RELIASTAR BANKERS SECURITY LIFE INSURANCE COMPANY
(FORMERLY KNOWN AS BANKERS SECURITY LIFE INSURANCE SOCIETY)
4601 FAIRFAX DRIVE
ARLINGTON, VIRGINIA 22203
INDIVIDUAL FLEXIBLE PAYMENT VARIABLE ANNUITY CONTRACTS
ISSUED BY
RELIASTAR BANKERS SECURITY VARIABLE ANNUITY FUNDS P
AND Q (FORMERLY KNOWN AS BANKERS SECURITY VARIABLE
ANNUITY FUNDS P AND Q)
SUPPLEMENT TO PROSPECTUS DATED APRIL 30, 1996
The general purpose of this supplement is to provide information about two
additional investment options available under Separate Accounts P and Q. The
assets of each new Sub-Account will be invested exclusively in shares of (1)
Northstar Growth Fund, whose adviser is Northstar Investment Management
Corporation, an affiliate of the ReliaStar Bankers Security Life Insurance
Company ("Company"). Navellier Fund Management Inc. serves as a subadviser and
its professional staff selects and supervises the investments in the Fund's
portfolio; or (2) Fidelity Contrafund Portfolio, managed by Fidelity Research
and Management Company, an unaffiliated investment adviser.
Effective October 3, 1996, the prospectus for ReliaStar Bankers Security
Variable Annuity Funds P and Q is amended as follows:
On page 1, the information related to investment choices is changed to read:
The Owner of the Contract directs the Company to allocate such net purchase
payments to one or more of nineteen accounts ("Sub-Accounts") that are
established within each Separate Account. The Owner may also accumulate Contract
values on a fixed basis in a Fixed Account. Each Sub-Account invests exclusively
in shares of one of the following portfolios of the mutual funds (collectively
the "Funds"):
<TABLE>
<CAPTION>
<S> <C> <C>
NORTHSTAR VARIABLE TRUST OPPENHEIMER VARIABLE ACCOUNT FUNDS
- GROWTH FUND - CAPITAL APPRECIATION FUND
- INCOME AND GROWTH FUND - GROWTH FUND
- HIGH YIELD BOND FUND - MULTIPLE STRATEGIES FUND
- GLOBAL SECURITIES FUND
FIDELITY INSURANCE PRODUCTS FUND AND - BOND FUND
VARIABLE INSURANCE PRODUCTS FUND II - STRATEGIC BOND FUND
- GROWTH PORTFOLIO - HIGH INCOME FUND
- CONTRAFUND PORTFOLIO - MONEY FUND
- EQUITY-INCOME PORTFOLIO
- INDEX 500 PORTFOLIO ALLIANCE VARIABLE PRODUCTS SERIES FUND
- ASSET MANAGER PORTFOLIO - GROWTH AND INCOME PORTFOLIO
- INVESTMENT GRADE BOND PORTFOLIO - SHORT-TERM MULTI-MARKET PORTFOLIO
</TABLE>
THE DATE OF THIS SUPPLEMENT IS OCTOBER 3, 1996.
<PAGE>
On page 4, the paragraph entitled "ALLOCATION OF PURCHASE PAYMENTS" is changed
to read:
"ALLOCATION OF PURCHASE PAYMENTS
Purchase payments, after deductions for any applicable premium taxes, are
allocated to ReliaStar Bankers Security Variable Annuity Fund P ("Separate
Account P") for Non-Qualified Plans and ReliaStar Bankers Security Variable
Annuity Fund Q ("Separate Account Q") for Qualified Plans. A Contract Owner
directs the Company to allocate such net purchase payments to up to nineteen
accounts ("Sub-Accounts") that are established within each Separate Account
and/or the Fixed Account. Shares of eight of the portfolios of Oppenheimer
Variable Account Funds, shares of two of the portfolios of the Alliance Variable
Products Series Fund, Inc., shares of six of the portfolios of the Fidelity
Variable Insurance Products Fund and Fund II and shares of three of the
portfolios of the Northstar Variable Trust are available to each Separate
Account as funding vehicles for the Contracts: Oppenheimer Money Fund ("Money
Fund"), Oppenheimer High Income Fund ("High Income Fund"), Oppenheimer Bond Fund
("Bond Fund"), Oppenheimer Strategic Bond Fund ("Strategic Bond Fund"),
Oppenheimer Capital Appreciation Fund ("Capital Appreciation Fund"), Oppenheimer
Growth Fund ("Growth Fund"), Oppenheimer Multiple Strategies Fund ("Multiple
Strategies Fund"), Oppenheimer Global Securities Fund ("Global Securities
Fund"), Alliance Growth and Income Portfolio ("Growth and Income Portfolio"),
Alliance Short-Term Multi-Market Portfolio ("Short-Term Multi-Market
Portfolio"), Fidelity Contrafund Portfolio ("Contrafund Portfolio"), Fidelity
Equity-Income Portfolio ("Equity-Income Portfolio"), Fidelity Growth Portfolio
("Growth Portfolio"), Fidelity Investment Grade Bond Portfolio ("Investment
Grade Bond Portfolio"), Fidelity Asset Manager Portfolio ("Asset Manager
Portfolio"), Fidelity Index 500 Portfolio ("Index 500 Portfolio"), Northstar
Growth Fund, Northstar Income and Growth Fund ("Income and Growth Fund") and
Northstar High Yield Bond Fund ("High Yield Bond Fund") (collectively the
"Funds"). Each Fund is a series of a no-load, diversified, open-end investment
company whose shares are not sold directly or indirectly to the general public
but are available only through the purchase of a contract issued by the Company
or of a variable annuity contract or variable life insurance policy issued by
another insurance company. (See the prospectus of each of the Funds for a
discussion of the risks in connection with the use of shares of the Funds as the
investment medium for annuity contracts or insurance policies issued by another
insurance company.) "
On page 5, the paragraph entitled "INVESTMENT OBJECTIVES OF THE FUNDS" is
changed to read:
"INVESTMENT OBJECTIVES OF THE FUNDS
The investment objective of the MONEY FUND is to seek the maximum current
income from investments in "money market" securities that is consistent with low
capital risk and the maintenance of liquidity. The investment objective of the
HIGH INCOME FUND is to earn a high level of current income by investing in a
diversified portfolio of high yield, fixed income securities (debt issues and
preferred stock) believed by this Fund's management not to involve undue risk.
Such securities, commonly known as "junk bonds", may be considered to be
speculative, are subject to a greater risk of loss of principal, and ordinarily
include those in the lower rating categories of the established rating services.
This Fund may not be appropriate for all retirement programs. Purchasers should
carefully assess the risks associated with an investment in this Fund. For a
description of risk factors of the High Income Fund, please read the
accompanying Prospectus for the Oppenheimer Variable Account Funds under the
heading "Investment Policies - High Income Fund - Risk Factors" of that
Prospectus. The BOND FUND primarily seeks a high level of current income from
investments in high yield fixed-income securities rated "Baa" or better by
Moody's or "BBB" or better by Standard & Poor's. Secondarily, this Fund seeks
capital growth
2
when consistent with its primary objective. The STRATEGIC BOND FUND seeks a high
level of current income principally from interest on debt securities and seeks
to enhance such income by writing covered call options on debt securities. The
Fund intends to invest principally in: (i) foreign government and corporate debt
securities, (ii) U.S. Government securities, and (iii) lower-rated high yield
domestic debt securities, commonly known as "junk bonds", which are subject to a
greater risk of loss of principal and nonpayment of interest than higher-rated
securities. This Fund's investments may be considered to be speculative. The
investment objective of the CAPITAL APPRECIATION FUND is to seek capital
appreciation through investment in securities of "growth type" companies or in
special situations or cyclical industries when its management believes they
present opportunities for capital growth. The GROWTH FUND seeks to achieve
capital appreciation by investing in securities of well-known established
companies. The MULTIPLE STRATEGIES FUND seeks a total investment return (which
includes current income and capital appreciation in the value of its shares)
from investments in common stocks and other equity securities, bonds and other
debt securities, and "money market" securities. The GLOBAL SECURITIES FUND seeks
long-term capital appreciation by investing a substantial portion of assets in
securities of foreign issuers, "growth-type" companies, cyclical industries and
special situations which are considered to have appreciation possibilities.
Current income is not an objective. The GROWTH AND INCOME PORTFOLIO seeks to
balance the objectives of reasonable current income and reasonable opportunities
for appreciation through investments primarily in dividend-paying common stocks
of good quality. The SHORT-TERM MULTI-MARKET PORTFOLIO seeks the highest level
of current income, consistent with what the Fund's Adviser considers to be
prudent investment risk, that is available from a portfolio of high-quality debt
securities having remaining maturities of not more than three years. The
CONTRAFUND PORTFOLIO seeks capital appreciation by investing in equity
securities of companies that are believed by the investment adviser to be
undervalued due to an overly pessimistic appraisal by the public. The Fund
usually invests primarily in common stock and securities convertible into common
stock, but it has the flexibility to invest in any type of security that may
produce capital appreciation. The Fund's strategy can lead to investments in
small and medium-sized companies, which carry more risk than larger ones, and
may be more susceptible to setbacks or downturns. The investment objective of
the EQUITY-INCOME PORTFOLIO is to seek reasonable income by investing primarily
in income-producing equity securities. In choosing these securities the
Investment Adviser will also consider the potential for capital appreciation.
The Fund's goal is to achieve a yield which exceeds the composite yield on the
securities comprising the Standard & Poor's 500 Composite Stock Price Index. The
investment objective of the GROWTH PORTFOLIO is to seek to achieve capital
appreciation. This Fund normally will purchase common stocks, although its
investments are not restricted to any one type of security. Capital appreciation
may also be found in other types of securities, including bonds and preferred
stocks. The emphasis on a particular security will depend on the Adviser's
interpretation of underlying economic, financial and security trends. The Fund
does not place any emphasis on dividend income from its investments except when
The Adviser believes this income will have a favorable influence on the market
value of the security. The investment objective of the INVESTMENT GRADE BOND
PORTFOLIO is to seek as high a level of current income as is consistent with the
preservation of capital. Under normal conditions, it invests at least 65% of the
Fund's total assets in investment-grade fixed-income securities such as bonds,
notes and debentures. The Fund's dollar-weighted average portfolio maturity may
not exceed ten years. The Fund may purchase individual securities with
maturities of more than ten years, as long as its average maturity remains
within this limit. The investment objective of the ASSET MANAGER PORTFOLIO is to
seek to obtain high total return with reduced risk over the long-term by
allocating its assets among domestic and foreign stocks, bonds and short-term
fixed-income instruments. The Adviser will normally allocate the Fund's assets
among the three asset classes within the following investment
3
parameters: 0-70% in short-term instruments; 20-60% in bonds (intermediate to
long-term debt securities); and 10-60% in stocks (equities). The investment
objective of the INDEX 500 PORTFOLIO is to seek investment results that
correspond to the total return (i.e., the combination of capital changes and
income) of common stocks publicly traded in the United States, as represented by
the Standard & Poor's Composite Stock Price Index (the S&P 500 or Index), while
keeping transaction costs and other expenses low. The investment objective of
NORTHSTAR GROWTH FUND is to seek long-term capital growth primarily through
investments in equity securities diversified over industries and companies which
are believed to provide above-average potential for capital appreciation. The
Fund will normally invest in common stocks, preferred stocks, securities
convertible to common stock, and warrants and options to purchase common stock.
The Fund may also invest in non-equity securities, such as corporate bonds and
U.S. Government obligations, when, in the opinion of the Fund's Adviser or
Subadviser, prevailing market, financial or economic conditions warrant. The
investment objective of the INCOME AND GROWTH FUND is to seek current income
balance with the objective of achieving capital appreciation. Under normal
circumstances, the Fund will invest at least 65% of its total assets in
income-producing securities. Securities are also purchased on the basis of
fundamental attraction regarding capital appreciation prospects. In this way,
income is "balanced" with capital. To achieve its objective, the Fund will
invest in common and preferred stocks of domestic and foreign issuers that have
prospects for dividend income and growth of capital, as well as selected
fixed-income securities of domestic and foreign private and government issuers.
The investment objective of the HIGH YIELD BOND FUND is to seek high income.
Under normal market conditions, the Fund will seek to achieve its investment
objective by investing at least 65% of its total assets in higher-yielding,
lower-rated U.S. dollar-denominated debt securities, which may involve high risk
and are predominantly speculative in character. These securities are commonly
known as "junk bonds". For further descriptions of each of these Funds, see the
section "The Funds" in this Prospectus and the accompanying Prospectus for each
of the Funds, which describes more fully each Fund and which should be read
before investment. There is no assurance that the investment objectives of any
of these Funds will be met."
4
<PAGE>
The "Fee Table" found on pages 8 and 9 is changed to read:
"FEE TABLE
CONTRACT OWNER TRANSACTION EXPENSES
Sales load imposed on purchases (as a percentage of purchase payments)........0%
Contingent Deferred Sales Load (as a percentage of purchase payments) when:
a. Surrendered purchase payments less than eight years old:
YEARS RATE YEARS RATE
0-2 7% 5-6 3%
2-3 6% 6-7 2%
3-4 5% 7-8 1%
4-5 4% 8+ 0%
b. Purchase payments more than 8 years old...............................0%
Charge for transfers among sub-accounts.......................................0%
ANNUAL CONTRACT FEE..........................................................$30
SEPARATE ACCOUNT ANNUAL EXPENSES
Mortality and expense risk charge (as percentage of the average
Sub-Account value).................... ...............................1.25%
Account Fees and Expenses................................................0%
Total Separate Account Annual Expenses................................1.25%
FUND ANNUAL CHARGES AND EXPENSES (AS PERCENTAGE OF PORTFOLIO'S AVERAGE NET
ASSETS) PAID BY EACH FUND IN ITS FISCAL YEAR ENDED DECEMBER 31, 1995. TOTAL
EXPENSES FOR THE FUNDS ARE RESTATED TO REFLECT CURRENT MANAGEMENT CHARGES.
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL FUND
FEES EXPENSES ANNUAL EXPENSES
<S> <C> <C> <C>
OPPENHEIMER MONEY FUND .45% .06% .51%
OPPENHEIMER HIGH INCOME FUND .75% .06% .81%
OPPENHEIMER BOND FUND .75% .05% .80%
OPPENHEIMER STRATEGIC BOND FUND .75% .10% .85%
OPPENHEIMER CAPITAL APPRECIATION FUND .74% .04% .78%
OPPENHEIMER GROWTH FUND .75% .04% .79%
OPPENHEIMER MULTIPLE STRATEGIES FUND .74% .03% .77%
OPPENHEIMER GLOBAL SECURITIES FUND .74% .15% .89%
ALLIANCE GROWTH AND INCOME PORTFOLIO .63% .16% .79%
ALLIANCE SHORT-TERM MULTI-MARKET PORTFOLIO .20% .75% .95%
FIDELITY CONTRAFUND PORTFOLIO .61% .11% .72%
FIDELITY EQUITY INCOME PORTFOLIO .51% .10% .61%
FIDELITY GROWTH PORTFOLIO .61% .09% .70%
FIDELITY INVESTMENT GRADE BOND PORTFOLIO .45% .14% .59%
FIDELITY ASSET MANAGER PORTFOLIO .71% .08% .79%
FIDELITY INDEX 500 PORTFOLIO 0% .28% .28%
NORTHSTAR GROWTH FUND .75% .05% .80%
NORTHSTAR INCOME AND GROWTH FUND .75% .05% .80%
NORTHSTAR HIGH YIELD BOND FUND .75% .05% .80%
</TABLE>
5
<PAGE>
EXAMPLES
If you surrender your contract at the end of the applicable time period:
You would pay the following expenses on a $1,000 investment, assuming 5%
annual return on assets:
SUBACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------
MONEY FUND $ 89 119 142 220
HIGH INCOME FUND $ 92 129 157 252
BOND FUND $ 92 128 157 251
STRATEGIC BOND FUND $ 93 130 159 256
CAPITAL APPRECIATION $ 92 128 156 249
GROWTH FUND $ 92 128 156 250
MULTIPLE STRATEGIES $ 92 127 155 248
GLOBAL SECURITIES $ 93 131 162 260
GROWTH AND INCOME PORTFOLIO $ 92 127 154 246
SHORT-TERM MULTI-MARKET $ 94 133 165 267
CONTRAFUND PORTFOLIO $ 91 126 153 243
EQUITY INCOME PORTFOLIO $ 90 122 147 231
GROWTH PORTFOLIO $ 91 125 152 241
INVESTMENT GRADE BOND PORTFOLIO $ 90 122 146 229
ASSET MANAGER PORTFOLIO $ 92 128 156 250
INDEX 500 PORTFOLIO $ 87 112 130 195
NORTHSTAR GROWTH FUND $ 92 128 157 251
INCOME AND GROWTH FUND $ 92 128 157 251
HIGH YIELD BOND FUND $ 92 128 157 251
If you annuitize at the end of the applicable time period:
You would pay the following expenses on a $1,000 investment, assuming 5%
annual return on assets:
SUBACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------
MONEY FUND $ 89 119 102 220
HIGH INCOME FUND $ 92 129 117 252
BOND FUND $ 92 128 117 251
STRATEGIC BOND FUND $ 93 130 119 256
CAPITAL APPRECIATION $ 92 128 116 249
GROWTH FUND $ 92 128 116 250
MULTIPLE STRATEGIES $ 92 127 115 248
GLOBAL SECURITIES $ 93 131 122 260
GROWTH AND INCOME PORTFOLIO $ 92 127 114 246
SHORT-TERM MULTI-MARKET $ 94 133 125 267
CONTRAFUND PORTFOLIO $ 91 126 113 243
EQUITY INCOME PORTFOLIO $ 90 122 107 231
GROWTH PORTFOLIO $ 91 125 112 241
INVESTMENT GRADE BOND PORTFOLIO $ 90 122 106 229
ASSET MANAGER PORTFOLIO $ 92 128 116 250
INDEX 500 PORTFOLIO $ 87 112 90 195
NORTHSTAR GROWTH FUND $ 92 128 117 251
INCOME AND GROWTH FUND $ 92 128 117 251
HIGH YIELD BOND FUND $ 92 128 117 251
6
<PAGE>
If you do not surrender your contract:
You would pay the following expenses on a 1,000 investment, assuming 5%
annual return on assets:
SUBACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------
MONEY FUND $ 19 59 102 220
HIGH INCOME FUND $ 22 69 117 252
BOND FUND $ 22 68 117 251
STRATEGIC BOND FUND $ 23 70 119 256
CAPITAL APPRECIATION $ 22 68 116 249
GROWTH FUND $ 22 68 116 250
MULTIPLE STRATEGIES $ 22 67 115 248
GLOBAL SECURITIES $ 23 71 122 260
GROWTH AND INCOME PORTFOLIO $ 22 67 114 246
SHORT-TERM MULTI-MARKET $ 24 73 125 267
CONTRAFUND PORTFOLIO $ 21 66 113 243
EQUITY INCOME PORTFOLIO $ 20 62 107 231
GROWTH PORTFOLIO $ 21 65 112 241
INVESTMENT GRADE BOND PORTFOLIO $ 20 62 106 229
ASSET MANAGER PORTFOLIO $ 22 68 116 250
INDEX 500 PORTFOLIO $ 17 52 90 195
NORTHSTAR GROWTH FUND $ 22 68 117 251
INCOME AND GROWTH FUND $ 22 68 117 251
HIGH YIELD BOND FUND $ 22 68 117 251
The purpose of the above table is to assist the Contract Owner in understanding
the various costs and expenses that a Contract Owner will bear directly or
indirectly. In calculating the expenses in the above examples, the $30 annual
contract fee has been converted to a .11% annual asset charge by dividing the
total contract fees collected in 1995 by the total average net assets of all of
the Sub-Accounts. The actual amount of the Annual Contract fee attributable to a
$1,000 investment depends on the value of the Contract. The table reflects
expenses of the Variable Account as well as the Fund. (See "Charges and Other
Deductions" of this Prospectus and "Management of the Fund" in each Fund's
Prospectus).
Any premium or other taxes levied by any governmental entity with respect to the
Contract will be charged against the Contract Values based on a percentage of
premiums paid. Premium taxes currently imposed by certain states on the
Contracts range from 0% to 3.5% of premiums paid. (see "Charges and Other
Deductions-Premium Taxes. ")
"Other Expenses" are based upon the expenses outlined under the section
describing the Management of the Fund in each Fund's Prospectus. Total Fund
expenses are assessed at the underlying mutual fund level.
* The expenses listed in the table for the Short-Term Multi-Market Portfolio,
the Contrafund Portfolio, the Asset Manager Portfolio, the Index 500 Portfolio,
the Northstar Growth Fund, the Income and Growth Fund and the High Yield Bond
Fund are net of voluntary expense reimbursements, which are not required to be
continued indefinitely. However, the Advisers intend to continue such
reimbursements for the foreseeable future. The estimated expenses of these
Portfolios, before expense reimbursements, would be: Short-Term Multi-Market
Portfolio: Management Fees -- .55%, Other Expenses -- .75% and Total Portfolio
Operating Expenses -- 1.30%. The total expenses for the other funds would be:
Contrafund -- .73%,
7
Asset Manager - .81%; Index 500 - .47%; Northstar Growth - 2.04%, Income and
Growth - 1.74%; and High Yield Bond - 2.11%.
After a Purchase Payment has been in the Contract for 12 months, a Contract
Owner may surrender up to 10% per year of that Purchase Payment without a
surrender charge.
THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. "
On page 16, the section entitled "Fidelity Variable Insurance Products Fund and
II," is expanded to include the following information on the fundamental
investment objective and policies of the Contrafund Portfolio:
CONTRAFUND PORTFOLIO. The Contrafund Portfolio seeks capital appreciation by
investing in equity securities of companies that are believed by the investment
adviser to be undervalued due to an overly pessimistic appraisal by the public.
The Fund usually invests primarily in common stock and securities convertible
into common stock, but it has the flexibility to invest in any type of security
that may produce capital appreciation. The Fund's strategy can lead to
investments in small and medium-sized companies, which carry more risk than
larger ones, and may be more susceptible to setbacks or downturns.
On page 17, the section entitled "NORTHSTAR/NWNL TRUST," now known as the
Northstar Variable Trust, is expanded to include the following information on
the fundamental investment objective and policies of the Northstar Growth Fund:
NORTHSTAR GROWTH FUND. The investment objective of Northstar Growth Fund is
to seek long-term capital growth primarily through investments in equity
securities diversified over industries and companies which are believed to
provide above-average potential for capital appreciation. The Fund will normally
invest in common stocks, preferred stocks, securities convertible to common
stock, and warrants and options to purchase common stock. The Fund may also
invest in non-equity securities, such as corporate bonds and U.S. Government
obligations, when, in the opinion of the Fund's Adviser or Subadviser,
prevailing market, financial or economic conditions warrant.
MANAGEMENT OF THE NORTHSTAR VARIABLE TRUST
Northstar Investment Management Corporation acts as the investment adviser
to each Fund. In this capacity, the Adviser, subject to the authority of the
Trustees, is responsible for furnishing continuous investment supervision to the
Funds and is responsible for the management of the Funds' portfolios. The
address of the Adviser is Two Pickwick Plaza, Greenwich, Connecticut 06830.
The Adviser's fee is accrued daily against the value of each Fund's net
assets and is payable by each Fund monthly. The fee is computed daily and
payable monthly, at an annual rate of .75 of 1% on the first $250 million of the
Fund's average daily net assets, scaled down to .55 of 1% for assets over $1
billion. This fee is higher than the fee paid by most funds for advisory
services.
Navellier Fund Management Inc. serves as a subadviser and its professional
staff selects and supervises the investments in the Fund's portfolio.
8
At page 18, the information on REQUIRED DELIVERY OF MUTUAL FUND PROSPECTUS is
changed as follows:
No offer will be made of a Contract funded by any of the above Funds for
which a current prospectus of the Oppenheimer Variable Account Funds, the
Alliance Variable Products Series Fund, Inc., the Fidelity Investments Variable
Insurance Products Fund and Variable Insurance Products Fund II, or the
Northstar Variable Trust has not been delivered. An investor's order to purchase
a Contract under a Separate Account will be accepted only if the investor has
received the current prospectuses.
For more complete information about Oppenheimer Money Fund, Oppenheimer
Bond Fund, Oppenheimer Strategic Bond Fund, Oppenheimer Capital Appreciation
Fund, Oppenheimer Growth Fund, Oppenheimer High Income Fund, Oppenheimer
Multiple Strategies Fund, and/or Oppenheimer Global Securities Fund, including
management fees and other expenses and any risks associated with mixed and/or
shared funding, see the prospectus of the Oppenheimer Variable Account Funds.
For more complete investment policies and restrictions, information about the
Alliance Growth and Income Portfolio and the Alliance Short-Term Multi-Market
Portfolio, including investment policies and restrictions, management fees and
other expenses and any risks associated with mixed and/or shared funding, see
the prospectus of the Alliance Variable Product Series Fund, Inc. For more
complete information about Fidelity Contrafund Portfolio, Fidelity Equity Income
Portfolio, Fidelity Growth Portfolio, Fidelity Investment Grade Bond Portfolio,
Fidelity Asset Manager Portfolio and/or Fidelity Index 500 Portfolio, including
management fees and other expenses and any risks associated with mixed and/or
shared funding, see the prospectus of the Fidelity Variable Insurance Products
Fund and Fund II. For more complete investment policies and restrictions,
information about Northstar Growth Fund, Northstar Income and Growth Fund and/or
Northstar High Yield Bond Fund, including investment policies and restrictions,
management fees and other expenses and any risks associated with mixed and/or
shared funding, see the prospectus of the Northstar/Variable Trust. It is
important to read each prospectus carefully before you decide to invest. An
additional copy of these prospectuses may be obtained by writing to the Company,
4601 Fairfax Drive, Arlington, Virginia 22203. Send no money. "
On page 34, the section entitled "PERFORMANCE DATA" is changed to read:
"PERFORMANCE DATA
From time to time, the ReliaStar Bankers Security Variable Annuity accounts
("The USA Plan") may advertise several types of performance measures relating
both to the underlying funds (the Oppenheimer Money Fund, Oppenheimer High
Income Fund, Oppenheimer Bond Fund, Oppenheimer Strategic Bond Fund, Oppenheimer
Capital Appreciation Fund, Oppenheimer Growth Fund, Oppenheimer Multiple
Strategies Fund, Oppenheimer Global Securities Fund, Alliance Growth and Income
Portfolio, Alliance Short-Term Multi-Market Portfolio, Fidelity Contrafund
Portfolio, Fidelity Equity Income Portfolio, Fidelity Growth Portfolio, Fidelity
Investment Grade Bond Portfolio, Fidelity Asset Manager Portfolio, Fidelity
Index 500 Portfolio, Northstar Growth Fund, Northstar Income and Growth Fund and
Northstar High Yield Bond Fund) and to the sub-accounts themselves for specified
periods, assuming current contract charges and actual fund performance. Methods
of quoting performance will include standardized calculations of average annual
total return for one, five and ten years, ending on a recent calendar quarter,
or if such periods have not yet elapsed, at the end of a shorter period
corresponding to the life of the
9
sub-account. The USA Plan may also use nonstandardized performance measures,
comparisons of investment results to various indices including the Dow Jones
Average of 30 Industrial Stocks, the Standard and Poor's 500 Stock Index, the
Consumer Price Index, the Salomon Brothers High Grade Bond Index, the Lehman
Brothers Government/Corporate Bond Index and the Merrill Lynch
Government/Corporate Master Index, all of which are widely recognized indices of
stock market performance but which do not include the reinvestment of income
dividends and do not consider tax consequences. In addition, The USA Plan may be
compared to the performance of other fixed income or government bond mutual
funds or mutual fund indices such as reported by Lipper Analytical Services,
Inc. ("Lipper") or CDA Investment Technologies, Inc. ("CDA"). Lipper and CDA are
widely recognized independent mutual fund reporting services. Their performance
calculations are based upon changes in net asset value with all dividends
reinvested, but do not include the effect of any sales charges. Comparisons may
also be made with results of other mutual funds or groups of mutual funds in
advertisements or in reports furnished to present or prospective shareholders.
Standardized measures of performance are based on several assumptions which may
or may not apply to an individual investor's account. Because the average annual
total return figures are annualized, they represent an average percentage change
over an annual period which may be based on less than 12 months of actual data,
whereas previously reported total return figures may not have been annualized
and represented in those cases the aggregate percentage or dollar-value change
over the period in question.
The USA Plan's method for computing average annual total return is to
compute the average annual compounded rate of return that equates a purchase
payment to the market value of such purchase payment on the last day of the
period for which such return is calculated. For purposes of the calculation, it
is assumed that an initial payment of $1,000 is made on the first day of the
period for which the return is calculated. All recurring charges are reflected
in the calculations. The asset charges are reflected in the changes in unit
values. The $30 administration fee is deducted by dividing the total amount of
contract fees collected in the prior year by the total average net assets.
Certain sub-accounts may quote current yield and effective yield. The
current yield refers to the income generated by an investment over a 7-day
period (which period will be stated in the advertisement). This income is then
assumed to be earned each week over a 52-week period. The effective yield is
calculated similarly, but the income earned by the sub-account investments are
assumed to be reinvested.
Each of the other sub-accounts may also quote yield. The yield of these
sub-accounts refers to the net income earned by the underlying mutual fund over
a 30-day period (which period will be stated in the advertisement). This income
is then assumed to be earned for a full year and to be reinvested each month or
six months. The resulting semi-annual yield is doubled.
Other reportable performance measures may include income production rates,
percentage changes in accumulation unit values, and distribution rates. A
distribution rate is simply a measure of the level of income and short-term
capital gain dividends distributed for a specified period. It is, therefore, not
intended to be a complete measure of performance. The distribution rate may
sometimes be greater than yield since, for instance, it may include short-term
gains (which may be nonrecurring) and may not include the effect of amortization
of bond premiums. A distribution rate will be accompanied by a disclosure
explaining (i) the components of the distribution rate that differ from yield,
(ii) where components consist of capital gains, they are nonrecurring, and (iii)
10
where a component consists of option premiums, what potential effect on overall
performance option writing might have.
Any of the indicators mentioned in the section entitled "Performance Data"
may be included in sales literature and share- holder reports when accompanied
by required standardized calculations. More detailed information on performance
data is set forth in the Statement of Additional Information.
Availability of the New Investment Options. The Company is in the process
of obtaining approvals from Insurance Departments of the various states to add
the Northstar Growth Fund and Fidelity's Contrafund as investment options under
the Contract. Such investment options may not be available in all states. Please
check with your agent as to availability.
11
<PAGE>
This Supplement is accompanied by the following Prospectuses for the Funds:
FUND PROSPECTUS CIK ACCESSION NUMBER
- --------------- --- ----------------
Fidelity Investments 0000831016 0000927384-96-000022
Variable Insurance
Products Funds II Dated
April 30, 1996
Northstar Variable Trust 0000916403 0000912057-96-003160
Dated April 30, 1996
