filed with
the SEC on September 24, 1997 (File No. 333-28681))

(r) Individual Deferred Variable Annuity Application Group Deferred
Combination Variable and Fixed Annuity Enrollment Form
(incorporated by reference from Exhibit 4(g) to Amendment No. 1
to a Registration Statement for Golden American filed with the
SEC on September 24, 1997 (File No. 333-28681))

(s) Individual Deferred Variable and Fixed Annuity Contract
(incorporated by reference from Exhibit 4(a) to Amendment No. 2
to a Registration Statement for Golden American filed with the
SEC on February 12, 1998 (File No. 333-28743))

(t) Group Deferred Variable and Fixed Annuity Contract Individual
Deferred Variable and Fixed Annuity Contract (incorporated by
reference from Exhibit 4(b) to Amendment No. 2 to a
Registration Statement for Golden American filed with the SEC
on February 12, 1998 (File No. 333-28743))

(u) Individual Deferred Variable Annuity Contract (incorporated
by reference from Exhibit 4(c) to Amendment No. 2 to a
Registration Statement for Golden American filed with the SEC
on February 12, 1998 (File No. 333-28743))

(v) Individual Deferred Combination Variable and Fixed Annuity
Application (incorporated by reference from Exhibit 4(e) to
Amendment No. 1 to a Registration Statement for Golden American
filed with the SEC on September 24, 1997 (File No. 333-28743))

(w) Group Deferred Combination Variable and Fixed Annuity Enrollment
Form (incorporated by reference from Exhibit 4(f) to Amendment
No. 1 to a Registration Statement for Golden filed with the
SEC on September 24, 1997 (File No. 333-28743))

INDEX

Exhibits to Annual Report on Form 10-K
Year ended December 31, 1997
GOLDEN AMERICAN LIFE INSURANCE COMPANY

(x) Individual Deferred Variable Annuity Application Group Deferred
Combination Variable and Fixed Annuity Enrollment Form
(incorporated by reference from Exhibit 4(g) to Amendment No. 1
to a Registration Statement for Golden American filed with the
SEC on September 24, 1997 (File No. 333-28743))

27 FINANCIAL DATA SCHEDULE (ELECTRONIC FILING ONLY)