TRANSAMERICA VARIABLE INSURANCE FUND INC, 485APOS, 1998-08-19

TRANSAMERICA VARIABLE INSURANCE FUND INC
485APOS, 1998-08-19

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As filed with the Securities and Exchange Commission on August 19, 1998

File No. 33-99016
File No. 811-9126

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C 20549

FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 o

Pre-Effective Amendment No. o
Post-Effective Amendment No. 7 x

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940o

Amendment No. 8 x

TRANSAMERICA VARIABLE INSURANCE FUND, INC.
(Exact Name of Registrant)

1150 South Olive Los Angeles, CA 90015-2211
(Address of Principal Executive Offices)

Registrant's Telephone Number:
1-213-742-2111

Name and Address of Agent for Service: Copy to:
JAMES W. DEDERER, Esq. FREDERICK R. BELLAMY, Esq.
Executive Vice President, General Counsel Sutherland, Asbill & Brennan, LLP
and Corporate Secretary 1275 Pennsylvania Avenue, N.W.
Transamerica Occidental Life Insurance Company Washington, D.C. 20004-2404
1150 South Olive Street
Los Angeles, California 90015-2211

Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of the registration statement.

DECLARATION PURSUANT TO RULE 24f-2

It is proposed that this filing will become effective: o
immediately upon filing pursuant to paragraph (b) o
on May 1, 1998 pursuant to paragraph (b) o 60 days
after filing pursuant to paragraph (a)(1) o on _
pursuant to paragraph (a)(1) x 75 days after filing
pursuant to paragraph (a)(2) o on _________________
pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:
o this Post-Effective Amendment designates a new
effective date for a previously filed Post-Effective Amendment.

<PAGE>

TRANSAMERICA VARIABLE INSURANCE FUND
Registration Statement on Form N-1A

CROSS REFERENCE SHEET
Pursuant to Rule 495
N-1A
Item No. Caption
- -------- -------
PART A INFORMATION REQUIRED IN A PROSPECTUS
<S> <C> <C>
1. Cover Page .......................................... Cover Page
2. Synopsis .......................................... Not Applicable
3. Condensed Financial Information............................. Condensed Financial Information

4. General Description of Registrant........................... Introduction; Investment
Objectives and Policies;
Investment Methods and Risks

5. Management of the Fund...................................... Management

5A. Management's Discussion of Performance...................... Not Applicable

6. Capital Stock and Other Securities.......................... Other Information

7. Purchase of Securities Being Offered........................ Offering, Purchase and Redemption
of Shares

8. Redemption or Repurchase.................................... Offering, Purchase and Redemption
of Shares

9. Pending Legal Proceedings................................... Not Applicable

PART B INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION

10. Cover Page .......................................... Cover Page
11. Table of Contents .......................................... Table of Contents

12. General Information and History............................. Introduction; Shares of Stock

13. Investment Objectives and Policies.......................... Additional Investment Policy
Information; Special Investment
Methods and Risks; Investment
Restrictions

14. Management of the Registrant................................ Investment Adviser

15. Control Persons and Principal
Holders of Securities..................................... Shares of Stock

CROSS REFERENCE SHEET -- continued

16. Investment Advisory and
Other Services .......................................... Investment Adviser

17. Brokerage Allocation and Other
Practices .......................................... Portfolio Transactions, Portfolio
Turnover and Brokerage

18. Capital Stock and Other Securities.......................... Shares of Stock

19. Purchase, Redemption and Pricing
of Securities Being Offered............................... Determination of Net Asset Value

20. Tax Status .......................................... Not Applicable

21. Underwriters .......................................... Not Applicable

22. Calculation of Performance Data............................. Performance Information

23. Financial Statements........................................ Other Information

</TABLE>

PART C OTHER INFORMATION

Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.

<PAGE>

TRANSAMERICA VARIABLE INSURANCE FUND, INC.
1150 South Olive Street, Los Angeles, California 90015, (213) 742-2111

PROSPECTUS November 2, 1998

The Transamerica Variable Insurance Fund, Inc. (the "Fund") is designed to
provide investment vehicles for variable annuity and variable life
insurance contracts of various insurance companies. The Fund currently
offers the following investment portfolios:

Aggressive Growth Portfolio Growth Portfolio Money Market Portfolio
Balanced Portfolio High Yield Bond Portfolio Small Company Portfolio
Bond Portfolio Index Portfolio Value Portfolio

Shares of each Portfolio may currently be purchased only by separate
accounts of insurance companies for the purpose of funding variable annuity
contracts and variable life insurance policies (collectively "variable insurance
contracts"). Each variable insurance contract involves fees and expenses not
described in this Prospectus. See the accompanying variable insurance contract
prospectus for information regarding contract fees and expenses and any
restrictions on purchases or allocations.

A Statement of Additional Information containing more detailed
information about the Fund is available free by writing to the Fund at the
Transamerica Annuity Service Center, 401 North Tryon Street, Suite 700,
Charlotte, North Carolina 28202, or by calling 800-420-7749. The Statement of
Additional Information, which has the same date as this Prospectus, has been
filed with the Securities and Exchange Commission and is incorporated herein by
reference. The Table of Contents of the Statement of Additional Information is
included at the end of this Prospectus.

This Prospectus contains vital information about the Portfolios that a
prospective purchaser of a variable insurance contract should know before
allocating premiums to one of the Portfolios. For your own benefit and
protection, please read it before you invest. Keep it on hand for future
reference.

Like all mutual funds, these securities have not been approved or
disapproved by the Securities and Exchange Commission or any state securities
commission, nor has the Securities and Exchange Commission or any state
securities commission passed upon the accuracy or adequacy of this prospectus.
Any representation to the contrary is a criminal offense.

This Prospectus should be read in conjunction with the prospectus for the
variable insurance contract.

AN INVESTMENT IN ANY PORTFOLIO IS NEITHER INSURED NOR GUARANTEED BY THE U. S.
GOVERNMENT.
AN INVESTMENT INVOLVES CERTAIN RISKS INCLUDING POSSIBLE LOSS OF THE AMOUNT
INVESTED.

THERE CAN BE NO ASSURANCE THAT THE MONEY MARKET
PORTFOLIO WILL MAINTAIN A STABLE NET ASSET
VALUE OF $1.00 PER SHARE.

<PAGE>

TABLE OF CONTENTS

THE PORTFOLIOS AT A GLANCE................................

TRANSAMERICA VARIABLE INSURANCE FUND, INC. ...............

MANAGER'S PERFORMANCE.....................................
GROWTH PORTFOLIO.................................
MANAGING SIMILAR FUNDS...........................

THE PORTFOLIOS IN DETAIL ---

AGGRESSIVE GROWTH PORTFOLIO
BALANCED PORTFOLIO
BOND PORTFOLIO
GROWTH PORTFOLIO
HIGH YIELD BOND PORTFOLIO
INDEX PORTFOLIO
MONEY MARKET PORTFOLIO
SMALL COMPANY PORTFOLIO
VALUE PORTFOLIO

A GENERAL DISCUSSION ABOUT RISK

INVESTMENT PROCEDURES AND RISK CONSIDERATIONS.............

PORTFOLIO TURNOVER.............................................

MANAGEMENT.....................................................
Directors and Officers................................
Investment Adviser....................................
Investment Sub-Adviser................................

PERFORMANCE INFORMATION........................................

DETERMINATION OF NET ASSET VALUE...............................

OFFERING, PURCHASE AND REDEMPTION OF SHARES....................

INCOME, DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS..............

TAXES ......................................................

OTHER INFORMATION..............................................
Preparing for Year 2000...............................
Reports...............................................
Voting and Other Rights...............................
Custody of Assets and Administrative Services........
Summary of Bond Ratings...............................

CONSOLIDATED FINANCIAL INFORMATION.............................

FOR MORE INFORMATION...........................................

<PAGE>

THE PORTFOLIOS AT A GLANCE

Transamerica Variable Insurance Fund, Inc., consists of the following Portfolios
with different investment objectives and risk levels. There is no guarantee that
these investment objectives will be met. These brief descriptions will give you
a summary of each Portfolio. A more detailed description for each Portfolio is
in "The Portfolios in Detail" beginning on page xx. For information on the risks
associated with investment in these Portfolios, see "Investment Procedures and
Risk Considerations" on page xx.

Aggressive Growth Portfolio
The Portfolio seeks to maximize long-term growth.
It invests primarily in common stocks selected for their growth potential
resulting from growing franchises protected by high barriers to
competition. Under normal market conditions, the Portfolio will invest at
least 90% of its total assets in a non-diversified portfolio of domestic
equity securities of any size, which may include securities of larger, more
established companies and/or smaller emerging companies selected for their
growth potential.
The Portfolio is intended for investors who have the perspective,
patience, and financial ability to take on above-average stock market
volatility in a focused pursuit of long-term capital growth.
See page xx for more details.

Balanced Portfolio
The Portfolio seeks to achieve long-term capital growth and current income
with a secondary objective of capital preservation, by balancing
investments among stocks, bonds, and cash (or cash equivalents).
It invests primarily in a diversified selection of common stocks, bonds,
and money market instruments and other short-term debt securities.
The Portfolio is intended for investors who wish to participate in both
the equity and debt markets, but who wish to leave the allocation of the
balance between them to professional management. Investors should have the
perspective, patience, and financial ability to take on average market
volatility in pursuit of long-term total return that balances capital
growth and current income.
See page xx for more details.

Bond Portfolio
The Portfolio seeks to achieve a high total return (income plus capital
changes) from fixed income securities consistent with preservation of
principal.
It invests primarily in a diversified selection of investment grade
corporate and government bonds and mortgage-backed securities.
The Portfolio is intended for investors who wish to invest in a
diversified portfolio of bonds. Investors should have the perspective,
patience, and financial ability to take on above-average bond price
volatility in pursuit of a high total return produced by income from
longer-term securities and capital gains from under-valued bonds.
See page xx for more details.

Growth Portfolio
The Portfolio seeks long-term capital growth.
It invests primarily in common stocks of growth companies that are
considered by the manager to be premier companies.
The Portfolio is intended for investors who wish to participate primarily
in the common stock markets. Investors should have the perspective,
patience, and financial ability to take on above-average stock market
volatility in a focused pursuit of long-term capital growth.
See page xx for more details.

High Yield Bond Portfolio
The Portfolio seeks to achieve a high total return (income plus capital
growth) by investing primarily in debt instruments and convertible
securities, with an emphasis on lower quality securities.
It invests primarily in lower-rated bonds, commonly known as "junk bonds."
Investments of this type are subject to a greater risk of loss of principal
and nonpayment of interest. Investors should carefully assess the risks
associated with an investment in this Fund.
The Portfolio is intended for investors who wish to invest in the bond
market and are willing to assume additional risk in return for
above-average income potential.
See page xx for more details.

Index Portfolio
The Portfolio seeks to track the performance of the Standard & Poor's 500
Composite Stock Price Index, also known as the S&P 500 Index.
It attempts to reproduce the overall investment characteristics of the S&P
500 Index by using a combination of management techniques. Its stock
purchases reflect the S&P 500 Index, but it makes no attempt to forecast
general market movements.
The Portfolio is intended for investors who wish to participate in the
overall growth of the economy, as reflected by the domestic stock market.
Investors should have the perspective, patience, and financial ability to
take on average stock market volatility in pursuit of long-term capital
growth.
See page xx for more details.

Money Market Portfolio
The Portfolio seeks to maximize current income from money market
securities consistent with liquidity and preservation of principal.
It invests primarily in high quality U.S. dollar-denominated money market
instruments with remaining maturities of 13 months or less.
The Portfolio is intended to provide a low risk, relatively low cost way
to maximize current income through high-quality money market securities
that offer stability of principal and liquidity. This Portfolio may be a
suitable investment for temporary or defensive purposes and may also be
appropriate as part of an overall long-term investment strategy.
See page xx for more details.

Small Company Portfolio
The Portfolio seeks to maximize long-term growth.
It invests primarily in a diversified portfolio of domestic common stocks.
Under normal market conditions, at least 65% of the Portfolio will be
invested in companies with smaller market capitalizations (generally, under
$1 billion) or annual revenues of no more than $1 billion.
The Portfolio is intended for investors who have the perspective,
patience, and financial ability to take on above-average stock market
volatility in a focused pursuit of long-term capital growth.
See page xx for more details.

Value Portfolio
The Portfolio seeks to maximize capital appreciation.
It invests primarily in securities of companies that the Investment
Adviser believes are "underfollowed" or "out-of-favor." The Investment
Adviser believes these securities are under-valued relative to the
intrinsic or private market value of the firm. The securities in the
Portfolio may include common and preferred stocks, warrants, and corporate
debt securities.
The Portfolio is intended for investors who wish to participate primarily
in the common stock markets. Investors should have the perspective,
patience, and financial ability to take on above-average stock market
volatility in a focused pursuit of long-term capital growth.
See page xx for more details.

TRANSAMERICA VARIABLE INSURANCE FUND, INC.

Transamerica Variable Insurance Fund, Inc. (the "Fund") is an open-end,
management investment company established as a Maryland Corporation on June 23,
1995. The Fund currently consists of nine investment portfolios. Additional
Portfolios may be created from time to time. By investing in one of the
Portfolios, an investor becomes entitled to a pro rata share of all dividends
and distributions arising from the net income and realized and unrealized
capital gains, if any, on the investments of that Portfolio. Likewise, an
investor shares pro-rata in any losses (realized and unrealized) of that
Portfolio.

Pursuant to an investment advisory agreement and subject to the authority of the
Fund's Board of Directors, Transamerica Occidental Life Insurance Company
("Transamerica" or the "Investment Adviser") serves as the investment adviser to
the Portfolios and conducts the business and affairs of the Fund. Transamerica
has engaged Transamerica Investment Services, Inc. ("Investment Services" or
"Sub-Adviser" or "Manager") to act as the Portfolios' sub-adviser to provide
their day-to-day portfolio management.

The Portfolios are designed primarily to serve as investment vehicles for
variable annuity and variable life insurance contracts offered by separate
accounts of various insurance companies. The Fund may sell its shares to
qualified pension and retirement plans, but currently does not do so. The Fund
does not offer its stock directly to the general public.

If the Investment Adviser had not reimbursed expenses, the ratio of
operating expenses to average net assets would have been 0.98%
and 1.34% for the years ended December 31, 1997, and 1996,
respectively.
If the Investment Adviser had not reimbursed expenses the ratio of
net investment loss to average net assets would have been (0.52%)
and (0.75%) for the years ended December 31, 1997, and 1996,
respectively.

THE PORTFOLIOS IN DETAIL

The investment objectives, strategies and policies of the
Portfolios are described below. There can be no assurance that a
Portfolio will achieve its investment objective. Investors should not
consider any one Portfolio alone to be a complete investment program. As
with any security, a risk of loss, including possible loss of principal,
is inherent in an investment in the shares of a Portfolio.

The different types of securities, investments, and investment
techniques used by the Portfolios involve risks of varying degrees.
These risks are described in greater detail, under "Investment Methods
and Risks" and in the Statement of Additional Information. Each
Portfolio is subject to certain investment restrictions that are
described under the caption "Investment Restrictions" in the Statement
of Additional Information.

The investment objective of each Portfolio, as well as the
investment policies that are not fundamental, may be changed by the
Fund's Board of Directors without shareholder approval. Certain of the
investment restrictions of each Portfolio are fundamental, however, and
may not be changed without the approval of a majority of the votes
attributable to the outstanding shares of that Portfolio. See
"Investment Restrictions" in the Statement of Additional Information.

Aggressive Growth Portfolio

Investment Objective
The Fund seeks to maximize long-term growth.

Investment Strategies and Policies The Portfolio generally invests at
least 90% of its total assets in a non-diversified portfolio of domestic
equity securities of any size, which may include securities of larger
more established companies and/or smaller emerging companies selected by
the Manager for their growth potential.

The Portfolio primarily invests in domestic common stocks selected by
the Manager for their growth potential resulting from growing franchises
protected by high barriers to competition. The Portfolio may invest to a
lesser degree in common stocks of foreign issuers and in other types of
domestic and foreign securities, including preferred stocks, warrants,
convertible securities and debt securities. Debt securities that the
Portfolio may purchase include investment grade and non-investment grade
corporate bonds and debentures, government securities, mortgage and
asset-backed securities, zero coupon bonds, indexed/structured notes,
high-grade commercial paper, certificates of deposit, and repurchase
agreements. Such securities may offer growth potential because of
anticipated changes in interest rates, credit standing, currency
relationships or other factors. The Portfolio may use a variety of
investment techniques, including derivatives and short sales.

While the Portfolio will generally be fully invested, should the Manager
determine that market conditions warrant, the Portfolio may invest
without limit in cash and cash equivalents for temporary defensive
purposes. To the extent the Portfolio is so invested, it is not
achieving its investment objectives. This practice is not expected to be
used routinely. As part of the management of cash and cash equivalents
and to help maintain liquidity, the Portfolio may invest in the same
kind of money market and other short-term instruments and debt
securities as the Money Market Portfolio does. See "Money Market
Portfolio" on page xx.

The Portfolio is constructed one stock at a time. Although themes may
emerge in the Portfolio, securities are generally selected without
regard to any defined industry sector or other similarly defined
selection procedure. Each company passes through a research process and
stands on its own merits as a viable investment in the Manager's
opinion. The Manager's research is designed to identify companies with
growing franchises protected by high barriers to competition with
potential for improvement in profitability and acceleration of growth.

Some Points To Consider When Investing Since the Portfolio invests
primarily in common stocks, its investments are subject to stock market
price volatility. Price volatility means that stock prices can go up or
down due to a variety of economic and market conditions.

Since the Portfolio is a non-diversified investment company portfolio,
it may invest in a smaller number of individual issuers than a
diversified investment company, and the value of the Portfolio's
investments could be impacted more significantly by any single adverse
occurrence than would the value of the investments of a diversified
investment company.

The Portfolio is intended for investors who have the perspective,
patience, and financial ability to take on above-average stock market
volatility in a focused pursuit of long-term capital growth. Because of
the uncertainty associated with common stock investments, the Portfolio
is intended to be a long-term investment.

Balanced Portfolio

Investment Objective
The Portfolio seeks to achieve long-term capital growth and current
income with a secondary objective of capital preservation, by balancing
investments among stocks, bonds, and cash and cash equivalents.

Investment Strategies and Policies The Portfolio invests in a
diversified selection of common stocks, bonds, and money market
instruments and other short-term debt securities. The Portfolio attempts
to achieve reasonable asset appreciation during favorable market
conditions and conservation of principal in adverse times. This requires
flexibility in managing the Portfolio's assets. Therefore, the
proportion of investments in bonds and stocks will be adjusted according
to business and investment conditions. While the Portfolio may hold
equity, fixed income, and cash securities in any proportion, at no time
will it hold less than 25% of its assets in non-convertible debt
securities. When the Manager determines that market conditions warrant,
the Portfolio may invest without limit in cash or cash equivalents for
temporary defensive purposes. To the extent that the Portfolio is so
invested, it is not achieving its investment objectives.

In general, common stocks represent 60% to 70% of the Portfolio's total
assets, with the remaining 30% to 40% of the Portfolio's assets
primarily invested in investment grade bonds as rated by either Moody's
or Standard & Poor's Corporation ("S&P") and cash and cash equivalents.
The Portfolio holds common stocks primarily to provide long-term growth
of capital. Changes in the asset mix may be made to increase the bond
position of the Portfolio and to help achieve the Portfolio's objectives
of long-term growth and current income.

The stocks in the Portfolio are generally growth companies that are
considered to be premier companies and under-valued in the stock market.
Equity securities may be selected based on growth potential and dividend
paying properties since income is a consideration. The equity portion of
the Portfolio may be managed in a similar manner as the Growth
Portfolio, although the selection of securities may differ. See "Growth
Portfolio" on page xx.

The fixed income portion of the Portfolio is invested in a diversified
selection of corporate and U.S. government bonds and mortgage-backed
securities. This portion of the Portfolio is managed in a similar manner
as the Bond Portfolio, although the selection of securities may differ.
See "Bond Portfolio" on page xx. The fixed income assets are normally at
least 65% high quality, investment grade bonds with maturities between 5
and 30 years. Non-investment grade bonds held in the fixed income
portion of the Portfolio will be less than 20% of the Portfolio's total
net assets. For more information on non-investment grade bonds, see
"High-Yield (`Junk') Bonds" on page xx and the Statement of Additional
Information. The Portfolio may also hold certain short-term fixed income
securities. As part of the management of cash and cash equivalents and
to help maintain liquidity, the Portfolio may invest in the same kind of
money market and other short-term instruments and debt securities as the
Money Market Portfolio does. See "Money Market Portfolio" on page xx.

The Portfolio may buy foreign securities and other instruments if they
meet the same criteria described above for the Portfolio's investments
in general. As much as 20% of the Portfolio's assets may be invested in
foreign securities. The Portfolio may also invest in stock and bond
index futures and options to a limited extent, as well as preferred
stocks.

Points To Consider When Investing In general, the Portfolio holds
equities for long-term capital appreciation, and holds bonds for
stability of principal and income as well as a reserve for investment
opportunities. This balance often creates a situation where some of the
market risks offset one another. But investment risks cannot totally be
avoided. The expected performance of such a fund would normally lie
somewhere between the performance of an equity fund (holding the same
stocks) and the performance of a bond fund (holding the same bonds). But
this depends on the actual proportion of stocks and bonds. Since the
Portfolio has flexibility in changing the balance between asset classes,
the Portfolio may increase exposure to the current advantages or
disadvantages of one or more of the asset classes. Or the Portfolio may
avoid the current disadvantages of one or more of the asset classes.

The Balanced Portfolio is intended for investors who wish to participate
in both the equity and debt markets, but who wish to leave the
allocation of the balance between them to professional management. The
Portfolio is intended for investors who have the perspective, patience,
and financial ability to take on average market volatility in pursuit of
long-term total return that balances capital growth and current income.
Because of the uncertainties associated with common stock and bond
investments, the Portfolio is intended to be a long-term investment.

Bond Portfolio

Investment Objective
The Portfolio seeks to achieve a high total return (income plus capital
appreciation) from fixed income securities consistent with preservation
of principal.

Investment Strategies and Policies The Portfolio invests in a
diversified portfolio of corporate and government bonds and
mortgage-backed securities. Through its proprietary evaluation and
credit research, the Manager attempts to identify bonds whose potential
to outperform other similar bonds, by virtue of underlying credit
strength and market mispricing, is not fully reflected in current bond
market valuations. By actively managing the Portfolio, the Manager seeks
to capitalize on these opportunities by finding price advantages as they
occur in the market.

Generally, at least 65% of the Portfolio's assets is invested in
investment grade bonds. Investment grade bonds are rated Baa or higher
by Moody's Investors Service ("Moody's") or BBB or higher by Standard &
Poor's Corporation ("S&P"). Maturities of these bonds are primarily
between 10 and 30 years. In addition, the Portfolio may invest in
lower-rated securities (currently not expected to exceed 20% of the
Portfolio's total assets). Those securities are rated Ba1 or lower by
Moody's or BB+ or lower by S&P. The Portfolio may also invest in unrated
securities of similar quality, as determined by the Manager. For more
information on lower-rated securities, see "High-Yield (`Junk') Bonds"
on page xx of the Prospectus and see the Statement of Additional
Information. For more information on S&P and Moody's ratings, see
"Summary of Bond Ratings" on page xx.

Investments for this Portfolio may include securities issued or
guaranteed by the U.S. government or its agencies and instrumentalities,
publicly traded corporate securities, as well as municipal obligations.
The Portfolio may also invest in mortgage-backed securities issued by
various federal agencies and government sponsored enterprises and in
other mortgage-related or asset-backed securities. The investments in
mortgage-related securities can be subject to the risk of early
repayment of principal. For more information, see "Mortgage-Backed and
Asset-Backed Securities" on page xx and the Statement of Additional
Information.

The Portfolio may buy foreign securities and other instruments if they
meet the same criteria described above for the Portfolio's investments
in general. As much as 20% of the Portfolio's total assets may be
invested in foreign securities. For more information see "Foreign
Securities" on page xx.

If a security in the Portfolio that was rated investment grade at the
time of purchase is downgraded by a rating service, it may or may not be
sold. An assessment of the issuer's prospects will be made by the
Manager. However, the Portfolio will not purchase below-investment-grade
securities if that would increase their representation in the Portfolio
to more than 35%. See "Summary of Bond Ratings" on page 47 and "High
Yield (`Junk') Bonds" on page xx for a description of bond ratings and
high-yield bonds.

As part of the management of cash and cash equivalents and to help
maintain liquidity, the Portfolio may purchase and sell the same kind of
money market and other short-term instruments and debt securities as the
Money Market Portfolio does. See "Money Market Portfolio" on page 24.
The Portfolio may also invest in options and futures contracts on
securities or groups of securities and preferred stock. See "Options,
Futures and Other Derivatives" on page xx and in the Statement of
Additional Information. The Portfolio ordinarily invests in common stock
only as a result of conversion of bonds, exercise of warrants, or other
extraordinary business events.

Points to Consider When Investing The Bond Portfolio is intended for
investors who have the perspective, patience, and financial ability to
take on above-average bond price volatility in pursuit of a high total
return produced by income from longer-term securities and capital
changes from under-valued credit strength. The longer maturity bonds in
which the Portfolio primarily invests tend to produce higher income than
bonds with shorter maturities. However, due to the long maturity of the
Portfolio's assets, the price of the Portfolio's securities can
fluctuate more sharply than shorter-term securities when interest rates
go up or down. An increase in interest rates will cause prices to fall.
Conversely, a decrease in rates will cause prices to rise. Because of
the uncertainty associated with bond investments, the Portfolio is
intended to be a long-term investment.

The basic quality of the bonds, which are primarily
investment grade, tends to provide some safety of
principal. In general, lower-rated bonds, which are
a much lesser component of the Portfolio, offer
higher returns than investment grade bonds. But they
also carry higher risks. These can include: a) a
higher risk of insolvency, especially during
economic downturns; b) a lower degree of liquidity;
and c) a higher degree of price volatility.

Growth Portfolio

Investment Objective
The Growth Portfolio's investment objective is long-term capital growth.

Investment Strategies and Policies The Growth Portfolio invests
primarily in common stocks of growth companies that are considered by
the manager to be premier companies. In the manager's view,
characteristics of premier companies include one or more of the
following: dominant market share; leading brand recognition; proprietary
products or technology; low-cost production capability; and excellent
management with shareholder orientation. The manager of the Portfolio
believes in long-term investing and places particular emphasis on the
sustainability of the above competitive advantages. Unless market
conditions indicate otherwise, the manager also tries to keep the
Portfolio fully invested in equity-type securities and does not try to
time stock market movements.

Although the Portfolio invests the majority of its assets in common
stocks, the Portfolio may also invest in debt securities and preferred
stocks (both having a call on common stocks by means of a conversion
privilege or attached warrants) and warrants or other rights to purchase
common stocks. When in the judgment of Manager market conditions
warrant, the Growth Portfolio may, for temporary defensive purposes,
hold part or all of its assets in cash, debt or money market
instruments.

The Growth Portfolio may invest up to 10% of its assets in debt
securities rated below investment grade and having a call on common
stocks. Those securities are rated Ba1 or lower by Moody's Investors
Service, Inc. ("Moody's") or BB+ or lower by S&P, or, if unrated, deemed
to be of comparable quality by the Manager.

If a security that was originally rated "investment grade" is downgraded
by a ratings service, it may or may not be sold. This depends on the
Manager's assessment of the issuer's prospects. However, the Manager
will not purchase below-investment-grade securities if that purchase
would increase their representation in the Growth Portfolio to more than
10% of total assets.

Foreign securities may be purchased if they meet the same criteria
described above for the Portfolio's investments in general. The
Portfolio may invest up to 10% of its assets in foreign securities. The
Growth Portfolio may invest up to 10% of its net assets in the
securities of foreign issuers that are in the form of American
Depository Receipts ("ADRs"). ADRs are registered stocks of foreign
companies that are typically issued by an American bank or trust company
evidencing ownership of the underlying securities. ADRs are designed for
use on the U. S. stock exchanges.

With respect to 75% of total assets, the Growth Portfolio may not
purchase more than 10% of the voting securities of any one issuer. And
it may not invest in companies for the purposes of exercising control or
management.

Points to Consider When Investing Since the Portfolio invests primarily
in common stocks, its investments are subject to stock market price
volatility. Price volatility means that stock prices can go up or down
due to a variety of economic and market conditions.

However, the Manager attempts to lessen price volatility by focusing on
the potential for each prospective holding (a `bottom up" approach)
rather than the economic and business cycle (a "top down" approach). The
Portfolio is constructed one stock at a time. Each company passes
through the Manager's research process and, in the Manager's opinion,
stands on its own merits as a viable investment. The Manager's
proprietary fundamental research is designed to identify companies with
potential for improvement in profitability and acceleration of growth.

The Portfolio is intended for investors who have the perspective,
patience and financial ability to take on above-average stock market
volatility in a focused pursuit of long-term capital growth. Because of
the uncertainty associated with common stock investments, the Portfolio
is intended to be a long-term investment.

High Yield Bond Portfolio

Investment Objective
The Portfolio seeks to maximize total return (income plus capital
appreciation) by investing primarily in debt instruments and convertible
securities, with an emphasis on lower quality securities.

Investment Strategies and Policies The Portfolio invests in a
diversified portfolio of high yield, below investment grade,
fixed-income securities. The Portfolio takes a disciplined approach to
high yield bonds, based on its research and credit analysis, seeking
securities that will pay coupons and principal at maturity with a
minimum of defaults. In order to minimize price volatility and achieve
potential price appreciation, the Manager seeks to identify those bonds
that are likely to receive credit quality upgrades from nationally
recognized statistical rating organizations. In order to lessen price
volatility, the Manager focuses on the potential for each prospective
holding (a "bottom up" approach) rather than the economic or business
cycle (a "top down" approach). This approach relies on extensive
research and credit analysis to help identify those bonds that are
likely to be upgraded.

The securities in which the Portfolio invests are rated below investment
grade and are commonly called "junk bonds." These securities have
greater risk of loss due to a higher default rate than securities which
are rated investment grade. Normally, at least 65% of the Portfolio's
assets will be invested in high yield debt securities. The Portfolio's
remaining assets may be held in cash or money market instruments, or
invested in common stocks and other equity securities when these types
of investments are consistent with the objective of high current income
and capital appreciation. These securities may also be convertible to
common stock, have warrants attached, or contain other equity features.
The Portfolio may retain equity securities obtained by conversion,
exchange, exercise of warrants, or other methods. The Portfolio may also
elect to invest in preferred stock, other debt instruments, money market
instruments, cash and cash equivalents, or other securities that the
Manager deems appropriate.

Differing yields on fixed-income securities of the same maturity are a
function of several factors, including the relative financial strength
of the issuers of such securities. Higher yields are generally available
from securities in the lower rating categories of recognized rating
agencies, such as Moody's and S&P. Securities rated below Baa or BBB are
considered to be of poorer standing and predominantly speculative. The
Portfolio may invest up to 15% of the assets in securities rated below
Caa by Moody's or CCC by S&P, including securities in the lowest rating
category of each rating agency, or in unrated securities that the
Manager determines are of comparable quality. Such securities may be in
default and are generally regarded by the rating agencies as having
extremely poor prospects of ever attaining any real investment standing.
The rating services' descriptions of securities in the lower rating
categories, including their speculative characteristics, are set forth
on page xx.

Securities ratings are based largely on the issuer's historical
financial condition and the rating agencies' investment analysis at the
time of rating. Consequently, the rating assigned to any particular
security is not necessarily a reflection of the issuer's current
financial condition, which may be better or worse than the rating would
indicate. Although securities ratings are considered when making
investment decisions, the Manager performs its own investment analysis
and does not rely principally on the ratings assigned by the rating
services. This analysis may include consideration of the issuer's
experience and managerial strength, changing financial condition,
borrowing requirements or debt maturity schedules, and its
responsiveness to changes in business conditions and interest rates.
Also considered are relative values based on anticipated cash flow,
interest or dividend coverage, asset coverage and earnings prospects.
Because of the greater number of investment considerations involved in
investing in lower-rated securities, the achievement of the Portfolio's
objectives depends more on the analytical abilities of the Manager than
would be the case if the Portfolio were investing primarily in
securities in the higher rating categories.

The Portfolio may invest in participations and assignments of fixed and
floating rate loans made by financial institutions to governmental or
corporate borrowers. In addition to other risks associated with
investments in debt securities, participations and assignments involve
the additional risk that the institution's insolvency could delay or
prevent the flow of payments on the underlying loan to the Portfolio.
The Portfolio may have limited rights to enforce the terms of the
liquidity of loan participations and assignments may be limited.

At times the Manager may determine that conditions in the securities
markets make pursuing the Portfolio's basic investment strategy
inconsistent with the best interests of the shareholders. At such times
alternative strategies may be temporarily used, designed primarily to
reduce fluctuations in the value of the Portfolio's assets. In
implementing these defensive strategies, the Portfolio may increase the
portion of its assets invested in money market instruments and may
invest in higher-rated fixed-income securities, or other securities we
consider consistent with such defensive strategies. The yield on these
securities would generally be lower than the yield on lower-rated
fixed-income securities. It is impossible to predict when, or for how
long, the Portfolio will use these alternative strategies. Overall,
investors should expect that this Portfolio may fluctuate in price
independently of the broad bond market and prevailing interest rate
trends, and that price volatility at times may be very high, especially
as a result of credit concerns, market liquidity, and anticipated or
actual legislative and regulatory changes.

Some Points To Consider When Investing The High Yield Bond Portfolio is
designed for investors willing to take substantial risks in pursuit of
potentially higher rewards. Since the Portfolio invests in securities
that are considered speculative by traditional investment standards, an
investment in this Portfolio should represent only a portion of a
balanced investment program for most investors. Because of the risks
associated with bond investments, this Portfolio is intended to be a
long-term investment vehicle and is not designed to provide investors
with a means of speculating on short-term bond market movements.
Investors should carefully consider their ability to assume the risks of
owning shares of a Portfolio that invests primarily in lower-rated
securities before making an investment in this Portfolio.

Index Portfolio

Investment Objective
The Portfolio seeks to track the performance of the Standard & Poor's
500 Composite Stock Price Index, also known as the S&P 500 Index (the
"Index").

Investment Strategies and Policies To achieve the Portfolio's objective,
a combination of management techniques are employed. The Portfolio
purchases common stocks, S&P 500 Stock Index futures, S&P 500 Stock
Index options, and short-term instruments in varying proportions. For
common stocks, investment decisions are based solely on the proportions
of securities which are included in the Index. The only exception is
that Transamerica Corporation common stock will not be purchased.
Because stock purchases reflect the Index, no attempt is made to
forecast general market movements. The correlation between the
performance of the Portfolio and the S&P 500 Index is expected to be
0.95 or higher (a correlation of 1.00 would indicate perfect
correlation). There is no assurance that the Portfolio will achieve the
expected correlation.

The S&P 500 Index is an unmanaged index which assumes reinvestment of
dividends and is generally considered representative of U.S. large
capitalization stocks. The Index is composed of 500 common stocks of
large capitalization companies that are chosen by Standard and Poor's
Corporation on a statistical basis. The inclusion of a stock in the
Index in no way implies that Standard & Poor's Corporation believes the
stock to be an attractive investment. The 500 stocks, most of which
trade on the New York Stock Exchange, represent approximately 70% of the
market value of all U.S. common stocks. Each stock in the Index is
weighted by its market value.

Due to the market value weighting, the 50 largest companies in the Index
currently account for approximately 50% of the Index. Typically,
companies included in the Index are the largest and most dominant firms
in their respective industries. The Manager routinely compares the
Portfolio's composition to the Index and rebalances the Portfolio as
required.

The Portfolio may invest in instruments, other than common stocks, whose
return depends on stock market prices. They include S&P 500 Stock Index
futures contracts, options on the Index, and options on futures
contracts. These are derivative securities whose returns are linked to
the returns of the S&P 500 Index. These investments are made primarily
to help the Portfolio track the total return of the Index. The use of
S&P 500 Index derivatives allows the Portfolio to achieve close
correlation with the Index on a cost-effective basis while maintaining
liquidity. Purchase of futures and options requires only a small amount
of cash to cover the Portfolio's position and approximate the price
movement of the Index. In order to avoid leverage, any cash which the
Portfolio does not invest in stocks or in futures and options is
invested in short-term debt securities of the same type as the Money
Market Portfolio can invest. See "Money Market Portfolio" on page xx.
These short-term debt investments allow the Portfolio to approximate the
dividend yield of the Index, to cover the Portfolio's open positions in
the S&P 500 Index derivatives, and to help offset transaction costs and
other expenses not incurred by the unmanaged Index. For more information
on derivatives, see the section on "Options, Futures, and Other
Derivatives" on page xx of this Prospectus, and also in the Statement of
Additional Information.

The Index Portfolio is not affiliated with, sponsored, endorsed, sold or
promoted by Standard & Poor's Corporation.

Points to Consider When Investing The performance of the Index Portfolio
will reflect the performance of the S&P 500 Index although it may not
match it precisely. Generally, when the Index is rising, the value of
shares in the Portfolio should also rise. When the index is declining,
the value of the Portfolio's shares should also decline. The Index's
returns are not reduced by investment or operating expenses. So, the
Portfolio's ability to match the Index will be impeded by such expenses.
The Portfolio's return versus that of the Index, and its monthly
correlation with the movement of the Index, will be reviewed by the
Portfolio's management and reported to the Board.

The Portfolio's turnover rate may be as high as 200%. This may result in
higher transaction costs and tax consequences than for a less actively
traded Portfolio, but the Manager believes that such turnover will not
adversely affect the Portfolio's performance. See "Investment Procedures
and Risk Considerations" on page xx for more information on turnover.

The Portfolio is intended for investors who wish to participate in the
overall growth of the economy, as reflected by the domestic stock
market. By owning shares of the Portfolio, an investor indirectly owns
shares of the largest U.S. companies, according to their proportional
representation in the Index. Investors should have the perspective,
patience, and financial ability to take on average stock market
volatility in pursuit of long-term capital growth. Because of the
uncertainty associated with common stock investments, the Portfolio is
intended to be a long-term investment.

Money Market Portfolio

Investment Objective
The Money Market Portfolio seeks to maximize current income from money
market securities consistent with liquidity and preservation of
principal.

Investment Strategies and Policies
The Money Market Portfolio invests primarily in high
quality U. S. dollar-denominated money market
instruments with remaining maturities of 13 months
or less, including:

o obligations issued or guaranteed
by the U. S. and foreign
governments and their agencies and
instrumentalities;
o obligations of U. S. and foreign
banks, or their foreign branches,
and U. S. savings banks;
o short-term corporate obligations,
including commercial paper, notes
and bonds;
o other short-term debt obligations
with remaining maturities of 397
days or less; and
o repurchase agreements involving
any of the securities mentioned
above.

The Money Market Portfolio may also purchase other
marketable, non-convertible corporate debt
securities of U. S. issuers. These investments
include bonds, debentures, floating rate
obligations, and issues with optional maturities.
See the Statement of Additional Information for a
description of these securities.

Bank obligations are limited to U. S. or foreign
banks having total assets over $1.5 billion.
Investments in saving association obligations are
limited to U. S. savings banks with total assets
over $1.5 billion. Investments in bank obligations
can include instruments issued by foreign branches
of U. S. or foreign banks or domestic branches of
foreign banks.

In addition, the Money Market Portfolio may invest in U. S.
dollar-denominated obligations issued or guaranteed by foreign
governments or their political subdivisions, agencies, or
instrumentalities. Manager may buy these foreign securities and other
instruments if they meet the same criteria described above for the Money
Market Portfolio's investments in general. The Manager may invest up to
25% of the Portfolio's assets in obligations of Canadian and other
foreign issuers. At times the Portfolio may have no foreign investments.

The Manager will determine that any commercial paper and other
short-term corporate obligations in which the Portfolio invests present
minimal credit risks. The Manager will determine that such investments
are either: a) rated in the highest short-term rating category by at
least two nationally recognized statistical rating organizations; or b)
rated in the highest short-term rating by a single rating organization
if it is the only organization that has assigned the obligations a
short-term rating; or c) is unrated, but determined to be of comparable
quality (also called "First Tier Securities").

The Money Market Portfolio seeks to maintain a stable net asset value of
$1.00 per share by investing in assets which present minimal credit
risks as defined above, and by maintaining an average maturity of 90
days or less. Securities are valued on an amortized cost basis.

Points to Consider When Investing The Money Market Portfolio may be
appropriate for investors who would like to earn income at current money
market rates while preserving the value of their investment. It stresses
preservation of capital, liquidity and income and does not seek the
higher yields or capital appreciation that more aggressive investments
may provide. The Portfolio's yield will vary from day to day and
generally reflects current short-term interest rates and other market
conditions.

THE MONEY MARKET PORTFOLIO IS NEITHER INSURED NOR GUARANTEED BY THE
UNITED STATES GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE
PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE.

Small Company Portfolio

Investment Objective
The Portfolio seeks to maximize long-term growth.

Investment Strategies and Policies The Portfolio invests primarily in a
diversified portfolio of domestic equity securities (i.e., common
stocks, preferred stocks, rights, warrants and securities convertible
into or exchangeable for common stocks) of companies with small market
capitalizations (under $1 billion) or annual revenues of up to $1
billion. The companies in which the Portfolio invests are those that the
Manager believes to have the potential for significant long-term capital
appreciation. The Manager's research is designed to identify companies
with potential for improvement in profitability and acceleration of
growth. The average and median market capitalization of holdings in the
Portfolio may, however, fluctuate over time as a result of changes in
stock prices and the companies held by the Portfolio. In addition, the
Portfolio may continue to hold securities of companies whose market
capitalization or revenues grow above $1 billion while they are in the
portfolio, if these companies continue to meet the other investment
policies of the Portfolio.

The securities of smaller companies are usually less actively followed
by analysts than those of larger companies and may be under-valued by
the market. This can provide significant opportunities for capital
appreciation. However, the securities of such smaller companies may also
involve greater risks and may be subject to more volatile market
movements than securities of larger, more established companies. See
"Investment Procedures and Risk Considerations" on page xx for further
information about small company investment.

The Portfolio primarily invests in domestic common stocks of small
companies selected by the Adviser for their growth potential resulting
from growing franchises protected by high barriers to competition. The
Portfolio may invest to a lesser degree in other types of domestic and
foreign securities, including preferred stocks, warrants, convertible
securities and debt securities.

Debt securities that the Portfolio may purchase include investment grade
and non-investment grade corporate bonds and debentures, government
securities, mortgage and asset-backed securities, zero coupon bonds,
indexed/structured notes, high-grade commercial paper, certificates of
deposit, and repurchase agreements. Such securities may offer growth
potential because of anticipated changes in interest rates, credit
standing, currency relationships or other factors. The Portfolio may use
a variety of investment techniques, including derivatives and short
sales.

Although the Portfolio is authorized to invest without limitation in
foreign equity and debt securities, the Manager currently does not
intend to invest in foreign securities.

The Manager tries to keep the Portfolio fully invested. However, when
the Manager determines that market conditions warrant, the Portfolio may
invest without limitation in cash and cash equivalents for temporary
defensive purposes. To the extent the Portfolio is so invested, it is
not achieving its investment objectives. This practice is not expected
to be used routinely. As part of the management of cash and cash
equivalents and to help maintain liquidity, the Portfolio may invest in
the same kind of money market and other short-term instruments and debt
securities as the Money Market Portfolio does. See "Money Market
Portfolio" on page xx.

The Portfolio is constructed one stock at a time. Each company passes
through a research process and stands on its own merits as a viable
investment in the Manager's opinion.

Value Portfolio

Investment Objective
The Portfolio seeks to maximize capital appreciation.

Investment Strategies and Policies The Portfolio is a diversified
Portfolio that invests primarily in securities of companies that the
Manager believes are "under-valued" relative to the intrinsic or private
market value of the firm. Intrinsic, or private market value, is what an
acquiring company might pay for the entire firm. The determination of
private market value is based on an analysis of the firm's unrecognized
balance sheet values and the discretionary cash flow the firm generates.
The securities in the Portfolio may include common and preferred stocks,
warrants, convertible securities, corporate and high-yield debt, and
other securities that the Manager believes are attractively priced.
Income is a secondary consideration of the Portfolio, although it is not
part of the Portfolio's fundamental investment objective.

The Portfolio has no pre-set limit as to the percentage of the portfolio
which may be invested in equity securities, debt securities, or cash
equivalents. The Manager's opinions are based upon analysis and
research, taking into account the valuation of the firm's securities
relative to the fundamental outlook for the firm's business and the
comparable valuation of similar industry competitors. These factors are
not applied formulaically, as the Manager examines each security
separately; the Manager has no general criteria as to asset size,
earnings or industry type which would make a security unsuitable for
purchase by the Portfolio.

Although the Portfolio may invest in securities from any size issuer,
the Portfolio will generally invest in securities of issuers with market
capitalizations in excess of $500 million. The Portfolio may invest in
securities that are traded on U.S. or foreign exchanges, the National
Association of Securities Dealers Automated Quotations ("NASDAQ")
national market system or in the over-the-counter ("OTC") market.

Debt securities in which the Portfolio invests (such as corporate and
U.S. government bonds, debentures and notes) may or may not be rated by
rating agencies such as Moody's or S&P, and, if rated, such rating may
range from the very highest to the very lowest, currently C for Moody's
and D for S&P. Securities rated D are in default as to the payment of
principal and interest. Lower rated debt securities in which the
Portfolio expects to invest are commonly referred to as "junk bonds."
The Portfolio is limited to 35% of total assets for junk bonds and other
non-investment grade debt securities. See "High Yield (`Junk') Bonds" on
page xx for further information.

The general investment policy for debt instruments, including junk
bonds, is the same as the investment policy for equity securities. The
Portfolio seeks to invest in debt instruments that are available at
prices less than their intrinsic value. Such instruments may include
securities issued by reorganizing or restructuring companies, or
companies which recently emerged from, or are facing, the prospect of a
financial restructuring. It is under these circumstances, which usually
involve unrated or low rated securities that are often in, or about to,
default, that the Manager identifies securities which are sometimes
available at prices which it believes are less than their intrinsic
value.

The Manager tries to keep the Portfolio fully invested. However, when
the Manager determines that market conditions warrant, the Portfolio may
invest without limit in cash and cash equivalents for temporary
defensive purposes. To the extent the Portfolio is so invested, it is
not achieving its investment objectives. This practice is not expected
to be used routinely. As part of the management of cash and cash
equivalents and to help maintain liquidity, the Portfolio may invest in
the same kind of money market and other short-term instruments and debt
securities as the Money Market Portfolio does. See "Money Market
Portfolio" on page xx.

Points To Consider When Investing Since the Portfolio invests primarily
in common stocks, its investments are subject to stock market price
volatility. Price volatility means that stock prices can go up or down
due to a variety of economic and market conditions.

However, the Manager attempts to lessen price volatility by focusing on
the potential for each prospective holding (a "bottom up" approach)
rather than the economic and business cycle (a "top down" approach). The
Portfolio is constructed one stock at a time. Each company passes
through the Manager's research process and, in the Manager's opinion,
stands on its own merits as a viable investment. The Manager's
proprietary fundamental research is designed to identify companies that
sell below their intrinsic value. Intrinsic value is what an informed
corporate or strategic buyer would pay to purchase an entire company.
The Manager will also focus on companies that are restructuring or
redeploying capital to improve their return on investment. By focusing
on intrinsic value and capital redeployment, the Manager seeks to limit
downside risk while improving the chances for capital appreciation.

The Portfolio is intended for investors who have the perspective and
patience to seek competitive stock market returns in a focused pursuit
of long-term capital growth. Because of the uncertainty associated with
common stock investments, the Portfolio is intended to be a long-term
investment.

A GENERAL DISCUSSION ABOUT RISK

There are risks inherent in investing in different kinds of funds, such
as the Portfolios. Each of the Portfolios is subject to the following
risks:

Market or Price Volatility Risk For stocks, this refers to the price
fluctuations, or volatility, caused by changing conditions in the
financial markets. For bonds and other debt securities, this refers to
the change in market price caused by interest rate movements.
Longer-maturity bond funds and stock funds are more subject to this risk
than money market funds and shorter-maturity bond funds.

Financial or Credit Risk
For stocks and other equity securities, financial risk comes from the
possibility that current earnings of the company will fall, or that its
overall financial circumstances will decline. Either of these could
cause the security to lose value. For bonds and other debt securities,
financial risk comes from the possibility that the issuer will be unable
to pay principal and interest on time. Portfolios with low quality bonds
and speculative stock funds are more subject to this risk than funds
with government or high quality bonds. For more information, see
"High-Yield (`Junk') Bonds" on page 29 and "Summary of Bond Ratings" on
page 47.

Current Income Risk
The Portfolios receive income, either as interest or dividends, from the
securities in which they invest. Each Portfolio pays out substantially
all of this income to its shareholders as dividends. Current income risk
refers to how overall interest rate or dividend rate changes can affect
the Portfolio's ability to maintain the current level of dividend
payments to its shareholders.

Inflation or Purchasing Power Risk Inflation risk is the uncertainty
that dollars invested may not buy as much in the future as they do
today. Longer-maturity bond funds are more subject to this risk than
money market or stock funds.

Sovereign Risk
Sovereign risk is the potential loss of assets or earning power due to
government actions, such as taxation, expropriation, or regulation.
Portfolios with large investments overseas or Portfolios with
tax-advantaged investments are more subject to this risk than other
Portfolios.

INVESTMENT PROCEDURES AND RISK CONSIDERATIONS

Buying and Selling Securities In general, the Portfolios purchase and
hold securities for capital growth, current income, or a combination of
those purposes. Investment decisions are made in order to achieve the
Portfolio's investment objective. Portfolio changes can result from
liquidity needs, securities reaching a price objective, anticipated
changes in interest rates, a change in the creditworthiness of an
issuer, or from general financial or market developments. Because
investment changes usually are not tied to the length of time a security
has been held, a significant number of short-term transactions may
result.

The Portfolios may sell one security and simultaneously purchase another
of comparable quality. The Portfolio may simultaneously purchase and
sell the same security to take advantage of short-term differentials and
bond yields. In addition, the Funds may purchase individual securities
in anticipation of relatively short-term price gains. The rate of
portfolio turnover will not be a determining factor in these decisions.

Portfolio turnover has not been and will not be a consideration. The
Manager buys and sells securities for each Portfolio whenever it
believes it is appropriate to do so. Increased turnover results in
higher costs. These costs result from brokerage commissions, dealer
mark-ups and other transaction costs on the sale of securities and
reinvestment in other securities. Securities Lending As a way to earn
additional income, the Portfolios may lend their securities to
creditworthy persons not affiliated with the Portfolios. Such loans must
be secured by cash collateral or by irrevocable letters of credit
maintained on a current basis in an amount at least equal to the market
value of the securities loaned. During the existence of the loan, the
Portfolios must continue to receive the equivalent of the interest and
dividends paid by the issuer on the securities loaned and interest on
the investment of the collateral. The Portfolio must have the right to
call the loan and obtain the securities loaned at any time on three days
notice. This includes the right to call the loan to enable the Portfolio
to execute its shareholder voting rights. Such loans cannot exceed
one-third of the Portfolio's net assets taken at market value. Interest
on loaned securities cannot exceed 10% of the annual gross income of the
Portfolio (without offset for realized capital gains).

Lending securities to broker-dealers and institutions could result in a
loss or a delay in recovering the Portfolio's securities.

Borrowing Policies of the Portfolios The Portfolios can borrow money
from banks or engage in reverse repurchase agreements, for temporary or
emergency purposes. A Portfolio can borrow up to one-third of the
Portfolio's total assets. To secure borrowings, the Portfolios can
mortgage or pledge securities in an amount up to one-third of a
Portfolio's net assets. If a Portfolio borrows money, the Portfolio's
share price may be subject to greater fluctuation until the borrowing is
paid off. The Portfolio will not make any additional investments, other
than through reverse repurchase agreements, while the level of borrowing
exceeds 5% of the Portfolio's total assets. For more information on
reverse repurchase agreements see the "Reverse Repurchase Agreements and
Leverage" section on page 29.

Small Capitalization Stocks The Aggressive Growth Portfolio , the Growth
Portfolio, the Small Company Portfolio, and the Value Portfolio can
purchase securities of small companies. The securities of small
companies are usually less actively followed by analysts and may be
under-valued by the market, which can provide significant opportunities
for capital appreciation; however, the securities of such small
companies may also involve greater risks and may be subject to more
volatile market movements than securities of larger, more established
companies. The securities of small companies are often traded in the
over-the counter market, and might not be traded in volumes typical of
securities traded on a national securities exchange. Thus, the
securities of small companies are likely to be subject to more abrupt or
erratic market movements than securities of larger, more established
companies.

Over-The-Counter-Market The Aggressive Growth Portfolio, the Growth
Portfolio and Small Company Portfolios may invest in over-the-counter
stocks. Generally, the volume of trading in an unlisted or
over-the-counter common stock is less than the volume of trading in a
listed stock. Low trading volumes may make it difficult to find a buyer
or seller for the securities of some companies. This will have an effect
on the purchase or selling price of a stock.

Special Situations
The Aggressive Growth Portfolio, the Growth Portfolio, the Small Company
Portfolio, and the Value Portfolio may invest in "special situations"
from time to time. A special situation arises when, in the opinion of a
Portfolio's manager, the securities of a particular issuer will be
recognized and appreciate in value due to a specific development with
respect to that issuer. Developments creating a special situation might
include, among others, a merger proposal or buyout, a leveraged
recapitalization, a new product or process, a technological
breakthrough, a management change or other extraordinary corporate
events, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in
the event that the anticipated development does not occur or does not
attract the expected attention.

Repurchase Agreements
The Portfolios may enter into repurchase agreements with Federal Reserve
System member banks or U.S. securities dealers. A repurchase agreement
occurs when, at the time a Portfolio purchases an interest-bearing debt
obligation, the seller agrees to repurchase the debt obligation on a
specified date in the future at an agreed-upon price. The repurchase
price reflects an agreed-upon interest rate during the time the
Portfolio's money is invested in the security. Since the security
constitutes collateral for the repurchase obligation, a repurchase
agreement can be considered a collateralized loan. The risk to the
Portfolio is the ability of the seller to pay the agreed-upon price on
the delivery date. If the seller is unable to make a timely repurchase,
the expected proceeds could be delayed, or the Portfolio could suffer a
loss in principal or current interest, or incur costs in liquidating the
collateral. The Portfolios have established procedures to evaluate the
creditworthiness of parties making repurchase agreements.

The Portfolios will not invest in repurchase agreements maturing in more
than seven days, if that would result in more than 10% of the
Portfolio's net assets being so invested when taking into account the
remaining days to maturity of its existing repurchase agreements.

Reverse Repurchase Agreements and Leverage The Portfolios may enter into
reverse repurchase agreements with Federal Reserve member banks and U.S.
securities dealers from time to time. In a reverse repurchase
transaction the Portfolio sells securities and simultaneously agrees to
repurchase them at a price which reflects an agreed-upon rate of
interest. The proceeds from reverse repurchase agreements are used to
make other investments which either mature or are under an agreement to
resell at a date simultaneous with or prior to the expiration of the
reverse repurchase agreement. The Portfolio may utilize reverse
repurchase agreements only if the interest income to be earned from the
investment proceeds of the transaction is greater than the interest
expense of the reverse repurchase transaction.

Reverse repurchase agreements are a form of leverage which increases the
opportunity for gain and the risk of loss for a given change in market
value. In addition, the gains or losses will cause the net asset value
of the Portfolio's shares to rise or fall faster than may otherwise be
the case. There may also be a risk of delay in the recovery of the
underlying securities, if the counter party has financial difficulties.
A Portfolio's obligations under all borrowings, including reverse
repurchase agreements, will not exceed one-third of the Portfolio's net
assets.

When-Issued Securities
Occasionally the Portfolios may purchase new issues of securities on a
when-issued basis. The price of when-issued securities is established at
the time the commitment to purchase is made. Delivery of and payment for
these securities typically occur 15 to 45 days after the commitment to
purchase. The market price of the securities at the time of delivery may
be higher or lower than that contracted for on the when-issued security,
and there is some risk the transaction may not be consummated. The
Portfolios maintain a segregated account consisting of liquid securities
in an amount at least equal to the when-issued commitments.

Short Sales
The Portfolios may sell securities which they do not own, or intend to
deliver to the buyer if they do own ("sell short") if, at the time of
the short sale, a Portfolio owns or has the right to acquire an equal
amount of the security being sold short at no additional cost. These
transactions allow the Portfolios to hedge against price fluctuations by
locking in a sale price for securities they do not wish to sell
immediately.

A Portfolio may make a short sale when it decides to sell a security it
owns at a currently attractive price. This allows the Portfolio to
postpone a gain or loss for federal income tax purposes and to satisfy
certain tests applicable to regulated investment companies under the
Internal Revenue Code of 1986, as amended, (the "Code"). The Portfolios
will only make short sales if the total amount of all short sales does
not exceed 10% of the total assets of the Portfolio. This limitation can
be changed at any time.

Municipal Obligations
Any of the Portfolios, except the Index Portfolio, may invest in
municipal obligations. This includes the equity Portfolios as part of
their cash management techniques. In addition to the usual risks
associated with investing for income, the value of municipal obligations
can be affected by changes in the actual or perceived credit quality.
The credit quality of a municipal obligation can be affected by, among
other factors: a) the financial condition of the issuer or guarantor; b)
the issuer's future borrowing plans and sources of revenue; c) the
economic feasibility of the revenue bond project or general borrowing
purpose; d) political or economic developments in the region or
jurisdiction where the security is issued; and e) the liquidity of the
security. Because municipal obligations are generally traded over the
counter, the liquidity of a particular issue often depends on the
willingness of dealers to make a market in the security. The liquidity
of some municipal issues can be enhanced by demand features which enable
the Portfolio to demand payment from the issuer or a financial
intermediary on short notice.

High-Yield ("Junk") Bonds
High-yield bonds (also known as "junk" bonds) are lower-rated bonds that
involve higher current income than investment grade bonds but are
predominantly speculative because they present a higher degree of credit
risk. Credit risk is the risk that the issuer of the bonds will be
unable to make interest or principal payment on time. If this occurs,
the Portfolio would lose income, and could expect a decline in the
market value of the securities affected. Careful analysis of the
financial condition of companies issuing junk bonds is required. The
prices of junk bonds tend to be more reflective of prevailing economic
and industry conditions, the issuers' unique financial situations, and
the bonds' coupon than to small changes in the level of interest rates.
But during an economic downturn or a period of rising interest rates,
highly leveraged companies may have trouble making principal and
interest payments, meeting projected business goals, and obtaining
additional financing.

The Portfolios may also invest in unrated debt securities. Unrated
securities, while not necessarily of lower quality than rated
securities, may not have as broad a market. Because of the size and
perceived demand for the issue, among other factors, certain
municipalities may decide not to pay the cost of getting a rating for
their bonds. An analysis of the creditworthiness of the issuer, as well
as any financial institution or other party responsible for payments on
the security, is made to determine whether to purchase unrated municipal
bonds.

Unrated debt securities are included in the 35% limit on non-investment
grade debt of the applicable Portfolios, unless such securities are
deemed by the Manager to be the equivalent of investment grade
securities. See "Summary of Bond Ratings" on page 47 and the Statement
of Additional Information for a description of bond rating categories.

Foreign Securities
All the Portfolios may invest in foreign securities.
The Index Portfolio will invest only in those ADRs
that are selected by the Standard & Poor's Corporation to be included in
the S&P 500 Index.

Investing in the securities of foreign issuers involves special risks
and considerations not typically associated with investing in U.S.
companies. These risks and considerations include differences in
accounting, auditing and financial reporting standards, generally higher
commission rates on foreign Portfolio transactions, the possibility of
expropriation or confiscatory taxation, adverse changes in investment or
exchange control regulations, political instability which could affect
U.S. investment in foreign countries and potential restrictions on the
flow of international capital and currencies. Foreign issuers may also
be subject to less government regulation than U.S. companies. Moreover,
the dividends and interest payable on foreign securities may be subject
to foreign withholding taxes, thus reducing the net amount of income
available for distribution to the Portfolio's shareholders. Further,
foreign securities often trade with less frequency and volume than
domestic securities and, therefore, may exhibit greater price
volatility. Changes in foreign exchange rates will affect, favorably or
unfavorably, the value of those securities which are denominated or
quoted in currencies other than the U.S. dollar.

Options, Futures, and Other Derivatives The Portfolios may use options,
futures, forward contracts, and swap transactions ("derivatives").
However, the Money Market Portfolio does not currently use, or
anticipate using, derivatives. Derivatives are used to protect a
Portfolio against potential unfavorable movements in interest rates or
securities prices. If those markets do not move in the direction
anticipated, the Portfolios could suffer losses. The Portfolios may
purchase, or write, call or put options on securities or on indexes
("options"). The Portfolios may also enter into futures contracts for
the purchase or sale of instruments based on interest rates or financial
indexes ("futures contracts"), options on futures contracts, forward
contracts, and interest rate swaps and swap-related products. These
instruments are used primarily to adjust a Portfolio's exposure to
changing securities prices, interest rates, or other factors that affect
securities values. The strategy is to attempt to reduce the overall
investment risk. However, the Index Portfolio will use derivatives as
part of its strategy to match the performance of the S&P 500 Index.

Risks in the use of these derivatives include, in addition to those
referred to above: a) the risk that interest rates and securities prices
do not move in the directions being hedged against, in which case the
Portfolio has incurred the cost of the derivative (either its purchase
price or, by writing an option, losing the opportunity to profit from
increases in the value of the securities covered) with no tangible
benefit; b) imperfect correlation between the price of derivatives and
the movements of the securities' prices or interest rates being hedged;
c) the possible absence of a liquid secondary market for any particular
derivative at any time; d) the potential loss if the counterparty to the
transaction does not perform as promised; and e) the possible need to
defer closing out certain positions to avoid adverse tax consequences.
More information on derivatives is contained in the Statement of
Additional Information.

Mortgage-Backed and Asset-Backed Securities The Portfolios may invest in
mortgage-backed and asset-backed securities. The Bond Portfolio is more
likely to invest in such securities than the other Portfolios.
Mortgage-backed and asset-backed securities are generally securities
evidencing ownership or interest in pools of many individual mortgages
or other loans. Part of the cash flow of these securities is from the
early payoff of some of the underlying loans. The specific amount and
timing of such prepayments is difficult to predict, creating "prepayment
risk." For example, prepayments on Government National Mortgage
Association certificates ("GNMAs") are more likely to increase during
periods of declining long-term interest rates because borrowers tend to
refinance when interest rates drop. In the event of very high
prepayments, the Portfolios may be required to invest these proceeds at
a lower interest rate, causing them to earn less than if the prepayments
had not occurred. Prepayments are more likely to decrease during periods
of rising interest rates, causing the expected average life of the
underlying mortgages to become longer. This variability of prepayments
will tend to limit price gains when interest rates drop and to
exaggerate price declines when interest rates rise.

Zero Coupon Bonds
The Portfolios may invest in zero coupon bonds and strips. Zero coupon
bonds do not make regular interest payments. Instead, they are sold at a
discount from face value. A single lump sum which represents both
principal and interest is paid at maturity. Strips are debt securities
whose interest coupons are taken out and traded separately after the
securities are issued, but otherwise are comparable to zero coupon
bonds. The market value of zero coupon bonds and strips generally is
more sensitive to interest rate fluctuations than interest-paying
securities of comparable term and quality.

Indebtedness
From time to time, the Portfolios may purchase the direct indebtedness
of various companies ("Indebtedness") or participation in such
Indebtedness. The Value Portfolio is more likely to invest in such
securities than the other Portfolios. Indebtedness represents a specific
commercial loan or portion of a loan which has been given to a company
by a financial institution such as a bank or insurance company ("Bank
Claims"). The company is typically obligated to repay such commercial
loan over a specified time period. By purchasing the Bank Claims, a
Portfolio steps into the shoes of the financial institution which made
the loan to the company prior to its restructuring or refinancing. Such
Bank Claims purchased by a Portfolio may be in the form of loans, notes
or bonds.

The Portfolios normally invest in the Indebtedness of a company which
Indebtedness has the highest priority in terms of payment by the
company, although on occasion, lower priority Indebtedness also may be
acquired.

Indebtedness of companies may also include Trade Claims. Trade Claims
generally represent money due to a supplier of goods or services to the
companies issuing indebtedness. Company Indebtedness, including Bank
Claims and Trade Claims, may be illiquid (as defined below).

Illiquid Securities
Up to 15% of a Portfolio's net assets may also be invested in securities
that are illiquid, except that the Money Market Portfolio may only
invest 10% of its net assets in such securities. Securities are
considered illiquid when there is no readily available market or when
they have legal or contractual restrictions. Repurchase agreements which
mature in more than seven days are included as illiquid securities.
These investments may be difficult to sell quickly for their fair market
value.

Certain restricted securities that are not registered for sale to the
general public but that can be resold to institutional investors under
Rule 144A may not be considered illiquid if a dealer or institutional
trading market exists. The institutional trading market is relatively
new. However, liquidity of the Portfolios' investments could be impaired
if trading for these securities does not further develop or declines.
The Manager determines the liquidity of Rule 144A securities under
guidelines approved by the Transamerica Variable Insurance Fund, Inc.
Board of Directors ("Board").

Variable Rate, Floating Rate, or Variable Amount Securities Any of the
Portfolios, except the Growth Portfolio, may invest in variable rate,
floating rate, or variable amount securities. These are short-term
unsecured promissory notes issued by corporations to finance short-term
credit needs. They are interest-bearing notes on which the interest rate
generally fluctuates on a scheduled basis.

Investments in Other Investment Companies Up to 10% of a Portfolio's
total assets may be invested in the shares of other investment
companies, but only up to 5% of its assets may be invested in any one
other investment company. In addition, the Portfolios cannot purchase
more than 3% of the outstanding shares of any one investment company. It
is intended that these investments be kept to a minimum.

State Insurance Regulation

The Portfolios are intended to be a funding vehicle for
variable annuity contracts and variable life policies to be offered by
insurance companies and will seek to be offered in as many jurisdictions
as possible. Certain states have regulations or guidelines concerning
concentration of investments and other investment techniques. If such
regulations and guidelines are applied to the Portfolios, a Portfolio
may be limited in its ability to engage in certain techniques and to
manage its portfolio with the flexibility provided herein. It is the
intention of each Portfolio that it operate in material compliance with
current insurance laws and regulations, as applied, in each jurisdiction
in which the Portfolio is offered.

PORTFOLIO TURNOVER

The Portfolios will not consider portfolio turnover to be a
limiting factor in making investment decisions. Changes will be made in
a Portfolio if such changes are considered advisable to better achieve
that Portfolio's investment objective. The portfolio turnover rate is
calculated by dividing the lesser of the dollar amount of sales or
purchases of portfolio securities by the average monthly value of the
portfolio securities, excluding debt securities having a maturity at the
date of purchase of one year or less.
High rates of portfolio turnover involve correspondingly
greater expenses which must be borne by a Portfolio and its
shareholders, including higher brokerage commissions, dealer mark-ups
and other transaction costs on the sale of securities and reinvestment
of other securities. High rate of turnover may result in the
acceleration of taxable gains and may under certain circumstances make
it more difficult for a Portfolio to qualify as a regulated investment
company under the Internal Revenue Code. See "Federal Tax Matters" in
the Statement of Additional Information.

MANAGEMENT

Directors and Officers

The Fund's Board of Directors is responsible for deciding
matters of general policy and reviewing the actions of the Investment
Adviser and Investment Sub-Adviser, the custodian, the accounting and
administrative services providers and other providers of services to the
Portfolios. The officers of the Fund supervise its daily business
operations. The Statement of Additional Information contains information
as to the identity of, and other information about, the directors and
officers of the Fund.

Investment Adviser

Transamerica Occidental Life Insurance Company
("Transamerica"), 1150 South Olive Street, Los Angeles, California
90015, is the investment adviser of the Portfolios. Transamerica is a
stock life insurance company incorporated in the state of California on
June 30, 1906. It has been a wholly-owned direct or indirect subsidiary
of Transamerica Corporation, 600 Montgomery Street, San Francisco,
California 94111, since March 14, 1930. Transamerica acted as investment
adviser to Transamerica Occidental's Separate Account Fund C ("Separate
Account Fund C"), the predecessor to the Growth Portfolio.

The Fund has entered into an Investment Advisory Agreement with
Transamerica under which Transamerica assumes overall responsibility,
subject to the supervision of the Fund's Board of Directors, for
administering all operations of the Fund and for monitoring and
evaluating the management of the assets of the Portfolios by Investment
Services on an ongoing basis. Transamerica provides or arranges for the
provision of the overall business management and administrative services
necessary for the Fund's operations and furnishes or procures any other
services and information necessary for the proper conduct of the Fund's
business. Transamerica also acts as liaison among, and supervisor of,
the various service providers to the Fund.

For its services to the Portfolios, Transamerica receives
annual advisory fees which are a percentages of the average daily net
assets of the Portfolios. The fees are deducted daily from the assets of
the Portfolios. The fees may be higher than the average advisory fee
paid to the investment advisers of other similar portfolios. The
advisory fees are shown below. Transamerica may waive some or all of its
fees from time to time at its discretion.

Each Portfolio pays all the costs of its operations that are
not assumed by Transamerica, including custodian, legal, auditing, and
registration fees and expenses, and fees and expenses of directors
unaffiliated with Transamerica. Fund expenses that are not
Portfolio-specific will be allocated between the Portfolios based on the
net assets of each Portfolio.

Sub-Adviser

Transamerica has contracted with Transamerica Investment
Services, Inc. ("Investment Services" or "Sub-Adviser" or "Manager"), a
wholly-owned subsidiary of Transamerica Corporation, to render
investment services to the Portfolios. Investment Services has been in
existence since 1967 and has provided investment services to investment
companies since 1968 and to Transamerica and affiliated companies since
1981. Investment Services is located at 1150 South Olive Street, Los
Angeles, California 90015-2211. Transamerica has agreed to pay
Investment Services a fee at the annual rate of a percentage of the
Portfolios' average daily net assets. Investment Services will provide
recommendations on the management of Portfolio assets, provide
investment research reports and information, supervise and manage the
investments of the Portfolios, and direct the purchase and sale of
Portfolio investments. Portfolio Advisory Fee Sub-Advisory Fee
Aggressive Growth Balanced Bond Growth High Yield Bond Index Money
Market Small Company Value

Investment Services is also responsible for the selection of
brokers and dealers to execute transactions for the Portfolios. Some of
these brokers or dealers may be affiliated persons of Transamerica and
Investment Services, although presently none are. Although it is the
policy of Investment Services to seek the best price and execution for
each transaction, Investment Services may give consideration to brokers
and dealers who provide Investment Services with statistical information
research and other services in addition to transaction services.
Additional information about the selection of brokers and dealers is
provided in the Statement of Additional Information.

Trading decisions for each of the Portfolios described in this
Prospectus are made by a team of expert managers and analysts headed by
a primary manager. The primary managers are primarily responsible for
the day-to-day decisions related to their Portfolio. They are supported
by the entire group of managers and analysts. The primary manager of any
one Portfolio may be on another Portfolio team. The transactions and
performance of the Portfolios are reviewed periodically by the
Investment Adviser's senior officers.

Here's a listing and brief biography of the team leaders for each of the
Portfolios:

Aggressive Growth Portfolio and Small Company
Portfolio
Primary Manager: Philip Treick, Vice President and
Fund Manager, Transamerica Investment Services.
B.S., University of South Florida. Financial
Analyst, Raymond James Financial Corporation,
1987-1988. Joined Transamerica in 1988.

Co-Manager: Christopher J. Bonavico, Assistant Vice
President and Fund Manager, Transamerica Investment
Services. B.S., University of Delaware. Equity
Research Analyst, Salomon Brothers, 1989-1993.
Business Analyst, Planning & Financial Management,
Chase Manhattan Bank, 1988-1989. Joined Transamerica
in 1993.

Growth Portfolio
Primary Manager: Jeffrey S. Van Harte, C.F.A. Vice
President and Senior Fund Manager, Transamerica
Investment Services. Member of San Francisco Society
of Financial Analysts. B.A., California State
University at Fullerton. Securities Analyst and
Trader, Transamerica Investment Services, 1980-1984.
Joined Transamerica in 1980.

Co-Manager: Philip Treick (see above).

Value Portfolio
Primary Manager: Christopher J. Bonavico (see above).

Co-Manager: Jeffrey S. Van Harte (see above).

Index Portfolio
Primary Manager: Lisa L. Hansen, Assistant Vice
President and Senior Trader, Transamerica Investment
Services. B.A. (biology), University of California
at Santa Cruz. Senior Trader, Husic Capital
Management, 1988-1997. Assistant Vice President,
Senior Trader, Kingsley Jennison McNulty & Morse,
Inc., 1979-1988. Joined Transamerica in 1997.

Co-Manager: Christopher J. Bonavico (see above).

Balanced Portfolio
Primary Manager: Gary U. Rolle', C.F.A., Executive
Vice President & Chief Investment Officer,
Transamerica Investment Services. Chairman &
President, Transamerica Income Shares. Chief
Investment Officer of Transamerica Occidental Life
and Transamerica Life Insurance & Annuity. Former
member of the Board of Governors of the Los Angeles
Society of Financial Analysts. B.S. (chemistry and
economics), University of California at Riverside.
Chief Investment Officer, Kaufman & Broad and Sun
Life Insurance Company of California, 1981-1983.
First joined Transamerica in 1967. Returned to
Transamerica in 1983.

Co-Manager: Stephen J. Ahearn, C.F.A., Vice
President and Director of Research, Transamerica
Investment Services. B.S. (finance), Boston College
(Magna Cum Laude). Senior Associate-Municipal Bonds,
General Electric Investment Corporation, 1991-1994.
Investment Analyst, General Electric Investment
Corporation 1987-1991. Financial Management Program,
General Electric Corporation, 1985-1987. Joined
Transamerica in 1994.

Co-Manager: Christopher J. Bonavico (see above).

High Yield Bond Portfolio
Primary Manager: Heather E. Creeden, C.F.A. Vice
President and Fund Manager, Transamerica Investment
Services. Member of the Los Angeles Society of
Financial Analysts. B.S., Arizona State University.
Portfolio Manager, Analytical Investment Management,
1986-1987. Joined Transamerica in 1987.

Co-Manager: Stephen J. Ahearn (see above).

Bond Portfolio
Primary Manager: Susan A. Silbert, C.F.A., Senior
Vice President and Director of Fixed Income
Management, Transamerica Investment Services. Vice
President of Transamerica Income Shares. Member of
the Los Angeles Society of Financial Analysts.
M.B.A. (finance), University of Southern California.
B.S. (finance), University of Southern California.
Joined Transamerica in 1967.

Co-Manager: Matthew W. Kuhns, C.F.A., Vice President
and Portfolio Manager, Transamerica Investment
Services. Member of the Bond Club of Los Angeles.
M.B.A. (finance), University of Southern California.
B.A. (social science), University of California,
Berkeley. Assistant Vice President, First National
Bank of Chicago, 1987-1991. Assistant to the Budget
Director, University of Southern California,
1985-1986. Joined Transamerica in 1991.

Co-Manager: James J. Flick, Assistant Vice President
and Portfolio Manager, Transamerica Investment
Services. M.B.A. (finance), University of Chicago.
B.S. (mechanical engineering), Ohio State
University. Senior Vice President-Fixed Income,
Lehman Brothers, 1994-1995. Senior Vice
President-Fixed Income, J.P. Morgan, 1993-1994. Vice
President-Fixed Income, Citicorp Securities,
1990-1993. Associate-Fixed Income, Goldman Sachs,
1987-1990. Engineer, Westinghouse, 1983-1986. Joined
Transamerica in 1995.

Co-Manager: William A. Griffin, C.F.A., Vice
President and Portfolio Manager, Transamerica
Investment Services. B.A. (history), Colgate
University. Analyst, Countrywide Funding
Corporation, 1991. Director-Mortgage Research, Mabon
Nugent & Co., 1988-1990. Mortgage-backed Options and
Intermediate Mortgage Trader, Citicorp Investment
Bank, 1986-1987. Mortgage-backed Trading Assistant,
Dean Witter Reynolds, 1984-1986. Joined Transamerica
in 1991.

Money Market Portfolio
Primary Manager: Kevin J. Hickam, C.F.A. Assistant
Vice President and Fund Manager, Transamerica
Investment Services. Member of Los Angeles Society
of Financial Analysts. M.B.A., Cornell University.
B.S., California State University at Chico. Senior
Accountant, Santa Clara Savings, 1984-1987. Joined
Transamerica in 1989.

Co-Manager: Rex A. Olson, C.F.A., Securities
Analyst, Transamerica Investment Services. Member of
the Los Angeles Society of Financial Analysts. B.S.
(finance), University of Southern California. Vice
President, Mitsubishi Trust, 1987-1997. Associate,
National Association of Securities Dealers,
1986-1987. Joined Transamerica in 1997.

PERFORMANCE INFORMATION

From time to time the Fund may disseminate average annual total
return and yield figures for the Portfolios in advertisements and
communications to shareholders or sales literature.

Average annual total return is determined by computing the
annual percentage change in value of $1,000 invested for specified
periods ending with the most recent calendar quarter, assuming
reinvestment of all dividends and distributions at net asset value. The
average annual total return calculation assumes a complete redemption of
the investment at the end of the relevant period.

The Fund also may from time to time disseminate year-by-year
total return, cumulative total return and yield information for the
Portfolios in advertisements, communications to shareholders or sales
literature. These may be provided for various specified periods by means
of quotations, charts, graphs or schedules. Year-by-year total return
and cumulative total return for a specified period are each derived by
calculating the percentage rate required to make a $1,000 investment in
the Portfolio (assuming all distributions are reinvested) at the
beginning of such period equal to the actual total value of such
investment at the end of such period.

Seven-day yield illustrates the income earned by an investment
in a money market fund over a recent seven-day period. Since money
market funds maintain a stable $1.00 share price, current seven-day
yields are the most common illustration of money market fund
performance.

In addition, the Fund may from time to time publish performance
of a Portfolio relative to certain performance rankings and indices.

Since each Portfolio is not available directly to the public,
its performance data is not advertised unless accompanied by comparable
data for the applicable variable annuity or variable life insurance
policy. The Portfolios' performance data does not reflect separate
account or contract level charges.

The investment results of each Portfolio will fluctuate over
time and any presentation of investment results for any prior period
should not be considered a representation of what an investment may earn
or what a Portfolio's performance may be in any future period. In
addition to information provided in shareholder reports, the Fund may,
in its discretion, from time to time make a list of a Portfolio's
holdings available to investors upon request.

These Portfolios are not available for purchase directly by the
general public, and are not the same as the mutual funds with very
similar or nearly identical names that are sold directly to the public.
However, the investment objectives and policies of certain of the
Portfolios are very similar to the investment objective and policies of
other portfolios, funds or separate accounts that are or may be managed
by the same investment adviser or manager. Nevertheless, the investment
performance and results of the Portfolios, available under variable
insurance contracts issued by Transamerica or other insurance companies
with participation agreements with the Fund, may be lower, or higher,
than the investment results of such other (publicly available)
portfolios. There can be no assurance, and no representation is made,
that the investment results of any of the Portfolios will be comparable
to the investment results of any other portfolio, mutual fund or
separate account, even if the other portfolio, mutual fund or separate
account has the same investment adviser or manager and the same
investment objective and policies, and a very similar name.

Growth Portfolio Performance

The Growth Portfolio is the successor to Transamerica
Occidental's Separate Account Fund C ("Separate Account Fund C"). The
assets of Separate Account Fund C as of the close of business October
31, 1996, were transferred intact to the Growth Portfolio in exchange
for shares of the Growth Portfolio. Because the Growth Portfolio is the
successor to Separate Account Fund C, the historical performance data of
Separate Account Fund C is the Growth Portfolio's performance history
for periods prior to the reorganization. The performance data for the
Growth Portfolio prior to the reorganization does not reflect any sales
or insurance charges or any other separate account or contract level
charges that were imposed under the annuity contracts issued through
Separate Account Fund C.

Average
Annual Total Returns

as of 12-31-97
TVIF Growth Portfolio 1 year
5 year 10 year
-------------------------
xx%
xx% xx%

Sub-Adviser Performance

The Portfolios' Sub-Adviser also manages SEC-registered mutual
funds ("mutual funds") and segregated investment accounts ("separate
accounts") of insurance companies.

A Portfolio may disclose in advertisements, supplemental sales
literature, and reports performance data of existing mutual funds or
separate accounts managed by the Portfolio's Sub-Adviser and that have
investment objectives, policies, and strategies substantially similar to
those of such Portfolio (a "Similar Sub-Adviser Fund").

Although the Similar Sub-Adviser Funds have substantially
similar investment objectives, policies, and restrictions as the
designated Portfolio, and are managed by the same Sub-Adviser as the
designated Portfolio, you should not assume that the designated
Portfolio will have the same future performance as the Similar
Sub-Adviser Funds.
Any Portfolio's future performance may be greater or less than the
historical performance and/or future performance of the corresponding
Similar Sub-Adviser Fund due to, among other things, certain inherent
differences between a Portfolio and the Similar Sub-Adviser Funds.
Additionally, the separate accounts are not registered with the SEC nor
are they subject to Subchapter M of the Internal Revenue Code of 1986,
as amended (the "Code"). Therefore, they were not subject to the
investment limitations, diversification requirements, and other
restrictions that apply to the Funds. If the separate accounts had been
subject to Subchapter M of the Code, their performance may have been
adversely affected at times. Additionally, the fees and expenses of the
Portfolios may be higher or lower than the fees and expenses of Similar
Sub-Adviser Funds. Higher fees and expenses have a negative impact on
performance.

The High Yield Bond separate account performance shown below
was recalculated to reflect its current fees and expenses. There are no
corresponding separate accounts for the Aggressive Growth, Small Company
and Value Portfolios.

The performance of each Similar Sub-Adviser Fund is its own and
should not be considered a substitute for a Portfolio's own performance;
nor should Similar Sub-Adviser Fund performance be considered indicative
of any past or future
performance of the Portfolios.

The following table illustrates the annualized performance1 of
Similar Sub-Adviser Funds and recognized industry indexes over the last
one, five, and ten-year periods, or since inception,
ending December 31, 1997.

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

Since
TVIF Portfolio Similar Sub-Adviser Fund 1 year 5 year 10 year Inception2

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

<S> <C> <C> <C> <C>
Index Equity Index Fund* 46.99% 21.79% 18.30% 17.48%

Premier Index Fund** 47.79% -- -- 30.96%

S&P 500 Index3 48.00% 22.40% 18.94% 15.74%

Balanced Balanced Fund* 47.62% 22.19% -- 22.19%

Premier Balanced Fund** 51.88% -- -- 26.39%

50% S&P 500 Index and 50% Lehman
Brothers Govt./Corporate Index4 29.34% 14.57% -- 14.57%

High Yield Bond High Yield Bond Fund* -- -- -- --

Premier High Yield Bond Fund** -- -- -- --

Merrill Lynch All High Yield Index5 14.77% 10.99% -- 14.07%

Bond Bond Fund* 14.77% 8.27% 10.60% 12.34%

Premier Bond Fund** 14.19% -- -- 7.18%

Lehman Brothers Govt./Corporate Index 9.76% 7.61% 9.15% 9.97%

Money Market Cash Management Fund6* 5.10% 4.50% 5.41% 6.62%

Premier Cash Reserve Fund** 5.54% -- -- 5.45%

IBC First Tier Index7 5.08% 4.44% 5.39% 6.56%

- -------------------- --------------------------------------------- ------------ ----------- ------------ ------------
</TABLE>

1 Average Annual Total Returns of the Premier Funds mutual funds reflect
that of the Investor Shares class, which are subject to Rule 12b-1
fees.
2 The inception date of all Premier Funds mutual funds shown in the table
is October 2, 1995. Inception dates of the separate accounts: Equity
Index - 10/1/86; Balanced - 4/1/93; High Yield Bond - 9/1/90; Bond -
5/1/83; and Money Market - 1/3/82. The inception dates shown for the
indexes match the dates of the separate accounts' inception.
3 The Standard and Poor's 500 Index consists of 500 widely held, publicly
traded common stocks.
4 The Lehman Brothers Government/Corporate Bond Index is a broad-
based unmanaged index of government and corporate bonds with maturities
of 10 years or longer that are rated investment grade or higher by
Moody's Investor Services, Inc. or Standard and Poor's Corporation.
5 The Merrill Lynch All High Yield Index consists of high yield bonds.
6 The 7-day current yield was 5.36% and effective yield was x.xx% as of
12/31/97.
7 IBC's Money Fund ReportTM-First Tier is a composite of taxable money
market funds that meet the SEC definition of first tier securities
contained in Rule 2a-7 under the Investment Company Act of 1940.

* indicates Separate Account
** indicates Mutual Fund

These indexes do not reflect any commissions or fees which would be
incurred by an investor purchasing the securities represented by each index.

DETERMINATION OF NET ASSET VALUE

The net asset value per share of each Portfolio is normally determined
once daily as of the close of regular trading on the New York Stock Exchange,
currently 4:00 p.m. New York time, on each day when the New York Stock Exchange
is open, except as noted below. The New York Stock Exchange is scheduled to be
open Monday through Friday throughout the year, except for certain holidays. The
net asset value of the Portfolios' shares will not be calculated on the Friday
following Thanksgiving, the Friday following Christmas if Christmas falls on a
Thursday and the Monday before Christmas if Christmas falls on a Tuesday.

The net asset value of each Portfolio is determined by dividing the
value of the Portfolio's securities, cash, and other assets (including accrued
but uncollected interest and dividends), less all liabilities (including accrued
expenses but excluding capital and surplus) by the number of shares of the
Portfolio outstanding.

The value of the Portfolio securities and assets is generally
determined on the basis of their market values. However, all securities held by
the Money Market Portfolio and any short-term debt securities of the other
Portfolios having remaining maturities of sixty days or less are valued by the
amortized cost method, which approximates market value. Amortized cost involves
valuing an investment at its cost and assuming a constant amortization to
maturity of any discount or premium, regardless of the effect of movements in
interest rates. Investments for which market quotations are not readily
available are valued at their fair value as determined in good faith by, or
under authority delegated by, the Fund's Board of Directors. For more
information, see "Determination of Net Asset Value" in the Statement of
Additional Information.

OFFERING, PURCHASE AND REDEMPTION OF SHARES

Pursuant to participation agreements between the Fund and Transamerica
and other insurance companies, shares of the Portfolios are sold in a continuous
offering and are authorized to be offered to the separate accounts of various
insurance companies in order to support variable annuity and life insurance
contracts. The separate accounts purchase and redeem shares of the Portfolios at
net asset value without sales or redemption charges.

For each day on which a Portfolio's net asset value is calculated, the
separate account will transmit to the Fund any orders to purchase or redeem
shares of the Portfolio based on the purchase payments, redemption (surrender)
requests, and transfer requests from contract owners, annuitants and
beneficiaries that have been processed on that day. Shares of the Portfolio are
purchased and redeemed at the Portfolio's net asset value per share calculated
as of that same day although such purchases and redemptions may be executed the
next morning.

In the event that shares of a Portfolio are offered to a separate
account supporting variable life insurance or to qualified pension and
retirement plans, a potential for certain conflicts may exist between the
interests of variable annuity contract owners, variable life insurance contract
owners and plan participants. The Fund currently does not foresee any
disadvantage to owners of the annuity contracts arising from the fact that
shares of a Portfolio might be held by such entities. However, in such an event,
the Fund's Board of Directors will monitor the Portfolios in order to identify
any material irreconcilable conflicts of interest which may possibly arise, and
to determine what action, if any, should be taken in response to such conflicts.

INCOME, DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS

Each Portfolio distributes substantially all of its net investment
income in the form of dividends to its shareholders. Except for the Money Market
Portfolio, the Portfolios declare and pay their dividends and capital gain
distributions at least annually.

Although the Fund pays dividends on the Money Market Portfolio monthly,
dividends are determined daily. Net capital gains of the Money Market Portfolio,
if any, are distributed annually.

TAXES

The Fund believes that each Portfolio qualifies as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), and each Portfolio intends to distribute substantially all
of its net income and net capital gains to its shareholders. As a result, under
the provisions of subchapter M, there should be little or no income or gains
taxable to the Portfolios. In addition, each Portfolio intends to comply with
certain other distribution rules specified in the Code so that it will not incur
a 4% nondeductible federal excise tax that otherwise would apply. See "Federal
Tax Matters" in the Statement of Additional Information.

OTHER INFORMATION

Preparing For Year 2000

Many computer software systems in use today cannot distinguish the year
2000 from the year 1900 because dates are encoded using the standard six-place
format that allows entry of only the last two digits of the year. This is
commonly known as the "Year 2000 Problem." This issue could adversely impact the
Fund if the computer systems used by the Fund's Investment Adviser, Sub-Adviser,
Custodian, transfer agent and other service providers do not accurately process
date information after January 1, 2000. The Investment Adviser and Sub-Adviser
are addressing this issue by testing the computer systems they use to ensure
that those systems will operate properly after January 1, 2000, and they are
also seeking assurances from the Custodian, transfer agent and other service
providers used that their computer systems will be adapted to address the Year
2000 Problem in time to prevent adverse consequences after January 1, 2000.
However, especially when taking into account interaction with other systems, it
is difficult to predict with precision that there will be no disruption of
services in connection with the year 2000.

Reports

Each year a Contract Owner (or annuitant or beneficiary, as
appropriate) will receive the Fund's Annual Report containing audited financial
statements and the Fund's Semi-Annual Report containing unaudited financial
statements. Proxy materials, if issued, will also be sent. Questions may be
directed to the Fund at the telephone number or address listed on the cover page
of this Prospectus.

Voting and Other Rights

Each share outstanding is entitled to one vote on all matters submitted
to a vote of shareholders (of the Portfolios or the Fund) and is entitled to a
pro-rata share of any distributions made by the Portfolios and, in the event of
liquidation, of its net assets remaining after satisfaction of outstanding
liabilities. Each share of the Portfolios, when issued, is nonassessable and has
no preemptive or conversion rights. The shares have noncumulative voting rights.

As a Maryland corporation, the Fund is not required to hold regular
annual shareholder meetings and does not intend to do so. The Fund is, however,
required to hold shareholder meetings for the following purposes: (i) approving
certain agreements as required by the 1940 Act; (ii) changing fundamental
investment objectives, policies and restrictions of the Portfolio; and (iii)
filling vacancies on the Board of Directors in the event that less than a
majority of the members of the Board of Directors were elected by shareholders.
Directors may also be removed by shareholders by a vote of two-thirds of the
outstanding votes attributable to shares at a meeting called at the request of
holders of 10% or more of such votes. The Fund has the obligation to assist in
shareholder communications.

Transamerica currently owns more than 25% of the outstanding shares of
each Portfolio which may result in it being deemed a controlling person of each
Portfolio, as that term is defined in the 1940 Act.

Custody of Assets and Administrative Services

Pursuant to a custody agreement with the Fund, State Street Bank and
Trust Company ("State Street" or "Custodian"), 225 Franklin Street, Boston,
Massachusetts 02110, will hold all securities and cash assets of the Fund,
provide recordkeeping and certain accounting services and serve as the custodian
of the Fund's assets. The custodian will be authorized to deposit securities in
securities depositories and to use the services of sub-custodians.

Summary of Bond Ratings

Following is a summary of the grade indicators used by two of the most
prominent, independent rating agencies (Moody's Investors Service, Inc. and
Standard & Poor's Corporation) to rate the quality of bonds. The first four
categories are generally considered investment quality bonds. Those below that
level are of lower quality, commonly referred to as "junk bonds."

Investment Grade Moody's Standard & Poor's
Highest quality Aaa AAA
High quality Aa AA
Upper medium A A
Medium, speculative features Baa BBB

Lower Quality
Moderately speculative Ba BB
Speculative B B
Very speculative Caa CCC
Very high risk Ca CC
Highest risk, may not be
paying interest C C
In arrears or default D D

For more information on bond ratings, including gradations within each
category of quality, see the Statement of Additional Information.

CONDENSED FINANCIAL INFORMATION

The following table gives information regarding income, expenses and
capital changes in the Growth Portfolio of the Transamerica Variable Insurance
Fund, Inc. (formerly, Transamerica Occidental's Separate Account Fund C)
attributable to a Portfolio share outstanding throughout the periods indicated.
The information is presented as if the reorganization of Separate Account Fund
C, in which the assets and liabilities of the Separate Account were transferred
intact to the Growth Portfolio, had always been in effect. The activity prior to
the November 1, 1996, reorganization of Separate Account Fund C, represents
accumulation unit values of Separate Account Fund C which have been converted
into share values for presentation purposes.

The per share data in the table for the period January 1, 1993, through
December 31, 1997, has been audited by Ernst & Young LLP, independent auditors
of the Fund, in connection with the annual audit of the Portfolio's financial
statements. The per share data in the table for the period January 1, 1988,
through December 31, 1991, is based upon data from the audited financial
statements of Separate Account Fund C, but Ernst & Young, LLP has not audited
the conversion of that data to Growth Portfolio share values. Prior to November
1, 1996, activity represents accumulated unit values of Separate Account Fund C
which have been converted to share values for presentation purposes. The
financial statements for the Growth Portfolio which appear in the Statement of
Additional Information are dated as of December 31, 1997.

There are no financial statements for the Money Market Portfolio
because it did not commence operations until January 1998. There are no
financial statements for the Aggressive Growth, Balanced, Bond, High Yield Bond,
Index, Small Company and Value Portfolios because they had not yet commenced
operations as of the date of this prospectus.
<TABLE>
<CAPTION>

GROWTH PORTFOLIO

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

1997 1996 1995 1994 1993

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

<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $10.93 $8.582 $5.615 $5.239 $4.287

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

Investment Operations
Net investment income (loss) (0.05) (0.065) (0.069) (0.042) (0.030)

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

Net realized and unrealized gain 5.13 2.413 3.036 0.418 0.982

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

Total from investment operations 5.08 2.348 2.967 0.376 0.952

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

Distribution from net realized gains (1.26) - - - -

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

Net asset value, end of year $14.75 $10.930 $8.582 $5.615 $5.239
====== ======= ====== ====== ======

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

Total Return 46.50% 27.36% 52.84% 7.19% 22.20%

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

Ratios and Supplemental Data

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

Net assets, end of year (in thousands) $46,378 $32,238 $25,738 $17,267 $16,584

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

Expenses to average net assets (1) 0.85% 1.27% 1.41% 1.43% 1.43%

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

Net investment income (loss) to average net assets (0.39%) (0.68%) (0.94%) (0.80%) (0.65%)
(2)

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

Portfolio turnover rate 20.54% 34.58% 18.11% 30.84% 42.04%

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

Average commission rate (3) $0.0575 $0.07 - - -

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

1992 1991 1990 1989 1988

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

Net asset value, beginning of year $3.783 $2.689 $3.026 $2.266 $1.694

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

Investment Operations
Net investment income (loss) (0.012) (0.009) (0.022) (0.010) (0.054)

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

Net realized and unrealized gain 0.492 1.085 (0.360) 0.750 0.517

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

Total from investment operations 0.504 1.095 (0.337) 0.760 0.572

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

Net asset value, end of year $4.287 $3.783 $2.689 $3.026 $2.266
====== ====== ====== ====== ======

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

Total Return 13.32% 40.71% (11.14%) 33.56 33.74%

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

Ratios and Supplemental Data

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

Net assets, end of year (in thousands) $13,966 $12,516 $9,281 $10,861 $8,453

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

Expenses to average net assets (1) 1.43% 1.43% 1.43% 1.44% 1.43%

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

Net investment income (loss) to average net assets (0.31%) 0.28% 0.81% 0.37% 2.66%
(2)

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

Portfolio turnover rate 43.07% 32.90% 49.87% 22.39% 52.18%

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

Average commission rate (3) - - - - -

------------------------------------------------------ ---------- ---------- ----------- ---------- -----------
</TABLE>

(1) If the Investment Adviser had not reimbursed expenses, the ratio of
operating expenses to average net assets would have been 0.98% and 1.34%
for the years ended December 31, 1997, and 1996, respectively.

(2) If the Investment Adviser had not reimbursed expenses the ratio of net
investment loss to average net assets would have been (0.52%) and (0.75%)
for the years ended December 31, 1997, and 1996, respectively.

(3) This disclosure is required for fiscal periods beginning on or after
September 1, 1995, and represents the
average commission rate paid on equity security transactions on which
commissions are charged.

FOR MORE INFORMATION

The Statement of Additional Information ("SAI") contains more detailed
information on the Portfolios. The current SAI has been filed with the
Securities and Exchange Commission and is incorporated by reference into this
prospectus (is legally part of this prospectus).

To request a free copy of the SAI, please write or call the Fund at:

Transamerica Annuity Service Center
401 North Tryon Street, Suite 700
Charlotte, North Carolina 28202
800-258-4260

<PAGE>

The following is the Table of Contents for the SAI:

TABLE OF CONTENTS

INTRODUCTION..........................................................
INVESTMENT OBJECTIVES AND POLICIES....................................
High-Yield ("Junk") Bond
Restricted and Illiquid Securities
Derivatives
Options on Securities and Securities Indices
Risks Associated with Options Transactions
Futures Contracts and Option on Futures Contracts
Futures Contracts
Hedging Strategies
Option on Futures Contracts
Other Considerations
Interest Rate Swaps
Swap Transactions
Foreign Securities
Segregated Accounts
Purchase of "When-Issued" Securities
Lending of Securities
Borrowing Policies of the Portfolios
Repurchase Agreements
Reverse Repurchase Agreement and Leverage
Other Investment Techniques and Opportunities
INVESTMENT RESTRICTIONS............................................
Fundamental Policies and Restrictions.....................
Non-Fundamental Restrictions..............................
Interpretive Rules........................................
INVESTMENT ADVISER.................................................
Investment Advisory Agreement.............................
Investment Sub-Advisory Agreement.........................
PORTFOLIO TRANSACTIONS, PORTFOLIO TURNOVER AND BROKERAGE...........
DETERMINATION OF NET ASSET VALUE...................................
PERFORMANCE INFORMATION............................................
Growth Portfolio Performance..............................
Money Market Portfolio Performance........................
Published Performance.....................................
FEDERAL TAX MATTERS................................................
SHARES OF STOCK....................................................
CUSTODY OF ASSETS..................................................
DIRECTORS AND OFFICERS.............................................
Compensation..............................................
LEGAL PROCEEDINGS..................................................
OTHER INFORMATION..................................................
Legal Counsel.............................................
Other Information.........................................
Independent Public Accountants............................
Financial Statements......................................
APPENDIX A.........................................................
APPENDIX B

<PAGE>

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

STATEMENT OF ADDITIONAL INFORMATION
-------------------------------------------

TRANSAMERICA VARIABLE INSURANCE FUND, INC.

Aggressive Growth Portfolio Growth Portfolio Money Market Portfolio
Balanced Portfolio High Yield Bond Portfolio Small Company Portfolio
Bond Portfolio Index Portfolio Value Portfolio

November 2, 1998

This Statement of Additional Information is not a prospectus. Much of
the information contained in this Statement expands upon information discussed
in the Prospectus for the Portfolios of Transamerica Variable Insurance Fund,
Inc. (the "Fund"). Please read this Statement in conjunction with the current
Prospectus for the Fund dated November 1, 1998. To obtain a free copy of the
Prospectus write to the Fund at the Transamerica Annuity Service Center, 401
North Tryon Street, Suite 700, Charlotte, North Carolina 28202, or call (800)
258-4260.

<PAGE>

TABLE OF CONTENTS
Page

INTRODUCTION......................................................
INVESTMENT OBJECTIVES AND POLICIES................................
High-Yield ("Junk") Bond
Restricted and Illiquid Securities
Derivatives
Options on Securities and Securities Indices
Risks Associated with Options Transactions
Futures Contracts and Option on Futures Contracts Futures Contracts
Hedging Strategies Option on Futures Contracts Other Considerations
Interest Rate Swaps Swap Transactions Foreign Securities Segregated
Accounts Purchase of "When-Issued" Securities Lending of Securities
Borrowing Policies of the Portfolios Repurchase Agreements Reverse
Repurchase Agreement and Leverage Other Investment Techniques and
Opportunities

INVESTMENT RESTRICTIONS..........................................
Fundamental Policies and Restrictions...................
Non-Fundamental Restrictions............................
Interpretive Rules......................................
INVESTMENT ADVISER...............................................
Investment Advisory Agreement...........................
Investment Sub-Advisory Agreement.......................
PORTFOLIO TRANSACTIONS, PORTFOLIO TURNOVER AND BROKERAGE.........
DETERMINATION OF NET ASSET VALUE.................................
PERFORMANCE INFORMATION..........................................
Growth Portfolio Performance............................
Money Market Portfolio Performance......................
Published Performance...................................
FEDERAL TAX MATTERS..............................................
SHARES OF STOCK..................................................
CUSTODY OF ASSETS................................................
DIRECTORS AND OFFICERS...........................................
Compensation............................................
LEGAL PROCEEDINGS................................................
OTHER INFORMATION................................................
Legal Counsel...........................................
Other Information.......................................
Independent Public Accountants..........................
Financial Statements....................................

APPENDIX A.......................................................
APPENDIX B

<PAGE>

INTRODUCTION

Transamerica Variable Insurance Fund, Inc. (the "Fund") is an open-end
management investment company established as a Maryland corporation on June 23,
1995. The Fund currently consists of nine investment portfolios: Aggressive
Growth; Balanced; Bond; Growth; High Yield Bond; Index; Money Market; Small
Company; and Value.

The Fund's Growth Portfolio is the successor to Transamerica
Occidental's Separate Account Fund C ("Separate Account Fund C"). The assets of
Separate Account Fund C, as of close of business October 31, 1996, were
transferred intact to the Growth Portfolio of the Fund in exchange for shares in
the Growth Portfolio which are held by Separate Account C.

The Money Market Portfolio commenced operations January 1998. As of the
date of this Statement of Additional Information, the other seven Portfolios had
not yet commenced operations.

By investing in a Portfolio, an investor becomes entitled to a pro-rata
share of all dividends and distributions arising from the net income and
realized and unrealized capital gains on the investments of that Portfolio.
Likewise, an investor shares pro-rata in any losses (realized and unrealized) of
that Portfolio.

As of April 15, 1998, 95.763% of the outstanding shares of the Growth
Portfolio were owned by Transamerica on behalf of Separate Account C, and 4.237%
of the outstanding shares of the Growth Portfolio were owned by Transamerica
Life Insurance and Annuity Company on behalf of Separate Account VA-6. As of
April 15, 1998, 95.701% of the outstanding shares of the Money Market Portfolio
were owned by Transamerica Life Insurance and Annuity Company and 4.299% were
owned by Transamerica Life Insurance and Annuity Company on behalf of Separate
Account VA-6.

Pursuant to an investment advisory agreement and subject to the
authority of the Fund's board of directors (the "Board of Directors"),
Transamerica Occidental Life Insurance Company ("Transamerica") serves as the
Fund's investment adviser and conducts the business and affairs of the Fund.
Transamerica has engaged Transamerica Investment Services, Inc. ("Investment
Services" or "Sub-Adviser") to act as the Fund's sub-adviser to provide the
day-to-day portfolio management for the Portfolios.

The Fund currently offers shares of the Portfolios as the underlying
funding vehicles for the variable annuity and variable life insurance contracts
(the "Contracts"). The Contracts are registered with the Securities and Exchange
Commission ("SEC"), and have separate prospectuses, and Statements of Additional
Information.

The Fund may, in the future, offer its stock to other separate accounts
of other insurance companies supporting other variable annuity contracts or
variable life insurance polices and to qualified pension and retirement plans.
The Fund does not offer its stock directly to the general public.

Terms appearing in this Statement of Additional Information that are
defined in the Prospectus have the same meaning as in the Prospectus.

INVESTMENT OBJECTIVES AND POLICIES

The investment objectives and policies of the Portfolios are described in the
Prospectus. The achievement of each Portfolio's investment objectives will
depend on market conditions generally and on the analytical and portfolio
management skills of the Manager. There can be no assurance that the investment
objective of any of the Portfolios can be achieved.

High-Yield ("Junk") Bonds
High-yield bonds (commonly called "junk" bonds) are lower rated bonds that
involve a higher degree of credit risk. See "Appendix A" for a description of
credit ratings. Credit risk is the risk that the issuer of the bonds will not be
able to make interest or principal payment on time. If this happened to a bond
in a Portfolio, the Portfolio would lose some of its income, and could expect a
decline in the market value of the securities affected. So the Manager needs to
carefully analyze the financial condition of companies issuing junk bonds. The
prices of junk bonds tend to be more reflective of prevailing economic and
industry conditions, issuers' unique financial situations, and the bonds' coupon
than to small changes in the level of interest rates. But during an economic
downturn or a period of rising interest rates, highly leveraged companies may
have trouble making principal and interest payments, meeting projected business
goals, and obtaining additional financing. Junk bonds' values will generally
decrease in a rising interest rate market.

Junk bonds may contain "call" provisions, which enable the issuers of the bond
to redeem the bond at will. If the issuer exercises this privilege during a
declining interest rate market, the Portfolio would most likely replace the bond
with a lower yield bond, resulting in a lower return for investors.

Periods of economic or political uncertainty and change can create some
volatility for junk bonds. Since the last major economic recession, there has
been a substantial increase in the use of high-yield debt securities to
Portfolio highly leveraged corporate acquisitions and restructurings. Past
experience with high-yield securities in a prolonged economic downturn may not
provide an accurate indication of future performance during such periods. Lower
rated securities may also be harder to sell than higher rated securities because
of negative publicity and investor perceptions of this market, as well as new or
proposed laws dealing with high yield securities. For many junk bonds, there is
no established retail secondary market. As a result, it may be difficult for the
Manager to accurately value the bonds because they cannot rely on available
objective data.

Each Portfolio may also invest in unrated debt securities. Unrated debt, while
not necessarily of lower quality than rated securities, may not have as broad a
market. Since bond ratings do not consider factors relevant to each issue, and
may not be updated regularly, the Manager may treat high yield securities as
unrated debt.

Because of the size and perceived demand of the issue, among other factors,
certain municipalities may decide not to pay the cost of getting a rating for
their bonds. The Manager will analyze the creditworthiness of the issuer, as
well as any financial institution or other party responsible for payments on the
security, to determine whether to purchase unrated municipal bonds. See
"Appendix B" for a description of fixed income instruments.

Restricted and Illiquid Securities
A Portfolio may purchase certain restricted securities of U.S. issuers
(securities that are not registered under the Securities Act of 1933, as amended
(the "1933 Act") but can be offered and sold to "qualified institutional buyers"
under Rule 144A of that Act) and limited amounts of illiquid investments,
including illiquid restricted securities.

Illiquid investments include restricted securities, repurchase agreements that
mature in more than seven days, fixed time deposits that mature in more than
seven days and participation interests in loans.

Certain repurchase agreements which provide for settlement in more than seven
days, however, can be liquidated before the nominal fixed term of seven days.
The Manager will consider such repurchase agreements as liquid. Likewise,
restricted securities (including commercial paper issued pursuant to Section
4(2) of the 1933 Act) that the Board or the Manager have determined to be liquid
will be treated as such.

The SEC staff has taken the position that fixed time deposits maturing in more
than seven days, that cannot be traded on a secondary market, and participation
interests in loans are illiquid and not readily marketable. A considerable
amount of time may elapse between a Portfolio's decision to dispose of
restricted or illiquid securities and the time which such Portfolio is able to
dispose of them, during which time the value of such securities (and therefore
the value of the Portfolio's shares) could decline.

Derivatives
Each Portfolio, except for the Money Market Portfolio, may use options, futures,
forward contracts, and swap transactions ("derivatives"). The Portfolios may
purchase, or write, call or put options on securities or on indexes ("options")
and may enter into interest rate or index futures contracts for the purchase or
sale of instruments based on financial indexes ("futures contracts"), options on
futures contracts, forward contracts, and interest rate swaps and swap-related
products.

By investing in derivatives, the Manager may seek to protect a Portfolio against
potentially unfavorable movements in interest rates or securities' prices, or
attempt to adjust a Portfolio's exposure to changing securities prices, interest
rates, or other factors that affect securities values. This is done in an
attempt to reduce a Portfolio's overall investment risk. Although it will not
generally be a significant part of a Portfolio's strategies, the Manager may
also use derivatives to enhance returns. Opportunities to enhance returns arise
when the derivative does not reflect the fair value of the underlying
securities. None of the Portfolios will use derivatives for leverage.

Risks in the use of derivatives include, in addition to those referred to above:
(1) the risk that interest rates and securities prices do not move in the
directions being hedged against, in which case the Portfolio has incurred the
cost of the derivative (either its purchase price or, by writing an option,
losing the opportunity to profit from increases in the value of the securities
covered) with no tangible benefit; (2) imperfect correlation between the price
of derivatives and the movements of the securities' prices or interest rates
being hedged; (3) the possible absence of a liquid secondary market for any
particular derivative at any time (some derivatives are not actively traded but
are custom designed to meet the investment needs of a narrow group of
institutional investors and can become illiquid if the needs of that group of
investors change); (4) the potential loss if the counterparty to the transaction
does not perform as promised; and (5) the possible need to defer closing out
certain positions to avoid adverse tax consequences.

The Bond Portfolio and Balanced Portfolio may invest in derivatives with respect
to less than 20% of each Portfolio's assets; Index Portfolio may invest with
respect to no more than 35% of its assets. The Board will closely monitor the
Manager's use of derivatives in each of the Portfolios to assure they are used
in accordance with the investment objectives of each Portfolio.

Options on Securities and Securities Indexes
A Portfolio may write (i.e.; sell) covered call and put options on any
securities in which it may invest. A call option written by a Portfolio
obligates the Portfolio to sell specified securities to the holder of the option
at a specified price if the option is exercised at any time before the
expiration date. All call options written by a Portfolio are covered, which
means that the Portfolio will own the securities subject to the option so long
as the option is outstanding. A Portfolio's purpose in writing covered call
options is to realize greater income than would be realized on securities
transactions alone. However, by writing the call option a Portfolio might forgo
the opportunity to profit from an increase in the market price of the underlying
security.

A put option written by a Portfolio would obligate the Portfolio to purchase
specified securities from the option holder at a specified price if the option
is exercised at any time before the expiration date. All put options written by
a Portfolio would be covered, which means that such Portfolio would have
deposited with its custodian cash or liquid securities with a value at least
equal to the exercise price of the put option. The purpose of writing such
options is to generate additional income for the Portfolio. However, in return
for the option premium, a Portfolio accepts the risk that it might be required
to purchase the underlying securities at a price in excess of the securities'
market value at the time of purchase.

In addition, a written call option or put option may be covered by maintaining
liquid securities in a segregated account with its custodian or by purchasing an
offsetting option or any other option which, by virtue of its exercise price or
otherwise, reduces a Portfolio's net exposure on its written option position.

A Portfolio may also write (sell) covered call and put options on any securities
index composed of securities in which it may invest. Options on securities
indexes are similar to options on securities, except that the exercise of
securities index options requires cash payments and does not involve the actual
purchase or sale of securities. In addition, securities index options are
designed to reflect price fluctuations in a group of securities or segment of
the securities market rather than price fluctuations in a single security.

A Portfolio may cover call options on a securities index by owning securities
whose price changes are expected to be similar to those of the underlying index,
or by having an absolute and immediate right to acquire such securities without
additional cash consideration (or for additional cash consideration held in a
segregated account by its custodian) upon conversion or exchange of other
securities in the Portfolio. A Portfolio may cover call and put options on a
securities index by maintaining cash or liquid securities with a value equal to
the exercise price in a segregated account with its custodian.

A Portfolio may terminate its obligations under an exchange traded call or put
option by purchasing an option identical to the one it has written. Obligations
under over-the-counter options may be terminated only by entering into an
offsetting transaction with the counterparty to such option. Such purchases are
referred to as "closing purchase" transactions.

A Portfolio may purchase put and call options on any securities in which it may
invest or options on any securities index based on securities in which it may
invest. A Portfolio would also be able to enter into closing sale transactions
in order to realize gains or minimize losses on options it had purchased.

A Portfolio would normally purchase call options in anticipation of an increase
in the market value of securities of the type in which it may invest. The
purchase of a call option would entitle a Portfolio, in return for the premium
paid, to purchase specified securities at a specified price during the option
period. A Portfolio would ordinarily realize a gain if, during the option
period, the value of such securities exceeded the sum of the exercise price, the
premium paid and transaction costs; otherwise the Portfolio would realize a loss
on the purchase of the call option.

A Portfolio would normally purchase put options in anticipation of a decline in
the market value of its securities ("protective puts") or in securities in which
it may invest. The purchase of a put option would entitle a Portfolio, in
exchange for the premium paid, to sell specified securities at a specified price
during the option period. The purchase of protective puts is designed to offset
or hedge against a decline in the market value of a Portfolio's securities. Put
options may also be purchased by a Portfolio for the purpose of affirmatively
benefiting from a decline in the price of securities which it does not own. A
Portfolio would ordinarily realize a gain if, during the option period, the
value of the underlying securities decreased below the exercise price
sufficiently to cover the premium and transaction costs; otherwise such a
Portfolio would realize a loss on the purchase of the put option.

A Portfolio would purchase put and call options on securities indexes for the
same purposes as it would purchase options on individual securities.

Risks Associated with Options Transactions
There is no assurance that a liquid secondary market will exist for any
particular exchange-traded option at any particular time. If a Portfolio is
unable to affect a closing purchase transaction with respect to covered options
it has written, the Portfolio will not be able to sell the underlying securities
or dispose of assets held in a segregated account until the options expire or
are exercised. Similarly, if a Portfolio is unable to effect a closing sale
transaction with respect to options it has purchased, it would have to exercise
the options in order to realize any profit and will incur transaction costs upon
the purchase or sale of underlying securities.

Reasons for the absence of a liquid secondary market on an exchange include the
following: (i) there may be insufficient trading interest in certain options;
(ii) restrictions may be imposed by an exchange on opening transactions or
closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options; (iv) unusual or unforeseen circumstances may interrupt normal
operations on an exchange; (v) the facilities of an exchange or the Options
Clearing Corporation may not at all times be adequate to handle current trading
volume; or (vi) one or more exchanges could, for economic or other reasons,
decide or be compelled at some future date to discontinue the trading of options
(or a particular class or series of options), in which event the secondary
market on that exchange (or in that class or series of options) would cease to
exist, although outstanding options on that exchange that had been issued by the
Options Clearing Corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms.

A Portfolio may purchase and sell both options that are traded on U.S., United
Kingdom, and other exchanges and options traded over-the-counter with
broker-dealers who make markets in these options. The ability to terminate
over-the-counter options is more limited than with exchange-traded options and
may involve the risk that broker-dealers participating in such transactions will
not fulfill their obligations. Until such time as the staff of the SEC changes
its position, a Portfolio will treat purchased over-the-counter options and all
assets used to cover written over-the-counter options as illiquid securities,
except that with respect to options written with primary dealers in U.S.
government securities pursuant to an agreement requiring a closing purchase
transaction at a formula price, the amount of illiquid securities may be
calculated with reference to the formula.

Transactions by a Portfolio in options on securities and securities indexes will
be subject to limitations established by each of the exchanges, boards of trade
or other trading facilities governing the maximum number of options in each
class which may be written or purchased by a single investor or group of
investors acting in concert. Thus, the number of options which a Portfolio may
write or purchase may be affected by options written or purchased by other
investment advisory clients of the Manager of the Portfolios. An exchange, board
of trade or other trading facility may order the liquidation of positions found
to be in excess of these limits, and it may impose certain other sanctions.

The writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary securities transactions. The successful use of protective puts for
hedging purposes depends in part on an ability to anticipate future price
fluctuations and the degree of correlation between the options and securities
markets.

Futures Contracts and Options on Futures Contracts
A Portfolio may purchase and sell futures contracts and may also purchase and
write options on futures contracts. A Portfolio may purchase and sell futures
contracts based on various securities (such as U.S. government securities),
securities indexes, and other financial instruments and indexes. A Portfolio
will engage in futures or related options transactions only for bona fide
hedging purposes as defined below or to increase total returns to the extent
permitted by regulations of the Commodity Futures Trading Commission ("CFTC").
All futures contracts entered into by a Portfolio are traded on U.S. exchanges
or boards of trade that are licensed and regulated by the CFTC.

Futures Contracts
A futures contract may generally be described as an agreement between two
parties to buy or sell particular financial instruments for an agreed price
during a designated month (or to deliver the final cash settlement price, in the
case of a contract relating to an index or otherwise not calling for physical
delivery at the end of trading in the contract).

When interest rates are rising or securities prices are falling, a Portfolio can
seek to offset a decline in the value of its current securities through the sale
of futures contracts. When rates are falling or prices are rising, a Portfolio,
through the purchase of futures contracts, can attempt to secure better rates or
prices than might later be available in the market when it effects anticipated
purchases. The Transamerica Premier Index Portfolio will use options and futures
contracts only to achieve its performance objective of matching the return on
the S&P 500.

Positions taken in the futures markets are not normally held to maturity, but
are instead liquidated through offsetting transactions which may result in a
profit or a loss. While a Portfolio's futures contracts on securities will
usually be liquidated in this manner, it may instead make or take delivery of
the underlying securities whenever it appears economically advantageous for a
Portfolio to do so. A clearing corporation associated with the exchange on which
futures on securities are traded guarantees that, if still open, the sale or
purchase will be performed on the settlement date.

Hedging Strategies
Hedging by use of futures contracts seeks to establish more certainty than would
otherwise be possible in the effective price or rate of return on securities
that a Portfolio owns or proposes to acquire. A Portfolio may, for example, take
a "short" position in the futures market by selling futures contracts in order
to hedge against an anticipated rise in interest rates or a decline in market
prices that would adversely affect the value of the Portfolio's securities. Such
futures contracts may include contracts for the future delivery of securities
held by the Portfolio or securities with characteristics similar to those of a
Portfolio's securities.

If, in the opinion of the Manager, there is a sufficient degree of correlation
between price trends for a Portfolio's securities and futures contracts based on
other financial instruments, securities indexes or other indexes, the Portfolio
may also enter into such futures contracts as part of its hedging strategy.
Although under some circumstances prices of a Portfolio's securities may be more
or less volatile than prices of such futures contracts, the Manager will attempt
to estimate the extent of this difference in volatility based on historical
patterns and to compensate for it by having a Portfolio enter into a greater or
lesser number of futures contracts or by attempting to achieve only a partial
hedge against price changes affecting the Portfolio's securities. When hedging
of this character is successful, any depreciation in the value of the
Portfolio's securities will be substantially offset by appreciation in the value
of the futures position. On the other hand, any unanticipated appreciation in
the value of the Portfolio's securities would be substantially offset by a
decline in the value of the futures position.

On other occasions, a Portfolio may take a "long" position by purchasing such
futures contracts. This would be done, for example, when a Portfolio anticipates
the subsequent purchase of particular securities when it has the necessary cash,
but expects the prices or interest rates then available in the applicable market
to be less favorable than prices or rates that are currently available.

Options on Futures Contracts
The acquisition of put and call options on futures contracts will give a
Portfolio the right (but not the obligation), for a specified price, to sell or
to purchase, respectively, the underlying futures contract at any time during
the option period. As the purchaser of an option on a futures contract, a
Portfolio obtains the benefit of the futures position if prices move in a
favorable direction but limits its risk of loss in the event of an unfavorable
price movement to the loss of the option premium and transaction costs.

The writing of a call option on a futures contract generates a premium which may
partially offset a decline in the value of a Portfolio's assets. By writing a
call option, a Portfolio becomes obligated, in exchange for the premium, to sell
a futures contract, which may have a value higher than the exercise price.
Conversely, the writing of a put option on a futures contract generates a
premium, which may partially offset an increase in the price of securities that
a Portfolio intends to purchase. However, a Portfolio becomes obligated to
purchase a futures contract, which may have a value lower than the exercise
price. Thus, the loss incurred by a Portfolio in writing options on futures is
potentially unlimited and may exceed the amount of the premium received. A
Portfolio will increase transaction costs in connection with the writing of
options on futures.

The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same series. There
is no guarantee that such closing transactions can be effected. A Portfolio's
ability to establish and close out positions on such options will be subject to
the development and maintenance of a liquid market.

Other Considerations
Where permitted, a Portfolio will engage in futures transactions and in related
options transactions only for bona fide hedging or to increase total return to
the extent permitted by CFTC regulations. A Portfolio will determine that the
price fluctuations in the futures contracts and options on futures used for
hedging purposes are substantially related to price fluctuations in securities
held by the Portfolio or which it expects to purchase. Except as stated below,
each Portfolio's futures transactions will be entered into for traditional
hedging purposes, i.e., futures contracts will be sold to protect against a
decline in the price of securities that the Portfolio owns, or futures contracts
will be purchased to protect the Portfolio against an increase in the price of
securities it intends to purchase. As evidence of this hedging intent, a
Portfolio expects that on 75% or more of the occasions on which they take a long
futures or option position (involving the purchase of futures contracts), that
Portfolio will have purchased, or will be in the process of purchasing,
equivalent amounts of related securities in the cash market at the time when the
futures or option position is closed out. However, in particular cases, when it
is economically advantageous for a Portfolio to do so, a long futures position
may be terminated or an option may expire without the corresponding purchase of
securities or other assets.

As an alternative to literal compliance with the bona fide hedging definition, a
CFTC regulation permits a Portfolio to elect to comply with a different test,
under which the aggregate initial margin and premiums required to establish
positions in futures contracts and options on futures for the purpose of
increasing total return, will not exceed 5% of the Portfolio's net asset value,
after taking into account unrealized profits and losses on any such positions
and excluding the amount by which such options were in-the-money at the time of
purchase. As permitted, each Portfolio will engage in transactions in futures
contracts and in related options transactions only to the extent such
transactions are consistent with the requirements of the Internal Revenue Code
of 1986, as amended (the "Code") for maintaining its qualification as a
regulated investment company for federal income tax purposes.

Transactions in futures contracts and options on futures involve brokerage
costs, require margin deposits and, in the case of contracts and options
obligating a Portfolio to purchase securities or currencies, require the
Portfolio to segregate with its custodian liquid securities in an amount equal
to the underlying value of such contracts and options.

While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
unanticipated changes in interest rates or securities prices may result in a
poorer overall performance for a Portfolio than if it had not entered into any
futures contracts or options transactions. In the event of an imperfect
correlation between a futures position and the position which is intended to be
protected, the desired protection may not be obtained and a Portfolio may be
exposed to risk of loss.

Perfect correlation between a Portfolio's futures positions and current
positions may be difficult to achieve because no futures contracts based on
individual equity securities are currently available. The only futures contracts
available to these Portfolios for hedging purposes are various futures on U.S.
government securities and securities indexes.

Interest Rate Swaps
A Portfolio may enter into interest rate swaps for hedging purposes and
non-hedging purposes. Since swaps are entered into for good faith hedging
purposes or are offset by a segregated account as described below, the Manager
believes that swaps do not constitute senior securities as defined in the 1940
Act and, accordingly, will not treat them as being subject to the Portfolio's
borrowing restrictions. The net amount of the excess, if any, of a Portfolio's
obligations over its "entitlement" with respect to each interest rate swap will
be accrued on a daily basis and an amount of cash or other liquid securities
having an aggregate net asset value at least equal to such accrued excess will
be maintained in a segregated account by the Portfolio's custodian. A Portfolio
will not enter into any interest rate swap unless the credit quality of the
unsecured senior debt or the claims-paying ability of the other party thereto is
considered to be investment grade by the Manager. If there is a default by the
other party to such a transaction, a Portfolio will have contractual remedies
pursuant to the agreement. The swap market has grown substantially in recent
years with a large number of banks and investment banking firms acting both as
principals and as agents utilizing standardized swap documentation. As a result,
the swap market has become relatively liquid in comparison with the markets for
other similar instruments which are traded in the interbank market.

Swap Transactions
The Portfolios may, to the extent permitted by the SEC, enter into privately
negotiated "swap" transactions with other financial institutions in order to
take advantage of investment opportunities generally not available in public
markets. In general, these transactions involve "swapping" a return based on
certain securities, instruments, or financial indexes with another party, such
as a commercial bank, in exchange for a return based on different securities,
instruments, or financial indexes.

By entering into swap transactions, a Portfolio may be able to protect the value
of a portion of its securities against declines in market value. A Portfolio may
also enter into swap transactions to facilitate implementation of allocation
strategies between different market segments or to take advantage of market
opportunities which may arise from time to time.

A Portfolio may be able to enhance its overall performance if the return offered
by the other party to the swap transaction exceeds the return swapped by the
Portfolio. However, there can be no assurance that the return a Portfolio
receives from the counterparty to the swap transaction will exceed the return it
swaps to that party.

While a Portfolio will only enter into swap transactions with counterparties it
considers creditworthy, a risk inherent in swap transactions is that the other
party to the transaction may default on its obligations under the swap
agreement. The Portfolio will monitor the creditworthiness of parties with which
it has swap transactions. If the other party to the swap transaction defaults on
its obligations, a Portfolio would be limited to contractual remedies under the
swap agreement. There can be no assurance that a Portfolio will succeed when
pursuing its contractual remedies. To minimize a Portfolio's exposure in the
event of default, the Portfolios will usually enter into swap transactions on a
net basis (i.e., the parties to the transaction will net the payments payable to
each other before such payments are made). When a Portfolio enters into swap
transactions on a net basis, the net amount of the excess, if any, of the
Portfolio's obligations over its entitlements with respect to each such swap
agreement will be accrued on a daily basis and an amount of liquid assets having
an aggregate market value at least equal to the accrued excess will be
segregated by the Portfolio's custodian. To the extent a Portfolio enters into
swap transactions other than on a net basis, the amount segregated will be the
full amount of the Portfolio's obligations, if any, with respect to each such
swap agreement, accrued on a daily basis. See "Segregated Accounts."

Swap agreements are considered to be illiquid by the SEC staff and will be
subject to the limitations on illiquid investments. See "Restricted and Illiquid
Securities."

To the extent that there is an imperfect correlation between the return a
Portfolio is obligated to swap and the securities or instruments representing
such return, the value of the swap transaction may be adversely affected. A
Portfolio therefore will not enter into a swap transaction unless it owns or has
the right to acquire the securities or instruments representative of the return
it is obligated to swap with the counterparty to the swap transaction. It is not
the intention of the Portfolios to engage in swap transactions in a speculative
manner, but rather primarily to hedge or manage the risks associated with assets
held in a Portfolio, or to facilitate the implementation of strategies of
purchasing and selling assets for a Portfolio.

Foreign Securities
All the Portfolios, except the Index Portfolio and the Money Market Portfolio,
may invest in foreign securities. The Index Portfolio invests only in those
securities that are selected by the Standard & Poor's Corporation to be included
in the S&P 500 Index.

Foreign securities, other than ADRs, will be held in custody by State Street
London Limited, who will handle transactions with the transnational depositories
Euroclear and Cedel.

Segregated Accounts
In connection with when-issued securities, firm commitment agreements, futures,
the writing of options, and certain other transactions in which a Portfolio
incurs an obligation to make payments in the future, a Portfolio may be required
to segregate assets with its custodian in amounts sufficient to settle the
transaction. To the extent required, such segregated assets will consist of
liquid securities.

Purchase of "When-Issued" Securities
The Portfolios may enter into firm commitment agreements for the purchase of
securities on a specified future date. Thus, the Portfolios may purchase, for
example, new issues of fixed-income instruments on a "when-issued" basis,
whereby the payment obligation, or yield to maturity, or coupon rate on the
instruments may not be fixed at the time of the transaction. In addition, the
Portfolios may invest in asset-backed securities on a delayed delivery basis.
This reduces the Portfolios' risk of early repayment of principal, but exposes
the Portfolios to some additional risk that the transaction will not be
consummated.

When the Portfolios enter into firm commitment agreements, liability for the
purchase price and the rights and risks of ownership of the securities accrue to
the Portfolios at the time they become obligated to purchase such securities,
although delivery and payment occur at a later date. Accordingly, if the market
price of the security should decline, the effect of the agreement would be to
obligate the Portfolios to purchase the security at a price above the current
market price on the date of delivery and payment. During the time the Portfolios
are obligated to purchase such securities they will be required to segregate
assets. See "Segregated Accounts," on this page. A Portfolio will not purchase
securities on a "when-issued" basis if, as a result, more than 15% of the
Portfolio's net assets would be so invested.

Lending of Securities
Subject to investment restriction number 2 titled "Lending" (relating to loans
of securities), a Portfolio may lend its securities to brokers and dealers that
are not affiliated with the Manager, are registered with the Commission and are
members of the NASD, and also to certain other financial institutions. All loans
will be fully collateralized. In connection with the lending of its securities,
a Portfolio will receive as collateral cash, securities issued or guaranteed by
the United States government (i.e., Treasury securities), or other collateral
permitted by applicable law, which at all times while the loan is outstanding
will be maintained in amounts equal to at least 102% of the current market value
of the loaned securities, or such lesser percentage as may be permitted by
applicable law, as reviewed daily. The Portfolio lending its securities will
receive amounts equal to the interest or dividends paid on the securities loaned
and in addition will expect to receive a portion of the income generated by the
short-term investment of cash received as collateral or, alternatively, where
securities or a letter of credit are used as collateral, a lending fee paid
directly to the Portfolio by the borrower of the securities. Such loans will be
terminable by the Portfolio at any time and will not be made to affiliates of
the Investment Adviser or Sub-Adviser. A Portfolio may terminate a loan of
securities in order to regain record ownership of, and to exercise beneficial
rights related to, the loaned securities, including but not necessarily limited
to voting or subscription rights, and may, in the exercise of its fiduciary
duties, terminate a loan in the event that a vote of holders of those securities
is required on a material matter. The Portfolio may pay reasonable fees to
persons unaffiliated with the Portfolio for services or for arranging such
loans. Loans of securities will be made only to firms deemed creditworthy. As
with any extension of credit, however, there are risks of delay in recovering
the loaned securities, should the borrower of securities default, become the
subject of bankruptcy proceedings, or otherwise be unable to fulfill its
obligations or fail financially.

Borrowing Policies of the Portfolios
The Portfolios can borrow money from banks or engage in reverse repurchase
agreements, for temporary or emergency purposes. The Portfolios can borrow up to
one-third of a Portfolio's total assets. To secure borrowings, the Portfolios
can mortgage or pledge securities in an amount up to one-third of a Portfolio's
net assets. If a Portfolio borrows money, its share price may be subject to
greater fluctuation until the borrowing is paid off. The Portfolio will not make
any additional investments, other than reverse repurchase agreements, while the
level of the borrowing exceeds 5% of the Portfolio's total assets.

Short-term corporate obligations may also include variable amount master demand
notes. Variable amount master notes are obligations that permit the investment
of fluctuating amounts by a Portfolio at varying rates of interest pursuant to
direct arrangements between the Portfolio, as lender, and the borrower. These
notes permit daily changes in the amounts borrowed. The Portfolio has the right
to increase the amount under the note at any time up to the full amount provided
by the note agreement, or to decrease the amount, and the borrower may repay up
to the full amount of the note without penalty. The borrower is typically a
large industrial or finance company which also issues commercial paper.
Typically these notes provide that the interest rate is set daily by the
borrower. The rate is usually the same or similar to the interest rate on
commercial paper being issued by the borrower. Because variable amount master
notes are direct lending arrangements between the lender and borrower, it is not
generally contemplated that such instruments will be traded, and there is no
secondary market for these notes, although they are redeemable (and thus
immediately repayable by the borrower) at the face value, plus accrued interest,
at any time. Accordingly, a Portfolio's right to redeem is dependent on the
ability of the borrower to pay principal and interest on demand. In connection
with master demand note arrangements, the Portfolio considers earning power,
cash flow, and other liquidity ratios of the issuer. The Portfolios will only
invest in master demand notes of U.S. issuers. While master demand notes, as
such, are not typically rated by credit rating agencies, if not so rated the
Portfolios may invest in them only if at the time of an investment the issuer
meets the criteria set forth in the Prospectus for all other commercial paper
issuers. A Portfolio will not invest more than 25% of its assets in master
demand notes.

Repurchase Agreements
Repurchase agreements have the characteristics of loans by a Portfolio, and will
be fully collateralized (either with physical securities or evidence of book
entry transfer to the account of the custodian bank) at all times. During the
term of the repurchase agreement the Portfolio retains the security subject to
the repurchase agreement as collateral securing the seller's repurchase
obligation, continually monitors the market value of the security subject to the
agreement, and requires the seller to deposit with the Portfolio additional
collateral equal to any amount by which the market value of the security subject
to the repurchase agreement falls below the resale amount provided under the
repurchase agreement. The Portfolios will enter into repurchase agreements only
with member banks of the Federal Reserve System, and with primary dealers in
United States government securities or their wholly-owned subsidiaries whose
creditworthiness has been reviewed and found satisfactory by the Manager and who
have, therefore, been determined to present minimal credit risk.

Securities underlying repurchase agreements will be limited to certificates of
deposit, commercial paper, bankers' acceptances, or obligations issued or
guaranteed by the United States government or its agencies or instrumentalities,
in which the Portfolio may otherwise invest.

If a seller of a repurchase agreement defaults and does not repurchase the
security subject to the agreement, the Portfolio would look to the collateral
security underlying the seller's repurchase agreement, including the securities
subject to the repurchase agreement, for satisfaction of the seller's obligation
to the Portfolio; in such event the Portfolio might incur disposition costs in
liquidating the collateral and might suffer a loss if the value of the
collateral declines. In addition, if bankruptcy proceedings are instituted
against a seller of a repurchase agreement, realization upon the collateral may
be delayed or limited.

Reverse Repurchase Agreements and Leverage
The Portfolios may enter into reverse repurchase agreements with Federal Reserve
member banks and U.S. securities dealers from time to time. In a reverse
repurchase transaction the Portfolio sells securities and simultaneously agrees
to repurchase them at a price which reflects an agreed-upon rate of interest.
The Portfolio will use the proceeds of reverse repurchase agreements to make
other investments which either mature or are under an agreement to resell at a
date simultaneous with or prior to the expiration of the reverse repurchase
agreement. The Portfolio may utilize reverse repurchase agreements only if the
interest income to be earned from the investment proceeds of the transaction is
greater than the interest expense of the reverse repurchase transaction.

Reverse repurchase agreements are a form of leverage which increases the
opportunity for gain and the risk of loss for a given change in market value. In
addition, the gains or losses will cause the net asset value of the Portfolios'
shares to rise or fall faster than would otherwise be the case. There may also
be a risk of delay in the recovery of the underlying securities if the opposite
party has financial difficulties. A Portfolio's obligations under all
borrowings, including reverse repurchase agreements, will not exceed one-third
of the Portfolio's net assets.

The use of reverse repurchase agreements is included in the Portfolio's
borrowing policy and is subject to the limits of Section 18(f)(1) of the
Investment Company Act of 1940, as amended. During the time a reverse repurchase
agreement is outstanding, each Portfolio that has entered into such an agreement
maintains a segregated account with its Custodian containing cash or other
liquid securities having a value at least equal to the repurchase price under
the reverse repurchase agreement.

Other Investment Techniques and Opportunities
The Portfolios may take certain actions with respect to merger proposals, tender
offers, conversion of equity-related securities and other investment
opportunities with the objective of enhancing overall return, irrespective of
how these actions may affect the weight of the particular securities in a
Portfolio. It is not the policy of any of the Portfolios to select investments
based primarily on the possibility of one or more of these investment techniques
and opportunities being presented.

INVESTMENT RESTRICTIONS

Fundamental Policies and Restrictions

Certain investment restrictions and policies have been adopted by the
Fund as fundamental policies for the Portfolios. It is fundamental that each
Portfolio operate as a "diversified company" within the meaning of the
Investment Company Act of 1940 except the Aggressive Growth Portfolio which will
operate as "non-diversified company". The investment objective of each Portfolio
is also a fundamental policy. See "Portfolios at a Glance" and "Portfolios in
Detail" in the Prospectus.

A fundamental policy is one that cannot be changed without the
affirmative vote of the holders of a majority (as defined in the 1940 Act) of
the outstanding votes attributable to the shares of each Portfolio. For purposes
of the 1940 Act, "majority" of share means the lesser of: (a) 67% or more of the
votes attributable to shares of such Portfolio present at a meeting, if the
holders of more than 50% of such votes are present or represented by proxy; or
(b) more than 50% of the votes attributable to shares of such Portfolio.

The fundamental policies and restrictions of the Growth and Money
Market Portfolios are:

1. Borrowing. Each Portfolio may borrow from banks for temporary or
emergency (not leveraging) purposes, including the meeting of redemption
requests and cash payments of dividends and distributions, provided such
borrowings do not exceed 5% of the value of the Portfolio's total assets.

2. Lending. Each Portfolio may not lend its assets or money to other
persons, except through: (a) the acquisition of all or a portion of an issue of
bonds, debentures or other evidence of indebtedness of a type customarily
purchased for investment by institutional investors, whether publicly or
privately distributed. (Each Portfolio does not presently intend to invest more
than 10% of the value of the Portfolio in privately distributed loans. It is
possible that the acquisition of an entire issue may cause the Portfolio to be
deemed an "underwriter" for purposes of the Securities Act of 1933); (b) lending
securities, provided that any such loan is collateralized with cash equal to or
in excess of the market value of such securities. (The Portfolio does not
presently intend to engage in the lending of securities); and (c) entering into
repurchase agreements.

3. 5% Fund Rule. With respect to 75% of total assets, the Growth
Portfolio may not purchase securities of any issuer if, as a result of the
purchase, more than 5% of such Portfolio's total assets would be invested in the
securities of the issuer. This limitation does not apply to securities issued or
guaranteed by the United States government, its agencies or instrumentalities
("Government Securities"). All securities of a foreign government and its
agencies will be treated as a single issuer for purposes of this restriction.
The Money Market Portfolio may invest more than 5%, but no more than 25%, of
total assets in the securities of one issuer for a period not to exceed three
business days.

4. 10% Issuer Rule. With respect to 75% of total assets, the Growth
Portfolio may not purchase more than 10% of the voting securities of any one
issuer. This limitation is not applicable to a Portfolio's investment in
Government Securities. All securities of a foreign government and its agencies
will be treated as a single issuer for purposes of this restriction. The Money
Market Portfolio will not invest in voting securities.

5. 25% Industry Rule. Each Portfolio may not invest more than 25% of
the value of its total assets in securities issued by companies engaged in any
one industry, including non-domestic banks or any foreign government. This
limitation does not apply to investments in Government Securities. For the Money
Market Portfolio, investments in the following are not subject to the 25%
limitation: repurchase agreements and securities loans collateralized by United
States government securities, certificates of deposit, bankers' acceptances, and
obligations (other than commercial paper) issued or guaranteed by United States
banks and United States branches of foreign banks.

6. Underwriting. No Portfolio may underwrite any issue of securities,
except to the extent that the sale of securities in accordance with the
Portfolio's investment objective, policies and limitations may be deemed to be
an underwriting, and except that the Portfolio may acquire securities under
circumstances in which, if the securities were sold, the Portfolio might be
deemed to be an underwriter for purposes of the Securities Act of 1933, as
amended.

7. Real Estate. The Growth Portfolio reserves the right to invest up to
10% of the value of its assets in real properties, including property acquired
in satisfaction of obligations previously held or received in part payment on
the sale of other real property owned. The purchase and sale of real estate or
interests in real estate is not intended to be a principal activity of the
Portfolio. The Portfolio currently does not intend to invest more than 5% of its
net assets in real estate.

8. Commodities. The Portfolios may not purchase or sell commodities or
commodities contracts.

9. Senior Securities. The Portfolios may not issue senior securities.

The fundamental policies and restrictions of the Aggressive Growth;
Balanced; Bond; High Yield Bond; Index; Small Company; and Value Portfolios are:

1. Borrowing
Each Portfolio may borrow from banks for temporary or emergency (not leveraging)
purposes, including the meeting of redemption requests and cash payments of
dividends and distributions that might otherwise require the untimely
disposition of securities, in an amount not to exceed 33.33% of the value of the
Portfolio's total assets (including the amount borrowed) valued at market less
liabilities (not including the amount borrowed) at the time the borrowing is
made. Whenever outstanding borrowings, not including reverse repurchase
agreements, represent 5% or more of a Portfolio's total assets, the Portfolio
will not make any additional investments.

2. Lending
No Portfolio may lend its assets or money to other persons, except through (a)
purchasing debt obligations, (b) lending securities in an amount not to exceed
33.33% of the Portfolio's assets taken at market value, (c) entering into
repurchase agreements (d) trading in financial futures contracts, index futures
contracts, securities indexes and options on financial futures contracts,
options on index futures contracts, options on securities and options on
securities indexes and (e) entering into variable rate demand notes.

3. 5% Portfolio Rule
Except for the Aggressive Growth Portfolio, no Portfolio may purchase securities
(other than government securities) of any issuer if, as a result of the
purchase, more than 5% of the Portfolio's total assets would be invested in the
securities of the issuer, except that up to 25% of the value of the total assets
of each Portfolio, may be invested without regard to this limitation. All
securities of a foreign government and its agencies will be treated as a single
issuer for purposes of this restriction. With respect to the Aggressive Growth
Portfolio, no more than 25% of the Portfolio's total assets may be invested in
the securities of a single issuer (other than cash items and government
securities); and with respect to 50% of the Portfolio's total assets, no more
than 5% may be invested in the securities of a single issuer (other than cash
items and government securities).

4. 10% Issuer Rule
No Portfolio may purchase more than 10% of the voting securities of any one
issuer, or more than 10% of the outstanding securities of any class of issuer,
except that (a) this limitation is not applicable to a Portfolio's investments
in government securities and (b) up to 25% of the value of the assets of a
Portfolio may be invested without regard to these 10% limitations. All
securities of a foreign government and its agencies will be treated as a single
issuer for purposes of this restriction. These limitations are subject to any
further limitation under the 1940 Act.

5. 25% Industry Rule
No Portfolio may invest more than 25% of the value of its total assets in
securities issued by companies engaged in any one industry, including
non-domestic banks or any foreign government. This limitation does not apply to
securities issued or guaranteed by the United States government, its agencies or
instrumentalities.

6. Underwriting
No Portfolio may underwrite any issue of securities, except to the extent that
the sale of securities in accordance with the Portfolio's investment objective,
policies and limitations may be deemed to be an underwriting, and except that
the Portfolio may acquire securities under circumstances in which, if the
securities were sold, the Portfolio might be deemed to be an underwriter for
purposes of the Securities Act of 1933, as amended.

7. Real Estate
No Portfolio may purchase or sell real estate or real estate limited partnership
interests, or invest in oil, gas or mineral leases, or mineral exploration or
development programs, except that a Portfolio may (a) invest in securities
secured by real estate, mortgages or interests in real estate or mortgages, (b)
purchase securities issued by companies that invest or deal in real estate,
mortgages or interests in real estate or mortgages, (c) engage in the purchase
and sale of real estate as necessary to provide it with an office for the
transaction of business or (d) acquire real estate or interests in real estate
securing an issuer's obligations, in the event of a default by that issuer.

8. Short Sales
No Portfolio may make short sales of securities or maintain a short position,
unless at all times when a short position is open, the Portfolio owns an equal
amount of the securities or securities convertible into or exchangeable for,
without payment of any further consideration, securities of the same issue as,
and equal in amount to, the securities sold short.

9. Margin Purchases
No Portfolio may purchase securities on margin, except that a Portfolio may
obtain any short-term credits necessary for the clearance of purchases and sales
of securities. For purposes of this restriction, the deposit or payment of
initial or variation margin in connection with futures contracts, financial
futures contracts or related options, and options on securities, and options on
securities indexes will not be deemed to be a purchase of securities on margin
by a Portfolio.

10. Commodities
No Portfolio may invest in commodities, except that each Portfolio may invest in
futures contracts (including financial futures contracts or securities index
futures contracts) and related options and other similar contracts as described
in this Statement of Additional Information and in the Prospectus.

All other investment policies and restrictions of the Portfolios are
considered by the Fund not to be fundamental and accordingly may be changed by
the Board of Directors without shareholder approval.

Non-Fundamental Restrictions

Non-fundamental restrictions represent the current intentions of the
Board of Directors, and they differ from fundamental investment restrictions in
that they may be changed or amended by the Board of Directors without prior
notice to or approval of shareholders.

The Growth and Money Market Portfolios' non-fundamental restrictions are:

1. Securities of Other Investment Companies. The Portfolios do not
currently intend to make investments in the securities of other investment
companies. Each Portfolio does reserve the right to purchase such securities,
provided the purchase of such securities does not cause: (1) more than 10% of
the value of the total assets of the Portfolio to be invested in securities of
registered investment companies; or (2) the Portfolio to own more than 3% of the
total outstanding voting stock of any one investment company; or (3) the
Portfolio to own securities of any one investment company that have a total
value greater than 5% of the value of the total assets of the Portfolio; or (4)
together with other investment companies advised by Transamerica, the Portfolio
to own more than 10% of the outstanding voting stock of a closed-end investment
company.

2. Invest for Control. No Portfolio may invest in companies for the
purpose of exercising management or control in that company.

3. Short Sales. The Growth Portfolio may not make short sales of
securities or maintain a short position, unless at all times when the short
position is open, the Portfolio owns an equal amount of such securities or
securities currently exchangeable, without payment of any further consideration,
for securities of the same issue as, and at least equal in amount to, the
securities sold short (generally called a "short sale against the box") and
unless not more than 10% of the value of the Portfolio's net assets is deposited
or pledged as collateral for such sales at any one time. The Money Market
Portfolio may not make short sales of securities or maintain a short position.

4. Restricted and Illiquid Securities. Purchases or acquisitions may be
made of securities which are not readily marketable by reason of the fact that
they are subject to the registration requirements of the Securities Act of 1933
or the salability of which is otherwise conditioned, including real estate and
certain repurchase agreements or time deposits maturing in more than seven days
("restricted securities"), as long as any such purchase or acquisition will not
immediately result in the value of all such restricted securities exceeding 15%
of the value of the Growth Portfolio's total assets (10% for the Money Market
Portfolio).

5. Margin Purchases. Each Portfolio may not purchase securities on
margin, except that a Portfolio may obtain any short-term credits necessary for
the clearance of purchases and sales of securities. For purposes of this
restriction, the deposit or payment of initial or variation margin in connection
with options on securities will not be deemed to be a purchase of securities on
margin by a Portfolio.

6. Put and Call Options. No Portfolio may write put and call options.

The non-fundamental restrictions for the Aggressive Growth; Balanced;
Bond; High Yield Bond; Index; Small Company; and Value Portfolios are:

1. Securities of Other Investment Companies
No Portfolio may purchase securities of other investment companies, other than a
security acquired in connection with a merger, consolidation, acquisition,
reorganization or offer of exchange and except as permitted under the 1940 Act,
if as a result of the purchase: (a) more than 10% of the value of the
Portfolio's total assets would be invested in the securities of investment
companies; (b) more than 5% of the value of the Portfolio's total assets would
be invested in the securities of any one investment company; or (c) the
Portfolio would own more than 3% of the total outstanding voting securities of
any investment company.

2. Invest for Control
No Portfolio may invest in companies for the purposes of exercising control or
management.

3. 3-Year Rule
No Portfolio may purchase securities (other than government securities) if, as a
result of the purchase, the Portfolio would then have more than 5% of its total
assets invested in securities of companies (including predecessors) that have
been in continuous operation for fewer than three years. This restriction will
apply to the entity supplying the revenues from which the issue is to be paid.

4. Restricted and Illiquid Securities
No Portfolio will invest more than 15% of its net assets in illiquid
investments, which includes most repurchase agreements maturing in more than
seven days, currency and interest rate swaps, time deposits with a notice or
demand period of more than seven days, certain over-the-counter option
contracts, participation interests in loans, securities that are not readily
marketable, and restricted securities, unless the Manager determines, based upon
a continuing review of the trading markets and available reliable price
information for the specific security, that such restricted securities are
eligible to be deemed liquid under Rule 144A. For purposes of this restriction,
illiquid securities are securities that cannot be disposed of by a Portfolio
within seven days in the ordinary course of business at approximately the amount
at which the Portfolio has valued the securities. In no event will any
Portfolio's investment in illiquid securities, in the aggregate, exceed 15% of
its assets. If through a change in values, net assets, or other circumstances,
any Portfolio were in a position where more than 15% of its assets were invested
in illiquid securities, it would take appropriate steps to protect liquidity.

The Board has adopted guidelines and delegated to the Adviser the daily function
of determining and monitoring the liquidity of restricted securities. The Board,
however, will retain sufficient oversight and be ultimately responsible for the
determinations. When no market, dealer, or matrix quotations are available for a
security, illiquid investments are priced at fair value as determined in good
faith by a committee appointed by the Board. Since it is not possible to predict
with assurance exactly how the market for restricted securities sold and offered
under Rule 144A will develop, the Board will carefully monitor each Portfolio's
investments in these securities, focusing on such important factors, among
others, as valuation, liquidity, and availability of information. To the extent
that qualified institutional buyers become for a time uninterested in purchasing
these restricted securities, this investment practice could have the effect of
decreasing the level of liquidity in a Portfolio.

The purchase price and subsequent valuation of restricted securities normally
reflect a discount from the price at which such securities would trade if they
were not restricted, since the restriction makes them less liquid. The amount of
the discount from the prevailing market prices is expected to vary depending
upon the type of security, the character of the issuer, the party who will bear
the expenses of registering the restricted securities, and prevailing supply and
demand conditions.

Interpretive Rules

For purposes of the foregoing restrictions, any limitation which
involves a maximum percentage will not be violated unless an excess over the
percentage occurs immediately after, and is caused by, an acquisition or
encumbrance of securities or assets of, or borrowings by, a Portfolio. In
addition, with regard to exceptions recited in a restriction, a Portfolio may
only rely on an exception if its investment objective(s) or policies (as
disclosed in the Prospectus) otherwise permit it to rely on the exception.

INVESTMENT ADVISER

Transamerica Occidental Life Insurance Company ("Transamerica") is the
investment adviser of the Fund and its Portfolios. It will oversee the
management of the assets of the Portfolios by Investment Services. In turn,
Investment Services is responsible for the day-to-day management of the
Portfolios. Investment Advisory Agreement

The investment adviser, Transamerica, has entered into an Investment
Advisory Agreement with the Fund under which Transamerica assumes overall
responsibility, subject to the supervision of the Board of Directors, for
administering all operations of the Fund and for monitoring and evaluating the
management of the assets of the Portfolios by Investment Services on an ongoing
basis. Transamerica provides or arranges for the provision of the overall
business management and administrative services necessary for the Fund's
operations and furnishes or procures any other services and information
necessary for the proper conduct of the Fund's business. Transamerica also acts
as liaison among, and supervisor of, the various service providers to the Fund.
Transamerica is also responsible for overseeing the Fund's compliance with the
requirements of applicable law and in conformity with the Portfolios' investment
objective(s), policies and restrictions, including oversight of Investment
Services.

For its services to the Fund, Transamerica receives annual advisory
fees which are percentages of the average daily net assets of the Portfolio's.
The fees are deducted daily from the assets of each Portfolio and paid to
Transamerica periodically. Transamerica pays the salaries and fees, if any, of
all officers and directors of the Fund who are "interested persons" (as defined
in the 1940 Act) of Transamerica and of all personnel of Transamerica performing
services relating to research, statistical and investment activities and the
fees of the Sub-Adviser.

The Growth Portfolio of the Fund began operations on November 1, 1996,
as the successor to Separate Account Fund C of Transamerica Occidental Life
Insurance Company. Transamerica was the investment adviser to the Separate
Account Fund C. The advisory fee paid by Separate Account Fund C was .30% of its
average daily net assets. The dollar amount paid by Separate Account Fund C to
Transamerica in 1995 was $67,198. The total dollar amount paid to Transamerica
in 1996, including amounts paid by Separate Account Fund C through October 31
and amounts paid by the Growth Portfolio after October 31, 1996, was $66,831.
The total dollar amount paid to Transamerica by the Portfolio in 1997 was
$313,749.

The Money Market Portfolio commenced operations in January, 1998. As of
the date of this Statement of Additional Information, Aggressive Growth,
Balanced, Bond, High Yield Bond, Index, Small Company, and Value Portfolios had
not yet commenced operations.

Each Portfolio pays all the costs of its operations that are not
assumed by Transamerica, including custodian fees, legal and auditing fees,
registration fees and expenses, and fees and expenses of directors unaffiliated
with Transamerica. Fund expenses that are not Portfolio-specific will be
allocated between the Portfolios based on the net assets of each Portfolio.

The Investment Advisory Agreement does not place limits on the
operating expenses of the Fund or of either Portfolio. However, Transamerica has
voluntarily undertaken to pay any such expenses (but not including brokerage or
other portfolio transaction expenses or expenses of litigation, indemnification,
taxes or other extraordinary expenses) to the extent that such expenses, as
accrued for each Portfolio separately, exceed .10% of the Growth Portfolio's and
.25% of the Money Market Portfolio's estimated average daily net assets on an
annualized basis.

The Investment Advisory Agreement provides that Transamerica may render
similar services to others so long as the services that it provides to the Fund
are not impaired thereby. The investment advisory agreement also provides that
Transamerica shall not be liable for any error of judgment or mistake of law or
for any loss arising out of any investment or for any act or omission in the
management of the Fund, except for: (i) willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of reckless disregard
of its duties or obligations under the investment advisory agreement; and (ii)
to the extent specified in Section 36(b) of the 1940 Act concerning loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation.

The Investment Advisory Agreement was approved by the Board of
Directors, including a majority of the Directors who are not parties to the
investment advisory agreement or "interested persons" (as such term is defined
in the 1940 Act) of any party thereto (the "non-interested Directors") for the
Growth Portfolio on July 24, 1996, for the Money Market Portfolio on July 31,
1997, and for the Aggressive Growth, Balanced, Bond, High Yield Bond, Index,
Small Company and Value Portfolios on October 29, 1998. The investment advisory
agreement will remain in effect from year to year provided such continuance is
specifically approved as to each Portfolio at least annually by: (a) the Board
of Directors or the vote of a majority of the votes attributable to shares of
such Portfolio; and (b) the vote of a majority of the non-interested Directors,
cast in person at a meeting called for the purpose of voting on such approval.
The investment advisory agreement will terminate automatically if assigned (as
defined in the 1940 Act). The investment advisory agreement is also terminable
as to any Portfolio at any time by the Board of Directors or by vote of a
majority of the votes attributable to outstanding voting securities of the
applicable Portfolio (a) without penalty and (b) on 60 days' written notice to
Transamerica.

Sub-Advisory Agreement

Transamerica has contracted with Transamerica Investment Services, Inc.
("Investment Services"), a wholly-owned subsidiary of Transamerica Corporation,
to render investment services to the Fund. Investment Services has been in
existence since 1967 and has provided investment services to investment
companies since 1968 and the Transamerica Life Companies since 1981. Investment
Services will provide recommendations on the management of each Portfolio's
assets, provide investment research reports and information, supervise and
manage the investments of each Portfolio, and direct the purchase and sale of
portfolio investments. Investment decisions regarding the composition of each
Portfolio and the nature and timing of changes in each Portfolio are subject to
the control of the Board of Directors of the Fund.

Transamerica has agreed to pay Investment Services a fee at the annual
rate of a percentage of each Portfolio's average daily net assets.
The sub-advisory agreement was approved by the Board of Directors,
including a majority of the Directors who are not parties to the sub-advisory
agreement or "interested persons" (as such term is defined in the 1940 Act) of
any party thereto (the "non-interested Directors"), for the Growth Portfolio on
July 24, 1996, for the Money Market Portfolio on October 31, 1997, and for the
Aggressive Growth, Balanced, Bond, High Yield Bond, Index, Small Company and
Value Portfolios on October 29, 1998. The sub-advisory agreement will remain in
effect from year to year provided such continuance is specifically approved as
to each Portfolio at least annually by: (a) the Board of Directors or the vote
of a majority of the votes attributable to shares of such Portfolio; and (b) the
vote of a majority of the non-interested Directors, cast in person at a meeting
called for the purpose of voting on such approval. The sub-advisory agreement
will terminate automatically if assigned (as defined in the 1940 Act). The
sub-advisory agreement is also terminable as to any Portfolio at any time by the
Board of Directors or by vote of a majority of the votes attributable to
outstanding voting securities of such Portfolio (a) without penalty and (b) on
30 days' written notice to Investment Services.

PORTFOLIO TRANSACTIONS, PORTFOLIO TURNOVER AND BROKERAGE

Investment Services is responsible for decisions to buy and sell
securities for each Portfolio, the selection of brokers and dealers to effect
the transactions and the negotiation of brokerage commissions, if any. Purchases
and sales of securities on a securities exchange are effected through brokers
who charge a negotiated commission for their services. Orders may be directed to
any broker including, to the extent and in the manner permitted by applicable
law, affiliates of Transamerica or Investment Services.

In placing orders for portfolio securities of a Portfolio, Investment
Services is required to give primary consideration to obtaining the most
favorable price and efficient execution. This means that Investment Services
will seek to execute each transaction at a price and commission, if any, which
provide the most favorable total cost or proceeds reasonably attainable in the
circumstances. While Investment Services generally seeks reasonably competitive
spreads or commissions, each Portfolio will not necessarily be paying the lowest
spread or commission available. Within the framework of this policy, Investment
Services will consider research and investment services provided by brokers or
dealers who effect or are parties to portfolio transactions of the Portfolio,
Investment Services and its affiliates, or other clients of Investment Services
or its affiliates. Such research and investment services include statistical and
economic data and research reports on particular companies and industries. Such
services are used by Investment Services in connection with all of its
investment activities, and some of such services obtained in connection with the
execution of transactions for each Portfolio may be used in managing other
investment accounts. Conversely, brokers furnishing such services may be
selected for the execution of transactions of such other accounts, whose
aggregate assets are far larger than those of each Portfolio, and the services
furnished by such brokers may be used by Investment Services in providing
investment sub-advisory services for each Portfolio. The aggregate dollar
amounts of the brokerage commissions paid with respect to portfolio transactions
of the Portfolio by Investment Services as sub-adviser to Separate Account Fund
C (the Growth Portfolio's predecessor) were $7,253 for 1995, and $19,115 for the
first ten months of 1996. The aggregate dollar amount of brokerage commissions
paid by the Growth Portfolio after the reorganization, during November and
December 1996, was $5,550, so that the total paid during 1996 was $24,665. The
total paid by the Growth Portfolio during fiscal year 1997 was $16,312. The
other Portfolios did not commence operations in 1997.

On occasions when Investment Services deems the purchase or sale of a
security to be in the best interest of a Portfolio as well as its other advisory
clients (including any other fund or other investment company or advisory
account for which Investment Services or an affiliate acts as investment
adviser), Investment Services, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be sold or purchased for a
Portfolio with those to be sold or purchased for such other customers in order
to obtain the best net price and most favorable execution. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by Investment Services in the manner
it considers to be most equitable as to each customer and consistent with its
fiduciary obligations to such Portfolio and such other customers. In some
instances, this procedure may adversely affect the price and size of the
position obtainable for a Portfolio.

Commission rates are established pursuant to negotiations with the
broker based on the quality and quantity of execution services provided by the
booker in the light of generally prevailing rates. The allocation of orders
among brokers and the commission rates paid are reviewed periodically by the
Board of Directors.

Changes will be made in the assets of the Growth Portfolio if such
changes are considered advisable to better achieve the Growth Portfolio's
investment objectives. It is anticipated that the annual portfolio turnover
should not exceed 75%. The portfolio turnover rates for Separate Account Fund C
(the Growth Portfolio's predecessor) for 1995 was 30.84%, the portfolio turnover
rate for 1996, when combining the experience of Separate Account Fund C through
October 31, 1996, and the Growth Portfolio's experience for November and
December 1996 was 34.58%. The Portfolio's portfolio turnover rate for 1997 was
20.54%.

DETERMINATION OF NET ASSET VALUE

Under the 1940 Act, the Board of Directors is responsible for
determining in good faith the fair value of securities of each Portfolio. In
accordance with procedures adopted by the Board of Directors, the net asset
value per share is calculated by determining the net worth of each Portfolio
(assets, including securities at market value or amortized cost value, minus
liabilities) divided by the number of that Portfolio's outstanding shares. All
securities are valued as of the close of regular trading on the New York Stock
Exchange.

In the event that the New York Stock Exchange, the Federal Reserve, or
the national securities exchange on which stock options are traded adopt
different trading hours on either a permanent or temporary basis, the Board of
Directors will reconsider the time at which net asset value is computed. In
addition, the Portfolios may compute their net asset value as of any time
permitted pursuant to any exemption, order or statement of the SEC or its staff.

Assets of the Portfolios, other than the Money Market Portfolio, are
valued as follows:

(a) equity securities and other similar investments ("Equities") listed on any
U. S. stock market or the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") are valued at the last sale price on that exchange
or NASDAQ on the valuation day; if no sale occurs, Equities traded on a U. S.
exchange or NASDAQ are valued at the mean between the closing bid and closing
asked prices; (b) over-the-counter securities not quoted on NASDAQ are valued at
the last sale price on the valuation day or, if no sale occurs, at the mean
between the last bid and asked prices; (c) debt securities with a remaining
maturity of 61 days or more are valued on the basis of dealer-supplied
quotations or by a pricing service selected by Investment Services and approved
by the Board of Directors; (d) options and futures contracts are valued at the
last sale price on the market where any such option contracts is principally
traded; (e) over-the-counter options are valued based upon prices provided by
market makers in such securities or dealers in such currencies; (f) all other
securities and other assets, including those for which a pricing service
supplies no quotations or quotations are not deemed by Investment Services to be
representative of market values, but excluding debt securities with remaining
maturities of 60 days or less, are valued at fair value as determined in good
faith pursuant to procedures established by the Board of Directors; and (g) debt
securities with a remaining maturity of 60 days or less will be valued at their
amortized cost which approximates market value.

Equities traded on more than one U. S. national securities exchange are
valued at the last sale price on each business day at the close of the exchange
representing the principal market for such securities. The value of all assets
and liabilities expressed in foreign currencies will be converted into U.S.
dollar values at the noon (Eastern Time) Reuters spot rate. If such quotations
are not available, the price will be determined in good faith by or under
procedures established by the Board of Directors.

All of the assets of the Money Market Portfolio are valued on the basis
of amortized cost in an effort to maintain a constant net asset value per share
of $1.00. The Board of Directors has determined the use of the amortized cost
method to be in the best interests of the Money Market Portfolio and its
shareholders. Under the amortized cost method of valuation, securities are
valued at cost on the date of their acquisition, and thereafter a constant
accretion of any discount or amortization of any premium to maturity is assumed,
regardless of the impact of fluctuating interest rates on the market value of
the security. While this method provides certainty in valuation, it may result
in periods during which the value as determined by amortized cost is higher or
lower than the price the Portfolio would receive if it were to sell the
security. During such periods, the quoted yield to investors may differ somewhat
from that obtained by a similar fund which uses available market quotations to
value all of its securities.

The Board has established procedures reasonably designed, taking into
account current market conditions and the Money Market Portfolio's investment
objective, to stabilize the net asset value per share for purposes of sales and
redemptions at $1.00. These procedures include review by the Board, at such
intervals as it deems appropriate, to determine the extent, if any, to which the
net asset value per share calculated by using available market quotations
deviates from $1.00 per share. In the event such deviation should exceed one
half of one percent, the Board will promptly consider initiating corrective
action. If the Board believes that the extent of any deviation from a $1.00
amortized cost price per share may result in material dilution or other unfair
results to new or existing shareholders, it will take such steps as it considers
appropriate to eliminate or reduce these consequences to the extent reasonably
practicable. Such steps may include: (1) selling securities prior to maturity;
(2) shortening the average maturity of the Portfolio; (3) withholding or
reducing dividends; or (4) utilizing a net asset value per share determination
from available market quotations. Even if these steps were taken, the Money
Market Portfolio's net asset value might still decline.

PERFORMANCE INFORMATION

Portfolio Performance

The Fund may from time to time quote or otherwise use average annual
total return information for the Portfolios in advertisements, shareholder
reports or sales literature. Average annual total return quotations are computed
by finding the average annual compounded rates of return over one, five and ten
year periods that would equate the initial amount invested to the ending
redeemable value, according to the following formula:

P(1+T)n = ERV

Where:
P = a hypothetical initial investment of $1,000

T = average annual total return

n = number of years

ERV = ending redeemable value of a hypothetical $1,000
investment made at the beginning of the one, five or
ten-year period at the end of the one, five, or
ten-year period (or fractional portion thereof).

From time to time, the Fund may disclose cumulative total returns in
conjunction with the standard format described above. The cumulative total
returns will be calculated using the following formula:

CTR = (ERV/P) - 1

Where:

CTR = The cumulative total return net of Portfolio recurring
charges for the period.

ERV = The ending redeemable value of the hypothetical investment
at the end of the period.

P = A hypothetical single payment of $1,000.
Any performance data quoted for the Portfolios will represent historical
performance and the investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than original cost. Performance data for the Portfolios does not reflect charges
deducted under the variable annuity contracts. If contract charges are taken
into account, such performance data would reflect lower returns.

The Growth Portfolio is the successor to Transamerica Occidental's
Separate Account Fund C. Separate Account Fund C had been a separate account of
Transamerica registered under the 1940 Act on Form N-3 as an open-end,
diversified, management investment company. The reorganization of Separate
Account Fund C from a management investment company into a unit investment trust
called Separate Account C, was approved at a meeting of the Contract owners held
on October 30, 1996. The assets of Separate Account Fund C as of close of
business October 31, 1996, were transferred intact to the Growth Portfolio of
the Fund in exchange for shares in the Growth Portfolio which will be held by
Separate Account C. Because the Growth Portfolio is the successor to Separate
Account Fund C, the historical performance data of Separate Account Fund C is
the Growth Portfolio's performance history for periods prior to the
reorganization.

Prior to the reorganization on November 1, 1996, Separate Account Fund C
paid a mortality and expense risk fee of 1.10% and an investment advisory fee of
0.30% per year, and it did not bear any operating expenses. After the
reorganization, the Growth Portfolio does not pay any mortality and expense risk
fees, and its total investment advisory fee and operating expenses during 1997
were 0.98% (before fee waivers and expense reimbursements) and 0.85% after fee
waivers and expense reimbursements. In accordance with conversations with the
SEC staff, investment performance for the Growth Portfolio for periods prior to
the reorganization reflect total mutual fund fees and expenses of 0.98% per
year.

In computing its standardized total returns for periods prior to the
reorganization, the Fund assumes that the charges currently imposed by the
Growth Portfolio were in effect through each of the periods for which the
standardized returns are presented. The Growth Portfolio's performance data does
not reflect any sales or insurance charges, or any other separate account or
contract level charges, that were imposed under the annuity contracts issued
through Separate Account Fund C.

Money Market Portfolio Performance

Current yield for the Money Market Portfolio will be computed by
determining the net change, exclusive of capital changes at the beginning of a
seven-day period in the value of a hypothetical investment, subtracting any
deductions from shareholder accounts, and dividing the difference by the value
of a hypothetical investment at the beginning of the base period to obtain the
base period return. This base period return is then multiplied by (365/7) with
the resulting yield figure carried to at least the nearest hundredth of one
percent.

Calculation of "effective yield" begins with the same "base period return"
used in the calculation of yield, which is then annualized to reflect weekly
compounding pursuant to the following formula:
365/7
Effective yield = [(1 + (Base Period Return) ] - 1

Published Performance

From time to time the Fund may publish, or provide telephonically, an
indication of the Portfolios' past performance as measured by independent
sources such as (but not limited to) Lipper Analytical Services, Weisenberger
Investment Companies Service, Donoghue's Money Portfolio Report, Barron's,
Business Week, Changing Times, Financial World, Forbes, Fortune, Money, Personal
Investor, Sylvia Porter's Personal Finance and The Wall Street Journal. The Fund
may also advertise information which has been provided to the NASD for
publication in regional and local newspapers.

In addition, the Fund may from time to time advertise the Portfolios'
performance relative to certain indices and benchmark investments, including: o
the Lipper Analytical Services, Inc. Mutual Portfolio Performance Analysis,
Fixed-Income Analysis and Mutual Portfolio Indices (which measure total return
and average current yield for the mutual fund industry and rank mutual fund
performance); o the CDA Mutual Portfolio Report published by CDA Investment
Technologies, Inc. (which analyzes price, risk and various measures of return
for the mutual fund industry); o the Consumer Price Index published by the U. S.
Bureau of Labor Statistics (which measures changes in the price of goods and
services); o Stocks, Bonds, Bills and Inflation published by Ibbotson Associates
(which provides historical performance figures for stocks, government securities
and inflation); o the Hambrecht & Quist Growth Stock Index; o the NASDAQ OTC
Composite Prime Return; o the Russell Midcap Index; o the Russell 2000 Index -
Total Return; o the ValueLine Composite-Price Return; o the Wilshire 5000 Index;
o the Salomon Brothers' World Bond Index (which measures the total return in U.
S. dollar terms of government bonds, Eurobonds and foreign bonds of ten
countries, with all such bonds having a minimum maturity of five years); o the
Shearson Lehman Brothers Aggregate Bond Index or its component indices (the
Aggregate Bond Index measures the performance of Treasury, U. S. Government
agencies, mortgage and Yankee bonds); o the S&P Bond indices (which measure
yield and price of corporate, municipal and U. S. Government bonds); o the J.P.
Morgan Global Government Bond Index; o Donoghue's Money Market Portfolio Report
(which provides industry averages of 7-day annualized and compounded yields of
taxable, tax-free and U. S. Government money market funds); o other taxable
investments including certificates of deposit, money market deposit accounts,
checking accounts, savings accounts, money market mutual funds and repurchase
agreements; o historical investment data supplied by the research departments of
Goldman Sachs, Lehman Brothers, First Boston Corporation, Morgan Stanley
(including EAFE), Salomon Brothers, Merrill Lynch, Donaldson Lufkin and Jenrette
or other providers of such data; o the FT-Actuaries Europe and Pacific Index; o
mutual fund performance indices published by Variable Annuity Research & Data
Service; o S&P 500 Index; and o mutual fund performance indices published by
Morningstar, Inc.

The composition of the investments in such indices and the characteristics
of such benchmark investments are not identical to, and in some cases are very
different from, those of each Portfolio's investments. These indices and
averages are generally unmanaged and the items included in the calculations of
such indices and averages may be different from those of the equations used by
the Fund to calculate the Portfolios' performance figures.

The Funds may also from time to time include in such advertising a total return
figure that is not calculated according to the formula set forth above in order
to compare more accurately the performance of a Fund with other measures of
investment return. For example, unmanaged indexes may assume the reinvestment of
dividends but generally do not reflect deductions for administrative and
management costs and expenses.

The Fund may from time to time summarize the substance of discussions
contained in shareholder reports in advertisements and publish Investment
Services' views as to markets, the rationale for the Portfolios' investments and
discussions of the Portfolios' current asset allocation.

From time to time, advertisements or information may include a discussion
of certain attributes or benefits to be derived by an investment in a particular
Portfolio. Such advertisements or information may include symbols, headlines or
other material which highlight or summarize the information discussed in more
detail in the communication.

Such performance data is based on historical results and is not intended
to indicate future performance. The total return of a Portfolio varies based on
market conditions, portfolio expenses, portfolio investments and other factors.
The value of a Portfolio's shares fluctuates and an investor's shares may be
worth more or less than their original cost upon redemption. The Fund may also,
at its discretion, from time to time make a list of the Portfolios' holdings
available to investors upon request.

FEDERAL TAX MATTERS

Each Portfolio intends to qualify and to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). In order to qualify for that treatment, each
Portfolio must distribute to its shareholders for each taxable year at least 90%
of its investment company taxable income, consisting of net investment income,
net short-term capital gain and net gains from certain foreign currency
transactions.

Sources of Gross Income. To qualify for treatment as a regulated
investment company, each Portfolio must also, among other things, derive its
income from certain sources. Specifically, in each taxable year, each Portfolio
must generally derive at least 90% of its gross income from dividends, interest,
payments with respect to securities loans, gains from the sale or other
disposition of securities or foreign currencies, or other income (including, but
not limited to, gains from options, futures or forward contracts) derived with
respect to its business of investing in securities, or these currencies. Each
Portfolio must also generally derive less than 30% of its gross income each
taxable year from the sale or other disposition of any of the following which
was held for less than three months: (1) stock or securities, (2) options,
futures, or forward contracts (other than options, futures, or forward contracts
on foreign currencies), or (3) foreign currencies (or options, futures, or
forward contracts on foreign currencies) that are not directly related to the
Portfolio's principal business of investing in stock or securities (or options
and futures with respect to stock or securities). For purposes of these tests,
gross income generally is determined without regard to losses from the sale or
other disposition of stock or securities or other Portfolio assets.

Diversification of Assets. To qualify for treatment as a regulated
investment company, each Portfolio must also satisfy certain tax requirements
with respect to the diversification of its assets. Each Portfolio must have, at
the close of each quarter of the Portfolio's taxable year, at least 50% of the
value of its total assets represented by cash, cash items, United States
Government securities, securities of other regulated investment companies, and
other securities which, in respect of any one issuer, do not exceed 5% of the
value of the Portfolio's total assets and that do not represent more than 10% of
the outstanding voting securities of the issuer. In addition, not more than 25%
of the value of each Portfolio's total assets may be invested in securities
(other than United States Government securities or the securities of other
regulated investment companies) of any one issuer, or of two or more issuers
which the Portfolio controls and which are engaged in the same or similar trades
or businesses or related trades or businesses. For purposes of each Portfolio's
requirements to maintain diversification for tax purposes, the issuer of a loan
participation will be the underlying borrower. In cases where a Portfolio does
not have recourse directly against the borrower, both the borrower and each
agent bank and co-lender interposed between the Portfolio and the borrower will
be deemed issuers of the loan participation for tax diversification purposes.
The Portfolio's investments in U. S. Government Securities are not subject to
these limitations. The foregoing diversification requirements are in addition to
those imposed by the Investment Company Act of 1940 (the "1940 Act").

Because the Fund is established as an investment medium for variable
annuity contracts, Section 817(h) of the Code imposes additional diversification
requirements on the Portfolio. These requirements which are in addition to the
diversification requirements mentioned above, place certain limitations on the
proportion of each Portfolio's assets that may be represented by any single
investment. In general, no more than 55% of the value of the assets of each
Portfolio may be represented by any one investment; no more than 70% by any two
investments; no more than 80% by any three investments; and no more than 90% by
any four investments. For these purposes, all securities of the same issuer are
treated as a single investment and each United States government agency or
instrumentality is treated as a separate issuer.

Additional Tax Considerations. The Portfolios will not be subject to the
4% Federal excise tax imposed on amounts not distributed to shareholders on a
timely basis because each Portfolio intends to make sufficient distributions to
avoid such excise tax. If a Portfolio failed to qualify as a regulated
investment company, owners of variable annuity contracts or variable life
policies ("Contracts") based on such Portfolio: (1) might be taxed currently on
the investment earnings under their Contracts and thereby lose the benefit of
tax deferral; and (2) the Portfolio might incur additional taxes. In addition,
if a Portfolio failed to qualify as a regulated investment company, or if a
Portfolio failed to comply with the diversification requirements of Section
817(h) of the Code, owners of Contracts based on that Portfolio would be taxed
on the investment earnings under their Contracts and thereby lose the benefit of
tax deferral. Accordingly, compliance with the above rules is carefully
monitored by Investment Services and it is intended that each Portfolio will
comply with these rules as they exist or as they may be modified from time to
time. Compliance with the tax requirements described above may result in a
reduction in the return of each Portfolio, since, to comply with the above
rules, the investments utilized (and the time at which such investments are
entered into and closed out) may be different from that Investment Services
might otherwise believe to be desirable.

The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and Treasury Regulations currently in effect. It is not
intended to be a complete explanation or a substitute for consultation with
individual tax advisers. For the complete provisions, reference should be made
to the pertinent Code sections and the Treasury Regulations promulgated
thereunder. The Code and Regulations are subject to change.

SHARES OF STOCK

Each issued and outstanding share of each Portfolio is entitled to
participate equally in dividends and distributions declared for that Portfolio's
stock and, upon liquidation or dissolution, in that Portfolio's net assets
remaining after satisfaction of outstanding liabilities. The shares of each
Portfolio, when issued, are fully paid and non-assessable and have no preemptive
or conversion rights.

As the designated successor to Separate Account Fund C, the Growth
Portfolio of the Fund received the assets of Separate Account Fund C. In
exchange, the Fund provided Separate Account C with shares in the Growth
Portfolio.

Under normal circumstances, subject to the reservation of rights explained
below, the Fund will redeem shares of each Portfolio in cash within 7 days.
However, the right of a shareholder to redeem shares and the date of payment by
the Fund may be suspended for more than seven days for any period during which
the New York Stock Exchange is closed, other than the customary weekends or
holidays, or when trading on such Exchange is restricted as determined by the
SEC; or during any emergency, as determined by the SEC, as a result of which it
is not reasonably practicable for a Portfolio to dispose of securities owned by
it or fairly to determine the value of its net assets; or for such other period
as the SEC may by order permit for the protection of shareholders.

Under Maryland law, the Fund is not required to hold annual shareholder
meetings and does not intend to do so.
CUSTODY OF ASSETS

Pursuant to a Custodian Agreement with the Fund, State Street Bank and
Trust Company ("State Street") holds the cash and portfolio securities of the
Portfolios of the Fund as custodian.

State Street is responsible for holding all securities and cash of the
Portfolios, receiving and paying for securities purchased, delivering against
payment securities sold, and receiving and collecting income from investments,
making all payments covering expenses of the Fund, all as directed by persons
authorized by the Fund. State Street does not exercise any supervisory function
in such matters as the purchase and sale of portfolio securities, payment of
dividends, or payment of expenses of the Portfolios or the Fund. Portfolio
securities of the Portfolios purchased domestically are maintained in the
custody of State Street and may be entered into the Federal Reserve, Depository
Trust Company, or Participants Trust Company book entry systems.

DIRECTORS AND OFFICERS

The Directors and officers of the Fund are listed below together with
their respective positions with the Fund and a brief statement of their
principal occupations during the past five years.
<TABLE>
<CAPTION>

Positions and Offices
Name, Age and Address** with the Fund Principal Occupation During the Past Five Years
- ----------------------- ------------- -----------------------------------------------
<S> <C> <C>
Donald E. Cantlay (76) Board of Directors Director, Managing General Partner of Cee 'n' Tee
Company; Director of California Trucking
Association and Western Highway Institute; Director
of FPA Capital Fund and FPA New Income Fund.

Richard N. Latzer (61)* Board of Directors President, Chief Executive Officer and Director of
Transamerica Investment Services, Inc.; Senior
Vice President and Chief Investment Officer of
Transamerica Corporation. Director and Chief
Investment Officer of Transamerica Occidental Life
Insurance Company.

Jon C. Strauss (58) Board of Directors President of Harvey Mudd College; Previously Vice
President and Chief Financial Officer of Howard
Hughes Medical Institute; President of Worcester
Polytechnic Institute; Vice President and Professor
of Engineering at University of Southern
California; Vice President Budget and Finance,
Director of Computer Activities and Professor of
Computer and Decision Sciences at University of
Pennsylvania.

Gary U. Rolle' (57)* Chairman, Board of Director, Executive Vice President and Chief
Directors Investment Officer of Transamerica Investment
Services, Inc.;
Director and Chief
Investment Officer
of Transamerica
Occidental Life
Insurance Company;
Director,
Transamerica
Investors, Inc..

Peter J. Sodini (57) Board of Directors Associate, Freeman Spogli & Co. (a private
investor); President, Chief Executive Officer and
Director, The Pantry, Inc. (a supermarket).
Director Pamida Holdings Corp. (a retail
merchandiser) and Buttrey Food and Drug Co. (a
supermarket).

Barbara A. Kelley (45) President President, Chief Operating Officer and Director of
Transamerica Financial Resources, Inc. and
President and Director of Transamerica Securities
Sales Corporation, Transamerica Advisors, Inc.,
Transamerica Product, Inc., Transamerica Product,
Inc. I, Transamerica Product, Inc. II, Transamerica
Product, Inc. IV, and Transamerica Leasing
Ventures, Inc.

Matt Coben (37)*** Vice President Vice President, Broker/Dealer Channel of the
Institutional Marketing Services Division of
Transamerica Life Insurance and Annuity Company
and prior to 1994, Vice President and National
Sales Manager of the Dreyfus Service Organization .

Sally S. Yamada (47) Vice President and Treasurer of Transamerica
Assistant Secretary Occidental Life Insurance Company and Treasurer of
Transamerica Life Insurance and Annuity Company.

Regina M. Fink (42) Secretary Counsel for Transamerica Occidental Life Insurance
Company and prior to 1994 Counsel and Vice
President for Colonial Management Associates, Inc.

Thomas M. Adams (63) Assistant Secretary Partner in the law firm of Lanning , Adams &
Peterson.

Susan R. Hughes (42) Treasurer Vice President and Chief financial Officer,
Transamerica Investment Services, Inc., since 1997;
Independent Financial Consultant 1992-1997,
</TABLE>

* These members of the Board are interested persons as defined by Section
2(a)(19) of the 1940 Act.

** Except as otherwise noted, the mailing address of
each Board member and officer is 1150 South Olive, Los Angeles, California
90015.

*** The mailing address of this officer is 401 North Tryon Street Suite
700, Charlotte, North Carolina 28202.

The principal occupations listed above apply for the last five years. In
some instances, the occupation listed above is the current position; prior
positions with the same company or affiliate are not indicated.

Each of the officers and members of the Board of the Fund holds the
same position with Transamerica Occidental's Separate Account Fund B. The
members of the Board of Directors are also members of the Board of Directors of
Transamerica Income Shares, Inc., a closed-end management company advised by
Transamerica Investment Services, Inc. Mr. Rolle is a director of Transamerica
Investors, Inc.

Compensation

The following table shows the compensation paid by the Fund and the
Fund Complex during the fiscal year ending December 31, 1997, to all Directors
of the Fund.
<TABLE>
<CAPTION>

Total Pension or
Aggregate Compensation Retirement Benefits Compensation From Registrant and
Name of Person From Fund1/ Accrued As Part of Fund Fund Complex Paid to Directors3/
- -------------- ------- -----------
Expenses2/
<S> <C> <C> <C>
Donald E. Cantlay $1500 -0- $6,000
Richard N. Latzer -0- -0- -0-
DeWayne W. Moore -$1500 -0- $6,250
Gary U. Rolle -0- -0- -0-
Peter J. Sodini $1500 -0- $4,750
Jon C. Strauss $500 -0- $500
- ---------------------
</TABLE>

1/ Each director of the Fund is compensated $250 for each meeting they attend.
(The Board of the Fund plans to hold four regularly scheduled board meetings
each year; other meetings may be scheduled.) This is the same compensation the
directors received while members of the Board of Managers of Separate Account
Fund C.

2/ None of the members of the Board of Directors currently receives any pension
or retirement benefits due to services rendered to the Fund and thus will not
receive any benefits upon retirement from the Fund.

3/ During fiscal year 1997, each Board member was also a member of the Board of
Transamerica Occidental's Separate Account Fund B and of Transamerica Income
Shares, Inc., a closed-end management company advised by Transamerica Investment
services, Inc. Mr. Rolle' is a director of Transamerica Investors, Inc. These
registered investment companies comprise the "Fund Complex."

LEGAL PROCEEDINGS

There is no pending material legal proceeding affecting the Fund.
Transamerica is involved in various kinds of routine litigation which, in
management's judgment, are not of material importance to Transamerica's assets.

OTHER INFORMATION

Other Information

The Prospectus and this Statement do not contain all the information
included in the registration statement filed with the SEC under the 1933 Act
with respect to the securities offered by the Prospectus. Certain portions of
the registration statement have been omitted from the Prospectus and this
Statement pursuant to the rules and regulations of the SEC. The registration
statement including the exhibits filed therewith may be examined at the office
of the SEC in Washington, D.C.

Statements contained in the Prospectus or in this Statement as to the
contents of any contract or other document referred to are not necessarily
complete, and, in each instance, reference is made to the copy of such contract
or other document filed as an exhibit to the registration statement of which the
Prospectus and this Statement form parts, each such statement being qualified in
all respects by such reference.

Independent Public Accountants

Ernst & Young LLP, 515 South Flower Street, Los Angeles, California
90071, acts as the Fund's independent certified public accountants.

Annual and Semi-Annual Reports

The Annual and Semi-Annual Reports of the Portfolios are incorporated
by reference in this Statement of Additional Information.

Financial Statements

This Statement of Additional Information contains the financial
statements for the Growth Portfolio of Transamerica Variable Insurance Fund,
Inc., for fiscal year ending December 31, 1997. No financial statements are
provided for the other Portfolios because, as of December 31, 1997, the other
Portfolios had not yet commenced operations.

<PAGE>

Appendix A

Description of Corporate Bond Ratings

Moody's Investors Service, Inc. and Standard and Poor's Corporation are two
prominent independent rating agencies that rate the quality of bonds. Following
are expanded explanations of the ratings shown in the Prospectus.

Moody's Investors Service, Inc. Aaa: Bonds with this rating are judged to be of
the best quality. They carry the smallest degree of investment risk. Interest
payments are protected by a large or exceptionally stable margin and principal
is secure.

Aa: Bonds with this rating are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude.

A: Bonds with this rating possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.

Baa: Bonds with this rating are considered as medium grade obligations, i.e.;
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba: Bonds with this rating are judged to have speculative elements; their future
cannot be considered as well-assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.

B: Bonds with this rating generally lack characteristics of desirable
investments. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa: Bonds with this rating are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.

Ca: Bonds with this rating represent obligations which are speculative to a
high degree. Such issues are often in
default or have other marked shortcomings.

C: Bonds with this rating are the lowest rated class of bonds. Issues so
rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.

Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

Generally, investment-grade debt securities are those rated Baa3 or better by
Moody's.

Standard & Poor's Corporation AAA: This rating is the highest rating
assigned by Standard & Poor's. Capacity to pay interest and repay principal
is very strong.

AA: This rating indicates a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only by a small degree.

A: This rating indicates a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB: This rating indicates an adequate capacity to pay interest and repay
principal. Whereas it normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to pay interest and repay principal for debt in this category
than in higher rated categories.

BB, B, CCC, CC: These ratings indicate, on balance, a predominantly speculative
capacity of the issuer to pay interest and repay principal in accordance with
the terms of the obligation. BB indicates the lowest degree of speculation and
CC the highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.

C: This rating is reserved for income bonds on which no interest is being paid.

D: This rating indicates debt in default, and payment of interest and/or
repayment of principal are in arrears.

The ratings from "AA" to "B" may be modified by the addition of a plus or minus
sign to show relative standing within the major rating categories, for example A
or B+.

Generally, investment-grade debt securities are those rated BBB or better by
Standard & Poor's.

<PAGE>

Appendix B

Description of Fixed-Income Instruments

U.S. Government Obligations
Securities issued or guaranteed as to principal and interest by the United
States government include a variety of Treasury securities, which differ in
their interest rates, maturities and times of issuance. Treasury Bills have a
maturity of one year or less; Treasury Notes have maturities of one to ten
years; and Treasury Bonds can be issued with any maturity period but generally
have a maturity of greater than ten years. Agencies of the United States
government which issue or guarantee obligations include, among others, the
Export-Import Bank of the United States, Farmers Home Administration, Federal
Housing Administration, Government National Mortgage Association, Maritime
Administration, Small Business Administration and The Tennessee Valley
Authority. Obligations of instrumentalities of the United States government
include securities issued or guaranteed by, among others, banks of the Farm
Credit System, the Federal National Mortgage Association, Federal Home Loan
Banks, Federal Home Loan Mortgage Corporation, Student Loan Marketing
Association, Federal Intermediate Credit Banks, Federal Land Banks, Banks for
Cooperatives, and the U.S. Postal Service. Some of these securities are
supported by the full faith and credit of the U.S. Treasury; others are
supported by the right of the issuer to borrow from the Treasury, while still
others are supported only by the credit of the instrumentality.

Certificates of Deposit
Certificates of deposit are generally short-term, interest-bearing negotiable
certificates issued by banks, savings and loan associations or savings banks
against funds deposited in the issuing institution.

Time Deposits
Time deposits are deposits in a bank or other financial institution for a
specified period of time at a fixed interest rate for which a negotiable
certificate is not received. Certain time deposits may be considered illiquid.

Bankers' Acceptance
A bankers' acceptance is a draft drawn on a commercial bank by a borrower,
usually in connection with an international commercial transaction (to finance
the import, export, transfer or storage of goods). The borrower is liable for
payment as well as the bank, which unconditionally guarantees to pay the draft
at its face amount on the maturity date. Most acceptances have maturities of six
months or less and are traded in secondary markets prior to maturity.

Commercial Paper
Commercial paper refers to short-term, unsecured promissory notes issued by
corporations to finance short-term credit needs. Commercial paper is usually
sold on a discount basis and has a maturity at the time of issuance not
exceeding 270 days.

Variable Rate, Floating Rate, or Variable Amount Securities
Variable rate, floating rate, or variable amount securities are short-term
unsecured promissory notes issued by corporations to finance short-term credit
needs. These are interest-bearing notes on which the interest rate generally
fluctuates on a scheduled basis.

Corporate Debt Securities
Corporate debt securities are debt issued by a corporation that pays interest
and principal to the holders at specified times.

Asset-Backed Securities
Asset-backed securities are securities which represent an undivided fractional
interest in a trust whose assets generally consist of mortgages, motor vehicle
retail installment sales contracts, or other consumer-based loans.

Participation Interests in Loans
A participation interest in a loan entitles the purchaser to receive a portion
of principal and interest payments due on a commercial loan extended by a bank
to a specified company. The purchaser of such an interest has no recourse
against the bank if payments of principal and interest are not made by the
borrower and generally relies on the bank to administer and enforce the loan's
terms.

International Organization Obligations
International organization obligations include obligations of those
organizations designated or supported by U.S. or foreign government agencies to
promote economic reconstruction and development, international banking, and
related government agencies. Examples include the International Bank for
Reconstruction and Development (the World Bank), the European Coal and Steel
Community, the Asian Development Bank, and the InterAmerican Development Bank.

Custody Receipts
A Fund may acquire custody receipts in connection with securities issued or
guaranteed as to principal and interest by the U.S. government, its agencies,
authorities or instrumentalities. Such custody receipts evidence ownership of
future interest payments, principal payments or both on certain notes or bonds
issued by the U.S. government, its agencies, authorities or instrumentalities.
These custody receipts are known by various names, including "Treasury
Receipts," "Treasury Investors Growth Receipts" ("TIGRs"), and "Certificates of
Accrual on Treasury Securities" ("CATS"). For certain securities law purposes,
custody receipts are not considered U.S.
government securities.

Pass-Through Securities
The Funds may invest in mortgage pass-through securities such as Government
National Mortgage Association ("GNMA") certificates or Federal National Mortgage
Association ("FNMA") and other mortgage-backed obligations, or modified
pass-through securities such as collateralized mortgage obligations issued by
various financial institutions. In connection with these investments, early
repayment of investment principal arising from prepayments of principal on the
underlying mortgage loans due to the sale of the underlying property, the
refinancing of the loan, or foreclosure may expose the Fund to a lower rate of
return upon reinvestment of the principal. Prepayment rates vary widely and may
be affected by changes in market interest rates. In periods of falling interest
rates, the rate of prepayment tends to increase, thereby shortening the actual
average life of the mortgage-related security. Conversely, when interest rates
are rising, the rate of prepayment tends to decrease, thereby lengthening the
actual average life of the mortgage-related security. Accordingly, it is not
possible to accurately predict the average life of a particular pool of
pass-through securities. Reinvestment of prepayments may occur at higher or
lower rates than the original yield on the certificates. Therefore, the actual
maturity and realized yield on pass-through or modified pass-through
mortgage-related securities will vary based upon the prepayment experience of
the underlying pool of mortgages. For purposes of calculating the average life
of the assets of the relevant Fund, the maturity of each of these securities
will be the average life of such securities based on the most recent or
estimated annual prepayment rate.

<PAGE>
PART C

Other Information

Item 24. Financial Statements and Exhibits

(a) Financial Statements

All required financial statements are
included in Parts A or B of this Registration
Statement.

(b) Exhibits

(1) Articles of Incorporation of Transamerica Variable Insurance Fund, Inc.
1/
(2) Bylaws of Transamerica Variable Insurance Fund, Inc. 1/ -
(3) Not
Applicable.
(4) Not Applicable.
(5) (a) Form of Investment Advisory
Agreement between Transamerica Variable Insurance Fund, Inc. and
Transamerica Occidental Life Insurance Company. 2/
(b) Form of Investment
Sub-Advisory Agreement between Transamerica Occidental Life Insurance
Company and Transamerica Investment Services, Inc. 3/
(6) Form of
Participation Agreement between Transamerica Variable Insurance Fund, Inc.
and Transamerica Life Insurance and Annuity Company. 4/ 5/ 8/
(a) Form of
Participation Agreement between Transamerica Variable Insurance Fund and
Transamerica Occidental Life Insurance Company4/5
(b) Form of Participation
Agreement between Transamerica Variable Insurance Fund and Transamerica
Life Insurance and Annuity Company8
(7) Not Applicable.
(8) Form of
Custodial Contract between Transamerica Variable Insurance Fund, Inc. and
State Street Bank and Trust Company. 5/
(9) Form of Adminstrative Services
Agreement between Transamerica Variable Insurance Fund, Inc. and State
Street Bank and Trust Company6/
(10) Opinion and Consent of Counsel. 4/

(11) (a) Consent of Sutherland, Asbill & Brennan, L.L.P. 4/ 5/ 6/ 9/ -- (b)
Consent of Ernst & Young LLP. 5/ 6/ 9/
(12) No financial statements are
omitted from Item 23.
(13) Form of Agreement and Plan of Reorganization. 1/

- (14) Not Applicable.
(15) Not Applicable.
(16) Performance Data
Calculations. 6/
(17) Not Applicable.
(18) Not Applicable.
(19) Powers of
Attorney. 1/ 9/
(27) Financial Data Schedule 6/ 7/ 9/

1/ Incorporated by reference to the like-numbered exhibit of the initial
filing of this Registration Statement on Form N-1A, File No. 33-99016 (Nov.
3, 1995). 2/ Incorporated by reference to Exhibit D to Part A of the
Registration Statement on Form N-14 of Transamerica Occidental's Separate
Account Fund C, File No. 333-11599 (Sept. 9, 1996). 3/ Incorporated by
reference to Exhibit E to Part A of the Registration Statement on Form N-14
of Transamerica Occidental's Separate Account Fund C, File No. 333-11599
(Sept. 9, 1996). 4/ Incorporated by reference to the like-numbered exhibit
to Pre-Effective Amendment No. 1 to this Registration Statement on Form
N-1A, File No. 33-99016 (Sept. 12, 1996). 5/ Incorporated by reference to
the like-numbered exhibit to Post-Effective Amendment No. 1 to this
Registration Statement on Form N-1A, File No. 33-99016 (November 4, 1996).
6/ Incorporated by reference to the like-numbered exhibit to Post-Effective
Amendment No. 2 to this Registration Statement on Form N-1A, File No.
33-99016 (May 1, 1997). 7/ . Incorporated by reference to the like numbered
exhibit to Post-Effective Amendment No. 3 to this Registration Statement on
Form N-1A, File No. 33-99016 (June 11, 1997). 8/ Incorporated by reference
to the like-numbered exhibit to Post-Effective Amendment No. 5 to this
Registration Statement on Form N-1A, File No. 33-99016 (October 31, 1997).
9/ Incorporated by reference to the like-numbered exhibit to Post Effective
Amendment No. 6 to this Registration Statement on Form N-1A, File no.
33-99016 (April 29, 1998)

Item 25. Person Controlled by or Under Common Control With the Registrant.

The Registrant, Transamerica Variable Insurance Fund, Inc., is
controlled by Transamerica Occidental Life Insurance Company ("Transamerica
Occidental"), a wholly-owned subsidiary of Transamerica Insurance Corporation of
California, which, in turn is a wholly-owned subsidiary of Transamerica
Corporation.

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

TRANSAMERICA CORPORATION AND SUBSIDIARIES
WITH STATE OR COUNTRY OF INCORPORATION

Transamerica Corporation - DE
ARC Reinsurance Corporation - HI
Transamerica Management, Inc. - DE
Criterion Investment Management Company - TX
Inter-America Corporation - CA
Mortgage Corporation of America - CA
Pyramid Insurance Company, Ltd. - HI
Pacific Cable Ltd. - Bmda.
TC Cable, Inc. - DE
RTI Holdings, Inc. - DE
Transamerica Airlines, Inc. - DE
Transamerica Business Technologies Corporation - DE
Transamerica CBO I, Inc. - DE
Transamerica Corporation (Oregon) - OR
Transamerica Delaware, L.P. - DE
Transamerica Finance Corporation - DE
TA Leasing Holding Co., Inc. - DE
Trans Ocean Ltd. - DE
Trans Ocean Container Corp. - DE
SpaceWise Inc. - DE
TOD Liquidating Corp. - CA
TOL S.R.L. - Itl.
Trans Ocean Container Finance Corp. - DE
Trans Ocean Leasing Deutschland GmbH - Ger.
Trans Ocean Leasing PTY Limited - Aust.
Trans Ocean Management Corporation - CA
Trans Ocean Management S.A. - SWTZ
Trans Ocean Regional Corporate Holdings - CA
Trans Ocean Tank Services Corporation - DE
Transamerica Leasing Inc. - DE
Better Asset Management Company LLC - DE
Transamerica Leasing Holdings Inc. - DE
Greybox Logistics Services Inc. - DE
Greybox L.L.C. - DE
Transamerica Trailer Leasing S.N.C. - Fra.
Greybox Services Limited - U.K.
Intermodal Equipment, Inc. - DE
Transamerica Leasing N.V. - Belg.
Transamerica Leasing SRL - Itl.
Transamerica Distribution Services Inc. - DE
Transamerica Leasing Coordination Center - Belg.
Transamerica Leasing do Brasil Ltda. - Braz.
Transamerica Leasing GmbH - Ger.
Transamerica Leasing Limited - U.K.
ICS Terminals (UK) Limited - U.K.
Transamerica Leasing Pty. Ltd. - Aust.
Transamerica Leasing (Canada) Inc. - Can.
Transamerica Leasing (HK) Ltd. - H.K.
Transamerica Leasing (Proprietary) Limited - S.Afr.
Transamerica Tank Container Leasing Pty. Limited - Aust.
Transamerica Trailer Holdings I Inc. - DE
Transamerica Trailer Holdings II Inc. - DE
Transamerica Trailer Holdings III Inc. - DE
Transamerica Trailer Leasing AB - Swed.
Transamerica Trailer Leasing AG - SWTZ
Transamerica Trailer Leasing A/S - Denmk.
Transamerica Trailer Leasing GmbH - Ger.
Transamerica Trailer Leasing (Belgium) N.V. - Belg.
Transamerica Trailer Leasing (Netherlands) B.V. - Neth.
Transamerica Trailer Spain S.A. - Spn.
Transamerica Transport Inc. - NJ
Transamerica Commercial Finance Corporation, I - DE
BWAC Credit Corporation - DE
BWAC International Corporation - DE
BWAC Twelve, Inc. - DE
TIFCO Lending Corporation - IL
Transamerica Insurance Finance Corporation - MD
Transamerica Insurance Finance Company (Europe) - MD
Transamerica Insurance Finance Corporation, California - CA
Transamerica Insurance Finance Corporation, Canada - ON
Transamerica Business Credit Corporation - DE
Direct Capital Equity Investment, Inc. - DE
TA Air East, Corp. -
TA Air III, Corp. - DE
TA Air II, Corp. - DE
TA Air IV, Corp. - DE
TA Air I, Corp. - DE
TBC III, Inc. - DE
TBC II, Inc. - DE
TBC IV, Inc. -
TBC I, Inc. - DE
TBC Tax III, Inc. -
TBC Tax II, Inc. -
TBC Tax IV, Inc. -
TBC Tax IX, Inc. -
TBC Tax I, Inc. -
TBC Tax VIII, Inc. -
TBC Tax VII, Inc. -
TBC Tax VI, Inc. -
TBC Tax V, Inc. -
TBC Tax XII, Inc. -
TBC Tax XI, Inc. -
TBC V, Inc. -
The Plain Company - DE
Transamerica Distribution Finance Corporation - DE
Transamerica Accounts Holding Corporation - DE
Transamerica Commercial Finance Corporation - DE
Inventory Funding Trust - DE
Inventory Funding Company, LLC - DE
TCF Asset Management Corporation - CO
Transamerica Joint Ventures, Inc. - DE
Transamerica Inventory Finance Corporation - DE
BWAC Seventeen, Inc. - DE
Transamerica Commercial Finance Canada, Limited - ON
Transamerica Commercial Finance Corporation, Canada - Can.
BWAC Twenty-One, Inc. - DE
Transamerica Commercial Finance Limited - U.K.
WFC Polska Sp. Zo.o -
Transamerica Commercial Holdings Limited - U.K.
Transamerica Commercial Holdings, Inc. -
Transamerica Trailer Leasing Limited - NY
Transamerica Commercial Finance France S.A. - Fra.
Transamerica GmbH Inc. - DE
Transamerica Retail Financial Services Corporation - DE
Transamerica Consumer Finance Holding Company - DE
Metropolitan Mortgage Company - FL
Easy Yes Mortgage, Inc. - FL
Easy Yes Mortgage, Inc. - GA
First Florida Appraisal Services, Inc. - FL
First Georgia Appraisal Services, Inc. - GA
Freedom Tax Services, Inc. - FL
J.J. & W. Advertising, Inc. - FL
J.J. & W. Realty Corporation - FL
Liberty Mortgage Company of Ft. Myers, Inc. - FL
Metropolis Mortgage Company - FL
Perfect Mortgage Company - FL
Whirlpool Financial National Bank - DE
Transamerica Vendor Financial Services - DE
Transamerica Distribution Finance Corporation de Mexico -
Transamerica Corporate Services de Mexico -
Transamerica Federal Savings Bank -
Transamerica HomeFirst, Inc. - CA
Transamerica Home Loan - CA
Transamerica Lending Company - DE
Transamerica Financial Products, Inc. - CA
Transamerica Foundation - CA
Transamerica Insurance Corporation of California - CA
Arbor Life Insurance Company - AZ
Plaza Insurance Sales, Inc. - CA
Transamerica Advisors, Inc. - CA
Transamerica Annuity Service Corporation - NM
Transamerica Financial Resources, Inc. - DE
Financial Resources Insurance Agency of Texas - TX
TBK Insurance Agency of Ohio, Inc. - OH
Transamerica Financial Resources Insurance Agency of Alabama
Inc. - AL
Transamerica Financial Resources Insurance Agency of
Massachusetts Inc. - MA
Transamerica International Insurance Services, Inc. - DE
Home Loans and Finance Ltd. - U.K.
Transamerica Occidental Life Insurance Company - CA
NEF Investment Company - CA
Transamerica China Investments Holdings Limited - H.K.
Transamerica Life Insurance and Annuity Company - NC
Transamerica Assurance Company - CO
Transamerica Life Insurance Company of Canada - Can.
Transamerica Life Insurance Company of New York - NY
Transamerica South Park Resources, Inc. - DE
Transamerica Variable Insurance Fund, Inc. - MD
USA Administration Services, Inc. - KS
Transamerica Products, Inc. - CA
Transamerica Leasing Ventures, Inc. - CA
Transamerica Products II, Inc. - CA
Transamerica Products IV, Inc. - CA
Transamerica Products I, Inc. - CA
Transamerica Securities Sales Corporation - MD
Transamerica Service Company - DE
Transamerica Intellitech, Inc. - DE
Transamerica International Holdings, Inc. - DE
Transamerica Investment Services, Inc. - DE
Transamerica Income Shares, Inc. (managed by TA Investment Services)
- MD
Transamerica LP Holdings Corp. - DE
Transamerica Real Estate Tax Service (A Division of Transamerica
Corporation) - N/A
Transamerica Flood Hazard Certification (A Division of TA Real Estate
Tax Service) - N/A
Transamerica Realty Services, Inc. - DE
Bankers Mortgage Company of California - CA
Pyramid Investment Corporation - DE
The Gilwell Company - CA
Transamerica Affordable Housing, Inc. - CA
Transamerica Minerals Company - CA
Transamerica Oakmont Corporation - CA
Ventana Inn, Inc. - CA
Transamerica Senior Properties, Inc. - DE
Transamerica Senior Living, Inc. - DE

*Designates INACTIVE COMPANIES
A Division of Transamerica Corporation
ss.Limited Partner; Transamerica Corporation is General Partner

Item 26. Numbers of Holders of Securities (as of June 1, 1998):

Title of Class Number of Record Holders

Growth Three
Money Market Two

Item 27. Indemnification

The Bylaws of Transamerica Variable Insurance Fund, Inc. provide in
Article VIII as follows:

ARTICLE VIII
Indemnification

Section 1. Every person who is or was a director, officer or
employee of the Corporation or of any other corporation which he served
at the request of the Corporation and in which the Corporation owns or
owned shares of capital stock or of which it is or was a creditor shall
have a right to be indemnified by the Corporation to the full extent
permitted by applicable law, against all liability, judgments, fines,
penalties, settlements and reasonable expenses incurred by him in
connection with or resulting from any threatened or actual claim,
action, suit or proceeding, whether criminal, civil, or administrative,
in which he may become involved as a party or otherwise by reason of
his being or having been a director, officer or employee, except as
provided in Article VIII, Sections 2 and 3 of these By-laws.

Section 2. Disabling Conduct. No such director, officer or
employee shall be indemnified for any liabilities or expenses arising
by reason of "disabling conduct," whether or not there is an
adjudication of liability. "Disabling conduct" means willful
misfeasance, active and deliberate dishonesty, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct
of office.

Whether any such liability arose out of disabling conduct
shall be determined: (a) by a final decision on the merits (including,
but not limited to, a dismissal for insufficient evidence of any
disabling conduct) by a court or other body, before whom the proceeding
was brought that the person to be indemnified ("indemnitee") was not
liable by reason of disabling conduct; or (b) in the absence of such a
decision, by a reasonable determination, based upon a review of the
facts, that such person was not liable by reason of disabling conduct,
(i) by the vote of a majority of a quorum of directors who are neither
interested persons of the Corporation nor parties to the action, suit,
or proceeding in question ("disinterested, non-party directors"), or
(ii) by independent legal counsel in a written opinion if a quorum of
disinterested, non-party directors so directs or if such quorum is not
obtainable, or (iii) by majority vote of the shareholders, or (iv) by
any other reasonable and fair means not inconsistent with any of the
above.

The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that any
liability or expense arose by reason of disabling conduct.

Section 3. Directors' Standards of Conduct. No person who is
or was a director shall be indemnified under this Article VIII for any
liabilities or expenses incurred by reason of service in that capacity
if an act or omission of a director was material to the matter giving
rise to the threatened or actual claim, action, suit or proceeding; and
such act (a) was committed in bad faith; or (2) was the result of
active and deliberate dishonesty.

Section 4. Expenses Prior to Determination. Any liabilities or
expenses of the type described in Article VIII, Section 1 may be paid
by the Corporation in advance of the final disposition of the claim,
action, suit or proceeding, as authorized by the directors in the
specific case, (a) upon receipt of a written affirmation by the
indemnitee of his good faith belief that his conduct met the standard
of conduct necessary for indemnification as authorized by this Article
VIII, Section 2; (b) upon receipt of a written undertaking by or on
behalf of the indemnitee to repay the advance, unless it shall be
ultimately determined that such person is entitled to indemnification;
and (c) provided that (i) the indemnitee shall provide security for
that undertaking, or (ii) the Corporation shall be insured against
losses arising by reason of any lawful advances, or (iii) a majority of
a quorum of disinterested, non-party directors, or independent legal
counsel in a written opinion, shall determine, based on a review of
readily available facts (as opposed to a full trial-type inquiry), that
there is reason to believe the indemnitee ultimately will be found
entitled to indemnification.

A determination pursuant to subparagraph (c)(iii) of this
Article VIII, Section 4 shall not prevent the recovery from any
indemnitee of any amount advanced to such person as indemnification if
such person is subsequently determined not to be entitled to
indemnification; nor shall a determination pursuant to said
subparagraph prevent the payment of indemnification if such person is
subsequently found to be entitled to indemnification.

Section 5. Provisions Not Exclusive. The indemnification
provided by this Article VIII shall not be deemed exclusive of any
rights to which those seeking indemnification may be entitled under any
law, agreement, vote of shareholders, or otherwise.

Section 6. General. No indemnification provided by this Article shall be
inconsistent with the Investment Company Act of 1940 or the Securities Act
of 1933.

Any indemnification provided by this Article shall continue as
to a person who has ceased to be a director, officer, or employee, and
shall inure to the benefit of the heirs, executors and administrators
of such person. In addition, no amendment, modification or repeal of
this Article shall adversely affect any right or protection of an
indemnitee that exists at the time of such amendment, modification or
repeal.

* * *

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

The directors and officers of Transamerica Variable Insurance Fund,
Inc. are covered under a Directors and Officers liability program which includes
direct coverage to directors and officers and corporate reimbursement to
reimburse the Fund for indemnification of its directors and officers. Such
directors and officers are indemnified for loss arising from any covered claim
by reason of any Wrongful Act in their capacities as directors or officers. In
general, the term "loss" means any amount which the insureds are legally
obligated to pay for a claim for Wrongful Acts. In general, the term "Wrongful
Acts" means any breach of duty, neglect, error, misstatement, misleading
statement or omission caused, committed or attempted by a director or officer
while acting individually or collectively in their capacity as such, claimed
against them solely by reason of their being directors and officers. The limit
of liability under the program is $5,000,000 for the period 2/1/98 to 2/1/99.
The primary policy under the program is with ICI Mutual Insurance Company.

Item 28. Business and Other Connections of the Investment Adviser:

Transamerica Occidental Life Insurance Company ("Transamerica") and
Transamerica Investment Services, Inc. (the "Sub-Adviser") are registered
investment advisers. Transamerica is a wholly-owned subsidiary of
Transamerica Insurance Corporation of California, which in turn is a
wholly-owned subsidiary of Transamerica Corporation. The Sub-Adviser is a
direct wholly-owned subsidiary of Transamerica Corporation.

Information as to the officers and directors of the Sub-Adviser is included in
its Form ADV filed in 1998with the Securities and Exchange Commission
(registration number 801-7740) and is incorporated herein by reference.

The names of the Directors and Executive Officers of Transamerica, their
positions and offices with the Company, and their other affiliations are as
follows. The address of Directors and Executive Officers is 1150 South Olive
Street, Los Angeles, California 90015-2211, unless indicated by asterisk.
<TABLE>
<CAPTION>

Other business and business
address, profession, vocation or
employment of a substantial nature
engaged in for
Position and his own account during last two
Name and Principal Position and Offices Offices with fiscal years or as director, officer,
Business Address with Transamerica Old Account C employee, partner or trustee

<S> <C> <C> <C>
Robert Abeles Director, Executive Vice None None
President & Chief
Financial Officer

Thomas J. Cusack Director, Chariman,
President and None Executive Vice President of
Chief Executive Officer Transamerica Corporation

James W. Dederer Director, Executive None None
Vice President, General
Counsel and Corporate
Secretary

George A. Foegele*** Director and None President and Chief
Senior Vice President Executive Officer of
Transamerica Life Insurance
Company of Canada

David E. Gooding Director, Executive None None
Vice President and
Chief Information Officer

Edgar H. Grubb* Director None Executive Vice President,
and Chief Financial Officer
of Transamerica Corporation

Frank C. Herringer* Director None Director, President and
Chief Executive Officer of
Transamerica Corporation

Richard N. Latzer* Director Director Senior Vice President and
Chief Invesment Officer of
Transamerica Corporation;
Director, President and
Chief Executive Officer of
Transamerica Investment
Services, Inc.

Karen O. MacDonald Director, Senior Vice None None
President and Corporate
Actuary

Gary U. Rolle Director and Chief Chairman, Executive Vice President
Investment Officer Board of and Chief Investment
Managers Officer of Transamerica
Investment Services, Inc.

Paul E. Rutledge III** Director and None None
President - Reinsurance Division

T. Desmond Sugrue Director and Executive None None
Vice President

Bruce A. Turkstra Director, Executive None None
Vice President and Chief
Information Officer

Nooruddin S. Veerjee Director and President, None President of Transamerica
Insurance Products Division Life Insurance and
Annuity Company

Robert A. Watson* Director None Executive Vice President of
Transamerica Corporation
- --------------------
</TABLE>

* 600 Montgomery Street, San Francisco, California 94111
** 401 North Tryon Street, Suite 700, Charlotte, North Carolina 28202
*** 300 Consilium Place, Scarborough, Ontario, Canada M1H3G2

List of Officers for Transamerica Occidental Life Insurance Company
<TABLE>
<CAPTION>
<S> <C>
Thomas J. Cusack President and Chief Executive Officer
Nooruddin S. Veerjee President - Insurance Products Division
Bruce A. Turkstra Executive Vice President and Chief Information Officer
George A. Foegele Senior Vice President
Paul E. Rutledge III President - Reinsurance Division
Robert Abeles Executive Vice President and Chief Financial Officer

James W. Dederer, CLU Executive Vice President, General Counsel and Corporate Secretary
David E. Gooding Executive Vice President
Meheriar Hasan Vice President
Daniel E. Jund, FLMI Senior Vice President
Karen MacDonald Senior Vice President and Corporate Actuary
Larry H. Roy Senior Vice President
William N. Scott, CLU, FLMI Senior Vice President
T. Desmond Sugrue Executive Vice President
Ron F. Wagley Senior Vice President and Chief Agency Officer
Darrel K.S. Yuen President-Asian Operations
Richard N. Latzer Chief Investment Officer
Gary U. Rolle', CFA Chief Investment Officer
Stephen J. Ahearn Investment Officer

Jim Bowman Vice President
John M. Casparian Investment Officer
Catherine Collinson Vice President
Heather E. Creeden Investment Officer
Colin Funai Investment Officer
William L. Griffin Investment Officer
Matthew W. Kuhns Investment Officer
Michael F. Luongo Investment Officer
Matthew Palmer Investment Officer
Thomas C. Pokorski Investment Officer
Susan A. Silbert Investment Officer
Philip W. Treick Investment Officer
Jeffrey S. Van Harte Investment Officer
Paul Wintermute Investment Officer
William D. Adams Vice President
Sandra Bailey-Whichard Vice President
Nicki Bair Senior Vice President
Michael Barnhart Regional Vice President
Dennis Barry Vice President
Laurie Bayless Vice President
Frank Beardsley Vice President
Nancy Blozis Vice President and Controller
Benjamin Bock FSA Vice President
Thomas Briggle Vice President
Thomas Brimacombe Vice President
Roy Chong-Kit Senior Vice President and Actuary
Alan T. Cunningham Vice President and Deputy General Counsel
Aldo Davanzo Vice President and Assistant Secretary
Peter DeWolf Vice President
Randy Dobo Vice President and Actuary
Thomas P. Dolan, FLMI Vice President
John V. Dohmen Vice President
Harry Dunn, FSA Vice President and Chief Reinsurance Actuary
Gail DuBois Vice President and Associate Actuary
Ken Ellis Vice President
George Garcia Vice President and Chief Medicare Officer
David M. Goldstein Vice President and Deptuty General Counsel
Paul Hankwitz, MD Vice President and Chief Medical Director
Randall C. Hoiby Vice President and Associate General Counsel
John W. Holowasko Vice President
Phoebe Huang Vice President
William M. Hurst Vice President and Associate General Counsel
James M. Jackson Vice President and Deputy General Counsel
Allan H. Johnson, FSA Vice President and Actuary
Ken Kilbane Vice President
Frank J. LaRusso Vice President and Chief Underwriting Officer
Richard K. M. Lau, ASA Vice President
Philip E. McHale, FLMI Vice President
Mark Madden Vice President
Maureen McCarthy Vice President
Vic Modugno Vice President and Associate Actuary
Jess Nadelman Vice President
Wayne Nakano, CPA Vice President
Paul Norris Vice President and Actuary
Michael Palace, ASA Vice President and Actuary
Jerry Paul Vice President
Stephen W. Pinkham Vice President
Kristy M. Pipes Senior Vice President
Jon J. Romer Vice President
Gary L. Seagraves Vice President
Joel D. Seigle Vice President

Christina Stiver Vice President
James O. Strand Vice President
Alice Su Vice President
Lee Tang Vice President
Bill Tate Vice President
Claude W. Thau, FSA Senior Vice President
Kim A. Tursky Vice President and Assistant Secretary
John Vieren Vice President
Timothy Weis Vice President
William R. Wellnitz, FSA Senior Vice President and Actuary
Virginia M. Wilson Vice President and Controller
Ronald R. Wolfe Regional Vice President
Sally Yamada Vice President and Treasurer
Olisa Abaelu Second Vice President
Flora Bahaudin Second Vice President
Daniel J. Bohmfalk Second Vice President and Associate Actuary
Ken Bromberg Second Vice President
Art Bueno Second Vice President
Barry Buner Second Vice President
Beverly Cherry Second Vice President
Wonjoon Cho Second Vice President
Art Cohen Second Vice President
Dave Costanza Second Vice President
Reid A. Evers Vice President and Associate General Counsel
David Fairhall Second Vice President and Associate Actuary
Selma Fox Second Vice President
Toni A. Forge Second Vice President
Jerry Gable, FSA Second Vice President
Roger Hagopian Second Vice President
Sharon Haley Second Vice President
Brian Hoyt Second Vice President
Zahid Hussain Vice President and Associate Actuary
Ahmad Kamil, FIA, MAAA Vice President and Associate Actuary
Andrew G. Kanelos Second Vice President
Ronald G. Keller Second Vice President
Joan Klubnik Second Vice President
Roger Korte Second Vice President
Lynette Lawson Second Vice President
Dean LeCesne Second Vice President
Liwen Lien Second Vice President
Marilyn McCullough Vice President
Richard MacKenzie Second Vice President
Danny Mahoney Second Vice President
Carl Macero Vice President and Chief Reinsurance Underwriter
Claudia Maytum Second Vice President
Clay Moye Second Vice President
Daniel A. Norwick Second Vice President
John Oliver Second Vice President
Susan O'Brien Second Vice President
Stephanie Quincey Second Vice President
Paul Reisz Second Vice President
James R. Robinson Second Vice President
Ray Robinson Second Vice President
Laura Scully Second Vice President
Frederick Seto Second Vice President
Jack Shalley, MD Second Vice President and Medical Director
Steven R. Shepard Second Vice President and Assistant General Counsel
Frank Snyder Second Vice President
Mary Spence Second Vice President
Jean Stefaniak Second Vice President
Michael S. Stein Second Vice President
David Stone Second Vice President
Suzette Stover-Hoyt Second Vice President
John Tillotson Second Vice President
K. Y. To Second Vice President
Boning Tong Second Vice President and Associate Actuary
Janet Unruh Second Vice President and Assistant General Counsel
Colleen Vandermark Vice President
James B. Watson Second Vice President and Assistant General Counsel
Marsha Wallace Second Vice President
Sheila Wickens, MD Second Vice President and Medical Director
Michael B. Wolfe Vice President
James Wolfenden Statement Officer
Kamran Haghighi Tax Officer

</TABLE>

Item 29. Principal Underwriter

Not applicable. There is no principal underwriter, the Fund is
self-distributing.

Item 30. Location and Accounts and Records

All accounts and records required to be maintained by Section 31(a) of
the 1940 Act and the rules promulgated thereunder are maintained at the offices
of:

Registrant, located at 1150 South Olive, Los Angeles, California
90015-2211; or at State Street Bank and Trust Company, Registrant's custodian,
located at 225 Franklin Street, Boston, Massachusetts 02110.

Item 31. Management Services

All management contracts are discussed in Parts A or B.

Items 32. Undertakings

(a) Not Applicable.

(b) Registrant undertakes that it will file a post-effective amendment, using
financial statements which need not be certified, within four to six months from
the effective date of this registration statement.

(c) Registrant hereby undertakes to furnish each person to whom a prospectus
is delivered with a copy of its most recent annual report to shareholders, upon
request and without charge.

(d) Registrant hereby undertakes to call for a meeting of shareholders for the
purpose of voting upon the question of removal of one or more of the directors
if requested to do so by the shareholders of at least 10% of the Fund's
outstanding shares, and to assist in communication with other shareholders as
required by Section 16(c).

(e) Transamerica hereby represents that the fees and the charges deducted
under the Contracts, in the aggregate, are reasonable in relation to
the services rendered, the expenses expected to be incurred, and the
risks assumed by Transamerica.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, Transamerica Variable Insurance Fund, Inc.
certifies that this Post-Effective Amendment meets all of the requirements for
effectiveness of this registration statement pursuant to Rule 485(a) under the
Securities Act of 1933 and that it has duly caused this Post-Effective Amendment
No. 7 to the Registration Statement to be signed on its behalf by the
undersigned in the City of Los Angeles, and State of California on this 19th day
of August, 1998.

TRANSAMERICA VARIABLE INSURANCE FUND, INC.

By: __________________________*
Regina M. Fnk Secretary

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>

Signatures Titles Date
<S> <C> <C>

______________________* President August 19, 1998
Barbara A. Kelley

______________________* Treasurer August 19, 1998
Sally S. Yamada

______________________* Director August 19, 1998
Donald E. Cantlay

______________________* Director August 19, 1998
Richard N. Latzer

______________________* Director and Chairman August 19, 1998
Gary U. Rolle'

______________________* Director August 19, 1998
Peter J. Sodini

______________________* Director August 19, 1998
Jon C. Strauss
</TABLE>

On August 19, 1998 as Attorney-in-Fact pursuant to

powers of
*By: Regina M. Fink attorney filed with the initial registration statement.
<PAGE>