EXHIBIT (3)

                        PRINCIPAL UNDERWRITING AGREEMENT

         This UNDERWRITING AGREEMENT made as of the first day of May 1999, by
and between Cova Life Sales Company (hereinafter the "Underwriter") and Security
Equity Life Insurance Company (hereinafter the "Insurance Company");

         WITNESSETH as follows:

         WHEREAS, the Insurance Company offers to the public certain variable
annuity contracts (the "Contracts"), which are required to be sold in accordance
with the rules of the National Association of Securities Dealers (the "NASD")
and applicable state and federal laws; and

         WHEREAS, the Underwriter is registered as a broker-dealer with the
Securities and Exchange Commission (the "SEC") under the Securities Exchange Act
of 1934, as amended (the "1934 Act"), and is a member of the NASD; and

         WHEREAS, the Insurance Company desires to have the Contracts sold and
distributed through the Underwriter and the Underwriter is willing to sell and
distribute the Contracts under the terms stated herein.

         NOW, THEREFORE, the parties hereto agree as follows:

         1. The Insurance Company grants to the Underwriter the right to be, and
the Underwriter agrees to serve as distributor and principal underwriter of the
Contracts during the term of this Agreement. The Underwriter agrees to use its
best efforts to perform all duties and functions which are necessary and proper
for the distribution of the Contracts.

         2. All premiums for Contracts shall be remitted promptly to the
Insurance Company in full together with appropriate application forms and any
other required

documentation. Checks or money orders in payment of premiums shall be drawn to
the order of "Security Equity Life Insurance Company."

         3. The Underwriter agrees to offer the Contracts for sale in accordance
with such sales literature as may be developed and authorized by the Insurance
Company.

         4. The Insurance Company shall furnish the Underwriter with copies of
all financial statements, authorized sales literature, and other documents which
the Underwriter reasonably requests for use in connection with the distribution
of the Contracts.

         5. The Underwriter represents that it is duly registered as a
broker-dealer under the 1934 Act, and is a member in good standing of the NASD,
and - to the extent necessary to offer the Contracts - shall be duly registered
or otherwise qualified under the securities laws of any state or other
jurisdiction. The Underwriter shall be responsible for carrying out its sales
and underwriting obligations hereunder in continued compliance with the NASD
Rules of Fair Practice, and applicable federal and state securities laws and
regulations. Without limiting the generality of the foregoing, the Underwriter
agrees that it shall be fully responsible for:

         (a) ensuring that no person shall offer or sell the Contracts on its
behalf until such person is duly registered as a representative of the
Underwriter; duly licensed and appointed by the Insurance Company; and
appropriately licensed, registered, or otherwise qualified to offer and sell
such Contracts under the federal securities laws and any applicable securities
laws of each state or other jurisdiction in which the Insurance Company is
licensed to sell the Contracts and in which such persons shall offer or sell the
Contracts; and



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         (b) training, supervising, and controlling of all such persons for
purposes of complying on a continuous basis with the NASD Rules of Fair Practice
and with federal and state securities law requirements applicable in connection
with the offering and sale of the Contracts. In this connection, the Underwriter
shall:

                  (1) conduct such training (including the preparation and
         utilization of training materials) as in the opinion of the Underwriter
         is necessary to accomplish the purposes of this Agreement;

                  (2) establish and implement reasonable written procedures, for
         supervision of sales practices of agents, representatives, or brokers
         selling the Contracts; and

                  (3) take reasonable steps to ensure that its associated
         persons shall not make recommendations to an applicant to purchase a
         Contract and shall not sell a Contract in the absence of reasonable
         grounds to believe that the purchase of the Contract is suitable for
         such applicant.

         6. Notwithstanding anything in this Agreement to the contrary, the
Underwriter is hereby authorized to enter into sales agreements with other
broker-dealers for the sale of the Contracts. All such sales agreements entered
into by the Underwriter shall provide that each separate broker-dealer will
assume full responsibility for continued compliance by itself and its associated
persons with the NASD Rules of Fair Practice and applicable federal and state
securities laws. All associated persons of broker-dealers soliciting
applications for the Contracts shall be duly and appropriately licensed or
appointed by the Insurance Company for the sale of the Contracts under the





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insurance laws of the applicable states or jurisdictions in which such persons
shall offer or sell the Contracts.

         7. The Insurance Company shall apply for the proper insurance licenses
in the appropriate states or jurisdictions for persons associated with other
broke-dealers which have entered into agreements with the Underwriter for the
sale of the Contracts and are designated to sell the Contracts; provided that
the Insurance Company reserves the right to refuse to appoint any proposed
associated person as an agent or broker, and to terminate an agent or broker
once appointed.

         8. The Insurance Company and the Underwriter shall cause to be
maintained and preserved for the periods described such account, books, and
other documents as are required of them by the Investment Company Act, the 1934
Act, and any other applicable laws and regulations. The books, accounts and
records of the Insurance Company and the Underwriter as to all transactions
hereunder shall be maintained so as to disclose clearly and accurately the
nature and details of the transactions. The Insurance Company shall maintain
such books and records of the Underwriter pertaining to the sale of policies and
required by the 1934 Act as may be mutually agreed upon from time to time by the
Insurance Company and the Underwriter; provided that such books and records
shall be the property of the Underwriter, and shall at all times be subject to
such reasonable periodic, special, or other examination by the SEC and all other
regulatory bodies having jurisdiction. The Insurance Company shall be
responsible for sending all required confirmations on customer transactions in
compliance with applicable regulations, as modified by an exemption or other
relief obtained by the Insurance Company. The Underwriter shall cause the
Insurance


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Company to be furnished with such reports as the Insurance Company may
reasonably request for the purpose of meeting its reporting and recordkeeping
obligations under the insurance laws of the State of New York and any other
states or jurisdictions.

         9. The Insurance Company shall have the responsibility for paying any
compensation to other broker-dealers and their associated persons due under the
terms of any sales agreements between the Underwriter and such broker-dealers.
Notwithstanding the preceding sentence, no associated person or broker-dealer
shall have an interest in any deductions or other fees payable to the
Underwriter as set forth herein.

         10.      (a) The Insurance Company agrees to indemnify the Underwriter
for any losses incurred as a result of any action taken or omitted by the
Underwriter, or any of its officers, agents, or employees, in performing their
responsibilities under this Agreement in good faith and without willful
misfeasance, gross negligence, or reckless disregard of such obligations.

                  (b) The Underwriter agrees to indemnify the Insurance Company
for any loss incurred as a result of the Underwriter's gross negligence, willful
misfeasance or reckless disregard of its obligations under this Agreement.

         11.      (a) This Agreement may be terminated by either party upon 60
days' written notice to the other party.

                  (b) This Agreement may be terminated upon written notice of
one party to the other party in the event of bankruptcy or insolvency of such
party to which notice is given.


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                  (c) This Agreement may be terminated at any time upon the
mutual written consent of the parties.

                  (d) The Underwriter shall not assign or delegate its
responsibilities under this Agreement without the written consent of the
Insurance Company. Without limiting the generality of the foregoing, the term
"assigned" shall not include any transaction exempted from section 15(b)(2) of
the Investment Company Act.

                  (e) This Agreement may be terminated by either party without
penalty.

                  (f) In the event either party to this Agreement fails to
perform in a satisfactory manner the other party may cancel this Agreement.

                  (g) Upon termination of this Agreement, all authorizations,
rights, and obligations shall cease except the obligation to settle accounts
hereunder, including payments (or premiums or contributions) subsequently
received for Contracts in effect at the time of termination or issued pursuant
to applications received by the Insurance Company prior to termination.

                  (h) In the event this Agreement is ended for any reason each
party agrees to return all records belonging to the other party promptly and
free from all claims.

         12. This Agreement shall be subject to the provisions of the federal
securities laws and the rules of the NASD, from time to time in effect,
including such exemptions from the Investment Company Act as the SEC may grant,
and the terms hereof shall be interpreted and construed in accordance therewith.

         13. Each party to this Agreement expressly reserves unto itself the
ultimate authority and responsibility for conduct of its business.


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         14. Neither party to this Agreement shall undertake any activity which
might conflict with its faithful discharge of the duties outlined in this
Agreement.

         15. If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.

         16. This Agreement shall be construed and enforced in accordance with
and governed by the laws of the State of New York.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officials thereunder duly authorized and seals to be
affixed, as of the day and year first above written.

Attest:                                     COVA LIFE SALES COMPANY

______________________________              By:  _____________________________
Secretary                                        President


                                           SECURITY EQUITY LIFE INSURANCE
Attest:                                    COMPANY

______________________________              By:  _____________________________
Secretary                                        President


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