As filed with the Securities and Exchange Commission on May 1, 2003

File No. 333-88302

File No. 811-21095

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ( )
Pre-effective Amendment No. ( )
Post-effective Amendment No. 1 (X)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 ( )
Pre-effective Amendment No. _ ( )
Post-effective Amendment No. _3 (X)
(Check appropriate box or boxes)

ANNUITY INVESTORS^® VARIABLE ACCOUNT C
(Exact Name of Registrant)
ANNUITY INVESTORS LIFE INSURANCE COMPANY®
(Name of Depositor)
P.O. Box 5423
Cincinnati, Ohio 45201-5423
(Address of Depositor's Principal Executive Offices) (Zip Code)

Depositor's Telephone Number, including Area Code:
1-800-789-6771

Mark F. Muething, Esq.
Executive Vice President, Secretary and General Counsel
Annuity Investors Life Insurance Company
P.O. Box 5423
Cincinnati, Ohio 45201-5423
(Name and Address of Agent for Service)

Copy to:

John P. Gruber, Esq.
Vice President
Annuity Investors Life Insurance Company
P.O. Box 5423
Cincinnati, Ohio 45201-5423

It is proposed that this filing will become effective:

Immediately upon filing pursuant to Rule 485(b)

On   May 1, 2003       pursuant to Rule 485(b)

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

On _____ pursuant to Rule 485(a)(1)

75 days after filing pursuant to Rule 485(a)(2)

On _____ pursuant to Rule 485(a)(2)

CROSS REFERENCE SHEET

Pursuant to Rule 495(a)

(333-88302)

Showing Location in Part A (Prospectus),

Part B (Statement of Additional Information) and Part C (Other Information)

of Registration Statement Information Required by Form N-4

PART A

	Item of Form N-4			Prospectus Caption
1.	Cover Page			Cover Page
2.	Definitions			Definitions; Glossary of Financial Terms
3.	Synopsis			Overview
4.	Condensed Financial Information			Condensed Financial Information
	(a)		Accumulation Unit Values	Glossary of Financial Terms
	(b)		Performance Data	Performance Information
	(c)		Financial Statements	Financial Statements
5.	General Description of Registrant, Depositor and Portfolio Companies
	(a)		Depositor	Annuity Investors Life Insurance Company®
	(b)		Registrant	The Separate Account
	(c)		Portfolio Companies	The Portfolios
	(d)		Portfolio Prospectuses	The Portfolios
	(e)		Voting Rights	Voting Rights
6.	Deductions and Expenses
	(a)		General	Charges and Deductions
	(b)		Sales Load %	Contingent Deferred Sales Charge
	(c)		Special Purchase Plan	Contingent Deferred Sales Charge
	(d)		Commissions	Great American AdvisorsSM, Inc.
	(e)		Portfolio Expenses	Fee Table
	(f)		Operating Expenses	Fee Table
7.	Contracts
	(a)		Persons with Rights	Persons with Rights Under a Contract; Voting Rights
	(b)(i)		Allocation of Premium Payments	Purchase Payments
	(ii)		Transfers	Transfers
	(iii)		Exchanges	Additions, Deletions or Substitutions
	(c)		Changes	Additions, Deletions, or Substitutions
	(d)		Inquiries	How Do I Contact the Company?
8.	Annuity Period			Benefit Payment Period
9.	Death Benefit			Death Benefit
10.	Purchases and Contract Values
	(a)	Purchases		Purchase Payments; Investment Options-Allocations; Account Value; Glossary of Financial Terms
	(b)	Valuation		Account Value; Definitions; Glossary of Financial Terms; Charges and Deductions
	(c)	Daily Calculation		Account Value; Accumulation Units; Definitions; Glossary of Financial Terms
	(d)	Underwriter		Great American AdvisorsSM, Inc.
11.	Redemptions
	(a)		By Owner	Surrenders
	(b)		By Annuitant	Not Applicable
	(c)		Texas ORP	Texas Optional Retirement Program
	(d)		Check Delay	Surrenders
	(e)		Involuntary Redemptions	Termination
	(f)		Free Look	Right to Cancel
12.	Taxes			Federal Tax Matters
13.	Legal Proceedings			Legal Proceedings
14.	Table of Contents for the Statement of Additional Information			Statement of Additional Information

PART B
	Item of Form N-4			Statement of Additional Information Caption
15.	Cover Page			Cover Page
16.	Table of Contents			Table of Contents
17.		General Information and History			General Information and History
18.	Services
	(a)		Fees and Expenses of Registrant	(Prospectus) Fee Table
	(b)		Management Contracts	Not Applicable
	(c)		Custodian	Not Applicable
	(d)		Independent Auditors	Experts
	(e)		Assets of Registrant	Not Applicable
	(f)		Affiliated Person	Not Applicable
	(g)		Principal Underwriter	(Prospectus) Great American AdvisorsSM, Inc.
19.	(a)		Purchase of Securities Being Offered	(Prospectus) Great American AdvisorsSM, Inc.
	(b)		Offering Sales Load	(Prospectus) Contingent Deferred Sales Charge
20.	Underwriters			(Prospectus) Great American AdvisorsSM, Inc.
21.	Calculation of Performance Data
	(a)		Money Market Funded Subaccounts	Money Market Subaccount Standardized Yield Calculation
	(b)		Other Subaccounts	Average Annual Total Return Calculation; Cumulative Total Return Calculation; Standardized Average Annual Total Return Data; Non-Standardized Average Annual Total Return Data; Other Performance Measures
22.	Annuity Payments			(Prospectus) Fixed Dollar Benefit; Variable Dollar Benefit; (SAI) Benefit Units-Transfer Formulas
23.	Financial Statements			Financial Statements

PART C
	Item of Form N-4				Part C Caption
24.	Financial Statements and Exhibits				Financial Statements and Exhibits
	(a)			Financial Statements	Financial Statements
	(b)		Exhibits		Exhibits
25.	Directors and Officers of the Depositor				Directors and Officers of Annuity Investors Life Insurance Company®
26.		Persons Controlled By or Under Common Control With the Registrant				Persons Controlled By Or Under Common Control With the Depositor or Registrant
27.		Number of Owners				Not Applicable
28.		Indemnification				Indemnification
29.	Principal Underwriters				Principal Underwriter
30.	Location of Accounts and Records				Location of Accounts and Records
31.	Management Services				Management Services
32.	Undertakings				Undertakings
	Signature Page				Signature Page

ANNUITY INVESTORS LIFE INSURANCE COMPANY^®

ANNUITY INVESTORS^® VARIABLE ACCOUNT C

PROSPECTUS FOR INDIVIDUAL FLEXIBLE PREMIUM DEFERRED ANNUITIES

May 1, 2003

This prospectus describes individual flexible premium deferred annuity contracts (the "Contracts"). Annuity Investors Life Insurance Company^® (the "Company") is the issuer of the Contracts. The Contracts are available for tax-qualified and non-tax-qualified annuity purchases. All Contracts are designed to qualify for tax-deferred treatment during the Accumulation Period. The tax treatment of annuities is discussed in the Federal Tax Matters section of this prospectus.

The Contracts offer both variable and fixed investment options. The variable investment options under the Contracts are Subaccounts of Annuity Investors^® Variable Account C (the "Separate Account"). The Contracts currently offer 36 Subaccounts. Each Subaccount is invested in shares of a registered investment company or a portfolio thereof (each, a "Portfolio"). The Portfolios are listed below.

AIM Variable Insurance Funds	Oppenheimer Variable Account Funds
-AIM V.I. Capital Development Fund-Series II Shares	-Oppenheimer VA-Capital Appreciation Fund/VA-SS
-AIM V.I. Global Utilities Fund-Series II Shares	-Oppenheimer VA-Global Securities Fund/VA-SS
-AIM V.I. Government Securities Fund-Series II Shares	-Oppenheimer VA-Main Street Small Cap Fund/VA-SS
-AIM V.I. Mid Cap Core Equity Fund-Series II Shares	-Oppenheimer VA-Multiple Strategies Fund/VA-SS
The Dreyfus Socially Responsible Growth Fund, Inc.-Service Shares	PBHG Insurance Series Fund
	-PBHG Large Cap Growth Portfolio
	-PBHG Mid-Cap Value Portfolio
Dreyfus Stock Index Fund-Service Shares	-PBHG Select Value Portfolio
	-PBHG Technology & Communications Portfolio
Dreyfus Variable Investment Fund
-Dreyfus VIF Appreciation Portfolio-Service Shares	PIMCO Variable Insurance Trust
-Dreyfus VIF Money Market Portfolio	-PIMCO High Yield Portfolio-Administrative Class
	-PIMCO Real Return Portfolio-Administrative Class
INVESCO Variable Investment Funds, Inc.	-PIMCO Total Return Portfolio-Administrative Class
-INVESCO VIF-Core Equity Fund
-INVESCO VIF-Financial Services Fund	Rydex Variable Trust
-INVESCO VIF-Health Sciences Fund	-Rydex VT Sector Rotation Fund
-INVESCO VIF-Small Company Growth Fund
	Strong Opportunity Fund II, Inc.-Advisor Class
Janus Aspen Series
-Janus Aspen Series Balanced Portfolio Service Shares	Strong Variable Insurance Funds, Inc.
-Janus Aspen Series Growth Portfolio Service Shares	-Strong VIF-Mid Cap Growth Fund II
-Janus Aspen Series Mid Cap Growth Portfolio Service Shares
-Janus Aspen Series Worldwide Growth Portfolio Service Shares	Van Kampen-The Universal Institutional Funds, Inc.
	-Van Kampen UIF Core Plus Fixed Income Portfolio-Class I
Neuberger Berman Advisers Management Trust	-Van Kampen UIF U.S. Mid Cap Core Portfolio-Class I
-Neuberger Berman AMT-Fasciano Portfolio (Class S)	-Van Kampen UIF U.S. Real Estate Portfolio-Class I
-Neuberger Berman AMT-Guardian Portfolio (Class S)	-Van Kampen UIF Value Portfolio-Class I

This prospectus includes information you should know before investing in the Contracts. This prospectus is not complete without the current prospectuses for the Portfolios. Please keep this prospectus and the Portfolio prospectuses for future reference.

A Statement of Additional Information ("SAI"), dated May 1, 2003 contains more information about the Separate Account and the Contracts. The Company filed the SAI with the Securities and Exchange Commission ("SEC"). It is part of this prospectus. For a free copy, complete and return the form on the last page of this prospectus, or call the Company at 1-800-789-6771. You may also access the SAI (as well as all other documents filed with the SEC with respect to the Contracts, the Separate Account or the Company) at the SEC's web site: www.sec.gov. The registration number is 333-88302. The table of contents for the SAI is printed on the last page of this prospectus.

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

• The Contracts are Not FDIC or NCUSIF Insured

The Contracts are Obligations of the Company and Not of the Bank or Credit Union

The Bank or Credit Union Does Not Guarantee the Company's Obligations Under the Contracts

The Contracts Involve Investment Risk and May Lose Value

TABLE OF CONTENTS

DEFINITIONS *

OVERVIEW *

What is the Separate Account? *

What Are the Contracts? *

How Do I Purchase or Cancel a Contract? *

Will Any Penalties or Charges Apply If I Surrender a Contract? *

What Other Charges and Deductions Apply to the Contract? *

How Do I Contact the Company? *

EXPENSE TABLES *

Contract Owner Transaction Expenses *

Annual Contract Maintenance Fee *

Separate Account Annual Expenses *

Total Annual Portfolio Operating Expenses *

Portfolio Annual Expenses (Before Expense Reimbursement) *

Examples *

CONDENSED FINANCIAL INFORMATION *

Financial Statements *

Performance Information *

Yield Data *

Total Return Data *

Other Performance Measures *

PORTFOLIOS *

AIM V.I. Funds *

Dreyfus Portfolios *

INVESCO Variable Investment Funds, Inc. *

Janus Aspen Series *

Neuberger Berman Advisers Management Trust *

Oppenheimer Variable Account Funds *

PBHG Insurance Series Fund *

PIMCO Variable Insurance Trust *

Rydex Variable Trust Funds *

Strong Portfolios *

Van Kampen-The Universal Institutional Funds, Inc. *

Additions, Deletions, or Substitutions *

Voting Rights *

ANNUITY INVESTORS LIFE INSURANCE COMPANY *

THE SEPARATE ACCOUNT *

GREAT AMERICAN ADVISORS, INC. *

CHARGES AND DEDUCTIONS *

Charges and Deductions By the Company *

Contingent Deferred Sales Charge ("CDSC") *

Contract Maintenance Fee *

Transfer Fee *

Administration Charge *

Mortality and Expense Risk Charge *

Premium Taxes *

Discretionary Waivers of Charges *

Expenses of the Portfolios *

THE CONTRACTS *

Right to Cancel *

Persons With Rights Under a Contract *

ACCUMULATION PERIOD *

Account Statements *

Account Value *

Accumulation Units *

Stepped-Up Account Value for Successor Owner *

Purchase Payments *

Investment Options--Allocations *

Fixed Account Options *

Renewal of Fixed Account Guaranteed Interest Rate Options *

Transfers *

Automatic Transfer Programs *

Termination of Automatic Transfer Programs *

Telephone, Facsimile or Internet Transfers *

Other Restrictions on Transfers *

Surrenders *

Free Withdrawal Privilege *

Long-Term Care Waiver Rider *

Systematic Withdrawal *

Contract Loans *

Termination *

BENEFIT PAYMENT PERIOD *

Annuity Benefit *

Death Benefit *

Death Benefit Amount *

Step Up in Value for Successor Owner *

Payment of Benefits *

Settlement Options *

Calculation of Fixed Dollar Benefit Payments *

Calculation of Variable Dollar Benefit Payments *

FEDERAL TAX MATTERS *

Tax Deferral on Annuities *

Tax-Qualified Retirement Plans *

Individual Retirement Annuities *

Roth IRAs *

Tax-Sheltered Annuities *

Texas Optional Retirement Program *

Summary of Income Tax Rules *

GLOSSARY OF FINANCIAL TERMS *

THE REGISTRATION STATEMENT *

OTHER INFORMATION AND NOTICES *

Householding - Revocation of Consent *

Electronic Delivery of Required Documents *

Legal Proceedings *

STATEMENT OF ADDITIONAL INFORMATION *

DEFINITIONS

The capitalized terms defined on this page will have the meanings given to them when used in this prospectus. Other terms which may have a specific meaning under the Contracts, but which are not defined on this page, will be explained as they are used in this prospectus.

Account Value

The value of a Contract during the Accumulation Period. It is equal to the sum of the value of the Owner's interest in the Subaccounts and the Owner's interest in the Fixed Account options.

Accumulation Period

The period during which purchase payments and accumulated earnings are invested according to the investment options elected. The Accumulation Period ends when a Contract is annuitized or surrendered in full, or on the Death Benefit Valuation Date.

Accumulation Unit

A share of a Subaccount that an Owner purchases during the Accumulation Period.

Accumulation Unit Value

The value of an Accumulation Unit at the end of a Valuation Period. See the Glossary of Financial Terms of this prospectus for an explanation of how Accumulation Unit Values are calculated.

Benefit Payment Period

The period during which either annuity benefit or death benefit payments are paid under a settlement option. The Benefit Payment Period begins on the first day of the first payment interval in which a benefit payment will be paid.

Benefit Unit

A share of a Subaccount that is used to determine the amount of each variable dollar benefit payment after the first variable dollar benefit payment during the Benefit Payment Period.

Benefit Unit Value

The value of a Benefit Unit at the end of a Valuation Period. See the Glossary of Financial Terms of this prospectus for an explanation of how Benefit Unit Values are calculated.

Death Benefit Valuation Date

The date the death benefit is valued. It is the date that the Company receives both proof of the death of the Owner and instructions as to how the death benefit will be paid. If instructions are not received within one year of the date of death, the Death Benefit Valuation Date will be one year after the date of death. The Death Benefit Valuation Date may never be later than five years after the date of death.

Net Asset Value

The price computed by or for each Portfolio, no less frequently than each Valuation Period, at which the Portfolio's shares or units are redeemed in accordance with the rules of the Securities and Exchange Commission.

Net Investment Factor

The factor that represents the percentage change in the Accumulation Unit Values and Benefit Unit Values from one Valuation Period to the next. See the Glossary of Financial Terms of this prospectus for an explanation of how the Net Investment Factor is calculated.

Valuation Date

A day on which Accumulation Unit Values and Benefit Unit Values can be calculated. Each day that the New York Stock Exchange is open for business is a Valuation Date.

Valuation Period

The period starting at the close of regular trading on the New York Stock Exchange on any Valuation Date and ending at the close of trading on the next succeeding Valuation Date.

OVERVIEW

What is the Separate Account?

The Separate Account is a unit investment trust registered with the Securities and Exchange Commission under the Investment Company Act of 1940. The Separate Account is divided into Subaccounts. Each Subaccount is invested in one of the Portfolios listed on page 1 of this prospectus. If you choose a variable investment option, you are investing in the Subaccounts, not directly in the Portfolios.

What Are the Contracts?

The Contracts are individual deferred variable annuities, which are insurance products. The Contracts are sold with a fee structure that is described in the Expense Tables of this prospectus. The Contracts are available in both tax-qualified and non-tax-qualified forms, both of which are designed to qualify for tax-deferred investment status. See the Federal Tax Matters section of this prospectus for more information about tax qualifications and taxation of annuities in general. During the Accumulation Period, the amounts you contribute can be allocated among any of the variable investment options currently offered and two Fixed Account options. The variable investment options are the Subaccounts of the Separate Account, each of which is invested in a Portfolio. The Owner bears the risk of any investment gain or loss on amounts allocated to the Subaccounts. The Fixed Account options earn a fixed rate of interest declared by the Company, which will be no less than 3% per year. The Company guarantees amounts invested in the Fixed Account options and the earnings thereon so long as those amounts remain in the Fixed Account.

During the Benefit Payment Period, payments can be allocated between variable dollar benefit and fixed dollar benefit options. If a variable dollar benefit is selected, Benefit Units can be allocated to any of the Subaccounts that are then available.

How Do I Purchase or Cancel a Contract?

The requirements to purchase a Contract are explained in The Contracts section of this prospectus. You may purchase a Contract only through a licensed securities representative. You may cancel a Contract within ten days after you receive it (the right to cancel may be longer in some states). In many states, you will bear the risk of investment gain or loss on any amounts allocated to the Subaccounts prior to cancellation. The right to cancel is described in the Right to Cancel section of this prospectus.

Will Any Penalties or Charges Apply If I Surrender a Contract?

A contingent deferred sales charge ("CDSC") may apply to amounts surrendered depending on the timing and amount of the surrender. The maximum CDSC is 7% for each purchase payment. The CDSC percentage decreases to 0% after three years from the date of receipt of each purchase payment. Surrender procedures and the CDSC are described in the Surrenders section of this prospectus. A penalty tax may also be imposed at the time of a surrender depending on your age and other circumstances of the surrender. Tax consequences of a surrender are described in the Federal Tax Matters section of this prospectus. The right to surrender may be restricted under certain tax-qualified retirement plans.

What Other Charges and Deductions Apply to the Contract?

Other than the CDSC, the Company will charge the fees and charges listed below unless the Company waives the fee or charge as discussed in the Charges and Deductions section of this prospectus:

a transfer fee for certain transfers among investment options;

an annual contract maintenance fee;

a mortality and expense risk charge, which is an expense of the Separate Account and charged against all assets in the Subaccounts (this charge may never be waived);

an administration charge, which is an expense of the Separate Account and charged against all assets in the Subaccounts; and

premium taxes, if any (where taxes apply, they may never be waived).

In addition to charges and deductions under the Contracts, the Portfolios incur expenses that are passed through to Owners. Portfolio expenses for the fiscal year ending December 31, 2001 are included in the Expense Tables of this prospectus and are described in the prospectuses and statements of additional information for the Portfolios.

How Do I Contact the Company?

Any questions or inquiries should be directed to the Company's Administrative Office, P.O. Box 5423, Cincinnati, Ohio 45201-5423, 1-800-789-6771. Please include the Contract number and the Owner's name. You may also contact us through our web site, www.annuityinvestors.com.

EXPENSE TABLES

These tables describe the fees and expenses you will pay when you buy, hold or withdraw amounts from the Contract.

The first table describes the fees and expenses that you will pay at the time you buy the Contract, surrender the Contract, or transfer cash value between investment options. Premium taxes may also be deducted.

Contract Owner Transaction Expenses

Maximum Contingent Deferred Sales Charge (as a percentage of purchase payments only)	7%
Maximum Transfer Fee	$30
Current Transfer Fee (applies to transfers in excess of 12 in any contract year)	$25

The next table describes the fees and expenses that you will pay periodically during the time that you own the Contract, not including Portfolio fees and expenses.

Annual Contract Maintenance Fee $30

Separate Account Annual Expenses

(as a percentage of the average value of the Owner's interest in the Subaccounts)

Mortality and Expense Risk Charge	1.50%
Administration Charge	0.15%
Total Separate Account Annual Expenses	1.65%

The next item shows the minimum and maximum total operating expenses charged by the Portfolios that you may pay periodically during the time that you own the Contract. More detail concerning each Portfolio's fees and expenses is contained in the prospectus for each Portfolio.

Total Annual Portfolio Operating Expenses

(expenses that are deducted from Portfolio assets, including management fees, distribution and service (12b-1) fees, and other expenses)

Minimum: 0.51% Maximum: 1.90%

Portfolio Annual Expenses (Before Expense Reimbursement)

Portfolio	Management Fees	12b-1 Fees	Other Expenses	Total Annual Expenses1
AIM V.I. Capital Development Fund-Series II	0.75	0.25	0.39	1.39
AIM V.I. Global Utilities Fund-Series II 2,3	0.65	0.25	0.57	1.47
AIM V.I. Government Securities Fund-Series II	0.50	0.25	0.31	1.06
AIM V.I. Mid Cap Core Equity Fund-Series II 3	0.73	0.25	0.57	1.55
The Dreyfus Socially Responsible Growth Fund, Inc.-Service Shares	0.75	0.25	0.03	1.03
Dreyfus Stock Index Fund-Service Shares	0.25	0.25	0.01	0.51
Dreyfus VIF Appreciation Portfolio-Service Shares	0.75	0.25	0.02	1.02
Dreyfus VIF Money Market Portfolio	0.50	-	0.06	0.56
INVESCO VIF-Core Equity Fund	0.75	-	0.37	1.12
INVESCO VIF-Financial Services Fund	0.75	-	0.34	1.09
INVESCO VIF-Health Sciences Fund	0.75	-	0.32	1.07
INVESCO VIF-Small Company Growth Fund 4	0.75	-	0.56	1.31
Janus Aspen Series Balanced Portfolio Service Shares 5	0.65	0.25	0.02	0.92
Janus Aspen Series Growth Portfolio Service Shares5	0.65	0.25	0.02	0.92
Janus Aspen Series Mid Cap Growth Portfolio Service Shares 5,6	0.65	0.25	0.02	0.92
Janus Aspen Series Worldwide Growth Portfolio Service Shares 5	0.65	0.25	0.05	0.95
Neuberger Berman AMT Fasciano Portfolio (Class S) 7,8	1.15	0.25	0.50	1.90
Neuberger Berman AMT Guardian Portfolio (Class S) 8	0.85	0.25	0.15	1.25
Oppenheimer Capital Appreciation Fund/VA-Service Class	0.65	0.15	0.01	0.81
Oppenheimer Global Securities Fund-VA-Service Class	0.65	0.23	0.02	0.90
Oppenheimer VA-Main Street Small Cap Fund/VA-Service Class 9	0.75	0.24	0.22	1.21
Oppenheimer VA-Multiple Strategies Fund/VA-Service Class	0.72	0.25	0.02	0.99
PBHG Large Cap Growth Portfolio	0.75	-	0.30	1.05
PBHG Mid-Cap Portfolio 10	0.85	-	0.62	1.47
PBHG Select Value Portfolio	0.65	-	0.22	0.87
PBHG Technology & Communications Portfolio	0.85	-	0.23	1.08
PIMCO VIT-High Yield Portfolio-Administrative Class 11	0.25	0.15	0.36	0.76
PIMCO VIT-Real Return Portfolio-Administrative Class	0.25	0.15	0.26	0.66
PIMCO VIT-Total Return Portfolio-Administrative Class 11	0.25	0.15	0.26	0.66
Rydex VT Sector Rotation Fund	0.90	-	0.79	1.69
Strong Opportunity Fund II (Advisor Class) 12	0.75	0.25	0.55	1.55
Strong VIF Mid Cap Growth Fund II 13	0.75	-	0.72	1.47
Van Kampen UIF Core Plus Fixed Income Portfolio Class I 14	0.40	-	0.33	0.73
Van Kampen UIF U.S. Mid Cap Core Portfolio-Class I 14	0.75	-	0.37	1.12
Van Kampen UIF U.S. Real Estate Portfolio Class I 14	0.80	-	0.32	1.12
Van Kampen UIF Value Portfolio Class I 14	0.55	-	0.41	0.96

1 Data for each Portfolio are for its fiscal year ended December 31, 2002. Actual expenses in future years may be higher or lower. Portfolios may have agreements with their advisors to cap or waive fees, and/or to reduce or waive expenses or to reimburse expenses. The specific terms of such waivers, reductions, or reimbursements are discussed in the Portfolio prospectuses. The net fees and expenses for Portfolios with such agreements are as follows:

Portfolio	Management Fees		12b-1 Fees			Other Expenses	Total Annual Expenses
AIM V.I. Global Utilities Fund-Series II 2,3		0.65		0.23	0.57		1.45
AIM V.I. Mid Cap Core Equity Fund-Series II 3		0.73		0.15	0.57		1.45
INVESCO VIF-Small Company Growth Fund 4		0.75		-	0.50		1.25
Neuberger Berman AMT Fasciano Portfolio (Class S) 7		1.15		0.25	0.00		1.40
Oppenheimer VA-Main Street Small Cap Fund/VA-Service Class 9		0.75		0.24	0.20		1.19
PBHG Mid-Cap Portfolio 10		0.58		-	0.62		1.20
PIMCO High Yield Portfolio-Administrative Class 11		0.25		0.15	0.35		0.75
PIMCO Total Return Portfolio-Administrative Class 11		0.25		0.15	0.25		0.65
Strong Opportunity Fund II (Advisor Class) 12		0.75		0.54	0.25		1.54
Strong VIF-Mid Cap Growth Fund II 13		0.75		-	0.42		1.17
Van Kampen UIF Core Plus Fixed Income Portfolio 14		0.37		-	0.33		0.70
Van Kampen UIF U.S. Mid Cap Core Portfolio-Class I 14		0.68		-	0.37		1.05
Van Kampen UIF U.S. Real Estate Portfolio Class I 14		0.78		-	0.32		1.10
Van Kampen UIF Value Portfolio Class I 14		0.44		-	0.41		0.85

2 Expenses have been restated to reflect current agreement.

3 The Fund's advisor has contractually agreed to waive advisory fees or reimburse expenses of Series II shares to the extent necessary to limit Total Annual Expenses (excluding Rule 12b-1 Plan fees, if any, interest, taxes, dividend expense on short sales, extraordinary items and increases in expenses due to expense offset arrangements, if any) to 1.30%. Further, the Fund's distributor has agreed to reimburse Rule 12b-1 Plan fees to the extent necessary to limit Series II Total Annual Expenses to 1.45%.

4 The Fund's net Other Expenses and Total Annual Expenses were lower than the actual expenses shown because their custodian fees were reduced under an expense offset arrangement. Certain expenses of the Fund were voluntarily absorbed by INVESCO pursuant to a voluntary expense limitation commitment between the Fund and INVESCO. This commitment may be changed at any time following consultation with the Board of Directors. Effective June 1, 2002, INVESCO became entitled to reimbursement from the Fund for fees and expenses absorbed pursuant to this commitment, if such reimbursements do not cause the Fund to exceed expense limitations and the reimbursement is made within three years after INVESCO incurred the expense.

5 Long term shareholders may pay more than the economic equivalent of the maximum front-end sales charges permitted by the National Association of Securities Dealers, Inc. Waivers, if applicable, are first applied against the management fee and then against other expenses, and will continue until at least the next annual renewal of the advisory agreements. All expenses are shown without the effect of any expense offset arrangements.

6 The Mid-Cap Growth Portfolio was formerly known as the Aggressive Growth Portfolio.

7 Neuberger Berman Management, Inc. ("NBMI") has undertaken through December 31, 2006 to reimburse certain operating expenses, including the compensation of NBMI, and excluding taxes, interest, extraordinary expenses, brokerage commissions and transaction costs, that exceed, in the aggregate, 1.40% of the average daily net asset value of the Fasciano Portfolio (Class S). The expense reimbursement arrangements for the Portfolio is contractual for three years and any excess expenses can be repaid to NBMI within three years of the year incurred, provided such recoupment would not cause a Portfolio to exceed its expense limitation.

8 The Fasciano Portfolio commenced operations on July 12, 2002. Thus, the expense figures for this Portfolio is estimated based on an asset size of $25 million. Class S shares of the Guardian Portfolio commenced operations on August 2, 2002; therefore, the expense figures for this class are estimated based on the existing Class I shares of the Guardian Portfolio and an asset size of $25 million on the Class S shares.

9 Expense waivers are voluntary and may be terminated at the manager's discretion.

10 For the fiscal year ended 12/31/02, Pilgrim Baxter & Associates, Ltd. waived a portion of its fee for Mid-Cap Portfolio. Absent this waiver, the management fee would have been 0.85%. For the fiscal year ending 12/31/03, Pilgrim Baxter has contractually agreed to waive that portion, if any, of the annual management fees payable by the Portfolio and to pay certain expenses of the Portfolio to the extent necessary to ensure that the total fund operating expenses do not exceed 1.20%. In any fiscal year in which the Portfolio's total assets are greater than $75 million and its total annual fund operating expenses are less than 1.20%, the Portfolio's Board of Trustees may elect to reimburse Pilgrim Baxter for any fees it waived or expenses it reimbursed on the Portfolio's behalf during the previous two fiscal years. To date, the Board has made no reimbursement election.

11 PIMCO has contractually agreed, for the Portfolios' current fiscal year, to reduce Total Annual Expenses for the Administrative Class shares to the extent they would exceed, due to the payment of organizational expenses and Trustees' fees, 0.75% of average daily net assets for the High Yield Portfolio, and 0.65% of average daily net assets for the Total Return Portfolio. Under the Expense Limitation Agreement, PIMCO may recoup these waivers and reimbursements in future periods, not exceed three years, provided total expenses, include such recoupment, do not exceed the annual expense limit.

12 The Fund has adopted a Rule 12b-1 distribution plan for the Advisor Class shares. Under the distribution plan, the Fund may make monthly payments to the Fund's distributor at the annual rate of 1.00% of the average daily net assets of the Fund attributable to its Advisor Class shares. However, under the Distribution Agreement for the Advisor Class shares, payments to the Fund's distributor are currently limited to payment at an annual rate equal to 0.25% of average daily net assets attributable to Advisor Class shares. Shareholder approval is required to increase the distribution fee from 0.25% to 1.00%. The 12b-1 payments may be made for distribution-rated services and other services that are primarily intended to result in the sale of Advisor Class shares of the Fund. Because Rule 12b-1 fees are ongoing, over time they will increase the cost of an investment in the Advisor Class shares of the Fund and may cost more than other types of sales charges.

13 As compensation for its advisory services, the Fund pays Strong a monthly management fee at an annual rate of 0.75% of the Fund's average daily net asset value. Strong has voluntarily agreed to waive the management fee and/or absorb the Fund's Other Expenses so that the total annual operating expenses are capped at 1.20%. Strong has no current intention to, but may in the future, discontinue or modify any fee waivers or expense absorptions after any appropriate notice to the Fund's shareholders. A cap on total annual operating expenses lowers the Fund's overall expense ratio and increases the Fund's return to investors.

14 The management fee for these Portfolios has been reduced to reflect the voluntary waiver of all or a portion of the management fee and/or reimbursement by the Portfolios' adviser to the extent total annual operating expenses exceed the following percentages: Core Plus Fixed Income Portfolio - 0.70%; Mid-Cap Value Portfolio - 1.05%; U. S. Real Estate Portfolio - 1.10%; Value Portfolio - 0.85%. The Adviser may terminate this voluntary waiver at any time at its sole discretion.

Examples

These examples are intended to help you compare the cost of investing in the Contract with the cost of investing in other variable annuity contracts. These costs include the Contract Owner transaction expenses (described in the first table), the annual contract maintenance fee and the Separate Account expenses (described in the second table), and Portfolio fees and expenses (described in the third table).

The examples assume you invest $10,000 in the Contract for the time periods indicated, and that your investment has a 5% return each year. The examples also assume either the maximum or the minimum fees and expenses of any of the Portfolios. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

1. If you surrender your Contract at the end of the applicable time period:

	1 year	3 years
Maximum	1,078	1,606
Minimum	938	1,169

(2) If you annuitize your Contract at the end of the applicable time period:

	1 year*	3 years
Maximum	N/A	1,206
Minimum	N/A	769

*Annuitization is not permitted under the Contracts until after the second Contract Year.

(3) If you do not surrender your Contract:

	1 year	3 years
Maximum	378	1,206
Minimum	238	769

CONDENSED FINANCIAL INFORMATION

Period from August 1, 2002, effective date, to December 31, 2002

Standard Accumulation Unit Value	Standard Accumulation Units Outstanding	Year
AIM V.I. Capital Development Fund-Series II Shares
9.295915	4.620	12/31/02
AIM V.I. Government Securities Fund-Series II Shares
10.338868	4.490	12/31/02
AIM V.I. Global Utilities Fund-Series II Shares
9.941737	4.600	12/31/02
AIM V.I. Mid Cap Core Equity Fund-Series II Shares
9.889956	4.540	12/31/02
The Dreyfus Socially Responsible Growth Fund, Inc.-Service Shares
9.380402	307.160	12/31/02
Dreyfus Stock Index Fund-Service Shares
9.636045	800.395	12/31/02
Dreyfus VIF Appreciation Portfolio-Service Shares
9.503473	4.632	12/31/02
Dreyfus VIF Money Market Portfolio
0.998339	45.000	12/31/02
INVESCO VIF-Core Equity Fund
9.598851	4.633	12/31/02
INVESCO VIF-Financial Services Fund
9.508153	4.602	12/31/02
INVESCO VIF-Health Sciences Fund
9.340507	4.582	12/31/02
INVESCO VIF-Small Company Growth Fund
9.844124	4.600	12/31/02
Janus Aspen Series Balanced Portfolio Service Shares
9.881671	1,718.883	12/31/02
Janus Aspen Series Growth Portfolio Service Shares
9.485980	4.620	12/31/02
Janus Aspen Series Mid Cap Growth Portfolio (formerly Aggressive Growth) Service Shares
9.689589	4.600	12/31/02
Janus Aspen Series Worldwide Growth Portfolio Service Shares
9.308784	1,604.064	12/31/02
Neuberger Berman AMT Fasciano Portfolio (Class S)
9.861928	4.510	12/31/02
Neuberger Berman AMT Guardian Portfolio (Class S)
9.453942	4.500	12/31/02
Oppenheimer Capital Appreciation Fund/VA-Service Class
9.813083	4.640	12/31/02
Oppenheimer Global Securities Fund/VA-Service Class
9.382674	4.623	12/31/02
Oppenheimer Main Street Small Cap Fund/VA-Service Class
9.511753	4.530	12/31/02
Oppenheimer Multiple Strategies Fund/VA-Service Class
10.163648	2,407.651	12/31/02
PBHG Large Cap Growth Portfolio
9.331418	4.611	12/31/02
PBHG Mid-Cap Portfolio
9.886203	1,306.865	12/31/02
PBHG Select Value Portfolio
9.360017	1,590.677	12/31/02
PBHG Technology & Communications Portfolio
8.762973	4.750	12/31/02
PIMCO High Yield Portfolio-Administrative Class
10.919931	4.440	12/31/02
PIMCO Real Return Portfolio-Administrative Class
10.669667	3,087.188	12/31/02
PIMCO Total Return Portfolio-Administrative Class
10.460778	3,626.722	12/31/02
Rydex VT Sector Rotation Fund
9.045614	4.550	12/31/02
Strong VIF-Mid Cap Growth Fund II
9.398615	4.660	12/31/02
Strong Opportunity Fund II (Advisor Class)
9.655245	4.620	12/31/02
Van Kampen UIF Core Plus Fixed Income Portfolio-Class I
10.284099	4.499	12/31/02
Van Kampen UIF U.S. Mid Cap Core Portfolio-Class I (formerly Mid Cap Value Portfolio)
9.610544	4.600	12/31/02
Van Kampen UIF U.S. Real Estate Portfolio-Class I
9.491939	4.591	12/31/02
Van Kampen UIF Value Portfolio-Class I
9.529623	4.580	12/31/02

Financial Statements

The financial statements and reports of independent auditors for the Company are included in the Statement of Additional Information.

Performance Information

From time to time, the Company may advertise yields and/or total returns for the Subaccounts. These figures are based on historical information and are not intended to indicate future performance. Performance data and a more detailed description of the methods used to determine yield and total return are included in the Statement of Additional Information.

Yield Data

The "yield" of the money market Subaccount refers to the annualized income generated by an investment in that Subaccount over a specified seven-day period. The "effective yield" of the money market Subaccount is the same as the "yield" except that it assumes reinvestment of the income earned in that Subaccount. The effective yield will be slightly higher than the yield because of the compounding effect of this assumed reinvestment. The Company does not advertise yields for any Subaccount other than the money market Subaccount.

Total Return Data

The Company may advertise two types of total return data: "average annual total return" and "cumulative total return." Average annual total return is presented in both standardized and non-standardized form. "Standardized" total return data reflects the deduction of all charges that apply to all Contracts of that type, except for premium taxes. The contingent deferred sales charge ("CDSC") reflected in standardized total return is the percentage CDSC that would apply at the end of the period presented assuming the purchase payment was received on the first day of the period presented. "Non-standardized" total return data does not reflect the deduction of CDSCs and contract maintenance fees. Cumulative total return data is currently presented only in non-standardized form.

Total return data that does not reflect the CDSC and other charges will be higher than the total return realized by an investor who incurs the charges. Total return data will be higher for a Contract without any optional features than for a Contract with such features. "Average annual total return" is either hypothetical or actual return data that reflects performance of a Subaccount for a one-year period or for an average of consecutive one-year periods.

If average annual total return data is hypothetical, it reflects performance for a period of time before the Subaccount commenced operations. When a Subaccount has been in operation for one, five and ten years, average annual total return will be presented for these periods, although other periods may be presented as well.

"Cumulative total return" is either hypothetical or actual return data that reflects the performance of a Subaccount from the beginning of the period presented to the end of the period presented. If cumulative total return data is hypothetical, it reflects performance for a period of time before the Subaccount commenced operations.

Other Performance Measures

The Company may include in reports and promotional literature rankings of the Subaccounts, the Separate Account or the Contracts, as published by any service, company, or person who ranks separate accounts or other investment products on overall performance or other criteria. Examples of companies that publish such rankings are Lipper Analytical Services, Inc., VARDS, IBC/Donoghue's Money Fund Report, Financial Planning Magazine, Money Magazine, Bank Rate Monitor, Standard & Poor's Indices, Dow Jones Industrial Average, and Morningstar.

The Company may also:

• compare the performance of a Subaccount with applicable indices and/or industry averages;
• present performance information that reflects the effects of tax-deferred compounding on Subaccount investment returns;
• compare investment return on a tax-deferred basis with currently taxable investment return;
• illustrate investment returns by graphs, charts, or otherwise

PORTFOLIOS

The Separate Account currently offers the Subaccounts described below. Each Subaccount is invested in a Portfolio. Each Portfolio has its own investment objectives and policies. The current Portfolio prospectuses, which accompany this prospectus, contain additional information concerning the investment objectives and policies of each Portfolio, the investment advisory services and administrative services of each Portfolio and the charges of each Portfolio. There is no assurance that the Portfolios will achieve their stated objectives. You should read the Portfolio prospectuses carefully before making any decision concerning the allocation of purchase payments to, or transfers among, the Subaccounts.

All dividends and capital gains distributed by the Portfolios are reinvested by the Separate Account and reflected in Accumulation Unit Values. Portfolio dividends and net capital gains are not distributed to Owners.

The Securities and Exchange Commission does not supervise the management or the investment practices and/or policies of any of the Portfolios. The Portfolios are available only through insurance company separate accounts and certain qualified retirement plans. Though a Portfolio may have a name and/or investment objectives which are similar to those of a publicly available mutual fund, and/or may be managed by the same investment advisor that manages a publicly available mutual fund, the performance of the Portfolio is entirely independent of the performance of any publicly available mutual fund. Neither the Company nor the Portfolios make any representations or assurances that the investment performance of any Portfolio will be the same or similar to the investment performance of any publicly available mutual fund.

Investment / Advisor	Investment Objective and Strategy
AIM V.I. Funds
AIM V.I. Capital Development Fund-Series II Advisor - AIM Advisors, Inc.	The fund's investment objective is long-term growth of capital. The fund seeks to meet its objective by investing primarily in securities, including common stocks, convertible securities and bonds, of small- and medium-sized companies. The fund may also invest up to 25% of its total assets in foreign securities.
AIM V.I. Government Securities Fund-Series II Advisor - AIM Advisors, Inc.	The fund's investment objective is to achieve a high level of current income consistent with reasonable concern for safety of principal. The fund seeks to meet its objective by investing, normally, at least 80% of its net assets, plus the amount of any borrowing for investment purposes, in debt securities issued, guaranteed or otherwise backed by the U.S. Government. The fund may invest in securities of all maturities issued or guaranteed by the U.S. Government or its agencies and instrumentalities. The fund may also invest up to 20% of its net assets in foreign securities.
AIM V.I. Global Utilities Fund-Series II Advisor - AIM Advisors, Inc.	The fund's investment objective is to achieve a high total return. The fund seeks to meet its objective by investing, normally, at least 80% of its net assets, plus the amount of any borrowing for investment purposes, in domestic and foreign public utility companies.
AIM V.I. Mid Cap Core Equity Fund-Series II Advisor - AIM Advisors, Inc.	The fund's investment objective is to achieve long-term growth of capital. The fund seeks to meet its objective by investing, normally, at least 80% ofits net assets, plus the amount of any borrowing for investment purposes, in equity securities. The fund also may invest up to 20% of its net assets in equity securities of companies in other market capitalization ranges or in investment-grade debt securities. The fund may also invest up to 25% of its total assets in foreign securities.
Dreyfus Portfolios
The Dreyfus Socially Responsible Growth Fund, Inc.-Service Shares Advisor - The Dreyfus Corporation Sub-Advisor - NCM Capital Management Group, Inc.	The Dreyfus Socially Responsible Growth Fund, Inc. seeks to provide capital growth with current income as a secondary goal. To pursue these goals, the fund under normal circumstances, invests at least 80% of its assets in the common stock of companies that in the opinion of the fund's management, meet traditional investment standards and conduct their business in a manner that contributes to the enhancement of the quality of life in America.
Dreyfus Stock Index Fund-Service Shares Advisor - The Dreyfus Corporation Index Manager - Mellon Equity Associates (an affiliate of Dreyfus)	The Dreyfus Stock Index Fund seeks to match the total return of the Standard & Poor's 500 Composite Stock Price Index. To pursue this goal, the Fund generally invests in all 500 stocks in the S&P 500® in proportion to their weighting in the index.
Dreyfus Variable Investment Fund Appreciation Portfolio-Service Shares Advisor - The Dreyfus Corporation Sub-Advisor - Fayez Sarofim & Co.	The Appreciation Portfolio seeks to provide long-term capital growth consistent with the preservation of capital. Current income is a secondary goal. It seeks to achieve its goals by investing in common stocks, focusing on "blue chip" companies with total market values of more than $5 billion at the time of purchase.
Dreyfus Variable Investment Fund Money Market Portfolio Advisor - The Dreyfus Corporation	The Money Market Portfolio seeks to provide as high a level of current income as is consistent with the preservation of capital and the maintenance of liquidity. This Portfolio invests in a diversified portfolio of high quality short-term debt securities. An investment in the Money Market Portfolio is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Portfolio seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Portfolio.
INVESCO Variable Investment Funds, Inc.
INVESCO VIF-Core Equity Fund Advisor - INVESCO Funds Group, Inc.	INVESCO VIF-Core Equity Fund seeks high total return through both growth and current income. The Portfolio normally invests at least 80% of its net assets in common and preferred stocks of companies with a history of paying regular dividends, it may also invest in companies that have not paid dividends. The Fund's equity investments are limited to stocks that can be traded easily in the United States. It may, however, invest in foreign securities in the form of American Depository Receipts (ADRs). The Fund will normally invest up to 5% of its assets in debt securities, generally U.S. government and corporate bonds that are rated investment grade at the time of purchase. The portfolio was formerly called the Industrial Income Portfolio and the Equity Income Fund.
INVESCO VIF-Financial Services Fund Advisor - INVESCO Funds Group, Inc.	INVESCO VIF-Financial Services seeks capital growth. The Portfolio invests normally at least 80% of its net assets in the equity securities and equity-related instruments of companies involved in the financial services sector. These companies include, but are not limited to, banks (regional and money-centers), insurance companies (life, property and casualty, and multi-line), investment and miscellaneous industries (asset managers, brokerage firms, and government-sponsored agencies) and suppliers to financial services companies. The investment advisor seeks companies, which it believes can grow their revenues and earnings in a variety of interest rate environments - although securities prices of financial services companies generally are interest rate sensitive.
INVESCO VIF-Health Sciences Fund Advisor - INVESCO Funds Group, Inc.	INVESCO VIF-Health Sciences seeks capital growth. The Portfolio normally invests at least 80% of its net assets in the equity securities and equity-related instruments of companies that develop, produce or distribute products or services related to health care. These companies include, but are not limited to, medical equipment or supplies, pharmaceuticals, biotechnology and healthcare providers and service companies. INVESCO focuses on the dominant players in fast-growing therapeutic areas or companies on the verge of exciting medical breakthroughs. INVESCO seeks companies with strong, commercially successful products as well as promising product pipelines. This strategy may lead us to invest in both well-established health care firms and faster-growing more dynamic entities. Well-established health care companies typically provide liquidity and earnings visibility for the Portfolio and represent core holdings in the Fund. The Fund also may invest in high growth, earlier state companies whose future profitability could be dependent upon increasing market shares from one or a few key products. Some companies often have limited operating histories and their potential profitability may be dependent on regulatory approval of their products, which increases the volatility of these companies' securities prices and could have an adverse impact on the companies' future growth and profitability.
INVESCO VIF-Small Company Growth Fund Advisor - INVESCO Funds Group, Inc.	INVESCO VIF-Small Company Growth Fund seeks long-term capital growth. The Fund normally invests at least 80% of its net assets in small capitalization companies. Small capitalization stocks are defined as companies that are included in the Russell 2000 Growth Index at the time of purchase, or if not included in that index, have market capitalizations of $2.5 billion or below at the time of purchase. The fund focuses on companies with accelerating earnings growth attributable to rapid sales growth, new products, management changes, and /or structural changes in the economy.
Janus Aspen Series
Janus Aspen Balanced Portfolio Service Shares Advisor - Janus Capital Management LLC	This diversified portfolio seeks long-term capital growth, consistent with preservation of capital and balanced by current income. The Portfolio normally invests 40-60% of its assets in securities selected primarily for their growth potential and 40-60% of its assets in securities selected primarily for their income potential. The Portfolio will normally invest at least 25% of its assets in fixed-income securities.
Janus Aspen Growth Portfolio Service Shares Advisor - Janus Capital Management LLC	This diversified portfolio seeks long-term growth of capital in a manner consistent with the preservation of capital by investing primarily in common stocks selected for their growth potential. Although the Portfolio can invest in companies of any size, it generally invests in larger, more established companies.
Janus Aspen Series-Mid Cap Growth Portfolio Service Shares (formerly Aggressive Growth Portfolio) Advisor: Janus Capital Management LLC	This non-diversified portfolio seeks long-term growth of capital. Under normal circumstances the portfolio will invest at least 80% of its net assets in equity securities of mid-sized companies whose market capitalization falls, at the time of purchase, in the 12-month average of the capitalization range of the Russell Midcap Growth Index.
Janus Aspen Worldwide Growth Portfolio Service Shares Advisor - Janus Capital Management LLC	This diversified portfolio seeks long-term growth of capital in a manner consistent with the preservation of capital primarily through investments in common stocks of foreign and domestic issuers. The Portfolio has the flexibility to invest on a worldwide basis in companies and other organizations of any size, regardless of country of organization or place of principal business activity. Worldwide Growth Portfolio normally invests at least 80% of its total assets in securities of issuers from at least five different countries, including the United States. The Portfolio may at times invest in fewer than five countries or even a single country. International investing may present special risks, including currency fluctuations and social and political developments.
Neuberger Berman Advisers Management Trust
Neuberger Berman AMT Fasciano Portfolio-Class S Advisor - Neuberger Berman Management, Inc. Sub-Advisor - Neuberger Berman, LLC	The Portfolio seeks long-term capital growth. The Portfolio manager also may consider a company's potential for current income prior to selecting it for the Portfolio. To pursue this goal, the Portfolio invests primarily in the common stocks of smaller companies, i.e., those with market capitalizations of less than $1.5 billion at the time the Portfolio first invests in them. These include securities having common stock characteristics, such as securities convertible into common stocks, and rights and warrants to purchase common stocks.
Neuberger Berman AMT Guardian Portfolio-Class S Advisor - Neuberger Berman Management, Inc. Sub-Advisor - Neuberger Berman, LLC	The Portfolio seeks long-term growth of capital; current income is a secondary goal. To pursue these goals, the Portfolio invests mainly in common stocks of large-capitalization companies. The managers look for well-managed companies whose stock prices are undervalued. Because the managers tend to find that undervalued stocks may be more common in certain sectors of the economy at a given time, the Portfolio may emphasize those sectors.
Oppenheimer Variable Account Funds
Oppenheimer Capital Appreciation Fund/VA-Service Class Advisor - Oppenheimer Funds, Inc.	The Fund seeks capital appreciation by investing in securities of well-known, established companies.
Oppenheimer Global Securities Fund/VA-Service Class Advisor - Oppenheimer Funds Inc.	The Fund seeks long-term capital appreciation by investing a substantial portion of assets in the securities of foreign issuers, in "growth-type" companies, in cyclical industries, and in special situations that are considered to have appreciation possibilities. It invests mainly in common stocks of U. S. and foreign issuers.
Oppenheimer Main Street Small Cap Fund/VA-Service Class Advisor - Oppenheimer Funds Inc.	The Fund seeks capital appreciation to make your investment grow. The Fund invests mainly in common stocks of "small-cap" companies. The Fund incorporates a blended style of investing combining both growth and value styles.
Oppenheimer Multiple Strategies Fund/VA-Service Class Advisor - Oppenheimer Funds Inc.	The Fund seeks a total investment return, which includes current income and capital appreciation in the value of its shares. The Fund allocates its investments among common stocks, debt securities, and "money market" instruments.
PBHG Insurance Series Fund
PBHG Large Cap Growth Portfolio Advisor - Pilgrim Baxter & Associates, Ltd.	The investment objective of the PBHG Insurance Series Large Cap Growth Portfolio is to seek to provide investors with long-term growth of capital. The Portfolio invests primarily in common stocks of companies that have market capitalizations similar to the companies in the Russell 1000® Growth Index at the time of purchase and that in Pilgrim Baxter's opinion have strong business momentum, earnings growth and capital appreciation potential. The Advisor intends to focus on companies whose market capitalization, are over $5 billion at the time of purchase.
PBHG Mid-Cap Portfolio Advisor - Pilgrim Baxter & Associates, Ltd.	The investment objective of PBHG Mid-Cap Portfolio is to seek to provide investors with above-average total return over a 3 to 5 year market cycle, consistent with reasonable risk. The Portfolio invests primarily in common stocks of companies that have market capitalizations similar to those in the S&P MidCap 400 Index at the time of purchase and that in Pilgrim Baxter's opinion are currently under priced using certain financial measurements, such as their price-to-earnings ratios dividend income potential and earnings power. The Portfolio generally has a lower price-to-earnings ratio than the average company in the Index and its sector weightings are generally within 10% of the Index.
PBHG Select Value Portfolio Advisor - Pilgrim Baxter & Associates, Ltd.	The investment objective of the PBHG Select Value Portfolio is to seek to provide investors long-term growth of capital and income. Current income is a secondary objective. The Portfolio invests primarily in common stocks of no more than 30 companies that have market capitalizations similar to the companies in the S&P 500 Index at the time of purchase and that in Pilgrim Baxter's opinion are currently under priced using certain financial measurements, such as their price-to-earnings ratios, dividend income potential and earnings power. The Advisor expects to focus on those companies whose market capitalizations are over $1 billion at the time of purchase.
PBHG Technology & Communications Portfolio Advisor - Pilgrim Baxter & Associates, Ltd.	The investment objective of the PBHG Insurance Series Technology & Communications Portfolio is to seek to provide investors with long-term growth of capital. Current income is incidental to the Portfolio's objective. The Portfolio, a non-diversified fund, invests primarily in common stocks of companies doing business in the technology and communications sector of the market. The Portfolio is concentrated which means it will invest 25% or more of its total assets in the groups of industries within that sector.
PIMCO Variable Insurance Trust
PIMCO High Yield Portfolio-Administrative Class Advisor - Pacific Investment Management Company LLC	The Portfolio seeks maximum total return consistent with preservation of capital and prudent investment management. The Portfolio invests under normal circumstances at least 80% of its assets in a diversified portfolio of high yield securities ("junk bonds") rated below investment grade but rated at least B by Moody's or S & P, or, if unrated, determined by the Advisor to be of comparable quality.
PIMCO Real Return Portfolio-Administrative Class Advisor - Pacific Investment Management Company LLC	The Portfolio seeks maximum real return consistent with preservation of real capital and prudent investment management. The Portfolio invests under normal circumstances at least 65% of its assets in inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S. governments, their agencies or government-sponsored enterprises and corporations.
PIMCO Total Return Portfolio-Administrative Class Advisor - Pacific Investment Management Company LLC	The Portfolio seeks maximum total return consistent with preservation of capital and prudent investment management. The Portfolio invests under normal circumstances at least 65% of its assets in a diversified Portfolio of Fixed Income Instruments of varying maturities. The Fund's average portfolio duration normally varies within a three- to six-year time frame, based on the Advisor's forecast for interest rates.
Rydex Variable Trust Funds
Rydex Variable Trust Sector Rotation Fund Advisor - Rydex Global Advisors	The Fund seeks long-term capital appreciation. The Fund seeks to respond to the dynamically changing economy by moving its investments among different sectors or industries. Each month the Advisor, using a quantitative methodology, ranks approximately fifty-nine different industries based on several measures of price momentum. The Fund then invests in the top ranked industries. Subject to maintaining adequate liquidity in the Fund, each industry or sector investment is intended to represent the entire industry or sector. The Fund invests in equity securities, but may also invest in equity derivatives such as futures contracts, options and swap transactions. The fund may also enter into short sales.
Strong Portfolios
Strong Opportunity Fund II-Advisor Series Advisor - Strong Investments	The investment objective of the Strong Opportunity Fund II is to seek capital growth. It currently emphasizes medium-sized companies that the advisor believes are under-researched and attractively valued.
Strong VIF Mid Cap Growth Fund II Advisor - Strong Investments	The investment objective of the Strong Mid Cap Growth Fund II is to seek capital growth. It invests primarily in equity securities that the Fund's managing advisor believes have above-average growth prospects.
Van Kampen-The Universal Institutional Funds, Inc.
Van Kampen UIF Core Plus Fixed Income Portfolio-Class I Advisor - Van Kampen 1	The investment objective of the Core Plus Fixed Income Portfolio is to seek above-average total return over a market cycle of three to five years by investing primarily in a diversified portfolio of fixed income securities. The Portfolio invests primarily in a diversified mix of dollar denominated investment grade fixed income securities, particularly U.S. Government, corporate and mortgage securities. The Portfolio ordinarily will seek to maintain an average weighted maturity in excess of five years. The Portfolio may invest opportunistically in non-dollar-denominated securities and high yield securities (commonly referred to as "junk bonds").
Van Kampen UIF U.S. Mid Cap Core Portfolio-Class I (formerly Mid Cap Value Portfolio) Advisor - Van Kampen 1	The investment objective of the Mid Cap Value Portfolio is to seek above-average total return over a market cycle of three to five years by investing primarily in common stocks and equity securities. The Portfolio invests primarily in common stocks of companies with capitalizations generally in the range of companies included in the S&P MidCap 400 Index. The Portfolio may purchase stocks that typically do not pay dividends. The Advisor analyzes securities to identify stocks that are believed to be undervalued, and measures the relative attractiveness of the Portfolio's current holdings against potential purchases.
Van Kampen UIF U.S. Real Estate Portfolio-Class I Advisor - Van Kampen 1	The investment objective of the U.S. Real Estate Portfolio is to seek above-average current income and long-term capital appreciation by investing primarily in equity securities of companies in the U.S. real estate industry, including real estate investment trusts (REITs).
Van Kampen UIF Value Portfolio-Class I Advisor - Van Kampen 1	The investment objective of the Value Portfolio is to seek above-average total return over a market cycle of three to five years by investing primarily in common stocks and other equity securities. The Portfolio invests primarily in common stocks of companies with capitalizations generally greater than $2.5 billion. The Portfolio focuses on stocks that are believed to be undervalued in comparison with the stock market as a whole, as measured by the S&P 500 Index. The Portfolio may purchase stocks that do not pay dividends; and it may invest, to a limited extent, in foreign equity securities.
1 Morgan Stanley Investment Management Inc., which does business in certain instances as "Van Kampen," serves as the investment advisor to the U.S. Mid Cap Core (formerly Mid Cap Value), Value, Core Plus Fixed Income and U.S. Real Estate Portfolios. Prior to May 1, 2002, Morgan Stanley Investments LP (formerly Miller Anderson & Sherrerd, LLP), an affiliate of Morgan Stanley Investment Management Inc., served as the investment advisor to the U.S. Mid Cap Core (formerly Mid Cap Value), Value and Core Plus Fixed Income Portfolios.

Additions, Deletions, or Substitutions

The Company may add or delete Subaccounts at any time, or may substitute one Portfolio for another, at any time. The Company does not guarantee that any of the Subaccounts or any of the Portfolios will always be available for allocation of purchase payments or transfers. In the event of any substitution or change, the Company may make such changes in the Contract as may be necessary or appropriate to reflect such substitution or change.

Additions, deletions or substitutions of Subaccounts or Portfolios may be due to an investment decision by the Company, or due to an event not within the Company's control, such as liquidation of a Portfolio or an irreconcilable conflict of interest between the Separate Account and another insurance company which offers a Portfolio. The Portfolio prospectuses describe the possibility of material conflict of interest in greater detail.

If the Company eliminates a Subaccount or substitutes the shares of another investment company for the shares of any Portfolio, the Company will first obtain approval of the Securities and Exchange Commission to the extent required by the Investment Company Act of 1940, as amended ("1940 Act"), or other applicable law. The Company will also notify Owners before it eliminates a Subaccount or substitutes a Portfolio.

New Subaccounts may be established when, in the sole discretion of the Company, marketing, tax, investment or other conditions so warrant. Any new Subaccounts will be made available to existing Owners on a basis to be determined by the Company.

If deemed to be in the best interests of persons having voting rights under the Contracts, the Separate Account may be operated as a management company under the 1940 Act or any other form permitted by law, may be de-registered under the 1940 Act in the event such registration is no longer required, or may be combined with one or more separate accounts.

Voting Rights

To the extent required by law, all Portfolio shares held in the Separate Account will be voted by the Company at regular and special shareholder meetings of the respective Portfolios in accordance with instructions received from persons having voting interests in the corresponding Subaccount. During the Accumulation Period, the Company will vote Portfolio shares according to instructions of Owners, unless the Company is permitted to vote shares in its own right.

The number of votes that an Owner may vote will be calculated separately for each Subaccount. The number will be determined by applying the Owner's percentage interest, if any, in a particular Subaccount to the total number of votes attributable to that Subaccount.

The Owner's percentage interest and the total number of votes will be determined as of the record date established by that Portfolio for voting purposes. Voting instructions will be solicited by written communication in accordance with procedures established by the respective Portfolios.

The Company will vote or abstain from voting shares for which it receives no timely instructions and shares it holds as to which Owners have no beneficial interest (including shares held by the Company as reserves for benefit payments*). The Company will vote or abstain from voting such shares in proportion to the voting instructions it receives from Owners of all Contracts participating in the Subaccount.

Each person or entity having a voting interest in a Subaccount will receive proxy material, reports and other material relating to the appropriate Portfolio. The Portfolios are not required to hold annual or other regular meetings of shareholders.

• Neither the Owner nor Payee has any interest in the Separate Account during the Benefit Payment Period. Benefit Units are merely a measure of the amount of the payment the Company is obligated to pay on each payment date.

ANNUITY INVESTORS LIFE INSURANCE COMPANY

Annuity Investors Life Insurance CompanyÒ (the "Company") is a stock life insurance company incorporated under the laws of the State of Ohio in 1981. The Company is principally engaged in the sale of variable and fixed annuity policies. The home office of the Company is located at 525 Vine Street, Cincinnati, Ohio 45202.

The Company is a wholly owned subsidiary of Great American Life Insurance CompanyÒ which is a wholly owned subsidiary of Great American Financial ResourcesÒ , Inc. ("GAFRI"), a publicly traded insurance holding company (NYSE: GFR). GAFRI is in turn indirectly controlled by American Financial Group, Inc., a publicly traded holding company (NYSE: AFG).

The Company may from time to time publish in advertisements, sales literature and reports to Owners the ratings and other information assigned to it by one or more independent rating organizations such as A.M. Best Company, Standard & Poor's, and Fitch. The purpose of the ratings is to reflect the financial strength and/or claims-paying ability of the Company. Each year A.M. Best Company reviews the financial status of thousands of insurers, culminating in the assignment of Best's Ratings. These ratings reflect A.M. Best Company's opinion of the relative financial strength and operating performance of an insurance company in comparison to the norms of the life/health insurance industry. Ratings of the Company do not reflect the investment performance of the Separate Account or the degree of risk associated with an investment in the Separate Account.

THE SEPARATE ACCOUNT

Annuity Investors^® Variable Account C was established by the Company on November 7, 2001 as an insurance company separate account under the laws of the State of Ohio pursuant to resolution of the Company's Board of Directors. The Separate Account is registered with the Securities and Exchange Commission under the 1940 Act as a unit investment trust. However, the Securities and Exchange Commission does not supervise the management or the investment practices or policies of the Separate Account.

The assets of the Separate Account are owned by the Company, but they are held separately from the other assets of the Company. Under Ohio law, the assets of a separate account are not chargeable with liabilities incurred in any other business operation of the Company. Income, gains and losses incurred on the assets in the Separate Account, whether realized or not, are credited to or charged against the Separate Account, without regard to other income, gains or losses of the Company. Therefore, the investment performance of the Separate Account is entirely independent of the investment performance of the Company's general account assets or any other separate account maintained by the Company. The assets of the Separate Account will be held for the exclusive benefit of Owners of, and the persons entitled to payment under, the Contracts offered by this prospectus and all other contracts issued by the Separate Account. The obligations under the Contracts are the obligation of the Company.

GREAT AMERICAN ADVISORS, INC.

Great American Advisors^SM, Inc. ("GAA"), an affiliate of the Company, is the principal underwriter and distributor of the Contracts. GAA is a wholly owned subsidiary of GAFRI. GAA is registered with the Securities and Exchange Commission as a broker-dealer and is a member of the National Association of Securities Dealers, Inc. ("NASD"). Its principal offices are located at 525 Vine Street, Cincinnati, Ohio 45202. The Company pays GAA for acting as underwriter according to the terms of a distribution agreement.

GAA sells Contracts through its registered representatives. In addition, GAA may enter into sales agreements with other broker-dealers to solicit applications for the Contracts through its registered representatives. These broker-dealers are registered with the Securities and Exchange Commission and are members of the NASD. All registered representatives who sell the Contracts are appointed by the Company as insurance agents and are authorized under applicable state insurance regulations to sell variable annuities.

The Company or GAA may pay commissions to registered representatives of GAA and other broker-dealers of up to 8.5% of purchase payments made under the Contracts. These commissions are reduced for Contracts issued to Owners over age 80. When permitted by state law and in exchange for lower initial commissions, GAA and/or the Company may pay trail commissions to registered representatives of GAA and to other broker-dealers. Trail commissions are not expected to exceed 2% of the Account Value of a Contract on an annual basis. To the extent permitted under current law, the Company and/or GAA may pay production, persistency and managerial bonuses as well as other promotional incentives, in cash or other compensation, to registered representatives of GAA and/or other broker-dealers.

CHARGES AND DEDUCTIONS

Charges and Deductions By the Company

There are two types of charges and deductions by the Company. There are charges assessed to the Contract, which are reflected in the Account Value of the Contract, but not in Accumulation Unit Values (or Benefit Unit Values). These charges are the contingent deferred sales charge, the annual contract maintenance fee, premium taxes (where applicable) and transfer fees. There are also charges assessed pro rata against the Separate Account. These charges are reflected in the Accumulation Unit Values (and Benefit Unit Values) of the Subaccounts. These charges are the mortality and expense risk charge and the administration charge.

Except as described below, the Company will never charge more to a Contract than the fees and charges described even if its actual expenses exceed the total fees and charges collected. If the fees and charges collected by the Company exceed the actual expenses it incurs, the excess will be profit to the Company and will not be returned to Owners.

The Company reserves the right to change the amount of the transfer fee in the future, or the number of transfers that can be made without incurring the transfer fee, and/or to charge fees for the automatic transfer programs described in the Transfers section of this prospectus, and/or for the systematic withdrawal program described in the Surrenders section of this prospectus, if in the Company's discretion, it determines such charges are necessary to offset the costs of administering transfers or systematic withdrawals. The maximum amount of these charges and fees is described below.

Contingent Deferred Sales Charge ("CDSC")

Purpose of Charge	Offset expenses incurred by the Company in the sale of the Contracts, including commissions paid and costs of sales literature.
Amount of Charge	Up to 7% of each purchase payment, depending on the number of years elapsed since receipt of the purchase payment.

Number of full years elapsed between date of receipt of purchase payment and date request for surrender received	0	1	2	3 or more
CDSC as a percentage of purchase payment surrendered	7%	6%	4%	0%

When Assessed	On partial or full surrenders of purchase payments during the Accumulation Period.
Assessed Against What	Purchase payments only, not earnings. See the Surrenders section of this prospectus for information on order of withdrawal of purchase payments and earnings.
Waivers	Free withdrawal privilege. See the Surrenders section for information. In the Company's discretion where the Company incurs reduced sales and servicing expenses. If the Contract is issued with a tax sheltered annuity endorsement: (i) upon separation from service if Owner has attained age 55 and the Contract has been in force for at least seven years; or (ii) after the Contract has been in force ten years or more. Long term care waiver rider. See the Surrenders section for information. If the Social Security Administration determines after the Contract is issued that the Owner is "disabled" as that term is defined in the Social Security Act of 1935, as amended. If the spouse becomes Successor Owner. See the Account Value section for information. Where required to satisfy state law.

Contract Maintenance Fee

Purpose of Charge	Offset expenses incurred in issuing the Contracts and in maintaining the Contracts and the Separate Account.
Amount of Charge	$30.00 per year.
When Assessed	During the Accumulation Period the charge is deducted on each anniversary of the effective date of the Contract, and at time of full surrender. During the Benefit Payment Period a pro rata portion of the charge is deducted from each benefit payment.
Assessed Against What	Amounts invested in the Subaccounts and Fixed Account options. During the Accumulation Period, the charge is deducted pro rata from the Subaccounts and Fixed Account options in which the Contract has an interest on the date of the charge. During the Benefit Payment Period, a pro rata portion of the annual charge is deducted from each benefit payment.
Waivers	During the Accumulation Period if the Account Value is at least $40,000 on the date the charge is due. During the Benefit Payment Period if the amount applied to the annuity benefit is at least $40,000. If the Contract is issued with a tax sheltered annuity endorsement. In the Company's discretion where the Company incurs reduced sales and servicing expenses. During the Benefit Payment Period where required to satisfy state law.

Transfer Fee

Purpose of Charge	Offset cost incurred in administering the Contracts.
Amount of Charge	$25 for each transfer in excess of 12 in any contract year. The Company reserves the right to change the amount of this charge, or the number of transfers which can be made without incurring the charge at any time. The transfer fee will never exceed $30 for each transfer, and the number of transfers that can be made without a charge will never be fewer than 8.
When Assessed	During the Accumulation Period.
Assessed Against What	Deducted from amount transferred.
Waivers	Currently, the transfer fee does not apply to transfers associated with the dollar cost averaging, interest sweep and portfolio rebalancing programs. Transfers associated with these programs do not count toward the free transfers permitted in a contract year. The Company reserves the right to eliminate this waiver at any time.

Administration Charge

Purpose of Charge	Offset expenses incurred in administering the Contracts and the Separate Account.
Amount of Charge	Daily charge equal to 0.000411% of the daily Net Asset Value for each Subaccount, which corresponds to an annual effective rate of 0.15%.
When Assessed	During the Accumulation Period and during the Benefit Payment Period if a variable dollar benefit is elected.
Assessed Against What	Amounts invested in the Subaccounts.
Waivers	May be waived or reduced in the Company's discretion where the Company incurs reduced sales and servicing expenses.

Mortality and Expense Risk Charge

Purpose of Charge	Compensation for bearing certain mortality and expense risks under the Contract. Mortality risks arise from the Company's obligation to pay benefit payments during the Benefit Payment Period and to pay the death benefit. The expense risk assumed by the Company is the risk that the Company's actual expenses in administering the Contracts and the Separate Account will exceed the amount recovered through the contract maintenance fees, transfer fees and administration charges.
Amount of Charge	Daily charge equal to .004079% of the daily Net Asset Value for each Subaccount, which corresponds to an effective annual rate of 1.50%. The Company estimates that the mortality risk component of this charge is 0.90% and the expense risk component is 0.60%.
When Assessed	During the Accumulation Period, and during the Benefit Payment Period if a variable dollar benefit is elected.
Assessed Against What	Amounts invested in the Subaccounts.
Waivers	None.

Premium Taxes

Currently some state and local governments impose premium taxes. These taxes currently range up to 5.0% depending upon the jurisdiction. A federal premium tax has been proposed but not enacted. The Company will deduct any applicable premium taxes from the Account Value either upon death, surrender, annuitization, or at the time purchase payments are made, but no earlier than when the Company incurs a tax liability under applicable law.

Discretionary Waivers of Charges

The Company will look at the following factors to determine if it will waive a charge, in part or in full, due to reduced sales and servicing expenses: (1) the total amount of purchase payments to be received; and (2) any prior or existing relationship with the Company. The Company would expect to incur reduced sales and servicing expenses in connection with Contracts offered to employees of the Company, its subsidiaries and/or affiliates. There may be other circumstances, of which the Company is not presently aware, which could result in reduced sales and servicing expenses. In no event will the Company waive a charge where such waiver would be unfairly discriminatory to any person.

Expenses of the Portfolios

In addition to charges and deductions by the Company, there are Portfolio management fees and administration expenses which are described in the prospectus and Statement of Additional Information for each Portfolio. The actual Portfolio fees and expenses for the prior calendar year are included in the Expense Tables of this prospectus, unless a Portfolio commenced operations in the current calendar year. In that case, estimated Portfolio expenses are included in the Expense Tables of this prospectus. Portfolio expenses, like Separate Account expenses, are reflected in Accumulation Unit Values (or Benefit Unit Values).

THE CONTRACTS

Each Contract is an agreement between the Company and the Owner. Values, benefits and charges are calculated separately for each Contract. Because the Company is subject to the insurance laws and regulations of all the jurisdictions where it is licensed to operate, the availability of certain Contract rights and provisions in a given State may depend on that State's approval of the Contracts. Where required by state law or regulation, the Contracts will be modified accordingly. The Contracts also may be modified as necessary to meet the requirements for inclusion as an investment option in the Texas Optional Retirement Program or other retirement program.

Right to Cancel

The Owner of an individual Contract may cancel it before midnight of the tenth day following the date the Owner receives the Contract. For a valid cancellation, the Contract must be returned to the Company, and written notice of cancellation must be given to the Company, or to the agent who sold the Contract, by that deadline. If mailed, the return of the Contract or the notice is effective on the date it is postmarked, with the proper address and with postage paid. If the Owner cancels the Contract, the Contract will be void and the Company will refund the purchase payment(s) paid for it plus or minus any investment gains or losses under the Contract as of the end of the Valuation Period during which the returned Contract is received by the Company. When required by state or federal law, the Company will return the purchase payments without any investment gain or loss, during all or part of the right to cancel period. In addition, when required by state or federal law, the Company will return the Purchase Payments in full, without deducting any fees or charges, during all or part of the right to cancel period. When required by state law, the right to cancel period may be longer than 10 days. During the right to cancel period specified on the first page of the Contract, the Company reserves the right to allocate all purchase payments to either the Fixed Accumulation Account or a money market Subaccount. If we exercise this right, we will allocate the Account Value as of the end of the right to cancel period to the Fixed Account options and/or to the Subaccounts in the percentages that the Owner instructed.

Persons With Rights Under a Contract

Owner: The Owner is the person with authority to exercise rights and receive benefits under the Contract (e.g., make allocations among investment options, elect a settlement option, designate the Annuitant, Beneficiary and Payee). An Owner must ordinarily be a natural person, or a trust or other legal entity holding a contract for the benefit of a natural person. Ownership of a non-tax-qualified Contract may be transferred, but transfer may have adverse tax consequences. Ownership of a tax-qualified Contract may not be transferred. Unless otherwise elected or required by law, a transfer of Ownership will not automatically cancel a designation of an Annuitant or Beneficiary or any settlement options election previously made.

Joint Owners: There may be joint Owners of a non-tax-qualified Contract. Joint Owners may each exercise transfer rights and make purchase payment allocations independently. All other rights must be exercised by joint action. A surviving joint Owner who is not the spouse of a deceased Owner may not become a Successor Owner, but will be deemed to be the Beneficiary of the death benefit which becomes payable on the death of the first Owner to die, regardless of any Beneficiary designation.

Successor Owner: The surviving spouse of a deceased Owner may become a Successor Owner if the surviving spouse was either the joint Owner or sole surviving Beneficiary under the Contract. In order for a spouse to become a Successor Owner, the Owner must make an election prior to the Owner's death, or the surviving spouse must make an election within one year of the Owner's death.

Annuitant: The Annuitant is the person whose life is the measuring life for life contingent annuity benefit payments. The Annuitant must be the same person as the Owner under a tax-qualified Contract. The Owner may designate or change an Annuitant under a non-tax-qualified Contract. Unless otherwise elected or required by law, a change of Annuitant will not automatically cancel a designation of a Beneficiary or any settlement option election previously made.

Beneficiary: The person entitled to receive the death benefit. The Owner may designate or change the Beneficiary, except that a surviving joint Owner will be deemed to be the Beneficiary regardless of any designation. Unless otherwise elected or required by law, a change of Beneficiary will not automatically cancel a designation of any Annuitant or any settlement option election previously made. If no Beneficiary is designated, and there is no surviving joint Owner, the Owner's estate will be the Beneficiary. The Beneficiary will be the measuring life for life contingent death benefit payments.

Payee: Under a tax-qualified Contract, the Owner-Annuitant is the Payee of annuity benefits. Under a non-tax-qualified Contract, the Owner may designate the Payee of annuity benefits. Irrevocable naming of a Payee other than the Owner can have adverse tax consequences. The Beneficiary is the Payee of the death benefit.

Assignee: Under a tax-qualified Contract, assignment is not permitted. The Owner of a non-tax-qualified Contract may assign most of his/her rights or benefits under a Contract. Assignment of rights or benefits may have adverse tax consequences.

ACCUMULATION PERIOD

Each Contract allows for an Accumulation Period during which purchase payments are invested according to the Owner's instructions. During the Accumulation Period, the Owner can control the allocation of investments through transfers or through the following investment programs offered by the Company: dollar cost averaging, portfolio rebalancing and interest sweep. These programs and telephone, facsimile and Internet transfer procedures are described in the Transfers section of this prospectus. The Owner can access the Account Value during the Accumulation Period through surrenders, systematic withdrawal, or contract loans (if available). These withdrawal features are described more fully in the Surrenders and Contract Loans sections of this prospectus.

Account Statements

During the Accumulation Period, the Company will provide a report of the Contract's Account Value, and any other information required by law, at least once each contract year. Owners should promptly notify the Company of any address change. This is especially important if Owners are receiving such reports and other information by mail rather than electronically. Owners at a shared address who are currently receiving one account statement, prospectus or shareholder report per household may receive separate account statements, prospectuses or shareholder reports by contacting the Company at 1-800-789-6771. The Company will provide confirmation statements showing any transactions that affect the Contract's value. Confirmation of regularly scheduled transactions, however, will be provided in quarterly statements of account activity. Examples of such recurring transactions include purchase payments (after the initial purchase payment) under a salary reduction program, systematic withdrawals, and dollar cost averaging transactions. Owners should review statements and confirmations carefully.

All errors or corrections must be reported to the Company immediately to assure proper crediting to the Contract. Unless the Company is notified within 30 days of receipt of the statement, the Company will assume statements and confirmations are correct.

Account Value

The value of a Contract during the Accumulation Period is referred to as the "Account Value." The Account Value at any given time is the sum of (1) the value of the Owner's interest in the Fixed Account options as of that time; and (2) the value of the Owner's interest in the Subaccounts as of that time. The value of the Owner's interest in the Subaccounts at any time is equal to the sum of the number of Accumulation Units for each Subaccount attributable to that Contract multiplied by the Accumulation Unit Value for the applicable Subaccount at the end of that Valuation Period. The Account Value at any time is net of any charges, deductions, surrenders, and/or outstanding loans incurred prior to or as of the end of that Valuation Period.

Accumulation Units

Amounts allocated or transferred to a Subaccount are converted into Accumulation Units. The number of Accumulation Units credited is determined by dividing the dollar amount directed to the Subaccount by the Accumulation Unit Value for that Subaccount as of the end of the Valuation Period in which the amount allocated is received by the Company, or as of the end of the Valuation Period in which the transfer is made.

Accumulation Units will be canceled as of the end of the Valuation Period during which one of the following events giving rise to cancellation occurs:

transfer from a Subaccount

full or partial surrender from a Subaccount

payment of a death benefit

application of the amounts in a Subaccount to a settlement option

deduction of the contract maintenance fee

deduction of a transfer fee

Stepped-Up Account Value for Successor Owner

If the surviving spouse of a deceased Owner becomes a Successor Owner of the Contract, the Account Value will be stepped-up to equal the death benefit which otherwise would have been payable as of what would have been the Death Benefit Valuation Date. In addition, contingent deferred sales charges will be waived on the entire stepped-up Account Value as of that date, but will apply to any purchase payments made by the Successor Owner after that date.

For purposes of determining what would have been the Death Benefit Valuation Date, the election to become Successor Owner will be deemed to be instructions as to the form of death benefit. The election to become Successor Owner must be made within one year of the date of the Owner's death.

Purchase Payments

Purchase payments may be made at any time during the Accumulation Period. The current restrictions on purchase payment amounts are:

	Tax-Qualified	Non-Tax-Qualified
Minimum initial purchase payment	$20,000	$20,000
Minimum monthly under periodic payment program	$50	N/A
Minimum additional payments	$100	$100
Maximum single purchase payment	$1,000,000* or Company approval	$1,000,000* or Company approval
*The maximum single purchase payment is $500,000 for issue ages above age 80 or Company approval.

The Company reserves the right to increase or decrease the minimum initial purchase payment, or the minimum monthly payment, or the minimum allowable additional purchase payment, or the maximum single purchase payment, at its discretion and at any time, where permitted by law.

Each purchase payment will be applied by the Company to the credit of the Owner's account. If the order ticket is in good order, the Company will apply the initial purchase payment to an account for the Owner within two business days of receipt of the purchase payment. If the order ticket is not in good order, the Company will attempt to get the order ticket in good order within five business days. If the order ticket is not in good order at the end of this period, the Company will inform the purchaser of the reason for the delay and that the purchase payment will be returned immediately unless the purchaser specifically consents to the Company keeping the purchase payment until the order ticket is in good order. Once the order ticket is in good order, the initial purchase payment will be applied to the Owner's account within two business days. During the right to cancel period, the Company reserves the right to allocate all purchase payments to either the Fixed Accumulation Account or a money market Subaccount. If we exercise this right, we will allocate the Account Value as of the end of the right to cancel period to the Fixed Account options and/or to the Subaccounts in the percentages that the Owner has instructed.

Each additional purchase payment is credited to a Contract as of the Valuation Date on which the Company receives the purchase payment. If the purchase payment is allocated to a Subaccount, it will be applied at the Accumulation Unit Value calculated at the end of the Valuation Period in which that Valuation Date occurs.

Investment Options--Allocations

Purchase payments can be allocated in whole percentages to any of the available Subaccounts or Fixed Account options. See The Portfolios section of this prospectus for a listing and description of the currently available Subaccounts. Interests in the Subaccounts are securities registered with the Securities and Exchange Commission. The Owner bears the risk of investment gain or loss on amounts allocated to the Subaccounts.

Interests in the Fixed Account options are not securities and are not registered with the Securities and Exchange Commission. Amounts allocated to the Fixed Account options will receive a stated rate of interest of at least 3% per year. Amounts allocated to the Fixed Account options and interest credited to the Fixed Account options are guaranteed by the Company.

Fixed Account Options

The currently available Fixed Account options are:

Fixed Accumulation Account Option

Three-Year Guaranteed Interest Rate Option

The current restrictions on allocations for either tax-qualified or non-tax-qualified Contracts are:

Minimum allocation to any Subaccount	$10
Minimum allocation to Fixed Accumulation Account	$10
Minimum allocation to Three-Year Guaranteed Interest Rate Option or any other Fixed Account guaranteed interest rate option which may be offered	$2,000 No amounts may be allocated to any guarantee period option which would extend beyond the Owner's 85th birthday or 5 years after the effective date of the Contract, if later.
Allocation during right to cancel period	No current restrictions, but the Company reserves the right to require that purchase payment(s) be allocated to the money market Subaccount or to the Fixed Accumulation Account option during the right to cancel period.

Renewal of Fixed Account Guaranteed Interest Rate Options

At the end of a guarantee period, and for 30 days preceding the end of such guarantee period, the Owner may elect to allocate the amount maturing to any of the available investment options under the Contract. If the Owner does not make a reallocation election, the amount maturing will be allocated to the guarantee period option with the same number of years as the period expiring, or the next shortest period as may be required to comply with the restriction on allocation to guarantee period options as described in the Investment Options--Allocations section of this prospectus. If no guarantee period is available due to this restriction, the amount maturing will be allocated to the Fixed Accumulation Account option.

Transfers

During the Accumulation Period, an Owner may transfer amounts among Subaccounts, among Fixed Account options, and/or between Subaccounts and Fixed Account options by written request once each Valuation Period.

The current restrictions on transfers for either tax-qualified or non-tax-qualified Contracts are:

Minimum transfer to any Fixed Account guarantee interest rate option	$2,000 No amounts may be transferred to a guarantee period option which would extend beyond the Owner's 85th birthday or 5 years after the effective date of the Contract, if later.
Maximum transfer from Fixed Account option other than Fixed Account guaranteed interest rate option which is maturing	During any contract year, 20% of the Fixed Account option's value as of the most recent contract anniversary.
Other restrictions on transfers from Fixed Account options	May not be made prior to first contract anniversary. Amounts transferred from Fixed Account options to Subaccounts may not be transferred back to Fixed Account options for a period of 6 months from the date of the original transfer.

A transfer is effective on the Valuation Date during which the Company receives the request for transfer, and will be processed at the Accumulation Unit Value for the end of the Valuation Period in which that Valuation Date occurs.

Automatic Transfer Programs

During the Accumulation Period, the Company offers the automatic transfer services described below. To enroll in one of these programs, you will need to complete the appropriate authorization form, which you can obtain from the Company by calling 1-800-789-6771.

Currently, the transfer fee does not apply to dollar cost averaging, portfolio rebalancing, or interest sweep transfers, and transfers under these programs will not count toward the twelve transfers permitted under the Contract without a transfer fee. However, the Company reserves the right to impose a fee in such amount as the Company may then determine to be reasonable for participation in automatic transfer programs, as described in the Charges and Deductions section of this prospectus.

Service	Description	Minimum Account Requirements	Limitations/Notes
Dollar Cost Averaging There are risks involved in switching between investments available under the Contract. Dollar cost averaging requires regular investments regardless of fluctuating price levels and does not guarantee profits or prevent losses in a declining market. You should consider your financial ability to continue dollar cost averaging transfers through periods of changing price levels.	Automatic transfers from the money market Subaccount to any other Subaccount(s), or from the Fixed Accumulation Account option to any Subaccount(s) other than the money market Subaccount, on a monthly or quarterly basis.	Source of funds must be at least $10,000. Minimum transfer is $500. When balance of source of funds falls below $500, entire balance will be allocated according to dollar cost averaging instructions.	Dollar cost averaging transfers may not be made to any of the Fixed Account options, or to the money market Subaccount. The dollar cost averaging transfers will take place on the last Valuation Date of each calendar month or quarter as requested by the Owner.
Portfolio Rebalancing	Automatically transfer amounts among the Subaccounts and the Fixed Accumulation Account option to maintain the percentage allocations selected by the Owner.	Minimum Account Value of $10,000.	Transfers will take place on the last Valuation Date of each calendar quarter. Portfolio rebalancing will not be available if the dollar cost averaging program or an interest sweep from the Fixed Accumulation Account option is being utilized.
Interest Sweep	Automatic transfers of the interest from any Fixed Account option(s) to any Subaccount(s).	Balance of each Fixed Account option selected must be at least $5,000. Maximum transfer from each Fixed Account option selected is 20% of such Fixed Account Option's value per year. Amounts transferred under the interest sweep program will reduce the 20% maximum transfer amount otherwise allowed.	Interest sweep transfers will take place on the last Valuation Date of each calendar quarter.

Termination of Automatic Transfer Programs

The Owner may terminate any of the automatic transfer programs at any time, but must give the Company at least 30 days' notice to change any automatic transfer instructions that are already in place. Termination and change instructions will be accepted by U.S. or overnight mail, or by facsimile at 513-412-3766. The Company may terminate, suspend or modify any aspect of the automatic transfer programs described above without prior notice to Owners, as permitted by applicable law. Any such termination, suspension or modification will not affect automatic transfer programs already in place.

The Company may also impose an annual fee or increase the current annual fee, as applicable, for any of the foregoing automatic transfer programs in such amount(s) as the Company may then determine to be reasonable for participation in the program. The maximum amount of the annual fee that would be imposed for participating in each automatic transfer program is $30.

Telephone, Facsimile or Internet Transfers

Currently, instead of placing a request in writing, an Owner may place a request for all or part of the Account Value to be transferred by telephone, facsimile or over the Internet. All transfers must be in accordance with the terms of the Contract. Transfer instructions are currently accepted once each Valuation Period by telephone at 1-800-789-6771, or via facsimile at 513-412-3766, or over the Internet through the Company's web site at www.annuityinvestors.com, between 9:30 a.m. and 4:00 p.m. Once instructions have been accepted, they may not be rescinded; however, new instructions may be given the following Valuation Period. Access to these alternate methods of placing transfer requests, particularly through the Company's web site, may be limited or unavailable during periods of peak demand, system upgrading and maintenance, or for other reasons. The Company may withdraw the right to make transfers by telephone, facsimile or over the Internet upon 10 days' written notice to affected Contract Owners.

The Company will not be liable for complying with transfer instructions that the Company reasonably believes to be genuine, or for any loss, damage, cost or expense in acting on such instructions. The Owner or person with the right to control payments will bear the risk of such loss. The Company will employ reasonable procedures to determine that telephone, facsimile or Internet instructions are genuine. If the Company does not employ such procedures, the Company may be liable for losses due to unauthorized or fraudulent instructions. These procedures may include, among others, tape recording telephone instructions or requiring use of a unique password or other identifying information.

Other Restrictions on Transfers

Transfers involving Subaccounts may be subject to restrictions or requirements if exercised by a market timing firm or any other third party authorized to initiate transfers on behalf of multiple Contract Owners. In particular, a pattern of transfers that coincides with a market timing strategy has the potential to have a detrimental effect on Accumulation Unit Values or Portfolio net asset values. Portfolios may refuse to execute such transfer requests. The Company may be unable to effectuate transfers in such situations.

Additionally, the Company reserves the right to refuse or limit transfer requests (or take any other action it deems necessary) in order to protect Contract Owners, Annuitants and beneficiaries from the negative investment results that may result from short-term trading or other harmful investment practices that are employed by some Contract Owners (or third parties acting on their behalf). If the Company determines that a Contract Owner (or third party acting on the Contract Owner's behalf) is engaging in harmful short-term trading, the Company reserves the right to take actions to protect investors, including exercising its right to terminate the ability of specified Contract Owners to submit transfer requests via telephone, facsimile or over the Internet. If the Company exercises this right, affected Contract Owners would be limited to submitting transfer requests via U.S. mail. The Company may also refuse transfer requests submitted by specified Contract Owners (or third parties on their behalf) that exhibit a pattern of short-term trading. Any action taken by the Company pursuant to this provision will be preceded by 10 days' written notice to the affected Contract Owner(s). If the Company refuses a transfer request pursuant to this provision, the request may be resubmitted via U. S. mail. That transfer would then be effective as of the Valuation Date during which the Company receives the request for transfer via U. S. mail, and would be processed at the Accumulation Unit Value for the end of the Valuation Period in which that Valuation Date occurs.

Surrenders

An Owner may surrender a Contract either in full or in part during the Accumulation Period. A contingent deferred sales charge ("CDSC") may apply on surrender. The restrictions and charges on surrenders are:

	Tax-Qualified	Non-Tax-Qualified
Minimum amount of partial surrender	$500
Minimum remaining Account Value after partial surrender	$500
Amount available for surrender (valued as of end of Valuation Period in which request for surrender is received by the Company)	Account Value subject to tax law restrictions on withdrawals	Account Value
Tax penalty for early withdrawal	When applicable, 10% of amount distributed before age 59 1/2 (25% for certain SIMPLE IRAs)
Contract maintenance fee on full surrender	$30 (no CDSC applies to fee)
Contingent deferred sales charge ("CDSC")	Up to 7% of purchase payments
Order of withdrawal for purposes of CDSC (order may be different for tax purposes)	First from purchase payments on "first-in, first-out" basis (CDSC may apply) and then from accumulated earnings (no CDSC applies)
*25% for SIMPLE IRAs in the first two years

A full surrender will terminate the Contract. Partial surrenders are withdrawn proportionally from all Subaccounts and Fixed Account options in which the Contract is invested on the date the Company receives the surrender request, unless the Owner requests that the surrender be withdrawn from a specific investment option. A surrender is effective on the Valuation Date during which the Company receives the request for surrender, and will be processed at the Accumulation Unit Value for the end of the Valuation Period in which that Valuation Date occurs. Payment of a surrendered amount may be delayed if the amount surrendered was paid to the Company by a check that has not yet cleared. Surrenders from a Fixed Account option may be delayed for up to six months after receipt of a surrender request as allowed by state law. Surrenders from the Subaccounts may be delayed during any period the New York Stock Exchange is closed or trading is restricted, or when the Securities and Exchange Commission either: (1) determines that there is an emergency which prevents valuation or disposal of securities held in the Separate Account; or (2) permits a delay in payment for the protection of security holders.

Free Withdrawal Privilege

The Company will waive the CDSC on partial surrenders of 10% or less of all purchase payments received that have not been previously withdrawn and that would otherwise still be subject to a CDSC. No Free Withdrawal Privilege is available on full surrender of your Contract. We reserve the right to reduce the Account Value by the amount of any CDSC waived on any partial surrender(s) taken within the six months preceding a request for full surrender. This is in addition to any other applicable deductions.

If the Free Withdrawal Privilege is not exercised during a contract year, it does not carry over to the next contract year.

Long-Term Care Waiver Rider

If a Contract is modified by the Long-Term Care Waiver Rider, surrenders may be made free of any CDSC if the Owner has been confined in a qualifying licensed hospital or long-term care facility for at least 90 days beginning on or after the first contract anniversary. There is no charge for this rider, but it may not be available in all states.

Systematic Withdrawal

During the Accumulation Period, an Owner may elect to automatically withdraw money from the Contract. The Account Value must be at least $10,000 in order to make a systematic withdrawal election. The minimum monthly amount that can be withdrawn is $100. Systematic withdrawals will be subject to the CDSC to the extent the amount withdrawn exceeds the free withdrawal privilege. The Owner may begin or discontinue systematic withdrawals at any time by request to the Company, but at least 30 days' notice must be given to make a change to any systematic withdrawal instructions that are currently in place. The Company reserves the right to discontinue offering systematic withdrawals at any time. Currently, the Company does not charge a fee for systematic withdrawal services. However, the Company reserves the right to impose an annual fee in such amount as the Company may then determine to be reasonable for participation in the systematic withdrawal program. If imposed, the fee will not exceed $30 annually.

Before electing a systematic withdrawal program, you should consult with a tax advisor. Systematic withdrawal is similar to annuitization, but will result in different taxation of payments and potentially different amount of total payments over the life of the Contract than if annuitization were elected.

Contract Loans

The Company may make loans to Owners of certain tax-qualified Contracts, as allowed under tax law. Any such loans (including unpaid interest thereon) will be secured with an interest in the Contract. Loans may be taken only from the Fixed Accumulation Account. An amount equal to 110% of the loan requested must be in the Fixed Accumulation Account prior to taking the loan. If the Fixed Accumulation Account is insufficient, the collateral for the loan will be moved from the Subaccounts you designate to the Fixed Accumulation Account and earn a fixed rate of interest applicable to loan collateral. If you do not designate any Subaccounts, the collateral for the loan will be moved from all the Subaccounts on a pro rata basis to the Fixed Accumulation Account. Loan amounts and repayment requirements are subject to provisions of the Internal Revenue Code, and default on a loan will result in a taxable event. You should consult a tax advisor prior to exercising loan privileges. If loans are available under a Contract, loan provisions are described in the loan endorsement to the Contract.

A loan, whether or not repaid, will have a permanent effect on the Account Value of a Contract because the collateral cannot be allocated to the Subaccounts or Fixed Account guarantee periods. The longer the loan is outstanding, the greater the effect is likely to be. The effect could be favorable or unfavorable. If the investment results are greater than the rate being credited on collateral while the loan is outstanding, the Account Value will not increase as rapidly as it would if no loan were outstanding. If investment results are below that rate, the Account Value will be higher than it would have been if no loan had been outstanding.

Termination

The Company reserves the right to terminate any Contract at any time during the Accumulation Period if the Account Value is less than $500. In that case, the Contract will be involuntarily surrendered and the Company will pay the Owner the amount which would be due the Owner on a full surrender.

BENEFIT PAYMENT PERIOD

Annuity Benefit

An Owner may designate the date that annuity payments will begin, and may change the date up to 30 days before annuity payments are scheduled to begin. If annuity payments begin, such payments will be in lieu of all other benefits under the Contract. The first day of the Benefit Payment Period in which annuity payments are made is generally referred to as the "Annuity Commencement Date."

Unless the Company agrees otherwise, the Annuity Commencement Date cannot be later than the contract anniversary following the eighty-fifth (85th) birthday of the oldest Owner, or five years after the effective date of the Contract, whichever is later.

The amount applied to a settlement option to provide annuity payments generally will be the Account Value (less any outstanding loans) as of the end of the Valuation Period immediately preceding the Annuity Commencement Date.

The Owner generally may select any form of settlement option currently available. The standard forms of settlement options are described in the Settlement Options section of this prospectus.

If the Owner has not previously made an election as to the form of settlement option, the Company will contact the Owner to ascertain the form of settlement option to be paid. Available options include a specific fixed dollar benefit payment, a variable dollar benefit payment, or a combination of a variable and fixed dollar benefit payment. If the Owner does not select a settlement option, the Company will apply the Account Value pro rata to a combination variable and fixed dollar benefit for the life of the Annuitant with 120 monthly payments assured, as described in the Settlement Options section of this prospectus.

Death Benefit

A death benefit will be paid under a Contract if an Owner dies during the Accumulation Period. If a surviving spouse becomes the Successor Owner of the Contract, the death benefit will be paid following the death of the Successor Owner if he or she dies during the Accumulation Period. If a death benefit is paid, it will be in lieu of any other benefits under the Contract.

The death benefit will be allocated among the Subaccounts and Fixed Account options. This allocation will occur as of the Death Benefit Valuation Date. It will be made in the same proportion as the value of each option bears to the total Account Value immediately before that date.

Any applicable premium tax or other taxes not previously deducted, and any outstanding loans will be deducted from the death benefit amounts described below.

An Owner may elect the form of payment of the death benefit at any time before his or her death. The form of payment may be a lump sum, or any available form of settlement option. Death Benefit payments shall be made to the Beneficiary as payee. After the death of the Owner, a Beneficiary which is a non-natural person may elect instead to have Death Benefit payments made to a payee to whom the Beneficiary is obligated to make corresponding payments of a death benefit. Any such election by a non-natural person must be by Written Request. The election may be made or changed at any time.

The Beneficiary will be the person on whose life any Death Benefit payments under a settlement option are based. If the Beneficiary is a non-natural person, any such payments under a life option must be based on the life of a natural person to whom the Beneficiary is obligated. The person must be designated by the Beneficiary by a Written Request. The request must be made before the Death Benefit Commencement Date.

If the Beneficiary is a non-natural person, any Death Benefit amounts that are still payable on the death of the payee will be paid to any contingent payee. A contingent payee may be designated by the Beneficiary by a Written Request. If none is still surviving at the time a payment is to be made, then any remaining amounts will be paid to the Beneficiary.

The standard forms of settlement options are described in the Settlement Options section of this prospectus. If the Owner does not make an election as to the form of death benefit, the Beneficiary may make an election within one year after the Owner's death. If no election as to form of settlement option is made, the Company will apply the death benefit to a fixed dollar benefit for a fixed period of 48 months. The first day of the Benefit Payment Period in which a death benefit is paid may not be more than one year after the Owner's death; the day a death benefit is paid in a lump sum may not be more than five years after the Owner's date of death.

Death Benefit Amount

The Death Benefit Amount will be equal to the greater of:

1)	the Account Value on the Death Benefit Valuation Date; or
2)	the total purchase payments, reduced proportionally for partial surrenders.

The reduction for partial surrenders will be in the same proportion that the Account Value was reduced on the date of the partial surrender.

Step Up in Value for Successor Owner

If your spouse becomes the Successor Owner of the Contract, the Account Value of the contract will be increased, as of the date that would have been the Death Benefit Valuation Date, to equal the amount of the death benefit which would have been payable if your spouse had not become the Successor Owner of the Contract. If the Account Value is increased under this provision, the Company will deposit the amount of the increase into the Fixed Accumulation Account Option.

If the death benefit which would have been payable is equal to the Account Value as of the date that would have been the Death Benefit Valuation Date, there will be no change in the Account Value of the Contract.

For purposes of determining the date that would have been the Death Benefit Valuation Date, the election to become Successor Owner will be deemed to be instructions as to the form of death benefit. Therefore, the date that would have been the Death Benefit Valuation Date will be the later of the date we receive Due Proof of Death of the Owner, or the date we receive a Successor Owner election, but never later than one year after the date of death of the Owner.

If your spouse becomes the Successor Owner of the Contract, any Contingent Deferred Sales Charge which would otherwise apply on surrender will be waived, except that if any additional purchase payments are paid by the Successor Owner, Contingent Deferred Sales Charges will apply as described in this Contract, to those additional purchase payments only.

Payment of Benefits

When a Contract is annuitized, or when a death benefit is applied to a settlement option, the Account Value or the death benefit, as the case may be, is surrendered to the Company in exchange for a promise to pay a stream of benefit payments for the duration of the settlement option selected. Benefit payments generally may be calculated and paid: (1) as a variable dollar benefit; (2) as a fixed dollar benefit; or (3) as a combination of both. The stream of payments, whether variable dollar or fixed dollar, is an obligation of the Company's general account. However, only the amount of fixed dollar benefit payments is guaranteed by the Company. The Owner (or Payee) bears the risk that any variable dollar benefit payment may be less than the initial variable dollar benefit payment, or that it may decline to zero, if Benefit Unit Values for that payment decrease sufficiently. Transfers between a variable dollar benefit and a fixed dollar benefit are not permitted, but transfers of Benefit Units among Subaccounts are permitted once each 12 months after a variable dollar benefit has been paid for at least 12 months. The formulas for transferring Benefit Units among Subaccounts during the Benefit Payment Period are set forth in the Statement of Additional Information.

Settlement Options

The Company will make periodic payments in any form of settlement option that is acceptable to it at the time of an election. The standard forms of settlement options are described below. Payments under any settlement option may be in monthly, quarterly, semi-annual or annual payment intervals. If the amount of any regular payment under the form of settlement option elected would be less than $50, an alternative form of settlement option will have to be elected. The Company, in its discretion, may require benefit payments to be made by direct deposit or wire transfer to the account of a designated Payee.

The Company may modify minimum amounts, payment intervals and other terms and conditions at any time without prior notice to Owners. If the Company changes the minimum amounts, the Company may change any current or future payment amounts and/or payment intervals to conform to the change. More than one settlement option may be elected if the requirements for each settlement option elected are satisfied. Once payment begins under a settlement option that is contingent on the life of a specified person or persons, the settlement option may not be changed or commuted (i.e., redeemed at present value). Other settlement options may be commuted on a basis acceptable to you and us at the time of the commutation request.

The dollar amount of benefit payments will vary with the frequency of the payment interval and the duration of the payments. Generally, each payment in a stream of payments will be lesser in amount as the frequency of payments increases, or as the length of the payment period increases, because more payments will be paid. For life contingent settlement options, each payment in the stream of payments will generally be lesser in amount as the life expectancy of the Annuitant or Beneficiary increases because more payments are expected to be paid.

Income for a Fixed Period: The Company will make periodic payments at the beginning of each payment interval for a fixed period of 5 to 30 years. (Payment intervals of 1 to 4 years are available for death benefit settlement options only.)

Life Annuity with Payments for a Fixed Period: The Company will make periodic payments at the beginning of each payment interval for a specified fixed period, or until the death of the person on whose life benefit payments are based if he or she lives longer than the fixed period.

Joint and One-Half Survivor Annuity: The Company will make periodic payments at the beginning of each payment interval until the death of the primary person on whose life benefit payments are based; thereafter, the Company will make one-half of the periodic payment until the death of the secondary person on whose life benefit payments are based.

Income for a Fixed Period, Not to Exceed Life Expectancy: The Company will make periodic payments at the end of each payment interval for a fixed period, not to exceed the life expectancy of the person on whose life benefit payments are based, as determined under life expectancy tables compiled by the Office of the Actuary of the Social Security Administration. If this option is elected, the Contract is irrevocable and has no value that can be assigned, surrendered, loaned, commuted or withdrawn. The first payment will be paid as of the last day of the initial payment interval.

Calculation of Fixed Dollar Benefit Payments

Fixed dollar benefit payments are determined by multiplying the amount applied to the fixed dollar benefit (expressed in thousands of dollars and after deduction of any fees and charges, loans, applicable premium taxes or any other applicable amounts) by the amount of the payment per $1,000 of value which the Company is currently paying for settlement options of that type. This amount is then reduced by a pro rata portion of the contract maintenance fee. This reduction is equal to the amount of the fee divided by the number of benefit payments to be made over a 12-month period. Fixed dollar benefit payments will remain level for the duration of the Benefit Payment Period.

The Company generally guarantees minimum fixed dollar benefit payment factors based on 1983 annuity mortality tables for individuals with interest at 2% per year, compounded annually. For individual tax-qualified Contracts, the Company uses tables for blended lives (60% female/40% male). For individual non-tax-qualified Contracts, the Company uses tables for male and female lives. Where required by state law, the Company uses blended tables for all Contracts. The minimum monthly payment per $1,000 of value for the Company's standard settlement options is set forth in tables in the Contracts. Upon request, the Company will provide information about minimum monthly payments for ages or fixed periods not shown in the settlement option tables.

Calculation of Variable Dollar Benefit Payments

The first variable dollar benefit payment is the amount it would be if it were a fixed dollar benefit payment calculated at the Company's minimum guaranteed settlement option factors, reduced by a pro rata portion of the contract maintenance fee. This reduction is equal to the amount of the fee divided by the number of benefit payments to be made over a 12-month period.

The amount of each subsequent variable dollar benefit payment will reflect the investment performance of the Subaccount(s) selected and may vary from payment to payment. For example, because the first benefit payment includes a 2% rate of interest, subsequent benefit payments will be less than the first payment if the net investment performance of the applicable Subaccounts is less than 2%. Subsequent benefit payments will be more than the first payment if the net investment performance of the applicable Subaccount(s) is greater than 2%.

The amount of each subsequent payment is the sum of the payment due for each Subaccount selected, less a pro rata portion of the contract maintenance fee, as described above. The payment due for a Subaccount equals the shares for that Subaccount, which are the Benefit Units, times their value, which is the Benefit Unit Value for that Subaccount, as of the end of the fifth Valuation Period preceding the due date of the payment.

The number of Benefit Units for each Subaccount selected is determined by allocating the amount of the first variable dollar benefit payment (before deduction of the pro rata portion of the contract maintenance fee) among the Subaccount(s) selected in the percentages indicated by the Owner (or Payee). The dollar amount allocated to a Subaccount is divided by the Benefit Unit Value for that Subaccount as of the first day of the Benefit Payment Period. The result is the number of Benefit Units that the Company will pay for that Subaccount at each payment interval. The number of Benefit Units for each Subaccount remains fixed during the Benefit Payment Period, except as a result of any transfers among Subaccounts. An explanation of how Benefit Unit Values are calculated is included in the Glossary of Financial Terms of this prospectus.

FEDERAL TAX MATTERS

This section provides a general description of federal income tax considerations relating to the Contracts. The purchase, holding and transfer of a Contract may have federal estate and gift tax consequences in addition to income tax consequences. Estate and gift taxation is not discussed in this prospectus or in the Statement of Additional Information. State taxation will vary depending on the state in which you reside, and is not discussed in this prospectus or in the Statement of Additional Information.

The tax information provided in the prospectus and Statement of Additional Information should not be used as tax advice. Federal income tax laws are subject to interpretation by the IRS and are subject to change. You should consult a competent tax advisor to discuss how current tax laws affect your particular situation.

Tax Deferral on Annuities

Internal Revenue Code ("IRC") Section 72 governs taxation of annuities in general. The income earned on a Contract is generally not included in income until it is withdrawn from the Contract. In other words, a Contract is a tax-deferred investment. The Contracts must meet certain requirements in order to qualify for tax-deferred treatment under IRC Section 72. These requirements are discussed in the Statement of Additional Information. In addition, tax deferral is not available for a Contract when the Owner is not a natural person unless the Contract is part of a tax-qualified retirement plan or the Owner is a mere agent for a natural person. For a nonqualified deferred compensation plan, this rule means that the employer as Owner of the Contract will generally be taxed currently on any increase in the Account Value, although the plan itself may provide a tax deferral to the participating employee. For a group nonqualified Contract where the Owner has no rights over the separate interests, this rule is applied to each participant who is not a natural person.

Tax-Qualified Retirement Plans

Annuities may also qualify for tax-deferred treatment, or serve as a funding vehicle, under tax-qualified retirement plans that are governed by other IRC provisions. These provisions include IRC Sections 401 (pension and profit sharing plans), 403(b) (tax-sheltered annuities), 408 and 408A (individual retirement annuities), and 457(g) (governmental deferred compensation plans). Tax-deferral is generally also available under these tax-qualified retirement plans through the use of a trust or custodial account without the use of an annuity.

The tax law rules governing tax-qualified retirement plans and the treatment of amounts held and distributed under such plans are complex. If the Contract is to be used in connection with a tax-qualified retirement plan, including individual retirement annuities ("IRAs"), you should seek competent legal and tax advice regarding the suitability of the Contract for the situation involved and the requirements governing the distribution of benefits.

Contributions to a tax-qualified Contract are typically made with pre-tax dollars, while contributions to a non-tax-qualified Contract are typically made from after-tax dollars, though there are exceptions in either case. Tax-qualified Contracts may also be subject to restrictions on withdrawals that do not apply to non-tax-qualified Contracts. These restrictions may be imposed to meet the requirements of the IRC or of an employer plan. Following is a brief description of the types of tax-qualified retirement plans for which the Contracts are available.

Individual Retirement Annuities

IRC Sections 219 and 408 permit individuals or their employers to contribute to an individual retirement arrangement known as an "Individual Retirement Annuity" or "IRA". Under applicable limitations, an individual may claim a tax deduction for certain contributions to an IRA. Contributions made to an IRA for an employee under a Simplified Employee Pension (SEP) Plan or Savings Incentive Match Plan for Employees (SIMPLE) established by an employer are not includable in the gross income of the employee until the employee receives distributions from the IRA. Distributions from an IRA are taxable to the extent that they represent contributions for which a tax deduction was claimed, contributions made under a SEP plan or SIMPLE, or income earned on the Contract.

Roth IRAs

IRC Section 408A permits certain individuals to contribute to a Roth IRA. Contributions to a Roth IRA are not tax deductible. Tax-free distributions may be made after five years once the Owner attains age 59 1/2, becomes disabled or dies, or for qualified first-time homebuyer expenses.

Tax-Sheltered Annuities

IRC 403(b) of the Code permits contributions to a "tax-sheltered annuity" or "TSA" for the employees of public schools and certain charitable, religious, educational and scientific organizations described in IRC Section 501(c)(3). TSA contributions and Contract earnings are generally not included in the gross income of the employee until the employee receives distributions from the TSA. Amounts attributable to contributions made under a salary reduction agreement cannot be distributed until the employee attains age 59 1/2, separates from service, becomes disabled, incurs a hardship or dies. The Contracts may be modified if necessary to comply with any restrictions under the Texas ORP, or any other retirement plan under which the Contract was purchased.

Texas Optional Retirement Program

The Texas Optional Retirement Program ("ORP") provides for the purchase of IRC Section 403(b) Tax-Sheltered Annuities with fixed employer and employee contributions. Section 830.105 of the Texas Government Code provides that amounts attributable to such contributions cannot be distributed until the employee terminates employment from all Texas public institutions of higher education, retires, attains age 70 1/2, or dies. Section 830.205 of the Texas Government Code provides that amounts attributable to employer contributions vest after one year of participation. Accordingly, distributions require written certification from the employer of the employee's vesting status and, if the employee is living and under age 70 1/2, the employee's retirement or other termination from employment. The Contracts may be modified as necessary to meet the requirements for inclusion as an investment option in the Texas ORP or other retirement program.

Summary of Income Tax Rules

The following chart summarizes the basic income tax rules governing tax-qualified and non-tax-qualified Contracts. This information should not be used as tax advice. A competent tax advisor should be consulted to discuss an Owner's particular situation.

	Tax-Qualified Plans Nonqualified Deferred Compensation Plans	Basic Non-Tax-Qualified Contracts
Plan Types	IRC section 401 (Pension and Profit Sharing) IRC section 403(b) (Tax-Sheltered Annuities) IRC section 408 (IRA, SEP, SIMPLE IRA) IRC section 408A (Roth IRA) IRC section 457 Nonqualified Deferred Compensation	IRC section 72 only
Who May Purchase a Contract	Natural person, employer, or employer plan. Nonqualified deferred compensation plans will generally lose tax-deferred status of Contract itself.	Anyone. Non-natural person may purchase but will generally lose tax-deferred status.
Taxation of Surrenders	If there is an after-tax "investment in the contract," a pro rata portion of the amount surrendered is taxable income based on the ratio of "investment in the contract" to Account Value. Usually, 100% of distributions from a qualified plan must be included in taxable income because there were no after-tax contributions and therefore no "investment in the contract." Qualified distributions from section 408A Roth IRA may be completely tax free. Surrenders prior to age 59 1/2 may be subject to 10% tax penalty (25% for a SIMPLE IRA within the first two years of participation). Surrenders from tax-qualified Contracts may be restricted to meet requirements of the Internal Revenue Code or the terms of a retirement plan.	Account Value in excess of "investment in the contract" is included in taxable income. Generally, the "investment in the contract" will equal the sum of all purchase payments less prior non-taxable withdrawals. Surrenders are deemed to come from earnings first, and "investments in the contract" last. For a Contract purchased as part of an IRC Section 1035 exchange which includes contributions made before August 14, 1982 ("pre-TEFRA contributions") partial withdrawals are not taxable until the pre-TEFRA contributions have been returned. The taxable portion of any surrender prior to age 59 1/2 may be subject to a 10% tax penalty.
Taxation of Benefit Payments (annuity benefit payments or death benefit payments)	For fixed dollar benefit payments, a percentage of each payment is tax free equal to the ratio of after-tax "investment in the contract" (if any) to the total expected payments, and the balance is included in taxable income. For variable dollar benefit payments, a specific dollar amount of each payment is tax free, as predetermined by a pro rata formula, rather than a percentage of each payment. In either case, once the after-tax "investment in the contract" has been recovered, the full amount of each benefit payment is included in taxable income. Qualified distributions from a Section 408A Roth IRA made five years or more after the first Roth IRA contribution may be completely tax free. The taxable portion of any payments received before age 59 1/2 may be subject to a 10% tax penalty (25% for SIMPLE IRA payments with in the first 2 years of participation). Tax penalties do not apply to any payments after the death of the Owner.
Taxation of Lump Sum Death Benefit Payment	Taxed to recipient generally in same manner as full surrender. Tax penalties do not apply to death benefit distributions.
Assignment of Contract/ Transfer of Ownership	Assignment and transfer of Ownership generally not permitted.	Generally, deferred earnings become taxable to transferor at time of transfer and transferee receives an "investment in the contract" equal to the Account Value at that time. Gift tax consequences are not discussed herein.
Withholding	Eligible rollover distributions from Section 401, Section 403(b), and governmental Section 457 plan Contracts subject to 20% mandatory withholding on taxable portion unless direct rollover. Other Section 457 plan benefits and nonqualified deferred compensation plan benefits subject to wage withholding. For all other payments, Payee may elect to have taxes withheld or not.	Generally, Payee may elect to have taxes withheld or not.

GLOSSARY OF FINANCIAL TERMS

The following financial terms explain how the variable portion of the Contracts is valued. Read these terms in conjunction with the Definitions section of this prospectus.

Accumulation Unit Value: The initial Accumulation Unit Value for each Subaccount other than the money market Subaccount was set at $10. The initial Accumulation Unit Value for the money market Subaccount was set at $1. The initial Accumulation Unit Value for a Subaccount was established at the inception date of the Separate Account, or on the date the Subaccount was established, if later. The Company establishes distinct Accumulation Unit Values for Contracts with different Separate Account fee structures, as described in the Expense Tables.

After the initial Accumulation Unit Value is established, the Accumulation Unit Value for a Subaccount at the end of each Valuation Period is the Accumulation Unit Value at the end of the previous Valuation Period multiplied by the Net Investment Factor for that Subaccount for the current Valuation Period.

A Net Investment Factor of 1 produces no change in the Accumulation Unit Value for that Valuation Period. A Net Investment Factor of more than 1 or less than 1 produces an increase or a decrease, respectively, in the Accumulation Unit Value for that Valuation Period. The Accumulation Unit Value will vary to reflect the investment experience of the applicable Funds.

Benefit Unit Value: The initial Benefit Unit Value for a Subaccount will be set equal to the Accumulation Unit Value for that Subaccount at the end of the first Valuation Period in which a variable dollar benefit is established by the Company. The Company will establish distinct Benefit Unit Values for Contracts with different Separate Account fee structures, as described in the Expense Tables.

The Benefit Unit Value for a Subaccount at the end of each Valuation Period after the first is the Benefit Unit Value at the end of the previous Valuation Period multiplied by the Net Investment Factor for that Subaccount for the current Valuation Period, and multiplied by a daily investment factor (0.99994521) for each day in the Valuation Period. The daily investment factor reduces the previous Benefit Unit Value by the daily amount of the assumed interest rate (2% per year, compounded annually) which is already incorporated in the stream of variable dollar benefit payments.

Net Investment Factor: The Net Investment Factor for any Subaccount for any Valuation Period is determined by dividing NAV2 by NAV1 and subtracting a factor representing the mortality and expense risk charge and the administration charge (as well as the charges for any optional riders or endorsements) deducted from the Subaccount during that Valuation Period, where:

NAV1 is equal to the Net Asset Value for the Portfolio for the preceding Valuation Period; and

NAV2 is equal to the Net Asset Value for the Portfolio for the current Valuation Period plus the per share amount of any dividend or net capital gain distributions made by the Portfolio during the current Valuation Period, and plus or minus a per share charge or credit if the Company adjusts its tax reserves due to investment operations of the Subaccount or changes in tax law.

In other words, the Net Investment Factor represents the percentage change in the total value of assets invested by the Separate Account in a Portfolio. That percentage is then applied to Accumulation Unit Values and Benefit Unit Values as described in the discussion of those terms in this section of the prospectus.

THE REGISTRATION STATEMENT

The Company filed a Registration Statement with the Securities and Exchange Commission under the Securities Act of 1933 relating to the Contracts offered by this prospectus. This prospectus was filed as a part of the Registration Statement, but it does not constitute the complete Registration Statement. The Registration Statement contains further information relating to the Company and the Contracts. Statements in this prospectus discussing the content of the Contracts and other legal instruments are summaries. The actual documents are filed as exhibits to the Registration Statement. For a complete statement of the terms of the Contracts or any other legal document, refer to the appropriate exhibit to the Registration Statement. The Registration Statement and the exhibits thereto may be inspected and copied at the office of the Securities and Exchange Commission, located at 450 Fifth Street, N.W., Washington, D.C., and may also be accessed at the Securities and Exchange Commission's web site www.sec.gov. The registration number for the Registration Statement is 333-88302.

OTHER INFORMATION AND NOTICES

Householding - Revocation of Consent

Owners at a shared address who have consented to receive only one copy of each prospectus, annual report, or other required document per household ("householding") may revoke their consent at any time, and may receive separate documents, by contacting the Company at 1-800-789-6771.

Owners who are currently receiving multiple copies of required documents may request additional information about householding by contacting the Company at 1-800-789-6771.

Electronic Delivery of Required Documents

Owners who wish to receive prospectuses, SAIs, annual reports, and other required documents only in electronic form must give their consent. Consent may be revoked at any time. Please contact the Company at 1-800-789-6771 for additional information about electronic delivery of documents.

Legal Proceedings

The Company and Great American Advisors^SM, Inc. are involved in various kinds of routine litigation which, in management's judgment, are not of material importance to their assets or the Separate Account. There are no pending legal proceedings against the Separate Account.

STATEMENT OF ADDITIONAL INFORMATION

A Statement of Additional Information containing more details concerning the subjects discussed in this prospectus is available. The following is the table of contents for the Statement of Additional Information:

		Page
ANNUITY INVESTORS LIFE INSURANCE COMPANY®		3
	General Information and History	3
	State Regulations	3
SERVICES		3
	Safekeeping of Separate Account Assets	3
	Records and Reports	3
	Experts	3
DISTRIBUTION OF THE CONTRACTS		4
CALCULATION OF PERFORMANCE INFORMATION		4
	Money Market Subaccount Standardized Yield Calculation	4
	Average Annual Total Return Calculation	5
	Cumulative Total Return Calculation	6
	Standardized Average Annual Return Data	7
	Non-Standardized Average Annual Return Data	10
	Other Performance Measures	11
BENEFIT UNITS - TRANSFER FORMULAS		12
FEDERAL TAX MATTERS		13
	Taxation of Separate Account Income	13
	Tax Deferral on Non-Qualified Contracts	14
FINANCIAL STATEMENTS		14

Copies of the Statement of Additional Information dated May 1, 2003 are available without charge. To request a copy, please clip this coupon on the dotted line below, enter your name and address in the spaces provided, and mail to: Annuity Investors Life Insurance Company, P.O. Box 5423, Cincinnati, Ohio 45201-5423. You may also call the Company at 1-800-789-6771, or visit us at our web site www.annuityinvestors.com to request a copy.

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Name:

Address:

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ANNUITY INVESTORS LIFE INSURANCE COMPANY^®

ANNUITY INVESTORS^® VARIABLE ACCOUNT C

THE COMMODORE MAJESTY^SM

INDIVIDUAL FLEXIBLE PREMIUM DEFERRED ANNUITY

SUPPLEMENTAL PROSPECTUS DATED MAY 1, 2003

Annuity Investors Life Insurance Company ("the Company") is providing you with this Supplemental Prospectus that supplements and should be read with the prospectus ("Contract Prospectus") dated May 1, 2003, for The Commodore Majesty^SM Variable Annuity (the "Contract"). The Contract Prospectus contains details regarding your Contract. Please read the Contract Prospectus and this Supplemental Prospectus carefully and keep them for future reference. Unless otherwise indicated, terms used in this Supplemental Prospectus have the same meaning as in the Contract Prospectus.

THIS SUPPLEMENTAL PROSPECTUS PROVIDES INFORMATION YOU SHOULD KNOW REGARDING THE OPTIONAL GUARANTEED MINIMUM INCOME BENEFIT ENDORSEMENT, OPTIONAL STEP-UP DEATH BENEFIT RIDER, OPTIONAL ENHANCED DEATH BENEFIT RIDER OR OPTIONAL EARNINGS ENHANCEMENT BENEFIT RIDER IF YOU WERE A CONTRACT OWNER PRIOR TO MAY 1, 2003.

The Statement of Additional Information ("SAI") dated May 1, 2003, contains more information about the Company, the Separate Account and the Contracts, including the Subaccounts. The Company filed the SAI with the Securities and Exchange Commission (SEC) and it is legally part of the Contract Prospectus and this Supplemental Prospectus. The table of contents for the SAI is located on the last page of the Contract Prospectus. For a free copy, complete and return the form on the last page of the Contract Prospectus, or call the Company at 1-800-789-6771. You may also access the SAI and the other documents filed with the SEC about the Company, the Separate Account and the Contracts at the SEC's website: www.sec.gov. The registration number for The Commodore Majesty is 333-88302.

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THE CONTRACT PROSPECTUS OR THIS SUPPLEMENTAL PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

You should rely only on the information contained in the Contract, the Contract Prospectus, this Supplemental Prospectus, the SAI, or our approved sales literature. The description of the Contract in the Contract Prospectus and this Supplemental Prospectus is subject to the specific terms of your Contract as it contains specific contractual provisions and conditions. If the terms of your Contract differ from those in the Contract Prospectus and this Supplemental Prospectus, you should rely on the terms in your Contract. No one is authorized to give any information or make any representation other than those contained in the Contract, the Contract Prospectus, this Supplemental Prospectus, the SAI or our approved sales literature.

These securities may be sold by a bank or credit union, but are not financial institution products.

• The contracts are not FDIC or NCUSIF insured.
• The contracts are obligations of the company and not of the bank or credit union.
• The bank or credit union does not guarantee the company's obligations under the contracts.
• The contracts involve investment risk and may lose value.

SECTIONS OF PROSPECTUS REPLACED IN THEIR ENTIRETY

The "What Other Charges And Deductions Apply To The Contract?" subsection of the "OVERVIEW" section of the Prospectus is deleted, and is replaced in its entirety by the following:

What Other Charges And Deductions Apply To The Contract?

Other than the CDSC, the Company will charge the fees and charges listed below unless the Company waives the fee or charge as discussed in the Charges and Deductions section of this prospectus:

• a transfer fee for certain transfers among investment options;
• an annual contract maintenance fee;
• a mortality and expense risk charge, which is an expense of the Separate Account and charged against all assets in the Subaccounts (this charge may never be waived);
• an administration charge, which is an expense of the Separate Account and charged against all assets in the Subaccounts;
• charges for any optional riders or endorsements you select; and
• premium taxes in some states (where taxes apply, they may never be waived).

In addition to charges and deductions under the Contracts, the Portfolios incur expenses that are passed through to Owners. Portfolio expenses for the fiscal year ending December 31, 2002 are included in the Expense Tables of this prospectus and are described in the prospectuses and statements of additional information for the Portfolios.

The "Separate Account Annual Expenses" subsection of the "EXPENSE TABLES" section of the Prospectus is deleted, and is replaced in its entirety by the following:

Separate Account Annual Expenses

(As a percentage of the average value of the Owner's interest in the Subaccounts)

Mortality and Expense Risk Charge	1.50%
Administration Charge	0.15%
Total Separate Account Annual Expenses Without Optional Riders or Endorsements (Lowest Possible Charges)	1.65%
Optional Guaranteed Minimum Income Benefit Endorsement	0.30%
Optional Step-Up Death Benefit Rider (Issued to Owners Age 70 and Younger)	0.10%
Optional Step-Up Death Benefit Rider (Issued to Owners Over Age 70 and Under Age 79)	0.15%
Optional Enhanced Death Benefit Rider (Issued to Owners Age 70 and Younger)	0.25%
Optional Enhanced Death Benefit Rider (Issued to Owners Over Age 70 and Under Age 79)	0.35%
Optional Earnings Enhancement Benefit Rider	0.30%
Total Separate Account Annual Expenses With All Possible Riders or Endorsements (Highest Possible Charges*)	2.60%
*Assumes Owner is over age 70 and under age 79, has elected the Optional Enhanced Death Benefit Rider rather than the Optional Step-Up Death Benefit Rider, and therefore has the highest of the Optional Death Benefit Rider Charges. Only one Death Benefit Rider will be issued with any Contract.

The "Examples" subsection of the "EXPENSE TABLES" section of the prospectus is deleted, and is replaced in its entirety by the following:

Examples

These examples are intended to help you compare the cost of investing in the Contract with the cost of investing in other variable annuity contracts. These costs include the contract Owner transaction expenses (described in the first table), the annual contract maintenance fee and the Separate Account expenses (described in the second table), and Portfolio fees and expenses (described in the third table).

The first example assumes you invest $10,000 in a Contract with all possible riders and endorsement (i.e., the highest possible charges) for the time periods indicated, and that your investment has a 5% return each year. The examples also assume either the maximum or the minimum fees and expenses of any of the Portfolios. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

1. If you surrender your Contract at the end of the applicable time period:

	1 year	3 years
Maximum	1,172	1,891
Minimum	1,033	1,466

2. If you annuitize your Contract at the end of the applicable time period:

	1 year*	3 years
Maximum	N/A	1,491
Minimum	N/A	1,066

*Annuitization is not permitted under the Contracts until after the second Contract Year.

3. If you do not surrender your Contract:

	1 year	3 years
Maximum	472	1,491
Minimum	333	1,066

The second example assumes you invest $10,000 in a Contract with no riders or endorsements (i.e., the lowest possible charges) for the time periods indicated, and that your investment has a 5% return each year. The examples also assume either the maximum or the minimum fees and expenses of any of the Portfolios. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

1. If you surrender your Contract at the end of the applicable time period:

	1 year	3 years
Maximum	1,078	1,606
Minimum	938	1,169

2. If you annuitize your Contract at the end of the applicable time period:

	1 year*	3 years
Maximum	N/A	1,206
Minimum	N/A	769

*Annuitization is not permitted under the Contracts until after the second Contract Year.

3. If you do not surrender your Contract:

	1 year	3 years
Maximum	378	1,206
Minimum	238	769

The "CONDENSED FINANCIAL INFORMATION" section of the Prospectus is amended by adding the following:

Accumulation Unit Value for Contracts with 1.95% Total M&E Charges	Accumulation Units Outstanding for Contracts with 1.95% Total M&E Charges	Year
AIM V.I. Capital Development Fund-Series II Shares
9.284432	0.000	12/31/2002
AIM V.I. Government Securities Fund-Series II Shares
10.326116	0.000	12/31/2002
AIM V.I. Global Utilities Fund-Series II Shares
9.929466	0.000	12/31/2002
AIM V.I. Mid Cap Core Equity Fund-Series II Shares
9.877737	0.000	12/31/2002
The Dreyfus Socially Responsible Growth Fund, Inc.-Service Shares
9.368800	0.000	12/31/2002
Dreyfus Stock Index Fund-Service Shares
9.624131	0.000	12/31/2002
Dreyfus VIF-Appreciation Portfolio-Service Shares
9.491721	0.000	12/31/2002
Dreyfus VIF-Money Market Portfolio
0.997114	0.000	12/31/2002
INVESCO VIF-Core Equity Fund
9.586996	0.000	12/31/2002
INVESCO VIF-Financial Services Fund
9.496390	0.000	12/31/2002
INVESCO VIF-Health Sciences Fund
9.328958	0.000	12/31/2002
INVESCO VIF-Small Company Growth Fund
9.831959	0.000	12/31/2002
Janus Aspen Series Balanced Portfolio-Service Shares
9.869464	0.000	12/31/2002
Janus Aspen Series Growth Portfolio-Service Shares
9.474247	0.000	12/31/2002
Janus Aspen Series Mid Cap Growth Portfolio (formerly Aggressive Growth)-Service Shares
9.677613	0.000	12/31/2002
Janus Aspen Series Worldwide Growth Portfolio-Service Shares
9.297277	0.000	12/31/2002
Neuberger Berman AMT Fasciano Portfolio (Class S)
9.849742	0.000	12/31/2002
Neuberger Berman AMT Guardian Portfolio (Class S)
9.442245	0.000	12/31/2002
Oppenheimer Capital Appreciation Fund/VA-Service Class
9.800943	0.000	12/31/2002
Oppenheimer Global Securities Fund/VA-Service Class
9.371068	0.000	12/31/2002
Oppenheimer Main Street Small Cap Fund/VA-Service Class
9.499993	0.000	12/31/2002
Oppenheimer Multiple Strategies Fund/VA-Service Class
10.151100	0.000	12/31/2002
PBHG Large Cap Growth Portfolio
9.319883	0.000	12/31/2002
PBHG Mid-Cap Portfolio
9.873983	0.000	12/31/2002
PBHG Select Value Portfolio
9.348459	0.000	12/31/2002
PBHG Technology & Communications Portfolio
8.752121	0.000	12/31/2002
PIMCO High Yield Portfolio-Administrative Class
10.906467	0.000	12/31/2002
PIMCO Real Return Portfolio-Administrative Class
10.656512	0.000	12/31/2002
PIMCO Total Return Portfolio-Administrative Class
10.447876	0.000	12/31/2002
Rydex VT Sector Rotation Fund
9.034427	0.000	12/31/2002
Strong Opportunity Fund II-Advisor Class
9.643309	0.000	12/31/2002
Strong VIF Mid Cap Growth Fund II
9.386987	0.000	12/31/2002
Van Kampen UIF Core Plus Fixed Income Portfolio-Class I
10.271421	343.232	12/31/2002
Van Kampen UIF U.S. Mid Cap Core Portfolio-Class I
9.598669	0.000	12/31/2002
Van Kampen UIF U.S. Real Estate Portfolio-Class I
9.480214	0.000	12/31/2002
Van Kampen UIF Value Portfolio-Class I
9.517844	0.000	12/31/2002

The "CHARGES AND DEDUCTIONS" section of the Prospectus is deleted, and is replaced in its entirety by the following:

CHARGES AND DEDUCTIONS

There are two types of charges and deductions by the Company. There are charges assessed to the Contract, which are reflected in the Account Value of the Contract, but not in Accumulation Unit Values (or Benefit Unit Values). These charges are the Contingent Deferred Sales Charge, the annual contract maintenance fee, premium taxes (where applicable) and transfer fees. There are also charges assessed pro rata against the Separate Account. These charges are reflected in the Accumulation Unit Values (and Benefit Unit Values) of the Subaccounts. These charges are the mortality and expense risk charge, the administration charge, and the charges for any optional riders or endorsements you selected.

Except as described below, the Company will never charge more to a Contract than the fees and charges described even if its actual expenses exceed the total fees and charges collected. If the fees and charges collected by the Company exceed the actual expenses it incurs, the excess will be profit to the Company and will not be returned to Owners.

The Company reserves the right to change the amount of the transfer fee in the future, or the number of transfers that can be made without incurring the transfer fee, and/or to charge fees for the automatic transfer programs described in the Transfers section of this prospectus, and/or for the systematic withdrawal program described in the Surrenders section of this prospectus, if in the Company's discretion, it determines such charges are necessary to offset the costs of administering transfers or systematic withdrawals. The maximum amount of these charges and fees is described below.

Contingent Deferred Sales Charge ("CDSC")

Purpose of Charge	Offset expenses incurred by the Company in the sale of the Contracts, including commissions paid and cost of sales literature.
Amount of Charge	Up to 7% of each purchase payment, depending on the number of years elapsed since receipt of the purchase payment.

Number of full years elapsed between date of receipt of purchase payment and date request for surrender received	0	1	2	3 or more
CDSC as a percentage of purchase payment surrendered	7%	6%	4%	0%

When Assessed	On partial or full surrenders of purchase payments during the Accumulation Period.
Assessed Against What	Purchase payments only, not earnings. See the Surrenders section of this prospectus for information on order of withdrawal of purchase payments and earnings.
Waivers	Free withdrawal privilege. See the Surrenders section for information. In the Company's discretion where the Company incurs reduced sales and servicing expenses. If the Contract is issued with a tax sheltered annuity endorsement: (i) upon separation from service if Owner has attained age 55 and the Contract has been in force for at least seven years; or (ii) after the Contract has been in force ten years or more. Long term care waiver rider. See the Surrenders section for information. If the Social Security Administration determines after the Contract is issued that the Owner is "disabled" as that term is defined in the Social Security Act of 1935, as amended. If the spouse becomes successor Owner. See the Account Value section for information. Where required to satisfy state law.

Contract Maintenance Fee

Purpose of Charge	Offset expenses incurred in issuing the Contracts and in maintaining the Contracts and the Separate Account.
Amount of Charge	$30.00 per year
When Assessed	During the Accumulation Period the charge is deducted on each anniversary of the effective date of the Contract, and at time of full surrender. During the Benefit Payment Period a pro rata portion of the charge is deducted from each benefit payment.
Assessed Against What	Amounts invested in the Subaccounts and Fixed Account options. During the Accumulation Period, the charge is deducted pro rata from the Subaccounts and Fixed Account options in which the Contract has an interest on the date of the charge. During the Benefit Payment Period, a pro rata portion of the annual charge is deducted from each benefit payment.
Waivers	During the Accumulation Period if the Account Value is at least $40,000 on the date the charge is due. During the Benefit Payment Period if the amount applied to the annuity benefit is at least $40,000. If the Contract is issued with a tax sheltered annuity endorsement. In the Company's discretion where the Company incurs reduced sales and servicing expenses. During the Benefit Payment Period where required to satisfy state law.

Transfer Fee

Purpose of Charge	Offset cost incurred in administering the Contracts.
Amount of Charge	$25 for each transfer in excess of 12 in any contract year. The Company reserves the right to change the amount of this charge, or the number of transfers which can be made without incurring the charge at any time. The transfer fee will never exceed $30 for each transfer, and the number of transfers that can be made without a charge will never be fewer than 8.
When Assessed	During the Accumulation Period.
Assessed Against What	Deducted from amount transferred.
Waivers	Currently, the transfer fee does not apply to transfers associated with the dollar cost averaging, interest sweep and portfolio re-balancing programs. Transfers associated with these programs do not count toward the free transfers permitted in a contract year. The Company reserves the right to eliminate this waiver at any time.

Administration Charge

Purpose of Charge	Offset expenses incurred in administering the Contracts and the Separate Account.
Amount of Charge	Daily charge equal to 0.000411% of the daily Net Asset Value for each Subaccount, which corresponds to an annual effective rate of 0.15%.
When Assessed	During the Accumulation Period and during the Benefit Payment Period if a variable dollar benefit is elected.
Assessed Against What	Amounts invested in the Subaccounts.
Waivers	May be waived or reduced in the Company's discretion where the Company incurs reduced sales and servicing expenses.

Mortality and Expense Risk Charge

Purpose of Charge	Compensation for bearing certain mortality and expense risks under the Contract. Mortality risks arise from the Company's obligation to pay benefit payments during the Benefit Payment Period and to pay the death benefit. The expense risk assumed by the Company is the risk that the Company's actual expenses in administering the Contracts and the Separate Account will exceed the amount recovered through the contract maintenance fees, transfer fees and administration charges.
Amount of Charge	Daily charge equal to 0.004079% of the daily Net Asset Value for each Subaccount, which corresponds to an effective annual rate of 1.50%. The Company estimates that the mortality risk component of this charge is 0.90% and the expense risk component is 0.60%.
When Assessed	During the Accumulation Period, and during the Benefit Payment Period if a variable dollar benefit is elected.
Assessed Against What	Amounts invested in the Subaccounts.
Waivers	None.

Optional Guaranteed Minimum Income Benefit Endorsement Charge

Purpose of Charge	Compensation for bearing certain risks under the Contract. These risks arise from the Company's obligation under this Endorsement to allow Owners to base Annuity Benefit Payments on the GMIB Annuity Benefit Value if they so choose, which may result in a larger Annuity Benefit Payment than that otherwise payable under the Contract.
Amount of Charge	Daily charge equal to 0.000821% of the daily Net Asset Value for each Subaccount, which corresponds to an effective annual rate of 0.30%.
When Assessed	During the Accumulation Period.
Assessed Against What	Amounts invested in the Subaccounts.
Waivers	None.

Optional Step-Up Death Benefit Rider Charge

Purpose of Charge	Compensation for bearing mortality risks under this Rider. These increased risks arise from the Company's obligation to pay a Step-Up Death Benefit Amount which may exceed the Death Benefit Amount otherwise payable under the Contract.
Amount of Charge	Daily charge equal to 0.000274% of the daily Net Asset Value for each Subaccount if issued to an Owner age 70 or younger, or 0.000411% of the daily Net Asset Value for each Subaccount if issued to an Owner over age 70 but under age 79. These daily charges correspond to an effective annual rate of 0.10% or 0.15%, respectively.
When Assessed	During the Accumulation Period, and during the Benefit Payment Period if a variable dollar benefit is elected.
Assessed Against What	Amounts invested in the Subaccounts.
Waivers	None.

Optional Enhanced Death Benefit Rider Charge

Purpose of Charge	Compensation for bearing mortality risks under this Rider. These increased risks arise from the Company's obligation to pay an Enhanced Death Benefit Amount that may exceed the Death Benefit Amount otherwise payable under the Contract.
Amount of Charge	Daily charge equal to 0.000684% of the daily Net Asset Value for each Subaccount if issued to an Owner age 70 or younger, or 0.000957% of the daily Net Asset Value for each Subaccount if issued to an Owner over age 70 but under age 79. These daily charges correspond to an effective annual rate of 0.25% or 0.35%, respectively.
When Assessed	During the Accumulation Period, and during the Benefit Payment Period if a variable dollar benefit is elected.
Assessed Against What	Amounts invested in the Subaccounts.
Waivers	None.

Optional Earnings Enhancement Benefit Rider Charge

Purpose of Charge	Compensation for bearing certain risks under this Rider. These risks arise from the Company's obligation to pay an increased Death Benefit Amount (or an increased Enhanced Death Benefit Amount, if applicable), when a Death Benefit becomes payable as a result of an Owner's death.
Amount of Charge	Daily charge equal to 0.000821% of the daily Net Asset Value for each Subaccount, which corresponds to an effective annual rate of 0.30%.
When Assessed	During the Accumulation Period.
Assessed Against What	Amounts invested in the Subaccounts.
Waivers	None.

Premium Taxes

Certain state and local governments impose premium taxes. These taxes currently range up to 5.0% depending upon the jurisdiction. The Company will deduct any applicable premium taxes from the Account Value either upon death, surrender, annuitization, or at the time purchase payments are made, but no earlier than when the Company incurs a tax liability under state law.

Discretionary Waivers of Charges

The Company will look at the following factors to determine if it will waive a charge, in part or in full, due to reduced sales and servicing expenses: (1) the total amount of purchase payments to be received; and (2) any prior or existing relationship with the Company. The Company would expect to incur reduced sales and servicing expenses in connection with Contracts offered to employees of the Company, its subsidiaries and/or affiliates. There may be other circumstances, of which the Company is not presently aware, which could result in reduced sales and servicing expenses. In no event will the Company waive a charge where such waiver would be unfairly discriminatory to any person.

Expenses of the Portfolios

In addition to charges and deductions by the Company, there are Portfolio management fees and administration expenses which are described in the prospectus and SAI for each Portfolio. The actual Portfolio fees and expenses for the prior calendar year are included in the Expense Tables of this prospectus, unless a Portfolio commenced operations in the current calendar year. In that case, estimated Portfolio expenses are included in the Expense Tables of this prospectus. Portfolio expenses, like Separate Account expenses, are reflected in Accumulation Unit Values (or Benefit Unit Values).

The "Accumulation Units," "Stepped-Up Account Value for Successor Owner " and "Limitation On Allocations to Fixed Account Options" subsections of the "ACCUMULATION PERIOD" sections of the Prospectus are deleted, and are replaced in their entirety by the following:

Accumulation Units

Amounts allocated or transferred to a Subaccount are converted into Accumulation Units. The number of Accumulation Units credited is determined by dividing the dollar amount directed to the Subaccount by the Accumulation Unit Value for that Subaccount as of the end of the Valuation Period in which the amount allocated is received by the Company, or as of the end of the Valuation Period in which the transfer is made.

Accumulation Units will be canceled as of the end of the Valuation Period during which one of the following events giving rise to cancellation occurs:

• transfer from a Subaccount
• full or partial surrender from a Subaccount
• payment of a death benefit
• application of the amounts in a Subaccount to a settlement option
• deduction of the contract maintenance fee
• deduction of a transfer fee
• deduction of charges for certain optional riders or endorsements

Stepped-Up Account Value for Successor Owner

If the surviving spouse of a deceased Owner becomes a successor Owner of the Contract, the Account Value will be stepped-up to equal the death benefit which otherwise would have been payable, including any increase in the death benefit which may be due if the Owner elected the Earnings Enhancement Benefit Rider, as of what would have been the Death Benefit Valuation Date. In addition, CDSC will be waived on the entire stepped-up Account Value as of that date, but will apply to any purchase payments made by the successor Owner after that date.

For purposes of determining what would have been the Death Benefit Valuation Date, the election to become successor Owner will be deemed to be instructions as to the form of death benefit. The election to become successor Owner must be made within one year of the date of the Owner's death.

Limitation on Allocations to Fixed Account Options

Benefits under the optional Guaranteed Minimum Income Benefit Endorsement, if elected, will be adversely affected if on the last Valuation Date of any calendar quarter after the first Contract Year the Fixed Account Value exceeds thirty percent (30%) of the total Account Value. Please refer to the Optional Guaranteed Minimum Income Benefit Endorsement section of this prospectus for additional information.

The "BENEFIT PAYMENT PERIOD" section of the Prospectus is deleted, and is replaced in its entirety by the following:

BENEFIT PAYMENT PERIOD

Annuity Benefit

An Owner may designate the date that annuity payments will begin, and may change the date up to 30 days before annuity payments are scheduled to begin. If annuity payments begin, such payments will be in lieu of all other benefits under the Contract. The first day of the Benefit Payment Period in which annuity payments are made is generally referred to as the "Annuity Commencement Date." If the Owner has elected the optional Guaranteed Minimum Income Benefit Endorsement (the "GMIB Endorsement") and chooses to receive the Guaranteed Minimum Income Benefit ("GMIB"), however, this date is referred to as the "GMIB Commencement Date."

Unless the Company agrees otherwise, the Annuity Commencement Date cannot be later than the Contract Anniversary following the eighty-fifth (85th) birthday of the oldest Owner, or five years after the effective date of the Contract, whichever is later. The GMIB Commencement Date must be on, or during the thirty (30) calendar day period immediately following, the tenth (10th) or any subsequent Contract Anniversary prior to the oldest Owner's ninety-first (91st) birthday.

The amount applied to a settlement option to provide annuity payments generally will be the Account Value (less any outstanding loans) as of the end of the Valuation Period immediately preceding the Annuity Commencement Date. An Owner who has elected the GMIB Endorsement, however, may choose to receive the GMIB instead. If the Owner chooses the GMIB, annuity payments will be based on the GMIB Annuity Benefit Value, rather than on the Account Value, as of the end of the Valuation Period immediately preceding the GMIB Commencement Date.

The Owner generally may select any form of settlement option currently available. If the Owner chooses to receive the GMIB, however, the only settlement option available is the GMIB Option Life Annuity with Payments for at Least 120 Months. The standard forms of settlement options, including the GMIB Option, are described in the Settlement Options section of this prospectus.

If the Owner has not previously made an election as to the form of settlement option, the Company will contact the Owner to ascertain the form of settlement option to be paid. Available options include a specific fixed dollar benefit payment, a variable dollar benefit payment, or a combination of a variable and fixed dollar benefit payment. If the Owner does not select a settlement option, the Company will apply the Account Value pro rata to a combination variable and fixed dollar benefit for the life of the Annuitant with 120 monthly payments assured, as described in the Settlement Options section of this prospectus.

Optional Guaranteed Minimum Income Benefit Endorsement

In states where the Company has received regulatory approval, if an Owner purchases a Contract that is issued before the oldest Owner's eightieth (80th) birthday, the Owner may elect the optional GMIB Endorsement. This endorsement gives the Owner the option of choosing to have annuity payments based on the GMIB Annuity Benefit Value, instead of the Account Value, as of the end of the Valuation Period immediately preceding the GMIB Commencement Date.

The GMIB Annuity Benefit Base is used to calculate your GMIB Annuity Benefit Value. The GMIB Annuity Benefit Base, at the end of any Valuation Period, is equal to all purchase payments received as of that date:

1. reduced proportionally for any partial surrenders;
2. less the annual contract maintenance fee, any transfer fees and any applicable charges due under any optional riders or endorsements to the Contract;
3. less any applicable CDSC;
4. less outstanding loans; and
5. less any purchase payments received in the immediately preceding twelve (12) months.

For purposes of calculating the GMIB Annuity Benefit Base, all adjustments will occur at the time the transaction occurs. The adjustment for partial surrenders will reduce the GMIB Annuity Benefit Base in the same proportion that the Account Value was reduced on the date of the partial surrender. All other adjustments will reduce the GMIB Annuity Benefit Base on a dollar for dollar basis.

The GMIB Annuity Benefit Value, at the end of any Valuation Date, is equal to the GMIB Annuity Base, compounded daily, at an effective annual interest rate (the "GMIB Interest Rate," as described below), from the Contract Effective Date until the Contract Anniversary immediately following the oldest Owner's 85th birthday, or the GMIB Commencement Date, whichever is earlier, plus any Purchase Payments received in the immediately preceding twelve (12) months.

The GMIB Interest Rate is equal to an effective annual interest rate of 6% if the oldest Owner is Age 75 or younger on the Contract Effective Date. The GMIB Interest Rate is equal to an effective annual interest rate of 5% if the oldest Owner is over Age 75 but under Age 80 on the Contract Effective Date. After the first Contract year, the GMIB Interest Rate applicable to any Contract will be reduced by 3% if the Fixed Account Value exceeds 30% of the total Account Value on the last Valuation Date of any quarter. This means that if the GMIB Interest Rate otherwise would have been 6%, it will be reduced to 3% for that quarter. If the GMIB Interest Rate otherwise would have been 5%, it will be reduced to 2% for that quarter.

The GMIB Annuity Benefit Value and the GMIB Annuity Benefit Base are used only in connection with the determination of annuity payments, and have no affect on other Contract provisions, riders or endorsements. Neither the GMIB Annuity Benefit Value nor the GMIB Annuity Benefit Base reflects the Account Value. If the Owner chooses to receive the GMIB, the only settlement option available is the GMIB Option Life Annuity with Payments for at Least 120 Months. No variable dollar benefit payment option is available if the Owner elects to receive the GMIB.

The GMIB Endorsement must be elected before the Contract Effective Date. The Owner cannot add or discontinue the GMIB Endorsement after the Contract Effective Date. The additional charge for the GMIB Endorsement is described in the Charges and Deductions section of the prospectus. The GMIB Endorsement will terminate automatically on the earliest of the following:

1. the date the Contract is fully surrendered;
2. the Annuity Commencement Date;
3. the 31st calendar day following the Contract Anniversary immediately preceding the oldest Owner's 91st birthday;
4. the Death Benefit Valuation Date (or the date that would have been the Death Benefit Valuation Date if a spouse becomes successor Owner);
5. the date you name a new Owner who is older than the oldest previous Owner; or
6. the date the Contract is otherwise terminated in accordance with Contract provisions.

Before electing the GMIB endorsement, you should consult a qualified financial advisor. In particular, the election of the GMIB endorsement may not be appropriate for contract Owners who will be subject to any minimum distribution requirements under an IRA or other qualified plan prior to the expiration of ten (10) contract years.

While the GMIB endorsement does provide a guaranteed GMIB Annuity Benefit Value, and therefore may afford some protection against unfavorable market performance, the GMIB endorsement does not in any way guarantee the performance of any underlying portfolio, or any other investment option available under the contract. The GMIB endorsement does not restrict or limit the rights of contract Owners to annuitize the contract based on the Account Value at other times permitted under the contract. The GMIB endorsement does not in any way restrict the right to annuitize the contract using an Account Value that may be higher than the GMIB Annuity Benefit Value. Owners should remember, however, that the GMIB endorsement cannot be discontinued once it is elected. This means that the GMIB charge will continue to be assessed even if the investment performance of the contract results in an Account Value that exceeds the GMIB Annuity Benefit Value.

Death Benefit

A death benefit will be paid under a Contract if an Owner dies during the Accumulation Period. If a surviving spouse becomes the successor Owner of the Contract, the death benefit will be paid following the death of the successor Owner if he or she dies during the Accumulation Period. If a death benefit is paid, it will be in lieu of any other benefits under the Contract.

The death benefit will be allocated among the Subaccounts and Fixed Account options. This allocation will occur as of the Death Benefit Valuation Date. It will be made in the same proportion as the value of each option bears to the total Account Value immediately before that date.

Any applicable premium tax or other taxes not previously deducted, and any outstanding loans will be deducted from the Death Benefit Amounts described below.

An Owner may elect the form of payment of the death benefit at any time before his or her death. The form of payment may be a lump sum, or any available form of settlement option. The standard forms of settlement options are described in the Settlement Options section of this prospectus. If the Owner does not make an election as to the form of death benefit, the Beneficiary may make an election within one year after the Owner's death. If no election as to form of settlement option is made, the Company will apply the death benefit to a fixed dollar benefit for a fixed period of 48 months. The first day of the Benefit Payment Period in which a death benefit is paid may not be more than one year after the Owner's death; the day a death benefit is paid in a lump sum may not be more than five years after the Owner's date of death.

Death Benefit Amount

The Death Benefit Amount will be equal to the greater of:

1)	the Account Value on the Death Benefit Valuation Date; or
2)	the total purchase payments, reduced proportionally for partial surrenders.

The reduction for partial surrenders will be in the same proportion that the Account Value was reduced on the date of the partial surrender.

Optional Death Benefit Riders

In states where the Company has received regulatory approval, if an Owner purchases a Contract that is issued before the oldest Owner's 79th birthday, the Owner may elect either the Optional Step-Up Death Benefit Rider ("SDB Rider") or the Optional Enhanced Death Benefit Rider ("EDB Rider"). An Owner may not elect both of these riders. If the receipt of any benefit under either of these riders would cause the Contract to lose its tax-qualified or tax-deferred status, the rider will be deemed to be void from its inception. In that event, all charges deducted from the Contract for the rider will be refunded.

Optional Step-Up Death Benefit Rider

The SDB Rider provides for a Step-Up Death Benefit Amount ("SDB Amount") when a death benefit becomes payable as a result of the death of any Owner before the Annuity Commencement Date or GMIB Commencement Date, as applicable. The SDB Amount, if it is larger, will be paid instead of the Death Benefit Amount otherwise payable under the Contract. Only one death benefit will be paid under the Contract. If an SDB Amount is paid, it is lieu of the Death Benefit Amount.

The SDB Amount is equal to the largest Account Value on any Contract Anniversary before the Death Benefit Valuation Date and prior to any Owner's Age 80, reduced proportionally for any partial surrenders made after this value was reached; provided, however, that the SDB Amount shall not exceed 200% of the total purchase payments, reduced proportionally for partial surrenders. Any reduction for partial surrenders will be in the same proportion that the Account Value was reduced on the date of the partial surrender.

The SDB Rider must be elected before the Contract Effective Date. The Owner cannot add or discontinue the SDB Rider after the Contract Effective Date. The additional charge for the SDB Rider is described in the Charges and Deductions section of this prospectus. The SDB Rider will terminate automatically on the earliest of the following:

1)	the date the Contract is fully surrendered;
2)	the Death Benefit Valuation Date (or the date that would have been the Death Benefit Valuation Date if a spouse becomes successor Owner);
3)	the Annuity Commencement Date, or GMIB Commencement Date, as applicable;
4)	the date you name a new Owner who is older than the oldest previous Owner; or
5)	the date the Contract is otherwise terminated in accordance with Contract provisions.

Optional Enhanced Death Benefit Rider

The EDB Rider provides for an Enhanced Death Benefit Amount ("EDB Amount") when a death benefit becomes payable as a result of the death of any Owner before the Annuity Commencement Date or GMIB Commencement Date, as applicable. The EDB Amount, if it is larger, will be paid instead of the Death Benefit Amount otherwise payable under the Contract. Only one death benefit will be paid under the Contract. If an EDB Amount is paid, it is in lieu of the Death Benefit Amount.

The EDB Amount is equal to the greater of:

1)	the total purchase payment(s), reduced proportionally for partial surrenders and increased by any applicable interest, as described below; or
2)	the largest Account Value on any Contract Anniversary before the Death Benefit Valuation Date and prior to any Owner's Age 80, reduced proportionally for any partial surrenders made after this value was reached;

provided, however, that the EDB Amount shall not exceed 200% of the total purchase payments, reduced proportionally for partial surrenders. Any reduction for partial surrenders will be in the same proportion that the Account Value was reduced on the date of the partial surrender.

If any Owner dies before age 80, interest on purchase payments for determination of an EDB Amount compounds daily, at the effective annual interest rate described below (the "Specified Rate"), to the Death Benefit Valuation Date. If any Owner dies on or after his or her 80th birthday, interest compounds daily, at the Specified Rate, to the Contract Anniversary prior to the 80th birthday of the deceased Owner.

If the Contract is issued before any Owner is age 71, the Specified Rate is 5%. If the Contract is issued after any Owner is age 71 and before any Owner is age 79, the Specified Rate is 4%.

The EDB Rider must be elected before the Contract Effective Date. The Owner cannot add or discontinue the EDB Rider after the Contract Effective Date. The additional charge for the EDB Rider is described in the Charges and Deductions section of this prospectus. The EDB Rider will terminate automatically on the earliest of the following:

1)	the date the Contract is fully surrendered;
2)	the Death Benefit Valuation Date (or the date that would have been the Death Benefit Valuation Date if a spouse becomes successor Owner);
3)	the Annuity Commencement Date, or GMIB Commencement Date, as applicable;
4)	the date you name a new Owner who is older than the oldest previous Owner; or
5)	the date the Contract is otherwise terminated in accordance with Contract provisions.

Optional Earnings Enhancement Benefit Rider

In states where the Company has received regulatory approval, if an Owner purchases a Contract that is issued before the oldest Owner's 75^th birthday, the Owner may elect the optional Earnings Enhancement Benefit Rider (the "EEB Rider").

If a death benefit becomes payable as a result of an Owner's death while the EEB Rider is in effect, an Earnings Enhancement Benefit Amount ("EEB Amount") is provided. The Death Benefit Amount (or the Enhanced Death Benefit Amount or Step-Up Death Benefit Amount, if applicable) will be increased by the EEB Amount, if any. No more than one death benefit (whether or not increased by any EEB Amount) is payable under the Contract and the EEB Rider.

If the oldest Owner was age 69 or younger on the Contract Effective Date, the EEB Amount will be the lesser of 40% of Earnings (as defined below) or 40% of purchase payments not already withdrawn. If the oldest Owner was age 70 to 74 on the Contract Effective Date, the EEB Amount will be the lesser of 25% of Earnings or 25% of purchase payments not already withdrawn.

Solely for purposes of calculating the EEB Amount, Earnings are defined as the Account Value as of the Valuation Date immediately preceding the Death Benefit Valuation Date, minus purchase payments not already withdrawn. Partial surrenders taken prior to the Death Benefit Valuation Date will be deemed to have been taken from earnings first, and then from purchase payments, for purposes of calculating the EEB Amount under the EEB Rider.

The EEB Rider must be elected before the Contract Effective Date. The Owner cannot add or discontinue the EEB Rider after the Contract Effective Date. The additional charge for the EEB Rider is described in the Charges and Deductions section of this prospectus. The EEB Rider will terminate automatically on the earliest of the following:

1)	the date the Contract is fully surrendered;
2)	the Death Benefit Valuation Date (or the date that would have been the Death Benefit Valuation Date if a spouse becomes successor Owner);
3)	the Annuity Commencement Date, or GMIB Commencement Date, as applicable;
4)	the date the Owner names a new Owner who is older than the oldest previous Owner; or
5)	the date the Contract is otherwise terminated in accordance with Contract provisions.

If the receipt of any benefit under the EEB Rider would cause the Contract to lose its tax-qualified or tax-deferred status, the EEB Rider will be deemed to be void from its inception. In that event, all charges deducted from the Contract for the EEB Rider will be refunded.

Step Up In Value for Successor Owner

If your spouse becomes the successor Owner of the Contract, the Account Value of the contract will be increased, as of the date that would have been the Death Benefit Valuation Date, to equal the amount of the death benefit, including any increase in the death benefit which may be due if the Owner elected the Earnings Enhancement Benefit Rider, which would have been payable if your spouse had not become the successor Owner of the Contract. If the Account Value is increased under this provision, the Company will deposit the amount of the increase into the Fixed Accumulation Account Option.

If the death benefit which would have been payable is equal to the Account Value as of the date that would have been the Death Benefit Valuation Date, there will be no change in the Account Value of the Contract.

For purposes of determining the date that would have been the Death Benefit Valuation Date, the election to become successor Owner will be deemed to be instructions as to the form of death benefit. Therefore, the date that would have been the Death Benefit Valuation Date will be the later of the date we receive Due Proof of Death of the Owner, or the date we receive a successor Owner election, but never later than one year after the date of death of the Owner.

If your spouse becomes the successor Owner of the Contract, any CDSC which would otherwise apply on surrender will be waived, except that if any additional purchase payments are paid by the successor Owner, CDSC will apply as described in this Contract, to those additional purchase payments only.

Payment of Benefits

When a Contract is annuitized or when a death benefit is applied to a settlement option, the Account Value, the GMIB Annuity Benefit Value, or the death benefit, as the case may be, is surrendered to the Company in exchange for a promise to pay a stream of benefit payments for the duration of the settlement option selected. Benefit payments generally may be calculated and paid: (1) as a variable dollar benefit; (2) as a fixed dollar benefit; or (3) as a combination of both. GMIB payments, however, may be paid only as a fixed dollar benefit for at least 120 months, and may be based only on the GMIB Option Tables included in the Contract. No variable dollar benefit payment option is available if the Owner elects to receive the GMIB. The stream of payments, whether variable dollar or fixed dollar, is an obligation of the Company's general account. However, only the amount of fixed dollar benefit payments is guaranteed by the Company. The Owner (or payee) bears the risk that any variable dollar benefit payment may be less than the initial variable dollar benefit payment, or that it may decline to zero, if Benefit Unit Values for that payment decrease sufficiently. Transfers between a variable dollar benefit and a fixed dollar benefit are not permitted, but transfers of Benefit Units among Subaccounts are permitted once each 12 months after a variable dollar benefit has been paid for at least 12 months. The formulas for transferring Benefit Units among Subaccounts during the Benefit Payment Period are set forth in the SAI.

Settlement Options

The Company will make periodic payments in any form of settlement option that is acceptable to it at the time of an election. The standard forms of settlement options, including the GMIB Option, are described below. Payments under any settlement option may be in monthly, quarterly, semi-annual or annual payment intervals. If the amount of any regular payment under the form of settlement option elected would be less than $50, an alternative form of settlement option will have to be elected. The Company, in its discretion, may require benefit payments to be made by direct deposit or wire transfer to the account of a designated payee.

The Company may modify minimum amounts, payment intervals and other terms and conditions at any time without prior notice to Owners. If the Company changes the minimum amounts, the Company may change any current or future payment amounts and/or payment intervals to conform to the change. More than one settlement option may be elected if the requirements for each settlement option elected are satisfied. Once payment begins under a settlement option that is contingent on the life of a specified person or persons, the settlement option may not be changed or commuted (i.e., redeemed at present value). Other settlement options may be commuted on a basis acceptable to you and us at the time of the commutation request.

The dollar amount of benefit payments will vary with the frequency of the payment interval and the duration of the payments. Generally, each payment in a stream of payments will be lesser in amount as the frequency of payments increases, or as the length of the payment period increases, because more payments will be paid. For life contingent settlement options, each payment in the stream of payments will generally be lesser in amount as the life expectancy of the Annuitant or Beneficiary increases because more payments are expected to be paid.

Income for A Fixed Period: The Company will make periodic payments at the beginning of each payment interval for a fixed period of 5 to 30 years. (Payment intervals of 1-4 years are available for death benefit settlement options only.)

Life Annuity With Payments For A Fixed Period: The Company will make periodic payments at the beginning of each payment interval for a specified fixed period, or until the death of the person on whose life benefit payments are based if he or she lives longer than the fixed period.

Joint And One-Half Survivor Annuity: The Company will make periodic payments at the beginning of each payment interval until the death of the primary person on whose life benefit payments are based; thereafter, the Company will make one-half of the periodic payment until the death of the secondary person on whose life benefit payments are based.

Income For A Fixed Period, Not To Exceed Life Expectancy: The Company will make periodic payments at the end of each payment interval for a fixed period, not to exceed the life expectancy of the person on whose life benefit payments are based, as determined under life expectancy tables compiled by the Office of the Actuary of the Social Security Administration. If this option is elected, the Contract is irrevocable and has no value that can be assigned, surrendered, loaned, commuted or withdrawn. The first payment will be paid as of the last day of the initial payment interval.

GMIB Option Life Annuity With Payments For At Least 120 Months: The Company will make periodic payments at the beginning of each payment interval for at least 120 months, or until the death of the person on whose life benefit payments are based if he or she lives longer than the fixed period. This is the only settlement option available if the Owner chooses to base benefit payments on the GMIB Annuity Benefit Value rather than on the Account Value. This option may only be applied to the GMIB Option Tables in the Contract.

Calculation of Fixed Dollar Benefit Payments

Fixed dollar benefit payments are determined by multiplying the amount applied to the fixed dollar benefit (expressed in thousands of dollars and after deduction of any fees and charges, loans, applicable premium taxes or any other applicable amounts) by the amount of the payment per $1,000 of value which the Company is currently paying for settlement options of that type. This amount is then reduced by a pro rata portion of the contract maintenance fee. This reduction is equal to the amount of the fee divided by the number of benefit payments to be made over a 12-month period. Fixed dollar benefit payments will remain level for the duration of the Benefit Payment Period.

Except with respect to payments made under the terms of the GMIB Endorsement, the Company guarantees minimum fixed dollar benefit payment factors based on 1983 annuity mortality tables for individuals with interest at 2% per year, compounded annually. For individual tax-qualified Contracts, the Company uses tables for blended lives (60% female/40% male). For individual non-tax-qualified Contracts, the Company uses tables for male and female lives. Where required by state law, the Company uses blended tables for all Contracts. The minimum monthly payments per $1,000 of value for the Company's standard settlement options, including the GMIB Option, are set forth in tables in the Contracts. For payments made under the terms of the GMIB Endorsement, the Company guarantees minimum fixed dollar benefit payment factors based on 1983 annuity mortality tables for individuals, with a ten year age setback, and with interest 2 1/2% per year, compounded annually. Upon request, the Company will provide information about minimum monthly payments for ages or fixed periods not shown in the settlement option tables.

Calculation of Variable Dollar Benefit Payments

The first variable dollar benefit payment is the amount it would be if it were a fixed dollar benefit payment calculated at the Company's minimum guaranteed settlement option factors, reduced by a pro rata portion of the contract maintenance fee. This reduction is equal to the amount of the fee divided by the number of benefit payments to be made over a 12-month period.

The amount of each subsequent variable dollar benefit payment will reflect the investment performance of the Subaccount(s) selected and may vary from payment to payment. For example, because the first benefit payment includes a 2% rate of interest, subsequent benefit payments will be less than the first payment if the net investment performance of the applicable Subaccounts is less than 2%. Subsequent benefit payments will be more than the first payment if the net investment performance of the applicable Subaccount(s) is greater than 2%.

The amount of each subsequent payment is the sum of the payment due for each Subaccount selected, less a pro rata portion of the contract maintenance fee, as described above. The payment due for a Subaccount equals the shares for that Subaccount, which are the Benefit Units, times their value, which is the Benefit Unit Value for that Subaccount, as of the end of the fifth Valuation Period preceding the due date of the payment.

The number of Benefit Units for each Subaccount selected is determined by allocating the amount of the first variable dollar benefit payment (before deduction of the pro rata portion of the contract maintenance fee) among the Subaccount(s) selected in the percentages indicated by the Owner (or payee). The dollar amount allocated to a Subaccount is divided by the Benefit Unit Value for that Subaccount as of the first day of the Benefit Payment Period. The result is the number of Benefit Units that the Company will pay for that Subaccount at each payment interval. The number of Benefit Units for each Subaccount remains fixed during the Benefit Payment Period, except as a result of any transfers among Subaccounts. An explanation of how Benefit Unit Values are calculated is included in the Glossary of Financial Terms of this prospectus.

ANNUITY INVESTORS LIFE INSURANCE COMPANY
ANNUITY INVESTORS VARIABLE ACCOUNT C
STATEMENT OF ADDITIONAL INFORMATION FOR
INDIVIDUAL FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITIES

May 1, 2003

This Statement of Additional Information supplements the current prospectuses for Individual Flexible Premium Deferred Variable Annuity Contracts (collectively, the "Contracts") offered by Annuity Investors life Insurance Company^® through Annuity Investors^®Variable Account C ("Separate Account"). This statement of additional information is not a prospectus and should be read only in conjunction with the prospectus for the applicable Contract. Terms used in the current prospectuses for the Contracts are incorporated in this Statement of Additional Information and have the same meaning as in the prospectuses.

A copy of either of the prospectuses dated May 1, 2003, as supplemented from time to time, may be obtained without charge by writing to Annuity Investors Life Insurance Company, Administrative Office, P.O. Box 5423, Cincinnati, Ohio 45201-5423. You may also call the Company at 1-800-789-6771, or visit us at our website www.annuityinvestors.com to request a copy.

TABLE OF CONTENTS

Page

ANNUITY INVESTORS LIFE INSURANCE COMPANY^® *

General Information and History *

State Regulations *

SERVICES *

Safekeeping of Separate Account Assets *

Records and Reports *

Experts *

DISTRIBUTION OF THE CONTRACTS *

CALCULATION OF PERFORMANCE INFORMATION *

Money Market Subaccount Standardized Yield Calculation *

Average Annual Total Return Calculation *

Cumulative Total Return Calculation *

Standardized Average Annual Total Return Data *

Non Standardized Average Annual Total Return Data *

Other Performance Measures *

BENEFIT UNITS - TRANSFER FORMULAS *

FEDERAL TAX MATTERS *

Taxation of Separate Account Income *

Tax Deferral on Nonqualified Contracts *

FINANCIAL STATEMENTS *

ANNUITY INVESTORS LIFE INSURANCE COMPANY

General Information and History

Annuity Investors Life Insurance^® Company (the "Company") is a stock life insurance company incorporated under the laws of the State of Ohio in 1981. The Company is principally engaged in the sale of fixed and variable annuity policies.

The Company is a wholly owned subsidiary of Great American Life Insurance Company^®, which is a wholly owned subsidiary of Great American Financial Resources^®, Inc., a publicly traded insurance holding company ("GAFRI") (NYSE: GFR). GAFRI is in turn indirectly controlled by American Financial Group, Inc., a publicly traded holding company (NYSE: AFG).

State Regulations

The Company is subject to the insurance laws and regulations of all the jurisdictions where it is licensed to operate. The availability of certain Contract rights and provisions depends on state approval and/or filing and review processes in each jurisdiction. Where required by law or regulation, or to meet the requirements for inclusion as an investment option in certain retirement programs, the Contracts will be modified accordingly.

SERVICES

Safekeeping of Separate Account Assets

The Company holds title to assets of the Separate Account. The Separate Account assets are segregated from the Company's general account assets. Records are maintained of all purchases and redemptions of Portfolio shares held by each of the Subaccounts. The Company holds title to assets invested in the Fixed Account options together with the Company's other general account assets.

Records and Reports

The Company will maintain all records and accounts relating to the Fixed Account options and the Separate Account. As presently required by the provisions of the Investment Company Act of 1940, as amended ("1940 Act"), and rules and regulations promulgated thereunder which pertain to the Separate Account, reports containing such information as may be required under the 1940 Act or by other applicable law or regulation will be sent to each owner of an individual Contract semiannually either at the owner's last known address or, if requested by the owner, electronically.

Experts

The financial statements of the Separate Account at December 31, 2002, and for the period then ended, and the financial statements of the Company at December 31, 2002 and 2001, and for the years then ended, appearing in this Statement of Additional Information and Registration Statement have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such reports given on the authority of such firm as experts in accounting and auditing. The principal business address of Ernst & Young LLP is 1300 Chiquita Center, 250 East Fifth Street, Cincinnati, Ohio 45202.

DISTRIBUTION OF THE CONTRACTS

The offering of the Contracts is expected to be continuous. Although the Company does not anticipate discontinuing the offering of the Contracts, the Company reserves the right to discontinue offering any one or more of the Contracts.

The approximate commissions received and retained by Great American Advisors, Inc. for sale of the Contracts period from August 1, 2002 (inception date of Separate Account) to December 31, 2002

Registration Statement #	12/31/2002
	Received	Retained
333-88300	$ 71,863.15	$ 4,092.05
333-88302	$ 27,868.87	$ 1,759.46

CALCULATION OF PERFORMANCE INFORMATION

Money Market Subaccount Standardized Yield Calculation

In accordance with rules and regulations adopted by the Securities and Exchange Commission, the Company computes the Money Market Subaccount's current annualized yield for a seven-day period in a manner which does not take into consideration any realized or unrealized gains or losses on shares of the Money Market Portfolio, or on its portfolio securities. This current annualized yield is calculated according to the following formula:

YIELD = (BASE PERIOD RETURN/7)*365

    Where:

    BASE PERIOD RETURN = The percentage (or net) change in the Accumulation Unit Value for the Money Market Subaccount ("AUV") over a 7-day period determined as follows:

AUV at end of 7-day period - AUV at beginning of 7-day period

AUV at beginning of 7-day period

Because the Net Asset Value of the Money Market Portfolio rarely deviates from 1.000000 per unit, the change in the Accumulation Unit Value for the Money Market Subaccount (numerator of the above fraction) is ordinarily attributable exclusively to dividends paid and reinvested over the 7-day period less mortality and expense risk charges deducted from the Subaccount over the 7-day period. Because of the deductions for mortality and expense risk charges, the yield for the Money Market Subaccount of the Separate Account will be lower than the yield for the Money Market Portfolio or any comparable substitute-funding vehicle.

The Securities and Exchange Commission also permits the Company to disclose the effective yield of the Money Market Subaccount for the same 7-day period, which is yield determined on a compounded basis. The effective yield will be slightly higher than yield due to this compounding effect, and is calculated according to the following formula:

EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1)^365/7] - 1

Contract	Total Separate Account	Yield	Effective Yield
333-88300
333-88302

The yield on amounts held in the Money Market Subaccount normally will fluctuate on a daily basis. Therefore, the disclosed yield for any given past period is not an indication or representation of future yields. The Money Market Subaccount's actual yield is affected by changes in interest rates on money market securities, average portfolio maturity of the Money Market Portfolio or substitute funding vehicle, the types and quality of portfolio securities held by the Money Market Portfolio or substitute funding vehicle, and operating expenses. You may obtain current 7-day yield information for the Money Market Subaccount by calling the Company's Administrative Office toll free at 1-800-789-6771.

In addition, the yield figures do not reflect the effect of any taxes, Contingent Deferred Sales Charges or contract maintenance fees that may be applicable on surrender under any Contract.

Average Annual Total Return Calculation

The Company may from time to time disclose average annual total returns for one or more of the Subaccounts for various periods of time. Average annual total return quotations are computed by finding the average annual compounded rates of return over one-, five- and ten-year periods (or for such period of time as the underlying Subaccount has been available in the Separate Account) that would increase the initial amount invested to the ending redeemable value, according to the following formula:

P (1+T)ⁿ = ERV

Where:

P	=	a hypothetical initial payment of $1,000
T	=	average annual total return
n	=	number of years
ERV	=	ending redeemable value, at the end of the one-, five-or ten-year period (or fractional portion thereof), of a hypothetical $1,000 payment made at the beginning of the one-, five-or ten-year period

Average annual total return may be presented in either standardized or non-standardized form. Average annual total return data may be either actual return or hypothetical return. It will be hypothetical if it reflects performance for a period of time before the Subaccount commenced operations. The SEC considers hypothetical performance to be non-standardized. The ERV for standardized data reflects the deduction of all recurring fees, such as contract maintenance fees, contingent deferred sales charges, administration charges and mortality and expense risk charges, which are charged to all Contracts of that type. The ERV for non-standardized data reflects the deduction of mortality and expense risk charges and administration charges, but not contract maintenance fees or contingent deferred sales charges. Non-standardized performance data will be advertised only if the requisite standardized performance data is also disclosed.

Cumulative Total Return Calculation

The Company may from time to time disclose cumulative total return for various periods of time. Cumulative total return reflects the performance of a Subaccount over the entire period presented. Cumulative total return may be either actual return or hypothetical return. It will be hypothetical if it reflects performance for a period of time before the Subaccount commenced operations. Cumulative total return is calculated using the following formula:

CTR = (ERV/P) - 1

Where:

CTR	=	the cumulative total return net of Subaccount recurring charges, other than the contract maintenance fee, for the period
ERV	=	ending redeemable value at the end of the one-, five-or ten-year period (or fractional portion thereof), of a hypothetical $1,000 payment made at the beginning of the one-, five-or ten-year period
P	=	a hypothetical initial payment of $1,000

Although cumulative total return can be presented in either standardized or non-standardized form, the Company currently advertises only non-standardized cumulative total return, which assumes a contingent deferred sales charge of 0%, and no contract maintenance fee. The contingent deferred sales charge is not reflected because the Contracts are designed as a long-term investment. If reflected, the contingent deferred sales charge would decrease the return shown. Non-standardized cumulative total return can only be advertised if standardized average annual total return is also disclosed.

Because the Separate Account will not commence operations until the effective date of this Registration Statement, no standardized performance data is available at the time of this filing. No non-standardized performance data will be presented until the requisite standardized performance data is available.

Standardized Average Annual Total Return Data (Data reflects deduction of all recurring charges including contingent deferred sales charges and contract (or certificate) maintenance fees.		S.E.C. File No. 333-88300
		Contracts with No Endorsements (Lowest Possible Charges)						Contracts with all Endorsements (Highest Possible Charges)
Period from August 1, 2002 (effective date to December 31, 2002)			1 Year			From Inception Date*			1 Year			From Inception Date*
AIM V.I. -Capital Development Fund-Series II		-16.94%			-16.94%			-17.27%			-17.27%
AIM V.I. -Global Utilities Fund-Series II	-10.48%			-10.48%			-10.83%			-10.83%
AIM V.I. -Government Securities Fund-Series II	-6.50%			-6.50%			-6.87%			-6.87%
AIM V.I. -Mid Cap Core Equity Fund-Series II		-11.00%			-11.00%			-11.34%			-11.34%
The Dreyfus Socially Responsible Growth Fund, Inc.-Service Shares		-16.10%			-16.10%			-16.43%			-16.43%
Dreyfus Stock Index Fund-Service Shares		-13.54%			-13.54%			-13.88%			-13.88%
Dreyfus V.I.F. -Appreciation Portfolio-Service Shares		-14.87%			-14.87%			-15.20%			-15.20%
Dreyfus V.I.F. -Money Market		-10.04%			-10.04%			-10.32%			-10.32%
INVESCO VIF -Core Equity Fund		-13.91%			-13.91%			-14.25%			-14.25%
INVESCO VIF -Financial Services Fund		-14.82%			-14.82%			-15.15%			-15.15%
INVESCO VIF -Health Sciences Fund		-16.50%			-16.50%			-16.82%			-16.82%
INVESCO VIF -Small Company Growth Fund		-11.46%			-11.46%			-11.80%			-11.80%
Janus A.S. -Balanced Portfolio-Service Shares		-11.08%			-11.08%			-11.43%			-11.43%
Janus A.S. -Growth Portfolio-Service Shares		-15.04%			-15.04%			-15.37%			-15.37%
Janus A.S. -Mid Cap Growth Portfolio-Service Shares		-13.00%			-13.00%			-13.34%			-13.34%
Janus A.S. -Worldwide Growth Portfolio-Service Shares		-16.82%			-16.82%			-17.14%			-17.14%
Neuberger Berman AMT Fasciano Portfolio Class S		-11.28%			-11.28%			-11.62%			-11.62%
Neuberger Berman AMT Guardian Portfolio Class S		-15.36%			-15.36%			-15.69%			-15.69%
Oppenheimer Capital Appreciation-Service Class		-11.77%			-11.77%			-12.11%			-12.11%
Oppenheimer Global Securities-Service Class		-16.07%			-16.07%			-16.40%			-16.40%
Oppenheimer Main Street Small Cap-Service Class		-14.78%			-14.78%			-15.12%			-15.12%
Oppenheimer Multi Strategy-Service Class		-8.26%			-8.26%			-8.61%			-8.61%
PBHG Large Cap Growth Portfolio		-16.59%			-16.59%			-16.91%			-16.91%
PBHG Mid-Cap Value Portfolio		-11.03%			-11.03%			-11.38%			-11.38%
PBHG Select Value Portfolio		-16.30%			-16.30%			-16.63%			-16.63%
PBHG Technology & Communication Portfolio		-22.28%			-22.28%			-22.59%			-22.59%
PIMCO High Yield-Administrative Class		-0.69%			-0.69%			-1.07%			-1.07%
PIMCO Real Return-Administrative Class		-3.19%			-3.19%			-3.57%			-3.57%
PIMCO Total Return-Administrative Class		-5.28%			-5.28%			-5.65%			-5.65%
Rydex VT Sector Rotation Fund		-19.45%			-19.45%			-19.77%			-19.77%
Strong Opportunity Fund II -Advisor Series		-13.35%			-13.35%			-13.68%			-13.68%
Strong Variable Insurance Funds, Inc. -Strong Mid Cap Growth Fund II		-15.92%			-15.92%			-16.24%			-16.24%
Van Kampen UIF-Core Plus Fixed Portfolio		-7.05%			-7.05%			-7.41%			-7.41%
Van Kampen UIF-U.S. Mid Cap Core Portfolio		-13.79%			-13.79%			-14.13%			-14.13%
Van Kampen UIF-U.S. Real Estate Portfolio		-14.98%			-14.98%			-15.31%			-15.31%
Van Kampen UIF-Value Portfolio		-14.60%			-14.60%			-14.94%			-14.94%

* Because the Variable Account Commenced operations on August 1, 2002 only performance from that inception date through December 31, 2002 is shown.

1/  Annual mortality and expense risk charge of 1.40% and annual administrative charge of_0.15% of daily net asset value.
2/  Annual mortality and expense risk charge of 1.40% and annual administrative charges of 0.15% of daily net asset value.
3/  From Separate Account Commencement date (8/1/2002) to 12/31/2002 unless otherwise noted.

Standardized Average Annual Total Return Data(Data reflects deduction of all recurring charges including contingent deferred sales charges and contract (or certificate) maintenance fees - data is the same for all Standard Contracts)		S.E.C. File No. 333-88302
		Contracts No Endorsements (Lowest Possible Charges)						Contracts Endorsements (Highest Possible Charges)
Period from August 1, 2002 (effective date to December 31, 2002)			1 Year			From Inception Date*			1 Year			From Inception Date*
AIM V.I. -Capital Development Fund-Series II		-17.04%			-17.04%			-17.40%			-17.40%
AIM V.I. -Global Utilities Fund-Series II	-10.58%			-10.58%			-10.97%			-10.97%
AIM V.I. -Government Securities Fund-Series II	-6.61%			-6.61%			-7.01%			-7.01%
AIM V.I. -Mid Cap Core Equity Fund-Series II		-11.10%			-11.10%			-11.49%			-11.49%
The Dreyfus Socially Responsible Growth Fund, Inc.-Service Shares		-16.20%			-16.20%			-16.56%			-16.56%
Dreyfus Stock Index Fund-Service Shares		-13.64%			-13.64%			-14.01%			-14.01%
Dreyfus V.I.F. -Appreciation Portfolio-Service Shares		-14.96%			-14.96%			-15.33%			-15.33%
Dreyfus V.I.F. -Money Market		-10.12%			-10.12%			-10.44%			-10.44%
INVESCO VIF -Core Equity Fund		-14.01%			-14.01%			-14.38%			-14.38%
INVESCO VIF -Financial Services Fund		-14.92%			-14.92%			-15.29%			-15.29%
INVESCO VIF -Health Sciences Fund		-16.59%			-16.59%			-16.96%			-16.96%
INVESCO VIF -Small Company Growth Fund		-11.56%			-11.56%			-11.94%			-11.94%
Janus A.S. -Balanced Portfolio-Service Shares		-11.18%			-11.18%			-11.57%			-11.57%
Janus A.S. -Growth Portfolio-Service Shares		-15.14%			-15.14%			-15.51%			-15.51%
Janus A.S. -Mid Cap Growth Portfolio-Service Shares		-13.11%			-13.11%			-13.48%			-13.48%
Janus A.S. -Worldwide Growth Portfolio-Service Shares		-16.91%			-16.91%			-17.27%			-17.27%
Neuberger Berman AMT Fasciano Portfolio Class S		-11.38%			-11.38%			-11.76%			-11.76%
Neuberger Berman AMT Guardian Portfolio Class S		-15.46%			-15.46%			-15.82%			-15.82%
Oppenheimer Capital Appreciation-Service Class		-11.87%			-11.87%			-12.25%			-12.25%
Oppenheimer Global Securities-Service Class		-16.17%			-16.17%			-16.54%			-16.54%
Oppenheimer Main Street Small Cap-Service Class		-14.88%			-14.88%			-15.25%			-15.25%
Oppenheimer Multi Strategy-Service Class		-8.36%			-8.36%			-8.76%			-8.76%
PBHG Large Cap Growth Portfolio		-16.69%			-16.69%			-17.05%			-17.05%
PBHG Mid-Cap Value Portfolio		-11.14%			-11.14%			-11.52%			-11.52%
PBHG Select Value Portfolio		-16.40%			-16.40%			-16.76%			-16.76%
PBHG Technology & Communication Portfolio		-22.37%			-22.37%			-22.71%			-22.71%
PIMCO High Yield-Administrative Class		-0.80%			-0.80%			-1.23%			-1.23%
PIMCO Real Return-Administrative Class		-3.30%			-3.30%			-3.72%			-3.72%
PIMCO Total Return-Administrative Class		-5.39%			-5.39%			-5.80%			-5.80%
Rydex VT Sector Rotation Fund		-19.54%			-19.54%			-19.90%			-19.90%
Strong Opportunity Fund II -Advisor Series		-13.45%			-13.45%			-13.82%			-13.82%
Strong Variable Insurance Funds, Inc. -Strong Mid Cap Growth Fund II		-16.01%			-16.01%			-16.38%			-16.38%
Van Kampen UIF-Core Plus Fixed Portfolio		-7.16%			-7.16%			-7.56%			-7.56%
Van Kampen UIF-U.S. Mid Cap Core Portfolio		-13.89%			-13.89%			-14.27%			-14.27%
Van Kampen UIF-U.S. Real Estate Portfolio		-15.08%			-15.08%			-15.45%			-15.45%
Van Kampen UIF-Value Portfolio		-14.70%			-14.70%			-15.07%			-15.07%

* Because the Variable Account Commenced operations on August 1, 2002 only performance from that inception date through December 31, 2002 is shown.

1/  Annual mortality and expense risk charge of 1.65% and annual administrative charge of 0.15% of daily net asset value.
2/  Annual mortality and expense risk charge of 2.60% and annual administrative charges of 0.15% of daily net asset value.
3/  From Separate Account Commencement date (8/1/2002) to 12/31/2002 unless otherwise noted.

Non Standardized Average Annual Total Return Data (Data reflects deduction of all recurring charges including contingent deferred sales charges and contract (or certificate) maintenance fees - data is the same for all Standard Contracts)	S.E.C. File No. 333-88300
	Contracts No Endorsements (Lowest Possible Charges)		Contracts Endorsements (Highest Possible Charges)
Period from August 1, 2002 (effective date to December 31, 2002)	1 Year	From Inception Date3	1 Year	From Inception Date3
AIM V.I. -Capital Development Fund-Series II	-6.94%	-6.94%	-7.27%	-7.27%
AIM V.I. -Global Utilities Fund-Series II	-0.48%	-0.48%	-0.83%	-0.83%
AIM V.I. -Government Securities Fund-Series II	3.50%	3.50%	3.13%	3.13%
AIM V.I. -Mid Cap Core Equity Fund-Series II	-1.00%	-1.00%	-1.34%	-1.34%
The Dreyfus Socially Responsible Growth Fund, Inc.-Service Shares	-6.10%	-6.10%	-6.43%	-6.43%
Dreyfus Stock Index Fund-Service Shares	-3.54%	-3.54%	-3.88%	-3.88%
Dreyfus V.I.F. -Appreciation Portfolio-Service Shares	-4.87%	-4.87%	-5.20%	-5.20%
Dreyfus V.I.F. -Money Market	-0.04%	-0.04%	-0.32%	-0.32%
INVESCO VIF -Core Equity Fund	-3.91%	-3.91%	-4.25%	-4.25%
INVESCO VIF -Financial Services Fund	-4.82%	-4.82%	-5.15%	-5.15%
INVESCO VIF -Health Sciences Fund	-6.50%	-6.50%	-6.82%	-6.82%
INVESCO VIF -Small Company Growth Fund	-1.46%	-1.46%	-1.80%	-1.80%
Janus A.S. -Balanced Portfolio-Service Shares	-1.08%	-1.08%	-1.43%	-1.43%
Janus A.S. -Growth Portfolio-Service Shares	-5.04%	-5.04%	-5.37%	-5.37%
Janus A.S. -Mid Cap Growth Portfolio-Service Shares	-3.00%	-3.00%	-3.34%	-3.34%
Janus A.S. -Worldwide Growth Portfolio-Service Shares	-6.82%	-6.82%	-7.14%	-7.14%
Neuberger Berman AMT Fasciano Portfolio Class S	-1.28%	-1.28%	-1.62%	-1.62%
Neuberger Berman AMT Guardian Portfolio Class S	-5.36%	-5.36%	-5.69%	-5.69%
Oppenheimer Capital Appreciation-Service Class	-1.77%	-1.77%	-2.11%	-2.11%
Oppenheimer Global Securities-Service Class	-6.07%	-6.07%	-6.40%	-6.40%
Oppenheimer Main Street Small Cap-Service Class	-4.78%	-4.78%	-5.12%	-5.12%
Oppenheimer Multi Strategy-Service Class	1.74%	1.74%	1.39%	1.39%
PBHG Large Cap Growth Portfolio	-6.59%	-6.59%	-6.91%	-6.91%
PBHG Mid-Cap Value Portfolio	-1.03%	-1.03%	-1.38%	-1.38%
PBHG Select Value Portfolio	-6.30%	-6.30%	-6.63%	-6.63%
PBHG Technology & Communication Portfolio	-12.28%	-12.28%	-12.59%	-12.59%
PIMCO High Yield-Administrative Class	9.31%	9.31%	8.93%	8.93%
PIMCO Real Return-Administrative Class	6.81%	6.81%	6.43%	6.43%
PIMCO Total Return-Administrative Class	4.72%	4.72%	4.35%	4.35%
Rydex VT Sector Rotation Fund	-9.45%	-9.45%	-9.77%	-9.77%
Strong Opportunity Fund II -Advisor Series	-3.35%	-3.35%	-3.68%	-3.68%
Strong Variable Insurance Funds, Inc. -Strong Mid Cap Growth Fund II	-5.92%	-5.92%	-6.24%	-6.24%
Van Kampen UIF-Core Plus Fixed Portfolio	2.95%	2.95%	2.59%	2.59%
Van Kampen UIF-U.S. Mid Cap Core Portfolio	-3.79%	-3.79%	-4.13%	-4.13%
Van Kampen UIF-U.S. Real Estate Portfolio	-4.98%	-4.98%	-5.31%	-5.31%
Van Kampen UIF-Value Portfolio	-4.60%	-4.60%	-4.94%	-4.94%

* Because the Variable Account Commenced operations on August 1, 2002 only performance from that inception date through December 31, 2002 is shown.

1/  Annual mortality and expense risk charge of 1.40% and annual administrative charge of 0.15% of daily net asset value.
2/  Annual mortality and expense risk charge of 2.25% and annual administrative charges of 0.15% of daily net asset value.
3/  From Separate Account Commencement date (8/1/2002) to 12/31/2002 unless otherwise noted.

Non Standardized Average Annual Total Return Data (Data reflects deduction of all recurring charges including contingent deferred sales charges and contract (or certificate) maintenance fees - data is the same for all Standard Contracts)	S.E.C. File No. 333-88302
	Contracts No Endorsements (Lowest Possible Charges)		Contracts Endorsements (Highest Possible Charges)
Period from August 1, 2002 (effective date to December 31, 2002)	1 Year	From Inception Date3	1 Year	From Inception Date3
AIM V.I. -Capital Development Fund-Series II	-7.04%	-7.04%	-7.40%	-7.40%
AIM V.I. -Global Utilities Fund-Series II	-0.58%	-0.58%	-0.97%	-0.97%
AIM V.I. -Government Securities Fund-Series II	3.39%	3.39%	2.99%	2.99%
AIM V.I. -Mid Cap Core Equity Fund-Series II	-1.10%	-1.10%	-1.49%	-1.49%
The Dreyfus Socially Responsible Growth Fund, Inc.-Service Shares	-6.20%	-6.20%	-6.56%	-6.56%
Dreyfus Stock Index Fund-Service Shares	-3.64%	-3.64%	-4.01%	-4.01%
Dreyfus V.I.F. -Appreciation Portfolio-Service Shares	-4.96%	-4.96%	-5.33%	-5.33%
Dreyfus V.I.F. -Money Market	-0.12%	-0.12%	-0.44%	-0.44%
INVESCO VIF -Core Equity Fund	-4.01%	-4.01%	-4.38%	-4.38%
INVESCO VIF -Financial Services Fund	-4.92%	-4.92%	-5.29%	-5.29%
INVESCO VIF -Health Sciences Fund	-6.59%	-6.59%	-6.96%	-6.96%
INVESCO VIF -Small Company Growth Fund	-1.56%	-1.56%	-1.94%	-1.94%
Janus A.S. -Balanced P mnbb,vortfolio-Service Shares	-1.18%	-1.18%	-1.57%	-1.57%
Janus A.S. -Growth Portfolio-Service Shares	-5.14%	-5.14%	-5.51%	-5.51%
Janus A.S. -Mid Cap Growth Portfolio-Service Shares	-3.11%	-3.11%	-3.48%	-3.48%
Janus A.S. -Worldwide Growth Portfolio-Service Shares	-6.91%	-6.91%	-7.27%	-7.27%
Neuberger Berman AMT Fasciano Portfolio Class S	-1.38%	-1.38%	-1.76%	-1.76%
Neuberger Berman AMT Guardian Portfolio Class S	-5.46%	-5.46%	-5.82%	-5.82%
Oppenheimer Capital Appreciation-Service Class	-1.87%	-1.87%	-2.25%	-2.25%
Oppenheimer Global Securities-Service Class	-6.17%	-6.17%	-6.54%	-6.54%
Oppenheimer Main Street Small Cap-Service Class	-4.88%	-4.88%	-5.25%	-5.25%
Oppenheimer Multi Strategy-Service Class	1.64%	1.64%	1.24%	1.24%
PBHG Large Cap Growth Portfolio	-6.69%	-6.69%	-7.05%	-7.05%
PBHG Mid-Cap Value Portfolio	-1.14%	-1.14%	-1.52%	-1.52%
PBHG Select Value Portfolio	-6.40%	-6.40%	-6.76%	-6.76%
PBHG Technology & Communication Portfolio	-12.37%	-12.37%	-12.71%	-12.71%
PIMCO High Yield-Administrative Class	9.20%	9.20%	8.77%	8.77%
PIMCO Real Return-Administrative Class	6.70%	6.70%	6.28%	6.28%
PIMCO Total Return-Administrative Class	4.61%	4.61%	4.20%	4.20%
Rydex VT Sector Rotation Fund	-9.54%	-9.54%	-9.90%	-9.90%
Strong Opportunity Fund II -Advisor Series	-3.45%	-3.45%	-3.82%	-3.82%
Strong Variable Insurance Funds, Inc. -Strong Mid Cap Growth Fund II	-6.01%	-6.01%	-6.38%	-6.38%
Van Kampen UIF-Core Plus Fixed Portfolio	2.84%	2.84%	2.44%	2.44%
Van Kampen UIF-U.S. Mid Cap Core Portfolio	-3.89%	-3.89%	-4.27%	-4.27%
Van Kampen UIF-U.S. Real Estate Portfolio	-5.08%	-5.08%	-5.45%	-5.45%
Van Kampen UIF-Value Portfolio	-4.70%	-4.70%	-5.07%	-5.07%

* Because the Variable Account Commenced operations on August 1, 2002 only performance from that inception date through December 31, 2002 is shown.

1/  Annual mortality and expense risk charge of 1.65% and annual administrative charge of 0.15% of daily net asset value.
2/  Annual mortality and expense risk charge of 2.60% and annual administrative charge of 0.15% of daily net asset value.
3/  From Separate Account Commencement date (8/1/2002) to 12/31/2002 unless otherwise noted.

Other Performance Measures

Any of the Contracts may be compared in advertising materials to certificates of deposit ("CDs") or other investments issued by banks or other depository institutions. Variable annuities differ from bank investments in several respects. For example, variable annuities may offer higher potential returns than CDs. However, unless you have elected to invest in only the fixed account options, the Company does not guarantee your return. Also, none of your investments under the Contract, whether allocated to the fixed account options or to a Subaccount, are FDIC-insured.

Advertising materials for any of the Contracts may, from time to time, address retirement needs and investing for retirement, the usefulness of a tax-qualified retirement plan, saving for college, or other investment goals. Advertising materials for any of the Contracts may discuss, generally, the advantages of investing in a variable annuity and the Contracts' particular features and their desirability and may compare Contract features with those of other issuers. Advertising materials may also include a discussion of the balancing of risk and return in connection with the selection of investment options under the Contracts and investment alternatives generally, as well as a discussion of the risks and attributes associated with the investment options under the Contracts. A description of the tax advantages associated with the Contracts, including the effects of tax-deferral under a variable annuity, or under a retirement plan generally, may be included as well. Advertising materials for any of the Contracts may quote or reprint financial or business publications and periodicals, including model portfolios or allocations as they relate to current economic and political conditions, management and composition of the underlying Portfolios, investment philosophy, investment techniques, and desirability of owning the Contract and other products and services offered by the Company or Great American Advisors, Inc. ("GAA").

The Company or GAA may provide information designed to help individuals understand their investment goals and explore various financial strategies. Such information may include: information about current economic, market and political conditions; materials that describe general principles of investing, such as asset allocation, diversification, risk tolerance and goal setting; questionnaires designed to help create a personal financial profile; worksheets used to project savings needs based on assumed rates of inflation and hypothetical rates of return; and alternative investment strategies and plans.

Ibbotson Associates of Chicago, Illinois ("Ibbotson"), provides historical returns of the capital markets in the United States, including common stocks, small capitalization stocks, long-term corporate bonds, intermediate-term government bonds, long-term government bonds, Treasury bills, the U.S. rate of inflation (based on Consumer Price Index), and combinations of various capital markets based on the returns of different indices.

Advertising materials for any of the Contracts may use the performance of these capital markets in order to demonstrate general risk-versus-reward investment scenarios. Performance comparisons may also include the value of a hypothetical investment in any of these capital markets. The risk associated with the security types in any capital market may or may not correspond directly to those of the Subaccounts and the Portfolios. Advertising materials may also compare performance to that of other compilations or indices that may be developed and made available in the future.

In addition, advertising materials may quote various measures of volatility and benchmark correlation for the Subaccounts and the respective Portfolios and compare these volatility measures and correlation with those of other separate accounts and their underlying funds. Measures of volatility seek to compare a Subaccount's, or its underlying Portfolio's, historical share price fluctuations or total returns to those of a benchmark. Measures of benchmark correlation indicate how valid a comparative benchmark may be. All measures of volatility and correlation are calculated using averages of historical data.

BENEFIT UNITS - TRANSFER FORMULAS

Transfers of a Contract owner's Benefit Units between Subaccounts during the Benefit Payment Period are implemented according to the following formulas:

      The number of Benefit Units to be transferred from a given Subaccount is BU1 (trans).

      The number of the Contract Owner's Benefit Units remaining in such Subaccount (after the transfer)

       = UNIT1 - BU1 (trans)

      The number of Benefit Units transferred to the new Subaccount is BU2 (trans).

       BU2 (trans) = BU1 (trans) * BUV1/BUV2.

      The number of the Contract Owner's Benefit Units in the new Subaccount (after the transfer)

      = UNIT2 + BU2 (trans).

Subsequent variable dollar benefit payments will be based on the number of the Contract Owner's Benefit Units in each Subaccount (after the transfer) as of the next variable dollar benefit payment's due date.

Where:

        BU1 (trans) is the number of the Contract Owner's Benefit Units transferred from a given Subaccount.

        BU2 (trans) is the number of the Contract Owner's Benefit Units transferred into the new Subaccount.

        BUV1 is the Benefit Unit Value of the Subaccount from which the transfer is being made as of the end of the Valuation Period in which the transfer request was received.

        BUV2 is the Benefit Unit Value of the Subaccount to which the transfer is being made as of the end of the Valuation Period in which the transfer request was received.

        UNIT1 is the number of the Contract owner's Benefit Units in the Subaccount from which the transfer is being made, before the transfer.

        UNIT2 is the number of the Contract owner's Benefit Units in the Subaccount to which the transfer is being made, before the transfer.

FEDERAL TAX MATTERS

The following discussion supplements the discussion of federal tax matters in the prospectuses for the Contracts. This discussion is general and is not intended as tax advice. Federal income tax laws or the interpretation of those laws by the Internal Revenue Service may change at any time.

Taxation of Separate Account Income

The Company is taxed as a life insurance company under Part I of Subchapter L of the Internal Revenue Code ("IRC"). Since the Separate Account is not an entity separate from the Company, and its operations form a part of the Company, it will not be taxed separately as a "Regulated Investment Company" under Subchapter M of the IRC. Investment income and realized capital gains are automatically applied to increase reserves under the Contracts. Under existing federal income tax law, the Company believes that it will not be taxed on the Separate Account investment income and realized net capital gains to the extent that such income and gains are applied to increase the reserves under the Contracts.

Accordingly, the Company does not anticipate that it will incur any federal income tax liability attributable to the Separate Account and, therefore, the Company does not intend to make provisions for any such taxes. However, if changes in the federal tax laws or interpretations thereof result in the Company being taxed on income or gains attributable to the Separate Account, then the Company may impose a charge against the Separate Account (with respect to some or all Contracts) to reflect such taxes.

In certain circumstances, owners of individual variable annuity contracts may be considered the owners, for federal income tax purposes, of the assets of the separate accounts used to support their contracts. In those circumstances, income and gains from the separate account assets would be included in the owner's gross income. The Internal Revenue Service has stated in published rulings that a variable contract owner will be considered the owner of separate account assets if the owner possesses incidents of ownership in those assets, such as the ability to exercise investment control over the assets.

The Treasury Department has also announced, in connection with the issuance of regulations concerning diversification, that those regulations "do not provide guidance concerning the circumstances in which investor control of the investments of a segregated asset account may cause the investor (i.e., the owner), rather than the insurance company, to be treated as the owner of the assets in the account." This announcement also stated that guidance would be issued by way of regulations or rulings on the "extent to which policyholders may direct their investments to particular Subaccounts without being treated as owners of the underlying assets." As of the date of this statement of additional information, no guidance has been issued.

The ownership rights under the Contracts are similar to, but different in certain respects from, those described by the Internal Revenue Service in rulings in which it was determined that contract owners were not owners of separate account assets. For example, the owner of a Contract has more flexibility in allocating purchase payments and Account Value that was contemplated in the rulings. These differences could result in an owner being treated as the owner of a pro rata portion of the assets of the Separate Account and/or Fixed Account. In addition, the Company does not know what standards will be set forth, if any, in the regulations or rulings that the Treasury Department has stated it expects to issue. The Company therefore reserves the right to modify the Contracts as necessary to attempt to prevent an owner from being considered the owner of a pro rata share of the assets of the Separate Account.

Tax Deferral on Non-tax qualified Contracts

Section 817(h) of the Code requires that with respect to non-tax qualified Contracts, the investments of the Portfolios be "adequately diversified" in accordance with Treasury regulations in order for the Contracts to qualify as annuity contracts under federal tax law. The Separate Account, through the Portfolios, intends to comply with the diversification requirements prescribed by the Treasury in Reg. Sec. 1.817-5, which affect how the Portfolios' assets may be invested. Failure of a Portfolio to meet the diversification requirements would result in loss of tax deferred status to owners of non-tax qualified Contracts.

FINANCIAL STATEMENTS

The audited financial statements of the Separate Account at, and for the period ended December 31, 2002 and the Company's financial statements for the years ended, December 31, 2002 and 2001 are included herein. The financial statements of the Company included in this Statement of Additional Information should be considered only as bearing on the ability of the Company to meet its obligations under the Contracts. They should not be considered as bearing on the investment performance of the assets held in the Separate Account.

ANNUITY INVESTORS

VARIABLE ACCOUNT C

Financial Statements

December 31, 2002

With Report of Independent Auditors

ANNUITY INVESTORS VARIABLE ACCOUNT C

Financial Statements

December 31, 2002

Contents

Report of Independent Auditors 1

Audited Financial Statements

Statement of Assets and Liabilities 2

Statement of Operations 5

Statement of Changes in Net Assets 6

Notes to Financial Statements 7

Report of Independent Auditors

Contractholders of Annuity Investors Variable Account C

and

Board of Directors of Annuity Investors Life Insurance Company

We have audited the accompanying statement of assets and liabilities of Annuity Investors Variable Account C (comprising the sub accounts as listed in Footnote 1 of the financial statements) as of December 31, 2002, and the related statement of operations and changes in net assets for the period from August 1, 2002 (commencement of operations) to December 31, 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2002, by correspondence with the custodian. 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the respective sub-accounts constituting the Annuity Investors Variable Account C at December 31, 2002, and the results of their operations and changes in their net assets for the period from August 1, 2002 (commencement of operations) to December 31, 2002, in conformity with accounting principles generally accepted in the United States.

/s/ Ernst & Young LLP

February 28, 2003

Cincinnati, Ohio

1

2

3

4

5

6

ANNUITY INVESTORS VARIABLE ACCOUNT C

NOTES TO FINANCIAL STATEMENTS

December 31, 2002

(1) GENERAL

Annuity Investors Variable Account C (the "Account") is registered under the Investment Company Act of 1940, as amended, as a unit investment trust. The Account was established on November 7, 2001 and commenced operations on August 1, 2002 as a segregated investment account for individual variable annuity contracts which are registered under the Securities Act of 1933. The operations of the Account are included in the operations of Annuity Investors Life Insurance Company (the "Company") pursuant to the provisions of the Ohio Insurance Code. The Company is an indirect wholly owned subsidiary of Great American Financial Resources, Inc., ("GAFRI"), a publicly traded insurance holding company listed on the New York Stock Exchange. The Company is licensed in 48 states.

Under applicable insurance law, the assets and liabilities of the Account are clearly identified and distinguished from the Company's other assets and liabilities. The portion of the Account's assets applicable to the variable annuity contracts is not chargeable with liabilities arising out of any other business the Company may conduct.

At December 31, 2002, the following investment options were available:

AIM Variable Insurance Funds:

• Capital Development Fund - Series II
• Global Utilities Fund - Series II
• Government Securities Fund - Series II
• Mid Cap Core Equity Fund - Series II

The Dreyfus Variable Investment Fund:

• Appreciation Portfolio - Service Shares
• Money Market Portfolio

Dreyfus Funds:

• Socially Responsible Growth Fund, Inc. - Service Shares
• Stock Index Fund - Service Shares

Invesco Variable Investment Funds, Inc.:

• Core Equity Fund
• Financial Services Fund
• Health Sciences Fund
• Small Company Growth Fund

Janus Aspen Series:

• Aggressive Growth Portfolio - Service Shares
• Balanced Portfolio - Service Shares
• Growth Portfolio - Service Shares
• Worldwide Growth Portfolio - Service Shares

Neuberger Berman Advisors Management Trust:

• AMT Fasciano Portfolio - Class S
• AMT Guardian Portfolio - Class S

Oppenheimer Variable Account Funds:

• Capital Appreciation - VA Service Class
• Global Securities - VA Service Class
• Main Street Small Cap - VA Service Class
• Multiple Strategies - VA Service Class

7

ANNUITY INVESTORS VARIABLE ACCOUNT C

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2002

PBHG Insurance Series Fund, Inc.:

• Large Cap Growth Portfolio
• Mid Cap Value Portfolio
• Select Value Portfolio
• Technology & Communications Portfolio

PIMCO Variable Insurance Trust:

• High Yield Portfolio - Administrative Class
• Real Return Portfolio - Administrative Class
• Total Return Portfolio - Administrative Class

Rydex Variable Trust:

• Sector Rotation Fund

Strong Funds:

• Mid Cap Growth Fund II
• Opportunity Fund II - Advisor Series

The Universal Institutional Funds, Inc.:

• Core Plus Fixed Income Portfolio
• Mid Cap Value Portfolio
• U.S. Real Estate Portfolio
• Value Portfolio

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The preparation of financial statements in accordance with Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the amount reported in the financial statements and accompanying notes. Changes in circumstances could cause actual results to differ materially from those estimates.

Investments

Investments are valued using the net asset value of the respective portfolios which value their investment securities at fair value at the end of each business day of the New York Stock Exchange, with the exception of business holidays. Investment transactions are accounted for on the trade date (the date the order to buy or sell is executed). Income for dividends is recorded on the ex-distribution date. The cost of investments sold is determined on a first-in, first-out basis. The Account does not hold any investments which are restricted as to resale.

Net investment income (loss), net realized gain (loss) and unrealized appreciation (depreciation) on investments are allocated to the contracts on each valuation date based on each contract's pro rata share of the assets of the Account as of the beginning of the valuation date.

8

ANNUITY INVESTORS VARIABLE ACCOUNT C

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2002

Federal Income Taxes

No provision for federal income taxes has been made in the accompanying financial statements because the operations of the Account are included in the total operations of the Company, which is treated as a life insurance company for federal income tax purposes under Subchapter L of the Internal Revenue Code. Net investment income (loss) and realized gains (losses) will be retained in the Account and will not be taxable until received by the contract owner or beneficiary in the form of annuity payments or other distributions.

Net Assets Attributable to Variable Annuity Contract Holders

The variable annuity contract reserves are comprised of net contract purchase payments less redemptions and benefits. These reserves are adjusted daily for the net investment income (loss), net realized gain (loss) and unrealized appreciation (depreciation) on investments.

9

10

ANNUITY INVESTORS VARIABLE ACCOUNT C

NOTES TO FINANCIAL STATEMENTS - CONTINUED

December 31, 2002

(4) DEDUCTIONS AND EXPENSES

Although periodic annuitization payments to contract owners vary according to the investment performance of the sub-accounts, such payments are not affected by mortality or expense experience because the Company assumes the mortality and expense risks under the contracts.

The mortality risk assumed by the Company results from the life annuity payment option in the contracts, in which the Company agrees to make annuity payments regardless of how long a particular annuitant or other payee lives. The annuity payments are determined in accordance with annuity purchase rate provisions established at the time the contracts are issued. Based on the actuarial determination of expected mortality, the Company is required to fund any deficiency in the annuity payment reserves from its general account assets.

The expense risk assumed by the Company is the risk that the deductions for sales and administrative expenses may prove insufficient to cover the actual sales and administrative expenses. In connection with certain contracts in which the Company incurs reduced sales and servicing expenses, such as contracts offered to active employees of the Company or any of its subsidiaries and/or affiliates, the Company may offer enhanced contracts. Under each contract, the Company deducts a fee from the Account each day for assuming the mortality and expense risks. These fees are equal on an annual basis to a percentage of the daily value of the total investments of the Account. The following schedule lists aggregate fees deducted by contract type for the period ended December 31, 2002:

1.95% Series Contracts $ 17

1.80% Series Contracts 463

1.70% Series Contracts 316

1.65% Series Contracts 573

1.40% Series Contracts 913

                          $ 2,282

Pursuant to an administrative agreement between GAFRI and the Company, GAFRI subsidiaries provide sales and administrative services to the Company and the Account. The Company may deduct a percentage of purchase payments surrendered to cover sales expenses. The percentage ranges from 0% to a maximum of 7.0% depending on the product and based upon the number of years the purchase payment has been held.

In addition, the Company may deduct units from contracts annually and upon full surrender to cover an administrative fee of $30 per contract. These fees totaled $0 for the year ended December 31, 2002.

(5) OTHER TRANSACTIONS WITH AFFILIATES

Great American Advisors, Inc., an affiliate of the Company, is the principal underwriter and performs all variable annuity sales functions on behalf of the Company.

11

12

13

14

Annuity Investors Life Insurance Company

Financial Statements

Years ended December 31, 2002 and 2001
with Report of Independent Auditors

ANNUITY INVESTORS LIFE INSURANCE COMPANY

Financial Statements

Years ended December 31, 2002 and 2001

Contents

Report of Independent Auditors 1

Audited Financial Statements

Balance Sheets 2

Income Statements 3

Statements of Changes in Stockholder's Equity 4

Statements of Cash Flows 5

Notes to Financial Statements 6

REPORT OF INDEPENDENT AUDITORS

Board of Directors

Annuity Investors Life Insurance Company

We have audited the accompanying balance sheets of Annuity Investors Life Insurance Company as of December 31, 2002 and 2001, and the related statements of income, shareholder's equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Annuity Investors Life Insurance Company at December 31, 2002 and 2001, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

/s/ Ernst & Young LLP

Cincinnati, Ohio

February 19, 2003

1

ANNUITY INVESTORS LIFE INSURANCE COMPANY

BALANCE SHEETS

(Dollars in thousands)

	December 31
	2002	2001
ASSETS
Invested assets:
Fixed maturities - at market (amortized cost - $458,482and $353,234)	$ 478,054	$ 356,741
Policy loans	8,600	7,233
Cash and short-term investments	35,782	4,750
Total investments	522,436	368,724
Accrued Investment income	6,188	5,323
Unamortized insurance acquisition costs, net	68,208	81,673
Receivables from affiliates	3,792	992
Other assets	5,748	1,079
Variable annuity assets (separate accounts)	455,142	529,590
Total assets	$1,061,514	$ 987,381
LIABILITIES
Annuity benefits accumulated	$ 496,888	$ 381,052
Accounts payable, accrued expenses, and other liabilities	10,104	4,927
Variable annuity liabilities	455,142	529,590
Total liabilities	$ 962,134	$ 915,569
STOCKHOLDER'S EQUITY
Common stock, par value - $125 per share:
- 25,000 shares authorized
- 20,000 shares issued and outstanding	2,500	2,500
Capital surplus	100,550	70,550
Retained earnings (deficit)	(6,325)	(1,155)
Unrealized gains (losses) on marketable securities, net	2,655	(83)
Total stockholder's equity	99,380	71,812
Total liabilities and stockholder's equity	$1,061,514	$ 987,381
See accompanying notes to financial statements.

2

ANNUITY INVESTORS LIFE INSURANCE COMPANY

INCOME STATEMENTS

(In thousands)

	December 31
	2002	2001
Revenues:
Net investment income	$ 26,486	$ 20,096
Realized gains (losses) on investments	442	(2,895)
Annuity policy charges	10,472	10,244
Other income	485	458
	37,885	27,903
Costs and expenses:
Annuity benefits	20,795	14,591
Insurance acquisition expenses	19,563	7,606
Other expenses	5,497	10,461
	45,855	32,658
Loss before income taxes	(7,970)	(4,755)
Income tax benefit	2,800	1,671
Net loss	($ 5,170)	($ 3,084)
See accompanying notes to financial statements.

3

ANNUITY INVESTORS LIFE INSURANCE COMPANY

STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY

(In thousands)

	December 31
	2002	2001
Common Stock:
Balance at beginning and end of year	$ 2,500	$ 2,500
Capital Surplus:
Balance at beginning of year	$ 70,550	$ 44,550
Capital contribution by parent	30,000	26,000
Balance at end of year	$ 100,550	$ 70,550
Retained Earnings (Deficit):
Balance at beginning of year	($ 1,155)	$ 1,929
Net loss	(5,170)	(3,084)
Balance at end of year	($ 6,325)	($ 1,155)
Unrealized Gains (Losses), Net:
Balance at beginning of year	($ 83)	($ 940)
Change during year	2,738	857
Balance at end of year	$ 2,655	($ 83)
Comprehensive Income (Loss):
Net Loss	($ 5,170)	($ 3,084)
Other comprehensive income - change in net unrealized
gains (losses) on marketable securities	2,738	857
Comprehensive loss	($ 2,432)	($ 2,227)
See accompanying notes to financial statements.

4

ANNUITY INVESTORS LIFE INSURANCE COMPANY

STATEMENTS OF CASH FLOWS

(In thousands)

	December 31
	2002	2001
Cash flows from operating activities:
Net loss	($ 5,170)	($ 3,084)
Adjustments:
Benefits to annuity policyholders	20,795	14,591
Amortization of insurance acquisition costs	18,305	6,505
Depreciation and amortization	(165)	10
Realized (gains) losses on investments, net	(442)	2,895
Increase in insurance acquisition costs	(16,693)	(21,638)
Increase in accrued investment income	(866)	(1,470)
Decrease in payable to affiliates, net	(3,166)	(3,298)
Increase (decrease) in other liabilities	584	(1,371)
(Increase) decrease in other assets	(4,669)	433
Other, net	(242)	753
Cash inflows (outflows) from operating activities	8,271	(5,674)
Cash flows from investing activities:
Purchases of investments in:
Fixed maturity investments	(246,930)	(164,095)
Securities purchased not paid	3,486	4
Equity securities	-	(746)
Sales of:
Fixed maturity investments	142,290	57,849
Increase in policy loans	(1,367)	(1,525)
Cash outflows from investing activities	(102,521)	(108,513)
Cash flows from financing activities:
Annuity receipts, net of separate account activity	124,996	125,053
Annuity surrenders, benefits, and withdrawals, net of separate accounts	(50,521)	(40,019)
Capital contribution from parent	30,000	26,000
Net transfers from (to) variable annuity assets	20,807	(363)
Cash inflows from financing activities	125,282	110,671
Net increase (decrease) in cash and short-term investments	$ 31,032	($ 3,516)
Beginning cash and short-term investments	4,750	8,266
Ending cash and short-term investments	$ 35,782	$ 4,750
See accompanying notes to financial statements.

5

ANNUITY INVESTORS LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2002 AND 2001

A. DESCRIPTION OF THE COMPANY

Annuity Investors Life Insurance Company ("AILIC" or "the Company"), a stock life insurance company domiciled in the State of Ohio, is an indirectly owned subsidiary of Great American Financial Resources, Inc., ("GAFRI"), a publicly traded, financial services holding company of which American Financial Group, Inc. ("AFG") owned 83% as of December 31, 2002.

AILIC's products are variable and fixed annuities. The variable annuities are marketed to hospitals, educational institutions and other qualified and non-qualified markets. AILIC also writes individual fixed annuity products produced mainly by one large agency, primarily in the western part of the United States. In 2002 and 2001, the individual fixed annuity products represented approximately 26% and 21%, respectively, of total premium production.

B. ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles. Preparation of the financial statements requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Changes in circumstances could cause actual results to differ materially from those estimates.

INVESTMENTS

All fixed maturity securities are considered "available for sale" and reported at fair value with unrealized gains and losses reported as a separate component of stockholder's equity. Short-term investments are carried at cost; policy loans are stated at the aggregate unpaid balance. Premiums and discounts on mortgage-backed securities are amortized over a period based on estimated future principal payments, including prepayments. Prepayment assumptions are reviewed periodically and adjusted to reflect actual prepayments and changes in expectations. The most significant determinants of prepayments are the differences between interest rates of the underlying mortgages and current mortgage loan rates and the structure of the security. Other factors affecting prepayments include the size, type and age of underlying mortgages, the geographic location of the mortgaged properties and the creditworthiness of the borrowers. Variations from anticipated prepayments will affect the life and yield of these securities.

Gains or losses on securities are determined on the specific identification basis. When a decline in the value of a specific investment is considered to be other than temporary, a provision for impairment is charged to earnings and the cost basis of that investment is reduced.

Emerging Issues Task Force Issue No. 99-20 ("EITF 99-20") established a new standard for recognizing interest income and impairment on certain asset-backed investments. Interest income on these investments is recorded at a yield based on projected cash flows. The yield is adjusted prospectively to reflect actual cash flows and changes in projected amounts. Impairment losses on these investments must be recognized when (i) the fair value of the security is less than its cost basis and (ii) there has been an adverse change in the expected cash flows. The new standard became effective on April 1, 2001. Subsequent impairments are recognized as a component of net realized gains and losses.

6

ANNUITY INVESTORS LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS CONTINUED

DECEMBER 31, 2002 AND 2001

INSURANCE ACQUISITION COSTS AND EXPENSES

Unamortized insurance acquisition costs consist of deferred policy acquisition costs ("DPAC"). Insurance acquisition expenses in the income statement reflect primarily the amortization of DPAC. In addition, certain commission costs are expensed as paid and included in insurance acquisition expenses. All other uncapitalized acquisition costs such as marketing expenses are included in "Other Expenses."

DPAC (principally commissions, advertising, policy issuance and sales expenses that vary with and are primarily related to the production of new business) is deferred to the extent that such costs are deemed recoverable.

DPAC is amortized, with interest, in relation to the present value of expected gross profits on the policies. These expected gross profits consist principally of estimated future net investment income and surrender, mortality and other variable annuity policy charges, less estimated future interest on policyholders' funds, policy administration expenses and death benefits in excess of account values.

To the extent that realized gains and losses result in adjustments to the amortization of DPAC, such adjustments are reflected as components of realized gains. DPAC is also adjusted, net of tax, for the change in amortization that would have been recorded if the unrealized gains (losses) from securities had actually been realized. This adjustment is included in "Unrealized gains (losses) on marketable securities, net" in the stockholders' equity section of the balance sheet.

ANNUITY BENEFITS ACCUMULATED

Annuity receipts and benefit payments are recorded as increases or decreases in "annuity benefits accumulated" rather than as revenue and expense. Increases in this liability for interest credited are charged to expense and decreases for surrender charges are credited to annuity policy charges. Reserves for traditional single-tier fixed annuities are generally recorded at the stated annuitization value.

VARIABLE ANNUITY ASSETS AND LIABILITIES

Separate accounts related to variable annuities represent deposits invested in underlying investment funds on which AILIC earns a fee. Investment funds are selected and may be changed only by the policyholder, who retains investment risk.

Separate account assets and liabilities reported in the accompanying balance sheets represent funds that are separately administered, and for which the contract holder, rather than AILIC, bears the investment risk. Assets of the separate accounts are not chargeable with liabilities incurred in any other business operation of AILIC. Separate account assets are reported at market value. Fees charged on separate account policyholder account values are included in annuity policy charges.

INCOME TAXES

AILIC is part of the American Financial Corporation ("AFC", an American Financial Group subsidiary) tax group. AILIC has a separate tax allocation agreement with AFC which designates how tax payments are shared by members of the tax group. In general, AILIC computes taxes on a separate return basis. The tax allocation agreement with AFC has not impacted the recognition of income tax expense and income tax payable in AILIC's financial statements.

7

ANNUITY INVESTORS LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS CONTINUED

DECEMBER 31, 2002 AND 2001

BENEFIT PLANS

GAFRI provides retirement benefits to qualified employees of participating companies through the GAFRI Retirement and Savings Plan. Under the retirement fund portion of the Plan, contributions are at the discretion of the GAFRI Board of Directors and are invested primarily in GAFRI securities. Under the savings fund portion of the Plan, GAFRI matches a specific portion of employee contributions. Employees have been permitted to direct the investment of their contributions to independently managed investment funds. Matching contributions to the savings fund portion of the Plan for the year 2002 were invested in accordance with participant elections. Company contributions to the Plan are charged against earnings in the year for which they are declared.

GAFRI and certain of its subsidiaries provide certain benefits to eligible retirees. The projected future cost of providing these benefits is expensed over the period the employees earn such benefits.

STATEMENT OF CASH FLOWS

For cash flow purposes, "investing activities" are defined as making and collecting loans and acquiring and disposing of debt or equity instruments and property and equipment. "Financing activities" include annuity receipts, benefits and withdrawals and obtaining resources from owners and providing them with a return on their investments. All other activities are considered "operating." Short-term investments having original maturities of three months or less when purchased are considered to be cash equivalents for purposes of the financial statements.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The methods and assumptions used in estimating fair values are described below. These fair values represent point-in-time estimates of value that might not be particularly relevant in predicting AILIC's future earnings or cash flows.

Investment Securities: Fair values for fixed maturity securities (including redeemable preferred stock) are based on quoted market prices, where available. For fixed maturity securities not actively traded, fair values are estimated using values obtained from independent pricing services, or, in the case of private placements, are estimated by discounting the expected future cash flows using current market rates applicable to the coupon rate, credit, and maturity of the investments.

Annuity Reserves: The fair value of the liability for annuities in the payout phase is assumed to be the present value of the anticipated cash flows, discounted at current interest rates. Fair value of annuities in the accumulation phase is assumed to be no more than the policyholders' cash surrender amount. The aggregate fair value of all reserve liabilities approximate their carrying value.

The carrying amounts reported in the accompanying balance sheets for cash, short term investments and policy loans approximate their fair values.

8

ANNUITY INVESTORS LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS CONTINUED

DECEMBER 31, 2002 AND 2001

C. INVESTMENTS

Fixed maturity investments at December 31 consisted of the following (in thousands):

	2002
	Amortized		Market		Gross Unrealized
	Cost		Value		Gains		Losses
U.S. Government and government agencies
and authorities	$ 86,014		$ 90,933		$ 4,919		$ -
Public utilities	43,472		44,326		2,334		1,480
Mortgage-backed securities	128,492		132,679		4,661		474
Redeemable preferred stock	59		75		16		-
All other corporate	200,445		210,041		13,448		3,852
	$ 458,482		$ 478,054		$ 25,378		$ 5,806
	2001
	Amortized	Market		Gross Unrealized
	Cost	Value		Gains		Losses
U.S. Government and government agencies
and authorities	$ 51,909	$ 53,474		$ 1,633		$ 68
Public utilities	32,816	32,722		379		473
Mortgage-backed securities	80,086	81,417		1,865		534
Redeemable preferred stock	746	502		-		244
All other corporate	187,677	188,626		3,699		2,750
	$353,234	$356,741		$ 7,576		$ 4,069

The table below sets forth the scheduled maturities of AILIC's fixed maturity investments based on market value as of December 31, 2002 (in thousands). Data based on amortized cost is generally the same.

	2002
Maturity
One year or less	$ 8,853
After one year through five years	100,720
After five years through ten years	166,845
After ten years	68,957
	345,375
Mortgage-backed securities	132,679
Total bonds by maturity	$478,054

The expected maturities in the foregoing table may differ from the contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

9

ANNUITY INVESTORS LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS CONTINUED

DECEMBER 31, 2002 AND 2001

Proceeds from sales of fixed maturity investments were $142.3 million in 2002 and $57.8 million in 2001. Gross realized gains of $2.8 million and $1.5 million and gross realized losses of $0.4 million and $1.9 million were realized on those sales during 2002 and 2001, respectively.

U.S. Treasury Notes with a carrying value of $7.2 million at December 31, 2002 and $6.8 million at December 31, 2001, were on deposit as required by the insurance departments of various states.

The Company reported realized losses of approximately $2.0 million and $2.5 million in 2002 and 2001, respectively, as a result of the write down of impaired bonds and preferred stock.

Net investment income consisted of the following (in thousands):

	2002	2001
Bonds	$26,168	$19,757
Preferred stocks	47	47
Short-term investments	374	315
Cash on hand and on deposit	(5)	4
Policy loans	514	408
Gross investment income	27,098	20,531
Investment expenses	(612)	(435)
Net investment income	$26,486	$20,096

AILIC's investment portfolio is managed by a subsidiary of AFG. Investment expenses included investment management charges related to this subsidiary of $584 thousand in 2002 and $408 thousand in 2001.

D. INSURANCE ACQUISITION EXPENSES

Included in 2002 and 2001 were DPAC write-offs related to variable annuities of $13.5 million and $3.0 million, respectively, resulting from the actual performance of the equity markets and a reduction of assumed future returns. Poor performance in the equity markets could lead to additional DPAC write-offs or a charge to earnings in order to accrue for guaranteed minimum death benefits included in the variable products. (See Note H - "Proposed Accounting Standard").

E. STOCKHOLDER'S EQUITY

The payment of dividends by AILIC to shareholders is limited and can only be made from earned profits unless prior approval is received from the Ohio Insurance Commissioner. The maximum amount of dividends that may be paid by life insurance companies without prior approval of the Ohio Insurance Commissioner is also subject to restrictions relating to statutory surplus and net income. In 2003, AILIC cannot pay dividends without prior approval of the Ohio Insurance Commissioner.

10

ANNUITY INVESTORS LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS CONTINUED

DECEMBER 31, 2002 AND 2001

Total statutory capital and surplus for the Company at December 31, 2002 and 2001, respectively, was $38.6 million and $26.5 million. The Company received capital contributions of $30.0 million in 2002 and $26.0 million in 2001 from its parent in order to meet statutory capital requirements.

The change in net unrealized gains on marketable securities included the following (in thousands):

		2002			2001
	Pretax	Taxes	Net	Pretax	Taxes	Net
Unrealized holding gains (losses) on
securities arising during the period	$4,654	($ 1,629)	$3,025	($ 1,577)	$ 552	($1,025)
Realized losses (gains) on securities	(442)	155	(287)	2,895	(1,013)	1,882
Change in net unrealized gains (losses)
on marketable securities	$4,212	($ 1,474)	$2,738	$ 1,318	($ 461)	$ 857

F. FEDERAL INCOME TAXES

The differences in income taxes computed at the statutory rate of 35% and income taxes as shown in the income statement are related to permanent tax adjustments in 2002 and 2001 for $11 thousand and $7 thousand, respectively.

The significant components of deferred tax assets and liabilities, excluding the effects of unrealized gains and losses on marketable securities, included in the Balance Sheets were as follows (in thousands):

	December 31,
	2002	2001
Deferred tax assets:
Investment securities	$ 1,010	$ 770
Policyholder liabilities	12,077	15,521
Deferred tax liabilities:
Unamortized insurance acquisition costs	($ 21,544)	($ 26,615)

G. RELATED PARTY TRANSACTIONS

AILIC has an agreement with GAFRI, subject to the direction of the Finance Committee of AILIC, whereby GAFRI, along with services provided by American Money Management, Inc. (an affiliate), provides for management and accounting services related to the investment portfolio. In 2002 and 2001, AILIC paid $584,089 and $482,816, respectively, in investment management fees.

AILIC has an agreement with Great American Advisors, Inc. ("GAA") a wholly-owned subsidiary of GAFRI, whereby GAA is the principal underwriter and distributor of AILIC's variable contracts. AILIC pays GAA for acting as underwriter under a distribution agreement. In 2002 and 2001, AILIC paid $3.5 million and $3.8 million, respectively, in commissions to GAA.

Certain administrative, management, accounting, actuarial, data processing, collection and investment services are provided under agreements between AILIC and affiliates based on actual costs incurred. In 2002 and 2001, AILIC paid $5.2 million and $6.1 million, respectively, for services to affiliates.

11

ANNUITY INVESTORS LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS CONTINUED

DECEMBER 31, 2002 AND 2001

H. PROPOSED ACCOUNTING STANDARD

AILIC's variable annuity contracts contain a guaranteed minimum death benefit ("GMDB") (which may exceed the value of the policyholder's account) to be paid if the annuityholder dies before the annuity payout period commences. Payment of any difference between the GMDB and the related account balance is borne by AILIC and expensed when paid. In periods of declining equity markets, the GMDB difference increases as the variable annuity account value decreases. At December 31, 2002 and 2001, the aggregate GMDB values (assuming every policyholder died on those dates) exceeded the market value of the underlying variable annuities by $233 million and $136 million, respectively. Industry practice varies, but AILIC does not establish GAAP reserves for this mortality risk. If a proposed accounting standard becomes effective, AILIC would be required to record a liability for the present value of expected GMDB payments. Initial recognition of a GAAP liability (estimated to be less than 4% of the difference between the underlying market value of the variable annuities and the GMDB value) would be accounted for as the cumulative effect of a change in accounting principles. Death benefits paid in excess of the variable annuity account balance were $1.1 million in 2002.

12

PART C

Other Information - 333-88302

Item 24 Financial Statements and Exhibits

(a)

Financial Statements

All required Financial Statements are included in Part A or B of this Registration Statement.

(b)

Exhibits

(1)

Resolution of the Board of Directors of Annuity Investors Life Insurance Company ® authorizing establishment of Annuity Investors Variable Account C.1/

(2)

Not Applicable.

(3)

(a)

Distribution Agreement between Annuity Investors Life Insurance Company and Great American Advisors, Inc. 1/

(b)

Form of Selling Agreement between Annuity Investors Life Insurance Company, Great American Advisors, Inc. and another Broker-Dealer. 1/

(4)

Individual and Group Contract Forms and Endorsements.

(a)

Form of Qualified Individual Flexible Premium Deferred Variable Annuity Contract. (filed herewith).

(b)

Form of Non-Qualified Individual Flexible Premium Deferred Variable Annuity Contract. (filed herewith).

(c)

Form of Guaranteed Minimum Income Benefit Endorsement to Non-Qualified Individual Contract. 1/

(d)

Form of Guaranteed Minimum Income Benefit Endorsement to Qualified Individual Contract. 1/

(e)

Form of Enhanced Death Benefit Rider to Individual Contract. 1/

(f)

Form Of Step-Up Death Benefit Rider to Individual Contract. (filed herewith)

(g)

Form of Earnings Enhancement Benefit Rider to Individual Contract.1/

(h)

Form of Loan Endorsement to Individual Contract. 1/

(i)

Form of Tax Sheltered Annuity Endorsement to Individual Contract. 1/

(j)

Form of Qualified Pension, Profit Sharing and Annuity Plan Endorsement to Individual Contract. 1/

(k)

Form of Employer Plan Endorsement to Individual Contract. 1/

(l)

Form of Individual Retirement Annuity Endorsement to Individual Contract. 1/

(m)

Form of Texas Optional Retirement Program Endorsement to Individual Contract. 1/

(n)

Form of Long-Term Care Waiver Rider to Individual Contract. 1/

(o)

Form of SIMPLE IRA Endorsement to Individual Contract. 1/

(p)

Form of Roth IRA Endorsement to Qualified Individual Contract. 1/

(q)

Form of Governmental Section 457 Plan Endorsement to Qualified Individual Contract. 1/

(r)

Form of Unisex Endorsement to Non-Qualified Individual Contract. 1/

(s)

Form of Unisex Endorsement to Qualified Individual Contract. 1/

(5)

(a)

Form of Application for Individual Flexible Premium Deferred Annuity Contract -- Order Ticket used in lieu thereof. 1/

(6)

(a)

Articles of Incorporation of Annuity Investors Life Insurance Company.3/

(b)

Amendment to Articles of Incorporation adopted April 9,1996 and approved by Secretary of State of Ohio on July 11, 1996. 4/

(c)

Amendment to Articles of Incorporation adopted August 9, 1996 and approved by Secretary of State of Ohio on December 3, 1996. 4/

(d)

Code of Regulations of Annuity Investors Life Insurance Company. 6/

(7)

Not Applicable.

(8)

Other Material Contracts.

(a)

Service Agreement between Annuity Investors Life Insurance Company and American Annuity Group, Inc. (n/k/a/ Great American Financial Resources, Inc.) 4/

(b)

Agreement Between AAG Securities Inc. (n/k/a Great American Advisors, Inc. and AAG Insurance Agency, Inc. 4/

(c)

Investment Services Agreement between Annuity Investors Life Insurance Company and American Annuity Group, Inc. (n/k/a/ Great American Financial Resources, Inc. 4/

(d)

Participation Agreement dated April 4, 2001, among Annuity Investors Life Insurance Company, AIM Advisors, Inc., and AIM Variable Insurance Funds. 1/

(e)

Amendment effective July 1, 2002, to Participation Agreement dated April 4, 2001, among Annuity Investors Life Insurance Company, AIM Advisors, Inc., and AIM Variable Insurance Funds. 1/

(f)

Administrative Services Agreement dated April 4, 2001, between Annuity Investors Life Insurance Company and AIM Advisors, Inc. 1/

(g)

Agreement with Respect to Trademarks and Fund Names dated April 4, 2001, between Annuity Investors Life Insurance Company, Great American Advisors, Inc., AIM Management Group, Inc. and AIM Variable Insurance Funds. 1/

(h)

Distribution Services Agreement dated July 1, 2002, between Annuity Investors Life Insurance Company and AIM Distributors. 1/

(i)

Letter Agreement dated July 1, 2002, between Annuity Investors Life Insurance Company and Dreyfus Service Corporation. 1/

(j)

Amended and Restated Letter Agreement dated April 24, 1997 by and among The Dreyfus Corporation and Annuity Investors Life Insurance Company. 4/

(k)

Amendment dated July 1, 2002, to the Amended and Restated Letter Agreement dated April 24, 1997 by and among The Dreyfus Corporation and Annuity Investors Life Insurance Company.1/

(l)

Fund Participation Agreement dated November 21, 1995 among ANNUITY INVESTORS LIFE INSURANCE COMPANY And DREYFUS LIFE AND ANNUITY INDEX FUND, INC. (D/B/A DREYFUS STOCK INDEX FUND). 4/

(m)

Amendment dated July 1, 2002, to Fund Participation Agreement dated November 21, 1995 among ANNUITY INVESTORS LIFE INSURANCE COMPANY and DREYFUS LIFE AND ANNUITY INDEX FUND, INC. (d/b/a DREYFUS STOCK INDEX FUND). 1/

(n)

Fund Participation Agreement dated November 21, 1995 among ANNUITY INVESTORS LIFE INSURANCE COMPANY and THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. 4/

(o)

Amendment dated July 1, 2002, to Fund Participation Agreement dated November 21, 1995 among ANNUITY INVESTORS LIFE INSURANCE COMPANY and THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. 1/

(p)

Fund Participation Agreement dated November 21, 1995 among ANNUITY INVESTORS LIFE INSURANCE COMPANY and DREYFUS VARIABLE INVESTMENT FUND. 4/

(q)

Amendment dated July 1, 2002, to Fund Participation Agreement dated November 21, 1995 among ANNUITY INVESTORS LIFE INSURANCE COMPANY and DREYFUS VARIABLE INVESTMENT FUND. 1/

(r)

Participation Agreement dated May 30, 1997, among Annuity Investors Life Insurance Company, INVESCO Variable Investment Funds, Inc., and INVESCO Funds Group, Inc. 4/

(s)

Amendment effective May 1, 2001, to Participation Agreement dated May 30, 1997, among Annuity Investors Life Insurance Company, INVESCO Variable Investment Funds, Inc., and INVESCO Funds Group, Inc. 1/

(t)

Amendment effective July 1, 2002, to Participation Agreement dated May 30, 1997, among Annuity Investors Life Insurance Company, INVESCO Variable Investment Funds, Inc., and INVESCO Funds Group, Inc. 1/

(u)

Letter Agreement effective June 6, 1997, between Annuity Investors Life Insurance Company and INVESCO Funds Group, Inc. 5/

(v)

Amendment dated July 1, 2002, to Letter Agreement effective June 6, 1997, between Annuity Investors Life Insurance Company and INVESCO Funds Group, Inc. 1/

(w)

Fund Participation Agreement (Service Shares) dated March 1, 2001, between Janus Aspen Series and Annuity Investors Life Insurance Company. 1/

(x)

Amendment dated July 1, 2002, to Fund Participation Agreement (Service Shares) dated March 1, 2001, between Janus Aspen Series and Annuity Investors Life Insurance Company. 1/

(y)

Distribution and Shareholder Services Agreement (Service Shares) dated May 1, 2001, between Annuity Investors Life Insurance Company and Janus Distributors, Inc. 1/

(z)

Fund Participation Agreement dated July 1, 2002, among NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST, NEUBERGER BERMAN MANAGEMENT INC., and ANNUITY INVESTORS LIFE INSURANCE COMPANY 1/

(aa)

Letter Agreement dated July 1, 2002, between Neuberger Berman Management Inc. and Annuity Investors Life Insurance Company. 1/

(bb)

Participation Agreement dated July 1, 2002, among Annuity Investors Life Insurance Company, Oppenheimer Variable Account Funds and Oppenheimer Funds, Inc. 1/

(cc)

Letter Agreement dated July 1, 2002, between Annuity Investors Life Insurance Company and Oppenheimer Funds, Inc. 1/

(dd)

Fund Participation Agreement dated May 1, 1997, among the PBHG INSURANCE SERIES FUND, PILGRIM, BAXTER & ASSOCIATES, LTD., and ANNUITY INVESTORS LIFE INSURANCE COMPANY. 4/

(ee)

Amendment Number 1 dated as of May 1, 2001,to Fund Participation Agreement dated May 1, 1997, among the PBHG INSURANCE SERIES FUND, PILGRIM, BAXTER & ASSOCIATES, LTD., and ANNUITY INVESTORS LIFE INSURANCE COMPANY. 1/

(ff)

Amendment Number 2 dated as of July 1, 2001, to Fund Participation Agreement dated May 1, 1997, among the PBHG INSURANCE SERIES FUND, PILGRIM, BAXTER & ASSOCIATES, LTD., and ANNUITY INVESTORS LIFE INSURANCE COMPANY. 1/

(gg)

Letter Agreement dated July 1, 2002, between Pilgrim Baxter & Associates, Ltd., Great American Life Insurance Company of New York and Annuity Investors Life Insurance Company. 1/

(hh)

Participation Agreement dated July 1, 2002, among Annuity Investors Life Insurance Company, PIMCO Variable Insurance Trust, and PIMCO Funds Distributors LLC. 1/

(ii)

Services Agreement dated July 1, 2002, between Pacific Investment Management Company LLC and Annuity Investors Life Insurance Company. 1/

(jj)

Services Agreement dated July 1, 2002, between PIMCO Variable Insurance Trust and Annuity Investors Life Insurance Company. 1/

(kk)

Participation Agreement dated July 1, 2002, among Annuity Investors Life Insurance Company, RYDEX VARIABLE TRUST, and RYDEX DISTRIBUTORS, INC. 1/

(ll)

Investor Services Agreement dated July 1, 2002, between Rydex Distributors, Inc. and Annuity Investors Life Insurance Company. 1/

(mm)

Participation Agreement dated April 25, 1997, among Annuity Investors Life Insurance Company, Strong Variable Insurance Funds, Inc., Strong Special Fund II, Inc. (n/k/a Strong Opportunity Fund II, Inc.), Strong Capital Management, Inc., and Strong Funds Distributors, Inc. 4/

(nn)

Amendment dated July 1, 2002, to Participation Agreement dated April 25, 1997, among Annuity Investors Life Insurance Company, Strong Variable Insurance Funds, Inc., Strong Special Fund II, Inc. (n/k/a Strong Opportunity Fund II, Inc.), Strong Capital Management, Inc., and Strong Funds Distributors, Inc. 1/

(oo)

Letter Agreement dated April 25, 1997, among Strong Capital Management, Inc., Annuity Investors Life Insurance Company, Strong Variable Insurance Funds, Inc., Strong Special Fund II, Inc. (n/k/a Strong Opportunity Fund II, Inc.), and Strong Funds Distributors, Inc. 4/

(pp)

Amendment dated July 1, 2002, to Letter Agreement dated April 25, 1997, among Strong Capital Management, Inc., Annuity Investors Life Insurance Company, Strong Variable Insurance Funds, Inc., Strong Special Fund II, Inc. (n/k/a Strong Opportunity Fund II, Inc.), and Strong Funds Distributors, Inc. 1/

(qq)

Distribution and Shareholder Services Agreement dated July 1, 2002, between Strong Investments, Inc. and Annuity Investors Life Insurance Company. 1/

(rr)

Participation Agreement dated May 1, 1997 among Annuity Investors Life Insurance Company, Morgan Stanley Universal Funds, Inc. (n/k/a The Universal Institutional Funds, Inc.), Morgan Stanley Asset Management Inc. (n/k/a Morgan Stanley Investment Management Inc.), and Miller Anderson & Sherrerd, LLP (n/k/a Morgan Stanley Investments LP). 4/

(ss)

Amendment dated July 1, 2002, to Participation Agreement dated May 1, 1997 among Annuity Investors Life Insurance Company, Morgan Stanley Universal Funds, Inc. (n/k/a The Universal Institutional Funds, Inc.), Morgan Stanley Asset Management Inc. (n/k/a Morgan Stanley Investment Management Inc.), and Miller Anderson & Sherrerd, LLP (n/k/a Morgan Stanley Investments LP). 1/

(tt)

Letter Agreement dated July 1, 2002, among Annuity Investors Life Insurance Company, Morgan Stanley Investment Management Inc. and Morgan Stanley Investments LP. 1/

(9)

Opinion and Consent of Counsel 1/

(10)

Consent of Independent Auditor(filed herewith)

(11)

No Financial Statements are omitted from item 23.

(12)

Not Applicable

(13)

Schedule for Computation of Performance Quotations. 5/

(14)

Not Applicable.

(15)

Powers of Attorney.7/

1/	Incorporated by reference to Pre-Effective Amendment No. 1 filed on behalf of Annuity Investors Variable Account C, SEC File No. 333-88300, on July 25, 2002.
2/	Incorporated by reference to Form N-4 filed on behalf of Annuity Investors Variable Account C, SEC File No. 333-88300, on May 15, 2002.
3/	Incorporated by reference to Form N-4 filed on behalf of Annuity Investors Variable Account B, SEC File No. 333-19725, on December 23, 1996.
4/	Incorporated by reference to Pre-Effective Amendment No. 1, filed on behalf of Annuity Investors Variable Account B, SEC File No. 333-19725, on June 3, 1997.
5/	Incorporated by reference to Post-Effective Amendment No. 2 filed on behalf of Annuity Investors Variable Account B, SEC File No. 333-19725, on April 29, 1998.
6/	Incorporated by reference to Post-Effective Amendment No. 3 filed on behalf of Annuity Investors Variable Account B, SEC File no. 333-51955, on November 17, 1998.
7/	Incorporated by reference to Post-Effective Amendment No. 12 filed on behalf of Annuity Investors Variable Account B, SEC File no. 333-19725, on April 29, 2003.

 Item 25. Directors and Officers of Annuity Investors Life Insurance Company

Name	Principal Business Address	Positions and Offices With the Company
Charles R. Scheper	(1)	President, Chief Executive Officer and Director
Stephen Craig Lindner	(1)	Director
Mark Francis Muething	(1)	Executive Vice President, Secretary, General Counsel and Director
Christopher P. Miliano	(1)	Director
Michael J. Prager	(1)	Director
Richard Magoteaux	(1)	Chief Financial Officer
Adrienne Kessling	(1)	Senior Vice President
Richard Sutton	(1)	Assistant Vice President and Chief Actuary
John P. Gruber	(1)	Vice President
James L. Henderson	(1)	Vice President
Gary L. Peters	(1)	Vice President
William Jack Maney, II	(1)	Assistant Treasurer
Thomas E. Mischell	(1)	Assistant Treasurer

 (1) P.O. Box 5423, Cincinnati, Ohio 45201-5423

Item 26. Persons Controlled by or Under Common Control with the Depositor and Registrant.

The Depositor, Annuity Investors Life Insurance Company^® , is a wholly owned subsidiary of Great American^® Life Insurance Company, which is a wholly owned subsidiary of Great American Financial Resources^®, Inc. The Registrant, Annuity Investors^® Variable Account C, is a segregated asset account of Annuity Investors Life Insurance Company.

 The following chart indicates the persons controlled by or under common control with the Company:

AFG ORGANIZATIONAL CHART	% OF STOCK OWNEDSTATE OFDOMICILE	DATE OF INCORPORATION	BY IMMEDIATE PARENT COMPANY	NATURE OF BUSINESS
American Financial Group, Inc.	Ohio	07/01/1997		Diversified Financial Holding Company
|__AFC Holding Company	Ohio	12/09/1994	100	Diversified Financial Holding Company
|__AHH Holdings, Inc.	Florida	12/27/1995	49	Holding Company
|__American Heritage Holding Corporation	Delaware	11/02/1994	100	Home Builder
|__Heritage Homes Realty, Inc.	Florida	07/20/1993	100	Home Sales
|__Southeast Title, Inc.	Florida	05/16/1995	100	Title Company
|__Columbia Financial Company	Florida	10/26/1993	100	Real Estate Holding Company
|__Heritage Home Finance Corporation	Florida	02/10/1994	100	Finance Company
|__American Financial Capital Trust I	Delaware	09/14/1996	100	Statutory Business Trust
|__American Financial Corporation	Ohio	11/15/1955	100	Diversified Financial Holding Company
|__American Financial Corporation (Name Holding Company)	Ohio	08/27/1963	100	Inactive
|__American Money Management Corporation	Ohio	03/01/1973	100	Securities Management Company
|__American Money Management International, N.V.	Netherland Antilles	05/10/1985	100	Securities Management Company
|__American Premier Underwriters, Inc.	Pennsylvania	04/13/1846	100 (2)	Diversified Company
|__The Ann Arbor Railroad Company	Michigan	09/21/1895	99	Inactive

AFG ORGANIZATIONAL CHART	% OF STOCK OWNEDSTATE OFDOMICILE	DATE OF INCORPORATION	BY IMMEDIATE PARENT COMPANY	NATURE OF BUSINESS
|__The Associates of the Jersey Company	New Jersey	11/10/1804	100	Inactive
|__Cal Coal, Inc.	Illinois	05/30/1979	100	Inactive
|__Delbay Corporation	Delaware	12/27/1962	100	Inactive
|__GAI (Bermuda) Ltd.	Bermuda	04/06/1998	100	Holding Company
|__GAI Insurance Company, Ltd.	Bermuda	09/18/1989	100	Reinsurance
|__Great Southwest Corporation	Delaware	10/25/1978	100	Real Estate Developer
|__World Houston, Inc.	Delaware	05/30/1974	100	Real Estate Developer
|__Hangar Acquisition Corp.	Ohio	10/06/1995	100	Aircraft Investment
|__The Indianapolis Union Railway Company	Indiana	11/19/1872	100	Inactive
|__Infinity Property and Casualty Corporation	Ohio	09/16/2002	100	Holding Company
|__Atlanta Casualty Company	Ohio	06/13/1972	100	Property/Casualty Insurance
|__American Premier Insurance Company	Indiana	11/30/1989	100	Property/Casualty Insurance
|__Atlanta Casualty Group, Inc.	Georgia	04/01/1977	100	Insurance Agency
|__Atlanta Casualty General Agency, Inc.	Texas	03/15/1961	100	Managing General Agency
|__Atlanta Reserve Insurance Company	Ohio	12/07/1998	100	Property/Casualty Insurance
|__Atlanta Specialty Insurance Company	Ohio	02/06/1974	100	Property/Casualty Insurance
|__Infinity Insurance Company	Indiana	08/28/1978	100	Property/Casualty Insurance

AFG ORGANIZATIONAL CHART	% OF STOCK OWNEDSTATE OFDOMICILE	DATE OF INCORPORATION	BY IMMEDIATE PARENT COMPANY	NATURE OF BUSINESS
|__Infinity Agency of Texas, Inc.	Texas	07/15/1992	100	Managing General Agency
American Financial Group, Inc.
|__AFC Holding Company
|__American Financial Corporation
|__American Premier Underwriters, Inc.
|__Infinity Property and Casualty Corporation
|__Infinity Insurance Company
|__The Infinity Group, Inc.	Indiana	07/22/1992	100	Insurance Holding Company
|__Infinity National Insurance Company	Indiana	08/05/1992	100	Property/Casualty Insurance
|__Infinity Select Insurance Company	Indiana	06/11/1991	100	Property/Casualty Insurance
|__Leader Insurance Company	Ohio	03/20/1963	100	Property/Casualty Insurance
|__American Commonwealth Development Company	Texas	07/23/1963	100	Real Estate Development
|__Budget Insurance Premiums, Inc.	Ohio	02/14/1964	100	Premium Finance Company
|__Leader Group, Inc.	Ohio	12/16/1997	100	Holding Company
|__Leader Managing General Agency, Inc.	Texas	08/21/1989	100	Managing General Agent/Surplus Lines Agent
|__Leader National Agency, Inc.	Ohio	04/05/1963	100	Brokering Agent
|__Leader Preferred Insurance Company	Ohio	11/07/1994	100	Property/Casualty Insurance
AFG ORGANIZATIONAL CHART	% OF STOCK OWNEDSTATE OFDOMICILE	DATE OF INCORPORATION	BY IMMEDIATE PARENT COMPANY	NATURE OF BUSINESS
|__Leader Specialty Insurance Company	Indiana	03/10/1994	100	Property/Casualty Insurance
|__TICO Insurance Company	Ohio	06/03/1980	100	Property/Casualty Insurance
|__Windsor Insurance Company	Indiana	11/05/1987	100	Property/Casualty Insurance
|__American Deposit Insurance Company	Oklahoma	12/28/1966	100	Property/Casualty Insurance
|__Granite Finance Co., Inc.	Texas	11/09/1965	100	Premium Financing
|__Coventry Insurance Company	Ohio	09/05/1989	100	Property/Casualty Insurance
|__El Aguila, Compañia de Seguros, S.A. de C.V.	Mexico	11/24/1994	100 (2)	Property/Casualty Insurance
|__Financiadora de Primas Condor, S.A. de C.V.	Mexico	03/16/1998	99	Premium Finance
|__Great American Contemporary Insurance Company	Ohio	04/16/1996	100	Property/Casualty Insurance
|__Great Texas County Mutual Insurance Company	Texas	04/29/1954	beneficial interest	Automobile Insurance
|__Moore Group Inc.	Georgia	12/19/1962	100	Insurance Holding Company/Agency
|__Casualty Underwriters, Inc.	Georgia	10/01/1954	51	Insurance Agency
|__Dudley L. Moore Insurance, Inc.	Louisiana	03/30/1978	100	Insurance Agency
|__Hallmark General Insurance Agency, Incorporated	Oklahoma	06/16/1972	beneficial interest	Insurance Agency
|__Windsor Group, Inc.	Georgia	05/23/1991	100	Insurance Holding Company
|__Regal Insurance Company	Indiana	11/05/1987	100	Property/Casualty Insurance
|__Texas Windsor Group, Inc.	Texas	06/23/1988	100	Insurance Agency

AFG ORGANIZATIONAL CHART	% OF STOCK OWNEDSTATE OFDOMICILE	DATE OF INCORPORATION	BY IMMEDIATE PARENT COMPANY	NATURE OF BUSINESS
|__Lehigh Valley Railroad Company	Pennsylvania	04/21/1846	100	Inactive
|__The New York and Harlem Railroad Company	New York	04/25/1831	97	Inactive
American Financial Group, Inc.
|__AFC Holding Company
|__American Financial Corporation
|__American Premier Underwriters, Inc.
|__The Owasco River Railway, Inc.	New York	06/02/1881	100	Inactive
|__PCC Real Estate, Inc.	New York	12/15/1986	100	Holding Company
|__PCC Chicago Realty Corp.	New York	12/23/1986	100	Real Estate Developer
|__PCC Gun Hill Realty Corp.	New York	12/18/1985	100	Real Estate Developer
|__PCC Michigan Realty, Inc.	Michigan	11/09/1987	100	Real Estate Developer
|__PCC Scarsdale Realty Corp.	New York	06/01/1986	100	Real Estate Developer
|__Scarsdale Depot Associates, L.P.	Delaware	05/05/1989	80	Real Estate Developer
|__PCC Technical Industries, Inc.	California	03/07/1955	100	Holding Company
|__ESC, Inc.	California	11/02/1962	100	Inactive
|__Marathon Manufacturing Companies, Inc.	Delaware	11/18/1983	100	Holding Company
|__Marathon Manufacturing Company	Delaware	12/07/1979	100	Inactive
|__PCC Maryland Realty Corp.	Maryland	08/18/1993	100	Real Estate Holding Company

AFG ORGANIZATIONAL CHART	% OF STOCK OWNEDSTATE OFDOMICILE	DATE OF INCORPORATION	BY IMMEDIATE PARENT COMPANY	NATURE OF BUSINESS
|__Penn Camarillo Realty Corp.	California	11/24/1992	100	Real Estate Holding Company
|__Penn Central Energy Management Company	Delaware	05/11/1987	100	Inactive
|__Penn Towers, Inc.	Pennsylvania	08/01/1958	100	Inactive
|__Pennsylvania-Reading Seashore Lines	New Jersey	06/14/1901	66.67	Inactive
|__Pittsburgh and Cross Creek Railroad Company	Pennsylvania	08/14/1970	83	Inactive
|__PLLS, Ltd.	Washington	05/14/1990	100	Insurance Agency
|__Premier Lease & Loan Services Insurance Agency, Inc.	Washington	12/27/1983	100	Insurance Agency
|__Premier Lease & Loan Insurance Services B.V.	The Netherlands	08/24/1999	100	Insurance Agency
|__Premier Lease & Loan Services of Canada, Inc.	Washington	02/28/1991	100	Insurance Agency
|__Republic Indemnity Company of America	California	12/05/1972	100	Workers' Compensation Insurance
|__Republic Indemnity Company of California	California	10/13/1982	100	Workers' Compensation Insurance
|__Republic Indemnity Medical Management, Inc.	California	03/25/1996	100	Medical Bill Review
|__Risico Management Corporation	Delaware	01/10/1989	100	Risk Management
|__Terminal Realty Penn Co.	District of Columbia	09/23/1968	100	Inactive
|__United Railroad Corp.	Delaware	11/25/1981	100	Inactive
|__Detroit Manufacturers Railroad Company	Michigan	01/30/1902	82	Inactive
|__Waynesburg Southern Railroad Company	Pennsylvania	09/01/1966	100	Inactive
|__Dixie Terminal Corporation	Ohio	04/23/1970	100	Real Estate Holding Company

AFG ORGANIZATIONAL CHART	% OF STOCK OWNEDSTATE OFDOMICILE	DATE OF INCORPORATION	BY IMMEDIATE PARENT COMPANY	NATURE OF BUSINESS
American Financial Group, Inc.
|__AFC Holding Company
|__American Financial Corporation
|__Fairmont Holdings, Inc.	Ohio	12/15/1983	100	Holding Company
|__Flextech Holding Co., Inc.	Ohio	08/31/2000	100	Packing Manufacturer
|__FWC Corporation	Ohio	03/16/1983	100	Financial Services Company
|__Great American Holding, Inc.	Ohio	07/25/2002	100	Holding Company
|__Great American Security Insurance Company	Ohio	07/01/1987	100	Property/Casualty Insurance
|__Great American Spirit Insurance Company	Indiana	04/05/1988	100	Property/Casualty Insurance
|__Great American Insurance Company	Ohio	03/07/1872	100	Property/Casualty Insurance
|__AFC Coal Properties, Inc.	Ohio	12/18/1996	100	Real Estate Holding Company
|__American Empire Surplus Lines Insurance Company	Delaware	07/15/1977	100	Excess and Surplus Lines Insurance
|__American Empire Insurance Company	Ohio	11/26/1979	100	Property/Casualty Insurance
|__American Empire Underwriters, Inc.	Texas	05/19/1976	100	Insurance Agency
|__Fidelity Excess and Surplus Insurance Company	Ohio	06/30/1987	100	Property/Casualty Insurance
|__American Financial Enterprises, Inc.	Connecticut	01/01/1871	100 (2)	Closed End Investment Company
|__American Signature Underwriters, Inc.	Ohio	04/08/1996	100	Insurance Agency
AFG ORGANIZATIONAL CHART	% OF STOCK OWNEDSTATE OFDOMICILE	DATE OF INCORPORATION	BY IMMEDIATE PARENT COMPANY	NATURE OF BUSINESS
|__American Special Risk, Inc.	Illinois	12/29/1981	100	Insurance Broker/Managing General Agency
|__Aviation Specialty Managers, Inc.	Texas	09/07/1965	100	Managing General Agency
|__Brothers Property Corporation	Ohio	09/08/1987	80	Real Estate Holding
|__Brothers Pennsylvanian Corporation	Pennsylvania	12/23/1994	100	Real Estate Holding
|__Brothers Port Richey Corporation	Florida	12/06/1993	100	Real Estate Holding
|__Brothers Property Management Corporation	Ohio	09/25/1987	100	Real Estate Management
|__Brothers Railyard Corporation	Texas	12/14/1993	100	Real Estate Holding
|__Crop Managers Insurance Agency, Inc.	Kansas	08/09/1989	100	Insurance Agency
|__Dempsey & Siders Agency, Inc.	Ohio	05/09/1956	100	Insurance Agency
|__FCIA Management Company, Inc.	New York	09/17/1991	100	Servicing Agent
|__GAI Warranty Company	Ohio	01/25/2001	100	Service Warranty Provider
|__GAI Warranty Company of Florida	Florida	03/23/2001	100	Service Warranty Provider
|__GAI Warranty Company of Canada Inc.	Ontario (Quebec)	04/17/2002	100	Service Contract Provider
|__The Gains Group, Inc.	Ohio	01/26/1982	100	Marketing of Advertising
|__Global Premier Finance Company	Ohio	08/25/1998	100	Premium Finance
|__Great American Agency of Texas, Inc.	Texas	01/25/1994	100	Managing General Agency
|__Great American Alliance Insurance Company	Ohio	09/11/1945	100	Property/Casualty Insurance

AFG ORGANIZATIONAL CHART	% OF STOCK OWNEDSTATE OFDOMICILE	DATE OF INCORPORATION	BY IMMEDIATE PARENT COMPANY	NATURE OF BUSINESS
American Financial Group, Inc.
|__AFC Holding Company
|__American Financial Corporation
|__Great American Insurance Company
|__Great American Assurance Company	Ohio	03/23/1905	100	Property/Casualty Insurance
|__Great American Claims Services, Inc.	Delaware	06/10/1986	100	Management Holding Company
|__Great American Custom Insurance Services Illinois, Inc.	Illinois	07/08/1992	100	Underwriting Office
|__Great American Custom Insurance Services, Inc.	Ohio	07/27/1983	100	Holding Company for E&S Agency/Brokerage
|__Eden Park Insurance Brokers, Inc.	California	02/13/1990	100	Wholesale Agency/Brokerage for E&S Lines
|__Great American Custom Insurance Services California	California	05/18/1992	100	Insurance Services
|__Great American Custom Insurance Services Massachusetts, Inc	Massachusetts	04/11/1994	100	Excess and Surplus Lines Broker
|__Great American Custom Solutions, Inc.	California	07/22/1988	100	Insurance Agency
|__Professional Risk Brokers of Connecticut, Inc.	Connecticut	07/09/1992	100	Wholesale Agency/Brokerage for E&S Lines
|__Professional Risk Brokers of Ohio, Inc.	Ohio	12/17/1986	100	Excess and Surplus Lines Broker
|__Professional Risk Brokers, Inc.	Illinois	03/01/1990	100	Wholesale Agency/Brokerage for E&S Lines

AFG ORGANIZATIONAL CHART	% OF STOCK OWNEDSTATE OFDOMICILE	DATE OF INCORPORATION	BY IMMEDIATE PARENT COMPANY	NATURE OF BUSINESS
|__Great American E & S Insurance Company	Delaware	02/28/1979	100	Excess and Surplus Lines Insurance
|__Great American Fidelity Insurance Company	Delaware	01/12/1982	100	Excess and Surplus Lines Insurance
|__Great American Financial Resources, Inc.	Delaware	11/23/1992	82.66	Insurance Holding Company
|__AAG Holding Company, Inc.	Ohio	09/11/1996	100	Holding Company
|__American Annuity Group Capital Trust I	Delaware	09/13/1996	100	Financing Entity
|__American Annuity Group Capital Trust II	Delaware	03/04/1997	100	Financing Entity
|__American Annuity Group Capital Trust III	Delaware	05/14/1997	100	Financing Entity
|__Great American Life Insurance Company	Ohio	12/15/1959	100	Life Insurance
|__American Retirement Life Insurance Company	Ohio	05/12/1978	100	Life Insurance
|__Annuity Investors Life Insurance Company	Ohio	11/13/1981	100	Life Insurance
|__Charleston Harbor Marina, Inc.	South Carolina	04/26/2002	100 (2)	Marina Facility
|__CHATBAR, Inc.	Massachusetts	11/02/1993	100	Hotel Operator
|__Chatham Enterprises, Inc.	Massachusetts	03/29/1954	100	Real Estate Holding Company
|__Consolidated Financial Corporation	Michigan	09/10/1985	100	Retirement & Financial Planning Company
|__Driskill Holdings, Inc.	Texas	06/07/1995	beneficial interest	Real Estate Manager
|__GALIC Brothers, Inc.	Ohio	11/12/1993	80	Real Estate Management
|__Great American Life Assurance Company	Ohio	08/10/1967	100	Life Insurance
|__Great American Life Children's Foundation	Ohio	08/06/1998	beneficial interest	Charitable Foundation

AFG ORGANIZATIONAL CHART	% OF STOCK OWNEDSTATE OFDOMICILE	DATE OF INCORPORATION	BY IMMEDIATE PARENT COMPANY	NATURE OF BUSINESS
|__Great American Life Insurance Company of New York	New York	12/31/1963	100	Life Insurance Company
American Financial Group, Inc.
|__AFC Holding Company
|__American Financial Corporation
|__Great American Insurance Company
|__Great American Financial Resources, Inc.
|__AAG Holding Company, Inc.
|__Great American Life Insurance Company
|__Loyal American Life Insurance Company	Ohio	05/18/1955	100	Life Insurance
|__ADL Financial Services, Inc.	North Carolina	09/10/1970	100	Inactive
|__Purity Financial Corporation	Florida	12/12/1991	100	Credit Union Marketing
|__Manhattan National Life Insurance Company	Illinois	12/20/1956	100	Life Insurance
|__Skipjack Marina Corp.	Maryland	06/24/1999	100	Marina Operator
|__United Teacher Associates, Ltd.	Texas	12/17/1998	100 (2)	Holding Company - Limited Partnership
|__United Teacher Associates Insurance Company	Texas	12/15/1958	100	Life Insurance Company
|__AAG Insurance Agency of Alabama	Alabama	09/22/1995	100	Insurance Agency
|__AAG Insurance Agency of Texas, Inc.	Texas	06/02/1995	100	Insurance Agency
|__AAG Insurance Agency, Inc.	Kentucky	12/06/1994	100	Insurance Agency
|__AAG Insurance Agency of Massachusetts, Inc.	Massachusetts	05/25/1995	100	Insurance Agency

AFG ORGANIZATIONAL CHART	% OF STOCK OWNEDSTATE OFDOMICILE	DATE OF INCORPORATION	BY IMMEDIATE PARENT COMPANY	NATURE OF BUSINESS
|__American DataSolutions International, Inc.	Ohio	08/24/2001	100	Data Processing & Holding Company
|__American Data Source India Private Limited	India	09/03/1997	99	Software Development
|__American Memorial Marketing Services, Inc.	Washington	06/19/1980	100	Marketing Services
|__CSW Management Services, Inc.	Texas	06/27/1985	100	Inactive
|__GALIC Disbursing Company	Ohio	05/31/1994	100	Payroll Servicer
|__Great American Advisors, Inc.	Ohio	12/10/1993	100	Broker-Dealer
|__Great American Life Assurance Company of Puerto Rico	Puerto Rico	07/01/1964	99	Insurance Company
|__Keyes-Graham Insurance Agency, Inc.	Massachusetts	08/07/1981	100	Insurance Agency
|__Laurentian Credit Services Corporation	Delaware	10/07/1994	100	Inactive
|__Laurentian Marketing Services, Inc.	Delaware	12/23/1987	100	Inactive
|__Laurentian Securities Corporation	Delaware	01/03/1990	100	Inactive
|__Lifestyle Financial Investments, Inc.	Ohio	12/29/1993	100	Marketing Services
|__Lifestyle Financial Investments Agency of Ohio, Inc	Ohio	03/07/1994	beneficial interest	Insurance Agency
|__Loyal Marketing Services, Inc.	Alabama	07/20/1990	100	Inactive
|__Money-Plan International, Inc.	Florida	12/31/1979	100	Insurance Agency
|__SPELCO (UK) Ltd.	United Kingdom		99	Inactive
|__SWTC Hong Kong Ltd.	Hong Kong		100	Inactive
American Financial Group, Inc.
|__AFC Holding Company

AFG ORGANIZATIONAL CHART	% OF STOCK OWNEDSTATE OFDOMICILE	DATE OF INCORPORATION	BY IMMEDIATE PARENT COMPANY	NATURE OF BUSINESS
|__American Financial Corporation
|__Great American Insurance Company
|__Great American Financial Resources, Inc.
|__SWTC, Inc.	Delaware		100	Inactive
|__Great American Insurance Agency, Inc.	Ohio	04/20/1999	100	Insurance Agency
|__Great American Insurance Company of New York	New York	08/22/1947	100	Property/Casualty Insurance
|__Great American Lloyd's Insurance Company	Texas	10/09/1979	beneficial interest	Lloyd's Plan Insurer
|__Great American Lloyd's, Inc.	Texas	08/02/1983	100	Corporate Attorney-in-Fact
|__Great American Management Services, Inc.	Ohio	12/05/1974	100	Data Processing and Equipment Leasing
|__Great American Protection Insurance Company	Indiana	01/08/1990	100	Surplus Lines Insurer
|__Great American Re Inc.	Delaware	05/14/1971	100	Reinsurance Intermediary
|__Grizzly Golf Center, Inc.	Ohio	11/08/1993	100	Golf Course Management
|__Key Largo Group, Inc.	Florida	02/25/1969	100	Land Developer
|__Mid-Continent Casualty Company	Oklahoma	02/26/1947	100	Property/Casualty Insurance
|__Mid-Continent Insurance Company	Oklahoma	08/13/1992	100	Property/Casualty Insurance
|__Oklahoma Surety Company	Oklahoma	08/05/1968	100	Special Coverage Insurance Company
|__National Interstate Corporation	Ohio	01/26/1989	58	Holding Company

AFG ORGANIZATIONAL CHART	% OF STOCK OWNEDSTATE OFDOMICILE	DATE OF INCORPORATION	BY IMMEDIATE PARENT COMPANY	NATURE OF BUSINESS
|__American Highways Insurance Agency (CA)	California	05/05/1994	100	Insurance Agency
|__American Highways Insurance Agency (OH)	Ohio	06/29/1999	100	Insurance Agency
|__Explorer Insurance Agency, Inc.	Ohio	07/17/1997	100	Insurance Agency
|__Hudson Indemnity, Ltd.	Cayman	06/12/1996	100	Property/Casualty Insurance
|__National Interstate Insurance Agency, Inc.	Ohio	02/13/1989	100	Insurance Agency
|__National Interstate Insurance Company	Ohio	02/10/1989	100	Property/Casualty Insurance
|__National Interstate Insurance Company of Hawaii, Inc	Hawaii	09/20/1999	100	Property/Casualty Insurance
|__Safety, Claims & Litigation Services, Inc.	Pennsylvania	06/23/1995	100	Claims Third Party Administrator
|__PCC 38 Corp.	Illinois	12/23/1996	100	Real Estate Holding Company
|__Penn Central U.K. Limited	United Kingdom	10/28/1992	100	Insurance Holding Company
|__Insurance (GB) Limited	United Kingdom	05/13/1992	100	Property/Casualty Insurance
|__PLLS Canada Insurance Brokers Inc.	Ontario (Quebec)	06/13/2001	49	Insurance Agency
|__Pointe Apartments, Inc.	Minnesota	06/24/1993	100	Real Estate Holding Company
|__Premier Dealer Services, Inc.	Illinois	06/24/1998	100	Third Party Administrator
|__Transport Insurance Company	Ohio	05/25/1976	100	Property Casualty Insurance
|__Instech Corporation	Texas	09/02/1975	100	Claim and Claim Adjustment Services

AFG ORGANIZATIONAL CHART	% OF STOCK OWNEDSTATE OFDOMICILE	DATE OF INCORPORATION	BY IMMEDIATE PARENT COMPANY	NATURE OF BUSINESS
American Financial Group, Inc.
|__AFC Holding Company
|__American Financial Corporation
|__Great American Insurance Company
|__Transport Insurance Company
|__Transport Insurance Agency, Inc.	Texas	08/21/1989	beneficial interest	Insurance Agency
|__Worldwide Insurance Company	Ohio	09/27/1979	100	Property/Casualty Insurance
|__Worldwide Direct Auto Insurance Company	Ohio	11/13/1961	100	Property/Casualty Insurance
|__Worldwide Casualty Insurance Company	Ohio	02/17/1981	100	Property/Casualty Insurance
|__One East Fourth, Inc.	Ohio	02/03/1964	100	Real Estate Holding Company
|__Pioneer Carpet Mills, Inc.	Ohio	04/29/1976	100	Inactive
|__Superior NWVN of Ohio, Inc.	Ohio	05/05/2000	100	Holding Company
|__TEJ Holdings, Inc.	Ohio	12/04/1984	100	Real Estate Holding Company
|__Three East Fourth, Inc.	Ohio	08/10/1966	100	Real Estate Holding Company
(1) Except Director's Qualifying Shares. (2) Total percentage owned by parent shown and by other affiliated company(s).

Item 27. Number of Contract Owners

As of March 31, 2003, there were 44 Individual Contract Owners, of which 26 were qualified and 18 were non-qualified.

Item 28. Indemnification

(a) The Code of Regulations of Annuity Investors Life Insurance Company provides in Article V as follows:

The Corporation shall, to the full extent permitted by the General Corporation Law of Ohio, indemnify any person who is or was a director or officer of the Corporation and whom it may indemnify pursuant thereto. The Corporation may, within the sole discretion of the Board of Directors, indemnify in whole or in part any other persons whom it may indemnify pursuant thereto.

Insofar as indemnification for liability arising under the Securities Act of 1933 ("1933 Act") may be permitted to directors, officers and controlling persons of the Depositor pursuant to the foregoing provisions, or otherwise, the Depositor has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Depositor of expenses incurred or paid by the director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Depositor will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue.

(b) The directors and officers of Annuity Investors Life Insurance Company are covered under a Directors and Officers Reimbursement Policy. Under the Reimbursement Policy, directors and officers are indemnified for loss arising from any covered claim by reason of any Wrongful Act in their capacities as directors or officers, except to the extent the Company has indemnified them. In general, the term "loss" means any amount which the directors or officers are legally obligated to pay for a claim for Wrongful Acts. In general, the term "Wrongful Acts" means any breach of duty, neglect, error, misstatement, misleading statement, omission or act by a director or officer while acting individually or collectively in their capacity as such claimed against them solely by reason of their being directors and officers. The limit of liability under the program is $20,000,000 for the policy year ending September 1, 2003. The primary policy under the program is with National Union Fire Insurance Company of Pittsburgh, PA, in the name of American Premier Underwriters, Inc.

Item 29. Principal Underwriter

Great American Advisors^sm, Inc. is the underwriter and distributor of the Contracts as defined in the Investment Company Act of 1940 ("1940 Act"). It is also the underwriter and distributor of Annuity Investors® Variable Account C.

(a)	Great American Advisors, Inc. does not act as a principal underwriter, depositor, sponsor or investment adviser for any investment company other than Annuity Investors Variable Account A, Annuity Investors Variable Account B, and Annuity Investors Variable Account C.
(b)	Directors and Officers of Great American Advisors, Inc.:

Name and Principal Business Address	Position with Great American Advisors, Inc.
James Lee Henderson (1)	President and Chief Compliance Officer
James T. McVey (1)	Chief Operating Officer and Senior Vice President
Mark Francis Muething (1)	Vice President, Secretary and Director
Peter J. Nerone (1)	Vice President
Paul Ohlin (1)	Treasurer
Thomas E. Mischell (1)	Assistant Treasurer
Fred J. Runk (1)	Assistant Treasurer

(1)    525 Vine Street, 7^th Floor, Cincinnati, Ohio 45202

(c) Required commission information is included in Part B of this Registration Statement.

Item 30. Location of Accounts and Records

All accounts and records required to be maintained by Section 31(a) of the 1940 Act and the rules under it are maintained by Richard Magoteaux Chief Financial Officer of the Company, at the Administrative Office.

Item 31. Management Services

Not Applicable

Item 32. Undertakings

(a) Registrant undertakes that it will file a post-effective amendment to this registration statement as frequently as necessary to ensure that the audited financial statements in the registration statement are never more than 16 months old for so long as payments under the Contracts may be accepted.

(b) Registrant undertakes that it will include either (1) as part of any application to purchase a Contract offered by the Prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a post card or similar written communication affixed to or included in the Prospectus that the applicant can remove to send for a Statement of Additional Information.

(c) Registrant undertakes to deliver any Prospectus and Statement of Additional Information and any financial statements required to be made available under this Form promptly upon written or oral request to the Company at the address or phone number listed in the Prospectus.

(d) The Company represents that the fees and charges deducted under the Contract, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred and the risks assumed by the Company.

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it has caused this Post-Effective Amendment No. 1 to its Registration Statement to be signed on its behalf by the undersigned in the City of Cincinnati, State of Ohio on the 30th day of April, 2003.

ANNUITY INVESTORS VARIABLE ACCOUNT C

(Registrant)
 

By: /s/ Charles R. Scheper
Charles R. Scheper*
President,
Chief Executive Officer and Director
Annuity Investors Life Insurance Company

 ANNUITY INVESTORS LIFE INSURANCE COMPANYÒ

(Depositor)

 By: /s/ Charles R. Scheper
Charles R. Scheper*
President,
Chief Executive Officer and Director

As required by the Securities Act of 1933, as amended, this Post-Effective Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

/s/ Richard Magoteaux Richard Magoteaux*	Chief Financial Officer	April 30, 2003
/s/ Stephen Craig Lindner Stephen Craig Lindner*	Director	April 30, 2003
/s/ Mark Francis Muething Mark Francis Muething*	Director	April 30, 2003
/s/ Christopher P. Miliano Christopher P. Miliano*	Director	April 30, 2003
/s/ Michael J. Prager Michael J. Prager	Director	April 30, 2003

 * Executed by Carol Edwards Dunn on behalf of those indicated pursuant to Power of Attorney.

 EXHIBIT INDEX

Exhibit No.	Description of Exhibits
(10)	Consent of Independent Auditors