Report of Independent Accountants
To the Board of Trustees of
State Farm Variable Product Trust -
Large Cap Equity Index Fund
Small Cap Equity Index Fund
We have examined management's assertion, included in the accompanying Management
Statement Regarding Compliance with Certain Provisions of the Investment Company
Act of 1940, that State Farm Variable Product Trust - Large Cap Equity Index
Fund and Small Cap Equity Index Fund (the "Funds") were in compliance with the
requirements of subsection (b)and (c) of Rule 17f-2 of the Investment Company
Act of 1940 as of December 31, 1998 with respect to securities and similar
investments reflected in the investment accounts of the Funds. Management is
responsible for the Funds' compliance with those requirements. Our
responsibility is to express an opinion on management's assertion about the
Funds' compliance based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and accordingly, included
examining, on a test basis, evidence about the Funds' compliance with those
requirements and performing such other procedures as we considered necessary in
the circumstances. Included among our procedures were the following tests
performed as of December 31, 1998, and with respect to agreement of security and
similar investments purchases and sales, for the period from October 31, 1998
(the date of last examination) through December 31, 1998;
- - Confirmation of the Funds' securities and similar investments with Barclay's
Global Investors, N.A. (the Custodian), without prior notice to management;
- - Reconciliation of confirmation results as to all such securities and
investments to the books and records of the Funds and the Custodian;
- - Confirmation and review of reconciliation of all securities and similar
investments held in book entry form by the Custodian to the Depository Trust
Company ("DTC");
- - Agreement of five investment purchases and five investment sales or
maturities for each Fund since our last examination from the books and
records of the Funds to trade listings and to the cash settlement;
We believe that our examination provides a reasonable basis for our opinion. Our
examination does not provide a legal determination on the Funds' compliance with
specified requirements.
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In our opinion, management's assertion that State Farm Variable Product Trust -
Large Cap Equity Index Fund and Small Cap Equity Index Fund were in compliance
with the requirements of subsection (b)and (c) of Rule 17f-2 of the Investment
Company Act of 1940 as of December 31, 1998, with respect to securities and
similar investments reflected in the investment accounts of the Funds, is fairly
stated, in all material respects.
This report is intended solely for the information and use of management of
State Farm Variable Product Trust - Large Cap Equity Index Fund and Small Cap
Equity Index Fund and the Securities and Exchange Commission and is not intended
to be and should not be used by anyone other than these specified parties.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Chicago, Illinois
January 22, 1999
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[STATE FARM INVESTMENT MANAGEMENT CORP. LETTERHEAD]
Management Statement Regarding Compliance with
Certain Provisions of the Investment Company Act of 1940
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We, as members of management of State Farm Variable Product Trust - Large Cap
Equity Index Fund and Small Cap Equity Index Fund (the "Funds"), are responsible
for complying with the requirements of subsection (b) and (c) of Rule 17f-2,
"Custody of Investments by Registered Management Investment Companies," of the
Investment Company Act of 1940. We are also responsible for establishing and
maintaining effective controls over compliance with those requirements. We have
performed an evaluation of the Funds' compliance with the requirements of
subsection (b) and (c) of Rule 17f-2 as of December 31, 1998.
Based on this evaluation, we assert that the Funds were in compliance with the
requirements of subsection (b) and (c) of Rule 17f-2 of the Investment Company
Act of 1940 as of December 31, 1998 with respect to securities and similar
investments reflected in the investment accounts of the Funds.
State Farm Variable Product Trust -
Large Cap Equity Index Fund
Small Cap Equity Index Fund
/s/ Roger Joslin
--------------------------
Roger Joslin
Vice President and Treasurer
/s/ Michael L. Tipsord
--------------------------
Michael L. Tipsord
Assistant Secretary
/s/ Howard A. Thomas
--------------------------
Howard A. Thomas
Assistant Secretary-Treasurer
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-17f-2 OMB APPROVAL
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OMB Number: 3235-0360
Certificate of Accounting of Securities and Similar --------------------------
Investments of a Management Investment Company Expires: July 31, 1994
in the Custody of Members of Estimated average burden
National Securities Exchanges hours per form. . . 0.05
--------------------------
Pursuant to Rule 17f-2 [17 CFR 270.17f-2]
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<S> <C> <C> <C> <C> <C> <C>
1. Investment Company Act File Number: Date examination completed:
811-08073 December 31, 1998
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2. State identification Number:
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AL AK AZ AR CA CO
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CT DE DC FL GA HI
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ID IL IN IA KS KY
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LA ME MD MA MI MN
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MS MO MT NE NV NH
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NJ NM NY NC ND OH
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OK OR PA RI SC SD
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TN TX UT VT VA WA
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WV WI WY PUERTO RICO
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Other (specify):
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3. Exact name of investment company as specified in registration statement:
State Farm Variable Product Trust
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5. Address of principal executive office (number, street, city, state, zip code):
One State Farm Plaza D-3, Bloomington, Illinois 61710-0001
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INSTRUCTIONS
This Form must be completed by investment companies that have custody of
securities or similar investments.
INVESTMENT COMPANY
1. All items must be completed by the investment company.
2. Give this Form to the independent public accountant who, in compliance with
Rule 17f-2 under the Act and applicable state law, examines securities and
similar investments in the custody of the investment company.
ACCOUNTANT
3. Submit this Form to the Securities and Exchange Commission and appropriate
state securities administrators when filing the certificate of accounting
required by Rule 17f-2 under the Act and applicable state law. File the
original and one copy with the Securities and Exchange Commission's
principal office in Washington, D.C., one copy with the regional office for
the region in which the investment company's principal business operations
are conducted, and one copy with the appropriate state administrator(s), if
applicable.
THIS FORM MUST BE GIVEN TO YOUR INDEPENDENT PUBLIC ACCOUNTANT
