A Message to Variable Life Policyowners
We are now in the fourth year of significant increases in the U.S. Stock
Markets, as measured by the Dow Jones Industrial Average and the Standard &
Poor's 500 Index. Propelled by a second quarter increase of 2.2%, the Dow's
increase for the six months ended June 30, 1998, was 14.1%. The S&P increased
3.3% in the second quarter and 17.7% in the first half of 1998. Both the Dow
Jones Industrial Average and the S&P 500 are unmanaged indices.
The yield on the 30 year Treasury Bond has stabilized recently, so that at the
middle of July, 1998, it was approximately 5.7%. Short term rates, as measured
by the 3 month Treasury Bill, are yielding 5.1%, which is slightly ahead of a
year ago.
The U.S. Gross Domestic Product for the second quarter of 1998 has increased
1.4% while inflation remains low with the Consumer Price Index increasing by
1.7% year-over-year on June 30, 1998.
The Variable Life Insurance Policies which are the subject of this report are
distributed by Washington Square Securities, Inc. ("WSSI"), 20 Washington Avenue
South, Minneapolis, Minnesota 55401, (612) 372-5507. WSSI, a registered
broker-dealer, is an affiliated company of ReliaStar Life Insurance Company of
New York, the issuer of your insurance policy.
The Stock Account. On June 30, 1998, the invested assets were allocated 99.8% to
63 different stock positions with the remainder in a high quality money market
fund. Our emphasis within the stock portfolio continues to be in issues which we
believe will perform well in the current environment and tend to hold their
values during market weakness.
The Money Market Account. On June 30, 1998, this portfolio held 20 different
issues of the highest quality commercial paper with maturities ranging from 1
week to 7 weeks.
The Investment Grade Bond Account. Bonds and other assets and liabilities
represented 100.0% of the investable funds on June 30, 1998. The portfolio was
comprised of 25 bond issues, with scheduled maturities ranging from 16 months to
51 years.
The Asset Allocation Account. On June 30, 1998, invested assets were allocated
56.0% to common stocks, 44.0% to bonds and other assets and liabilities. There
were 63 different common stock issues in the portfolio and 34 different bond
positions.
The Outlook. For the remainder of 1998, we expect economic growth to slow by
0.5% to 1.0% given the Asian financial crisis. Inflation and interest rates
should remain near current levels. At the time of this report, macroeconomic
indicators are showing signs of moderation and low unemployment. While the
business expansion has been underway for almost 8 years, it is likely to be
sustained throughout 1998. Nevertheless profits are expected to grow albeit at a
slower rate than in the past few years.
Name Change. Please note that on December 31, 1997, ReliaStar Bankers Security
Life changed its name to ReliaStar Life Insurance Company of New York. ReliaStar
Life of New York is a wholly owned subsidiary of ReliaStar Financial
Corporation.
Respectfully,
Robert C. Salipante
President and Chief Executive Officer
ReliaStar Life Insurance Company of New York
<PAGE>
ReliaStar Life Insurance Company of New York Variable Life Separate Account I
Statement of Assets and Liabilities
June 30, 1998
(unaudited)
<TABLE>
<CAPTION>
Sub-accounts
------------
Common Money Asset Total
Stock Market Bond Allocation Sub-accounts
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in USLICO Series Fund Portfolios (see below) $13,968,487 $ 5,028,056 $ 1,233,667 $ 6,233,681 $26,463,891
Policy loans 1,214,490 723,557 8,884 575,736 2,522,667
----------- ----------- ----------- ----------- -----------
Total assets 15,182,977 5,751,613 1,242,551 6,809,417 28,986,558
----------- ----------- ----------- ----------- -----------
Liabilities:
Net accrued for policy related
transactions due to ReliaStar Life of New York 511,695 45,800 32,043 193,607 783,145
Amounts payable to ReliaStar Life of New York 375,000 125,000 1,000,000 1,000,000 2,500,000
----------- ----------- ----------- ----------- -----------
Total liabilities 886,695 170,800 1,032,043 1,193,607 3,283,145
----------- ----------- ----------- ----------- -----------
Net assets - for variable life insurance policies $14,296,282 $ 5,580,813 $ 210,508 $ 5,615,810 $25,703,413
=========== =========== =========== =========== ===========
Investments basis data:
Shares Owned 952,180 5,028,056 122,509 494,737
Cost $11,353,078 $ 5,028,056 $ 1,234,558 $ 5,538,636
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
ReliaStar Life Insurance Company of New York Variable Life Separate Account I
Statement of Operations and Changes in Net Assets
For the Period Ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Sub-accounts
------------
Common Money Asset Total
Stock Market Bond Allocation Sub-accounts
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Investment income:
Income:
Reinvested dividends $ 96,791 $ 120,114 $ 31,297 $ 90,539 $ 338,741
Expenses:
Mortality and expense risk charges 33,436 12,265 2,962 15,010 63,673
------------ ----------- --------- ----------- -----------
Net investment income 63,355 107,849 28,335 75,529 275,068
------------ ----------- --------- ----------- -----------
Realized and unrealized gains (losses):
Net unrealized gains on investments 1,219,511 -- 10,881 341,335 1,571,727
Net realized gains on investments -- -- -- -- --
------------ ----------- --------- ----------- -----------
Net increase resulting from investments 1,219,511 -- 10,881 341,335 1,571,727
------------ ----------- --------- ----------- -----------
Net increase resulting from operations 1,282,866 107,849 39,216 416,864 1,846,795
------------ ----------- --------- ----------- -----------
Policy related transactions:
Transfers in for net premiums 317,446 288,906 15,948 331,026 953,326
Transfers between sub-accounts (3,771) (31,455) 36,195 (969) --
Transfers for withdrawal/surrender (428,166) (127,546) (37,417) (208,195) (801,324)
Transfer of investment and operating
results to ReliaStar Life of New York (144,802) (108,449) (36,710) (177,669) (467,630)
------------ ----------- --------- ----------- -----------
Net increase in net assets 1,023,573 129,305 17,232 361,057 1,531,167
Net assets, beginning of period 13,272,709 5,451,508 193,276 5,254,753 24,172,246
------------ ----------- --------- ----------- -----------
Net assets, end of period $ 14,296,282 $ 5,580,813 $ 210,508 $ 5,615,810 $25,703,413
============ =========== ========= =========== ===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
ReliaStar Life Insurance Company of New York Variable Life Separate Account I
Statement of Operations and Changes in Net Assets
For the Six Months Ended June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Sub-accounts
------------
Common Money Asset Total
Stock Market Bond Allocation Sub-accounts
----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Income:
Reinvested dividends $ 109,110 $ 116,520 $ 36,536 $ 105,566 $ 367,732
Expenses:
Mortality and expense risk charges 28,703 12,226 2,926 13,501 57,356
------------ ------------ ------------ ------------ ------------
Net investment income 80,407 104,294 33,610 92,065 310,376
NET UNREALIZED GAINS (LOSSES) ON INVESTMENTS 1,292,520 -- (9,250) 306,366 1,589,636
NET REALIZED GAINS (LOSSES) ON INVESTMENTS 84,115 -- (533) 14,289 97,871
------------ ------------ ------------ ------------ ------------
Net increase in net assets resulting from operations 1,457,042 104,294 23,827 412,720 1,997,883
FROM POLICY RELATED TRANSACTIONS:
Transfers in for net premiums 345,313 304,131 16,120 355,040 1,020,604
Transfers between sub-accounts 6,681 (8,745) 2,198 (134) --
Transfers for withdrawal/surrender (442,227) (181,372) (6,109) (190,503) (820,211)
TRANSFER OF INVESTMENT AND OPERATING
RESULTS TO RELIASTAR LIFE OF NEW YORK (200,863) (111,305) (24,222) (205,040) (541,430)
------------ ------------ ------------ ------------ ------------
Net increase in net assets 1,165,946 107,003 11,814 372,083 1,656,846
Net assets, beginning of period 11,678,718 5,274,709 175,060 4,530,059 21,658,546
------------ ------------ ------------ ------------ ------------
Net assets, end of period $ 12,844,664 $ 5,381,712 $ 186,874 $ 4,902,142 $ 23,315,392
============ ============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
ReliaStar Life Insurance Company of New York Variable Life Separate Account I
Statement of Operations and Changes in Net Assets
For the Six Months Ended June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Sub-accounts
------------
Common Money Asset Total
Stock Market Bond Allocation Sub-accounts
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Investment income:
Income:
Reinvested dividends $ 131,432 $ 118,565 $ 41,257 $ 114,033 $ 405,287
Expenses:
Mortality and expense risk charges 25,732 12,451 3,255 13,198 54,636
------ ------ ----- ------ ------
Net investment income 105,700 106,114 38,002 100,835 350,651
Net unrealized gains (losses) on investments 738,421 -- (74,659) 27,190 690,952
Net realized gains (losses) on investments 112,451 -- (2,455) 45,103 155,099
------- ------- ------- ------- -------
Net increase (decrease) in net assets resulting
from operations 956,572 106,114 (39,112) 173,128 1,196,702
From policy related transactions:
Transfers in for net premiums 359,218 318,936 17,877 383,297 1,079,328
Transfers between sub-accounts 12,975 (14,358) 1,629 (246) --
Transfers for withdrawal/surrender (400,989) (165,367) (2,071) (202,620) (771,047)
Transfer of investment and operating
results (to) from ReliaStar Life of New York (180,783) (129,835) 29,428 (158,541) (439,731)
-------- -------- ------ -------- --------
Net increase in net assets 746,993 115,490 7,751 195,018 1,065,252
Net assets, beginning of period 9,937,227 5,081,267 158,765 3,933,006 19,110,265
--------- --------- ------- --------- ----------
Net assets, end of period $ 10,684,220 $ 5,196,757 $ 166,516 $ 4,128,024 $20,175,517
============ =========== ========= =========== ===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
ReliaStar Life Insurance Company of New York Variable Life Separate Account I
- - Notes to Financial Statements - June30, 1998
(1) Organization - ReliaStar Life Insurance Company of New York Variable Life
Separate Account I ("Separate Account I") was established by ReliaStar Life
Insurance Company of New York ("ReliaStar Life of New York"), previously
ReliaStar Bankers Security Life Insurance Society, in 1986 under New York
insurance laws. Separate Account I operates as a unit investment trust under the
Investment Company Act of 1940 and is used to fund certain benefits for
variable life insurance policies issued by ReliaStar Life of New York. The
assets of Separate Account I and its sub-accounts are the property of ReliaStar
Life of New York. The portion of Separate Account I assets applicable to the
variable life policies will not be charged with liabilities arising out of any
other business ReliaStar Life of New York may conduct. The net assets maintained
in the sub-accounts provide the basis for the periodic determination of the
amount of increased or decreased benefits under the policies. The net assets may
not be less than the amount required under the state insurance law to provide
for death benefits (without regard to the minimum death benefit guarantee) and
other policy benefits. Additional assets are held in ReliaStar Life of New York
general account to cover the contingency that the guaranteed minimum death
benefit might exceed the death benefit which would have been payable in the
absence of such guarantee.
In January 1995, ReliaStar Life of New York became an indirect wholly-owned
subsidiary of ReliaStar Financial Corp. ("ReliaStar"), a financial services
company based in Minneapolis, Minnesota. Prior to that time ReliaStar Life of
New York was an indirect wholly-owned subsidiary of USLICO Corporation. USLICO
Series Fund ("Series Fund") is an open-end diversified management investment
company whose shares are sold only to ReliaStar Life of New York and other
affiliates' separate accounts.
(2) Summary of Significant Accounting Policies
(a) Valuation of Investments - Investments in shares of the Series Fund
are valued at the reported net asset value of the respective portfolios. The
aggregate cost of the investments acquired and the aggregate proceeds of
investments sold, for the six months ended June 30, 1998, were:
Cost of Shares Proceeds from
Sub-account Acquired Shares Sold
----------- -------- -----------
Common Stock $ 96,791 $ -
Money Market 120,114 -
Bond 31,297 -
Asset Allocation 90,539 -
------ --------
Total $ 338,741 $ -
(b) Security Transactions - Purchases and sales are recorded on the
trade date.
(c) Federal Income Taxes - ReliaStar Life of New York is taxed as a life
insurance company under the Internal Revenue Code of 1986, as amended (the
"Code"). Since the sub-accounts are not separate entities from ReliaStar Life of
New York, and their operations form a part of ReliaStar Life of New York, they
will not be taxed separately as a "regulated investment company" under
Sub-chapter M of the Code. Under existing Federal income tax law, investment
income of the sub-accounts, to the extent that it is applied to increase
reserves under a contract, is not taxed and may be compounded for reinvestment
without additional tax to ReliaStar Life of New York.
(d) Charges Deducted from Premiums - Transfers to the sub-accounts of
Separate Account I for net premiums represent gross premiums payable for a
policy year, less deductions for sales loads, administrative expenses, premium
taxes, risk charges and additional premiums, if any, for optional insurance
benefits.
(e) Amounts Payable to ReliaStar Life of New York - The amounts payable to
ReliaStar Life of New York in each sub-account arises from the amount allocated
from ReliaStar Life of New York to facilitate commencement of operations.
(f) Dividends - Dividends received on the shares held by the sub-accounts
of Separate Account I are reinvested to purchase additional shares of the
applicable portfolio of the Series Fund.
(g) Transfer of Investment and Operating Results from (to) ReliaStar Life
of New York - The sub-accounts transfer their investment and operating results
in excess of amounts required to meet policyholder reserve and liability amounts
to ReliaStar Life of New York. When investment and operating results are
insufficient to meet reserve requirements, ReliaStar Life of New York transfers
to the sub-accounts amounts sufficient to fund the deficiency. Also included in
this transfer are cost of insurance charges totaling $409,112, $417,800 and
$411,600 for all sub-accounts for the six months ended June 30, 1998, 1997 and
1996 respectively.
(3) ADMINISTRATION AND RELATED PARTY TRANSACTIONS - A daily charge is made by
ReliaStar Life of New York against each sub-account's investments for mortality
and expense risks at an effective annual rate of .50%. The mortality risk
assumed is that insureds may live for a shorter period of time than estimated
and therefore, a greater amount of death benefits than expected will be payable
in relation to the amount of premiums received. The expense risk assumed is that
expenses incurred in issuing and administering the policies will be greater than
estimated. Other costs of administering Separate Account I are absorbed by
ReliaStar Life of New York.
Washington Square Securities, Inc., a direct wholly-owned ReliaStar subsidiary,
acts as principal underwriter (as defined in the Investment Company Act of 1940)
of Separate Account I's policies. Washington Square Advisers, Inc., previously
known as Washington Square Capital, Inc., also a direct wholly-owned ReliaStar
subsidiary, serves as investment adviser to the Series Fund with respect to
short-term and fixed maturity securities. Pilgrim Baxter Value Investors, Inc.
serves as investment sub-adviser to the Series Fund with respect to equity
securities.
Certain officers and directors of ReliaStar and ReliaStar Life of New York are
also officers and directors of Washington Square Securities, Inc., the Series
Fund and Washington Square Advisers, Inc.
6
<PAGE>
USLICO Series Fund
Statement of Assets and Liabilities
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Common Money Asset Total
Stock Market Bond Allocation Portfolios
Portfolio Portfolio Portfolio Portfolio Combined
--------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Assets
Cash and cash equivalents $567,213 $ 10,350 $ 42,024 $ 339,475 $ 959,062
Common stock, at fair value (cost
$24,741,373 and $7,840,913 respectively) 30,025,518 -- -- 9,548,742 39,574,260
Bonds, at fair value (cost
$2,975,782 and $7,538,314 respectively) -- -- 3,022,049 7,730,330 10,752,379
Commercial paper, at amortized
cost which approximates fair value -- 5,965,842 -- -- 5,965,842
Dividends receivable 40,095 -- 12,790 52,885
Interest receivable 752 -- 35,051 80,069 115,872
Securities not settled, net (372,353) -- (184,542) (595,966) (1,152,861)
-------- -------- -------- ----------
Total assets 30,261,225 5,976,192 2,914,582 17,115,440 56,267,439
---------- --------- --------- ---------- ----------
Liabilities
Accrued expenses 166,729 50,360 16,372 63,107 296,568
------------ ----------- --------- ----------- -----------
Total liabilities 166,729 50,360 16,372 63,107 296,568
------------ ----------- --------- ----------- -----------
Net assets $ 30,094,496 $ 5,925,832 $2,898,210 $17,052,333 $55,970,871
============ =========== ========= =========== ===========
Net asset value per share $ 14.78 $ 1.00 $ 10.08 $ 12.66
============ =========== ========= ===========
Shares outstanding 2,035,744 5,925,832 287,627 1,347,295
============ =========== ========= ===========
Net assets consist of:
Capital stock ($ 001 par value) $ 2,036 $ 5,926 $ 288 $ 1,347
Additional paid-in capital 24,139,412 5,919,906 2,838,995 14,897,972
Accumulated undistributed
net investment income 18,271 -- 4,074 18,496
Accumulated undistributed net
realized gains from investment transactions 650,631 -- 8,586 234,673
Net unrealized appreciation of investments 5,284,146 -- 46,267 1,899,845
--------- ----------- ------ ---------
Net assets $ 30,094,496 $ 5,925,832 $2,898,210 $17,052,333
============ =========== ========== ===========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
USLICO Series Fund-Common Stock Portfolio
Statement of Investments
June 30,1998
(Unaudited)
<TABLE>
<CAPTION>
Common Stock
Fair Fair
Shares Value Shares Value
------ ----- ------ -----
Computers & Electronics - 2.86% Industrial - 16.70%
- ------------------------------- ---------------------
<S> <C> <C> <C> <C>
International Business Machines Corp. 4,100 $470,731 B.F. Goodrich Co. 4,500 $ 223,312
Lexmark International Group 6,400 390,400 Borg Warner Automotive, Inc. 7,000 336,437
-------
861,131 CaseCorp. 4,100 197,825
-------
Drugs & Health Care - 2.45% Deere & Co. 8,500 449,437
Columbia/HCA Healthcare Corp. 20,000 582,500 Ford Motor Co. 2,800 165,200
Tenet Healthcare Corp. 5,000 155,300 General Dynamics Corp. 11,000 511,500
-------
737,800 Ingersoll Rand Co. 9,000 396,563
-------
Energy - 10.58% Johnson Controls, Inc. 9,400 537,563
- ---------------
Atlantic Richfield Co. 7,500 585,937 Lafarge Corp. 16,000 629,000
Mobil Corp. 8,000 613,000 PPG Industries, Inc. 4,000 278,250
R & B Falcon Corp. 15,000 339,375 Southdown Inc. 7,200 513,900
Repsol S.A. ADR 9,000 495,000 Sundstrand Corp. 5,000 286,250
Rowan Co. 14,200 276,013 United Technologies Corp. 5,400 499,500
---------
Santa Fe International Corp. 10,000 302,500 5,024,737
---------
Texaco, Inc. 9,600 573,000 Realty - 4.80%
--------- --------------
3,184,825 Equity Residential Properties
--------- Trust 7,000 332,062
Finance - 31.55% First Industrial Realty Trust 10,000 318,125
- ----------------
Allstate Corp. 3,000 274,687 Nationwide Health Properties,
Inc. 10,000 238,750
American General Corp. 7,300 519,669 Simon Debartolo Group, Inc. 17,100 555,750
---------
Banc 0ne Corp. 11,550 644,634 1,444,687
---------
Bear Stearns Companies, Inc. 6,000 341,250 Retail Trade - 7.76%
--------------------
Chase Manhattan Corp. 12,200 921,100 Federated Departinent Stores,
Inc. 10,000 538,125
Cigna Corp. 4,000 276,000 J.C. Penney Company, Inc. 7,500 542,344
Citicorp 1,200 179,100 Nieman Marcus Group, Inc. 20,000 868,750
Conseco, Inc. 10,000 467,500 V F Corp. 7,500 386,250
---------
First Union Corp. 15,000 873,750 2,335,469
Fleet Financial Group, Inc. 9,000 751,500 Telecommunications - 8.74% ---------
---------------------------
Hartford Financial Services Group 8,000 915,000 AT & T Corp. 12,000 685,500
Morgan Stanley Dean Witter & Co. 5,300 484,287 Bell Atlantic Corp. 16,164 737,483
NationsBank Corp. 11,000 841,500 GTE Corp. 15,400 856,625
Nationwide Financial Services, Inc. 13,000 663,000 SBC Communications, Inc. 8,800 352,000
---------
The PMI Group, Inc. 8,800 645,700 2,631,608
---------
Republic New York Corp. 5,000 314,688 Transportation - 7.97%
----------------------
Travelers Group, Inc. 6,300 381,938 AMR Corp. 4.800 399,600
-------
9,495,303 Burlington Northern Santa Fe 5,500 540,031
---------
Food, House & Personal Products - 3.76% Canadian National Railway Co. 3,000 159,933
- ---------------------------------------
Albertson's, Inc. 4,500 233,156 Delta Air Lines, Inc. 5,000 646,250
Centex Corp. 11,900 449,225 Southwest Air Lines Co. 22,000 651,750
---------
Philip Morris Companies, Inc. 11,400 448,875 2,397,564
---------
1,131,256 Utilities - 2.60%
--------- ------------------
Fair
Shares Value
------ -----
Florida Progress Corp. 12,900 530,513
Potomac Electric Power Co. 10,000 250,625
---------
781,138
30,025,518
Total Common Stock 99.77%
Other Assets and
Liabilities, Net 0.23% 68,978
----------
Net Assets 100.00% $30,094,496
===========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
USLICO Series Fund-Money Market Portfolio
Statement of Investments
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Principal Amortized
Commercial Paper Amount Cost
---------- ---------
<S> <C> <C> <C> <C>
Bank of New York, 5.53%, Due July 6, 1998 $300,009 $299,770
Clorox Co., 5.51%, Due July 7, 1998 300,000 299,724
Du Pont E I De Nemours & Co., 5.49%, Due July 7, 1998 300,000 299,726
Banc One Corp., 5.50%, Due July 8, 1998 300,000 299,679
General Electric Capital Corp., 5.47%, Due July 13, 1998 300,000 299,453
Gannett Inc., 5.53%, Due July 14, 1998 300,000 299,401
Motorola Inc., 5.52%, Due July 14, 1998 300,000 299,402
Chevron USA Inc., 5.50%, Due July 17, 1998 300,000 299,267
Unilever Corp., 5.48%, Due July 17, 1998 300,000 299,269
AT & T Co., 5.49%, Due July 20, 1998 300,000 299,131
Coca Cola Co., 5.46%, Due July20, 1998 300,000 299,136
American General Finance Corp., 5.51%, Due July 24, 1998 300,000 298,944
Heinz H J Co., 5.50%, Due July 24, 1998 300,000 298,946
Eastman Kodak Co., 5.5 1?~o, Due July 28,1998 300,000 298,760
Florida Power Corp., 5.51%, Due July 29, 1998 300,000 298,714
Wisconsin Electric Power Co., 5.54%, Due July 30, 1998 300,000 298,661
Beneficial Corp., 5.53%, D~e August 3, 1998 300,000 298,479
Procter & Gamble Co., 5.52%, Due August 7, 1998 300,000 298,298
American Express Co., 5.52%, Due August 10, 1998 285,000 283,252
Merrill Lynch & Co., 5.54%, Due August 17, 1998 300,000 297,830
------- -------
Total Commercial Paper 100.68% $5,985,000 5,965,842
==========
Other Assets and
Liabilities, Net (0.68%) (40,010)
--------
Net Assets 100.00% $ 5,925,832
====== ===========
</TABLE>
See accompanying notes to financial statements
9
<PAGE>
USLICO Series Fund-Bond Portfolio
Statement of Investments
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Par Fair
Bonds Value Value
----- -----
Government - 40.64%
-------------------
<S> <C> <C> <C> <C>
FHLMC, 5.58%, Due December, 2026 # $ 183,722 187,115
FNMA, 5.84%, Due July, 2027 # 68,840 70,254
FNMA, 6.00%, Due July, 2027 # 275,312 279,885
GNMA Pool 181826,9.00%,Due March,2021 # 27,889 29,920
US Treasury Note, 5.50%, Due March, 2000 381,000 381,080
US Trust Security Strips, 6.97%, Due February, 2019 300,000 92,343
US Trust Security Strips, 6.93%, Due February, 2021 500,000 137,260
------- -------
1,736,763 1,177,857
--------- ---------
Finance - 58.46%
----------------
Abbey National PLC, 7.35%, Due October, 2049 # 100,000 106,186
Advanta Mortgage Loan Trust, 6.06%, Due March, 2028 50,000 49,990
Amerco, 6.65%, Due October, 1999 150,000 149,943
Amresco Residential Securities Corp., 6.30%, Due January, 2028 100,000 100,172
BHP Finance USA, 6.42%, Due March, 2026 # 100,000 100,304
Equity Office Properties Trust, 6.38%, Due February, 2003 150,000 149,363
Hyder PLC, 6.75%, Due December, 2004 100,000 101,405
IBJ Preferred Capital Co., 8.79%, Due December, 2049 # 25,000 22,887
Lehman Brothers, 7.36%, Due December, 2003 100,000 105,074
Macsaver Financial Services, 7.40%, Due February, 2002 150,000 147,333
Malayan Banking Berhad-NY, 7.13%, Due September, 2005 100,000 82,352
MBNA Corp., 7.25%, Due September, 2002 100,000 103,645
Noranda Forest Inc., 6.88%, Due November, 2005 100,000 101,753
SB Treasury Co., 9.40%, Due December, 2049 # 25,000 24,846
Salomon Brothers Mortgage Securities VII, 6.30%, Due May, 2028 145,000 145,000
TriNet Corporate Realty Trust, 6.75%. Due March, 2003 100,000 100,102
United Companies Financial Corp., 9.35%, Due November, 1999 100,000 103,853
1,695,000 1,694,208
Industrial - 5.18%
------------------
US Filter Corp., 6.38%, Due May, 2011 150,000 149,984
------- -------
Total Bonds 104.27% $ 3,581,763 3,022,049
=========
Other Assets and
Liabilities, Net (4.27)% (123,839)
----- --------
Net Assets 100.00% 2,898,210
====== =========
</TABLE>
# -Callable at the option of the issuer.
See accompanying notes to financial statements.
10
<PAGE>
USLICO Series Fund-Asset Allocation Portfolio
Statement of Investments
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Common Stock
Fair Fair
Shares Value Shares Value
------ ----- ------ -----
Computers & Electronics - 1.59% Industrial - 9.79%
- ------------------------------- ------------------
International Business Machines Corp. 1,300 $ 149,256 B.F. Goodrich Co. 1,400 $ 69,475
Lexmark 2,000 122,000 Borg Warner Automotive, Inc. 2,500 120,156
-------
271,256 Case Corp. 1,200 57,900
-------
Drugs & Health Care - 1.30% Deere & Co. 2,500 132,187
- ---------------------------
Columbia/HCA Healthcare Corp. 6,000 174,750 Ford Motor Co. 900 53,100
Tenet Healthcare Corp. 1,500 46,590 General Dynamics Corp. 3,200 148,800
-------
221,340 Ingersoll Rand Co. 3,100 136,594
-------
Energy - 6.06% Johnson Controls, Inc. 3,000 171,563
- --------------
Atlantic Richfield Co. 2,500 195,312 Lafarge Corp. 5,300 208,356
Mobil Corp. 2,500 191,563 PPG Industries, Inc. 1,500 104,344
R & B Falcon Corp. 5,000 113,125 Southdown, Inc. 2,500 178,438
Repsol S.A. ADR 3,000 165,000 Sunstrand Corp. 1,800 103,050
Rowan Co. 4,500 87,469 United Technologies Corp. 2,000 185,000
---------
Santa Fe International Corp. 3,200 96,800 1,668,963
Texaco, Inc. 3,100 185,031 Realty - 2.78% ---------
------- --------------
1,034,300 Equity Residential Properties
--------- Trust 94,875 2,000
Finance - 17.57% First Industrial Realty Trust 3,500 111,344
- ----------------
Allstate Corp. 900 82,406 Nationwide Health Properties Inc. 3,700 88,337
American General Corp. 2,300 163,731 Simon Debartolo Group, Inc. 5,500 178,750
-----------
Banc One Corp. 3,630 202,599 473,306
-----------
Bear Stearns Companies, Inc. 2,000 113,750 Retail Trade - 4.09%
---------------------
Chase Manhattan Corp. 3,900 294,450 Federated Department Stores, Inc. 3,600 193,725
Cigna Corp. 1,200 82,800 J.C. Penney Co. Inc. 144,625 2,000
Citicorp 300 44,775 Nieman Marcus Group, Inc. 260,625 6,000
Conseco, Inc. 3,000 140,250 V F Corp. 1,900 97,850
-----------
First Union Corp. 4,400 256,300 696,825
-----------
Fleet Financial Group, Inc. 2,900 242,150 Telecommunications - 4.92%
--------------------------
Hartford Financial Services Group 2,600 297,375 A T & T Corp. 3,800 217,075
Morgan Stanley Dean Witter & Co. 1,700 155,338 Bell Atlantic Corp. 5,142 234,604
NationsBank Corp. 3,300 252,450 GTE Corp. 4,950 275,344
Nationwide Financial Services, Inc 4,000 204,000 SBC Communications, Inc. 2,800 112,000
-----------
The PMI Group, Inc. 2,800 205,450 839,023
-----------
Republic New York Corp. 1,800 113,288 Transportation - 4.41%
-----------------------
Travelers Group, Inc. 2,400 145,500 AMR Corp. 1,600 133,200
------ -------
2,996,612 Burlington Northern Santa Fe 1,800 176,737
Food, House & Personal Products - 2.13% Canadian National Railway Co. 1,000 53,311
- ---------------------------------------
Albertson's, Inc. 1,500 77,719 Delta Air Lines, Inc. 1,400 180,950
Centex Corp. 3,800 143,450 Southwest Air Lines Co. 7,000 207,375
-----------
Philip Morris Companies, Inc. 3,600 141,750 751,573
------- -----------
362,919 Utilities 1.36%
------- ---------------
F1orida Progress Corp. 2,000 82,250
Potomac Electric Power Co. 6,000 150,375
-----------
232,625
-----------
Total Common Stock 56.00% 9.548,742
-----------
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
USLICO Series Fund-Asset Allocation Portfolio
Statement of Investments
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Bonds
Par Fair
Government - 19.03% Value Value
------------------- ----- -----
<S> <C> <C> <C> <C>
FHLMC, 9.00%, Due October, 2019 # $ 11,831 $ 12,496
FHLMC, 5.58%, Due December, 2026 # 480,504 489,379
FNMA, 5.84%, Due July, 2027 # 344,201 351,270
FNMA, 6.00%, Due July, 2027 # 732,331 744,495
GNMA, 10.00%, Due February, 2016 # 8,820 9,758
US Treasury Note, 5.50%, Due March, 2000 840,000 840,176
US Trust Security Strips, Interest, 6.93%, Due February, 2015 200,000 77,638
US Trust Security Strips, Interest, 6.71%, Due February, 2019 1,000,000 307,810
US Trust Security Strips, Interest, 6.93%, Due February, 2021 1,500,000 411,78
--------- --------
5,117,687 3,244,80
--------- --------
Finance - 22.45
---------------
Abbey National PLC, 7.35%, Due October, 2049 # 100,000 106,186
Advanta Mortgage Loan Trust, 6.06%, Due March, 2028 100,000 99,980
Amerco, 6.65%, Due October, 1999 250,000 249,905
Amerco Medium Term Notes, 6.89%, Due September, 1998 110,000 110,371
Amerco Residential Securities Corp., 6.30%, Due January, 2028 200,000 200,343
BHP Finance USA, 6.42%, Due March, 2026 # 100,000 100,304
Discover Card Trust 1991-D, 8.00%, Due October, 2000 100,000 100,367
Equity Office Properties Trust, 6.375%, Due February, 2003 300,000 298,725
Hyder PLC, 6.75%, Due December, 2004 300,000 304,215
IBJ Preferred Capital Co., 8.79%, Due December, 2049 # 125,000 114,437
Lehman Brothers Inc., 7.36%, Due December, 2003 300,000 315,222
Malayan Banking Berhad-NY, 7.125%, Due September, 2005 100,000 82,352
Macsaver Financial Services Inc., 7.40%, Due February, 2002 350,000 343,777
MBNA Corp., 7.25%, Due September, 2002 100,000 103,645
Nomura Depositor Trust, 6.76%, Due January, 2003 # 100,000 100,031
Noranda Forest Inc., 6.88%, Due November, 2005 100,000 101,753
SB Treasury Co., 9.40% Due December, 2049 # 125,000 124,230
Salomon Brothers Mortgage Securities VII, 6.30%, Due May, 2028 365,000 365,000
200,000 199,750
Time Warner Pass Through Asset Trust, 6.10%, Due December, 2001 200,000 200,204
TriNet Corporate Realty Trust, 6.75%, Due March, 2003 200,000 207,706
United Companies Financial Corp., 9.35%, Due November, 1999 --------- ---------
3,825,000 3,828,503
--------- ---------
Industrial - 2.65%
------------------
Canadian Pacific, 6.875%, Due April, 2003 100,000 102,779
US Filter Corp., 6.38%, Due May, 2011 350,000 349,962
-------- --------
450,000 452,741
======= =======
#- Callable at the option of the issuer. (continued)
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
USLICO Series Fund-Asset Allocation Portfolio
Statement of Investments
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Bonds, continued Par Fair
Value Value
------- --------
Utilities - 1.20%
-----------------
Illinois Bell Telephone, 7.625%, Due April, 2006 # $100,000 $100,990
Kansas City Power & Light, 7.40%, Due February, 2008 # 100,000 103,294
------- -------
200,000 204,284
------- -------
Total Bonds 45.33% $9,592,687 7,730,330
========== ---------
Total Investments 101.33%
17,279,072
Other Assets and
Liabilities, Net (1.33)% (226,739)
--------
Net Assets 100.00% $17,052,333
===========
</TABLE>
# - Callable at the option of the issuer.
See accompanying notes to financial statements.
13
<PAGE>
USLICO Series Fund
Statement of Operations and Changes in Net Assets
For the Period Ended June 30, 1998
(Unaudited)
Common Money Asset
Stock Market Bond Allocation
Portfolio Portfolio Portfolio Portfolio
---------- --------- --------- ----------
Investment income:
Income:
Dividends $303,843 $ - $ - $ 97,765
Interest 20,772 163,293 86,487 219,682
------ ------- ------ -------
Total income 324,615 163,293 86,487 317,447
------- ------- ------ -------
Expenses:
Accounting fee 18,151 2,235 707 7,529
Custodian fee 13,540 6,431 4,104 16,243
Management fee 35,922 7,258 3,531 20,534
Other administrative 40,152 5,849 2,252 17,297
------ ----- ----- ------
Total expenses 107,765 21,773 10,594 61,603
------- ------ ------ ------
Net investment income 216,850 141,520 75,893 255,844
------- ------- ------ -------
Realized and unrealized gains
on investment's:
Net proceeds from sales 12,298,975 - 1,243,009 6,637,587
Cost of securities sold (11,695,271) - (1,234,423) (6,413,738)
------------ ------- ----------- -----------
Net realized gains
on investments 603,704 8,586 223,849
Net unrealized gains
on investments 1,982,297 - 11,357 672,546
--------- ------- ------ -------
Net gains on investments 2,586,001 - 19,943 896,395
--------- ------- ------ -------
Net increase in net assets
resulting from operations 2,802,851 141,520 95,836 1,152,239
Distributions to shareholders from:
Net investment income (206,937) (141,520) (73,481) (246,561)
Capital share transactions 206,937 141,520 73,481 246,561
------- ------- ------ -------
Net increase in net assets 2,802,851 141,520 95,836 1,152,239
Net assets, beginning of year 27,291,645 5,784,312 2,802,374 15,900,094
---------- --------- --------- ----------
Net assets, end of period $ 30,094,496 $5,925,832 $2,898,210 $17,052,333
=========== ========= ========= ==========
See accompanying notes to financial statements.
14
<PAGE>
USLICO Series Fund
Statement of Operations and Changes in Net Assets
For the Period Ended June 30, 1997
(Unaudited)
Common Money Asset
Stock Market Bond Allocation
Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ---------
Investment income:
Income:
Dividends $ 309,536 $ - $ - $ 99,581
Interest 15,548 158,989 95,822 243,600
------ ------- ------- -------
Total income 325,084 158,989 95,822 343,181
------- ------- ------ -------
Expenses:
Accounting fee 6,716 1,705 793 4,166
Custodian fee 7,237 5,648 1,120 6,004
Management fee 29,353 7,101 3,342 17,857
Other administrative 44,753 6,849 4,772 25,543
------ ----- ----- ------
Total expenses 88,059 21,303 10,027 53,570
------ ------ ------ ------
Net investment income 237,025 137,686 85,795 289,611
------- ------- ------ -------
Realized and unrealized gains
on investments:
Net proceeds from sales 10,805,263 - 855,011 4,512,921
Cost of securities sold (9,333,389) - (830,363) (4,008,914)
----------- ------- --------- ----------
Net realized gains
on investments 1,471,874 - 24,648 504,007
Net unrealized gains
on investments 396,495 - (48,031) 356,608
------- ------- ------- -------
Net gains on investments 2,868,369 - (23,383) 860,615
--------- ------- ------ -------
Net increase in net assets
resulting from operations 3,105,394 137,686 62,412 1,150,226
Distributions to shareholders from:
Net investment income (227,980) (137,686 (85,005) (284,617)
Capital share transactions (303,436) (205,117) 40,938 (59,187)
--------- ------- ------ --------
Net increase (decrease)
in net assets 2,573,978 (205,117) 18,345 806,422
Net assets, beginning of year 23,558,091 5,979,861 2,783,385 14,614,568
---------- --------- --------- ----------
Net assets, end of period $26,132,069 $5,774,744 $2,801,730 $15,420,990
========== ========= ========= ==========
See accompanying notes to financial statements.
15
<PAGE>
USLICO Series Fund - Notes to Financial Statements - June 30, 1998
(1) ORGANIZATION - USLICO Series Fund (the Fund) is an open-end, diversified
management investment company registered under the Investment Company Act of
1940 and consisting of four separate series (Portfolios), each of which has its
own investment objectives and policies. The Fund was organized as a business
trust under the laws of Massachusetts on January 19. 1988. Shares of the
Portfolios are sold only to separate accounts of ReliaStar United Services Life
Insurance Company (ReliaStar United Services) and ReliaStar Life Insurance
Company of New York (ReliaStar Life of New York), previously ReliaStar Bankers
Security Life Insurance Society, to serve as the investment medium for variable
life insurance policies issued by these companies. The separate accounts invest
in shares of one or more of the Portfolios, in accordance with allocation
instructions received from policyowners. Each Portfolio share outstanding
represents a beneficial interest in the respective Portfolio and carries a par
value of $.001. The Fund has an unlimited number of shares authorized.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) VALUATION OF INVESTMENTS
1. Common Stock, Bond and Asset Allocation Portfolios - Equity
securities for which market quotations are readily available are stated at that
fair value. Fair value is determined on the basis of last reported sales price,
or, if no sales are reported, the latest available bid price obtained from a
quotation reporting system or from established market makers. Money market
instruments are valued at fair value, except that instruments maturing in sixty
days or less are valued using amortized cost which approximates fair value. Debt
securities (other than obligations having a maturity of sixty days or less at
their date of acquisition) are valued on the basis of market quotations obtained
from brokers and dealers or pricing services, which take into account
appropriate factors such as institutional-size trading in similar groups of
securities, yield, quality, coupon rate, maturity, type of issue, trading
characteristics, and other market data. Debt obligations having a maturity of
sixty days or less are generally valued at amortized cost, which approximates
fair value.
2. Money Market Portfolio - Investment securities held by the Money
Market Portfolio are all carried at amortized cost.
(b) INCOME RECOGNITION - Dividend income is recorded on the ex-dividend
date. Interest income is accrued daily. Realized gains and losses on the sale of
securities are computed on the basis of the identified cost of the related
securities sold and are recognized at the date of trade.
(c) OTHER ADMINISTRATIVE FEES - Other administrative fees are charged to the
Portfolios at an annual percentage rate of .5%. Fund expenses directly
attributable to a Portfolio are charged to that Portfolio. All other expenses
are allocated proportionately among all Portfolios in relation to respective net
assets.
(d) FEDERAL INCOME TAXES - Each Portfolio intends to quality as a regulated
investment company under Subchapter M of the Internal Revenue Code. Accordingly,
a Portfolio will not be subject to Federal income taxes if it makes
distributions of net investment income and net realized gains in compliance with
subchapter M and meets certain other requirements. (Normally, however, such
distributions are automatically reinvested in additional portfolio shares.) As
the Fund is believed to be in compliance with these requirements, no federal
income tax provision has been provided.
(e) MANAGEMENT FEES - The Fund's investment advisers are compensated with a
quarterly management fee based on an annual percentage of the average daily net
assets of each Portfolio. During 1998, 1997, 1996 and 1995, the adviser was paid
a fee at an annual rate of .25% of the net asset value of the Portfolios except
for the period from January 1, 1995 to June 30, 1995 during which no investment
advisory fee was charged pending approval of new advisory agreements which were
received on June 30, 1995. The maximum management fee which may be charged is an
annual percentage rate of.50% on the first $100 million of average daily net
assets and .45% of average daily net assets in excess thereof.
(f) CONTRIBUTIONS AND WITHDRAWALS - Net funds contributed into or withdrawn
from the Fund are made on the basis of the net asset value per share prevailing
at the close of business on the preceding business day.
(g) RECLASSIFICATIONS - Certain prior year amounts have been reclassified to
conform to current year presentation.
(3) AFFILIATIONS AND RELATED PARTY TRANSACTIONS - ReliaStar United Services and
ReliaStar Life of New York are indirect wholly-owned subsidiaries of ReliaStar
Financial Corp. ("ReliaStar"), a financial services company based in
Minneapolis, Minnesota. Washington Square Advisers, Inc., previously Washington
Square Capital, Inc., a direct wholly-owned ReliaStar subsidiary, serves as
investment adviser to the Fund. The Fund's distributor, Washington Square
Securities, Inc., is also a direct wholly-owned ReliaStar subsidiary. Newbold's
Asset Management, Inc. serves as investment sub-adviser for the Common Stock
Portfolio and the common stock portion of the Asset Allocation Portfolio. The
Fund purchases securities through Newbold's Asset Management, Inc. in the normal
course of business. Effective January 1, 1998, Newbold's Asset Management, Inc.
changed its name to Pilgrim Baxter Value Investors, Inc.
Officers of the Fund are also officers of ReliaStar, Washington Square
Securities, Inc., ReliaStar United Services and ReliaStar Life of New York and
receive compensation therefrom. They do not receive additional compensation for
services rendered to the Fund. Trustees of the Board receive a fee of $1,000 for
each meeting attended during 1998. $500 was paid for each meeting attended
during 1997 and 1996 For the six months ended June 30, 1998, 1997, and 1996,
total fees paid to the Trustees aggregated $8,000, $4,000, and $3,000,
respectively, for all Portfolios combined.
16
<PAGE>
(4) Investments - As of June 30, 1998, net unrealized appreciation for each
portfolio was as follows:
Net
Unrealized
Portfolio Appreciation Depreciation Appreciation
--------- ------------ ------------ ------------
Common Stock $5,794,532 $ (510,386) $5,284,146
MoneyMarket N/A N/A N/A
Bond 69,449 (23,182) 46,267
Asset Allocation 2,102,718 (202,873) 1,899,845
(5) CAPITAL SHARE TRANSACTIONS - TRANSACTIONS IN CAPITAL STOCK FOR THE SIX
MONTHS ENDED JUNE 30, WERE AS FOLLOWS:
<TABLE>
<CAPTION>
<S> <C>
SHARES AMOUNT
----------------- ----------------
1998 1997 1998 1997
---- ---- ---- ----
COMMON STOCK PORTFOLIO:
Shares sold ................................................. -- -- $ -- $ --
Shares issued in reinvestment of dividends .................. 14,060 15,488 206,937 227,980
------- ------- --------- --------
14,060 15,488 206,937 227,980
Shares redeemed ............................................. -- (38,901) -- (531,416)
------- ------- --------- --------
Net increase (decrease) .................................... 14,060 (23,413) $ 3,982,104 (303,436)
======= ======= ========= ========
MONEY MARKET PORTFOLIO:
Shares sold ................................................ -- -- $ -- $ --
Shares issued in reinvestment of dividends ................. 141,520 137,686 141,520 137,686
------- ------- --------- --------
141,520 137,686 141,520 137,686
Shares redeemed ............................................ -- (342,803) -- (342,803)
------- ------- --------- --------
Net increase (decrease) ..................................... 141,520 (205,117) $ 141,520 (205,117)
======= ======= ========= ========
BOND PORTFOLIO:
Shares sold ................................................ -- -- $ -- --
Shares issued in reinvestment of dividends ................. 7,329 8,387 73,481 85,005
-------- ------- --------- --------
7,329 8,387 73,481 85,005
Shares redeemed ............................................. -- (4,475) -- (44,067)
-------- -------- --------- --------
Net increase (decrease) ................................... 7,329 3,912 $ 73,481 $ 40,938
======== ======== ========= ========
ASSET ALLOCATION PORTFOLIO:
Shares sold ................................................ -- -- $ -- $ --
Shares issued in reinvestment of dividends ................. 19,580 22,632 246,561 284,617
-------- ------- --------- --------
19,580 22,632 246,561 284,617
Shares redeemed ............................................. -- (28,781) -- (343,804)
-------- ------- --------- --------
Net increase (decrease) ................................... 19,580 (6,149) 246,561 $ (59,187)
======== ======= ========= ========
</TABLE>
17
<PAGE>
USLICO Series Fund
Condensed Financial Information
For the Six Months Ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Common Money Asset
Stock Market Bond Allocation
Portfolio Portfolio Portfolio Portfolio
----------- ---------- ----------- ------------
FINANCIAL HIGHLIGHTS (per share)
Net asset value, beginning of period $ 13.50 $ 1.00 $ 10.00 $ 11.98
Income from investment operations:
Net investment income 0.11 0.02 0.27 0.19
Net realized and unrealized
gains (losses) on securities 1.27 0.00 0.07 0.67
---------- ----------- ----------- ------------
Total from investment operations 1.38 0.02 0.34 0.86
Distributions:
Distribution of income (0.10) (0.02) (0.26) (0.18)
Distribution of capital gains -- -- -- --
----------- ----------- ----------- ------------
Net asset value, end of period $ 14.78 $ 1.00 $ 10.08 $ 12.66
=========== =========== =========== ============
Total return 10.22% 2.00% 3.40% 7.18%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period $ 30,094,496 $ 5,925,832 $ 2,898,210 $ 17,052,333
Expenses to average net assets 0.37% 0.37% 0.37% 0.37%
Net investment income to average net assets 0.75% 2.42% 2.67% 1.55%
Portfolio turnover rate 43.31% N/A 44.71% 40.91%
Weighted average number of shares outstanding
for six months ended June 30, 1998 2,025,571 5,854,271 282,265 1,332,971
</TABLE>
For the Six Months Ended June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS (per share)
Net asset value, beginning of period $ 13.25 $ 1.00 $ 10.02 $ 11.85
Income from investment operations:
Net investment income 0.13 0.02 0.31 0.24
Net realized and unrealized
gains (losses) on securities 1.65 - (0.07) 0.71
Total from investment operations 1.78 0.02 0.24 0.95
Distributions:
Distribution of income (0.13) (0.02) (0.31) (0.23)
Distribution of capital gains - - - -
--------- ----- --------- ---------
Net asset value, end of period $ 14.90 $ 1.00 $ 9.95 $ 12.57
========= ===== ========= =========
Total return 13 43% 2.000% 2.40% 8.02%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period $26,132,069 $5,774,744 $2,801,730 $15,420,990
Expenses to average net assets 0.36% 0.36% 0 36% 0.36%
Net investment income to average net assets 0.98% 2.35% 3.11% 1.960%
Portfolio turnover rate 40.94% N/A 22.09% 31.38%
Weighted average number of shares outstanding
for six months ended June 30, 1997 1,759,005 5,858,375 277,117 1,222,311
</TABLE>
18
<PAGE>
USLICO Series Fund
Condensed Financial Information
For the Six Months Ended June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Common Money Asset
Stock Market Bond Allocation
Portfolio Portfolio Portfolio Portfolio
----------- --------- --------- -----------
FINANCIAL HIGHLIGHTS (per share)
Net asset value, beginning of period $ 12.62 $ 1.00 $ 10.38 $ 11.82
Income from investment operations:
Net investment income 0.18 0.02 0.32 0.27
Net realized and unrealized
gains (losses) on securities 1.08 - (0.61) 0.14
----------- --------- --------- --------
Total from investment operations 1.26 0.02 (0.29) 0.41
Distributions:
Distribution of income (0.17) (0.02) (0.32) (0.26)
Distribution of capital gains - - - -
----------- --------- --------- --------
Net asset value, end of period $ 13.71 $ 100 $ 9.77 $ 11.97
=========== ========= ========= ========
Total return 9.98% 2.00% (2.79%) 3.47%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period $21,331,637 $5,837,918 $2,628,032 $13,495,050
Expenses to average net assets 0.37% 0.37% 0.37% 0.37%
Net investment income to average net assets 1.36% 2.38% 3.25% 2.25%
Portfolio turnover rate 38.57% N/A 18.37% 29.82%
Weighted average number of shares outstanding
for six months ended June 30, 1996 1,585,079 5,886,655 297,054 1,161,799
</TABLE>
For the Six Months Ended June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS (per share)
Net asset value, beginning of period $ 10.37 $ 1.00 $ 9.41 $ 10.18
Income from investment operations:
Net investment income 0.20 0.03 0.35 0.28
Net realized and unrealized
gains on securities 1.56 - 0.74 1.18
--------- -------- ------- -----------
Total from investment operations 1.76 0.03 1.09 1.46
Distributions:
Distribution of income (0.18) (0.03) (0.33) (0.27)
Distribution of capital gains - - - -
--------- -------- ------- -----------
Net asset value, end of period $ 11.95 $ 1.00 $ 10.17 $ 11.37
========= ======== ======= ===========
Total return 16.97% 3.00% 11.58% 14.34%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period $17,192,186 $5,635,745 $2,858,249 $12,030,713
Expenses to average net assets 0.25% 0.25% 0.25% 0.25%
Net investment income to average net assets 1.76% 2.80% 3.47% 2.64%
Portfolio turnover rate 22.18% N/A 8 39% 13.58%
Weighted average number of shares outstanding
for six months ended June 30, 1995 1,422,300 5,809,244 266,922 1,042,143
</TABLE>
19
<PAGE>
USLICO Series Fund
Condensed Financial Information
For the Six Months Ended June 30, 1994
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Common Money Asset
Stock Market Bond Allocation
Portfolio Portfolio Portfolio Portfolio
---------- --------- --------- ----------
FINANCIAL HIGHLIGHTS (per share)
Net asset value, beginning of period $ 11.23 $ 1.00 $ 10.49 $ 11.26
Income from investment operations:
Net investment income 0.17 0.01 0.33 0.28
Net realized and unrealized
losses on securities (0.30) - (0.66) (0.58)
---------- -------- --------- ---------
Total from investment operations (0.13) 0.01 (0.33) (0.30)
Distributions:
Distribution of income (0.16) (0.01) (0.31) (0.26)
Distribution of capital gains - - - -
---------- --------- --------- ---------
Net asset value, end of period $ 10.94 $ 1.00 $ 9.85 $ 10.70
========== ========= ========= =========
Total return (1.16%) 1.00% (3.15%) (2.66%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period $13,106,990 $ 5,541,252 $2,548,853 $9,643,909
Expenses to average net assets 0.37% 0.37% 0.37% 0.37%
Net investment income to average net assets 1.51% 1.43% 3.24% 2.49%
Portfolio turnover rate 27.89% N/A 4.61% 12.40%
Weighted average number of shares outstanding
for six months ended June 30, 1994 1,127,581 5,422,913 252,884 830,763
</TABLE>
20
<PAGE>
(This Page left Blank Intentionally)
<PAGE>
(This Page Left Blank Intentionally)
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
[RELIASTAR LOGO]
ReliaStar Life Insurance Company of New York JUNE 30, 1998
4601 Fairfax Drive, PO Box 3700
Arlington, VA 22203
SEMI-ANNUAL
REPORT
to Variable Life Policyowners
DYNAMIC
VARIABLE LIFE
Dynamic Variable Life
ReliaStar Life Insurance
Company of New York
Variable Separate Account
USLICO Series Fund
This report is for the
information of Policyowners
and not an offering of the sale
of the Variable Life policy, which can
only be made by a current prospectus
BULK RATE
U.S. POSTAGE [RELIASTAR LOGO HERE]
PAID
CHARLOTTE, NC ReliaStar Life Insurance
PERMIT NO. 136 Company of New York
4601 Fairfax Drive, PO Box 3700
Arlington, VA 22203
</TABLE>
