FINANCIAL INVESTORS VARIABLE INSURANCE TRUST, N-1A, 2000-11-28

FINANCIAL INVESTORS VARIABLE INSURANCE TRUST
N-1A, 2000-11-28

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<PAGE> 1
As filed with the Securities and Exchange Commission on November 28, 2000

File Nos. 811-____
33-_____

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. ___ [ ]
Post-Effective Amendment No. ___ [ ]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. ___

(Check appropriate box or boxes.)

FINANCIAL INVESTORS VARIABLE INSURANCE TRUST
--------------------------------------------
(Exact name of Registrant as Specified in Charter)

370 17th Street, Suite 3100
Denver, CO 80202
----------------
(Address of principal executive offices) (Zip Code)

Registrant's Telephone Number, including Area Code: 303-623-2577

Russell C. Burk, Secretary
Financial Investors Variable Trust
370 17th Street, Suite 3100
Denver, CO 80202
----------------
(Name and Address of Agent of Service)

Copy to:

Lester Woodward, Esq.
Davis, Graham, & Stubbs
1550 17th Street, Suite 500
Denver, CO 80202-1600

Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Amendment

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 2
================================================================================

FIRST HORIZON

GROWTH & INCOME PORTFOLIO
CAPITAL APPRECIATION PORTFOLIO

PROSPECTUS

Dated ___________________

The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the accuracy of this prospectus. Any
representation to the contrary is a criminal offense.

================================================================================

<PAGE> 3

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TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Investment Objective, Principal Strategies and Risks
Growth & Income Portfolio.................................................1
Capital Appreciation Portfolio............................................3

Performance
Growth & Income Portfolio.................................................1
Capital Appreciation Portfolio............................................3

Fees and Expenses
Growth & Income Portfolio.................................................2
Capital Appreciation Portfolio............................................4

Who Manages the Portfolio?
Growth & Income Portfolio.................................................5
Capital Appreciation Portfolio............................................6

Portfolio Managers
Growth & Income Portfolio.................................................5
Capital Appreciation Portfolio............................................6

Shareholder Information........................................................7

Distribution Plan .............................................................8

Special Information About the Portfolios.......................................9

Financial Highlights...........................................................9

Additional Information about the Portfolios...........................Back Cover
--------------------------------------------------------------------------------
</TABLE>

No person has been authorized to give any information or to make any
representation that is not contained in this Prospectus, or in the Statement of
Additional Information ("SAI") that is incorporated herein by reference, in
connection with the offering made by this Prospectus and, if given or made, such
information or representations must not be relied upon. Also, this Prospectus
does not constitute an offering by the Trust or its Distributor in any
jurisdiction where such an offering would not be lawful.

<PAGE> 4
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVE, PRINCIPAL STRATEGIES AND RISKS OF THE
GROWTH & INCOME PORTFOLIO
--------------------------------------------------------------------------------

INVESTMENT OBJECTIVE -- The objective of the Growth & Income Portfolio (the
"Portfolio") is to achieve maximum total return through a combination of capital
appreciation and dividend income by investing at least 65% of its total assets
in equity securities.

PRINCIPAL INVESTMENT STRATEGY -- Under normal market conditions, the Adviser and
Sub-Adviser currently intend to invest at least 80% of the Portfolio's assets in
common stock and American Depositary Receipts (ADRs) of U.S. and international
companies that are traded on major domestic securities exchanges (NYSE, ASE,
NASDAQ).

PRINCIPAL RISKS -- You may be interested in the Portfolio if you are comfortable
with the risks of equity securities and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the Adviser's strategy
for managing the Portfolio may not achieve the desired results. In addition, the
price of common stock moves up and down in response to corporate earnings and
developments, interest rate movements, economic and market conditions and
anticipated events. As a result, the price of the Portfolio's investments may go
down and you could lose money on your investment.

The SAI contains additional information about the risks associated with
investing in the Portfolio.

THE VALUE OF THE PORTFOLIO'S SHARES, LIKE STOCK PRICES, GENERALLY WILL FLUCTUATE
WITHIN A WIDE RANGE. AN INVESTOR IN THE PORTFOLIO COULD LOSE MONEY OVER SHORT OR
EVEN LONG PERIODS OF TIME.

PLEASE REMEMBER THAT THERE IS NO GUARANTEE THAT THE PORTFOLIO WILL ACHIEVE ITS
INVESTMENT OBJECTIVE, AND AN INVESTMENT IN THE PORTFOLIO IS NOT A DEPOSIT OR ANY
OTHER OBLIGATION OF A BANK, IS NOT INSURED, ENDORSED, OR GUARANTEED BY THE FDIC,
A BANK OR ANY GOVERNMENT AGENCY, AND INVOLVES INVESTMENT RISK INCLUDING THE
POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.

The Portfolio may sell its shares only to separate accounts of various insurance
companies (the "Insurer(s)") and to various pension and profit-sharing plans
("Retirement Plans"). Shares are available through investment in various
Retirement Plans, or purchase of certain variable annuity and/or variable life
insurance contracts ("Contracts") issued by Insurers. If you are a Contract
owner, the Insurer will allocate your premium payments to the Portfolio through
separate accounts in accordance with your Contract.

The Retirement Plans and separate accounts of Insurers are the shareholders of
record of the Portfolio's shares. Any reference to the shareholder in this
Prospectus technically refers to the Retirement Plans and the Insurer separate
accounts and not to you, the Contract owner or Retirement Plan participant.

FUND FACTS

GOAL:

Maximum current total return through -

o Capital Appreciation

o Dividend Income

PRINCIPAL INVESTMENTS:

o Common Stocks

o ADRs

o Convertible Securities

INVESTMENT ADVISER:

o First Tennessee Bank National Association ("First Tennessee" or "Adviser")

INVESTMENT SUB-ADVISER:

o Highland Capital Management Corporation ("Highland" or "Sub-Adviser")

PORTFOLIO MANAGERS:

o Edward J. Goldstein

o David L. Thompson

DISTRIBUTOR:

o ALPS Mutual Funds Services, Inc. ("ALPS")

--------------------------------------------------------------------------------
PERFORMANCE OF THE GROWTH & INCOME PORTFOLIO
--------------------------------------------------------------------------------

There is no performance information for the Portfolio because it has not
completed a full calendar year of operations.

1
<PAGE> 5

--------------------------------------------------------------------------------
FEES AND EXPENSES OF THE GROWTH & INCOME PORTFOLIO
--------------------------------------------------------------------------------

The information in this section describes the fees and expenses that you may pay
if you buy and hold shares of the Portfolio. The Portfolio's fees and expenses
are based upon estimates of the operating expenses for the Portfolio's initial
year of operation.

<TABLE>
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)

Maximum sales charge (load) imposed on
purchases as a percentage of offering price None

Maximum deferred sales charge (load)
(as a percentage of original purchase price None
or redemption proceeds, as applicable)

ANNUAL PORTFOLIO OPERATING EXPENSES
(expenses that are deducted from portfolio assets)

Management Fees %
---
Distribution (12b-1) Fees %
---

Other Expenses %
---

Total Annual Portfolio Operating Expenses %*
---
</TABLE>

*First Tennessee has agreed to reimburse Portfolio expenses and/or waive a
portion of its fee to the extent necessary for the Portfolio to maintain a total
annual expense ratio of not more than ____%. This waiver may be cancelled at any
time.

EXAMPLE -- The following example is intended to help you compare the cost of
investing in the Portfolio to the cost of investing in other mutual funds with
similar investment objectives. The example shows the cumulative amount of
portfolio expenses you would pay on a hypothetical investment of $10,000 in the
Portfolio. The example assumes a 5% average annual return and that you reinvest
all of your dividends. Your actual costs may be higher or lower.

<TABLE>
<CAPTION>
ONE-YEAR 3-YEAR
<S> <C> <C>
First Horizon
Growth & Income Portfolio
</TABLE>

A NOTE ON FEES

As an indirect investor in the Portfolio, you will incur various operating
costs, including investment management fees and operating expenses as indicated
in the Fee Table. If you are a Contract owner, you will also incur fees
associated with the Contract you purchase, which are not reflected in the table
and example above. Additional information about the cost of investing in the
Portfolio is presented in the prospectus for your Contract through which the
Portfolio's shares are offered to you.

<PAGE> 6

--------------------------------------------------------------------------------
INVESTMENT OBJECTIVE, PRINCIPAL STRATEGIES AND RISKS OF THE
CAPITAL APPRECIATION PORTFOLIO
--------------------------------------------------------------------------------

INVESTMENT OBJECTIVE -- The objective of the Capital Appreciation Portfolio (the
"Portfolio") is to seek long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES -- Under normal market conditions, DMC currently
intends to invest at least 80% of the Portfolio's total assets in equity
securities of companies with market capitalizations generally between $200
million and $2 billion at the time of purchase, with an average market
capitalization of the Portfolio not to exceed $1.5 billion. The Portfolio also
may invest in preferred stock, bonds and debentures convertible into common
stock of U.S. based companies of all sizes, industries, and geographical
markets. The Portfolio may also invest in securities of foreign issuers.

PRINCIPAL RISKS -- You may be interested in the Portfolio if you are comfortable
with above-average risk and intend to make a long-term investment commitment.
Like all managed funds, there is a risk that the Adviser's strategy for managing
the Portfolio may not achieve the desired results. In addition, the price of
common stock moves up and down in response to corporate earnings and
developments, interest rate movements, economic and market conditions and
anticipated events. As a result, the price of the Portfolio's investments may go
down and you could lose money on your investment.

The Portfolio's share price may fluctuate more than that of funds primarily
invested in stocks of large companies. Occasionally, small company securities
may under perform as compared to the securities of larger companies. They may
also pose greater risk due to narrow product lines, limited financial resources,
less depth in management or a limited trading market for their stocks.

The SAI contains additional information about the risks associated with
investing in the Portfolio.

THE VALUE OF THE PORTFOLIO'S SHARES, LIKE STOCK PRICES, GENERALLY WILL FLUCTUATE
WITHIN A WIDE RANGE. AN INVESTOR IN THE PORTFOLIO COULD LOSE MONEY OVER SHORT OR
EVEN LONG PERIODS OF TIME.

FUND FACTS
GOAL:

Long-term capital appreciation

PRINCIPAL INVESTMENTS:

o Common Stocks

o Small Company Stocks

CO-INVESTMENT ADVISERS:

o First Tennessee Bank National Association ("First Tennessee")

o Delaware Management Company ("DMC" or "Adviser")

PORTFOLIO MANAGERS:

o Gerald S. Frey

o Marshall T. Bassett

o John A. Heffern

o Jeffrey W. Hynoski

o Steven T. Lampe

o Lori P. Wachs

o Francis J. Houghton, Jr.

o Barry Gladstein

DISTRIBUTOR:

o ALPS Mutual Funds Services, Inc. ("ALPS")

--------------------------------------------------------------------------------
PERFORMANCE OF THE CAPITAL APPRECIATION PORTFOLIO
--------------------------------------------------------------------------------

There is no performance information for the Portfolio because it has not
completed a full calendar year of operations.

3
<PAGE> 7
--------------------------------------------------------------------------------
FEES AND EXPENSES OF THE CAPITAL APPRECIATION PORTFOLIO
--------------------------------------------------------------------------------

<TABLE>
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)

Maximum sales charge (load) imposed on
purchases as a percentage of offering price None

Maximum deferred sales charge (load)
(as a percentage of original purchase price None
or redemption proceeds, as applicable)

ANNUAL PORTFOLIO OPERATING EXPENSES
(expenses that are deducted from portfolio assets)

Management Fees %
---
Distribution (12b-1) Fees %
---
Other Expenses %
---
Total Annual Portfolio Operating Expenses %*
---
</TABLE>

<TABLE>
<CAPTION>
ONE-YEAR 3-YEAR
-------- ------
<S> <C> <C>
FIRST HORIZON
CAPITAL APPRECIATION PORTFOLIO
</TABLE>

A NOTE ON FEES

4
<PAGE> 8

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WHO MANAGES THE GROWTH & INCOME PORTFOLIO?
--------------------------------------------------------------------------------

First Tennessee, 530 Oak Court Dr., Memphis, Tennessee, serves as Investment
Adviser to the Portfolio and, with the prior approval of the Board of Trustees
of Financial Investors Variable Insurance Trust (the "Trustees"), has engaged
Highland to act as Sub-Adviser to the Portfolio. Subject to First Tennessee's
supervision, Highland is responsible for the day-to-day investment management of
the Portfolio, including providing investment research and credit analysis
concerning portfolio investments and conducting a continuous program of
investment of portfolio assets in accordance with the investment policies and
objectives of the Portfolio.

For managing its investment and business affairs, the Portfolio is obligated to
pay First Tennessee a monthly management fee at the annual rate of ____% of its
average net assets. First Tennessee serves as an investment adviser to
individual, corporate and institutional advisory clients and pension plans with
approximately $23.4 billion in assets under administration (including
nondiscretionary accounts) and $9.9 billion in assets under management as of
September 30, 2000, and has experience in supervising sub-advisers.

First Tennessee may compensate an Insurer for certain administrative services
performed for the Portfolio in connection with the Contracts, based on the
assets of the Portfolio attributable to Contracts issued through the separate
account of the Insurer.

Highland, 6077 Primacy Parkway, Memphis, TN, serves as the Sub-Adviser for the
Portfolio subject to the supervision of First Tennessee and pursuant to the
authority granted to it under its Sub-Advisory Agreement with First Tennessee.
On March 1, 1994, Highland merged with and into First Tennessee Investment
Management, Inc. ("FTIM"), an affiliate of First Tennessee, and changed its name
to Highland Capital Management Corp.

FTIM (now Highland), has been a wholly-owned subsidiary of First Tennessee
National Corporation since 1972. First Tennessee and Highland have a history of
investment management that dates back to 1929. Highland has a total of $5.2
billion in assets under management as of September 30, 2000. First Tennessee is
obligated to pay Highland a monthly sub-advisory fee at the annual rate of ____%
of the Portfolio's average net assets. The Portfolio is not responsible for
paying any portion of Highland's sub-advisory fee.

--------------------------------------------------------------------------------
PORTFOLIO MANAGERS FOR THE GROWTH & INCOME PORTFOLIO
--------------------------------------------------------------------------------

[PHOTO]

Edward J. Goldstein, one of the two Portfolio Managers for the Portfolio, is an
Executive Vice President and Director of Highland. He joined Highland in
September, 1989. Mr. Goldstein is a graduate of Boston University and received a
Masters degree in Business Administration from Columbia University.

David L. Thompson, one of the two Portfolio Managers for the Portfolio, is a
Senior Vice President and Managing Director of Highland. He joined Highland in
May 1995 and is a Chartered Financial Analyst. Mr. Thompson is a graduate of the
University of Mississippi and received a Masters degree in Business
Administration from the University of North Carolina.

5
<PAGE> 9

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WHO MANAGES THE CAPITAL APPRECIATION PORTFOLIO?
--------------------------------------------------------------------------------

First Tennessee (530 Oak Court Drive, Memphis, Tennessee) and DMC
(2005 Market Street, Philadelphia, Pennsylvania) serve as Co-Investment Advisers
to the Portfolio. First Tennessee, among other things, provides investment
management evaluations to the Board of Trustees of Financial Investors Variable
Insurance Trust (the "Trustees"), monitors the activities of DMC, including
DMC's Portfolio transactions, and coordinates DMC's activities with the
Portfolio's custodian, transfer agent, administrator, and independent
accountants. DMC is responsible for the day-to-day investment management of the
Portfolio, including providing investment research and credit analysis
concerning portfolio investments and conducting a continuous program of
investment of portfolio assets in accordance with the investment policies and
objective of the Portfolio.

The Portfolio is obligated to pay First Tennessee a monthly management fee at
the annual rate of ____% of its average net assets for the investment advisory
services First Tennessee provides. First Tennessee serves as an investment
adviser to individual, corporate and institutional advisory clients, pension
plans and collective investment funds, with approximately $23.4 billion in
assets under administration (including nondiscretionary accounts) and $9.9
billion in assets under management as of September 30, 2000, and has experience
in supervising co-advisers.

DMC uses a team approach and is responsible for the day-to-day investment and
reinvestment of the Portfolio's assets in accordance with its investment
objective and policies. DMC is obligated to provide a continual program of
investment of portfolio assets, to conduct investment research and credit
analysis concerning portfolio investments, and to place orders for all purchases
and sales of investments on behalf of the Portfolio.

As compensation for the services it provides, DMC is entitled to receive from
the Portfolio a monthly management fee at the annual rate of ____% on the first
$50 million of the Portfolio's average net assets and .65% on average daily net
assets of the Portfolio in excess of $50 million.

As of June 30, 2000, DMC had approximately $45.0 billion under management in a
wide range of asset classes for institutional investors, large private trusts
and mutual fund shareholders. DMC is organized as a series of Delaware
Management Business Trust ("DMBT"), a business trust organized under the laws of
the State of Delaware. DMC and DMBT are part of the Delaware Investments family
of companies, which are located at 2005 Market Street, Philadelphia, PA 19103.
They are indirect, wholly-owned subsidiaries of Lincoln National Corporation,
Centre Square, West Tower, 1500 Market St., Suite 3900, Philadelphia, PA
19102-2112 ("LNC"). LNC is a publicly-owned company whose shares are traded on
the New York Stock Exchange.

--------------------------------------------------------------------------------
PORTFOLIO MANAGERS FOR THE CAPITAL APPRECIATION PORTFOLIO
--------------------------------------------------------------------------------

[PHOTO]

GERALD S. FREY is Senior Vice President/Senior Portfolio Manager of DMC and
joined the company in 1996. Prior to joining DMC, he was a Senior Director with
Morgan Grenfell Capital Management in New York. Mr. Frey has 22 years'
experience in the money management business and holds a bachelor's degree in
Economics from Bloomsburg University and attended Wilkes College and New York
University.

MARSHALL T. BASSETT is Vice President/Portfolio Manager of DMC and joined the
company in 1997. Prior to joining DMC, he served as Vice President in Morgan
Stanley Asset Management's Emerging Growth Group, where he analyzed small growth
companies. Prior to that, he was a trust officer at Sovran Bank and Trust
Company. Mr. Bassett received his bachelor's degree and MBA from Duke
University.

6
<PAGE> 10

JOHN A. HEFFERN is Vice President/Portfolio Manager of DMC and joined the
company in 1997. Prior to joining DMC, he was a Senior Vice President, Equity
Research at NatWest Securities Corporation's Specialty Finance Services unit and
a Principal and Senior Regional Bank Analyst at Alex, Brown & Sons. Mr. Heffern
holds a bachelor's degree and an MBA from the University of North Carolina at
Chapel Hill.

JEFFREY W. HYNOSKI is Vice President/Portfolio Manager of DMC and joined the
company in 1998. Prior to joining DMC, he served as a Vice President for
Bessemer Trust Company in the mid and large capitalization growth group. Prior
to that, Mr. Hynoski held positions at Lord Abbett & Co. and Cowen Asset
Management. Mr. Hynoski holds a bachelor's degree in Finance from the University
of Delaware and an MBA from Pace University.

STEVEN T. LAMPE is Vice President/Portfolio Manager of DMC and joined the
company in 1995. Prior to joining DMC, he served as a manager at Price
Waterhouse. Mr. Lampe is a Certified Public Accountant. Mr. Lampe earned a
bachelor's degree and an MBA from the University of Pennsylvania's Wharton
School.

LORI P. WACHS is Vice President/Portfolio Manager of DMC and joined the company
in 1992. Prior to joining DMC, she was with Goldman Sachs, where she was an
equity analyst for two years. Ms. Wachs earned a bachelor's degree in Finance
and Oriental Studies from the University of Pennsylvania's Wharton School.

FRANCIS J. HOUGHTON, JR. is Vice President/Senior Portfolio Manager of DMC and
joined the company in 1990. Prior to joining DMC, he was President and Portfolio
Manager of Lynch & Mayer, Inc. which he joined in 1990 and became President in
1999. Prior to joining Lynch & Mayer, Inc., Mr. Houghton was Chairman of BMI
Capital from 1984 to 1990, a Portfolio Manager at Neuberger & Berman from 1977
to 1984 and a Partner at Oppenheimer & Co., Inc. from 1969-1977. Mr. Houghton
received a BBA from Manhattan College and attended New York University Graduate
School of Business Administration.

BARRY S. GLADSTEIN is Vice President/Portfolio Analyst of DMC and joined the
company in 1995. Prior to joining DMC, he held positions with Cigna Corporation
and Arthur Young and Company. Mr. Gladstein earned a bachelor's degree from
Binghamton University and an MBA from the University of Pennsylvania's Wharton
School. He is a Certified Public Accountant.

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SHAREHOLDER INFORMATION
--------------------------------------------------------------------------------

BUYING AND SELLING SHARES

The Portfolios continuously offer shares to Insurers and Retirement Plans at the
NAV per share next determined after the Trust or its designated agent receives
and accepts a proper purchase request. Each Insurer or Retirement Plan submits
purchase and redemption orders to the Trust based on allocation instructions for
premium payments, transfer instructions and surrender or partial withdrawal
requests which are furnished to the Insurer by such Contract owners (or by
participants). The Insurers and Retirement Plans are designated agents of the
Portfolios. The Trust, the Adviser and the Portfolios' distributor reserve the
right to reject any purchase order from any party for shares of the Portfolios.

The Portfolios will ordinarily make payment for redeemed shares within seven (7)
business days after the Trust or their designated agent receives and accepts a
proper redemption order. A proper redemption order will contain all the
necessary information and signatures required to process the redemption order.
The redemption price will be the NAV per share next determined after the Trust
or its designated agent receives and accepts the shareholder's request in proper
form.

The Portfolios may suspend the right of redemption or postpone the date of
payment during any period when trading on the New York Stock Exchange ("NYSE")
is restricted, or the NYSE is closed for other than weekends and holidays; when
an emergency makes it not reasonably practicable for the Portfolios to dispose
of its assets or calculate their net asset values; or as permitted by the
Securities and Exchange Commission.

The accompanying Prospectus or disclosure documents for the Contracts or Plan
describes the allocation, transfer and withdrawal provisions of such Contract or
Plan.

7
<PAGE> 11

VALUING SHARES

The price at which you buy, sell or exchange Portfolio shares is the share price
or net asset value (NAV). The share price for shares of the Portfolios is
determined by adding the value of the Portfolios' investments, cash and other
assets, deducting liabilities, and then dividing that value by the total number
of the shares outstanding. The Portfolios are open for business each day that
the NYSE is open (a "Business Day"). The NAV is calculated at the close of the
Portfolios' Business Day, which coincides with the close of regular trading of
the NYSE (normally 4:00 p.m. Eastern Time). Share price is not calculated on the
days that the NYSE is closed.

When the Portfolios calculate the share price, they value the securities they
hold at market value. Sometimes market quotes from some securities are not
available or are not representative of market value. Examples would be when
events occur that materially affect the value of a security at a time when the
security is not trading or when the securities are illiquid. In that case,
securities may be valued in good faith at fair value, using consistently applied
procedures decided on by the Trustees.

TAX CONSEQUENCES

The Portfolios distribute substantially all of their net income and capital
gains to shareholders each year. The Portfolios distribute capital gains and
income dividends annually. All dividends and capital gains distributions paid by
the Portfolios will be automatically reinvested at net asset value in the
Portfolios. For Contract owners the result of automatic reinvestment of
distributions on a Portfolio's performance, including the effect of dividends,
is reflected in the cash value of the Contracts you own. Please see the Contract
prospectus accompanying this Prospectus for more information.

The Portfolios each intend to qualify as a "regulated investment company" under
the Internal Revenue Code of 1986, as amended (the "Code"), in order to be
relieved of federal income tax on that part of their net investment income and
realized capital gains they distributes to shareholders. To qualify, the
Portfolios must meet certain relatively complex income and diversification
tests. The loss of such status would result in the Portfolios being subject to
federal income tax on their taxable income and gains.

Federal tax regulations require that mutual funds offered through insurance
company separate accounts must meet certain additional diversification
requirements to preserve the tax-deferral benefits provided by the variable
contracts. The Adviser intends to diversify investments in accordance with those
requirements. The Insurers' prospectuses for variable annuities and variable
life insurance policies describe the federal income tax treatment of
distributions from such contracts to Contract owners.

The foregoing is only a summary of important federal tax law provisions that can
affect the Portfolios. Other federal, state, or local tax law provisions may
also affect the Portfolios and their operations.

Because each investor's tax circumstances are unique and because the tax laws
are subject to change, we recommend that you consult your tax adviser about your
investment.

--------------------------------------------------------------------------------
DISTRIBUTION PLAN
--------------------------------------------------------------------------------

The Trustees have adopted a plan of distribution pursuant to Rule 12b-1 under
the 1940 Act for the Portfolios ("the Distribution Plan"). The Distribution Plan
permits the use of portfolio assets to compensate ALPS for its services and
costs in distributing shares and servicing shareholder accounts.

The "Distribution Plan" also recognizes that the Adviser may use its management
fee revenues, as well as its past profits or its resources from any other
source, to pay for expenses incurred in connection with providing services
intended to result in the sale of shares and/or shareholder support services.

Under the Distribution Plan, ALPS receives an amount equal to .__% of the
average annual net assets of the Portfolios. All or a portion of the fees paid
to ALPS under the Distribution Plan will, in turn, be paid to certain insurers,
broker-dealers, investment advisers, and other third parties as compensation for
selling shares and for providing ongoing sales support services.

These services include responding to shareholder inquiries, directing
shareholder communications, account balance maintenance, and dividend posting.

Because the fees paid under the Distribution Plan are paid out of portfolio
assets on an on-going basis, over time these fees will increase the cost of your
investment and may cost you more than other types of sales charges.

8
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SPECIAL INFORMATION ABOUT THE PORTFOLIOS
--------------------------------------------------------------------------------

The Portfolios offer shares to both variable annuity and variable life insurance
policy separate accounts and to various Retirement Plans. The Board of Trustees
does not anticipate that this arrangement will disadvantage any Contract owners.
Each Insurer will bear the expenses of establishing separate portfolios for
variable annuity and variable life insurance separate accounts if such action
becomes necessary; however, ongoing expenses that are ultimately borne by
Contract owners will likely increase due to the loss of the economies of scale
benefits that can be provided to mutual funds with substantial assets.

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FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

There are no Financial Highlights for the Portfolios because they have not
completed a fiscal year of operations.

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================================================================================

370 Seventeenth Street
Suite 3100
Denver, Colorado 80202

--------------------------------------------------------------------------------
ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS
--------------------------------------------------------------------------------

If you would like more information about the Portfolios, the following documents
are available free upon request.

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI contains additional information about all aspects of the Portfolios. A
current SAI has been filed with the Securities and Exchange Commission (the
"SEC") and is incorporated herein by reference. For a copy of the SAI, write or
call the Portfolios at the address or phone number listed below.

Information about the Portfolios (including the SAI) also may be reviewed and
copied, upon payment of a duplicating fee, at the SEC's Public Reference Room in
Washington, D.C. You also can obtain this information, upon payment of a
duplicating fee, by writing to the Public Reference Section of the SEC,
Washington, D.C. 20549-6009. Copies of this information may also be obtained,
upon payment of a duplicating fee, by electronic request at the following e-mail
address: [email protected].

The SEC also maintains a Web site located at http://www.sec.gov that contains
the SAI, material incorporated herein by reference, and other information
regarding the Portfolios. For more information about the operation of the Public
Reference Room, please call the SEC at 1-202-942-8090.

================================================================================
TO OBTAIN THE SAI FOR THE PORTFOLIOS FREE OF CHARGE, OR TO OBTAIN OTHER
INFORMATION ABOUT THE PORTFOLIOS AND TO MAKE SHAREHOLDER INQUIRIES, YOU MAY
WRITE TO FIRST HORIZON FUNDS AT 370 17TH STREET, SUITE 3100, DENVER, COLORADO
80202 OR CALL FIRST HORIZON FUNDS AT 1-800-442-1941 (OPTION 1).
================================================================================

Investment Company Act File No. _______

FIRST HORIZON FUNDS

[FIRST TENNESSEE LOGO] o Are NOT insured by the FDIC or
any other governmental agency.

o Are NOT bank deposits or
other obligations of or
guaranteed by First
Tennessee Bank National
Association or any of its
affiliates.

[ALPS LOGO] o Involve investment risks,
including the possible
loss of the principal
amount invested.

================================================================================

<PAGE> 17
FINANCIAL INVESTORS VARIABLE INSURANCE TRUST
FIRST HORIZON GROWTH & INCOME PORTFOLIO
FIRST HORIZON CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF ADDITIONAL INFORMATION
OF THE
GROWTH & INCOME AND CAPITAL APPRECIATION PORTFOLIOS,
DATED
---------------------

This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the current Prospectus for the First Horizon:
Growth & Income and Capital Appreciation Portfolios (Portfolios) dated , as it
may be amended or supplemented from time to time. Please retain this SAI for
future reference. To obtain additional free copies of this SAI or the Prospectus
for each Portfolio, please call the Distributor at , or write to the
Distributor at 370 17th Street, Suite 3100, Denver CO 80202.

Shares of the Portfolios are available only through the purchase of a variable
annuity contract or variable life insurance policy issued through a separate
account of an insurance company ("Variable Contract"), or through a qualified
plan.

<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
----------------- ----
<S> <C>
INVESTMENT RESTRICTIONS AND LIMITATIONS.....................................................................................2
INVESTMENT INSTRUMENTS......................................................................................................3
PORTFOLIO TRANSACTIONS......................................................................................................9
VALUATION OF PORTFOLIO SECURITIES......................................................................................... 10
PERFORMANCE................................................................................................................10
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION.............................................................................12
DISTRIBUTIONS AND TAXES....................................................................................................12
TRUSTEES AND OFFICERS......................................................................................................13
INVESTMENT ADVISORY AGREEMENTS.............................................................................................14
CODE OF ETHICS.............................................................................................................14
ADMINISTRATION AGREEMENT AND OTHER CONTRACTS...............................................................................15
DESCRIPTION OF THE TRUST...................................................................................................16
FINANCIAL STATEMENTS.......................................................................................................17
</TABLE>

Investment Adviser (First Horizon Growth & Income Portfolio)
First Tennessee Bank National Association (First Tennessee)

Sub-Adviser (First Horizon Growth & Income Portfolio)
Highland Capital Management Corp. (Highland or a Sub-Adviser)

Co-Investment Advisers (First Horizon Capital Appreciation Portfolio)
First Tennessee Bank National Association (First Tennessee)
Delaware Management Company (DMC)

Administrator and Distributor
ALPS Mutual Funds Services, Inc. (ALPS or the Administrator and Distributor)

Co-Administrator
First Tennessee Bank National Association (First Tennessee or the
Co-Administrator)

Transfer Agent & Shareholder Servicing Agent
ALPS Mutual Funds Services, Inc. (ALPS or the Transfer Agent)

Custodian

<PAGE> 18

INVESTMENT RESTRICTIONS AND LIMITATIONS

The following policies and limitations supplement those set forth in the
Portfolios' Prospectuses. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of a Portfolio's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be determined
immediately after and as a result of a Portfolio's acquisition of such security
or other asset. Accordingly, except as to borrowings and illiquid securities,
any subsequent change in values, net assets, or other circumstances will not be
considered when determining whether the investment complies with a Portfolio's
investment policies and limitations. With respect to borrowings or illiquid
securities, any borrowing or investment in such securities that exceeds the
applicable limitations listed below will be reduced promptly to meet such
limitation.

Fundamental policies and investment limitations cannot be changed without
approval by a "majority of the outstanding voting securities" (as defined in the
Investment Company Act of 1940) of that Portfolio. However, except for the
fundamental investment limitations set forth below, the investment policies and
limitations described in this SAI are not fundamental and may be changed without
shareholder approval.

INVESTMENT LIMITATIONS OF THE PORTFOLIOS

THE FOLLOWING ARE THE FUNDAMENTAL LIMITATIONS FOR EACH PORTFOLIO, SET FORTH IN
THEIR ENTIRETY. EACH PORTFOLIO MAY NOT:

(1) with respect to 75% of a Portfolio's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed by
the U.S. government or any of its agencies or instrumentalities) if, as
a result of such purchase, (a) more than 5% of a Portfolio's total
assets would be invested in the securities of that issuer; or (b) such
a Portfolio would hold more than 10% of the outstanding voting
securities of that issuer;

(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;

(3) borrow money, except that each Portfolio may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;

(4) underwrite securities issued by others, except to the extent that each
Portfolio may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;

(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, 25% or more of such a Portfolio's
total assets would be invested in the securities of companies whose
principal business activities are in the same industry;

(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent a
Portfolio from investing in securities or other instruments backed by
real estate or securities of companies engaged in the real estate
business);

(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent a Portfolio from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or

(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this limit
does not apply to purchases of debt securities or to repurchase
agreements;

(9) Each Portfolio may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end or closed-end management investment company with
substantially the same fundamental investment objectives, policies, and
limitations as the Portfolio.

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<PAGE> 19

THE FOLLOWING LIMITATIONS OF EACH PORTFOLIO ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.

(i) Each Portfolio does not currently intend during the coming year to
purchase securities on margin, except that each Portfolio may obtain
such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.

(ii) Each Portfolio may borrow money only (a) from a bank or (b) by engaging
in reverse repurchase agreements with any party [reverse repurchase
agreements are treated as borrowings for purposes of fundamental
investment limitation (3)]. The Portfolio will not purchase any
security while borrowings representing more than 5% of its total assets
are outstanding.

(iii) Each Portfolio does not currently intend during the coming year to
purchase any security, if, as a result of such purchase, more than 15%
of its net assets would be invested in securities that are deemed to be
illiquid because they are subject to legal or contractual restrictions
on resale or because they cannot be sold or disposed of in the ordinary
course of business at approximately the prices at which they are
valued.

(iv) Each Portfolio does not currently intend during the coming year to
purchase or sell futures contracts. This limitation does not apply to
securities that incorporate features similar to futures contracts.

(v) Each Portfolio does not currently intend during the coming year to make
loans, but this limitation does not apply to purchases of debt
securities.

(vi) Each Portfolio does not currently intend during the coming year to
invest all of its assets in the securities of a single open-end
management investment company with substantially the same fundamental
investment objectives, policies, and limitations as the Portfolio.

INVESTMENT INSTRUMENTS

The prospectuses discuss the investment objectives of the Portfolios and the
policies to be employed to achieve those objectives. This section contains
supplemental information concerning certain types of securities and other
instruments in which the Portfolios may invest, and certain risks attendant to
such investment.

DELAYED-DELIVERY AND WHEN-ISSUED TRANSACTIONS. Each Portfolio may buy and sell
securities on a delayed-delivery or when-issued basis. These transactions
involve a commitment by each Portfolio to purchase or sell specific securities
at a predetermined price and/or yield, with payment and delivery taking place
after the customary settlement period for that type of security (and more than
seven days in the future). Typically, no interest accrues to the purchaser until
the security is delivered. Each Portfolio may receive fees for entering into
delayed-delivery transactions.

When purchasing securities on a delayed-delivery basis, each Portfolio assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a Portfolio is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with such
Portfolio's other investments. If a Portfolio remains substantially fully
invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, a Portfolio will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When a Portfolio has sold a security on a delayed-delivery
basis, a Portfolio does not participate in further gains or losses with respect
to the security. If the other party to a delayed-delivery transaction fails to
deliver or pay for the securities, such Portfolio could miss a favorable price
or yield opportunity, or could suffer a loss.

Each Portfolio may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.

-3-
<PAGE> 20

FOREIGN INVESTMENTS. Foreign investments purchased by each Portfolio can involve
significant risks in addition to the risks inherent in U.S. investments. The
value of securities denominated in or indexed to foreign currencies, and of
dividends and interest from such securities, can change significantly when
foreign currencies strengthen or weaken to the U.S. dollar. Foreign securities
markets generally have less trading volume and less liquidity than U.S. markets,
and prices on some foreign markets can be highly volatile. Many foreign
countries lack uniform accounting and disclosure standards comparable to those
applicable to U.S. companies, and it may be more difficult to obtain reliable
information regarding an issuer's financial condition and operations. In
addition, the costs of foreign investing, including withholding taxes, brokerage
commissions, and custodial costs, are generally higher than for U.S.
investments.

Foreign markets may offer less protection to investors than U.S. markets.
Foreign issuers, brokers, and securities markets may be subject to less
government supervision. Foreign security trading practices, including those
involving the release of assets in advance of payment, may involve increased
risks in the event of a failed trade or the insolvency of a broker-dealer, and
may involve substantial delays. It may also be difficult to enforce legal rights
in foreign countries.

Investing abroad also involves different political and economic risks. Foreign
investments may be affected by actions of foreign governments adverse to the
interests of U.S. investors, including the possibility of expropriation or
nationalization of assets, confiscatory taxation, restriction on U.S. investment
or on the ability to repatriate assets or convert currency into U.S. dollars, or
other government intervention. There may be a greater possibility of default by
foreign governments or foreign government-sponsored enterprises. Investments in
foreign countries also involve a risk of local political, economic, or social
instability, military action or unrest, or adverse diplomatic developments.
There is no assurance that a Portfolio's investment adviser will be able to
anticipate or counter these potential events.

The considerations noted above generally are intensified for investments in
developing countries. Developing countries may have relatively unstable
governments, economies based on only a few industries, and securities markets
that trade a small number of securities.

Each Portfolio may invest in foreign securities that impose restrictions on
transfer within the U.S. or to U.S. persons. Although securities subject to
transfer restrictions may be marketable abroad, they may be less liquid than
foreign securities of the same class that are not subject to such restrictions.

American Depositary Receipts and European Depositary Receipts (ADRs and EDRs)
are certificates evidencing ownership of shares of a foreign-based corporation
held in trust by a bank or similar financial institution. Designed for use in
U.S. and European securities markets, respectively, ADRs and EDRs are
alternatives to the purchase of the underlying securities in their national
markets and currencies.

FOREIGN CURRENCY TRANSACTIONS. The Portfolios may conduct foreign currency
transactions on a spot (i.e., cash) basis or by entering into forward contracts
to purchase or sell foreign currencies at a future date and price. The
Portfolios will convert currency on a spot basis from time to time, and
investors should be aware of the costs of currency conversion. Although foreign
exchange dealers generally do not charge a fee for conversion, they do realize a
profit based on the difference between the prices at which they are buying and
selling various currencies. Thus, a dealer may offer to sell a foreign currency
to the fund at one rate, while offering a lesser rate of exchange should the
portfolio desire to resell that currency to the dealer. Forward contracts are
generally traded in an interbank market conducted directly between currency
traders (usually large commercial banks) and their customers. The parties to a
forward contract may agree to offset or terminate the contract before its
maturity, or may hold the contract to maturity and complete the contemplated
currency exchange.

Each Portfolio may use currency forward contracts for any purpose consistent
with its investment objective. The following discussion summarizes the principal
currency management strategies involving forward contracts that could be used by
the Portfolio. The Portfolios may also use swap agreements, indexed securities,
and options and futures contracts relating to foreign currencies for the same
purposes.

When a Portfolio agrees to buy or sell a security denominated in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security. By
entering into a forward contract for the purchase or sale, for a fixed amount of
U.S. dollars,

-4-
<PAGE> 21

of the amount of foreign currency involved in the underlying security
transaction, the Portfolio will be able to protect itself against an adverse
change in foreign currency values between the date the security is purchased or
sold and the date on which payment is made or received. This technique is
sometimes referred to as a "settlement hedge" or "transaction hedge." The
Portfolio may also enter into forward contracts to purchase or sell a foreign
currency in anticipation of future purchases or sales of securities denominated
in foreign currency, even if the specific investments have not yet been selected
by the Portfolio's investment adviser.

A Portfolio may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. For example, if a
Portfolio owned securities denominated in pounds sterling, it could enter into a
forward contract to sell pounds sterling in return for U.S. dollars to hedge
against possible declines in the pound's value. Such a hedge, sometimes referred
to as a "position hedge," would tend to offset both positive and negative
currency fluctuations, but would not offset changes in security values caused by
other factors. A Portfolio could also hedge the position by selling another
currency expected to perform similarly to the pound sterling - for example, by
entering into a forward contract to sell Deutsche marks or European Currency
Units in return for U.S. dollars. This type of hedge, sometimes referred to as a
"proxy hedge," could offer advantages in terms of cost, yield, or efficiency,
but generally would not hedge currency exposure as effectively as a simple hedge
into U.S. dollars. Proxy hedges may result in losses if the currency used to
hedge does not perform similarly to the currency in which the hedged securities
are denominated.

A Portfolio may enter into forward contracts to shift its investment exposure
from one currency into another. This may include shifting exposure from U.S.
dollars to a foreign currency, or from one foreign currency to another foreign
currency. For example, if a Portfolio held investments denominated in Deutsche
marks, such Portfolio could enter into forward contracts to sell Deutsche marks
and purchase Swiss Francs. This type of strategy, sometimes known as a "cross
hedge," will tend to reduce or eliminate exposure to the currency that is sold,
and increase exposure to the currency that is purchased, much as if the
Portfolio had sold a security denominated in one currency and purchased an
equivalent security denominated in another. Cross-hedges protect against losses
resulting from a decline in the hedged currency, but will cause the Portfolio to
assume the risk of fluctuations in the value of the currency it purchases.

Under certain conditions, Securities and Exchange Commission (SEC) guidelines
require mutual funds to set aside cash or other appropriate liquid assets in a
segregated custodial account to cover currency forward contracts. As required by
SEC guidelines, the Portfolios will segregate assets to cover currency forward
contracts, if any, whose purpose is essentially speculative. The Portfolios will
not segregate assets to cover forward contracts entered into for hedging
purposes, including settlement hedges, position hedges, and proxy hedges.

Successful use of forward currency contracts will depend on Highland's or DMC's
skill in analyzing and predicting currency values. Forward contracts may
substantially change a Portfolio's investment exposure to changes in currency
exchange rates, and could result in losses to a Portfolio if currencies do not
perform as the investment adviser anticipates. For example, if a currency's
value rose at a time when the investment adviser had hedged a Portfolio by
selling that currency in exchange for dollars, a Portfolio would be unable to
participate in the currency's appreciation. If Highland or DMC hedges currency
exposure through proxy hedges, a Portfolio could realize currency losses from
the hedge and the security position at the same time if the two currencies do
not move in tandem. Similarly, if Highland or DMC increases a Portfolio's
exposure to a foreign currency, and that currency's value declines, the
Portfolio will realize a loss. There is no assurance that Highland's or DMC's
use of forward currency contracts will be advantageous to a Portfolio or that it
will hedge at an appropriate time. The policies described in this section are
non-fundamental policies of each Portfolio.

ILLIQUID INVESTMENTS. Illiquid Investments are investments that cannot be sold
or disposed of in the ordinary course of business at approximately the prices at
which they are valued. Under guidelines established by the Trustees, Highland,
under the supervision of First Tennessee, and DMC determine the liquidity of
each respective Portfolio's investments and, through reports from Highland and
DMC, the Trustees monitor investments in illiquid instruments. In determining
the liquidity of each Portfolio's investments, Highland and DMC may consider
various factors including (1) the frequency of trades and quotations, (2) the
number of dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including any
demand or tender features) and (5) the nature of the marketplace for trades
(including the ability to assign or offset each Portfolio's rights and
obligations relating to the investment). Investments currently considered by
each Portfolio to be illiquid include repurchase agreements not entitling the
holder to payment of principal and interest within seven days, over-the-counter
options, and some restricted securities

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<PAGE> 22

determined by Highland or DMC to be illiquid. However, with respect to
over-the-counter options that each Portfolio writes, all or a portion of the
value of the underlying instrument may be illiquid depending on the assets held
to cover the option and the nature and terms of any agreement each Portfolio may
have to close out the option before expiration. In the absence of market
quotations, illiquid investments are priced at fair value as determined in good
faith by the Trustees. If through a change in values, net assets or other
circumstances, each Portfolio was in a position where more than 15% of its net
assets were invested in illiquid securities, the Trustees would seek to take
appropriate steps to protect liquidity.

REAL ESTATE INVESTMENT TRUSTS. The Portfolios may purchase interests in real
estate investment trusts. Real estate industry companies include, among others,
equity real estate investment trusts, which own properties, and mortgage real
estate investment trusts, which make construction, development, and long-term
mortgage loans. Equity real estate investment trusts may be affected by changes
in the value of the underlying property owned by the trusts, while mortgage real
estate investment trusts may be affected by the quality of credit extended.
Equity and mortgage real estate investment trusts are dependent upon management
skill, are not diversified, and are subject to the risks of financing projects.
Such trusts are also subject to heavy cash flow dependency, defaults by
borrowers, self liquidation, and the possibilities of failing to qualify for
tax-free pass-through of income under the Internal Revenue Code and failing to
maintain exemption from the Investment Company Act of 1940 (the 1940 Act).

REPURCHASE AGREEMENTS. Repurchase Agreements are transactions in which a
Portfolio purchases a security and simultaneously commits to resell that
security at an agreed upon price and date within a number of days from the date
of purchase. The resale price reflects the purchase price plus an agreed upon
market rate of interest which is unrelated to the coupon rate or maturity of the
purchased security. A repurchase agreement involves the obligation of the seller
to pay the agreed upon price. This obligation is in effect secured by the
underlying security having a value at least equal to the amount of the agreed
upon resale price. Each Portfolio may enter into a repurchase agreement with
respect to any security in which it is authorized to invest. While it presently
does not appear possible to eliminate all risks from the transactions
(particularly the possibility of a decline in the market value of the underlying
securities, as well as delay and costs to each Portfolio in connection with
bankruptcy proceedings), it is the policy of each Portfolio to limit repurchase
agreements to those parties whose creditworthiness has been reviewed and found
satisfactory by Highland or DMC, as the case may be.

REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a Portfolio
sells a portfolio security to another party, such as a bank or broker-dealer, in
return for cash and agrees to repurchase the instrument at a particular price
and time. While a reverse repurchase agreement is outstanding, each Portfolio
will maintain appropriate high-grade liquid assets in a segregated custodial
account to cover its obligation under the agreement. Each Portfolio will enter
into reverse repurchase agreements only with parties whose creditworthiness has
been found satisfactory by Highland or DMC, as the case may be.

RESTRICTED SECURITIES. Restricted Securities generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where registration
is required, each Portfolio may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time it
decides to seek registration and the time each Portfolio may be permitted to
sell a security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, each Portfolio might obtain a
less favorable price than prevailed when it decided to seek registration of the
security.

SECURITIES LENDING. Each Portfolio may lend securities to parties such as
broker-dealers or institutional investors. Securities lending allows the
Portfolios to retain ownership of the securities loaned and, at the same time,
to earn additional income. Since there may be delays in the recovery of loaned
securities, or even a loss of rights in collateral supplied should the borrower
fail financially, loans will be made only to parties deemed by Highland or DMC
to be of good standing. Furthermore, they will only be made if, in Highland's or
DMC's judgment, the consideration to be earned from such loans would justify the
risk.

First Tennessee, Highland, and DMC understand that it is the current view of the
SEC that each Portfolio may engage in loan transactions only under the following
conditions: (1) each Portfolio must receive 100% collateral in the form of cash
or cash equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2)
the borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of the
collateral; (3) after giving notice, each Portfolio must be able to terminate
the loan at any time; (4) each Portfolio must receive reasonable

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<PAGE> 23

interest on the loan or a flat fee from the borrower, as well as amounts
equivalent to any dividends, interest, or other distributions on the securities
loaned and to any increase in market value; (5) each Portfolio may pay only
reasonable custodian fees in connection with the loan; and (6) the Trustees must
be able to vote proxies on the securities loaned, either by terminating the loan
or by entering into an alternative arrangement with the borrower.

Cash received through loan transactions may be invested in any security in which
the Portfolios are authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).

WARRANTS. The Portfolios may invest in warrants, which entitle the holder to buy
equity securities at a specific price during a specific period of time. Warrants
may be considered more speculative than certain other types of investments in
that they do not entitle a holder to dividends or voting rights with respect to
the securities, which may be purchased, nor do they represent any rights in the
assets of the issuing company. The value of a warrant may be more volatile than
the value of the securities underlying the warrants. Also, the value of the
warrant does not necessarily change with the value of the underlying securities
and ceases to have value if it is not exercised prior to the expiration date.
Warrants may be allowed to expire if Highland or DMC deems it undesirable to
exercise or sell.

LIMITATIONS ON OPTIONS TRANSACTIONS. Each Portfolio will not: (a) purchase put
options or write call options if, as a result, more than 25% of a Portfolio's
total assets would be hedged with options under normal conditions; (b) write put
options if, as a result, a Portfolio's total obligations upon settlement or
exercise of written put options would exceed 25% each of their total assets; or
(c) purchase call options if, as a result, the current value of option premiums
for call options purchased by each Portfolio would exceed 5% of total assets.
These limitations do not apply to options attached to or acquired or traded
together with their underlying securities, and do not apply to securities that
incorporate features similar to options.

PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, a Portfolio obtains
the right (but not the obligation) to sell the option's underlying instrument at
a fixed strike price. In return for this right, a Portfolio pays the current
market price for the option (known as the option premium). Options have various
types of underlying instruments, including specific securities and indexes of
securities prices. A Portfolio may terminate its position in a put option it has
purchased by allowing them to expire or by exercising the option. If the option
is allowed to expire, a Portfolio will lose the entire premium it paid. If a
Portfolio exercises the option, it completes the sale of the underlying
instrument at the strike price. A Portfolio may also terminate a put option
position by closing it out in the secondary market at its current price, if a
liquid secondary market exists.

The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price does
not fall enough to offset the cost of purchasing the option, a put buyer can
expect to suffer a loss (limited to the amount of the premium paid, plus related
transaction costs).

The features of call options are essentially the same as those of put options,
except that the purchaser of a call option obtains the right to purchase, rather
than sell, the underlying instrument at the option's strike price. A call buyer
typically attempts to participate in potential price increases of the underlying
instrument with risk limited to the cost of the option if security prices fall.
At the same time, the buyer can expect to suffer a loss if security prices do
not rise sufficiently to offset the cost of the option.

WRITING PUT AND CALL OPTIONS. When a Portfolio writes a put option, it takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, the Portfolio assumes the obligation to pay the strike
price for the option's underlying instrument if the other party to the option
chooses to exercise it. The Portfolios may seek to terminate their positions in
put options they write before exercise by closing out the options in the
secondary market at their current price. If the secondary market is not liquid
for a put option a Portfolio has written, however, the Portfolio must continue
to be prepared to pay the strike price while the option is outstanding,
regardless of price changes, and must continue to set aside assets to cover its
position.

If security prices rise, a put writer would generally expect to profit, although
its gain would be limited to the amount of the premium it received. If security
prices remain the same over time, it is likely that the writer will also profit,
because it

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<PAGE> 24

should be able to close out the option at a lower price. If security prices
fall, the put writer would expect to suffer a loss. However, this loss should be
less than the loss from purchasing the underlying instrument directly, because
the premium received for writing the option should mitigate the effects of the
decline.

Writing a call option obligates each Portfolio to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the same
time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is greater,
a call writer gives up some ability to participate in security price increases.

COMBINED POSITIONS. Each Portfolio may purchase and write options in combination
with each other, or in combination with forward contracts, to adjust the risk
and return characteristics of the overall position. For example, the Portfolios
may purchase a put option and write a call option on the same underlying
instrument, in order to construct a combined position whose risk and return
characteristics are similar to selling a futures contract. Another possible
combined position would involve writing a call option at one strike price and
buying a call option at a lower price, in order to reduce the risk of the
written call option in the event of a substantial price increase. Because
combined options positions involve multiple trades, they result in higher
transaction costs and may be more difficult to open and close out.

CORRELATION OF PRICE CHANGES. Because there are a limited number of types of
exchange-traded options contracts, it is likely that the standardized contracts
available will not match the Portfolios' current or anticipated investments
exactly. Each Portfolio may invest in options contracts based on securities with
different issuers, maturities, or other characteristics from the securities in
which each typically invests.

Options prices can also diverge from the prices of their underlying instruments,
even if the underlying instruments match the Portfolios' investments well.
Options prices are affected by such factors as current and anticipated
short-term interest rates, changes in volatility of the underlying instrument,
and the time remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result from
differing levels of demand in the options markets and the securities markets,
from structural differences in how options and securities are traded, or from
imposition of daily price fluctuation limits or trading halts.

The Portfolios may purchase or sell options contracts with a greater or lesser
value than the securities it wishes to hedge or intends to purchase in order to
attempt to compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price changes
in the Portfolios' options positions are poorly correlated with its other
investments, the positions may fail to produce anticipated gains or result in
losses that are not offset by gains in other investments.

LIQUIDITY OF OPTIONS. There is no assurance a liquid secondary market will exist
for any particular options contract at any particular time. Options may have
relatively low trading volume and liquidity if their strike prices are not close
to the underlying instrument's current price. On volatile trading days when the
price fluctuation limit is reached or a trading halt is imposed, it may be
impossible for the Portfolios to enter into new positions or close out existing
positions. If the secondary market for a contract is not liquid because of price
fluctuation limits or otherwise, it could prevent prompt liquidation of
unfavorable positions, and potentially could require the Portfolios to continue
to hold a position until delivery or expiration regardless of changes in its
value. As a result, the Portfolios' access to other assets held to cover its
options or futures positions could also be impaired.

OTC OPTIONS. Unlike exchange-traded options, which are standardized with respect
to the underlying instrument, expiration date, contract size, and strike price,
the terms of over-the-counter options (options not traded on exchanges)
generally are established through negotiation with the other party to the option
contract. While this type of arrangement allows the Portfolios greater
flexibility to tailor an option to its needs, OTC options generally involve
greater credit risk than exchange-traded options, which are guaranteed by the
clearing organization of the exchanges where they are traded.

ASSET COVERAGE FOR OPTIONS POSITIONS. The Portfolios will comply with guidelines
established by the SEC with respect to coverage of options strategies by mutual
funds and, if the guidelines so require, will set aside appropriate liquid
assets in a

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<PAGE> 25

segregated custodial account in the amount prescribed. Securities held in a
segregated account cannot be sold while the option strategy is outstanding,
unless they are replaced with other suitable assets. As a result, there is a
possibility that segregation of a large percentage of the Portfolios' assets
could impede portfolio management or the Portfolios' ability to meet redemption
requests or other current obligations.

PORTFOLIO TRANSACTIONS

All orders for the purchase or sale of securities are placed on behalf of the
respective Portfolios by Highland, and DMC (collectively, the Advisers) pursuant
to authority contained in each Portfolio's Sub-Advisory Agreement or Co-Advisory
Agreement, as the case may be. The Advisers are also responsible for the
placement of transaction orders for other investment companies and accounts for
which they or their affiliates act as investment adviser. In selecting
broker-dealers, subject to applicable limitations of the federal securities
laws, the Advisers consider various relevant factors, including, but not limited
to, the broker's execution capability, the broker's perceived financial
stability, the broker's responsiveness to the Advisers' transaction requests,
and the broker's clearance and settlement capability. Commissions for foreign
investments traded on foreign exchanges will generally be higher than for U.S.
investments and may not be subject to negotiation.

Each Portfolio may execute portfolio transactions with broker-dealers who
provide research and execution services to the Portfolios or other accounts over
which the Advisers or their affiliates exercise investment discretion. Such
services may include research-related computer hardware and software; and
furnishing analyses and reports concerning issuers, industries, and economic
factors and trends.

The receipt of research from broker-dealers that execute transactions on behalf
of each Portfolio may be useful to the Advisers in rendering investment
management services to each Portfolio and/or its other clients, and conversely,
such information provided by broker-dealers who have executed transaction orders
on behalf of other clients may be useful to the Advisers in carrying out their
obligations to each Portfolio. The receipt of such research has not reduced the
Advisers' normal independent research activities; however, it enables the
Advisers to avoid the additional expenses that could be incurred if they tried
to develop comparable information through their own efforts. Such research is
used by the Advisers in connection with their investment decision-making process
with respect to one or more funds and accounts managed by them, and may not be
used, or used exclusively, with respect to the fund or account generating the
brokerage.

Subject to applicable limitations of the federal securities laws, broker-dealers
may receive commissions for agency transactions that are higher than the
commission of other broker-dealers in recognition of their research and
execution services. In order to cause each Portfolio to pay such higher
commissions, the Advisers must determine in good faith that such commissions are
reasonable in relation to the value of the brokerage and research services
provided by such executing broker-dealers viewed in terms of a particular
transaction or the Advisers' overall responsibilities to each Portfolio and
their other clients. In reaching this determination, the Advisers will not
attempt to place a specific dollar value on the brokerage and research services
provided or to determine what portion of the compensation should be related to
those services.

The Advisers are authorized to use research services provided by and to place
portfolio transactions, to the extent permitted by law, with brokerage firms
that have provided assistance in the distribution of shares of each Portfolio.

The Trustees periodically review the Advisers' performance of their
responsibilities in connection with the placement of portfolio transactions on
behalf of each Portfolio and review the commissions paid by each Portfolio over
representative periods of time to determine if they are reasonable in relation
to the benefits to each Portfolio.

From time to time the Trustees will review whether the recapture for the benefit
of each Portfolio of some portion of the brokerage commissions or similar fees
paid by each Portfolio on portfolio transactions is legally permissible and
advisable. Each Portfolio seeks to recapture soliciting broker-dealer fees on
the tender of portfolio securities, but at present no other recapture
arrangements are in effect. The Trustees intend to continue to review whether
recapture opportunities are available and are legally permissible, and, if so,
to determine, in the exercise of their business judgment, whether it would be
advisable for each Portfolio to seek such recapture.

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<PAGE> 26

When two or more Portfolios are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance with a
formula considered by the Trustees and each Portfolio's respective Adviser to be
equitable to each Portfolio. In some cases this system could have a detrimental
effect on the price or value of the security as far as each Portfolio is
concerned. In other cases, however, the ability of each Portfolio to participate
in volume transactions will produce better executions for each Portfolio. It is
the current opinion of the Trustees that the desirability of retaining the
Portfolios' Advisers outweighs any disadvantages to the Portfolios that may be
said to exist from exposure to simultaneous transactions.

VALUATION OF PORTFOLIO SECURITIES

In valuing securities owned by each Portfolio, the Advisers use various methods
depending on the market or exchange on which the securities are traded.
Securities traded on the New York Stock Exchange (NYSE) or the American Stock
Exchange are appraised at the last sale price, or if no sale has occurred, at
the closing bid price. Securities traded on other exchanges are appraised as
nearly as possible in the same manner. Securities and other assets for which
exchange quotations are not readily available are valued on the basis of closing
over-the-counter bid prices, if available, or at their fair value as determined
in good faith under consistently applied procedures under the general
supervision of the Trustees. Short-term securities maturing in 60 days are
valued either at amortized cost or at original cost plus accrued interest, both
of which approximate current value. Convertible securities and fixed-income
securities are valued primarily by a pricing service that uses a vendor security
valuation matrix, which incorporates both dealer-supplied valuations and
electronic data processing techniques. The Advisers believe that this two-fold
approach more accurately reflects fair value because it takes into account
appropriate factors such as institutional trading in similar groups of
securities, yield, quality, coupon rate, maturity, type of issue, trading
characteristics, and other market data, without exclusive reliance upon quoted,
exchange, or over-the-counter prices.

The Trustees have approved the use of pricing services. Securities and other
assets for which there is no readily available market are valued in good faith
by a committee appointed by the Trustees. The procedures set forth above need
not be used to determine the value of the securities owned by a Portfolio if, in
the opinion of a committee appointed by the Trustees, some other method (e.g.,
closing over-the-counter bid prices in the case of debt instruments traded on an
exchange) would more accurately reflect the fair market value of such
securities.

Generally, the valuation of foreign and domestic equity securities, as well as
corporate bonds, U.S. government securities, money market instruments, and
repurchase agreements, is substantially completed each day at the close of the
NYSE. The values of any such securities held by the Portfolios are determined as
of such time for the purpose of computing the Portfolios' net asset values per
share (NAV). Foreign security prices are furnished by independent brokers or
quotation services, which express the value of securities in their local
currency. ALPS, the Fund Accountant, gathers all exchange rates daily at the
close of the NYSE using the last quoted price on the local currency and then
translates the value of foreign securities from their local currency into U.S.
dollars. Any changes in the value of forward contracts due to exchange rate
fluctuations and days to maturity are included in the calculation of the net
asset value. If an extraordinary event that is expected to materially affect the
value of a portfolio security occurs after the close of an exchange on which
that security is traded, then the security will be valued as determined in good
faith.

PERFORMANCE

Performance of the Portfolios does not reflect Variable Contract fees and
charges.

TOTAL RETURNS for each Portfolio quoted in advertising reflect all aspects of
return, including the effect of reinvesting dividends and capital gain
distributions (if any), and any change in NAV over the period. Average annual
total returns are calculated by determining the growth or decline in value of a
hypothetical historical investment over a stated period, and then calculating
the annually compounded percentage rate that would have produced the same result
if the rate of growth or decline in value had been constant over the period. For
example, a cumulative total return of 100% over ten years would produce an
average annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. While average
annual total returns are a convenient means of comparing investment

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<PAGE> 27

alternatives, investors should realize that performance is not constant over
time, but changes from year to year, and that average annual total returns
represent averaged figures as opposed to the actual year-to-year performance.
Average annual returns covering periods of less than one year are calculated by
determining total return for the period, extending that return for a full year
(assuming that performance remains constant over the year), and quoting the
result as an annual return.

PERFORMANCE information for the Growth & Income and Capital Appreciation
Portfolios are not included because these Portfolios have not been in existence
for one full calendar year.

CUMULATIVE TOTAL RETURNS reflect the simple change in value of an investment
over a stated period. Average annual and cumulative total returns may be quoted
as a percentage or as a dollar amount, and may be calculated for a single
investment, a series of investments, or a series of redemptions, over any time
period. Total returns may be broken down into their components of income and
capital (including capital gains and changes in share price) in order to
illustrate the relationship of these factors and their contributions to total
return. Total returns, yields, and other performance information may be quoted
numerically or in a table, graph, or similar illustration. Where applicable,
sales loads may or may not be included.

Each Portfolio may compare its performance or the performance of securities in
which it may invest to other mutual funds, especially to those with similar
investment objectives. These comparisons may be based on data published by
imoneynet.com of Ashland, MA or by Lipper, Inc., an independent service located
in Summit, New Jersey that monitors the performance of mutual funds. Lipper
generally ranks funds on the basis of total return, assuming reinvestment of
distributions, but does not take sales charges or redemption fees into
consideration, and is prepared without regard to tax consequences. Lipper may
also rank funds based on yield. In addition to the mutual fund rankings, each
Portfolio's performance may be compared to mutual fund performance indices
prepared by Lipper.

MOVING AVERAGES. The Portfolios may illustrate performance using moving
averages. A long-term moving average is the average of each week's adjusted
closing NAV for a specified period. A short-term moving average is the average
of each day's adjusted closing NAV for a specified period. Moving Average
Activity Indicators combine adjusted closing NAVs from the last business day of
each week with moving averages for a specified period to produce indicators
showing when an NAV has crossed, stayed above, or stayed below its moving
average.

NET ASSET VALUE. Charts and graphs using the Portfolios' net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by the Portfolio
and reflects all elements of its return. Unless otherwise indicated, the
Portfolio's adjusted NAVs are not adjusted for sales charges, if any.

From time to time, each Portfolio's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals. For
example, the Portfolios may quote Morningstar, Inc. in their advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates mutual
funds on the basis of risk-adjusted performance.

Each Portfolio may be compared in advertising to certificates of deposits (CD's)
or other investments issued by banks. Mutual funds differ from bank investments
in several respects. For example, the Portfolios may offer greater liquidity or
higher potential returns than CD's, and the Portfolio does not guarantee your
principal or your return.

Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical returns
of the capital markets in the United States, including common stocks, small
capitalization stocks, long-term corporate bonds, intermediate-term government
bonds, long-term government bonds, Treasury bills, the U.S. rate of inflation
(based on the Consumer Price Index), and combinations of various capital
markets. The performance of these capital markets is based on the return of
different indices.

The Growth & Income Portfolio may compare its performance to that of the
Standard & Poor's Composite Index of 500 stocks (S&P 500), a widely recognized,
unmanaged index of the combined performance of the stocks of 500 American
companies. The Capital Appreciation Portfolio may compare its performance to
that of the S&P 500, the Standard & Poor's 400 Midcap Index, the Russell 2000
Growth Index or the Russell 2500 Growth Index. Each Portfolio may also quote

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<PAGE> 28

mutual fund rating services in its advertising materials, including data from a
mutual fund rating service which rates mutual funds on the basis of risk
adjusted performance.

Each Portfolio may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a program, the
investor invests a fixed dollar amount at periodic intervals, thereby purchasing
fewer shares when prices are high and more shares when prices are low. While
such a strategy does not assure a profit nor guard against loss in a declining
market, the investor's average cost per share can be lower than if fixed numbers
of shares had been purchased at those intervals. In evaluating such a plan,
investors should consider their ability to continue purchasing shares through
periods of low price levels.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

Each Portfolio is an investment vehicle for the separate accounts of Variable
Contracts offered by insurance companies. Individual Variable Contract holders
are not the shareholders of the Portfolios. Rather, a participating insurance
company and its separate accounts are the shareholders. The offering is without
a sales charge and is made at each Portfolio's net asset value per share. Shares
of the Portfolios are not offered to the general public. Each Portfolio reserves
the right, in its sole discretion, to refuse purchase orders. The procedures for
redemption of Portfolio shares under ordinary circumstances is set forth in the
Prospectus and in the separate prospectus relating to the Variable Contracts
which accompanies the Prospectus.

The following holiday closings have been scheduled: Thanksgiving Day, Christmas
Day, New Year's Day, Dr. Martin Luther King Jr. Day, Washington's Birthday, Good
Friday, Memorial Day, Independence Day and Labor Day. Although the same holiday
schedule is expected to be observed in the future, the New York Stock Exchange
and the Federal Reserve Bank of New York (New York Federal Reserve) may modify
their holiday schedules at any time.

If the Trustees determine that existing conditions make cash payment
undesirable, redemption payments may be made in whole or in part in securities
or other property, valued for this purpose as they are valued in computing each
Portfolio's NAV. Shareholders receiving securities or other property on
redemption may realize a gain or loss for tax purposes and will incur any costs
of sale, as well as the associated inconveniences.

DISTRIBUTIONS AND TAXES

DISTRIBUTIONS. All dividends and capital gains distributions paid by the
Portfolios will be automatically reinvested, at net asset value, in additional
shares of the Portfolios unless otherwise indicated. Each Portfolio currently
intends to declare and pay dividends, if any, on an annual basis. There is no
fixed dividend rate and there can be no assurance that the Portfolios will pay
any dividends or realize any capital gains.

If the net asset value of shares is reduced below a shareholder's cost as a
result of a distribution by the Portfolios, such distribution generally will be
taxable even though it represents a return of invested capital. Investors should
be careful to consider the tax implications of buying shares of the Portfolios
just prior to a distribution. The price of shares purchased at this time will
include the amount of the forthcoming distribution, but the distribution will
generally be taxable to the shareholder.

TAXES. It is the policy of each Portfolio to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies. As a result,
the Portfolio will not be subject to U.S. Federal income tax on any net income
or capital gains that it distributes to its shareholders, that is, the insurance
companies separate accounts.

The Treasury Department has issued Regulations under Internal Revenue Code
Section 817(h) that pertain to diversification requirements for variable annuity
and variable life insurance contracts. Each Portfolio intends to comply with the
diversification requirement. These requirements are in addition to the
diversification requirement imposed on the Portfolios by Subchapter M and the
1940 Act. The 817(h) requirements place certain limitations on the assets of
each separate account that may be invested in securities of a single issue. A
variable contract based upon a separate account will

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<PAGE> 29

not receive favorable tax treatment as an annuity or life insurance contract
unless the separate account and underlying regulated investment company
investments are adequately diversified. In determining whether a separate
account is adequately diversified, in certain circumstances the separate account
can look through to the assets of the regulated investment company in which it
has invested.

The Regulations require the Portfolios' assets to be diversified so that no
single investment represents more than 55% of the value of the Portfolio's total
assets, no two investments represent more than 70% of the Portfolio's total
assets, no three investments represent more than 80% of the Portfolio's total
assets and no four investments represent more than 90% of the Portfolio's total
assets. A "safe harbor" is available to a separate account if it meets the
diversification tests applicable to registered investment companies and not more
than 55% of its assets constitute cash, cash items, government securities and
securities of other registered investment companies.

The applicable Regulations treat all securities of the same issuer as a single
investment. In the case of "government securities," each government agency or
instrumentality shall be treated as a separate issuer for the purpose of the
diversification test (although not for the purpose of the "safe harbor" test
described above). All securities of the same issuer, all interests in the same
real property project, and all interests in the same commodity are treated as a
single investment. The Trust intends to comply with these diversification
requirements. Failure of the Portfolios to satisfy the Section 817(h)
requirements would result in taxation of the applicable separate accounts, the
insurance companies variable life policies and variable annuity contracts, and
tax consequences to the holders thereof.

The foregoing is only a brief summary of important tax considerations that
generally affect the Portfolios. Prospective investors should consult their own
tax advisers with regard to the Federal tax consequences of the purchase,
ownership, or disposition of Portfolio shares, as well as the tax consequences
arising under the laws of any state, foreign country, or other taxing
jurisdiction.

For a discussion of the impact on Variable Contract owners of income taxes an
issuer may owe as a result of (i) its ownership of shares of the Portfolio, (ii)
its receipt of dividends and distributions thereon, and (iii) its gains from the
purchase and sale thereof, reference should be made to the Prospectus for the
Variable Contract accompanying this Prospectus.

TRUSTEES AND OFFICERS

Information regarding the Trustees and executive officers of the Trust is set
forth in the table below. Each Trustee or officer that is an "interested person"
(as defined in the 1940 Act) by virtue of his affiliation with First Tennessee
or ALPS, is indicated by an asterisk (*).

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
TRUSTEES AND OFFICERS
------------------------------------------------------------------------------------------------------------------------------
Name, Address, and Age Position(s) Held Principal Occupation
with Trust During Past 5 Years
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
*JEREMY O. MAY, age 30, Trustee, Mr. May is a Vice President and Director of Mutual Fund
370 17th Street Treasurer and Operations at ALPS, the Administrator and Distributor. Prior to
Denver, CO President joining ALPS, Mr. May was an auditor with Deloitte & Touche LLP
in their Denver office.
------------------------------------------------------------------------------------------------------------------------------
*RUSSELL C. BURK, age 42, Trustee and Mr. Burk is General Counsel of ALPS. Prior to joining ALPS, Mr.
370 17th Street Secretary Burk served as Securities Counsel for Security Life of Denver, a
Denver, CO wholly-owned subsidiary of ING.
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The Trustees of the Trust each receive from the Trust an annual fee of $___ and
a fee in the amount of $___ for attending each regularly scheduled quarterly
meeting of the Trustees and $___ for each unscheduled meeting.

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<PAGE> 30

The officers and trustees of the Trust own less than 1% of the outstanding
shares of any Portfolio.

INVESTMENT ADVISORY AGREEMENTS

The First Horizon Growth & Income Portfolio employs First Tennessee Bank
National Association, Memphis, Tennessee, to furnish investment advisory and
other services to the Portfolio. Under the Investment Advisory and Management
Agreement with each such Portfolio, First Tennessee is authorized to appoint one
or more sub-advisers at First Tennessee's expense. Highland Capital Management
Corp., Memphis, Tennessee, acts as Sub-Adviser to the Growth & Income Portfolio.
Subject to the direction of the Trustees and of First Tennessee, Highland will
direct the investments of the First Horizon Growth & Income Portfolio in
accordance with its investment objective, policies and limitations.

First Tennessee and DMC, Philadelphia, Pennsylvania, act as Co-Advisers to the
First Horizon Capital Appreciation Portfolio. Subject to the direction of the
Trustees and monitoring by First Tennessee, DMC directs the investments of this
Portfolio in accordance with the Portfolio's investment objective, policies and
limitations.

In addition to First Tennessee's and DMC's fees and the fees payable to the
Transfer Agent, Pricing and Accounting Agent, and to the Administrator and
Co-Administrator, each Portfolio pays for all its expenses, without limitation,
that are not assumed by these parties. Each Portfolio pays for typesetting,
printing and mailing of proxy material to existing shareholders, legal expenses,
and the fees of the custodian, auditor and Trustees. Other expenses paid by each
Portfolio include: interest, taxes, brokerage commissions, each Portfolio's
proportionate share of insurance premiums, and costs of registering shares under
federal and state securities laws. Each Portfolio is also liable for such
nonrecurring expenses as may arise, including costs of litigation to which each
Portfolio is a party, and its obligation under the Declaration of Trust to
indemnify its officers and Trustees with respect to such litigation.

For managing the investment and business affairs of the Portfolios, First
Tennessee is entitled to receive a monthly management fee at the annual rate of
.65% and .15% of the First Horizon Growth & Income and First Horizon Capital
Appreciation Portfolios' average net assets, respectively. First Tennessee has
voluntarily agreed to reimburse fund expenses and/or waive a portion of its fee
to the extent necessary for the First Horizon Growth & Income and First Horizon
Capital Appreciation Portfolios to maintain a total expense ratio of not more
than ____%. This waiver may be cancelled at any time.

Under its Investment Advisory and Management Agreement with the First Horizon
Growth & Income Portfolio, First Tennessee is authorized, at its own expense, to
hire sub-advisers to provide investment advice to the Portfolio. As Sub-Adviser,
Highland is entitled to receive from First Tennessee a monthly sub-advisory fee
at the annual rate of .38% of the First Horizon Growth & Income Portfolio's
average net assets. As Co-Adviser to the First Horizon Capital Appreciation
Portfolio, DMC is entitled to receive .70% of that Portfolio's average net
assets up to $50 million and .65% thereafter. Under the terms of Highland's
Sub-Advisory Agreement with First Tennessee and DMC's Investment Advisory and
Management Agreement with the Trust, Highland, subject to the supervision of
First Tennessee, and DMC supervise the day-to-day operations of their respective
Portfolios and provide investment research and credit analysis concerning their
respective Portfolios' investments, conduct a continual program of investment of
their respective Portfolios' assets and maintain the books and records required
in connection with their duties under their agreements. In addition, Highland
and DMC keep First Tennessee informed of the developments materially affecting
each Portfolio. Highland is currently waiving some or all of the fees that it is
entitled to receive from First Tennessee.

CODE OF ETHICS

Each Portfolio permits "Access Persons" as defined by Rule 17j-1 under the 1940
Act to engage in personal securities transactions, subject to the terms of the
Code of Ethics (the "Code") that has been adopted by the Trustees. Access
Persons are required to follow the guidelines established by the Code in
connection with all personal securities transactions and are subject to certain
prohibitions on personal trading. First Tennessee and the Advisers, pursuant to
Rule 17j-1 and other applicable laws, and pursuant to the Code, must adopt and
enforce their own Code of Ethics appropriate to their operations. The Trustees
are required to review and approve the Code of Ethics for First Tennessee, the
Advisers and Distributor.

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<PAGE> 31

First Tennessee and the Advisers are also required to report to the Trustees on
a quarterly basis with respect to the administration and enforcement of such
Code of Ethics, including any violations thereof which may potentially affect
the Portfolios.

ADMINISTRATION AGREEMENT AND OTHER CONTRACTS

ADMINISTRATOR AND DISTRIBUTOR. ALPS is the Administrator and Distributor to each
Portfolio. ALPS, a Colorado corporation, is a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc.

As the Administrator, ALPS assists in each Portfolio's administration and
operation, including, but not limited to, providing various legal and accounting
services in connection with the regulatory requirements applicable to each
Portfolio. For its services as Administrator, Fund Accountant and Transfer
Agent, ALPS is entitled to and receives from each Portfolio a monthly fee at the
annual rate of .20% of average net assets.

First Tennessee serves as the Co-Administrator for each Portfolio. As the
Co-Administrator, First Tennessee assists in each Portfolio's operation,
including, but not limited to, providing non-investment related research and
statistical data and various operational and administrative services. First
Tennessee is entitled to receive from each Portfolio a monthly fee at the annual
rate of .05% of average net assets.

As the Distributor, ALPS receives monthly 12b-1 fees at the annual rate of up to
____% of each Portfolio's average net assets all or a portion of which may be
paid out to insurance companies or their affiliates or others involved in the
indirect distribution of each Portfolio. First Tennessee and its affiliates
neither participate in nor are responsible for the underwriting of portfolio
shares. Consistent with applicable law, affiliates of First Tennessee may
receive commissions or asset-based fees.

TRANSFER AGENT, FUND ACCOUNTING AGENT AND CUSTODIAN. ALPS provides transfer
agent and shareholder services for each Portfolio.

[INSERT NAME OF CUSTODIAN AND ADDRESS]

______________, is Custodian of the assets of the Portfolios. The Custodian is
responsible for the safekeeping of each Portfolio's assets and the appointment
of sub-custodian banks and clearing agencies. For such services, __________ is
entitled to receive a fee from each Portfolio based on its net asset value, plus
out-of-pocket expenses. The Custodian takes no part in determining the
investment policies of the Portfolios or in deciding which securities are
purchased or sold by the Portfolios. The Portfolios, however, may invest in
obligations of the Custodian and may purchase securities from or sell securities
to the Custodian.

ALPS serves as the fund accounting agent for the portfolios. As fund accounting
agent, ALPS calculates the NAV and dividends of each Portfolio and maintains the
general accounting records of each Portfolio.

DISTRIBUTION PLAN. The Trustees have adopted a Distribution Plan on behalf of
each Portfolio pursuant to Rule 12b-1 (the Rule) under the 1940 Act. The Rule
provides in substance that a mutual fund may not engage directly or indirectly
in financing any activity that is intended primarily to result in the sale of
shares of the fund except pursuant to a plan adopted by the fund under the Rule.
The Trustees have adopted the Plans to allow each Portfolio to compensate ALPS
for incurring distribution expenses. ALPS receives a Distribution and Service
fee (12b-1 fee) of up to 0 ____% of the average net assets of each Portfolio.
These fees are in addition to the fees paid to ALPS under the Administration
Agreement. The "Distribution Plan" also recognizes that the Adviser may use its
management fee revenues, as well as its past profits or its resources from any
other source, to pay for expenses incurred in connection with providing services
intended to result in the sale of shares and/or shareholder support services.

The distribution-related services include, but are not limited to, the
following: formulation and implementation of marketing and promotional
activities, such as mail promotions and television, radio, newspaper, magazine
and other mass

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<PAGE> 32

media advertising; preparation, printing and distribution of sales literature;
preparation, printing and distribution of prospectuses of each Portfolio and
reports to recipients other than existing shareholders of each Portfolio;
obtaining such information, analysis and reports with respect to marketing and
promotional activities as ALPS may, from time to time, deem advisable; making
payments to insurance companies, securities dealers and others and providing
training, marketing and support to such companies and dealers and others with
respect to the sale of shares. Each Plan recognizes ALPS may use its fees and
other resources to pay expenses associated with the promotion and administration
of activities primarily intended to result in the sale of shares.

Each Plan has been approved by the Trustees, including the majority of
disinterested Trustees. As required by the Rule, the Trustees carefully
considered all pertinent factors relating to the implementation of the Plans
prior to its approval, and have determined that there is a reasonable likelihood
that each Plan will benefit each Portfolio and its shareholders. To the extent
that the Plans give ALPS greater flexibility in connection with the distribution
of shares of the class, additional sales of shares may result.

The Plans could be construed as compensation plans because ALPS is paid a fixed
fee and is given discretion concerning what expenses are payable under the
Plans. ALPS may spend more for marketing and distribution than it receives in
fees and reimbursements from each Portfolio. However, to the extent fees
received exceed expenses, including indirect expenses such as overhead, ALPS
could be said to have received a profit. (Because ALPS is reimbursed for its
out-of-pocket direct promotional expenses, each Plan also could be construed as
a reimbursement plan. Until the issue is resolved by the SEC, unreimbursed
expenses incurred in one year will not be carried over to a subsequent year). If
after payments by ALPS for marketing and distribution there are any remaining
fees attributable to a Plan, these may be used as ALPS may elect. Since the
amount payable under each Plan will be commingled with ALPS's general funds,
including the revenues it receives in the conduct of its business, it is
possible that certain of ALPS' overhead expenses will be paid out of Plan fees
and that these expenses may include items such as the costs of leases,
depreciation, communications, salaries, training and supplies. Each Portfolio
believes that such expenses, if paid, will be paid only indirectly out of the
fees being paid under the Plan.

DESCRIPTION OF THE TRUST

TRUST ORGANIZATION. The First Horizon Growth & Income and Capital Appreciation
Portfolios are Portfolios of Financial Investors Variable Insurance Trust, an
open-end management investment company organized as a Delaware business trust by
a Declaration of Trust dated ______, ___. The Declaration of Trust permits the
Trustees to create additional Portfolios and Classes. There are two Portfolios
of the Trust.

The assets of the Trust received for the issue or sale of shares of each
Portfolio and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are specially allocated to such Portfolio, and
constitute the underlying assets of such Portfolio. The underlying assets of
each Portfolio are segregated on the books of account, and are to be charged
with the liabilities with respect to such Portfolio and with a share of the
general expenses of the Trust. Expenses with respect to the Trust are to be
allocated in proportion to the asset value of the respective Portfolios except
where allocations of direct expense can otherwise be fairly made. The officers
of the Trust, subject to the general supervision of the Trustees, have the power
to determine which expenses are allocable to a given Portfolio, or which are
general or allocable to all of the Portfolios. In the event of the dissolution
or liquidation of the Trust, shareholders of a Portfolio are entitled to receive
as a class the underlying assets of such Portfolio available for distribution.

SHAREHOLDER AND TRUSTEE LIABILITY. The Declaration of Trust provides that the
Trust shall not have any claim against shareholders except for the payment of
the purchase price of shares and requires that each agreement, obligation, or
instrument entered into or executed by the Trust or the Trustees shall include a
provision limiting the obligations created thereby to the Trust and its assets.
The Declaration of Trust provides for indemnification out of each Portfolio's
property of any shareholders held personally liable for the obligations of each
Portfolio. The Declaration of Trust also provides that each Portfolio shall,
upon request, assume the defense of any claim made against any shareholder for
any act or obligation of a Portfolio and satisfy any judgment thereon. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Portfolio itself would be
unable to meet its obligations. The Trustees believe that, in view of the above,
the risk of personal liability to shareholders is remote.

-16-
<PAGE> 33

The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or wrongdoing, but
nothing in the Declaration of Trust protects a Trustee against any liability to
which he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office.

Insurance companies will be each Portfolio's sole shareholders of record, and
pursuant to the 1940 Act, such shareholders may be deemed to be in control of
the Portfolio. When a shareholder's meeting occurs, each insurance company
solicits and accepts voting instructions from its Variable Contract owners who
have allocated or transferred monies for an investment in the Portfolio as of
the record date of the meeting. Each shareholder then votes the Portfolio's
shares that are attributable to its interests in the Portfolio in which it is
entitled to vote, in proportion to the voting instructions received.

Each Portfolio is available through separate accounts relating to both variable
annuity and variable life insurance contracts. The Portfolios do not currently
foresee any disadvantages to Variable Contract owners arising from offering
their shares to variable annuity and variable life insurance policy separate
accounts, and the Trustees continuously monitors events for the existence of any
material irreconcilable conflict between or among Variable Contract owners.
Material conflicts could result from, for example, (i) changes in state
insurance laws; (ii) changes in federal income tax laws; or (iii) differences in
voting instructions between those given by variable life owners and variable
annuity owners. If a material irreconcilable conflict arises, as determined by
the Board of Trustees, one or more separate accounts may withdraw their
investment in the Portfolio. This could possibly require the Portfolio to sell
securities as disadvantageous prices. Each insurance company will bear the
expenses of establishing separate portfolios for its variable annuity and
variable life insurance separate accounts if such action becomes necessary.
However, ongoing expenses that are ultimately borne by Variable Contract owners
will likely increase due to the loss of economies of scale benefits that can be
provided to separate accounts with substantial assets.

VOTING RIGHTS. Each Portfolio's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the voting and
dividend rights, the right of redemption, and the privilege of exchange are
described in the Prospectus. Shares are fully paid and nonassessable, except as
set forth under the heading "Shareholder and Trustee Liability" above.
Shareholders representing 10% or more of the Trust or a Portfolio may, as set
forth in the Declaration of Trust, call meetings of the Trust or a Portfolio for
any purpose related to the Trust or Portfolio, as the case may be, including, in
the case of a meeting of the entire Trust, the purpose of voting on removal of
one or more Trustees. The Trust or any Portfolio may be terminated upon the sale
of its assets to another open-end management investment company, or upon
liquidation and distribution of its assets, if approved by vote of the holders
of a majority of the outstanding shares of the Trust or that Portfolio. If not
so terminated, the Trust and each Portfolio will continue indefinitely.

INDEPENDENT ACCOUNTANTS. Deloitte & Touche LLP, 555 Seventeenth Street, Suite
3600, Denver, Colorado 80202, serves as the Trust's independent accountant. The
independent accountant examines the annual financial statements for the Trust
and provides other audit, tax, and related services.

FINANCIAL STATEMENTS

There are no financial statements for the Portfolios because they have not
completed a fiscal year of operations.

-17-

<PAGE> 34
PART C. OTHER INFORMATION

<TABLE>
<CAPTION>
Item 23. Exhibits
Exhibit
Number Description
------ -----------
<S> <C> <C>
(a) (1) Declaration of Trust dated July 26, 2000 is filed electronically herewith.

(2) Certificate of Trust is filed electronically herewith.

(b) (1) Bylaws of the Trust dated July 26, 2000 is filed electronically herewith.

(d) (1) Form of Investment Advisory and Management Agreement between Financial Investors
Variable Insurance Trust, on behalf of the Growth and Income Portfolio, and
First Tennessee Bank National Association is filed electronically herewith.

(2) Form of Investment Advisory and Management Agreement between Financial Investors
Variable Insurance Trust, on behalf of the Capital Appreciation Portfolio, and
First Tennessee Bank National Association is filed electronically herewith.

(3) Form of Co-Investment Advisory and Management Agreement between Financial
Investors Variable Insurance Trust, on behalf of the Capital Appreciation
Portfolio, and Delaware Management Company is filed electronically herewith.

(4) Form of Sub-Advisory Agreement between First Tennessee Bank National
Association, on behalf of the Growth and Income Portfolio, and Highland Capital
Management Corp. is filed electronically herewith.

(e) (1) Form of Distribution Agreement between Financial Investors Variable Insurance
Trust and ALPS Mutual Funds Services, Inc. on behalf of all Portfolios is filed
electronically.

(f) Not Applicable.

(g) Custody Agreement between Financial Investors Variable Insurance Trust and
__________dated _______ to be filed by pre-effective amendment.

(h) (1) Form of Transfer Agency Agreement between Financial Investors Variable Insurance
Trust and ALPS Mutual Funds Services, Inc. on behalf of all Portfolios is filed
electronically herewith.
</TABLE>

<PAGE> 35

<TABLE>
<S> <C> <C>
(2) Form of Administration Agreement between Financial Investors Variable Insurance
Trust and ALPS Mutual Funds Services, Inc., on behalf of all Portfolios is filed
electronically herewith.

(3) Form of Administration Agreement, Co-Administrator between Financial Investors
Variable Insurance Trust and First Tennessee Bank National Association, on
behalf of all Portfolios is filed electronically herewith.

(4) Form of Bookkeeping and Pricing Agreement between Financial Investors Variable
Insurance Trust and ALPS Mutual Funds Services, Inc. on behalf of all Portfolios
is filed electronically herewith.

(i) Opinion and Consent of Davis, Graham & Stubbs to be filed by pre-effective amendment.

(j) Opinion and Consent of Deloitte & Touche, LLP, independent accountants to be filed by
pre-effective amendment.

(k) Not Applicable.

(l) Not Applicable.

(m) Not Applicable.

(n) Not Applicable.

(o) Not Applicable.

(p) (1) Code of Ethics for ALPS Mutual Funds Services, Inc. to be filed by
pre-effective amendment.

(2) Code of Ethics for First Tennessee Bank National Association to be
filed by pre-effective amendment.

(3) Code of Ethics for Delaware Management Corporation to be filed by
pre-effective amendment.

(4) Code of Ethics for Highland Capital Management Corporation to be
filed by pre-effective amendment.

(5) Code of Ethics for Financial Investors Variable Insurance Trust
to be filed by pre-effective amendment.

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

Item 24. Persons Controlled by or Under Common Control with Registrant

Not Applicable.
</TABLE>
<PAGE> 36

<TABLE>
<S> <C> <C>
Item 25. Indemnification

Article 8, Section 8.1 of the Declaration of Trust sets forth the reasonable and
fair means for determining whether indemnification shall be provided to any
Trustee or officer. It states, in part, that no personal liability for any debt
or obligation of the Trust shall attach to any Trustee of the Trust. Section
8.5 states that the Registrant shall indemnify any present or past Trustee,
officer, employee, or agent of the Trust to the fullest extent permitted by law
against liability and all expenses reasonably incurred by him in connection with
any claim, action suit or proceeding in which he becomes involved as a party or
otherwise by virtue of his being or having been such trustee, director, officer,
employee, or agent. Additionally, amounts paid or incurred in settlement of
such matters are covered by this indemnification. Indemnification will not be
provided in certain circumstances, however. These include, among others,
instances of willful misfeasance, bad faith, gross negligence, and reckless
disregard of the duties involved in the conduct of the particular person
involved.

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the 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 a 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 Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

Item 26. Business and Other Connections of Investment Manager
</TABLE>

<PAGE> 37

FIRST TENNESSEE BANK NATIONAL ASSOCIATION (FTB) -- INVESTMENT ADVISER

<TABLE>
<CAPTION>
Position Other Business Type of
with FTB Name connections* Business
-------- ---- ------------ --------
<S> <C> <C> <C>

Director Robert C. Blattberg Polk Brothers Distinguished Professor Education
of Retailing
J.L. Kellogg Graduate School
of Management
Northwestern University(1)

Director, Factory Card Outlet Corp.(2) Retail

Director, Golub Corporation(3) Grocery

Director Carlos H. Cantu Senior Chairman, The ServiceMaster Consumer services
Company(4) and Supportive
Management services

Director, Unicom Corporation(5) Utility

Director George E. Cates Chairman of the Board and Chief Real estate
Executive Officer, Mid-America investment trust
Apartment Communities, Inc.(6)

Director, SCB Computer Technology,
Inc.(7)

Director, J. Kenneth Glass Executive Vice President, Director, Bank holding company
President, FTNC(8)
Retail Financial Services

President and Director, Norlen Life Credit life insurance
Insurance Company(8)

Director, FT Mortgage Holding Mortgage company
Corp.(9)

Director, First Horizon Home Loan Mortgage company
Corp.(10)

Director, FT Mortgage Services, Mortgage company
Inc.(11)

Director, Highland Capital Management Investment Advisor
Corp.(12)

Chairman and Director, First Horizon Consumer access/
Strategic Alliances, Inc.(13) discount card
program and finder
</TABLE>

<PAGE> 38

<TABLE>
<S> <C> <C> <C>
Director, First Tennessee Merchant Merchant processing
Services, Inc.(14)

Director, Federal Flood Certification Flood insurance
Corp.(15)

Director, FT Reinsurance Company(16) Insurance

Director, Martin & Company(17) Investment adviser

Director, First Horizon Asset Securitization
Securities, Inc.(18) conduit

Director, FT Real Estate Information Holding company
Mortgage Solutions Holdings, Inc.(19)

Director, Vice President, FT Real Holding company
Estate Information Mortgage
Solutions, Inc.(20)

Director James A. Haslam, III Chief Executive Officer, Director, Retail operator of
Pilot Corporation(21) convenience stores
and travel centers

Director, Ruby Tuesday, Inc.(22) Restaurant

President, Chairman of the Ralph Horn President, Chairman of the Board, Bank holding company
Board, Chief Executive Chief Executive Officer and Director,
Officer and Director FTNC(8)

Director, Harrah's Entertainment, Casino, entertainment
Inc.(23)

Director Mid-America Apartment Real estate
Communities, Inc.(6) investment trust

Director, President, John C. Kelley, Jr. Executive Vice President, Director, Bank holding company
Business Financial FTNC(8)
Services/
Memphis Financial
Services
</TABLE>

<PAGE> 39

<TABLE>
<S> <C> <C> <C>
Director, President, Check Check processing and
Consultants, Inc.(8) related services

Director, Check Consultants Company Check processing and
of Tennessee(8) related services

Director, First Tennessee Housing Public welfare
Corporation(24) investments

Director, First Tennessee Equipment Equipment financing
Finance Corporation(25)

Director, President, First Express Check processing
Remittance Processing, Inc.(26)

Director, Hickory Capital Venture capital
Corporation(27)

Director, Hickory Venture Capital Venture capital
Corp.(28)

Director R. Brad Martin Chairman of the Board, Chief Retail
Executive Officer, Saks,
Incorporated(29)

Director, Harrah's Entertainment Casino, entertainment
Inc.(23)

Director, Pilot Corporation(21) Retail operator of
convenience stores
and travel centers

Director Joseph Orgill, III Chairman of the Board, West Union Distributor and
Corporation(30) manufacturer for
construction industry

Director, Chairman of the Board, Wholesale hardware
Orgill, Inc.(31) distributor

Director, Mallory Group(32) Warehousing,
distribution and
transportation
</TABLE>

<PAGE> 40

<TABLE>
<S> <C> <C> <C>
Director Vicki R. Palmer Senior Vice President and Treasurer Bottler of soft
and Special Assistant to the CEO, drink products
Coca Cola Enterprises, Inc.(33)

Director Michael D. Rose Director, Nextera Enterprises, Business consulting
Inc.(34)

Former Director, General Mills, Food processing
Inc.(35)

Former Director, Ashland Inc.(36) Oil company

Director, Darden Restaurants, Restaurant
Inc.(37)

Director, Stein Mart, Inc.(38) Retail

Director, FelCor Lodging Trust, Hotel
Inc.(39)

Director, ResortQuest International, Vacation property
Inc.(40) management

Director William B. Sansom Chairman of the Board and Chief Wholesale distributor
Executive Officer, The H.T. Hackney
Company(41)

Director, Martin Marietta Materials, Construction
Inc.(42) aggregate materials
producer

Director, Astec Industries, Inc.(43) Construction
aggregate materials
producer

Executive Vice President, Susan Schmidt Bies Executive Vice President, Auditor, Bank holding company
Auditor FTNC(8)

Executive Vice President Harry A. Johnson, III Executive Vice President and General Bank holding company
and General Counsel Counsel of FTNC(8)
</TABLE>

<PAGE> 41

<TABLE>
<S> <C> <C> <C>
Executive Vice President John P. O'Connor, Jr. Executive Vice President and Chief Bank holding company
and Chief Credit Officer Credit Officer of FTNC(8)

Director, TSMM Corporation(44) Real Estate

Director, JPO, Inc.(45) Real Estate

Director, First Tennessee Securities Broker Dealer
Corp.(46)

Executive Vice Sarah Meyerrose Executive Vice President Employee Bank holding company
President-Employee Services Services of FTNC(8)

Executive Vice President, Elbert L. Thomas, Jr. Executive Vice President and Chief Bank holding company
Chief Financial Officer Financial Officer of FTNC(8)

Director, First Tennessee ABS, REIT/REMIC
Inc.(47)

Director, FT Real Estate Securities REIT/REMIC
Company, Inc.(48)

Director, FT Real Estate Securities REIT/REMIC
Holding Company, Inc.(49)

Executive Vice President, Charles Burkett Director, Highland Capital Management Investment Adviser
Affluent Market Manager Corp.(12)

Director, First Tennessee Brokerage, Broker Dealer
Inc.(50)

Director, FT Insurance Corporation(51) Insurance

Director, First Horizon Insurance Insurance
Services, Inc.(52)

Director, Martin & Co., Inc.(17) Investment adviser

Executive Vice President David L. Berry None

Executive Vice President David B. Lantz None
</TABLE>

<PAGE> 42

<TABLE>
<S> <C> <C>
Senior Vice President Wayne C. Marsh None

Senior Vice President John Curtis None

Senior Vice President Deborah McDonald None

Senior Vice President Yvonne Watson None

Senior Vice President C. Douglas Kelso None

Senior Vice President David M. Taylor None

Senior Vice President Steven J. McNally None

Senior Vice President Scott Bovee None

Senior Vice President Maureen MacIver None

Senior Vice President Otis M. Clayton None

Vice President Suzanne Donaldson None

Vice President Craig Harris None

Vice President Edward C. Dellinger None

Vice President Claudette S. Sanders None

Vice President John Barringer None

Vice President Robert Johnston None

Trust Officer Roxanne Morris None

Chairman and CEO First Larry B. Martin Director, Martin & Co., Inc.(17) Investment Adviser
Tennessee Bank-Knoxville

President, First Tennessee Lew Weems Director, Martin & Co., Inc.(17) Investment Adviser
Bank-Knoxville
</TABLE>

<PAGE> 43

NOTES:

* All directors of FTB are also directors of its parent, First Tennessee
National Corporation, which controls FTB. Messrs. Glass, Horn, Johnson, Keen,
Kelley, Lewis, O'Connor and Thomas and Ms. Bies and Ms. Meyerrose are considered
executive officers of FTNC.

----------
<TABLE>
<S> <C>
(1) J.L. Kellogg Graduate School of Management, 875 N. Michigan Ave., Suite 2945, Chicago, IL 60611

(2) Factory Card Outlet Corp., 745 Birbinal Drive, Bensenville, IL 60106-1212

(3) Golub Corporation, P.O. Box 1074, Schenectady, NY 12301

(4) ServiceMaster Company, One ServiceMaster Way, Downers Grove, IL 30515

(5) Unicom Corporation, 1 First National Plaza, Chicago, IL 60690

(6) Mid-America Apartment Communities, Inc., 6584 Poplar Ave., Ste. 340, Memphis, TN 38138

(7) SCB Computer Technology, Inc., 3800 Forrest Hill-Irene, Suite 100, Memphis, TN 38125

(8) First Tennessee Bank National Association and First Tennessee National Corporation, 165 Madison Avenue, Memphis, TN 38103

(9) FT Mortgage Holding Corp., 2974 LBJ Freeway, Dallas, TX 75234

(10) First Horizon Home Loan Corporation, 165 Madison Ave., Memphis, TN 38103

(11) FT Mortgage Services, Inc., 165 Madison Ave., Memphis, TN 38103

(12) Highland Capital Management Corp., 6077 Primacy Parkway, Suite 228, Memphis, TX 38117

(13) First Horizon Strategic Alliances, Inc., 1700 Rambling Road, Richmond, VA 23235

(14) First Tennessee Merchant Services, Inc., 300 Court Ave., Memphis, TN 38103

(15) Federal Floor Certification Corporation, 6220 Gaston Ave., Dallas, TX 75214

(16) FT Reinsurance Company, 7 Burlington Square, 6th Floor, Burlington, VT 05401

(17) Martin & Company, Two Centre Square, 625 S. Gay Street, Suite 200, Knoxville, TN 37902-1669

(18) First Horizon Asset Securities, 2974 LBJ Freeway, Dallas, TX 75234

(19) FT Real Estate Securities Holding Company, Inc., 165 Madison Ave., Memphis, TN 38103

(20) First Tennessee Real Estate Information Mortgage Solutions, Inc., 165 Madison Ave., Memphis, TN 38103

(21) Pilot Corporation, 5508 Lonas Road, Knoxville, TN 37909

(22) Ruby Tuesday, Inc., 150 West Church Ave., Maryville, TN 37801

(23) Harrah's Entertainment, Inc. 1023 Cherry Road, Memphis, TN 38117

(24) First Tennessee Housing Corporation, 165 Madison Ave., Memphis, TN 38103

(25) First Tennessee Equipment Finance Corporation, 165 Madison Ave., Memphis, TN 38103

(26) First Express Remittance Processing, 165 Madison Ave., Memphis, TN 38103

(27) Hickory Venture Capital Corporation, 200 West Court Square, Suite 100, Huntsville, AL 35801

(28) Hickory Capital Corporation, 200 West Court Square, Suite 100, Huntsville, AL 35801

(29) Saks, Incorporated, 5810 Shelby Oaks Drive, Memphis, TN 38134

(30) West Union Corporation, 35 Union Ave., Suite 300, Memphis, TN 38103

(31) Orgill, Inc., 2100 Latham Street, Memphis, TN 38109

(32) Mallory Group, 4294 Sweeney Road, Memphis, TN 38118

(33) Coca Cola Enterprises, Inc., 2500 Windy Ridge Pkwy, Marietta, GA 30067

(34) Nextera Enterprises, Inc., One Cranberry Hill, Lexington, MA 02421

(35) General Mills, Inc., 9200 Wayzata Blvd., Minneapolis, MN 55426

(36) Ashland Co., 2351 Channel Ave., Memphis, TN

(37) Darden Restaurants, Inc., 5900 Lake Ellenor Drive, Orlando, FL 32809

(38) Stein Mart, Inc., 1200 Riverplace Blvd., Jacksonville, FL 32207

(39) FelCor Lodging Trust, Inc., 545 East John Carpenter Freeway, Suite 1300, Irving, TX 75062-3933

(40) ResortQuest International, Inc., 530 Oak Court Drive, #360, Memphis, TN 38117

(41) The H.T. Hackney Company, Fidelity Bldg., 502 S. Gay Street, Suite 300, Knoxville, TN 37902

(42) Martin Marietta Materials, Inc., P.O. Box 30013, Raleigh, NC 27622-0013

(43) Astec Industries, Inc., P.O. Box 72787, Chattanooga, TN 37407

(44) TSMM Corporation, 165 Madison Ave., Memphis, TN 38103

(45) JPO, Inc., 165 Madison Ave., Memphis, TN 38103

(46) First Tennessee Securities Corp., 845 Crossover Lane, Suite 150, Memphis, TN 38117

(47) First Tennessee ABS, Inc., P.O. Box 249, Springdale, AR 72765

(48) FT Real Estate Securities Company, Inc., P.O. Box 249, Springdale, AR 72765

(49) FT Real Estate Securities Holding Company, Inc., P.O. Box 249, Springdale, AR 72765

(50) First Tennessee Brokerage, Inc., 530 Oak Court Drive, Memphis, TN 38117

(51) FT Insurance Corporation, 530 Oak Court Drive, Memphis, TN 38117

(52) First Horizon Insurance Services, Inc., 530 Oak Court Drive, Memphis, TN 38117

(53) AMX Corporation dba AMA Irrigation, P.O. Box 356, Marion, AR 72364
</TABLE>

<PAGE> 44

HIGHLAND CAPITAL MANAGEMENT CORP. (HIGHLAND)
6077 PRIMACY PARKWAY, MEMPHIS, TN

<TABLE>
<CAPTION>
Position Other Business
with Highland Name Connections
------------- ---- -----------
<S> <C> <C>

Director, Executive Vice President, Treasurer, Edward J. Goldstein None
Secretary

Director, President Steven Wishnia None

Director James M. Weir None

Director, Chairman of the Board Paul H. Berz None

Director, Senior Vice President David L. Thompson None

Director Charles Thomas Whitman(1)(2) Director, NexAir, LLC

Director J. Kenneth Glass see FTB listing

Director Charles Burkett see FTB listing

Senior Vice President Steven T. Ashby None

Senior Vice President James R. Turner None

Vice President Mark Cronin None
</TABLE>

----------
(1) Previously, Executive Vice President of Highland Capital Management Corp.,
6077 Primacy Parkway, Memphis, TN 38119

(2) NexAir, LLC, 1385 Corporate Avenue, Memphis, TN 38186-1182, distributor of
industrial gases, welding supplies and medical products

DELAWARE MANAGEMENT COMPANY
2005 Market Street
Philadelphia, Pennsylvania

Delaware Management Company is organized as a series of Delaware
Management Business Trust ("DMBT"), a business trust organized under the laws of
the State of Delaware. The list required by this Item 26 of officers and
directors of DMBT, together with information as to any other business,
profession, vocation or employment of a substantial nature engaged in by such
officers and directors during the past two years, is incorporated by reference
to Schedules A and D of Form ADV, filed by DMBT pursuant to the Investment
Advisers Act of 1940 (SEC File No. 801-32108).

<PAGE> 45

Item 27. Principal Underwriters

(1) The sole principal underwriter for the Fund is ALPS
Mutual Funds Services, Inc. which acts as distributor
for the Registrant and the following other funds:
Westcore Trust, Financial Investors Trust, First
Funds, Stonebridge Growth Fund, Inc., Stonebridge
Aggressive Growth Fund, Inc., SPDR Trust, MidCap SPDR
Trust, DIAMONDS Trust, Select Sector SPDR Trust,
Nasdaq 100 Trust, Firsthand Funds, and Holland
Balanced Fund.

(b) To the best of Registrant's knowledge, the directors
and executive officers of ALPS Mutual Funds Services,
Inc., the distributor for Registrant, are as follows:

<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Positions and Officers with
Business Address* Registrant Underwriter
----------------- ---------- -----------
<S> <C> <C>
W. Robert Alexander None Chairman, Chief Executive Officer
and Secretary

Thomas A. Carter None Chief Financial Officer

Edmund J. Burke None President and Director

Jeremy May Trustee Vice President

Russell C. Burk Trustee General Counsel

Robert Szydlowski None Vice President

Rick A. Pederson None Director

Chris Woessner None Director
</TABLE>

* All Addresses are 370 Seventeenth Street, Suite 3100, Denver, Colorado 80202

Item 28. Location of Accounts and Records

First Tennessee Bank National Association, located at
530 Oak Court Dr., Suite 200, Memphis, Tennessee,
Highland Capital Management Corp., located at 6011
Privacy Parkway, Suite 228, Memphis, Tennessee,
Delaware Management Company, located at 2005 Market
Street, Philadelphia, Pennsylvania, and ALPS Mutual
Funds Services, Inc., located at 370 17th Street,
Denver, Colorado, will maintain physical possession
of each such account, book or other documents of the
Trust, except for those documents relating to the
custodial records maintained by the Trust's
Custodian, [name of custodian], [address].

Item 29. Management Services

<PAGE> 46

Not Applicable.

Item 30. Undertakings

The Registrant, on behalf of each Portfolio
undertakes, provided the information required by Item
5A is contained in the Annual Report, to furnish each
person to whom a Prospectus has been delivered, upon
their request and without charge, a copy of the
Registrant's latest annual report to shareholders.

<PAGE> 47

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and Rule 485(a)
thereunder and the Investment Company Act of 1940, the Registrant certifies that
it has duly caused this Registration Statement to be signed on its behalf by the
undersigned, hereunto duly authorized, in the City of Denver, and State of
Colorado, on the 28th day of November, 2000.

FINANCIAL INVESTORS VARIABLE INSURANCE TRUST

By: /s/Russell C. Burk
---------------------------
Russell C. Burk, Trustee

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 dates indicated.

/s/Russell C. Burk
-------------------------------
Russell C. Burk Trustee November 28, 2000

/s/Jeremy O. May
-------------------------------
Jeremy O. May Trustee November 28, 2000

<PAGE> 48

EXHIBIT INDEX

<TABLE>
<CAPTION>
Item 23. Exhibits
Exhibit
Number Description
------ -----------
<S> <C> <C>
(a) (1) Declaration of Trust dated July 26, 2000 is filed electronically herewith.

(2) Certificate of Trust is filed electronically herewith.

(b) (1) Bylaws of the Trust dated July 26, 2000 is filed electronically herewith.

(e) (1) Form of Distribution Agreement between Financial Investors Variable Insurance
Trust and ALPS Mutual Funds Services, Inc. on behalf of all Portfolios is filed
electronically.

(f) Not Applicable.

(g) Custody Agreement between Financial Investors Variable Insurance Trust and
__________dated _______ to be filed by pre-effective amendment.

<PAGE> 49

(4) Form of Bookkeeping and Pricing Agreement between Financial Investors Variable
Insurance Trust and ALPS Mutual Funds Services, Inc. on behalf of all Portfolios
is filed electronically herewith.

(i) Opinion and Consent of Davis, Graham & Stubbs to be filed by pre-effective amendment.

(j) Opinion and Consent of Deloitte & Touche, LLP, independent accountants to be filed by
pre-effective amendment.

(k) Not Applicable.

(l) Not Applicable.

(m) Not Applicable.

(n) Not Applicable.

(o) Not Applicable.

(p) (1) Code of Ethics for ALPS Mutual Funds Services, Inc. to be filed by
pre-effective amendment.

(2) Code of Ethics for First Tennessee Bank National Association to be
filed by pre-effective amendment.

(3) Code of Ethics for Delaware Management Corporation to be filed by
pre-effective amendment.

(4) Code of Ethics for Highland Capital Management Corporation to be
filed by pre-effective amendment.

(5) Code of Ethics for Financial Investors Variable Insurance Trust
to be filed by pre-effective amendment.
</TABLE>