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SECURITIES AND EXCHANGE COMMISSION --------------------------
WASHINGTON, D.C. 20549 OMB Approval
FORM N-17f-2 --------------------------
OMB Number: 3235-0360
Certificate of Accounting of Securities and Similar Expires: July 31, 1994
Investment in the Custody of Estimated average burden
Management Investment Companies hours per response... 0.05
Pursuant to Rule 17f-2 [17 CFR 270.17f-2]
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1. Investment Company Act File Number: Date examination completed
811-8644 10/20/99
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2. State identification Number: N/A
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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 representation statement:
Victory Variable Insurance Funds
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4. Address of principal executive office (number, street, city, state, zip code):
3435 Stelzer Road, Ste. 1000, Columbus, OH 43219
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PRICEWATERHOUSECOOPERS LOGO
PricewaterhouseCoopers LLP
100 East Broad Street
Suite 2100
Columbus OH 43215-3671
Telephone (614) 225 8700
Facsimile (614) 224 1044
INDEPENDENT ACCOUNTANTS' REPORT
To the Trustees of The Victory Variable Insurance Funds
We have examined management's assertion about The Victory Variable Insurance
Investment Quality Bond Fund, the Victory Variable Insurance Diversified Stock
Fund, and the Victory Variable Insurance Small Company Opportunity Fund
(separate portfolios constituting The Victory Variable Insurance Funds)
compliance with the requirements of subsections (b) and (c) of Rule 17f-2 under
the Investment Company Act of 1940 as of September 30, 1999, included in the
accompanying Management Statement Regarding Compliance with Certain Provisions
of the Investment Company Act of 1940. Management is responsible for The
Victory Variable Insurance Funds' compliance with those requirements. Our
responsibility is to express an opinion on management's assertion about The
Victory Variable Insurance 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 Victory Variable Insurance
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 September 30, 1999, with respect to
securities of The Victory Variable Insurance Funds:
- Count and inspection of all securities located in the vault of Key Trust
Company of Ohio, N.A. in Cleveland, Ohio, without prior notice;
- Confirmation, or other procedures as we considered necessary, of all
securities held in book entry form by the Federal Reserve Bank of
Cleveland, Depository Trust Company or Bank of New York;
- Confirmation or other procedures as we considered necessary, of all
securities out for transfer with brokers; and
- Reconciliation of all such securities to the books and records of the
Funds and Key Trust Company of Ohio, N.A.
We believe that our examination provides a reasonable basis for our opinion.
Our examination does not provide a legal determination on The Victory Variable
Insurance Funds' compliance with specified requirements.
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PRICEWATERHOUSECOOPERS LOGO
In our opinion, management's assertion that The Victory Variable Insurance
Funds were in compliance with the requirements of subsections (b) and (c) of
Rule 17f-2 of the Investment Company Act of 1940 as of September 30, 1999,
with respect to securities reflected in the investment accounts of The Victory
Variable Insurance Funds is fairly stated, in all material respects.
This report is intended solely for the information and use of management of The
Victory Variable Insurance Funds and the Securities and Exchange Commission and
should not be used for any other purpose.
/s/ PricewaterhouseCoopers LLP
Columbus, Ohio
October 20, 1999
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MANAGEMENT STATEMENT REGARDING COMPLIANCE WITH CERTAIN PROVISIONS
OF THE INVESTMENT COMPANY ACT OF 1940
We, as members of management of The Victory Variable Insurance Investment
Quality Bond Fund, The Victory Variable Insurance Diversified Stock Fund, and
The Victory Variable Insurance Small Company Opportunity Fund (separate
portfolios constituting The Victory Variable Insurance Funds) are responsible
for complying with the requirements of subsections (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 internal controls over compliance with those requirements.
We have performed an evaluation of The Victory Variable Insurance Funds'
compliance with the requirements of subsections (b) and (c) of Rule 17f-2 as of
September 30, 1999. Based on this evaluation, we assert that The Victory
Variable Insurance Funds were in compliance with the provisions of subsections
(b) and (c) of Rule 17f-2 of the Investment Company Act of 1940 as of September
30, 1999, with respect to securities reflected in the investment accounts of The
Victory Variable Insurance Funds.
The Victory Variable Insurance Funds
