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SELECT*ANNUITY III

AN INDIVIDUAL DEFERRED VARIABLE/FIXED ANNUITY CONTRACT
issued by
ReliaStar Life Insurance Company and its ReliaStar Select Variable Account

This prospectus describes flexible purchase payment individual deferred variable/fixed annuity contracts. The contracts were sold both as non-qualified contracts and in connection with retirement plans that may qualify for special Federal tax treatment under the Internal Revenue Code of 1986, as amended. (See “Federal Tax Status.”) Annuity payouts from the contracts are deferred until a selected later date. ReliaStar Life does not currently offer this contract for sale to new purchasers.

Subject to certain restrictions, you can allocate premiums to:

  • The Fixed Account, an account that provides a minimum specified rate of interest; and
  • Subaccounts of ReliaStar Select Variable Account, a Variable Account through which you may invest in certain portfolios of the following Fund families:
American Funds Insurance Series    ING Variable Products Trust 
Fidelity® Variable Insurance Products Funds    ING Variable Product Funds 
ING Investors Trust    Neuberger Berman Advisers Management Trust 
ING Partners, Inc.     

The Variable Account, your account value and the amount of any Variable Annuity payments that you receive will vary, primarily based on the investment performance of the Funds you select. (For more information about investing in the Funds, see “Investments of the Variable Account.”) The Fixed Account is the general account of ReliaStar Life Insurance Company (the “company,” “ReliaStar Life,” “we,” “us” or “our”). The Fixed Account is not available to Contract Owners in the States of Maryland, Oregon, South Carolina and Washington.

Additional information about the contracts, ReliaStar Life and the Variable Account, contained in a Statement of Additional Information dated April 28, 2008, has been filed with the Securities and Exchange Commission (“SEC”). The Statement of Additional Information is available by accessing the SEC’s Internet website (http://www.sec.gov) or upon request without charge by writing to us at the ING Customer Service Center, P.O. Box 5050, Minot, North Dakota 58703 or by calling 1-877-884-5050. The Statement of Additional Information is incorporated by reference in this prospectus and its Table of Contents can be found on page 2 of this prospectus.

THIS PROSPECTUS SETS FORTH CONCISELY THE INFORMATION ABOUT THE CONTRACTS THAT A PROSPECTIVE INVESTOR OUGHT TO KNOW BEFORE INVESTING AND SHOULD BE RETAINED FOR FUTURE REFERENCE.

The contracts:

  • Are not bank deposits or guaranteed by a bank
  • Are not insured or guaranteed by the FDIC, the Federal Reserve Board or any other government agency
  • Are affected by market fluctuations and so involve investment risk, including possible loss of principal
  • Have not been approved or disapproved by the SEC nor has the SEC passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

This prospectus describes what you should know before purchasing the Select*Annuity III variable annuity contract. Please read it carefully and keep it for future reference.

THE DATE OF THIS PROSPECTUS IS APRIL 28, 2008.


                                                                                         TABLE OF CONTENTS     
 
     Page 
SUMMARY OF CONTRACT EXPENSES       5 
RELIASTAR LIFE       8 
THE VARIABLE ACCOUNT       9 
INVESTMENTS OF THE VARIABLE ACCOUNT     10 
CHARGES MADE BY RELIASTAR LIFE     12 
ADMINISTRATION OF THE CONTRACTS     17 
THE CONTRACTS     17 
OTHER PRODUCTS     18 
ANNUITY PROVISIONS     27 
FEDERAL TAX STATUS     30 
VOTING OF FUND SHARES     39 
DISTRIBUTION OF THE CONTRACT     39 
ANTI-MONEY LAUNDERING     41 
REVOCATION     41 
REPORTS TO OWNERS     41 
LEGAL PROCEEDINGS     42 
EXPERTS     42 
FURTHER INFORMATION     42 
STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS     43 
APPENDIX A    A-1 
APPENDIX B    B-1 
APPENDIX C    C-1 
APPENDIX D    D-1 

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DEFINITIONS

Annuitant. The person who is named by the Owner whose life determines the annuity benefits payable.

Annuity Commencement Date. The date on which the annuity payments begin, which must be the first day of a month. The date will be the first day of the month following the Annuitant’s 75th birthday unless an earlier or later date has been selected by the Owner and, if the date is later, it has been agreed to by ReliaStar Life.

Beneficiary. The person who is named to receive the Contract Value upon the death of the Owner before the Annuity Commencement Date or to receive the balance of the annuity payments, if any, under the annuity form in effect at the Annuitant’s death.

Code. The Internal Revenue Code of 1986, as amended.

Contract Anniversary. Occurs yearly on the same day and month the contract was issued.

Contract Owner (Owner, you). The person who controls all the rights and privileges under the contract. The Annuitant owns the contract unless another Owner is named as provided for in the contract. The contract may be owned by one, but no more than two, natural persons. When it is held under a retirement plan or program described in Section 401(a), 403(a), 403(b), 408 or 408A or similar provisions of the Code, it may be held by one natural person only.

Contract Value. The sum of (a) the Variable Account Contract Value, which is the value of the Subaccount Accumulation Units under the contract, plus (b) the Fixed Account Contract Value, which is the sum of purchase payments allocated to the Fixed Account under the contract, plus credited interest, minus surrenders, surrender charges previously applied and any annual administrative charges applicable to the Fixed Account and minus any transfers to the Variable Account.

Contract Year. Each twelve-month period starting with the date the contract was issued and each Contract Anniversary after that.

Death Benefit. The amount payable upon the death of a Contract Owner before the Annuity Commencement Date. (See “Death Benefit Before the Annuity Commencement Date.”)

Death Benefit Valuation Date. The Death Benefit Valuation Date is the Valuation Date next following the date ReliaStar Life receives proof of death and a written request from the Beneficiary for a single sum payment or an annuity form permitted by Section 72(s) of the Code.

Fixed Account. The Fixed Account is the general account of ReliaStar Life, which consists of all assets of ReliaStar Life other than those allocated to separate accounts of ReliaStar Life.

Fixed Annuity. An annuity with payments that do not vary as to dollar amount.

Funds. Any open-end management investment company (or portfolio thereof) or unit investment trust (or series thereof) in which a Subaccount invests.

Qualified Plan. A retirement plan under Sections 401, 408 or 408A or some provisions of 403 and 456 of the Code.

Specified Contract Anniversary. Each consecutive six year anniversary date measured from the date the contract was issued. The Specified Contract Anniversary is used to determine the Death Benefit payable if the Contract Owner dies before the Annuity Commencement Date. (See “Death Benefit Before the Annuity Commencement Date.”)

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Subaccount. That portion of the Variable Account which invests in shares of a specific Fund.

Subaccount Accumulation Unit. A unit of measure used to determine the Variable Account Contract Value before annuity payments start.

Successor Beneficiary. The person named to become the Beneficiary if the Beneficiary is not alive.

Valuation Date. Each day on which the New York Stock Exchange is open for business except for a day that a Subaccount’s corresponding Fund does not value its shares. ReliaStar Life reserves the right to revise the definition of Valuation Date as needed in accordance with applicable federal securities laws and regulations.

Valuation Period. A Valuation Period is the period between two successive Valuation Dates, commencing at the close of business of a Valuation Date (normally at 4.00 p.m., Eastern Time) and ending at the close of business on the next Valuation Date (normally at 4:00 p.m., Eastern Time). ReliaStar Life reserves the right to revise the definition of Valuation Period as needed in accordance with applicable federal securities laws and regulations.

Variable Account. A separate account of ReliaStar Life consisting of assets set aside by ReliaStar Life, the investment performance of which is kept separate from that of the general assets of ReliaStar Life.

Variable Annuity. A series of periodic payments to the contract payee that will vary in amount, primarily based on the investment results of the Subaccounts under the contract.

Variable Annuity Unit. A unit of measure used in the calculation of the second and each subsequent Variable Annuity payment from the Variable Account.

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SUMMARY OF CONTRACT EXPENSES

The following tables describe the fees and expenses you will pay when buying, owning and surrendering the contract. See “Charges Made By ReliaStar Life” for additional information about each of these fees and expenses.

Maximum Contract Owner Transaction Expenses. The following table describes the fees and

expenses you will pay at the time you buy the contract, surrender the contract or make transfers between the Subaccounts or to the Fixed Account. State premium taxes may also be deducted. See “Premium and Other Taxes.”

                   Sales Charge Imposed on Purchases     None 
                   Maximum Surrender Charge (a)     6% 
                   Partial Surrender Fee (b)    2% of the partial surrender 
           amount, up to $25 
                   Transfer Charge (c)    $25 
 
Periodic Fees and Expenses. The following table describes the fees and expenses you will pay periodically 
during the time you own the contract, not including Fund fees and expenses.     
                   Annual Contract Charge    $30 
                   Variable Account Annual Expenses (as a percentage of average Variable Account Contract Value): 
                                       Mortality and Expense Risk Premiums    1.25% 
                                       Administration Charge    0.15% 
                                       Total Variable Account Annual Expenses     1.40% 

(a)      The surrender charge is percentage of amounts surrendered attributable to purchase payments made in the last six Contract Years. The percentage declines over time. In certain situations amounts can be surrendered without any surrender charge. See “Surrender Charge (Contingent Deferred Sales Charge).”
 
(b)      ReliaStar Life currently does not assess this fee. See “Partial Surrenders.”
 
(c)      ReliaStar Life currently imposes this charge only on transfers after the 12th transfer in a Contract Year. See “Transfer Charge.”
 

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Expenses of the Funds. The following table shows the minimum and maximum total gross annual Fund expenses that you may pay during the time you own the contract. Fund expenses vary from Fund to Fund and may change from year to year. For more detail about a Fund’s fees and expenses, review the Fund’s prospectus. See also “Expenses of the Funds.”

    Minimum    Maximum 
Total Gross Annual Fund Expenses d (deducted from Fund assets)       0.26%       1.25% 

Total gross annual Fund expenses are deducted from amounts that are allocated to the Fund. They include management fees and other expenses and may include distribution (12b-1) fees. Other expenses may include service fees that may be used to compensate service providers, including ReliaStar Life and its affiliates, for administrative and Contract Owner services provided on behalf of the Fund. Distribution (12b-1) fees are used to finance any activity that is primarily intended to result in the sale of Fund shares.

If a Fund is structured as a “Fund of Funds,” total gross annual Fund expenses also include the fees associated with the Fund or Funds in which it invests. Because of this a Fund that is structured as a “Fund of Funds” may have higher fees and expenses than a Fund that invests directly in debt and equity securities. For a list of the “Fund of Funds” available through the contract, see the chart of Funds available through the Variable Account on page 10.

(d)      Some Funds that are available through the contract have contractual arrangements to waive and/or reimburse certain Fund fees and expenses. The minimum and maximum total gross annual Fund expenses shown above do not reflect any of these waiver and/or reimbursement arrangements.
 

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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 Contract Owner transaction expenses, periodic fees and expenses, including the annual contract charge of $30 (converted to a percentage of assets equal to 0.092%), and Fund fees and expenses.

Example 1: The following examples assume that you invest $10,000 in the contract for the time periods indicated. The examples also assume that your investment has a 5% return each year and assume the maximum Fund fees and expenses without taking into account any expense reimbursements or fee waivers. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

    1 Year    3 Years    5 Years    10 Years 
If you surrender your contract at the end of the applicable                 
time period:     $877    $1,351    $1,851     $3,072 
If you annuitize your contract at the end of the applicable                 
time period:*     $877     $851    $1,451     $3,072 
If you do not surrender your contract at the end of the                 
applicable time period:     $277     $851    $1,451     $3,072 

Example 2: The following examples assume that you invest $10,000 in the contract for the time periods indicated. The examples also assume that your investment has a 5% return each year and assume the minimum Fund fees and expenses without taking into account any expense reimbursements or fee waivers. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

    1 Year    3 Years    5 Years    10 Years 
If you surrender your contract at the end of the applicable                 
time period:     $778    $1,052    $1,350     $2,065 
If you annuitize your contract at the end of the applicable                 
time period:*     $778     $752     $950     $2,065 
If you do not surrender your contract at the end of the                 
applicable time period:     $178     $752     $950     $2,065 

ReliaStar Life and certain of its insurance company affiliates offers other variable annuity contracts that also invest in the Funds. These contracts may have charges that could affect the value of their Subaccounts and may offer different benefits more suitable to your needs. To obtain more information about these contracts, contact your agent/registered representative or call 1-877-884-5050.

For performance information and Condensed Financial Information, see Appendix C.

*      If the contract’s Annuity Commencement Date occurs during the first two Contract Years following the date the contract was issued, a surrender charge is deducted and the expenses shown in year one reflect this deduction.
 

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RELIASTAR LIFE

ReliaStar Life is a stock life insurance company organized in 1885 and incorporated under the laws of the State of Minnesota. ReliaStar Life offers individual life insurance and annuities, employee benefits and retirement contracts. Our home office is located at 20 Washington Avenue South, Minneapolis, Minnesota 55401 (612-372-5597).

ReliaStar Life is an indirect, wholly owned subsidiary of ING Groep N.V. (“ING”). ING Groep N.V. is a global financial institution active in the fields of insurance, banking and asset management. ING is headquartered in Amsterdam, The Netherlands. Although ReliaStar Life is a subsidiary of ING, ING is not responsible for the obligations under the contract. The obligations under the contract are solely the responsibility of ReliaStar Life.

The contracts described in this prospectus are nonparticipating. The capital and surplus of ReliaStar Life should be considered as bearing only upon the ability of ReliaStar Life to meet its obligations under the contracts.

ReliaStar Life is a member of the Insurance Marketplace Standard Association (“IMSA”). Companies that belong to IMSA subscribe to a rigorous set of standards that cover the various aspects of sales and service for individually sold life insurance and annuities. IMSA members have adopted policies and procedures that demonstrate a commitment to honesty, fairness and integrity in all customer contacts involving sales and service of individual life insurance and annuity products.

Regulatory Developments -- ReliaStar Life and the Industry

As with many financial services companies, ReliaStar Life and its affiliates have received informal and formal requests for information from various state and federal governmental agencies and self-regulatory organizations in connection with inquiries and investigations of the products and practices of the financial services industry. In each case, ReliaStar Life and its affiliates have been and are providing full cooperation.

Insurance and Retirement Plan Products and Other Regulatory Matters. Federal and state regulators and self-regulatory agencies are conducting broad inquiries and investigations involving the insurance and retirement industries. These initiatives currently focus on, among other things, compensation, revenue sharing, and other sales incentives; potential conflicts of interest; potential anti-competitive activity; reinsurance; sales and marketing practices (including sales to seniors); specific product types (including group annuities and indexed annuities); and disclosure. It is likely that the scope of these industry investigations will further broaden before they conclude. ReliaStar Life and certain of its U.S. affiliates have received formal and informal requests in connection with such investigations, and are cooperating fully with each request for information. Some of these matters could result in regulatory action involving ReliaStar Life. These initiatives also may result in new legislation and regulation that could significantly affect the financial services industry, including businesses in which ReliaStar Life is engaged. In light of these and other developments, U.S. affiliates of ING, including ReliaStar Life, periodically review whether modifications to their business practices are appropriate.

Investment Product Regulatory Issues. Since 2002, there has been increased governmental and regulatory activity relating to mutual Funds and variable insurance products. This activity has primarily focused on inappropriate trading of Fund shares; directed brokerage; compensation; sales practices, suitability, and supervision; arrangements with service providers; pricing; compliance and controls; adequacy of disclosure; and document retention.

In addition to responding to governmental and regulatory requests on Fund trading issues, ING management, on its own initiative, conducted, through special counsel and a national accounting firm, an extensive internal review of mutual Fund trading in ING insurance, retirement, and mutual Fund products. The goal of this review was to identify any instances of inappropriate trading in those products by third parties or by ING investment professionals and other ING personnel.

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The internal review identified several isolated arrangements allowing third parties to engage in frequent trading of mutual Funds within the variable insurance and mutual Fund products of ING, and identified other circumstances where frequent trading occurred despite measures taken by ING intended to combat market timing. Each of the arrangements has been terminated and disclosed to regulators, to the independent trustees of ING Funds (U.S.) and in reports previously filed by affiliates of ReliaStar Life with the SEC pursuant to the Securities Exchange Act of 1934, as amended.

Action may be taken by regulators with respect to ReliaStar Life or certain ING affiliates before investigations relating to Fund trading are completed. The potential outcome of such action is difficult to predict but could subject ReliaStar Life or certain affiliates to adverse consequences, including, but not limited to, settlement payments, penalties, and other financial liability. It is not currently anticipated, however, that the actual outcome of any such action will have a material adverse effect on ING or ING’s U.S. based operations, including ReliaStar Life.

ING has agreed to indemnify and hold harmless the ING Funds from all damages resulting from wrongful conduct by ING or its employees or from ING’s internal investigation, any investigations conducted by any governmental or self-regulatory agencies, litigation or other formal proceedings, including any proceedings by the SEC. Management reported to the ING Funds Board that ING management believes that the total amount of any indemnification obligations will not be material to ING or ING’s U.S. based operations, including ReliaStar Life.

Product Regulation. Our products are subject to a complex and extensive array of state and federal tax, securities and insurance laws, and regulations, which are administered and enforced by a number of governmental and self-regulatory authorities. Specifically, U.S. federal income tax law imposes certain requirements relating to non-qualified annuity product design, administration and investments that are conditions for beneficial tax treatment of such products under the Code. See FEDERAL TAX STATUS, page 30, for further discussion of some of these requirements. Failure to administer certain non-qualified product features (for example, contractual annuity dates) could affect such beneficial tax treatment. In addition, state and federal securities and insurance laws impose requirements relating to insurance and annuity product design, offering and distribution, and administration. Failure to meet any of these complex tax, securities or insurance requirements could subject ReliaStar Life to administrative penalties, unanticipated remediation or other claims and costs.

THE VARIABLE ACCOUNT

The Variable Account is a separate account of ReliaStar Life established by the Board of Directors of ReliaStar Life on November 12, 1981, pursuant to the laws of the State of Minnesota. The Variable Account is registered with the SEC as a unit investment trust under the Investment Company Act of 1940, as amended (“1940 Act”). Such registration does not involve supervision by the SEC of the management or investment policies or practices of the Variable Account, ReliaStar Life or the Funds. ReliaStar Life has complete ownership and control of the assets in the Variable Account, but these assets are held separately from ReliaStar Life’s other assets and are not part of ReliaStar Life’s general account.

The portion of the assets of the Variable Account equal to the reserves and other contract liabilities of the Variable Account will not be charged with liabilities incurred in any other business that ReliaStar Life may conduct. ReliaStar Life has the right to transfer to its general account any assets of the Variable Account that are in excess of such reserves and other liabilities. The income, if any, and gains and losses, realized or unrealized, of the Variable Account will be credited to or charged against the Variable Account in accordance with the contracts supported by the Variable Account, without regard to the other income, gains or losses of ReliaStar Life.

Purchase payments allocated to the Variable Account under a contract are invested in one or more Subaccounts of the Variable Account, as selected by you, the Owner. The future Variable Account Contract Value depends primarily on the investment performance of the Funds whose shares are held in the Subaccounts selected.

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INVESTMENTS OF THE VARIABLE ACCOUNT

When you apply for a contract, you can allocate purchase payments to one or more of the available Subaccounts. Each Subaccount invests in shares of one of the Funds at its net asset value. As Owner, you can change a purchase payment allocation for future purchase payments and can transfer all or part of the values in a Subaccount to another Subaccount. An Owner may make transfers to the Fixed Account from the Variable Account at any time. The following chart lists the Funds that are available through the Variable Account.

Certain of these Funds that are available through the Variable Account are structured as “Fund of Funds.” A “Fund of Funds” may have higher fees and expenses than a Fund that invests directly in debt and equity securities because they also incur the fees and expenses of the underlying Funds in which they invest. The “Fund of Funds” available through the Contract are identified below.

Funds Available Through the Variable Account

  • American Funds – Growth Fund (Class 2)
  • American Funds – Growth-Income Fund (Class 2)
  • American Funds – International Fund (Class 2)
  • Fidelity® VIP Contrafund® Portfolio (Initial Class)
  • Fidelity® VIP Equity-Income Portfolio (Initial Class)
  • ING AllianceBernstein Mid Cap Growth Portfolio (Class I)
  • ING BlackRock Large Cap Growth Portfolio (Class I)
  • ING Evergreen Health Sciences Portfolio (Class I)
  • ING Evergreen Omega Portfolio (Class I)
  • ING FMRSM Diversified Mid Cap Portfolio (Class I)
  • ING Focus 5 Portfolio (Class I)
  • ING Franklin Templeton Founding Strategy Portfolio (Class I)*
  • ING Global Real Estate Portfolio (Class S)
  • ING Global Resources Portfolio (Class I)
  • ING JPMorgan Emerging Markets Equity Portfolio (Class I)
  • ING JPMorgan Small Cap Core Equity Portfolio (Class I)
  • ING JPMorgan Value Opportunities Portfolio (Class I)
  • ING Julius Baer Foreign Portfolio (Class I)
  • ING Legg Mason Value Portfolio (Class I)
  • ING LifeStyle Aggressive Growth Portfolio (Class I)*
  • ING LifeStyle Growth Portfolio (Class I)*
  • ING LifeStyle Moderate Growth Portfolio (Class I)*
  • ING LifeStyle Moderate Portfolio (Class I)*
  • ING Limited Maturity Bond Portfolio (Class S)
  • ING Liquid Assets Portfolio (Class I)
  • ING Marsico Growth Portfolio (Class I)
  • ING Marsico International Opportunities Portfolio (Class I)
  • ING MFS Total Return Portfolio (Class I)
  • ING MFS Utilities Portfolio (Class I)
  • ING Oppenheimer Main Street Portfolio ® Class I)
  • ING PIMCO Core Bond Portfolio (Class I)
  • ING Pioneer Fund Portfolio (Class I)
  • ING Pioneer Mid Cap Value Portfolio (Class I)
  • ING Stock Index Portfolio (Class I)
  • ING T. Rowe Price Capital Appreciation Portfolio (Class I)
  • ING T. Rowe Price Equity Income Portfolio (Class I)
  • ING Van Kampen Capital Growth Portfolio (Class I)
  • ING Van Kampen Growth and Income Portfolio (Class S)
  • ING VP Index Plus International Equity Portfolio (Class S)
  • ING Wells Fargo Small Cap Disciplined Portfolio (Class I)
  • ING Baron Small Cap Growth Portfolio (I Class)
  • ING Columbia Small Cap Value II Portfolio (I Class)
  • ING JP Morgan Mid Cap Value Portfolio (I Class)
  • ING Neuberger Berman Partners Portfolio (I Class)
  • ING Oppenheimer Global Portfolio (I Class)
  • ING Oppenheimer Strategic Income Portfolio (S Class)
  • ING Pioneer High Yield Portfolio (I Class)
  • ING T. Rowe Price Diversified Mid Cap Growth Portfolio (I Class)
  • ING UBS U.S. Large Cap Equity Portfolio (I Class)
  • ING Van Kampen Comstock Portfolio (I Class)
  • ING Van Kampen Equity and Income Portfolio (I Class)
  • ING VP Balanced Portfolio (Class I)
  • ING VP Intermediate Bond Portfolio (Class I)
  • ING Lehman Brothers U.S. Aggregate Bond Index ® Portfolio (Class I)
  • ING RussellTM Small Cap Index Portfolio (Class I)
  • ING VP Index Plus LargeCap Portfolio (Class I)
  • ING VP Index Plus MidCap Portfolio (Class I)
  • ING VP Index Plus SmallCap Portfolio (Class I)
  • ING VP SmallCap Opportunities Portfolio (Class I)
  • Neuberger Berman AMT Socially Responsive Portfolio® (Class I)
*      These Funds are structured as “Fund of Funds.” See the “Expenses of the Funds” table and “Expenses of the Funds” for more information about “Fund of Funds.”
 

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Certain Funds available through the Variable Account have names, investment objectives and policies similar to the names, investment objectives and policies of other Funds managed by the Fund’s investment adviser. The investment results of a Fund, however, may be higher or lower than those of other Funds managed by the same adviser. There can be no assurance, and no representation is made, that the investment results of any Fund will be comparable to those of another Fund managed by the same investment adviser.

See Appendix B to this prospectus for more information about the Funds available through the Variable Account, including information about each Fund’s investment adviser/subadviser and investment objective. More detailed information about each Fund, including information about their investment risks and fees and expenses, can be found in the Fund’s current prospectus and Statement of Additional Information. The Fund prospectuses should be read carefully before any allocation to, or transfers among, the Subaccounts. You may obtain these documents by contacting us at the ING Customer Service Center.

There is no assurance that the stated objectives and policies of any of the Funds will be achieved. Shares of the Funds will rise and fall in value and you could lose money by investing in the Funds. Shares of the Funds are not bank deposits and are not guaranteed, endorsed or insured by any financial institution, the Federal Deposit Insurance Corporation or any other government agency. Except as noted, all Funds are diversified, as defined under the 1940 Act.

ReliaStar Life reserves the right, subject to compliance with the law, to offer additional Funds.

The Funds are available to registered separate accounts of ReliaStar Life and to insurance companies other than ReliaStar Life, offering variable annuity contracts and variable life insurance policies. ReliaStar Life currently does not foresee any disadvantages to Owners resulting from the Funds selling shares to fund products other than the contracts. However, there is a possibility that a material conflict may arise between Owners whose Contract Values are allocated to the Variable Account and the owners of variable life insurance policies and variable annuity contracts issued by ReliaStar Life or by such other companies whose assets are allocated to one or more other separate accounts investing in any one of the Funds. In the event of a material conflict, ReliaStar Life will take any necessary steps, including removing the Fund from the Variable Account, to resolve the matter. The Board of Directors or Trustees of each Fund will monitor events in order to identify any material conflicts that possibly may arise and determine what action, if any, should be taken in response to those events or conflicts. See each individual Fund prospectus for more information.

Reinvestment

The Funds have, as a policy, the distribution of income, dividends and capital gains. However, under the contracts there is an automatic reinvestment of such distributions.

Addition, Deletion or Substitution of Fund Shares

ReliaStar Life reserves the right, subject to applicable law and any required regulatory approvals, to make additions to, deletions from or substitutions for the shares that are held in the Variable Account or that the Variable Account may purchase:

  • ReliaStar Life reserves the right to establish additional Subaccounts of the Variable Account each of which would invest in shares corresponding to a new or another investment company portfolio or delete Subaccounts.
    Any new Subaccounts may be made available to existing Contract Owners on a basis to be determined byReliaStar Life.

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  • ReliaStar Life may, in its sole discretion, eliminate one or more Subaccounts, combine two or more Subaccounts or close such Subaccounts to new premium or transfers, if marketing needs, tax or regulatory considerations or investment conditions warrant. ReliaStar Life will notify you in advance by a supplement to this prospectus if it closes a Subaccount. If ReliaStar Life eliminates, closes or combines a Subaccount or if a Subaccount is otherwise unavailable for new investment, all future premiums directed to the Subaccount that was eliminated, closed or combined or otherwise unavailable may be automatically allocated among the other available Subaccounts according to your most recent allocation instructions. If your most recent allocation instructions do not include any available Funds, you must provide us with alternative allocation instructions or the premium payment will be returned to you. You may give us alternative allocation instructions by contacting the ING
    Customer Service Center. See also the “Transfers” section of this prospectus for information about makingSubaccount allocation changes;
  • If the shares of a Fund are closed or otherwise no longer available for investment, or if, in ReliaStar Life’s judgment, further investment in a Fund should become inappropriate in view of the purposes of the Variable Account or when, in our sole discretion, marketing, tax, regulatory requirements or investment conditions warrant, ReliaStar Life may redeem the shares of that Fund and substitute shares of another registered open-end investment company. The new Funds may have higher fees and charges than the ones they replaced.

In the event of any such substitution, deletion or change, ReliaStar Life may make such changes as may be necessary or appropriate to reflect such substitution, deletion or change. If all or a portion of your investments are allocated to any of the current Funds that are being substituted for or deleted on the date such action is announced, you may transfer the portion of the Accumulation Value affected without payment of a transfer charge to available Subaccounts.

ReliaStar will not make a change, until the change is disclosed in an effective prospectus or prospectus supplement, authorized, if necessary, by an order from the SEC, and approved, if necessary, by the appropriate state insurance department(s). ReliaStar will notify you of any changes.

If deemed by us to be in the best interests of persons having voting rights under the contracts, the Variable Account may be operated as a management company under the 1940 Act, it may be deregistered under the 1940 Act in the event such registration is no longer required or it may be combined with our other separate accounts.

CHARGES MADE BY RELIASTAR LIFE

ReliaStar Life deducts the charges described below to cover our costs and expenses, the services we provide and the risks we assume under the contracts. The amount of a charge may not necessarily correspond to the costs associated with providing the services or benefits indicated by the designation of the charge. For example, the surrender charge we collect may not fully cover all of the sales and distribution expenses we actually incur. We also may profit on one or more of the charges. We may use any such profits for any corporate purpose, including the payment of sales expenses.

Surrender Charge (Contingent Deferred Sales Charge)

No deduction for a sales charge is made from purchase payments. However, a surrender charge (which may be deemed a contingent deferred sales charge) may be assessed. This charge is intended to reimburse ReliaStar Life for expenses relating to the sale of the contracts, including commissions to sales personnel, costs of sales material and other promotional activities and sales administration costs.

If part or all of a contract’s value is surrendered or, except for contracts issued in the State of Washington, if the contract’s Annuity Commencement Date occurs within the first two years after the contract is issued, surrender charges may be assessed by ReliaStar Life.

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In the case of a partial withdrawal where you request a specified dollar amount, the amount withdrawn will be the amount you specified, adjusted by any applicable surrender charge.

Computation of Surrender Charges -- For purposes of determining surrender charges, surrenders shall first be taken from Old Purchase Payments until they are exhausted, then from New Purchase Payments until they are exhausted and thereafter from Contract Earnings.

  • “New Purchase Payments” are those contract purchase payments received by ReliaStar Life during the Contract Year in which the surrender occurs or in the five immediately preceding Contract Years;
  • “Old Purchase Payments” are those contract purchase payments not defined as New Purchase Payments; and
  • “Contract Earnings” at any Valuation Date is the Contract Value less the sum of New Purchase Payments and Old Purchase Payments.

Total Surrenders; Amount of Surrender Charge -- The surrender charge for a total surrender is determined by multiplying the amount of each New Purchase Payment surrendered, that is not eligible for a free surrender, by the applicable surrender charge percentage as set forth in the following table:

Surrender Charge Percentage Table

Contract Year of Surrender    Surrender Charge as a 
   Minus Contract Year of       Percentage of Each 
         Purchase Payment       Purchase Payment 


                             0-1                           6% 
                             2-3                             5 
                             4-5                             4 
                     6 and later                             0 

Free Surrenders -- Surrenders taken from the following amounts (“Free Surrenders”) are not subject to a surrender charge during any Contract Year: (a) any Old Purchase Payments not already surrendered; (b) 10% of all New Purchase Payments that have been received by ReliaStar Life (with the exception of systematic withdrawals, this does not apply to surrenders made during the first Contract Year nor to any surrenders after the first surrender made in each Contract Year thereafter); and (c) any contract earnings being surrendered.

Partial Surrenders -- The amount of the partial surrender subject to a surrender charge is determined by dividing (a) the portion of each New Purchase Payment to be surrendered that is not eligible for a Free Surrender by (b) one minus the applicable surrender charge percentage from the Surrender Charge Percentage Table set forth above. The resulting amount for each New Purchase Payment to be surrendered is then multiplied by the applicable surrender charge percentage from the Surrender Charge Percentage Table shown above to arrive at the amount of surrender charge to be assessed. The total of the amount surrendered will be subject to the surrender charge.

If the surrender charge is less than the Contract Value that remains immediately after surrender, it will be deducted proportionately from the Subaccounts that make up such Contract Value. If the surrender charge is more than such remaining Contract Value, the portion of the surrender charge that can be deducted from such remaining Contract Value will be so deducted and the balance will be deducted from the surrender payment. In computing surrenders, any portion of a surrender charge that is deducted from the remaining Contract Value will be deemed a part of the surrender.

In addition, ReliaStar Life reserves the right to assess a partial surrender fee. This fee is the lesser of 2% of the partial surrender amount or $25. ReliaStar Life currently does not assess this fee.

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Annual Contract Charge

Each year on the Contract Anniversary, ReliaStar Life deducts an annual contract charge of $30 from the Contract Value. ReliaStar Life will not increase the annual contract charge. In any Contract Year when a contract is surrendered for its full value on other than the Contract Anniversary, the annual contract charge will be deducted at the time of such surrender. If a Fixed Annuity payment or a Variable Annuity payment is selected, then the annual contract charge will be assessed and deducted in equal installments from each annuity payment. When more than one annuity is selected, then a separate annual contract charge will be assessed against each annuity.

Waiver of Charges

Waiver of Annual Contract Charge -- ReliaStar Life reserves the right to waive the annual contract charge for contracts applied for on or after September 1, 1998 where the cumulative purchase payments, less any cumulative partial surrenders, exceed $50,000. ReliaStar Life reserves the right to reinstate the annual contract charge on contracts previously qualifying for the waiver, if the cumulative purchase payments, less any cumulative partial surrenders, equals or falls below $50,000 or if ReliaStar Life withdraws the waiver of the charge.

ReliaStar Life will not waive the annual contract charges assessed and deducted from annuity payments.

Waiver of Surrender Charge -- Under certain circumstances as defined in the contract and the rider(s) related to the provisions below, beginning one year after the effectiveness of the rider(s) ReliaStar Life will permit the Contract Owner to access his or her money in the contract. ReliaStar Life will permit a full or partial surrender without a surrender charge (1) if the Contract Owner becomes terminally ill; (2) if the Contract Owner becomes confined to a skilled nursing facility or hospital; and (3) if and so long as the Contract Owner is disabled. If the Contract Owner is unemployed for at least 90 consecutive days the Owner can take, on a one time basis, up to 50% of the Contract Value of the contract without incurring a surrender charge.

These waivers are subject to the specific provisions of the rider(s) and may not be available in all states.

Mortality Risk Premium

The Variable Annuity payments made to Annuitants will vary in accordance with the investment performance of the Subaccounts selected by the Owner. However, they will not be affected by the mortality experience (death rate) of persons receiving annuity payments from the Variable Account. ReliaStar Life assumes this “mortality risk” and has guaranteed the annuity rates incorporated in the contract, which cannot be changed.

To compensate ReliaStar Life for assuming this mortality risk and the mortality risk that Beneficiaries of Annuitants dying before the Annuity Commencement Date may receive amounts in excess of the then current Contract Value (see “Death Benefit Before the Annuity Commencement Date”), ReliaStar Life deducts a mortality risk premium from the Variable Account Contract Value. The deduction is made daily in an amount that is equal to an annual rate of 0.85% of the daily Contract Values under the Variable Account.

Once it is set, ReliaStar Life may not change the rate charged for the mortality risk premium under any contract.

Expense Risk Premium

ReliaStar Life will not increase charges for administrative expenses regardless of its actual expenses. To compensate ReliaStar Life for assuming this expense risk, ReliaStar Life deducts an expense risk premium from the Variable Account Contract Value. The deduction is made daily in an amount that is equal to an annual rate of 0.40% of the daily Variable Account Contract Values.

Once it is set, ReliaStar Life may not change the rate of the expense risk premium under any contract.

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Administration Charge

ReliaStar Life deducts a daily administration charge from the Variable Account Contract Value in an amount equal to an annual rate of 0.15% of the daily Contract Values under the Variable Account. This charge is deducted to reimburse ReliaStar Life for the cost of providing administrative services under the contracts and the Variable Account. ReliaStar Life may not change the rate of the administration charge under any contract.

Once it is set, ReliaStar Life may not change the rate of the administration charge under any contract.

Transfer Charge

ReliaStar Life currently assesses a transfer charge of $25 per transfer for transfers between the Subaccounts or the Fixed Account after the 12th transfer in a Contract Year. We reserve the right to charge up to $25 on all transfers and to limit the number of transfers.

Premium and Other Taxes

Various states and other governmental entities levy a premium tax, currently ranging up to 3.5%, on annuity contracts issued by insurance companies. If the Owner of the contract lives in a governmental jurisdiction that levies such a tax, ReliaStar Life will pay the taxes when due and reserves the right to deduct the amount of the tax either from purchase payments as they are received or from the Contract Value at the Annuity Commencement Date (immediately before the Contract Value is applied to an annuity form) as permitted or required by applicable law.

Premium tax rates are subject to change from time to time by legislative and other governmental action. The timing of tax levies also varies from one taxing authority to another. Consequently, in many cases the purchaser of a contract will not be able to accurately determine the premium tax applicable to the contract. ReliaStar Life reserves the right to deduct charges for any other tax or economic burden resulting from the application of the tax laws that it determines to be applicable to the contract.

General: Reduction or Waiver of Charges or Minimum Purchase Payments

Any of the charges under the contract, as well as the minimum purchase payment requirements set forth in this prospectus, may be reduced due to special circumstances that result in lower sales, administrative or mortality expenses. For example, special circumstances may exist in connection with group or sponsored arrangements, sales to ReliaStar Life’s policy and Contract Owners or those of affiliated insurance companies or sales to employees or clients of ReliaStar Life or ReliaStar Life’s affiliates. The amount of any reductions will reflect the reduced sales effort and administrative costs resulting from, or the different mortality experience expected as a result of, the special circumstances. Reductions will not be unfairly discriminatory against any person, including the affected policy or Contract Owners and owners of all other contracts funded by the Variable Account.

Expenses of the Funds

As shown in the Fund prospectuses and described in the “Expenses of the Funds” table of this prospectus, each Fund deducts management fees from the amounts allocated to the Funds. In addition, each Fund deducts other expenses which may include service fees that may be used to compensate service providers, including ReliaStar Life and its affiliates, for administrative and Contract Owner services provided on behalf of the Fund. Furthermore, certain Funds deduct a distribution or 12b-1 fee, which is used to finance any activity that is primarily intended to result in the sale of Fund shares. For a more complete description of the Funds’ fees and expenses, review each Fund’s prospectus.

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ReliaStar Life or its U.S. affiliates receives substantial revenue from each of the Funds or the Funds’ affiliates, although the amount and types of revenue vary with respect to each of the Funds offered through the contract. This revenue is one of several factors ReliaStar Life considers when determining the contract fees and charges and whether to offer a Fund through our contracts. Fund revenue is important to ReliaStar Life’s profitability, and it is generally more profitable for us to offer affiliated Funds than to offer unaffiliated Funds.

In terms of total dollar amounts received, the greatest amount of revenue generally comes from assets allocated to Funds managed by Directed Services LLC or other ReliaStar Life affiliates, which Funds may or may not also be subadvised by another company affiliate. Assets allocated to Funds managed by a company affiliate but subadvised by unaffiliated third parties generally generate the next greatest amount of revenue. Finally, assets allocated to unaffiliated Funds generate the least amount of revenue. ReliaStar Life expects to make a profit from this revenue to the extent it exceeds its expenses, including the payment of sales compensation to our distributors.

Types of Revenue Received from Affiliated Funds. Affiliated Funds are (a) Funds managed by Directed Services LLC or other company affiliates, which Funds may or may not also be subadvised by another company affiliate; and (b) Funds managed by a company affiliate but that are subadvised by unaffiliated third parties.

Revenues received by ReliaStar Life from affiliated Funds may include:

  • A share of the management fee deducted from Fund assets;
  • Service fees that are deducted from Fund assets;
  • For certain share classes, ReliaStar Life or its affiliates may also receive compensation paid out of 12b-1 fees that are deducted from Fund assets; and
  • Other revenues that may be based either on an annual percentage of average net assets held in the Fund by ReliaStar life or a percentage of the Fund’s management fees.

These revenues may be received as cash payments or according to a variety of financial accounting techniques that are used to allocate revenue and profits across the organization. In the case of affiliated Funds subadvised by unaffiliated third parties, any sharing of the management fee between ReliaStar Life and the affiliated investment adviser is based on the amount of such fee remaining after the subadvisory fees has been paid to the unaffiliated subadviser. Because subadvisory fees vary by subadviser, varying amounts of revenue are retained by the affiliated investment adviser and ultimately shared with ReliaStar Life.

Types of Revenue Received from Unaffiliated Funds. Revenue received from each of the unaffiliated Funds or their affiliates is based on an annual percentage of the average net assets held in that Fund by ReliaStar Life. Some unaffiliated Funds or their affiliates pay us more than others and some of the amounts ReliaStar Life receives may be significant.

Revenues received by ReliaStar Life from unaffiliated Funds and/or their affiliates may include:

  • For certain Funds, compensation paid from 12b-1 fees or service fees that are deducted from Fund assets; and
  • Additional payments for administrative, recordkeeping or other services that we provide to the Funds or their affiliates, such as processing purchase and redemption requests, and mailing Fund prospectuses, periodic reports and proxy materials. These additional payments may be used by us to finance distribution of the contract.
  • For certain Funds, compensation paid from 12b-1 fees or service fees that are deducted from Fund assets; and
  • Additional payments for administrative, recordkeeping or other services that we provide to the Funds or their affiliates, such as processing purchase and redemption requests and mailing Fund prospectuses, periodic reports and proxy materials. These additional payments may be used by us to finance distribution of the policy.

These revenues are received as cash payments, and if the three unaffiliated Fund families currently offered through the contract were individually ranked according to the total amount they paid to ReliaStar Life or its affiliates in 2007, that ranking would be as follows:

  • Fidelity ® Variable Insurance Product Portfolios;
  • Neuberger Berman AMT Portfolios ® ; and
  • American Funds Insurance Series.

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If the revenues received from affiliated Funds were included in this list, payments from Directed Services LLC and other company affiliates would be at the top of the list.

In addition to the types of revenue received from affiliated and unaffiliated Funds described above, affiliated and unaffiliated Funds and their investment advisers, subadvisers or affiliates may participate at their own expense in company sales conferences or educational and training meetings. In relation to such participation, a Fund’s investment adviser, subadviser or affiliate may make fixed dollar payments to help offset the cost of the meetings or sponsor events associated with the meetings. In exchange for these expense offset or sponsorship arrangements, the investment adviser, subadviser or affiliate may receive certain benefits and access opportunities to company sales representatives and wholesalers rather than monetary benefits. These benefits and opportunities include, but are not limited to:

  • Co-branded marketing materials;
  • Targeted marketing sales opportunities;
  • Training opportunities at meetings;
  • Training modules for sales personnel; and
  • Opportunity to host due diligence meetings for representatives and wholesalers.

Certain Funds that are available through the Variable Account are structured as “Fund of Funds.” These Funds may have higher fees and expenses than a Fund that invests directly in debt and equity securities because they also incur the fees and expenses of the underlying Funds in which they invest. These Funds are affiliated Funds and the underlying Funds in which they invest may be affiliated Funds as well. The Fund prospectuses disclose the aggregate annual operating expenses of each portfolio and its corresponding underlying Fund or Funds. The “Fund of Funds” available through the contract are identified in the list of Funds available through the Variable Account on page 10.

Please note that certain management personnel and other employees of ReliaStar Life or its affiliates may receive a portion of their total employment compensation based on the amount of net assets allocated to affiliated Funds. See “Distribution of the Contract.”

ADMINISTRATION OF THE CONTRACTS

ReliaStar Life assumes the responsibilities of performing certain administrative functions relating to the contracts and the Variable Account. These functions include, among other things, maintaining the books and records of the Variable Account and the Subaccounts and maintaining records of the name, address, taxpayer identification number, contract number, type of contract issued to each Owner, Contract Value and other pertinent information necessary to the administration and operation of the contracts. These administrative functions are located at the ING Customer Service Center, P.O. Box 5050, Minot, North Dakota 58703; Telephone 1-877-884-5050.

THE CONTRACTS

The contracts are designed for sale as non-qualified contracts and also for retirement plans that may be Qualified Plans. A single purchase payment can be made for a deferred annuity or subsequent purchase payments can be made up to the maximum level of funding set forth below. The minimum amount ReliaStar Life will accept as an initial purchase payment is $5,000 for non-qualified contracts and $2,000 for qualified contracts. ReliaStar Life may choose not to accept any subsequent purchase payment for a non-qualified contract if it is less than $500 and for a qualified contract if it is less than $200. ReliaStar Life may also choose not to accept any subsequent purchase payment if the purchase payment together with the Contract Value at the next Valuation Date exceeds $1,000,000. Any purchase payment not accepted by ReliaStar Life will be refunded. ReliaStar Life reserves the right to accept smaller or larger initial and subsequent purchase payments in connection with special circumstances, such as sales through group or sponsored arrangements.

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Factors to Consider in the Purchase Decision

The decision to purchase the contract should be discussed with a qualified financial representative and tax adviser, making sure that you understand the Subaccounts it provides, its other features, the risks and potential benefits you will face and the fees and expenses you will incur when, together with a qualified financial representative and tax adviser, you consider an investment in the contract.

  • Long-Term Investment - This contract is a long-term investment and is typically most useful as part of a personal retirement plan. Early withdrawals may expose you to surrender charges or tax penalties. The value of deferred taxation on earnings grows with the amount of time your purchase payments are left in the contract.
    You should not purchase the contract if you are looking for a short-term investment or expect to need to makewithdrawals before you are 59½.
  • Investment Risk - The value of the Funds available under the contract may fluctuate with the markets and interest rates. You should not purchase the contract in order to invest in the Funds if you cannot risk getting back less money than you put in.
  • Features and Fees - The fees for the contract reflect costs associated with the features and benefits it provides. As you consider the contract, you should determine the value that these various benefits and features have for you, given your particular circumstances, and consider the charges for those features.
  • Exchanges - If the contract will be a replacement for another annuity contract, you should compare the two options carefully, compare the costs associated with each and identify additional benefits available under the contract. You should consider whether these additional benefits justify incurring a new schedule of surrender charges or any increased charges that might apply under this contract. Also, be sure to talk to your financial representative or tax adviser to make sure that the exchange will be handled so that it is tax-free.
  • Tax Favored Arrangement - If you are purchasing the contract through a tax favored arrangement, including Individual Retirement Annuities (“IRAs”) and Roth IRAs, you should carefully consider the costs and benefits of the contract (including annuity income benefits) before purchasing the contract. Under the Federal tax laws, earnings on amounts held in annuity contracts are generally not taxed until they are withdrawn. However, in relation to a Qualified Plan, an annuity contract is not necessary to obtain this favorable tax treatment and does not provide any tax benefits beyond the deferral already available to the Qualified Plan itself. However, annuities do provide other features and benefits (such as the Death Benefit or the option of lifetime annuity payments at established rates) that may be valuable to you. You should discuss your alternatives with a qualified tax adviser or registered representative taking into account the additional fees and expenses you may incur in an annuity.

There may be differences in your contract (such as differences in fees, charges and benefits) from the one described in this prospectus because of the requirements of the state where ReliaStar issued your contract. Consult your contract for its specific terms.

OTHER PRODUCTS

ReliaStar Life and our affiliates offer various other products with different features and terms than the contracts, and that may offer some or all of the same Funds. These products have different benefits, fees and charges, and may or may not better match your needs. You should be aware that there are alternative options available, and, if you are interested in learning more about these other products, contact the ING Customer Service Center or your agent/registered representative.

Allocation of Purchase Payments

Purchase payments can be allocated by the Owner to one or more of the available Subaccounts of the Variable Account (see “Funds Available Through the Variable Account,”) and/or to the Fixed Account (see Appendix A). The Fixed Account is not available to Contract Owners in the States of Maryland, Oregon, South Carolina and Washington. Any purchase payment or portion thereof for which no allocation election is made will be returned to the Owner.

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The initial purchase payment will be allocated not later than two business days after receipt, if the application and all information necessary for processing the contract are complete. ReliaStar Life may retain purchase payments for up to five business days while attempting to complete an incomplete application. If the application cannot be made complete within this period, the applicant will be informed of the reasons for the delay and the purchase payment will be returned immediately. Once the completed application is received, the payment must be allocated within two business days according to the applicant’s premium allocation instructions. ReliaStar Life will make inquiry to discover any missing information related to subsequent payments. For any subsequent purchase payments, the payments will be credited at the Subaccount accumulation unit value next determined after receipt of the purchase payment.

If the applicant’s most recent premium allocation instructions includes a Fund that corresponds to a Subaccount that is closed to new investment or is otherwise unavailable, net premium received that would have been allocated to the Subaccount corresponding to the closed or otherwise unavailable Fund may be automatically allocated among the other available Subaccounts according to your most recent allocation instructions. If your most recent allocation instructions do not include any available Funds, you must provide us with alternative allocation instructions or the premium payment will be returned to you. You may give us alternative allocation instructions by contacting the ING Customer Service Center. See also the “Transfers” section of this prospectus for information about making Subaccount allocation changes;

Upon allocation to Subaccounts of the Variable Account, a purchase payment is converted into accumulation units of the Subaccount. The amount of the purchase payment allocated to a particular Subaccount is divided by the value of an accumulation unit for the Subaccount to determine the number of accumulation units of the Subaccount to be held in the Variable Account with respect to the contract. The net investment results of each Subaccount vary primarily with the investment performance of the Fund whose shares are held in the Subaccount.

A Fund may impose a minimum purchase requirement. If that minimum purchase requirement exceeds the aggregate of all purchase payments received by ReliaStar Life, less any redemption of Fund shares resulting from transfers or surrenders, on any given day that are to be applied to a Subaccount for the purchase of shares of such Fund, such purchase payments will be refunded.

Subaccount Accumulation Unit Value

Each Subaccount Accumulation Unit was initially valued at $10 when the first Fund shares were purchased. Thereafter the value of each Subaccount Accumulation Unit will vary up or down according to a net investment factor, which is primarily based on the investment performance of the applicable Fund. Fund shares in the Subaccounts will be valued at their net asset value.

Dividend and capital gain distributions from a Fund will be automatically reinvested in additional shares of such Fund and allocated to the appropriate Subaccount. The number of Subaccount Accumulation Units does not increase because of the additional shares, but the accumulation unit value may increase.

Net Investment Factor

The net investment factor is an index number which reflects charges under the contract and the investment performance during a Valuation Period of the Fund whose shares are held in the particular Subaccount. If the net investment factor is greater than one, the value of a Subaccount Accumulation Unit has increased. If the net investment factor is less than one, the value of a Subaccount Accumulation Unit has decreased. The net investment factor is determined by dividing (1) by (2) then subtracting (3) from the result, where:

(1)      Is the net result of:
 
  (a)      the net asset value per share of the Fund shares held in the Subaccount, determined at the end of the current
 
  Valuation Period, plus
 
  (b)      the per share amount of any dividend or capital gain distributions made on the Fund shares held in the
 
  Subaccount during the current Valuation Period, plus or minus
 
  (c)      a per share charge or credit for any taxes reserved for which ReliaStar Life determines to have resulted from the investment operations of the Subaccount and to be applicable to the contract;
 

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(2)      Is the net result of:
 
  (a)      the net asset value per share of the Fund shares held in the Subaccount, determined at the end of the last prior Valuation Period, plus or minus
 
  (b)      a per share charge or credit for any taxes reserved for during the last prior Valuation Period which ReliaStar Life determines to have resulted from the investment operations of the Subaccount and to be applicable to the contract; and
 
(3)      Is a factor representing the mortality risk premium, the expense risk premium and the administration charge deducted from the Subaccount which factor is equal, on an annual basis, to 1.40% of the daily net asset value of the Subaccount.
 

Death Benefit Before the Annuity Commencement Date

If the Owner, including any joint Owner, dies before the Annuity Commencement Date, the Beneficiary will be entitled to receive the Death Benefit. The Death Benefit will be:

(1)      If any Owner (including the Annuitant) dies on or before the first day of the month following the Owner’s 85th birthday, the greater of (i) the Contract Value on the Death Benefit Valuation Date; or (ii) the sum of the purchase payments received by ReliaStar Life under the contract to the Death Benefit Valuation Date, less any surrender payments previously made by ReliaStar Life; or (iii) the Contract Value on the Specified Contract Anniversary (immediately preceding the Owner’s death), plus any Purchase Payments and reduced by any surrender payments since that anniversary;
 
(2)      If any Owner (including the Annuitant) dies after the first day of the month following the Owner’s 85th birthday, the Contract Value on the Death Benefit Valuation Date.
 

If a single sum is requested, it will be paid within seven days after the Death Benefit Valuation Date. If an annuity form is requested, it may be any annuity form permitted by Section 72(s) of the Code and that ReliaStar Life is willing to issue. An annuity form selection must be in writing and must be received by ReliaStar Life within 60 days after the date of the Owner’s death, otherwise the Death Benefit as of the Death Benefit Valuation Date will be paid in a single sum to the Beneficiary and the contract will be canceled.

If the only Beneficiary is the Owner’s surviving spouse, such spouse may continue the contract as the Owner and then (1) select a single sum payment or (2) select any annuity form that does not exceed such spouse’s life expectancy.

If the Beneficiary elects to receive annuity payments under an annuity form, the amount and duration of payments may vary depending on the annuity form selected and whether Fixed and/or Variable Annuity payments are requested. (See “Annuity Provisions.”) Repayments cannot extend beyond the life or life expectancy of the Beneficiary.

Death Benefit After the Annuity Commencement Date

If the Annuitant dies after the Annuity Commencement Date, the Death Benefit, if any, shall be as stated in the annuity form in effect.

Surrender (Redemption)

If a written request is received by ReliaStar Life from the Owner before the Annuity Commencement Date, all or part of the Contract Value will be paid to the Owner after deducting any applicable surrender charge and taxes. (See “Surrender Charge (Contingent Deferred Sales Charge).”)

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Partial surrenders must be at least $500. No partial surrender can cause the Contract Value to fall below $1,000. If a total surrender occurs other than on a Contract Anniversary, the annual contract charge will be deducted from the Contract Value before the surrender payment is made. ReliaStar Life reserves the right to assess a processing fee not to exceed the lesser of 2% of the partial surrender amount or $25. No processing fee will be charged in connection with total surrenders.

ReliaStar Life may require that the contract be returned before a surrender takes place. A surrender will take place on the next Valuation Date after the requirements for surrender are completed and payment will be made within seven days after such Valuation Date. Unless the Owner requests a partial surrender to be made from the Fixed Account or particular Subaccounts, a partial surrender will be taken proportionately from the Fixed Account and all Subaccounts on a basis that reflects their proportionate percentage of the Contract Value.

If the Contract Value after all charges is less than $1,000, ReliaStar Life can cancel the contract on any Contract Anniversary or, if such Contract Anniversary is not a Valuation Date, on the next Valuation Date thereafter by paying to the Owner the Contract Value as of such Valuation Date.

If the contract is purchased as a “tax-sheltered annuity” under Section 403(b) of the Code, it is subject to certain restrictions on redemption imposed by Section 403(b)(11) of the Code. (See “Tax-Sheltered Annuities.”)

Surrender payments may be taxable and in addition may be subject to a 10% tax penalty if before age 59½. Consideration should be given to the tax implications of a surrender before making a surrender request, including a surrender in connection with a Qualified Plan.

Systematic Withdrawals

Systematic withdrawals, which are a specialized form of partial surrenders (see “Surrender (Redemption)”), are offered for both Qualified Plan contracts and for non-qualified contracts. The Owner may elect to take systematic withdrawals from Subaccounts by surrendering a specified dollar amount or percentage of cumulative purchase payments on a monthly, quarterly, semi-annual or annual basis. The minimum amount of any systematic withdrawal is $100. Systematic withdrawals can be taken from Variable Account Contract Value and/or Fixed Account Contract Value. A surrender charge will be imposed on the amount of any systematic withdrawal, which is not a Free Surrender. (See “Surrender Charge (Contingent Deferred Sales Charge).”) Systematic withdrawals can be discontinued by the Owner if the Contract Value falls below $10,000 or at any time by writing to ReliaStar Life’s administrative office in Minot, North Dakota.

ReliaStar Life reserves the right to modify or discontinue offering systematic withdrawals; however, any such modification or discontinuation will not affect any systematic withdrawal programs already commenced. While ReliaStar Life does not currently charge a processing fee for partial surrenders under this program, it reserves the right to charge a processing fee not to exceed the lesser of 2% of the systematic withdrawal payment or $25.

Systematic withdrawals may be subject to tax, including a penalty tax, and you should consult with a qualified tax adviser before requesting any systematic withdrawal. (See “Taxation of Annuities.”)

Contract Owners interested in participating in the systematic withdrawal program can obtain a separate application form and full information about the program and its restrictions from their registered representative.

Transfers

Before the Annuity Commencement Date, the Owner may transfer amounts between Subaccounts or from the Subaccounts to the Fixed Account subject to certain conditions ReliaStar Life or the Funds may impose. See “Limits on Frequent or Disruptive Transfers.” Subject to certain restrictions, amounts may also be transferred from the Fixed Account to the Subaccounts. Currently, these are our methods by which transfers may be made: in writing, by telephone or fax, by dollar cost averaging and by portfolio rebalancing.

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Written Transfers

Before the Annuity Commencement Date -- Before the Annuity Commencement Date the Owner may request a transfer in writing, subject to any conditions or charges the Funds whose shares are involved may impose, of all or part of a Subaccount’s value to other Subaccounts or to the Fixed Account. The transfer will be made on the first Valuation Date after the request for such a transfer is received by ReliaStar Life. Before the Annuity Commencement Date, transfers may also be made from the Fixed Account to the Variable Account, provided, that:

  • Transfers may only be made during the period starting 30 days before and ending 30 days after the Contract Anniversary and only one transfer may be made during each such period;
  • No more than 50% of the Fixed Account Contract Value may be the subject of any such transfer (unless the balance, after such transfer, would be less than $1,000, in which case the full Fixed Account Contract Value may be transferred); and
  • Such transfer must involve at least $500 (or the total Fixed Account Contract Value, if less).

Currently, there is a $25 charge for each transfer in excess of 12 per Contract Year, plus any charge that may be made by the Funds. For purposes of this restriction, reallocations pursuant to the ReliaStar Life dollar cost averaging, portfolio rebalancing and systematic withdrawal services currently do not constitute transfers and multiple transfers on a single day currently constitute a single transfer. ReliaStar Life reserves the right to charge a transfer fee not to exceed $25 per transfer on any transfer and to limit the number of transfers.

After the Annuity Commencement Date -- After the Annuity Commencement Date, an Annuitant who has selected Variable Annuity Payments can request transfer of Annuity Unit values in the same manner and subject to the same requirements as for an Owner-transfer of Subaccount Accumulation Unit values.

No transfers may be made to or from the Fixed Account after the Annuity Commencement Date.

Telephone/Fax Instructions -- An Owner is allowed to enter the following types of instructions either by telephone or by fax if he or she completes a telephone/fax instruction authorization form:

  • Transfers between Funds;
  • Surrenders;
  • Changes of allocations among Fund options;
  • Change of source Funds for systematic withdrawals; and
  • Change of source Funds for variable annuitization payouts.

If you complete the telephone/fax form, you thereby agree that ReliaStar Life will not be liable for any loss, liability, cost or expense when it acts in accordance with the telephone/fax instructions received. If a telephone/fax transaction, is later determined not to have been made by you or was made without your authorization and a loss results, you bear the risk of this loss. Any fax requests are considered telephone requests and are bound by the conditions in the telephone/fax authorization form. Any fax request should include your name, daytime telephone number, contract number and the names of the Subaccounts from which and to which money will be transferred or surrendered and the allocation percentage. ReliaStar Life will employ reasonable procedures to confirm that instructions communicated by telephone are genuine. In the event ReliaStar Life does not employ such procedures, it may be liable for any losses due to unauthorized or fraudulent instructions. Such procedures may include, among others, requiring forms of personal identification prior to acting upon telephone instructions, providing written confirmation of such instructions and/or tape recording telephone instructions.

The conditions applicable to Written Transfers also apply to Telephone/Fax Transfers, dollar cost averaging transfers and portfolio rebalancing.

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Limits on Frequent or Disruptive Transfers

The contract is not designed to serve as a vehicle for frequent transfers. Frequent transfer activity can disrupt management of a Fund and raise its expenses through:

  • Increased trading and transaction costs;
  • Forced and unplanned portfolio turnover;
  • Lost opportunity costs; and
  • Large asset swings that decrease the Fund’s ability to provide maximum investment return to all Contract Owners.

This in turn can have an adverse effect on Fund performance. Accordingly, individuals or organizations that use market-timing investment strategies or make frequent transfers should not purchase the contract.

Excessive Trading Policy. We and the other members of the ING family of companies that provide multi-Fund variable insurance and retirement products have adopted a common Excessive Trading Policy to respond to the demands of the various Fund families that make their Funds available through our products to restrict excessive Fund trading activity and to ensure compliance with Rule 22c-2 of the 1940 Act.

We actively monitor Fund transfer and reallocation activity within our variable insurance products to identify violations of our Excessive Trading Policy. Our Excessive Trading Policy is violated if Fund transfer and reallocation activity:

  • Meets or exceeds our current definition of Excessive Trading, as defined below; or
  • Is determined, in our sole discretion, to be disruptive or not in the best interests of other owners of our variable insurance and retirement products.

We currently define Excessive Trading as:

  • More than one purchase and sale of the same Fund (including money market Funds) within a 60 calendar day period (hereinafter, a purchase and sale of the same Fund is referred to as a “round-trip”). This means two or more round-trips involving the same Fund within a 60 calendar day period would meet our definition of Excessive Trading; or
  • Six round-trips involving the same Fund within a rolling twelve month period.

The following transactions are excluded when determining whether trading activity is excessive:

  • Purchases or sales of shares related to non-Fund transfers (for example, new purchase payments and withdrawals and loans);
  • Transfers associated with scheduled dollar cost averaging, scheduled rebalancing or scheduled asset allocation programs;
  • Purchases and sales of Fund shares in the amount of $5,000 or less;
  • Purchases and sales of Funds that affirmatively permit short-term trading in their Fund shares, and movement between such Funds and a money market Fund; and
  • Transactions initiated by us, another member of the ING family of companies or a Fund.

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If we determine that an individual or entity has made a purchase of a Fund within 60 days of a prior round-trip involving the same Fund, we will send them a letter (once per year) warning that another sale of that same Fund within 60 days of the beginning of the prior round-trip will be deemed to be Excessive Trading and result in a six month suspension of their ability to initiate Fund transfers or reallocations through the Internet, facsimile, Voice Response Unit (VRU), telephone calls to the ING Customer Service Center or other electronic trading medium that we may make available from time to time (“Electronic Trading Privileges”). Likewise, if we determine that an individual or entity has made five round-trips involving the same Fund within a rolling twelve month period, we will send them a letter warning that another purchase and sale of that same Fund within twelve months of the initial purchase in the first round-trip will be deemed to be Excessive Trading and result in a suspension of their Electronic Trading Privileges. According to the needs of the various business units, a copy of any warning letters may also be sent, as applicable, to the person(s) or entity authorized to initiate Fund transfers or reallocations, the agent/registered representative or the investment adviser for that individual or entity. A copy of the warning letters and details of the individual’s or entity’s trading activity may also be sent to the Fund whose shares were involved in the trading activity.

If we determine that an individual or entity has violated our Excessive Trading Policy, we will send them a letter stating that their Electronic Trading Privileges have been suspended for a period of six months. Consequently, all Fund transfers or reallocations, not just those that involve the Fund whose shares were involved in the activity that violated our Excessive Trading Policy, will then have to be initiated by providing written instructions to us via regular U.S. mail. Suspension of Electronic Trading Privileges may also extend to products other than the product through which the Excessive Trading activity occurred. During the six month suspension period, electronic “inquiry only” privileges will be permitted where and when possible. A copy of the letter restricting future transfer and reallocation activity to regular U.S. mail and details of the individual’s or entity’s trading activity may also be sent, as applicable, to the person(s) or entity authorized to initiate Fund transfers or reallocations, the agent/registered representative or investment adviser for that individual or entity and the Fund whose shares were involved in the activity that violated our Excessive Trading Policy.

Following the six month suspension period during which no additional violations of our Excessive Trading Policy are identified, Electronic Trading Privileges may again be restored. We will continue to monitor the Fund transfer and reallocation activity, and any future violations of our Excessive Trading Policy will result in an indefinite suspension of Electronic Trading Privileges. A violation of our Excessive Trading Policy during the six month suspension period will also result in an indefinite suspension of Electronic Trading Privileges.

We reserve the right to suspend Electronic Trading Privileges with respect to any individual or entity, with or without prior notice, if we determine, in our sole discretion, that the individual’s or entity’s trading activity is disruptive or not in the best interests of other owners of our variable insurance and retirement products, regardless of whether the individual’s or entity’s trading activity falls within the definition of Excessive Trading set forth above.

Our failure to send or an individual’s or entity’s failure to receive any warning letter or other notice contemplated under our Excessive Trading Policy will not prevent us from suspending that individual’s or entity’s Electronic Trading Privileges or taking any other action provided for in our Excessive Trading Policy.

Except as noted below with respect to Paul M. Prusky, we do not allow exceptions to our Excessive Trading Policy. We reserve the right to modify our Excessive Trading Policy, or the policy as it relates to a particular Fund, at any time without prior notice, depending on, among other factors, the needs of the underlying Fund(s), the best interests of Contract Owners and Fund investors and/or state or federal regulatory requirements. If we modify our policy, it will be applied uniformly to all Contract Owners or, as applicable, to all Contract Owners investing in the underlying Fund.

Our Excessive Trading Policy may not be completely successful in preventing market timing or excessive trading activity. If it is not completely successful, Fund performance and management may be adversely affected, as noted above.

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Since late 2003, we have been engaged in litigation with Paul M. Prusky (“Prusky”), and others, regarding a 1998 agreement between Prusky and ReliaStar. Under the agreement, Prusky, through a profit-sharing plan, engaged in frequent electronic trading between subaccounts available through certain ReliaStar variable life insurance policies (“market timing”). Beginning in late 2003, ReliaStar refused to accept electronic trading instructions from Prusky because of violations of our Excessive Trading Policy.

On January 5, 2007, the United States District Court for the Eastern District of Pennsylvania (the “Federal Court”) ordered ReliaStar to accept and effect Prusky’s subaccount transfer instructions electronically “without limitation as to the number of transfer instructions so long as those transfers are not explicitly barred by a specific condition imposed by the Fund in which the subaccount is invested.” (Order Granting in Part Summary Judgment, Paul M. Prusky, et al. v. ReliaStar Life Insurance Company, Civil Action No. 03-6196, Jan. 5, 2007, and Order Denying Defendant’s Motion for Clarification, dated January 12, 2007 (“Order”)). In light of the Order, we must accept and effect Prusky’s electronic transfer instructions.

When issuing the Order, the Federal Court did state that we could enforce conditions and/or restrictions on trading imposed by the Funds in which the ReliaStar subaccounts invest. (Memorandum Accompanying the Order, at pp. 9-10.) We will enforce all such Fund-imposed conditions and/or restrictions consistent with the Order and the judgment of the Federal Court in a related matter.

Prusky’s ReliaStar policies include subaccounts which invest in all the same Funds as are available through this contract. The prospectus for each Fund describes restrictions imposed by the Fund to prevent or minimize frequent trading.

Limits Imposed by the Funds. Each underlying Fund available through the variable insurance and retirement products offered by us and/or the other members of the ING family of companies, either by prospectus or stated contract, has adopted or may adopt its own excessive/frequent trading policy, and orders for the purchase of Fund shares are subject to acceptance or rejection by the underlying Fund. We reserve the right, without prior notice, to implement Fund purchase restrictions and/or limitations on an individual or entity that the Fund has identified as violating its excessive/frequent trading policy and to reject any allocation or transfer request to a subaccount if the corresponding Fund will not accept the allocation or transfer for any reason. All such restrictions and/or limitations (which may include, but are not limited to, suspension of Electronic Trading Privileges and/or blocking of future purchases of a Fund or all Funds within a Fund family) will be done in accordance with the directions we receive from the Fund.

Agreements to Share Information with Fund Companies. As required by Rule 22c-2 under the 1940 Act, we have entered into information sharing agreements with each of the Fund companies whose Funds are offered through the contract. Contract Owner trading information is shared under these agreements as necessary for the Fund companies to monitor Fund trading and our implementation of our Excessive Trading Policy. Under these agreements, ReliaStar Life is required to share information regarding Contract Owner transactions, including but not limited to information regarding Fund transfers initiated by you. In addition to information about Contract Owner transactions, this information may include personal Contract Owner information, including names and social security numbers or other tax identification numbers.

As a result of this information sharing, a Fund company may direct us to restrict a Contract Owner’s transactions if the Fund determines that the Contract Owner has violated the Fund’s excessive/frequent trading policy. This could include the Fund directing us to reject any allocations of premium or Contract Value to the Fund or all Funds within the Fund family.

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Dollar Cost Averaging Transfers -- You can direct ReliaStar Life to automatically transfer a fixed dollar amount or a specified percentage of Subaccount value to any one or more other Subaccounts or to the Fixed Account over time. No transfers from the Fixed Account are permitted under this service. The minimum transfer amount is $100. Transfers may be made on a monthly, quarterly, semi-annual or annual basis. ReliaStar Life makes no guarantees that dollar cost averaging will result in a profit or protect against loss. You can discontinue dollar cost averaging at any time by notifying ReliaStar Life in writing. Contract Owners interested in dollar cost averaging can obtain an application form and full information concerning this service and its restrictions from their registered representatives.

ReliaStar Life reserves the right to modify or discontinue offering dollar cost averaging at any time without prior notice, including, but not limited to, as a result of any excessive trading restrictions imposed by ING or a Fund company. Any such modification or discontinuation would not affect dollar cost averaging transfer programs already commenced. Although ReliaStar Life currently charges no fees for transfers made under the dollar cost averaging program, it reserves the right to charge a processing fee for dollar cost averaging transfers not to exceed $25 per transfer.

Portfolio Rebalancing Service -- You may request this service if your Contract Value is at least $25,000. If you request this service, you direct us to automatically make periodic transfers to maintain your specified percentage allocation among Subaccounts of the Variable Account. You may also have your allocation of future premium payments changed to be equal to this specified percentage allocation. Transfers made under this service may be made on a quarterly, semi-annual or annual basis. This service is intended to maintain the allocation you have selected consistent with your personal objectives. This service will be discontinued if your Contract Value falls below $10,000.

You can discontinue portfolio rebalancing at any time by notifying ReliaStar Life in writing. Contract Owners interested in portfolio rebalancing can obtain an application form and full information concerning this service and its restrictions from their registered representatives. ReliaStar Life reserves the right to modify or discontinue offering portfolio rebalancing at any time without prior notice, including, but not limited to, as a result of any excessive trading restrictions imposed by ING or a Fund company. Although ReliaStar Life currently charges no fees for transfers made under the portfolio rebalancing program, it reserves the right to charge a processing fee for portfolio rebalancing transfers not to exceed $25 per transfer.

Assignments

If the contract is issued pursuant to or in connection with a Qualified Plan, it cannot be sold, transferred, pledged or assigned to any person or entity other than ReliaStar Life. In other circumstances, an assignment of the contract is permitted, but only before the Annuity Commencement Date, by giving ReliaStar Life the original or a certified copy of the assignment. ReliaStar Life shall not be bound by any assignment until it is actually received by ReliaStar Life and shall not be responsible for the validity of any assignment. Any payments made or actions taken by ReliaStar Life before ReliaStar Life actually receives any assignment shall not be affected by the assignment. An assignment may have tax consequences. (See “Taxation of Annuities.”)

Contract Owner and Beneficiaries

Unless someone else is named as the Owner in the application for the contract, the applicant is the Owner of the contract and before the Annuity Commencement Date may exercise all of the Owner’s rights under the contract. No more than two (2) natural persons may be named as Owner.

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The Owner may name a Beneficiary and a Successor Beneficiary. In the event an Owner dies before the Annuity Commencement Date, the Beneficiary shall receive a Death Benefit as provided in the contract. In the event an Owner dies on or after the Annuity Commencement Date, the Beneficiary, if the annuity form in effect at the Owner’s death so provides, may continue receiving payments, be paid a lump sum or be paid nothing. If the Beneficiary or Successor Beneficiary is not living on the date payment is due or if no Beneficiary or Successor Beneficiary has been named, the Owner’s estate will receive the applicable proceeds. If the Beneficiary or Successor Beneficiary is a minor, the proceeds will be held in an interest bearing account until the Beneficiary or Successor Beneficiary attains the age of majority.

A person named as an Annuitant, a Beneficiary or a Successor Beneficiary shall not be entitled to exercise any rights relating to the contract or to receive any payments or settlements under the contract or any annuity form, unless such person is living on the earlier of (a) the day due proof of death of the Owner, the Annuitant or the Beneficiary, whichever is applicable, is received by ReliaStar Life or (b) the tenth day after the death of the Owner, the Annuitant or the Beneficiary, whichever is applicable.

Unless different arrangements have been made with ReliaStar Life by the Owner, if more than one Beneficiary is entitled to payments from ReliaStar Life the payments shall be in equal shares.

Before the Annuity Commencement Date, the Owner may change the Annuitant, the Beneficiary or the Successor Beneficiary by giving ReliaStar Life written notice of the change, but the change shall not be effective until actually received by ReliaStar Life. Upon receipt by ReliaStar Life of a notice of change, the change will be effective as of the date it was signed but shall not affect any payments made or actions taken by ReliaStar Life before ReliaStar Life received the notice and ReliaStar Life shall not be responsible for the validity of any change.

Contract Inquiries

Inquiries regarding a contract may be made by writing to the ING Customer Service Center, P.O. Box 5050, Minot, North Dakota 58703, or by calling 1-877-884-5050.

ANNUITY PROVISIONS

Annuity Commencement Date

The Owner selects the Annuity Commencement Date, which must be the first day of a month, when making application for the contract. The date will be the first day of the month following the Annuitant’s 75th birthday unless an earlier or later date has been selected by the Owner and, if the date is later, it has been agreed to by ReliaStar Life. The earliest Annuity Commencement Date is the issue date. However, if the Annuity Commencement Date selected by the Owner does not occur on a Valuation Date at least 60 days after the date on which the contract was issued, ReliaStar Life reserves the right to adjust the Annuity Commencement Date to the first Valuation Date after the Annuity Commencement Date selected by the Owner which is at least 60 days after the contract issue date. If the Annuity Commencement Date occurs before the second Contract Anniversary, ReliaStar Life will deduct surrender charges. (See “Surrender Charge (Contingent Deferred Sales Charge).”) The latest Annuity Commencement Date is the later of the Annuitant’s age 85 or ten years after the contract issue date.

The Owner may change an Annuity Commencement Date selection by written notice received by ReliaStar Life at least 30 days before both the Annuity Commencement Date currently in effect and the New Annuity Commencement Date. The new date selected must satisfy the requirements for an Annuity Commencement Date.

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Annuity Form Selection

The Owner may select a Variable Annuity form, a Fixed Annuity form or both, with payments starting at the Annuity Commencement Date when making application for the contract. Thereafter, the Owner may change the annuity form(s) by written notice received by ReliaStar Life before the Annuity Commencement Date. If no election has been made before the Annuity Commencement Date, ReliaStar Life will apply the Fixed Account Contract Value to provide a Fixed Annuity and the Variable Account Contract Value to provide a Variable Annuity, both in the form of a Life Annuity with Payments Guaranteed for ten years (120 months), which shall be automatically effective.

Annuity Forms

Variable Annuity Payments and Fixed Annuity Payments are available in any of the following annuity forms:

Life Annuity -- An annuity payable on the first day of each month during the Annuitant’s life, starting with the first payment due according to the contract. Payments cease with the payment made on the first day of the month in which the Annuitant’s death occurs. It would be possible under this annuity form for the Annuitant to receive only one payment if he or she died before the second annuity payment, only two payments if he or she died before the third annuity payment, etc.

Life Annuity With Payments Guaranteed for Ten Years (120 Months) or 20 Years (240 Months) -- An annuity payable on the first day of each month during the Annuitant’s life, starting with the first payment due according to the contract. If the Annuitant receives all of the guaranteed payments, payments will continue thereafter but cease with the payment made on the first day of the month in which the Annuitant’s death occurs. If all of the guaranteed payments have not been made before the Annuitant’s death, the unpaid installments of the guaranteed payments will be continued to the Beneficiary.

Joint and Full Survivor Annuity -- An annuity payable on the first day of each month during the Annuitant’s life and the life of a named person (the “Joint Annuitant”), starting with the first payment due according to the contract. Payments will continue while either the Annuitant or the joint Annuitant is living and cease with the payment made on the first day of the month in which the death of the Annuitant or the joint Annuitant, whichever lives longer, occurs. There is no minimum number of payments guaranteed under this annuity form. Payments cease upon the death of the last survivor of the Annuitant and the joint Annuitant regardless of the number of payments received.

ReliaStar Life also has other annuity forms available and information about them can be obtained by writing to ReliaStar Life.

Frequency and Amount of Annuity Payments

Annuity payments will be paid as monthly installments, unless the Annuitant and ReliaStar Life agree to a different payment schedule. However, if the Contract Value at the Annuity Commencement Date is less than $5,000, ReliaStar Life may pay the Contract Value in a single sum and the contract will be canceled. Also if a monthly payment would be or becomes less than $50, ReliaStar Life may change the frequency of payments to intervals that will result in payments of at least $50 each. The minimum frequency and amount of annuity payments or the minimum Contract Value required for annuity payments may vary by state.

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Annuity Payments

The amount of the first Fixed Annuity payment is determined by applying the Contract Value to be used for a Fixed Annuity at the Annuity Commencement Date to the annuity table in the contract for the Fixed Annuity form selected. The table shows the amount of the initial annuity payment for each $1,000 applied and all subsequent payments shall be equal to this amount. The amount of the first Variable Annuity payment is determined by applying the Contract Value to be used for a Variable Annuity at the Annuity Commencement Date to the annuity table in the contract for the annuity form selected.

Subsequent Variable Annuity payments vary in amount in accordance with the investment performance of the applicable Subaccount. Assuming annuity payments are based on the unit values of a single Subaccount, the dollar amount of the first annuity payment, determined as set forth above, is divided by the Subaccount Annuity Unit Value as of the Annuity Commencement Date to establish the number of Variable Annuity Units representing each annuity payment. This number of Variable Annuity Units remains fixed during the annuity payment period. The dollar amount of the second and subsequent payments is not predetermined and may change from month to month. The dollar amount of the second and each subsequent payment is determined by multiplying the fixed number of Variable Annuity Units by the Subaccount Annuity Unit Value for the Valuation Period with respect to which the payment is due. If the monthly payment is based upon the Annuity Unit Values of more than one Subaccount, the foregoing procedure is repeated for each applicable Subaccount and the sum of the payments based on each Subaccount is the amount of the monthly annuity payment.

The annual contract charge is deducted in equal installments from each Fixed and/or Variable Annuity payment. Premium taxes payable to any governmental entity will be charged against the contracts. (See “Premium and Other Taxes.”) Additionally, the mortality and expense risk premiums and the administration charge continue to be deducted from amounts held in the Subaccounts during the income or payout phase.

The annuity tables in the contracts are based on the annuity mortality table as defined in the contract.

ReliaStar Life guarantees that the dollar amount of each Variable Annuity payment after the first payment will not be affected by variations in expenses (including those related to the Variable Account) or in mortality experience from the mortality assumptions used to determine the first payment.

Subaccount Annuity Unit Value

A Subaccount’s Variable Annuity Units will initially be valued at $10 each at the time accumulation units with respect to the Subaccount are first converted into Variable Annuity Units. The Subaccount Annuity Unit Value for any subsequent Valuation Period is determined by multiplying the Subaccount Annuity Unit Value for the immediately preceding Valuation Period by the net investment factor for the Subaccount for the Valuation Period for which the Subaccount Annuity Unit Value is being calculated and multiplying the result by an interest factor to neutralize the assumed investment rate built into the annuity tables contained in the contracts. (See “Net Investment Factor.”)

Assumed Investment Rate

An assumed investment rate of 4% per annum is built into the annuity tables contained in the contracts. If the actual net investment rate on the assets of the Variable Account is the same as the assumed investment rate, Variable Annuity payments will remain level. If the actual net investment rate exceeds the assumed investment rate, Variable Annuity payments will increase and conversely, if it is less than the assumed investment rate, the payments will decrease.

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FEDERAL TAX STATUS

Introduction

This section discusses our understanding of current federal income tax laws affecting the contract. The Contract Owner should keep the following in mind when reading it:

  • The Contract Owner’s tax position (or the tax position of the designated Beneficiary, as applicable) determines federal taxation of amounts held or paid out under the contract;
  • Tax laws change. It is possible that a change in the future could affect contracts issued in the past;
  • This section addresses federal income tax rules and does not discuss federal estate and gift tax implications, state and local taxes, foreign taxes or any other tax provisions; and
  • ReliaStar Life does not make any guarantee about the tax treatment of the contract or transactions involving the contract.

ReliaStar Life does not intend this information to be tax advice. For advice about the effect of federal income taxes or any other taxes on amounts held or paid out under the contract, consult a qualified tax adviser. For more comprehensive information, contact the Internal Revenue Service (IRS).

Types of Contracts: Non-Qualified or Qualified

The contract may be purchased on a non-tax-qualified basis or purchased on a tax-qualified basis.

Non-qualified contracts are purchased with after tax contributions and are not related to retirement plans that receive special income tax treatment under the Code.

Qualified contracts are designed for use by individuals whose premium payments are comprised solely of proceeds from and/or contributions under retirement plans that are intended to qualify as plans entitled to special income tax treatment under Sections 401, 408 or 408A, and some provisions of 403 and 457 of the Code.

Taxation of Non-Qualified Contracts

Taxation of Gains Prior to Distribution. Code section 72 governs taxation of annuities in general. ReliaStar Life believes that if the Contract Owner is a natural person the Contract Owner will generally not be taxed on increases in the value of a non-qualified contract until a distribution occurs or until annuity payments begin. This assumes that the contract will qualify as an annuity contract for federal income tax purposes. For these purposes, the agreement to assign or pledge any portion of the Contract Value generally will be treated as a distribution. In order to receive deferral of taxation, the following requirements must be satisfied:

  • Diversification. Internal Revenue Code Section 817(h) requires that in a nonqualified contract the investments of the Fund be “adequately diversified” in accordance with Treasury Regulations in order for the contract to qualify as an annuity contract under federal tax law. The Variable Account, through the Funds, intends to comply with the diversification requirements prescribed by Tax Code Section 817(h) and by the Treasury in Reg. Sec. 1:817-5 which affects how the Funds’ assets may be invested. If is it determined, however, that the contract does not satisfy the applicable diversification requirements and rulings because a Subaccount’s corresponding Fund fails to be adequately diversified for whatever reason, ReliaStar Life will take appropriate steps to bring the contract into compliance with such regulations and rulings, and ReliaStar Life reserves the right to modify the contract as necessary to do so.

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  • Investor Control. Although earnings under non-qualified contracts are generally not taxed until withdrawn, the Internal Revenue Service (IRS) has stated in published rulings that a variable Contract Owner will be considered the owner of separate account assets if the Contract Owner possesses incidents of investment control over the assets. In these circumstances, income and gains from the separate account assets would be currently includible in the variable Contract Owner’s gross income. Future guidance regarding the extent to which Contract Owners could direct their investments among subaccounts without being treated as owners of the underlying assets of the separate account may adversely affect the tax treatment of existing contracts. ReliaStar Life therefore reserves the right to modify the contract as necessary to attempt to prevent the Contract Owner from being considered the federal tax owner of a pro rata share of the assets of the Variable Account.
  • Required Distributions. In order to be treated as an annuity contract for federal income tax purposes, the Code requires any non-qualified contract to contain certain provisions specifying how the Contract Owner’s interest in the contract will be distributed in the event of the Contract Owner’s death. The non-qualified contracts contain provisions that are intended to comply with these Code requirements, although no regulations interpreting these requirements have yet been issued. ReliaStar Life intends to review such distribution provisions and modify them if necessary to assure that they comply with the applicable requirements when such requirements are clarified by regulation or otherwise.
  • Non-Natural Persons. If the Contract Owner is not a natural person, a non-qualified contract generally is not treated as an annuity for income tax purposes and the income on the contract for the taxable year is currently taxable as ordinary income. Income on the contract is any increase over the year in the excess of the Contract Value over the “investment in the contract” (generally, the premiums or other consideration the Contract Owner paid for the contract less any nontaxable withdrawals) during the taxable year. There are some exceptions to this rule and a non-natural person should consult with its tax adviser prior to purchasing the contract. When the Contract Owner is not a natural person, a change in the Annuitant is treated as the death of the Contract Owner.
  • Delayed Annuity Starting Date. If the contract’s annuity starting date occurs (or is scheduled to occur) at a time when the Annuitant has reached an advanced age (e.g., age 85), it is possible that the contract would not be treated as an annuity for federal income tax purposes. In that event, the income and gains under the contract could be currently includible in the Contract Owner’s income.

Taxation of Distributions

General. When a withdrawal from a non-qualified contract occurs, the amount received will be treated as ordinary income subject to tax up to an amount equal to the excess (if any) of the Contract Value (unreduced by the amount of any surrender charge) immediately before the distribution over the Contract Owner’s investment in the contract at that time. Investment in the contract is generally equal to the amount of all contributions to the contract, plus amounts previously included in the Contract Owner’s gross income as the result of certain assignments or gifts, less the aggregate amount of non-taxable distributions previously made.

In the case of a surrender under a non-qualified contract, the amount received generally will be taxable only to the extent it exceeds the Contract Owner’s cost basis in the contract.

10% Penalty Tax. A distribution from a non-qualified contract may be subject to a federal tax penalty equal to 10% of the amount treated as income. In general, however, there is no penalty on distributions:

  • Made on or after the taxpayer reaches age 59½;
  • Made on or after the death of a Contract Owner (the Annuitant if the Contract Owner is a non-natural person):
  • Attributable to the taxpayer’s becoming disabled as defined in the Code; or
  • Made as part of a series of substantially equal periodic payments (as least annually) over the Contract Owner’s life or life expectancy or the joint lives or joint life expectancies of the Contract Owner and the Contract Owner’s designated Beneficiary; or
  • The distribution is allocable to the investment in the contract before August 14, 1982.

The 10% penalty does not apply to distributions from an immediate annuity as defined in the Code. Other exceptions may be applicable under certain circumstances and special rules may be applicable in connection with the exceptions enumerated above. A qualified tax adviser should be consulted with regard to exceptions from the penalty tax.

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Tax Free Exchanges. Section 1035 of the Code permits the exchange of a life insurance, endowment or annuity contract for an annuity contract on a tax-free basis. In such instance, the “investment in the contract” in the old contract will carry over to the new contract. The Contract Owner should consult with a qualified tax adviser regarding procedures for making Section 1035 exchanges.

If the contract is purchased through a tax free exchange of a life insurance, endowment or annuity contract that was purchased prior to August 14, 1982, then any distributions other than annuity payments will be treated, for tax purposes, as coming:

  • First, from any remaining “investment in the contract” made prior to August 14, 1982, and exchanged into the contract;
  • Next, from any “income on the contract” attributable to the investment made prior to August 14, 1982;
  • Then, from any remaining “income on the contract”; and
  • Lastly, from any remaining “investment in the contract.”

The IRS has concluded that in certain instances, the partial exchange of a portion of one annuity contract for another contract will be tax-free. However, the IRS has reserved the right to treat transactions it considers abusive as ineligible for favorable partial Section 1035 tax free exchange treatment. It is not certain whether the IRS would treat an immediate withdrawal or annuitization after a partial exchange as abusive. In addition, it is unclear how the IRS will treat a partial exchange from a life insurance, endowment, or annuity contract directly into an immediate annuity. Currently, ReliaStar Life will accept a partial Section 1035 exchange from a non-qualified annuity into a deferred annuity or an immediate annuity as a tax free transaction unless ReliaStar Life believes that it would be expected to treat the transaction as abusive. ReliaStar Life is not responsible for the manner in which any other insurance company, for tax reporting purposes, or the IRS, with respect to the ultimate tax treatment, recognizes or reports a partial exchange. ReliaStar Life strongly advises the Contract Owner to discuss any proposed Section 1035 exchange with a qualified tax adviser prior to proceeding with the transaction.

Taxation of Annuity Payments. Although tax consequences may vary depending on the payment option elected under an annuity contract, a portion of each annuity payment is generally not taxed and the remainder is taxed as ordinary income. The non-taxable portion of an annuity payment is generally determined in a manner that is designed to allow the Contract Owner to recover the Contract Owner’s investment in the contract ratably on a tax-free basis over the expected stream of annuity payments, as determined when annuity payments start. Once the Contract Owner’s investment in the contract has been fully recovered, however, the full amount of each annuity subsequent payment is subject to tax as ordinary income. The tax treatment of partial annuitizations is unclear. ReliaStar Life currently treats any partial annuitizations as withdrawals rather than as annuity payments. Please consult a qualified tax adviser before electing a partial annuitization.

Death Benefits. Amounts may be distributed from a contract because of the Contract Owner’s death or the death of the Annuitant. Generally, such amounts are includible in the income of the recipient as follows: (i) if distributed in a lump sum, they are taxed in the same manner as a surrender of the contract, or (ii) if distributed under a payment option, they are taxed in the same way as annuity payments. Special rules may apply to amounts distributed after a Beneficiary has elected to maintain Contract Value and receive payments.

Different distribution requirements apply if the Contract Owner’s death occurs:

  • After the Contract Owner begins receiving annuity payments under the contract; or
  • Before the Contract Owner begins receiving such distributions.

If the Contract Owner’s death occurs after the Contract Owner began receiving annuity payments, distributions must be made at least as rapidly as under the method in effect at the time of the Contract Owner’s death.

If your death occurs before you begin receiving annuity payments, your entire balance must be distributed within five years after the date of your death. For example, if you died on September 1, 2008, your entire balance must be distributed by August 31, 2013. However, if distributions begin within one year of your death, then payments may be made over one of the following timeframes:

  • Over the life of the designated beneficiary; or
  • Over a period not extending beyond the life expectancy of the designated beneficiary.

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If the designated beneficiary is the Contract Owner’s spouse, the contract may be continued with the surviving spouse as the new Contract Owner. If the Contract Owner is a non-natural person and the primary Annuitant dies, the same rules apply on the death of the primary Annuitant as outlined above for the death of a Contract Owner.

The contract offers a death benefit that may exceed the greater of the premium payments and the Contract Value. Certain charges are imposed with respect to the death benefit. It is possible that these charges (or some portion thereof) could be treated for federal tax purposes as a distribution from the contract.

Assignments and Other Transfers. A transfer, pledge or assignment of ownership of a non-qualified contract, the selection of certain annuity dates, or the designation of an Annuitant or payee other than a Contract Owner may result in certain tax consequences to the Contract Owner that are not discussed herein. The assignment, pledge or agreement to assign or pledge any portion of the Contract Value generally will be treated as a distribution. A Contract Owner contemplating any such transfer, pledge, assignment, or designation or exchange, should consult a qualified tax adviser as to the tax consequences.

Immediate Annuities. Under section 72 of the Code, an immediate annuity means an annuity (1) that is purchased with a single premium, (2) with annuity payments starting within one year from the date of purchase, and (3) that provides a series of substantially equal periodic payments made annually or more frequently. While this contract is not designed as an immediate annuity, treatment as an immediate annuity would have significance with respect to exceptions from the 10% early withdrawal penalty, to contracts owned by non-natural persons, and for certain exchanges.

Multiple Contracts. The tax law requires that all non-qualified deferred annuity contracts that are issued by a company or its affiliates to the same Contract Owner during any calendar year be treated as one annuity contract for purposes of determining the amount includible in gross income under Code Section 72(e). In addition, the Treasury Department has specific authority to issue regulations that prevent the avoidance of Code Section 72(e) through the serial purchase of annuity contracts or otherwise.

Withholding. ReliaStar Life will withhold and remit to the IRS a part of the taxable portion of each distribution made under a contract unless the distributee notifies us at or before the time of the distribution that he or she elects not to have any amounts withheld. Withholding is mandatory, however, if the distributee fails to provide a valid taxpayer identification number or if ReliaStar Life is notified by the IRS that the taxpayer identification number ReliaStar Life has on file is incorrect. The withholding rates applicable to the taxable portion of periodic annuity payments are the same as the withholding rates generally applicable to payments of wages. In addition, a 10% withholding rate applies to the taxable portion of non-periodic payments. Regardless of whether the Contract Owner elects not to have federal income tax withheld, the Contract Owner is still liable for payment of federal income tax on the taxable portion of the payment.

If the Contract Owner or the Contract Owner’s designated beneficiary is a non-resident alien, then any withholding is governed by Code Section 1441 based on the individual’s citizenship, the country of domicile and treaty status.

Taxation of Qualified Contracts

General. The contracts are primarily designed for use with several types of Qualified Plans. The tax rules applicable to participants in these Qualified Plans vary according to the type of plan and the terms and conditions of the plan itself. The ultimate effect of federal income taxes on the amounts held under a contract, or on annuity payments, depends on the type of retirement plan and the Contract Owner’s tax status. Special favorable tax treatment may be available for certain types of contributions and distributions. In addition, certain requirements must be satisfied in purchasing a Qualified Contract with proceeds from a tax-qualified plan in order to continue receiving favorable tax treatment.

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Adverse tax consequences may result from: contributions in excess of specified limits; distributions before age 59½ (subject to certain exceptions); distributions that do not conform to specified commencement and minimum distribution rules; and in other specified circumstances. Some Qualified Plans may be subject to additional distribution or other requirements that are not incorporated into the contract. No attempt is made to provide more than general information about the use of the contracts with Qualified Plans. Contract Owners, Annuitants, and Beneficiaries are cautioned that the rights of any person to any benefits under these Qualified Plans may be subject to the terms and conditions of the plans themselves, regardless of the terms and conditions of the contract. ReliaStar Life shall not be bound by the terms and conditions of such plans to the extent such terms contradict the contract, unless ReliaStar Life consents.

Contract Owners and Beneficiaries generally are responsible for determining that contributions, distributions and other transactions with respect to the contract comply with applicable law. Therefore, the Contract Owner should seek qualified legal and tax advice regarding the suitability of a contract for the Contract Owner’s particular situation. The following discussion assumes that qualified contracts are purchased with proceeds from and/or contributions under retirement plans or programs that qualify for the intended special federal tax treatment.

Tax Deferral. Under the federal tax laws, earnings on amounts held in annuity contracts are generally not taxed until they are withdrawn. However, in the case of a Qualified Plan (as defined in this prospectus), an annuity contract is not necessary to obtain this favorable tax treatment and does not provide any tax benefits beyond the deferral already available to the Qualified Plan itself. Annuities do provide other features and benefits (such as guaranteed living benefits and/or death benefits or the option of lifetime income phase options at established rates) that may be valuable to the Contract Owner. The Contract Owner should discuss alternatives with a qualified financial representative taking into account the additional fees and expenses that may incur in an annuity.

Section 401(a), 401(k), Roth 401(k), and 403(a) Plans. Sections 401(a), 401(k), and 403(a) of the Code permit certain employers to establish various types of retirement plans for employees, and permits self-employed individuals to establish these plans for themselves and their employees. These retirement plans may permit the purchase of contracts to accumulate retirement savings under the plans. Employers intending to use the Contract with such plans should seek competent legal advice.

The contracts may also be available as a Roth 401(k), as described in Tax Code Section 402A, and ReliaStar may set up accounts for the Contract Owner under the contract for Roth 401(k) contributions (“Roth 401(k) accounts”). Code Section 402A allows employees of certain private employers to contribute after-tax salary contributions to a Roth 401(k), which provides for tax-free distributions, subject to certain restrictions.

Individual Retirement Annuities. Section 408 of the Code permits eligible individuals to contribute to an individual retirement program known as an Individual Retirement Annuity (“IRA”). IRAs are subject to limits on the amounts that can be contributed, the deductible amount of the contribution, the persons who may be eligible, and the time when distributions commence. Contributions to IRAs must be made in cash or as a rollover or a transfer from another eligible plan. Also, distributions from IRAs, individual retirement accounts, and other types of retirement plans may be “rolled over” on a tax-deferred basis into an IRA. If the Contract Owner makes a tax-free rollover of a distribution from an IRA the Contract Owner may not make another tax-free rollover from the IRA within a one-year period. Sales of the contract for use with IRAs may be subject to special requirements of the IRS.

The IRS has not reviewed the contract described in this prospectus for qualification as an IRA and has not addressed in a ruling of general applicability, whether the contract’s death benefit provisions comply with IRS qualification requirements.

Roth IRAs. Section 408A of the Code permits certain eligible individuals to contribute to a Roth IRA. Contributions to a Roth IRA are subject to limits on the amount of contributions and the persons who may be eligible to contribute, are not deductible, and must be made in cash or as a rollover or transfer from another Roth IRA or other IRA. Certain qualifying individuals may convert an IRA, SEP, or a SIMPLE to a Roth IRA. Such rollovers and conversions are subject to tax, and other special rules may apply. If the Contract Owner makes a tax-free rollover of a distribution from a Roth IRA to another Roth IRA, the Contract Owner may not make another tax-free rollover from the Roth IRA within a one-year period. A 10% penalty may apply to amounts attributable to a conversion to a Roth IRA if the amounts are distributed during the five taxable years beginning with the year in which the conversion was made.

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Sales of a contract for use with a Roth IRA may be subject to special requirements of the IRS. The IRS has not reviewed the contract described in this prospectus for qualification as an IRA and has not addressed, in a ruling of general applicability, whether the contract’s death benefit provisions comply with IRS qualification requirements.

Contributions

In order to be excludable from gross income for federal income tax purposes, total annual contributions to certain Qualified Plans are limited by the Code. The Contract Owner should consult with a qualified tax adviser in connection with contributions to a qualified contract.

Distributions – General

Certain tax rules apply to distributions from the contract. A distribution is any amount taken from a contract including withdrawals, annuity payments, rollovers, exchanges and death benefit proceeds. We report the taxable portion of all distributions to the IRS.

Section 401(a), 401(k) and 403(a) Plans. All distributions from these plans are taxed as received unless one of the following is true:

  • The distribution is an eligible rollover distribution and is rolled over to another plan eligible to receive rollovers or to a traditional IRA in accordance with the Code;
  • The Contract Owner made after-tax contributions to the plan. In this case, depending upon the type of distribution, the amount will be taxed according to the rules detailed in the Code; or
  • The distribution is a qualified health insurance premium of a retired safety officer as defined in the Pension Protection Act of 2006.

A payment is an eligible rollover distribution unless it is:

  • Part of a series of substantially equal periodic payments (at least one per year) made over the life expectancy of the participant or the joint life expectancy of the participant and his designated beneficiary or for a specified period of 10 years or more;
  • A required minimum distribution under Code Section 401(a)(9);
  • A hardship withdrawal;
  • Otherwise excludable from income; or
  • Not recognized under applicable regulations as eligible for rollover.

The Code imposes a 10% penalty tax on the taxable portion of any distribution from a contract used with a 401(a), 401(k) or 403(a) plan unless certain exceptions, including one or more of the following, have occurred:

  • The Contract Owner has attained age 59½;
  • The Contract Owner has become disabled, as defined in the Code;
  • The Contract Owner has died and the distribution is to the designated Beneficiary;
  • The Contract Owner has separated from service with the sponsor at or after age 55;
  • The distribution amount is rolled over into another eligible retirement plan or to an IRA in accordance with the terms of the Code;
  • The Contract Owner has separated from service with the plan sponsor and the distribution amount is made in substantially equal periodic payments (at least annually) over the Contract Owner’s life or the life expectancy or the joint lives or joint life expectancies of the Contract Owner and the Contract Owner’s designated beneficiary;
  • The distribution is made due to an IRS levy upon the Contract Owner’s plan;
  • The withdrawal amount is paid to an alternate payee under a Qualified Domestic Relations Order (QDRO); or
  • The distribution is a qualified reservist distribution as defined under the Pension Protection Act of 2006 (401(k) plans only).

In addition, the 10% penalty tax does not apply to the amount of a distribution equal to unreimbursed medical expenses incurred by the Contract Owner during the taxable year that qualify for deduction as specified in the Code. The Code may provide other exceptions or impose other penalties in other circumstances.

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Individual Retirement Annuities. All distributions from an IRA are taxed as received unless either one of the following is true:

  • The distribution is rolled over to another IRA or to a plan eligible to receive rollovers as permitted under the Code; or
  • The Contract Owner made after-tax contributions to the IRA. In this case, the distribution will be taxed according to rules detailed in the Code.

The Code imposes a 10% penalty tax on the taxable portion of any distribution from an IRA unless certain exceptions, including one or more of the following, have occurred:

  • The Contract Owner has attained age 59½;
  • The Contract Owner has become disabled, as defined in the Code;
  • The Contract Owner has died and the distribution is to the designated Beneficiary;
  • The distribution amount is rolled over into another eligible retirement plan or to an IRA in accordance with the terms of the Code;
  • The distribution is made due to an IRS levy upon the Contract Owner’s plan;
  • The withdrawal amount is paid to an alternate payee under a Qualified Domestic Relations Order (QDRO); or
  • The distribution is a qualified reservist distribution as defined under the Pension Protection Act of 2006.

In addition, the 10% penalty tax does not apply to a distribution made from an IRA to pay for health insurance premiums for certain unemployed individuals, a qualified first-time home purchase, or for higher education expenses.

Roth IRAs. A qualified distribution from a Roth IRA is not taxed when it is received. A qualified distribution is a distribution:

  • Made after the five-taxable year period beginning with the first taxable year for which a contribution was made to a Roth IRA of the owner; and
  • Made after the Contract Owner attains age 59½, die, become disabled as defined in the Code, or for a qualified first-time home purchase.

If a distribution is not qualified, generally it will be taxable to the extent of the accumulated earnings. A partial distribution will first be treated as a return of contributions which is not taxable and then as taxable accumulated earnings.

The Code imposes a 10% penalty tax on the taxable portion of any distribution from a Roth IRA that is not a qualified distribution unless certain exceptions have occurred. In general, the exceptions for an IRA listed above also apply to a distribution from a Roth IRA that is not a qualified distribution or a rollover to a Roth IRA that is not a qualified rollover contribution. The 10% penalty tax is also waived on a distribution made from a Roth IRA to pay for health insurance premiums for certain unemployed individuals, used for a qualified first-time home purchase, or for higher education expenses.

Special Hurricane-Related Relief. The Katrina Emergency Tax Relief Act and the Gulf Opportunity Zone Act provide tax relief to victims of Hurricanes Katrina, Rita and Wilma. The relief includes a waiver of the 10% penalty tax on qualified hurricane distributions from eligible retirement plans. In addition, the 20% mandatory withholding rules do not apply to these distributions and the tax may be spread out ratably over a three-year period. A recipient of qualified hurricane distribution may also elect to re-contribute all or a portion of the distribution to an eligible retirement plan within three (3) years of receipt without tax consequences. Other relief may also apply. The Contract Owner should consult a competent tax adviser for further information.

Lifetime Required Minimum Distributions (Sections 401(a), 401(k), Roth 401(k), 403(a) and IRAs only). To avoid certain tax penalties, the Contract Owner and any designated Beneficiary must also meet the minimum distribution requirements imposed by the Code. These rules may dictate the following:

  • Start date for distributions;
  • The time period in which all amounts in the Contract Owner’s account(s) must be distributed; and
  • Distribution amounts.

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     Start Date and Time Period. Generally, the Contract Owner must begin receiving distributions by April 1 of the calendar year following the calendar year in which the Contract Owner attains age 70½. ReliaStar Life must pay out distributions from the contract over a period not extending beyond one of the following time periods:

  • Over the Contract Owner’s life or the joint lives of the Contract Owner and the Contract Owner’s designated Beneficiary; or
  • Over a period not greater than the Contract Owner’s life expectancy or the joint life expectancies of the Contract Owner and the Contract Owner’s designated Beneficiary.

     Distribution Amounts. The amount of each required distribution must be calculated in accordance with Code Section 401(a)(9). The entire interest in the account includes the amount of any outstanding rollover, transfer, recharacterization, if applicable, and the actuarial present value of any other benefits provided under the account, such as guaranteed death benefits.

     50% Excise Tax. If the Contract Owner fails to receive the minimum required distribution for any tax year, a 50% excise tax may be imposed on the required amount that was not distributed.

Lifetime Required Minimum Distributions are not applicable to Roth IRAs.

Required Distributions Upon Death (Sections 401(a), 401(k), Roth 401(k), 403(a), IRAs and Roth IRAs Only).

Different distribution requirements apply after the Contract Owner’s death, depending upon if the Contract Owner has been receiving required minimum distributions. Further information regarding required distributions upon death may be found in the contract.

If the Contract Owner’s death occurs on or after the Contract Owner began receiving minimum distributions under the contract, distributions generally must be made at least as rapidly as under the method in effect at the time of the Contract Owner’s death. Code Section 401(a)(9) provides specific rules for calculating the required minimum distributions after the Contract Owner’s death.

If the Contract Owner’s death occurs before the Contract Owner began receiving minimum distributions under the contract, the Contract Owner’s entire balance must be distributed by December 31 of the calendar year containing the fifth anniversary of the date of the Contract Owner’s death. For example, if the Contract Owner died on September 1, 2008, the entire balance must be distributed to the designated beneficiary by December 31, 2013. However, if distributions begin by December 31 of the calendar year following the calendar year of the Contract Owner’s death, and the Contract Owner has named a designated Beneficiary, then payments may be made over either of the following time frames:

  • Over the life of the designated Beneficiary; or
  • Over a period not extending beyond the life expectancy of the designated Beneficiary.

     Start Dates for Spousal Beneficiaries. If the designated Beneficiary is the Contract Owner’s spouse, distributions must begin on or before the later of the following:

  • December 31 of the calendar year following the calendar year of the Contract Owner’s death; or
  • December 31 of the calendar year in which the Contract Owner would have attained age 70½.

      No Designated Beneficiary. If there is no designated Beneficiary, the entire interest generally must be distributed by the end of the calendar containing the fifth anniversary of the Contract Owner’s death.

     Special Rule for IRA Spousal Beneficiaries (IRAs and Roth IRAs Only). In lieu of taking a distribution under these rules, if the sole designated Beneficiary is the Contract Owner’s surviving spouse, the spousal Beneficiary may elect to treat the contract as his or her own IRA and defer taking a distribution until his or her own start date. The surviving spouse is deemed to have made such an election if the surviving spouse makes a rollover to or from the contract or fails to take a distribution within the required time period.

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Withholding

Any taxable distributions under the contract are generally subject to withholding. Federal income tax liability rates vary according to the type of distribution and the recipient’s tax status.

401(a), 401(k), Roth 401(k) and 403(a). Generally, distributions from these plans are subject to mandatory 20% federal income tax withholding. However, mandatory withholding will not be required if the Contract Owner elects a direct rollover of the distributions to an eligible retirement plan or in the case of certain distributions described in the Code.

IRAs and Roth IRAs. Generally, the Contract Owner or, if applicable, a designated Beneficiary may elect not to have tax withheld from distributions.

Non-resident Aliens. If the Contract Owner or the Contract Owner’s designated Beneficiary is a non-resident alien, then any withholding is governed by Code Section 1441 based on the individual’s citizenship, the country of domicile and treaty status.

Assignment and Other Transfers

IRAS and Roth IRAs. The Code does not allow a transfer or assignment of the Contract Owner’s rights under the contracts except in limited circumstances. Adverse tax consequences may result if the Contract Owner assigns or transfers the Contract Owner’s interest in the contract to persons other than the Contract Owner’s spouse incident to a divorce. Anyone contemplating such an assignment or transfer should contact a qualified tax adviser regarding the potential tax effects of such a transaction.

Possible Changes in Taxation

Although the likelihood of legislative change or tax reform is uncertain, there is always the possibility that the tax treatment of the contracts could change by legislation or other means. It is also possible that any change may be retroactive (that is, effective before the date of the change). The Contract Owner should consult a qualified tax adviser with respect to legislative developments and their effect on the contract.

Taxation of Company

ReliaStar Life is taxed as a life insurance company under the Code. The Variable Account is not a separate entity from us. Therefore, it is not taxed separately as a “regulated investment company,” but is taxed as part of ReliaStar Life.

ReliaStar Life automatically applies investment income and capital gains attributable to the Variable Account to increase reserves under the contracts. Because of this, under existing federal tax law ReliaStar Life believes that any such income and gains will not be taxed to the extent that such income and gains are applied to increase reserves under the contracts. In addition, any foreign tax credits attributable to the Variable Account will be first used to reduce any income taxes imposed on the Variable Account before being used by ReliaStar Life.

In summary, ReliaStar Life does not expect that it will incur any federal income tax liability attributable to the Variable Account and ReliaStar Life does not intend to make any provision for such taxes. However, changes in federal tax laws and/or their interpretation may result in our being taxed on income or gains attributable to the Variable Account. In this case, ReliaStar Life may impose a charge against the Variable Account (with respect to some or all of the contracts) to set aside provisions to pay such taxes. ReliaStar Life may deduct this amount from the Variable Account, including from the Contract Owner’s account value invested in the Subaccounts.

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VOTING OF FUND SHARES

As long as the Variable Account is registered as a unit investment trust under the 1940 Act and the assets of the Variable Account are allocated to Subaccounts that are invested in Fund shares, the Fund shares held in the Subaccounts will be voted by ReliaStar Life in accordance with instructions received from the person having voting interests under the contracts as described below. If ReliaStar Life determines pursuant to applicable law or regulation that Fund shares held in the Subaccounts and attributable to the contracts need not be voted pursuant to instructions received from persons otherwise having the voting interests, then ReliaStar Life may vote such Fund shares held in the Subaccounts in its own right.

Before the Annuity Commencement Date, the Owner shall have the voting interest with respect to the Fund shares attributable to the contract. On and after the Annuity Commencement Date, the person then entitled to receive annuity payments shall have the voting interest with respect to the Fund shares. Such voting interest will generally decrease during the annuity payout period.

Any Fund shares held in the Variable Account for which ReliaStar Life does not receive timely voting instructions, or that are not attributable to Contract Owners, will be voted by us in proportion to the instructions received from all Contract Owners having a voting interest in the Fund. This means that instructions from a small number of shareholders can determine the outcome of a vote. There is no minimum number of shares for which ReliaStar Life must receive instructions before ReliaStar Life votes the shares. Any Fund shares held by us or any of our affiliates in general accounts will, for voting purposes, be allocated to all separate accounts having voting interests in the Fund in proportion to each account’s voting interest in the respective Fund and will be voted in the same manner as are the respective account’s vote.

All Fund proxy material will be sent to persons having voting interests together with appropriate forms that may be used to give voting instructions. Persons entitled to voting interests and the number of votes that they may cast shall be determined as of a record date, to be selected by the Fund, not more than 90 days before the meeting of the applicable Fund.

Persons having voting interests under the contracts as described above will not, as a result thereof, have voting interests with respect to meetings of the stockholders of ReliaStar Life.

DISTRIBUTION OF THE CONTRACT

Effective January 1, 2004, ReliaStar Life’s affiliate, ING Financial Advisers, LLC, became the principal underwriter (distributor) for the contracts. ING Financial Advisers, LLC, a Delaware limited liability company, is registered as a broker-dealer with the SEC. ING Financial Advisers, LLC is also a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation. ING Financial Advisers, LLC’s principal office is located at One Orange Way, Windsor, CT 06095-4774.

This contract is no longer available for new purchasers.

The following is a list of broker/dealers affiliated with ReliaStar Life:

  • Bancnorth Investment Group, Inc.
  • Directed Services LLC
  • Financial Network Investment Corporation
  • Guaranty Brokerage Services, Inc.
  • ING America Equities, Inc.
  • ING DIRECT Securities, Inc.
  • ING Financial Advisers LLC
  • ING Financial Markets LLC
  • ING Financial Partners, Inc.
  • ING Funds Distributor, LLC
  • ING Investment Management Services LLC
  • ING Private Wealth Management LLC
  • Multi-Financial Securities Corporation
  • PrimeVest Financial Services, Inc.
  • ShareBuilder Securities Corporation
  • Systematized Benefits Administrators, Inc.

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The amounts that we pay for the sale of the contract can generally be categorized as either commissions or other amounts. Commissions and other distribution compensation will be paid by ReliaStar Life. However categorized, commissions paid will not exceed 8% of the purchase payments. In some cases a trail commission based on the Contract Value may also be paid.

In addition to the sales compensation described above, ING Financial Advisers, LLC may also pay broker/dealers additional compensation or reimbursement of expenses for their efforts in selling contracts to you and other customers. These amounts may include:

  • Marketing/distribution allowances which may be based on the percentages of premium received, the aggregate commissions paid and/or the aggregate assets held in relation to certain types of designated insurance products issued by ReliaStar Life and/or its affiliates during the year;
  • Loans or advances of commissions in anticipation of future receipt of premiums (a form of lending to agents/registered representatives). These loans may have advantageous terms such as reduction or elimination of the interest charged on the loan and/or forgiveness of the principal amount of the loan, which terms may be conditioned on fixed insurance product sales;
  • Education and training allowances to facilitate ReliaStar Life’s attendance at certain educational and training meetings to provide information and training about its products. ReliaStar Life also holds training programs from time to time at its own expense;
  • Sponsor payments or reimbursements for broker/dealers to use in sales contests and/or meetings for their agents/registered representatives who sell ReliaStar Life’s products. We do not hold contests based solely on sales of this product;
  • Certain overrides and other benefits that may include cash compensation based on the amount of earned commissions, agent/representative recruiting or other activities that promote the sale of contracts; and
  • Additional cash or noncash compensation and reimbursements permissible under existing law. This may include, but is not limited to, cash incentives, merchandise, trips, occasional entertainment, meals and tickets to sporting events, client appreciation events, business and educational enhancement items, payment for travel expenses (including meals and lodging) to pre-approved training and education seminars and payment for advertising and sales campaigns.

ReliaStar Life may pay commissions, dealer concessions, wholesaling fees, overrides, bonuses, other allowances and benefits and the costs of all other incentives or training programs from its resources, which include the fees and charges imposed under the contract.

The following is a list of the top 25 broker/dealers that, during 2007, received the most, in the aggregate, from ReliaStar Life in connection with the sale of registered variable annuity contracts issued by us, ranked by total dollars received:

· ING Financial Partners, Inc. · Lincoln Investment Planning Inc. · PlanMember Securities Corporation · Great American Advisors, Inc. · GLP Investment Services, LLC · Linsco/Private ledger Corp.

· Legend Equities Corporation

· Veritrust ® Financial, L.L.C. · Royal Alliance Associates, Inc. · GWN Securities, Inc.

· Brecek & Young Advisors, Inc. · T.S. Phillips Investments, Inc. · AIG Financial Advisors

· Centaurus Financial, Inc. · National Planning Corporation · Pavek Investments, Inc. · Lincoln Financial Advisors Corp. · Sammons Securities Company, LLC · cfd Investmens, Inc.

· Securities America, Inc.

· Multi-Financial Securities Corporation · Mutual Service Corporation · InterSecurities, Inc.

· Raymond James Financial Services, Inc. · USAllianz Securities, Inc.


This is a general discussion of the types and levels of compensation paid by us for the sale of our variable annuity contracts. It is important for you to know that the payment of volume or sales-based compensation to a broker/dealer or registered representative may provide that registered representative a financial incentive to promote our contracts over those of another company.

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ANTI-MONEY LAUNDERING

In order to protect against the possible misuse of our products in money laundering or terrorist financing, ReliaStar Life has adopted an anti-money laundering program satisfying the requirements of the USA PATRIOT Act. Among other things, this program requires us, our agents/registered representatives and customers to comply with certain procedures and standards that serve to assure that our customers’ identities are properly verified and that premiums are not derived from improper sources.

Under ReliaStar Life’s anti-money laundering program, it may require Contract Owners, Annuitants and/or Beneficiaries to provide sufficient evidence of identification, and ReliaStar Life reserves the right to verify any information received by accessing information databases maintained internally or by outside firms.

ReliaStar Life may also refuse to accept certain forms of premium payments (travelers cheques, for example) or restrict the amount of certain forms of premium payments (money orders totaling more than $5,000, for example). In addition, ReliaStar Life may require information as to why a particular form of payment was used (third party checks, for example) and the source of the funds of such payment in order to determine whether or not to accept it. Use of an unacceptable form of payment may result in ReliaStar Life returning your premium payment and/or not issuing the contract.

Applicable laws designed to prevent terrorist financing and money laundering might, in certain circumstances, require ReliaStar Life to block certain transactions until authorization is received from the appropriate regulator. ReliaStar Life may also be required to provide additional information about you and your contract to government regulators.

ReliaStar Life’s anti-money laundering program is subject to change without notice to take account of changes applicable in laws or regulations and our ongoing assessment of our exposure to illegal activity.

REVOCATION

The Contract Owner may revoke the contract at any time between the date of application and the date ten days after receipt of the contract and receive a refund of the Contract Value unless otherwise required by state and/or Federal law. All IRA refunds will be for a return of purchase payments. In order to revoke the contract, it must be mailed or delivered to ReliaStar Life’s Contract Administrator at the mailing address shown below or the agent/registered representative through whom it was purchased. Mailing or delivery must occur on or before ten days after receipt of the contract for revocation to be effective. In order to revoke the contract written notice must be mailed or delivered to:

  ReliaStar Life Insurance Company
ING Customer Service Center
P.O. Box 5050
Minot, North Dakota 58703
www.ingservicecenter.com

The liability of the Variable Account under this provision is limited to the Contract Value in each Subaccount on the date of revocation. Any additional amounts refunded to the Contract Owner will be paid by ReliaStar Life.

REPORTS TO OWNERS

ReliaStar Life will mail to the Contract Owner, at the last known address of record at the administrative office of ReliaStar Life, at least annually after the first Contract Year, a report containing such information as may be required by any applicable law or regulation and a statement showing the Contract Value.

Select*Annuity III

41


To reduce expenses, only one copy of most financial reports and prospectuses, including reports and prospectuses for the Funds, will be mailed to your household, even if you or other persons in your household have more than one contract issued by ReliaStar Life or an affiliate. Call 1-877-884-5050 if you need additional copies of financial reports, prospectuses, or annual and semi-annual reports or if you would like to receive one copy for each contract in all future mailings.

LEGAL PROCEEDINGS

ReliaStar Life is not aware of any pending legal proceedings that involve the variable account as a party.

ReliaStar Life is involved in threatened or pending lawsuits/arbitrations arising from the normal conduct of business. Due to the climate in insurance and business litigation/arbitrations, suits against ReliaStar Life sometimes include claims for substantial compensatory, consequential or punitive damages and other types of relief. Moreover, certain claims are asserted as class actions, purporting to represent a group of similarly situated individuals. While it is not possible to forecast the outcome of such lawsuits/arbitrations, in light of existing insurance, reinsurance and established reserves, it is the opinion of management that the disposition of such lawsuits/arbitrations will not have a materially adverse effect on ReliaStar Life’s operations or financial position.

ING Financial Advisers, LLC, the principal underwriter and distributor of the contract, is a party to threatened or pending lawsuits/arbitration that generally arise from the normal conduct of business. Some of these suits may seek class action status and sometimes include claims for substantial compensatory, consequential or punitive damages and other types of relief. ING Financial Advisers, Inc. is not involved in any legal proceeding that, in the opinion of management, is likely to have a material adverse affect on its ability to distribute the contract.

EXPERTS

The statements of assets and liabilities of ReliaStar Select Variable Account as of December 31, 2007, and the related statements of operations and changes in net assets for the periods disclosed in the financial statements, and the statutory basis financial statements of ReliaStar Life Insurance Company as of December 31, 2007 and 2006, and for each of the three years in the period ended December 31, 2007, included in this Statement of Additional Information, have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports 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.

FURTHER INFORMATION

A Registration Statement under the Securities Act of 1933 has been filed with the SEC, with respect to the contracts described herein. The prospectus does not contain all of the information set forth in the Registration Statement and exhibits thereto. Additional information about ReliaStar Life, the variable account or the contracts (including the SAI) can be reviewed and copied from the SEC’s Internet website (http://www.sec.gov) or at the SEC’s Public Reference Branch in Washington, DC. Copies of this additional information may also be obtained, upon payment of a duplicating fee, by writing the SEC’s Public Reference Branch at 100 F Street, NE, Room 1580, Washington, DC 20549. More information about operation of the SEC’s Public Reference Branch can be obtained by calling 202-551-5850. When looking for information regarding the contract offered through this prospectus, you may find it useful to use the number assigned to the registration statement under the 1933 Act. This number is 33-69892.

Information about the Fixed Account can be found in Appendix A to the prospectus and Condensed Financial Information can be found in Appendix C to the prospectus.

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42


                                 STATEMENT OF ADDITIONAL INFORMATION     
                                                                               TABLE OF CONTENTS     
 
    Page 
Introduction       2 
Administration of the Contracts       2 
Underwriters       2 
Custody of Assets       2 
Experts       2 
Sales Material and Advertising       3 
Financial Statements       3 
Financial Statements of ReliaStar Select Variable Account       1 
Statutory Basis Financial Statements of ReliaStar Life Insurance Company       1 

If you would like to receive a copy of the ReliaStar Select Variable Account Select*Annuity III Variable Annuity Statement of Additional Information, please call 1-877-884-5050 or return this request to:

RELIASTAR LIFE INSURANCE COMPANY
ING CUSTOMER SERVICE CENTER
P.O. BOX 5050
MINOT, ND 58703
www.ingservicecenter.com

Your Name

Address

City

State

Zip

Please send me a copy of the ReliaStar Select Variable Account Select*Annuity III Statement of Additional Information.

No person is authorized to give any information or to make any representations other than those contained in this prospectus and, if given or made, such information or representations must not be relied upon as having been authorized. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the registered securities to which it relates. This prospectus does not constitute an offer or solicitation in any circumstances in which such offer or solicitation would be unlawful.

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43


APPENDIX A

THE FIXED ACCOUNT

Contributions to the Fixed Account under the contract and transfers to the Fixed Account become part of the general account of ReliaStar Life, which supports insurance and annuity obligations. Interests in the Fixed Account have not been registered under the Securities Act of 1933 (“1933 Act”) nor is the Fixed Account registered as an investment company under the Investment Company Act of 1940 (“1940 Act”). Accordingly, neither the Fixed Account nor any interest therein are generally subject to the provisions of the 1933 Act or 1940 Act and ReliaStar Life has been advised that the staff of the SEC has not reviewed the disclosures in this prospectus that relate to the fixed portion of the contract. Disclosures regarding the fixed portion of the annuity contract and the Fixed Account, however, may be subject to certain generally applicable provisions of the Federal securities laws relating to the accuracy and completeness of statements made in prospectuses.

The Fixed Account is made up of all of the general assets of ReliaStar Life other than those allocated to any separate account. Purchase payments will be allocated to the Fixed Account as elected by the Owner at the time of purchase or as subsequently changed. ReliaStar Life will invest the assets of the Fixed Account in those assets chosen by ReliaStar Life and allowed by applicable law.

ReliaStar Life guarantees that it will credit interest at a rate of not less than 3% per year, compounded annually, to amounts allocated to the Fixed Account under the contract. ReliaStar Life may credit interest at a rate in excess of 3% per year; however, ReliaStar Life is not obligated to do so. Any interest credited to amounts allocated to the Fixed Account in excess of 3% per year will be determined in the sole discretion of ReliaStar Life. The Owner assumes the risk that interest credited to Fixed Account allocations may not exceed the minimum guarantee of 3% for any given year.

A-1


APPENDIX B

Funds Available Through the Variable Account

The following chart lists the funds that are currently available through the Subaccounts of the variable account, along with each Fund’s investment adviser/subadviser and investment objective. More detailed information about the funds can be found in the current prospectus and Statement of Additional Information for each Fund.

There is no assurance that the stated objectives and policies of any of the Funds will be achieved. Shares of the Funds will rise and fall in value and you could lose money by allocating Contract Value to the Subaccounts that invest in the Funds. Shares of the Funds are not bank deposits and are not guaranteed, endorsed or insured by any financial institution, the Federal Deposit Insurance Corporation or any other government agency. Except as noted, all Funds are diversified, as defined under the 1940 Act.

                 Investment Adviser/     
                         Fund Name                             Subadviser                 Investment Objective 



American Funds – Growth Fund    Investment Adviser:    Seeks growth of capital by investing 
(Class 2)    Capital Research and Management    primarily in U.S. common stocks. 
    Company     

American Funds – Growth-Income    Investment Adviser:    Seeks capital growth and income over 
Fund (Class 2)    Capital Research and Management    time by investing primarily in U.S. 
    Company    common stocks and other securities 
        that appear to offer potential for capital 
        appreciation and/or dividends. 

American Funds – International    Investment Adviser:    Seeks growth of capital over time by 
Fund (Class 2)    Capital Research and Management    investing primarily in common stocks 
    Company    of companies based outside the United 
        States. 

Fidelity ® VIP Contrafund ® Portfolio    Investment Adviser:    Seeks long-term capital appreciation. 
(Initial Class)    Fidelity Management & Research     
    Company     
    Subadvisers:     
    FMR Co., Inc.; Fidelity Research &     
    Analysis Company; Fidelity     
    Management & Research (U.K.) Inc.;     
    Fidelity International Investment     
    Advisors; Fidelity International     
    Investment Advisors (U.K.) Limited;     
    Fidelity Investments Japan Limited     

Fidelity ® VIP Equity-Income    Investment Adviser:    Seeks reasonable income. Also 
Portfolio (Initial Class)    Fidelity Management & Research    considers the potential for capital 
    Company    appreciation. Seeks to achieve a yield 
    Subadvisers:    which exceeds the composite yield on 
    FMR Co., Inc.; Fidelity Research &    the securities comprising the Standard 
    Analysis Company; Fidelity    & Poor's 500SM Index (S&P 500® ). 
    Management & Research (U.K), Inc.;     
    Fidelity International Investment     
    Advisors; Fidelity International     
    Investment Advisors (U.K.) Limited;     
    Fidelity Investments Japan Limited     


B-1


                 Investment Adviser/     
                         Fund Name                             Subadviser                 Investment Objective 



ING AllianceBernstein Mid Cap    Investment Adviser:    Seeks long-term growth of capital. 
Growth Portfolio (Class I)    Directed Services LLC     
    Subadviser:     
    AllianceBernstein, L.P.     

ING BlackRock Large Cap    Investment Adviser:    Seeks long-term growth of capital. 
Growth Portfolio (Class I)    Directed Services LLC     
    Subadviser:     
    BlackRock Investment Management,     
    LLC     

ING Evergreen Health Sciences    Investment Adviser:    A non-diversified portfolio that seeks 
Portfolio (Class I)    Directed Services LLC    long-term capital growth. 
    Subadviser:     
    Evergreen Investment Management     
    Company, LLC     

ING Evergreen Omega Portfolio    Investment Adviser:    Seeks long-term capital growth. 
(Class I)    Directed Services LLC     
    Subadviser:     
    Evergreen Investment Management     
    Company, LLC     

ING FMRSM Diversified Mid Cap    Investment Adviser:    Seeks long-term growth of capital. 
Portfolio (Class I)    Directed Services LLC     
    Subadviser:     
    Fidelity Management & Research Co.     

ING Focus 5 Portfolio (Class I)    Investment Adviser:    Seeks total return through capital 
    Directed Services LLC    appreciation and dividend income. 
    Subadviser:     
    ING Investment Management Co.     

ING Franklin Templeton Founding    Investment Adviser:    Seeks capital appreciation and 
Strategy Portfolio (Class I)    Directed Services LLC    secondarily, income. 



ING Global Real Estate Portfolio    Investment Adviser:    A non-diversified portfolio that seeks 
(Class S)    ING Investments, LLC    high total return, consisting of capital 
    Subadviser:    appreciation and current income. 
    ING Clarion Real Estate Securities L.P.     

ING Global Resources Portfolio    Investment Adviser:    A non-diversified portfolio that seeks 
(Class I)    Directed Services LLC    long-term capital appreciation. 
    Subadviser:     
    ING Investment Management Co.     

ING JPMorgan Emerging    Investment Adviser:    Seeks capital appreciation. 
Markets Equity Portfolio    Directed Services LLC     
(Class I)    Subadviser:     
    J.P. Morgan Investment Management     
    Inc.     

ING JPMorgan Small Cap Core    Investment Adviser:    Seeks capital growth over the long 
Equity Portfolio (Class I)    Directed Services LLC    term. 
    Subadviser:     
    J.P. Morgan Investment Management     
    Inc.     


B-2


                 Investment Adviser/     
                         Fund Name                             Subadviser                 Investment Objective 



ING JPMorgan Value    Investment Adviser:    Seeks long-term capital appreciation. 
Opportunities Portfolio (Class I)    Directed Services LLC     
    Subadviser:     
    J. P. Morgan Investment Management     
    Inc.     

ING Julius Baer Foreign    Investment Adviser:    Seeks long-term growth of capital. 
Portfolio (Class I)    Directed Services LLC     
    Subadviser:     
    Julius Baer Investment Management,     
    LLC     

ING Legg Mason Value Portfolio    Investment Adviser:    A non-diversified portfolio that seeks 
(Class I)    Directed Services LLC    long-term growth of capital. 
    Subadviser:     
    Legg Mason Capital Management, Inc.     

ING LifeStyle Aggressive    Investment Adviser:    Seeks growth of capital. 
Growth Portfolio (Class I)    ING Investments, LLC     
    Asset Allocation Consultants:     
    Ibbotson Associates and ING     
    Investment Management Co.     

ING LifeStyle Growth Portfolio    Investment Adviser:    Seeks growth of capital and some 
(Class I)    ING Investments, LLC    current income. 
    Asset Allocation Consultants:     
    Ibbotson Associates and ING     
    Investment Management Co.     

ING LifeStyle Moderate Growth    Investment Adviser:    Seeks growth of capital and a low to 
Portfolio (Class I)    ING Investments, LLC    moderate level of current income. 
    Asset Allocation Consultants:     
    Ibbotson Associates and ING     
    Investment Management Co.     

ING LifeStyle Moderate Portfolio    Investment Adviser:    Seeks growth of capital and current 
(Class I)    ING Investments, LLC    income. 
    Asset Allocation Consultants:     
    Ibbotson Associates and ING     
    Investment Management Co.     

ING Limited Maturity Bond    Investment Adviser:    Seeks highest current income consistent 
Portfolio (Class S)    Directed Services LLC    with low risk to principal and liquidity 
    Subadviser:    and secondarily, seeks to enhance its 
    ING Investment Management Co.    total return through capital appreciation 
        when market factors, such as falling 
        interest rates and rising bond prices, 
        indicate that capital appreciation may 
        be available without significant risk to 
        principal. 

ING Liquid Assets Portfolio    Investment Adviser:    Seeks high level of current income 
(Class I)    Directed Services LLC    consistent with the preservation of 
    Subadviser:    capital and liquidity. 
    ING Investment Management Co.     


B-3


                 Investment Adviser/     
                         Fund Name                             Subadviser                 Investment Objective 



ING Marsico Growth Portfolio    Investment Adviser:    Seeks capital appreciation. 
(Class I)    Directed Services LLC     
    Subadviser:     
    Marsico Capital Management, LLC     

ING Marsico International    Investment Adviser:    Seeks long-term growth of capital. 
Opportunities Portfolio (Class I)    Directed Services LLC     
    Subadviser:     
    Marsico Capital Management, LLC     

ING MFS Total Return Portfolio    Investment Adviser:    Seeks above-average income 
(Class I)    Directed Services LLC    (compared to a portfolio entirely 
    Subadviser:    invested in equity securities) consistent 
    Massachusetts Financial Services    with the prudent employment of 
    Company    capital. Secondarily seeks reasonable 
        opportunity for growth of capital and 
        income. 

ING MFS Utilities Portfolio (Class I)    Investment Adviser:    Seeks total return. 
    Directed Services LLC     
    Subadviser:     
    Massachusetts Financial Services     
    Company     

ING Oppenheimer Main Street    Investment Adviser:    Seeks long-term growth of capital and 
Portfolio ® (Class I)    Directed Services LLC    future income. 
    Subadviser:     
    OppenheimerFunds, Inc.     

ING PIMCO Core Bond Portfolio    Investment Adviser:    Seeks maximum total return, consistent 
(Class I)    Directed Services LLC    with preservation of capital and prudent 
    Subadviser:    investment management. 
    Pacific Investment Management     
    Company LLC     

ING Pioneer Fund Portfolio    Investment Adviser:    Seeks reasonable income and capital 
(Class I)    Directed Services LLC    growth. 
    Subadviser:     
    Pioneer Investment Management, Inc.     

ING Pioneer Mid Cap Value    Investment Adviser:    Seeks capital appreciation. 
Portfolio (Class I)    Directed Services LLC     
    Subadviser:     
    Pioneer Investment Management, Inc.     

ING Stock Index Portfolio    Investment Adviser:    Seeks total return. 
(Class I)    Directed Services LLC     
    Subadviser:     
    ING Investment Management Co.     

ING T. Rowe Price Capital    Investment Adviser:    Seeks, over the long-term, a high total 
Appreciation Portfolio (Class I)    Directed Services LLC    investment return, consistent with the 
    Subadviser:    preservation of capital and prudent 
    T. Rowe Price Associates, Inc.    investment risk. 


ING T. Rowe Price Equity    Investment Adviser:    Seeks substantial dividend income as 
Income Portfolio (Class I)    Directed Services LLC    well as long-term growth of capital. 
    Subadviser:     
    T. Rowe Price Associates, Inc.     


B-4


                 Investment Adviser/     
                         Fund Name                             Subadviser                 Investment Objective 



ING Van Kampen Capital    Investment Adviser:    Seeks long-term capital appreciation. 
Growth Portfolio (Class I)    Directed Services LLC     
    Subadviser:     
    Morgan Stanley Investment     
    Management, Inc. (d/b/a Van Kampen)     

ING Van Kampen Growth and    Investment Adviser:    Seeks long-term growth of capital and 
Income Portfolio (Class S)    Directed Services LLC    income. 
    Subadviser:     
    Morgan Stanley Investment     
    Management, Inc. (d/b/a Van Kampen)     

ING VP Index Plus International    Investment Adviser:    Seeks to outperform the total return 
Equity Portfolio (Class S)    ING Investments, LLC    performance of the Morgan Stanley 
    Subadviser:    Capital International Europe 
    ING Investment Management    Australasia and Far East® Index 
    Advisors, B. V.    (“MSCI EAFE® Index”), while 
        maintaining a market level of risk. 

ING Wells Fargo Small Cap    Investment Adviser:    Seeks long-term capital appreciation. 
Disciplined Portfolio (Class I)    Directed Services LLC     
    Subadviser:     
    Wells Capital Management, Inc.     

ING Baron Small Cap Growth    Investment Adviser:    Seeks capital appreciation. 
Portfolio (Initial Class)    Directed Services LLC     
    Subadviser:     
    BAMCO, Inc.     

ING Columbia Small Cap Value    Investment Adviser:    Seeks long-term growth of capital. 
II Portfolio (Initial Class)    Directed Services LLC     
    Subadviser:     
    Columbia Management Advisors, LLC     

ING JP Morgan Mid Cap Value    Investment Adviser:    Seeks growth from capital appreciation. 
Portfolio (Initial Class)    Directed Services LLC     
    Subadviser:     
    J.P. Morgan Investment Management     
    Inc.     

ING Neuberger Berman    Investment Adviser:    Seeks capital growth. 
Partners Portfolio (Initial Class)    Directed Services LLC     
    Subadviser:     
    Neuberger Berman Management Inc.     

ING Oppenheimer Global    Investment Adviser:    Seeks capital appreciation. 
Portfolio (Initial Class)    Directed Services LLC     
    Subadviser:     
    OppenheimerFunds, Inc.     

ING Oppenheimer Strategic    Investment Adviser:    Seeks a high level of current income 
Income Portfolio (Service Class)    Directed Services LLC    principally derived from interest on 
    Subadviser:    debt securities. 
    OppenheimerFunds, Inc.     

ING Pioneer High Yield    Investment Adviser:    Seeks to maximize total return through 
Portfolio (Initial Class)    Directed Services LLC    income and capital appreciation. 
    Subadviser:     
    Pioneer Investment Management, Inc.     


B-5


                 Investment Adviser/     
                         Fund Name                             Subadviser                 Investment Objective 



ING T. Rowe Price Diversified Mid    Investment Adviser:    Seeks long-term capital appreciation. 
Cap Growth Portfolio (Initial Class)    Directed Services LLC     
    Subadviser:     
    T. Rowe Price Associates, Inc.     

ING UBS U.S. Large Cap Equity    Investment Adviser:    Seeks long-term growth of capital and 
Portfolio (Initial Class)    Directed Services LLC    future income. 
    Subadviser:     
    UBS Global Asset Management     
    (Americas) Inc.     

ING Van Kampen Comstock    Investment Adviser:    Seeks capital growth and income. 
Portfolio (Initial Class)    Directed Services LLC     
    Subadviser:     
    Morgan Stanley Investment     
    Management, Inc. (d/b/a Van Kampen)     

ING Van Kampen Equity and    Investment Adviser:    Seeks total return, consisting of long- 
Income Portfolio (Initial Class)    Directed Services LLC    term capital appreciation and current 
    Subadviser:    income. 
    Morgan Stanley Investment     
    Management, Inc. (d/b/a Van Kampen)     

ING VP Balanced Portfolio, Inc    Investment Adviser:    Seeks to maximize investment return, 
(Class I)    ING Investments, LLC    consistent with reasonable safety of 
    Subadviser:    principal, by investing in a diversified 
    ING Investment Management Co.    portfolio of one or more of the 
        following asset classes: stocks, bonds 
        and cash equivalents, based on the 
        judgment of the portfolio’s 
        management, of which of those sectors 
        or mix thereof offers the best 
        investment prospects. 

ING VP Intermediate Bond    Investment Adviser:    Seeks to maximize total return 
Portfolio (Class I)    ING Investments, LLC    consistent with reasonable risk, through 
    Subadviser:    investment in a diversified portfolio 
    ING Investment Management Co.    consisting primarily of debt securities. 


ING Lehman Brothers U.S.    Investment Adviser:    Seeks investment results (before fees 
Aggregate Bond Index ® Portfolio    ING Investments, LLC    and expenses) that correspond to the 
(Class I)    Subadviser:    total return of the Lehman Brothers 
    Lehman Brothers Asset Management    U.S. Aggregate Bond Index ® . 
    LLC     

ING RussellTM Small Cap Index    Investment Adviser:    Seeks investment results (before fees 
Portfolio (Class I)    ING Investments, LLC    and expenses) that correspond to the 
    Subadviser:    total return of the Russell 2000® Index. 
    ING Investment Management Co.     

ING VP Index Plus LargeCap    Investment Adviser:    Seeks to outperform the total return 
Portfolio (Class I)    ING Investments, LLC    performance of the Standard & Poor’s 
    Subadviser:    500 Composite Stock Price Index (S&P 
    ING Investment Management Co.    500 Index), while maintaining a market 
        level of risk. 


B-6


                 Investment Adviser/     
                         Fund Name                             Subadviser                 Investment Objective 



ING VP Index Plus MidCap    Investment Adviser:    Seeks to outperform the total return 
Portfolio (Class I)    ING Investments, LLC    performance of the Standard & Poor’s 
    Subadviser:    MidCap 400 Index (S&P MidCap 400 
    ING Investment Management Co.    Index) while maintaining a market 
        level of risk. 

ING VP Index Plus SmallCap    Investment Adviser:    Seeks to outperform the total return 
Portfolio (Class I)    ING Investments, LLC    performance of the Standard & Poor’s 
    Subadviser:    SmallCap 600 Index (S&P SmallCap 
    ING Investment Management Co.    600 Index) while maintaining a market 
        level of risk. 

ING VP SmallCap Opportunities    Investment Adviser:    Seeks long-term capital appreciation. 
Portfolio (Class I)    ING Investments, LLC     
    Subadviser:     
    ING Investment Management Co.     

Neuberger Berman AMT    Investment Adviser:    Seeks long-term growth of capital by 
Socially Responsive Portfolio®    Neuberger Berman Management Inc.    investing primarily in securities of 
(Class I)    Subadviser:    companies that meet the fund’s 
    Neuberger Berman, LLC    financial criteria and social policy. 



B-7


APPENDIX C

Performance Information and Condensed Financial Information

Performance Information

From time to time, ReliaStar Life may advertise or include in sales literature yields, effective yields and total returns for the available Subaccounts. These figures are based on historical earnings and do not indicate or project future performance.

Yields and total returns for the Subaccounts are based on the investment performance of the corresponding Funds. The performance in part reflects the Funds’ expenses. See the prospectuses for the Funds.

The yield of the Subaccount investing in money market portfolios such as the ING Liquid Assets Portfolio refers to the annualized income generated by an investment in the Subaccount over a specified seven-day period. The yield is calculated by assuming that the income generated for that seven-day period is generated each seven-day period over a 52-week period and is shown as a percentage of the investment.

The yield of a Subaccount (except money market portfolios such as the ING Liquid Assets Portfolio) refers to the annualized income generated by an investment in the Subaccount over a specified 30-day or one-month period. The yield is calculated by assuming that the income generated by the investment during that 30-day or one-month period is generated each period over a 12-month period and is shown as a percentage of the investment.

Total returns generally will be presented in “standardized” format. This means, among other things, that performance will be shown from the date on which a Fund was first available in the Variable Account. In some instances, “non-standardized” returns may be shown from prior to the inception date of the Variable Account. Nonstandardized information will be accompanied by standardized information. ReliaStar Life will not show nonstandardized performance unless ReliaStar Life also shows standardized performance.

When a Subaccount has been in operation for one, five and ten years, respectively, the average annual total return for these periods will be provided. For periods prior to the date the Subaccount commenced operations, nonstandardized performance information for contracts funded by the Subaccounts will be calculated based on the performance of the Funds and the assumption that the Subaccounts were in existence for the same periods as those indicated for the Funds, with the level of contract charges that were in effect at the inception of the Subaccounts for the contracts.

ReliaStar Life may, from time to time, also disclose yield and total returns for the Funds, including such disclosure for periods prior to the dates the Subaccounts commenced operations.

ReliaStar Life may also report other information including the effect of tax-deferred compounding on a Subaccount’s investment returns, or returns in general, which may be illustrated by tables, graphs or charts.

With respect to performance reporting it is important to remember that past performance does not guarantee future results. Current performance may be higher or lower than the performance shown and actual investment returns and principal values will fluctuate so that shares and/or units, at redemption, may be worth more or less than their original cost.

C-1


CONDENSED FINANCIAL INFORMATION

The following table shows, for each subaccount of the Variable Account, the value of a subaccount Accumulation Unit as they are invested in Funds at the dates shown, and the total number of subaccount Accumulation Units outstanding at the end of each period.

TABLE I

Year Ended December 31

       2007       2006           2005           2004           2003           2002           2001           2000           1999           1998 
 
AMERICAN FUNDS INSURANCE SERIES - GROWTH                                         
FUND                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period     $13.15     $12.10       $10.63                             
Value at end of period     $14.57     $13.15       $12.10                             
Number of accumulation units outstanding at end of period    174,191    202,364     188,279                             
AMERICAN FUNDS INSURANCE SERIES - GROWTH                                         
INCOME FUND                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period     $12.56     $11.06       $10.10                             
Value at end of period     $13.02     $12.56       $11.06                             
Number of accumulation units outstanding at end of period    118,879    143,882     153,073                             
AMERICAN FUNDS INSURANCE SERIES -                                         
INTERNATIONAL FUND                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period     $14.50     $12.36       $10.20                             
Value at end of period     $17.17     $14.50       $12.36                             
Number of accumulation units outstanding at end of period    142,211    148,217     130,550                             
FIDELITY® VIP CONTRAFUND® PORTFOLIO                                         
Value at beginning of period     $36.36     $33.00       $28.62       $25.13       $19.84    $22.1874    $25.6395    $27.8416    $22.7206    $17.7248 
Value at end of period     $42.17     $36.36       $33.00       $28.62       $25.13       $19.84    $22.1874    $25.6395    $27.8416    $22.7206 
Number of accumulation units outstanding at end of period    613,349    807,671    1,131,052    1,478,830    1,816,561    2,009,345    2,545,232    3,048,087    3,388,151    3,002,878 
FIDELITY® VIP EQUITY-INCOME PORTFOLIO                                         
Value at beginning of period     $33.06     $27.89       $26.72       $24.29       $18.90    $23.0729    $24.6181    $23.0232    $21.9558    $19.9442 
Value at end of period     $33.10     $33.06       $27.89       $26.72       $24.29       $18.90    $23.0729    $24.6181    $23.0232    $21.9558 
Number of accumulation units outstanding at end of period    623,519    834,836    1,172,633    1,621,767    1,985,202    2,122,244    2,584,578    2,952,877    3,543,768    4,241,041 
FIDELITY® VIP INVESTMENT GRADE BOND                                         
PORTFOLIO                                         
Value at beginning of period     $17.79     $17.29       $17.15       $16.65       $16.05    $14.7484       $28.70    $12.5711    $12.8823    $12.0011 
Value at end of period     $18.31     $17.79       $17.29       $17.15       $16.65       $16.05    $14.7484       $28.70    $12.5711    $12.8823 
Number of accumulation units outstanding at end of period    276,395    428,235     691,373    1,071,855    1,441,591    1,718,651    1,602,587    1,291,171    1,302,913    1,152,135 

C-2


                                                                                                                   Condensed Financial Information (continued)                 

 
 
       2007       2006       2005       2004    2003    2002    2001    2000    1999    1998 
 
ING ALLIANCEBERNSTEIN MID CAP GROWTH                                         
PORTFOLIO                                         
(Funds were first received in this option during September 2005)                                         
Value at beginning of period     $12.82     $12.74     $12.02                             
Value at end of period     $14.04     $12.82     $12.74                             
Number of accumulation units outstanding at end of period     16,635     10,927       1,398                             
ING AMERICAN CENTURY LARGE COMPANY VALUE                                         
PORTFOLIO                                         
(Funds were first received in this option during July 2005)                                         
Value at beginning of period     $12.53     $10.63     $10.35                             
Value at end of period     $12.15     $12.53     $10.63                             
Number of accumulation units outstanding at end of period             53           909           821                             
ING AMERICAN CENTURY SMALL-MID CAP VALUE                                         
PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period     $12.97     $11.36     $10.51                             
Value at end of period     $12.44     $12.97     $11.36                             
Number of accumulation units outstanding at end of period       3,619       5,485       9,953                             
ING BARON SMALL CAP GROWTH PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period     $12.58     $11.04     $10.38                             
Value at end of period     $13.19     $12.58     $11.04                             
Number of accumulation units outstanding at end of period     37,080     33,166     26,510                             
ING BLACKROCK LARGE CAP GROWTH PORTFOLIO                                         
(Funds were first received in this option during April 2006)                                         
Value at beginning of period     $12.26     $11.95                                 
Value at end of period     $12.95     $12.26                                 
Number of accumulation units outstanding at end of period       5,151       3,773                                 
ING BLACKROCK LARGE CAP VALUE PORTFOLIO                                         
(Since May 17, 2004)                                         
Value at beginning of period     $13.11     $11.39     $10.94     $10.32                         
Value at end of period     $13.51     $13.11     $11.39     $10.94                         
Number of accumulation units outstanding at end of period    170,507    241,275    342,999    493,592                         
ING COLUMBIA SMALL CAP VALUE II PORTFOLIO                                         
(Funds were first received in this option during May 2006)                                         
Value at beginning of period     $10.07       $9.95                                 
Value at end of period     $10.25     $10.07                                 
Number of accumulation units outstanding at end of period       2,144           458                                 
ING EVERGREEN HEALTH SCIENCES PORTFOLIO                                         
(Funds were first received in this option during April 2006)                                         
Value at beginning of period     $12.26     $11.40                                 
Value at end of period     $13.15     $12.26                                 
Number of accumulation units outstanding at end of period       2,436       9,749                                 

C-3


    Condensed Financial Information (continued)                 

 
 
                         2007           2006           2005    2004    2003    2002    2001    2000    1999    1998 
 
ING EVERGREEN OMEGA PORTFOLIO                                         
(Funds were first received in this option during September 2005)                                     
Value at beginning of period                       $11.89       $11.39       $11.10                             
Value at end of period                       $13.13       $11.89       $11.39                             
Number of accumulation units outstanding at end of period                 1,470,754    1,931,323    2,641,223                             
ING FMRSM DIVERSIFIED MID CAP PORTFOLIO                                         
(Funds were first received in this option during April 2006)                                         
Value at beginning of period                         $9.86           $9.99                                 
Value at end of period                       $11.16           $9.86                                 
Number of accumulation units outstanding at end of period                       11,930       12,229                                 
ING FMRSM LARGE CAP GROWTH PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period                       $10.69       $10.54       $10.07                             
Value at end of period                       $10.94       $10.69       $10.54                             
Number of accumulation units outstanding at end of period                 1,631,752    2,242,277    1,200,206                             
ING FMRSM MID CAP GROWTH PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period                       $11.87       $11.48       $10.55                             
Value at end of period                       $11.89       $11.87       $11.48                             
Number of accumulation units outstanding at end of period                           132             132           6,858                             
ING GLOBAL RESOURCES PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period                       $16.22       $13.51           $9.51                             
Value at end of period                       $21.37       $16.22       $13.51                             
Number of accumulation units outstanding at end of period                       44,354       79,982       54,568                             
ING JPMORGAN EMERGING MARKETS EQUITY                                         
PORTFOLIO                                         
(Funds were first received in this option during May 2006)                                         
Value at beginning of period                       $11.39       $10.48                                 
Value at end of period                       $15.59       $11.39                                 
Number of accumulation units outstanding at end of period                       30,179       33,573                                 
ING JPMORGAN MID CAP VALUE PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period                       $12.62       $10.95       $10.17                             
Value at end of period                       $12.77       $12.62       $10.95                             
Number of accumulation units outstanding at end of period                       31,093       43,161       42,804                             

C-4


                                                                                                                   Condensed Financial Information (continued)                 

 
 
       2007           2006           2005       2004    2003    2002    2001    2000    1999    1998 
 
ING JPMORGAN SMALL CAP CORE EQUITY                                         
PORTFOLIO                                         
(Since June 4, 2004)                                         
Value at beginning of period     $14.16       $12.28       $11.97       $9.96                         
Value at end of period     $13.75       $14.16       $12.28     $11.97                         
Number of accumulation units outstanding at end of period    347,644     514,301     792,826    337,948                         
ING JPMORGAN VALUE OPPORTUNITIES PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period     $12.66       $10.66       $10.25                             
Value at end of period     $12.37       $12.66       $10.66                             
Number of accumulation units outstanding at end of period    905,718    1,175,261    1,579,028                             
ING JULIUS BAER FOREIGN PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period     $15.04       $11.76           $9.82                             
Value at end of period     $17.31       $15.04       $11.76                             
Number of accumulation units outstanding at end of period     41,358       40,421       30,413                             
ING LEGG MASON PARTNERS AGGRESSIVE GROWTH                                         
PORTFOLIO                                         
(Funds were first received in this option during July 2005)                                         
Value at beginning of period     $12.97       $11.93       $11.26                             
Value at end of period     $12.59       $12.97       $11.93                             
Number of accumulation units outstanding at end of period       1,569           2,010           1,583                             
ING LEGG MASON VALUE PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period     $12.11       $11.50       $10.19                             
Value at end of period     $11.26       $12.11       $11.50                             
Number of accumulation units outstanding at end of period       2,484       12,037           7,019                             
ING LIFESTYLE AGGRESSIVE GROWTH PORTFOLIO                                         
(Funds were first received in this option during May 2006)                                         
Value at beginning of period     $14.33       $13.49                                 
Value at end of period     $14.63       $14.33                                 
Number of accumulation units outstanding at end of period       9,913           9,204                                 
ING LIFESTYLE GROWTH PORTFOLIO                                         
(Funds were first received in this option during June 2006)                                         
Value at beginning of period     $13.69       $12.09                                 
Value at end of period     $14.06       $13.69                                 
Number of accumulation units outstanding at end of period       9,065           3,237                                 
ING LIFESTYLE MODERATE GROWTH PORTFOLIO                                         
(Funds were first received in this option during May 2006)                                         
Value at beginning of period     $13.04       $11.89                                 
Value at end of period     $13.49       $13.04                                 
Number of accumulation units outstanding at end of period     33,789       24,680                                 

C-5


    Condensed Financial Information (continued)                 

 
 
                         2007       2006       2005           2004    2003    2002    2001    2000    1999    1998 
 
ING LIFESTYLE MODERATE PORTFOLIO                                         
(Funds were first received in this option during May 2006)                                         
Value at beginning of period                       $12.57     $11.84                                 
Value at end of period                       $13.05     $12.57                                 
Number of accumulation units outstanding at end of period                       12,488     29,543                                 
ING LIMITED MATURITY BOND PORTFOLIO                                         
(Funds were first received in this option during June 2005)                                         
Value at beginning of period                       $10.27     $10.03     $10.01                             
Value at end of period                       $10.71     $10.27     $10.03                             
Number of accumulation units outstanding at end of period                   291,662    401,552     11,931                             
ING LIQUID ASSETS PORTFOLIO                                         
(Since May 10, 2004)                                         
Value at beginning of period                       $10.51     $10.15       $9.99       $10.00                         
Value at end of period                       $10.90     $10.51     $10.15           $9.99                         
Number of accumulation units outstanding at end of period                   793,479    769,051    970,786    1,405,296                         
ING LORD ABBETT AFFILIATED PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period                       $12.86     $11.06     $10.34                             
Value at end of period                       $13.23     $12.86     $11.06                             
Number of accumulation units outstanding at end of period                           194       1,172       1,380                             
ING LORD ABBETT U.S. GOVERNMENT SECURITIES                                         
PORTFOLIO                                         
(Funds were first received in this option during July 2006)                                         
Value at beginning of period                       $10.43     $10.03                                 
Value at end of period                       $11.04     $10.43                                 
Number of accumulation units outstanding at end of period                       22,983     12,787                                 
ING MARSICO GROWTH PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period                       $11.93     $11.50     $10.09                             
Value at end of period                       $13.47     $11.93     $11.50                             
Number of accumulation units outstanding at end of period                       14,514     15,264       9,170                             
ING MARSICO INTERNATIONAL OPPORTUNITIES                                         
PORTFOLIO                                         
(Funds were first received in this option during June 2005)                                         
Value at beginning of period                       $15.25     $12.45     $10.16                             
Value at end of period                       $18.17     $15.25     $12.45                             
Number of accumulation units outstanding at end of period                   309,597    415,318    646,005                             
ING MFS TOTAL RETURN PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period                       $11.55     $10.44     $10.14                             
Value at end of period                       $11.88     $11.55     $10.44                             
Number of accumulation units outstanding at end of period                       11,848     12,948     16,322                             

C-6


                                                                                                                   Condensed Financial Information (continued)                 

 
 
           2007           2006           2005           2004    2003    2002    2001    2000    1999    1998 
 
ING MFS UTILITIES PORTFOLIO                                         
(Funds were first received in this option during September 2005)                                         
Value at beginning of period       $12.95       $10.02       $10.02                             
Value at end of period       $16.31       $12.95       $10.02                             
Number of accumulation units outstanding at end of period     177,283     238,766     240,264                             
ING OPPENHEIMER GLOBAL PORTFOLIO                                         
(Funds were first received in this option during April 2005)                                         
Value at beginning of period       $13.93       $11.98       $10.04                             
Value at end of period       $14.64       $13.93       $11.98                             
Number of accumulation units outstanding at end of period     719,366     987,160    1,384,718                             
ING OPPENHEIMER MAIN STREET PORTFOLIO®                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period       $12.59       $11.08       $10.14                             
Value at end of period       $12.98       $12.59       $11.08                             
Number of accumulation units outstanding at end of period           4,371           4,024             774                             
ING OPPENHEIMER STRATEGIC INCOME PORTFOLIO                                         
(Funds were first received in this option during June 2005)                                         
Value at beginning of period       $10.77       $10.09       $10.11                             
Value at end of period       $11.54       $10.77       $10.09                             
Number of accumulation units outstanding at end of period     134,254     173,717       18,735                             
ING OPPORTUNISTIC LARGE CAP VALUE PORTFOLIO                                         
(Funds were first received in this option during December 2005)                                         
Value at beginning of period       $11.35           $9.92           $9.98                             
Value at end of period       $11.53       $11.35           $9.92                             
Number of accumulation units outstanding at end of period       19,788       38,912       64,275                             
ING PIMCO TOTAL RETURN PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period       $10.36       $10.08       $10.07                             
Value at end of period       $11.20       $10.36       $10.08                             
Number of accumulation units outstanding at end of period       30,740       38,670       31,552                             
ING PIONEER FUND PORTFOLIO                                         
(Funds were first received in this option during April 2006)                                         
Value at beginning of period       $12.65       $11.73                                 
Value at end of period       $13.15       $12.65                                 
Number of accumulation units outstanding at end of period           7,316           8,280                                 
ING PIONEER MID CAP VALUE PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period       $12.13       $10.92       $10.19                             
Value at end of period       $12.65       $12.13       $10.92                             
Number of accumulation units outstanding at end of period           3,310           2,645           6,724                             
ING STOCK INDEX PORTFOLIO                                         
(Since June 22, 2004)                                         
Value at beginning of period       $12.87       $11.29       $10.95       $10.24                         
Value at end of period       $13.36       $12.87       $11.29       $10.95                         
Number of accumulation units outstanding at end of period    1,408,512    1,806,092    2,519,398    3,644,867                         

C-7


                                                                                                                   Condensed Financial Information (continued)                 

 
 
       2007           2006           2005       2004    2003    2002    2001    2000    1999    1998 
 
ING T. ROWE PRICE CAPITAL APPRECIATION                                         
PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period     $12.51       $11.03       $10.19                             
Value at end of period     $12.91       $12.51       $11.03                             
Number of accumulation units outstanding at end of period     95,844     101,957       75,316                             
ING T. ROWE PRICE DIVERSIFIED MID CAP GROWTH                                         
PORTFOLIO                                         
(Funds were first received in this option during April 2005)                                         
Value at beginning of period     $12.58       $11.69       $10.03                             
Value at end of period     $14.06       $12.58       $11.69                             
Number of accumulation units outstanding at end of period    708,539    1,029,207    1,558,061                             
ING T. ROWE PRICE EQUITY INCOME PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period     $12.59       $10.69       $10.36                             
Value at end of period     $12.83       $12.59       $10.69                             
Number of accumulation units outstanding at end of period     32,477       46,197       37,296                             
ING UBS U.S. ALLOCATION PORTFOLIO                                         
(Funds were first received in this option during June 2005)                                         
Value at beginning of period     $11.86       $10.83       $10.38                             
Value at end of period     $11.91       $11.86       $10.83                             
Number of accumulation units outstanding at end of period             21               61               62                             
ING UBS U.S. LARGE CAP EQUITY PORTFOLIO                                         
(Funds were first received in this option during July 2005)                                         
Value at beginning of period     $12.69       $11.24       $10.74                             
Value at end of period     $12.66       $12.69       $11.24                             
Number of accumulation units outstanding at end of period    120,796     172,164     228,257                             
ING VAN KAMPEN CAPITAL GROWTH PORTFOLIO                                         
(Since June 25, 2004)                                         
Value at beginning of period     $12.46       $12.11       $10.63     $10.16                         
Value at end of period     $14.93       $12.46       $12.11     $10.63                         
Number of accumulation units outstanding at end of period    282,429     426,952     606,204    848,263                         
ING VAN KAMPEN COMSTOCK PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period     $12.17       $10.62       $10.21                             
Value at end of period     $11.75       $12.17       $10.62                             
Number of accumulation units outstanding at end of period     13,021       17,889       25,740                             
ING VAN KAMPEN EQUITY AND INCOME PORTFOLIO                                         
(Funds were first received in this option during June 2005)                                         
Value at beginning of period     $12.10       $10.89       $10.29                             
Value at end of period     $12.36       $12.10       $10.89                             
Number of accumulation units outstanding at end of period     15,219       16,737           3,714                             

C-8


                                                                                                                   Condensed Financial Information (continued)                 

 
 
       2007       2006       2005       2004       2003       2002       2001       2000           1999           1998 
 
ING VAN KAMPEN GROWTH AND INCOME                                         
PORTFOLIO                                         
(Funds were first received in this option during November 2005)                                         
Value at beginning of period     $12.73     $11.13     $11.09                             
Value at end of period     $12.88     $12.73     $11.13                             
Number of accumulation units outstanding at end of period    271,078    362,385       2,190                             
ING VP BALANCED PORTFOLIO                                         
(Funds were first received in this option during April 2006)                                         
Value at beginning of period     $10.51     $10.01                                 
Value at end of period     $10.94     $10.51                                 
Number of accumulation units outstanding at end of period    340,649    423,116                                 
ING VP GROWTH AND INCOME PORTFOLIO                                         
(Funds were first received in this option during November 2007)                                         
Value at beginning of period     $10.00                                     
Value at end of period       $9.96                                     
Number of accumulation units outstanding at end of period     81,832                                     
ING VP HIGH YIELD BOND PORTFOLIO                                         
Value at beginning of period     $10.85     $10.02     $10.01       $9.41       $8.13    $8.3374    $8.3965    $9.6354    $10.0955    $10.3496 
Value at end of period     $10.90     $10.85     $10.02     $10.01       $9.41       $8.13    $8.3374    $8.3965     $9.6354    $10.0955 
Number of accumulation units outstanding at end of period    414,520    537,657    166,935    199,216    496,538    237,293    266,875    283,066     368,743     389,807 
ING VP INDEX PLUS INTERNATIONAL EQUITY                                         
PORTFOLIO                                         
(Funds were first received in this option during April 2006)                                         
Value at beginning of period     $12.79     $11.48                                 
Value at end of period     $13.64     $12.79                                 
Number of accumulation units outstanding at end of period    159,544    202,822                                 
ING VP INDEX PLUS LARGECAP PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period     $12.41     $10.98     $10.29                             
Value at end of period     $12.85     $12.41     $10.98                             
Number of accumulation units outstanding at end of period       2,244     13,209       3,972                             
ING VP INDEX PLUS MIDCAP PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period     $12.52     $11.60     $10.59                             
Value at end of period     $13.02     $12.52     $11.60                             
Number of accumulation units outstanding at end of period     74,122    100,409    106,720                             
ING VP INDEX PLUS SMALLCAP PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period     $12.92     $11.51     $10.16                             
Value at end of period     $11.94     $12.92     $11.51                             
Number of accumulation units outstanding at end of period     59,344     87,105     97,075                             

C-9


    Condensed Financial Information (continued)                 

 
 
                         2007       2006       2005           2004       2003           2002           2001           2000           1999           1998 
 
ING VP INTERMEDIATE BOND PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period                       $10.39     $10.12     $10.02                             
Value at end of period                       $10.86     $10.39     $10.12                             
Number of accumulation units outstanding at end of period                       57,798     48,426     29,572                             
ING VP INTERNATIONAL VALUE PORTFOLIO                                         
Value at beginning of period                       $26.01     $20.38     $18.88       $16.31     $12.73    $15.2495    $17.5072    $17.2046    $11.6165    $10.0738 
Value at end of period                       $29.10     $26.01     $20.38       $18.88     $16.31       $12.73    $15.2495    $17.5072    $17.2046    $11.6165 
Number of accumulation units outstanding at end of period                   116,618    188,003    325,902     503,669    547,278     406,618     368,448     349,793     284,973     232,846 
ING VP MIDCAP OPPORTUNITIES PORTFOLIO                                         
(Since May 1, 2000)                                         
Value at beginning of period                         $7.45       $7.01       $6.44           $5.85       $4.34     $5.9396     $8.8561         $0.00         
Value at end of period                         $9.24       $7.45       $7.01           $6.44       $5.85         $4.34     $5.9396     $8.8561         
Number of accumulation units outstanding at end of period                   515,659    732,188    979,332    1,286,006    119,974       78,226     104,414       63,345         
ING VP REAL ESTATE PORTFOLIO                                         
(Funds were first received in this option during May 2005)                                         
Value at beginning of period                       $15.46     $11.54     $10.00                             
Value at end of period                       $12.75     $15.46     $11.54                             
Number of accumulation units outstanding at end of period                       24,422     69,209     25,815                             
ING VP SMALLCAP OPPORTUNITIES PORTFOLIO                                         
Value at beginning of period                       $29.07     $26.18     $24.33       $22.40     $16.39    $29.4598    $42.1707    $42.3014     $17.795    $15.3827 
Value at end of period                       $31.55     $29.07     $26.18       $24.33     $22.40       $16.39    $29.4598    $42.1707    $42.3014     $17.795 
Number of accumulation units outstanding at end of period                   109,698    161,191    220,745     301,141    410,529     620,847     773,226     860,669     434,003     323,803 
ING VP STRATEGIC ALLOCATION CONSERVATIVE                                         
PORTFOLIO                                         
(Funds were first received in this option during August 2005)                                         
Value at beginning of period                       $11.19     $10.47     $10.38                             
Value at end of period                       $11.68     $11.19     $10.47                             
Number of accumulation units outstanding at end of period                         1,304       1,305           807                             
ING VP STRATEGIC ALLOCATION GROWTH                                         
PORTFOLIO                                         
(Funds were first received in this option during August 2005)                                         
Value at beginning of period                       $12.25     $10.97     $10.65                             
Value at end of period                       $12.68     $12.25     $10.97                             
Number of accumulation units outstanding at end of period                         1,824       1,888       3,979                             

C-10


    Condensed Financial Information (continued)                 

 
 
                         2007     2006     2005     2004     2003           2002           2001           2000           1999    1998 
 
ING VP STRATEGIC ALLOCATION MODERATE                                         
PORTFOLIO                                         
(Funds were first received in this option during July 2005)                                         
Value at beginning of period                       $11.74    $10.71    $10.53                             
Value at end of period                       $12.21    $11.74    $10.71                             
Number of accumulation units outstanding at end of period                         4,187     4,273     2,775                             
ING WELLS FARGO SMALL CAP DISCIPLINED                                         
PORTFOLIO                                         
(Funds were first received in this option during May 2006)                                         
Value at beginning of period                       $10.46    $10.00                                 
Value at end of period                         $9.96    $10.46                                 
Number of accumulation units outstanding at end of period                         1,729     1,903                                 
NEUBERGER BERMAN AMT SOCIALLY RESPONSIVE                                     
PORTFOLIO®                                         
(Since April 30, 1999)                                         
Value at beginning of period                       $14.46    $12.90    $12.24    $10.95     $8.26     $9.8309    $10.3394    $10.6549         $0.00     
Value at end of period                       $15.35    $14.46    $12.90    $12.24    $10.95    $10.3394     $9.8309    $10.3394    $10.6549     
Number of accumulation units outstanding at end of period                       27,008    35,585    47,808    53,325    63,728       48,267       62,695       47,083       22,281     

C-11


APPENDIX D

INFORMATION REGARDING CLOSED SUBACCOUNTS

The subaccounts that invest in the following Funds have been closed to new investment:

  • Fidelity® VIP Investment Grade Bond Portfolio
  • ING BlackRock Large Cap Value Portfolio
  • ING Lord Abbett Affiliated Portfolio
  • ING Opportunistic Large Cap Value Portfolio 1
  • ING American Century Large Company Value Portfolio
  • ING American Century Small-Mid Cap Value Portfolio
  • ING Legg Mason Partners Aggressive Growth Portfolio
  • ING PIMCO Total Return Portfolio
  • ING VP Strategic Allocation Conservative Portfolio
  • ING VP Strategic Allocation Growth Portfolio
  • ING VP Strategic Allocation Moderate Portfolio
  • ING VP High Yield Bond Portfolio
  • ING VP International Value Portfolio
  • ING VP MidCap Opportunities Portfolio 2
  • ING VP Real Estate Portfolio

Contract owners who have Contract Value allocated to one or more of the Subaccounts that correspond to these Funds may leave their Contract Value in those Subaccounts, but future allocations and transfers into those Subaccounts are prohibited. If your most recent premium allocation instructions includes a Subaccount that corresponds to one of these Funds, premium received that would have been allocated to a Subaccount corresponding to one of these Funds may be automatically allocated among the other available Subaccounts according to your most recent premium allocation instructions. If your most recent allocation instructions do not include any available Funds, you must provide us with alternative allocation instructions or the premium payment will be returned to you. You may give us alternative allocation instructions by contacting our:

  ING Customer Service Center
P.O. Box 5050
Minot, ND 58703
1-877-884-5050

1      Prior to April 28 2008, this Fund was known as the ING VP Value Opportunity Portfolio.
 
2      Effective April 28, 2008, the ING Mid Cap Growth and Income Portfolio (formerly known as the ING FMRSM Mid Cap Growth Portfolio) merged with and into the ING VP MidCap Opportunities Portfolio. Your investment in the Subaccount that invested in the ING Mid Cap Growth Portfolio automatically became an investment in the ING VP MidCap Opportunities Portfolio subaccount with an equal total net asset value.
 

D-1


STATEMENT OF ADDITIONAL INFORMATION

-----------------
SELECT*ANNUITY III
INDIVIDUAL DEFERRED VARIABLE/FIXED ANNUITY CONTRACTS
ISSUED BY
RELIASTAR SELECT VARIABLE ACCOUNT OF
RELIASTAR LIFE INSURANCE COMPANY

This Statement of Additional Information is not a prospectus, but should be read in conjunction with the prospectus dated April 28, 2008, (the "prospectus") relating to the Select*Annuity III Individual Deferred Variable/Fixed Annuity contracts issued by ReliaStar Select Variable Account (the "Variable Account") and ReliaStar Life Insurance Company ("ReliaStar Life"). Much of the information contained in this Statement of Additional Information expands upon subjects discussed in the prospectus. A copy of the prospectus may be obtained from the ING Service Center at P.O. Box 5050, Minot, North Dakota 58703, by calling 1-877-884-5050 or by accessing the SEC's website at http://www.sec.gov.

Capitalized terms used in this Statement of Additional Information that are not otherwise defined herein shall have the meanings given to them in the prospectus.

                                                                                     TABLE OF CONTENTS     
    Page 
Introduction       2 
Administration of the Contracts       2 
Underwriters       2 
Custody of Assets       2 
Experts       2 
Sales Material and Advertising       3 
Financial Statements       3 
Financial Statements of ReliaStar Select Variable Account       1 
Statutory Basis Financial Statements of ReliaStar Life Insurance Company       1 
 
 
                                         The date of this Statement of Additional Information is April 28, 2008.     


INTRODUCTION

The Select*Annuity III contracts (the "contracts") are flexible purchase payment individual deferred variable/fixed annuity contracts. The contracts are sold both as non-qualified contracts and/or in connection with retirement plans which may qualify for special federal tax treatment under the Internal Revenue Code. (See "Federal Tax Status" in the prospectus.) Annuity payouts under the contracts are deferred until a selected later date.

Purchase payments may be allocated to one or more of the available subaccounts of the Variable Account, a separate account of ReliaStar Life, and/or to the Fixed Account (which is the general account of ReliaStar Life). Purchase payments allocated to one or more of the available subaccounts of the Variable Account, as selected by the Contract Owner, will be invested in shares at net asset value of one or more of a group of Funds.

ADMINISTRATION OF THE CONTRACTS

ReliaStar Life performs certain administrative functions ("Administrative Functions") relating to the contracts and the Variable Account in Minot, North Dakota. These functions include, among other things, maintaining the books and records of the Variable Account and the subaccounts, and maintaining records of the name, address, taxpayer identification number, contract number, type of contract issued to each owner, Contract Value and other pertinent information necessary to the administration and operation of the contracts. ReliaStar Life receives no payment for performing any of the Administrative Functions.

UNDERWRITERS

Effective January 1, 2004, ReliaStar Life’s affiliate, ING Financial Advisers, LLC, became the principal underwriter (distributor) for the contracts. ING Financial Advisers, LLC, a Delaware limited liability company, is registered as a broker-dealer with the SEC. ING Financial Advisers, LLC is also a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation. ING Financial Advisers, LLC’s principal office is located at One Orange Way, Windsor, CT 06095-477.

ING Financial Advisers, LLC offers the securities under the contracts on a continuous basis, however, the contract is no longer available to new purchasers. ReliaStar Life pays ING Financial Advisers, LLC under a distribution agreement. For the years ended December 31, 2007, 2006 and 2005, ING Financial Advisers, LLC was paid fees by ReliaStar Life with respect to distribution of the Select*Annuity III contract aggregating $103,569, $138,168, and $144,759, respectively.

CUSTODY OF ASSETS

ReliaStar Life maintains custody of the assets of the Variable Account. As custodian, ReliaStar Life holds cash balances for the Variable Account pending investment in the Funds or distribution. The Fund shares owned by the subaccounts are reflected only on the records of the Funds, and are not issued in certificated form.

EXPERTS

The statements of assets and liabilities of ReliaStar Select Variable Account as of December 31, 2007, and the related statements of operations and changes in net assets for the periods disclosed in the financial statements, and the statutory basis financial statements of ReliaStar Life Insurance Company as of December 31, 2007 and 2006, and for each of the three years in the period ended December 31, 2007, included in this Statement of Additional Information, have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports 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.

2


INTRODUCTION

The Select*Annuity III contracts (the "contracts") are flexible purchase payment individual deferred variable/fixed annuity contracts. The contracts are sold both as non-qualified contracts and/or in connection with retirement plans which may qualify for special federal tax treatment under the Internal Revenue Code. (See "Federal Tax Status" in the prospectus.) Annuity payouts under the contracts are deferred until a selected later date.

Purchase payments may be allocated to one or more of the available subaccounts of the Variable Account, a separate account of ReliaStar Life, and/or to the Fixed Account (which is the general account of ReliaStar Life). Purchase payments allocated to one or more of the available subaccounts of the Variable Account, as selected by the Contract Owner, will be invested in shares at net asset value of one or more of a group of Funds.

ADMINISTRATION OF THE CONTRACTS

ReliaStar Life performs certain administrative functions ("Administrative Functions") relating to the contracts and the Variable Account in Minot, North Dakota. These functions include, among other things, maintaining the books and records of the Variable Account and the subaccounts, and maintaining records of the name, address, taxpayer identification number, contract number, type of contract issued to each owner, Contract Value and other pertinent information necessary to the administration and operation of the contracts. ReliaStar Life receives no payment for performing any of the Administrative Functions.

UNDERWRITERS

Effective January 1, 2004, ReliaStar Life’s affiliate, ING Financial Advisers, LLC, became the principal underwriter (distributor) for the contracts. ING Financial Advisers, LLC, a Delaware limited liability company, is registered as a broker-dealer with the SEC. ING Financial Advisers, LLC is also a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation. ING Financial Advisers, LLC’s principal office is located at One Orange Way, Windsor, CT 06095-477.

ING Financial Advisers, LLC offers the securities under the contracts on a continuous basis, however, the contract is no longer available to new purchasers. ReliaStar Life pays ING Financial Advisers, LLC under a distribution agreement. For the years ended December 31, 2007, 2006 and 2005, ING Financial Advisers, LLC was paid fees by ReliaStar Life with respect to distribution of the Select*Annuity III contract aggregating $103,569, $138,168, and $144,759, respectively.

CUSTODY OF ASSETS

ReliaStar Life maintains custody of the assets of the Variable Account. As custodian, ReliaStar Life holds cash balances for the Variable Account pending investment in the Funds or distribution. The Fund shares owned by the subaccounts are reflected only on the records of the Funds, and are not issued in certificated form.

EXPERTS

The statements of assets and liabilities of ReliaStar Select Variable Account as of December 31, 2007, and the related statements of operations and changes in net assets for the periods disclosed in the financial statements, and the statutory basis financial statements of ReliaStar Life Insurance Company as of December 31, 2007 and 2006, and for each of the three years in the period ended December 31, 2007, included in this Statement of Additional Information, have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports 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.

2


SALES MATERIAL AND ADVERTISING

We may include hypothetical illustrations in our sales literature that explain the mathematical principles of dollar cost averaging, compounded interest, tax deferred accumulation, and the mechanics of variable annuity contracts. We may also discuss the difference between variable annuity contracts and other types of savings or investment products such as personal savings accounts and certificates of deposit.

We may distribute sales literature that compares the percentage change in accumulation unit values for any of the subaccounts to established market indices such as the Standard & Poor's 500 Stock Index and the Dow Jones Industrial Average or to the percentage change in values of other management investment companies that have investment objectives similar to the subaccount being compared.

We may publish in advertisements and reports, the ratings and other information assigned to us by one or more independent rating organizations such as A.M. Best Company, Duff & Phelps, Standard & Poor's Corporation and Moody's Investors Service, Inc. The purpose of the ratings is to reflect our financial strength and/or claims-paying ability. We may also quote ranking services such as Morningstar's Variable Annuity/Life Performance Report and Lipper's Variable Insurance Products Performance Analysis Service (VIPPAS), which rank variable annuity or life subaccounts or their underlying Funds by performance and/or investment objective. We may categorize the underlying Funds in terms of the asset classes they represent and use such categories in marketing materials for the contracts. We may illustrate in advertisements the performance of the underlying Funds, if accompanied by performance which also shows the performance of such Funds reduced by applicable charges under the Variable Account. We may also show in advertisements the portfolio holdings of the underlying Funds, updated at various intervals. From time to time, we will quote articles from newspapers and magazines or other publications or reports such as The Wall Street Journal, Money magazine, USA Today and The VARDS Report.

We may provide in advertising, sales literature, periodic publications or other materials information on various topics of interest to current and prospective contract holders or participants. These topics may include the relationship between sectors of the economy and the economy as a whole and its effect on various securities markets, investment strategies and techniques (such as value investing, market timing, dollar cost averaging, asset allocation, constant ratio transfer and portfolio rebalancing), the advantages and disadvantages of investing in tax-deferred and taxable investments, customer profiles and hypothetical purchase and investment scenarios, financial management and tax and retirement planning, and investment alternatives to certificates of deposit and other financial instruments, including comparison between the contracts and the characteristics of and market for such financial instruments.

FINANCIAL STATEMENTS

The financial statements of the Variable Account reflect the operations of the Variable Account as of and for the year ended December 31, 2007, and have been audited by Ernst & Young LLP, independent registered public accounting firm.

The statutory basis financial statements of ReliaStar Life as of December 31, 2007 and 2006, and for each of the three years in the period ended December 31, 2007, have been audited by Ernst & Young LLP, independent registered public accounting firm. The financial statements of ReliaStar Life should be distinguished from the financial statements of the Variable Account and should be considered only as bearing upon the ability of ReliaStar Life to meet its obligations under the contracts. They should not be considered as bearing on the investment performance of the assets held in the Variable Account. The statutory basis financial statements of ReliaStar Life as of December 31, 2007 and 2006, and for each of the three years in the period ended December 31, 2007, have been prepared on the basis of statutory accounting practices prescribed or permitted by the State of Minnesota Division of Insurance.

The primary business address of Ernst & Young LLP is Suite 1000, 55 Ivan Allen Jr. Boulevard, Atlanta, GA 30308.

3


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RELIASTAR LIFE INSURANCE COMPANY
RELIASTAR SELECT VARIABLE ACCOUNT
Financial Statements
Year ended December 31, 2007

Contents
 
Report of Independent Registered Public Accounting Firm    1 
 
Audited Financial Statements     
 
Statements of Assets and Liabilities    3 
Statements of Operations    19 
Statements of Changes in Net Assets    35 
Notes to Financial Statements    55 


RELIASTAR LIFE INSURANCE COMPANY
RELIASTAR SELECT VARIABLE ACCOUNT
Financial Statements
Year ended December 31, 2007

This page intentionally left blank.


Report of Independent Registered Public Accounting Firm

The Board of Directors and Participants
ReliaStar Life Insurance Company

We have audited the accompanying statements of assets and liabilities of the Divisions constituting ReliaStar Life Insurance Company ReliaStar Select Variable Account (the “Account”) as of December 31, 2007, and the related statements of operations and changes in net assets for the periods disclosed in the financial statements. These financial statements are the responsibility of the Account’s management. Our responsibility is to express an opinion on these financial statements based on our audits. The Account is comprised of the following Divisions:

American Funds Insurance Series:
American Funds Insurance Series® Growth Fund - Class 2
American Funds Insurance Series® Growth-Income Fund -
Class 2
American Funds Insurance Series® International Fund - Class 2
Fidelity® Variable Insurance Products:
Fidelity® VIP Equity-Income Portfolio - Initial Class
Fidelity® Variable Insurance Products II:
Fidelity® VIP Contrafund® Portfolio - Initial Class
Fidelity® VIP Index 500 Portfolio - Initial Class
Fidelity® Variable Insurance Products V:
Fidelity® VIP Investment Grade Bond Portfolio - Initial Class
Fidelity® VIP Money Market Portfolio - Initial Class
ING Investors Trust:
ING AllianceBernstein Mid Cap Growth Portfolio - Institutional
Class
ING BlackRock Large Cap Growth Portfolio - Institutional Class
ING BlackRock Large Cap Value Portfolio - Institutional Class
ING Evergreen Health Sciences Portfolio - Institutional Class
ING Evergreen Omega Portfolio - Institutional Class
ING FMRSM Diversified Mid Cap Portfolio - Institutional Class
ING FMRSM Large Cap Growth Portfolio - Institutional Class
ING FMRSM Mid Cap Growth Portfolio - Institutional Class
ING Global Resources Portfolio - Institutional Class
ING JPMorgan Emerging Markets Equity Portfolio - Institutional
Class
ING JPMorgan Small Cap Core Equity Portfolio - Institutional
Class
ING JPMorgan Value Opportunities Portfolio - Institutional
Class
ING Julius Baer Foreign Portfolio - Institutional Class
ING Legg Mason Value Portfolio - Institutional Class
ING LifeStyle Aggressive Growth Portfolio - Institutional Class
ING LifeStyle Growth Portfolio - Institutional Class
ING LifeStyle Moderate Growth Portfolio - Institutional Class
ING LifeStyle Moderate Portfolio - Institutional Class
ING Limited Maturity Bond Portfolio - Service Class
ING Liquid Assets Portfolio - Institutional Class
ING Lord Abbett Affiliated Portfolio - Institutional Class
ING MarketStyle Growth Portfolio - Institutional Class
ING Marsico Growth Portfolio - Institutional Class
ING Marsico International Opportunities Portfolio - Institutional
Class
ING MFS Total Return Portfolio - Institutional Class
ING MFS Utilities Portfolio - Institutional Class

ING Investors Trust (continued):
ING Oppenheimer Main Street Portfolio® - Institutional Class
ING Pioneer Fund Portfolio - Institutional Class
ING Pioneer Mid Cap Value Portfolio - Institutional Class
ING Stock Index Portfolio - Institutional Class
ING T. Rowe Price Capital Appreciation Portfolio - Institutional
Class
ING T. Rowe Price Equity Income Portfolio - Institutional Class
ING UBS U.S. Allocation Portfolio - Service Class
ING Van Kampen Capital Growth Portfolio - Institutional Class
ING Van Kampen Growth and Income Portfolio - Service Class
ING VP Index Plus International Equity Portfolio - Service Class
ING Wells Fargo Small Cap Disciplined Portfolio - Institutional
Class
ING Partners, Inc.:
ING American Century Large Company Value Portfolio - Initial
Class
ING American Century Small-Mid Cap Value Portfolio - Initial
Class
ING Baron Small Cap Growth Portfolio - Initial Class
ING Columbia Small Cap Value II Portfolio - Initial Class
ING Fundamental Research Portfolio - Initial Class
ING JPMorgan Mid Cap Value Portfolio - Initial Class
ING Legg Mason Partners Aggressive Growth Portfolio - Initial
Class
ING Lord Abbett U.S. Government Securities Portfolio - Initial
Class
ING Neuberger Berman Partners Portfolio - Initial Class
ING Neuberger Berman Regency Portfolio - Initial Class
ING Oppenheimer Global Portfolio - Initial Class
ING Oppenheimer Strategic Income Portfolio - Service Class
ING PIMCO Total Return Portfolio - Initial Class
ING T. Rowe Price Diversified Mid Cap Growth Portfolio -
Initial Class
ING UBS U.S. Large Cap Equity Portfolio - Initial Class
ING Van Kampen Comstock Portfolio - Initial Class
ING Van Kampen Equity and Income Portfolio - Initial Class
ING Strategic Allocation Portfolios, Inc.:
ING VP Strategic Allocation Conservative Portfolio - Class I
ING VP Strategic Allocation Growth Portfolio - Class I
ING VP Strategic Allocation Moderate Portfolio - Class I
ING Variable Funds:
ING VP Growth and Income Portfolio - Class I


ING Variable Portfolios, Inc.:
ING VP Index Plus LargeCap Portfolio - Class I
ING VP Index Plus MidCap Portfolio - Class I
ING VP Index Plus SmallCap Portfolio - Class I
ING VP Value Opportunity Portfolio - Class I
ING Variable Products Trust:
ING VP High Yield Bond Portfolio - Class I
ING VP International Value Portfolio - Class I
ING VP MidCap Opportunities Portfolio - Class I
ING VP Real Estate Portfolio - Class S
ING VP SmallCap Opportunities Portfolio - Class I

ING VP Balanced Portfolio, Inc.:
ING VP Balanced Portfolio - Class I
ING VP Intermediate Bond Portfolio:
ING VP Intermediate Bond Portfolio - Class I
Neuberger Berman Advisers Management Trust:
Neuberger Berman AMT Socially Responsive Portfolio® -
Class I

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Account’s internal control over financial reporting. Our audits include consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Account’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2007, by correspondence with the transfer agents. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the respective Divisions constituting ReliaStar Life Insurance Company ReliaStar Select Variable Account at December 31, 2007, the results of their operations and changes in their net assets for the periods disclosed in the financial statements, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

Atlanta, Georgia
March 21, 2008


RELIASTAR LIFE INSURANCE COMPANY
RELIASTAR SELECT VARIABLE ACCOUNT
Statements of Assets and Liabilities
December 31, 2007
(Dollars in thousands)

        American    American         
    American    Funds    Funds         
    Funds    Insurance    Insurance    Fidelity® VIP    Fidelity® VIP 
    Insurance    Series®    Series®    Equity-Income    Contrafund® 
    Series® Growth   Growth-Income    International    Portfolio -    Portfolio - 
    Fund - Class 2    Fund - Class 2    Fund - Class 2    Initial Class    Initial Class 





Assets                     
Investments in mutual funds                     
   at fair value    $ 2,873    $ 1,693    $ 2,618    $ 41,961    $ 28,892 
Total assets    2,873    1,693    2,618    41,961    28,892 
Net assets    $ 2,873    $ 1,693    $ 2,618    $ 41,961    $ 28,892 





 
Net assets                     
Accumulation units    $ 2,873    $ 1,693    $ 2,618    $ 41,908    $ 28,858 
Contracts in payout (annuitization)    -    -    -    53    34 
Total net assets    $ 2,873    $ 1,693    $ 2,618    $ 41,961    $ 28,892 





 
Total number of mutual fund shares    43,059    40,060    105,890    1,754,960    1,035,546 





 
Cost of mutual fund shares    $ 2,685    $ 1,602    $ 2,241    $ 38,501    $ 24,186 






The accompanying notes are an integral part of these financial statements.

3


RELIASTAR LIFE INSURANCE COMPANY
RELIASTAR SELECT VARIABLE ACCOUNT
Statements of Assets and Liabilities
December 31, 2007
(Dollars in thousands)

                        ING BlackRock 
            Fidelity® VIP        ING    Large Cap 
    Fidelity® VIP    Investment    Fidelity® VIP    AllianceBernstein    Growth 
    Index 500      Grade Bond    Money Market    Mid Cap Growth    Portfolio - 
    Portfolio -      Portfolio -    Portfolio -    Portfolio -    Institutional 
    Initial Class    Initial Class    Initial Class    Institutional Class    Class 





Assets                         
Investments in mutual funds                         
   at fair value    $ 3    $ 6,584    $ 48    $ 234    $ 74 
Total assets        3    6,584    48    234    74 
Net assets    $ 3    $ 6,584    $ 48    $ 234    $ 74 





 
Net assets                         
Accumulation units    $ 3    $ 6,584    $ -    $ 234    $ 74 
Contracts in payout (annuitization)        -    -    48    -    - 
Total net assets    $ 3    $ 6,584    $ 48    $ 234    $ 74 





 
Total number of mutual fund shares    18    515,994    48,008    13,248    5,952 





 
Cost of mutual fund shares    $ 3    $ 6,588    $ 48    $ 246    $ 72 






The accompanying notes are an integral part of these financial statements.

4


RELIASTAR LIFE INSURANCE COMPANY
RELIASTAR SELECT VARIABLE ACCOUNT
Statements of Assets and Liabilities
December 31, 2007
(Dollars in thousands)

                    ING FMRSM 
        ING Evergreen    ING Evergreen    ING FMRSM    Large Cap 
    ING BlackRock   Health Sciences    Omega    Diversified Mid    Growth 
    Large Cap Value    Portfolio -    Portfolio -    Cap Portfolio -    Portfolio - 
    Portfolio -    Institutional    Institutional    Institutional    Institutional 
    Institutional Class    Class    Class    Class    Class 





Assets                     
Investments in mutual funds                     
   at fair value    $ 2,647    $ 37    $ 21,274    $ 141    $ 35,819 
Total assets    2,647    37    21,274    141    35,819 
Net assets    $ 2,647    $ 37    $ 21,274    $ 141    $ 35,819 





 
Net assets                     
Accumulation units    $ 2,647    $ 37    $ 21,241    $ 141    $ 35,580 
Contracts in payout (annuitization)    -    -    33    -    239 
Total net assets    $ 2,647    $ 37    $ 21,274    $ 141    $ 35,819 





 
Total number of mutual fund shares    187,996    2,896    1,651,702    9,189    3,175,421 





 
Cost of mutual fund shares    $ 2,205    $ 38    $ 17,698    $ 126    $ 34,485 






The accompanying notes are an integral part of these financial statements.

5


RELIASTAR LIFE INSURANCE COMPANY
RELIASTAR SELECT VARIABLE ACCOUNT
Statements of Assets and Liabilities
December 31, 2007
(Dollars in thousands)

                ING JPMorgan        ING JPMorgan 
                Emerging     ING JPMorgan    Value 
    ING FMRSM Mid    ING Global    Markets Equity    Small Cap Core    Opportunities 
    Cap Growth    Resources    Portfolio -    Equity Portfolio -    Portfolio - 
    Portfolio -      Portfolio -    Institutional    Institutional    Institutional 
    Institutional Class    Institutional Class    Class    Class    Class 





Assets                         
Investments in mutual funds                         
   at fair value    $ 2    $ 1,081    $ 526    $ 5,627    $ 12,627 
Total assets        2    1,081    526    5,627    12,627 
Net assets    $ 2    $ 1,081    $ 526    $ 5,627    $ 12,627 





 
Net assets                         
Accumulation units    $ 2    $ 1,081    $ 526    $ 5,627    $ 12,594 
Contracts in payout (annuitization)        -    -    -    -    33 
Total net assets    $ 2    $ 1,081    $ 526    $ 5,627    $ 12,627 





 
Total number of mutual fund shares        122    41,012    19,596    421,161    1,073,728 





 
Cost of mutual fund shares    $ 1    $ 920    $ 472    $ 5,286    $ 11,501 






The accompanying notes are an integral part of these financial statements.

6


RELIASTAR LIFE INSURANCE COMPANY
RELIASTAR SELECT VARIABLE ACCOUNT
Statements of Assets and Liabilities
December 31, 2007
(Dollars in thousands)

            ING LifeStyle        ING LifeStyle 
    ING Julius Baer    ING Legg    Aggressive    ING LifeStyle    Moderate 
    Foreign    Mason Value    Growth    Growth    Growth 
    Portfolio -    Portfolio -    Portfolio -    Portfolio -    Portfolio - 
    Institutional    Institutional    Institutional    Institutional    Institutional 
    Class    Class    Class    Class    Class 





Assets                     
Investments in mutual funds                     
   at fair value    $ 937    $ 35    $ 145    $ 227    $ 593 
Total assets    937    35    145    227    593 
Net assets    $ 937    $ 35    $ 145    $ 227    $ 593