JUNE 30, 1999
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.
[LOGO] RELIASTAR
RELIASTAR LIFE INSURANCE
COMPANY OF NEW YORK
4601 Fairfax Drive, PO Box 3700
Arlington, VA 22203
VL 4026 (6/99)
<PAGE>
A MESSAGE TO VARIABLE LIFE POLICYOWNERS
We are now in the fifth 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 12.1%, the Dow's increase for
the twelve months ended June 30, 1999, was 22.6%. The S&P increased 6.7% in the
second quarter and 21.1% for the last twelve months. Both the Dow Jones
Industrial Average and the S&P 500 are unmanaged indices and the percentage
changes exclude dividends.
The yield on the 30-year Treasury Bond has increased, so that at the end of
June, it was approximately 6.0%. Short-term rates, as measured by the 3-month
Treasury Bill, are yielding 4.8%, which is also above a quarter ago.
The U.S. Gross Domestic Product for the first quarter of 1999 has increased 4.3%
while inflation remains low with the Consumer Price Index increasing by 2.0%
year-over-year on June 30, 1999.
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, 1999, the invested assets were allocated 99.63%
to 70 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, 1999, this portfolio held 21 different
issues of the highest quality commercial paper with maturities ranging from 1
day to 9 weeks.
THE INVESTMENT GRADE BOND ACCOUNT. Bonds represented 97.84% of the investable
funds on June 30, 1999 with the remainder in a high quality money market fund.
The portfolio was comprised of 30 bond issues, with scheduled maturities ranging
from 4 months to 51 years.
THE ASSET ALLOCATION ACCOUNT. On June 30, 1999, invested assets were allocated
56.91% to common stocks and 42.33% to bonds, with the remainder in a high
quality money market fund. There were 70 different common stock issues in the
portfolio and 34 different bond positions.
THE OUTLOOK. For the remainder of 1999, we expect economic growth to slow to
1.5% to 2.5% given the lagged effect of the global 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 1999. Nevertheless, profits are expected
to grow albeit at a slower rate than in the past few years.
ReliaStar Life Insurance Company of New York is a wholly owned subsidiary of
ReliaStar Financial Corp.
Respectfully,
/s/ Robert C. Salipante
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, 1999
(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 $ 13,171,551 $ 5,176,305 $ 1,208,481 $ 6,219,213 $ 25,775,550
Policy loans 1,590,382 733,941 10,076 695,347 3,029,746
------------ ------------ ------------ ------------ ------------
TOTAL ASSETS 14,761,933 5,910,246 1,218,557 6,914,560 28,805,296
------------ ------------ ------------ ------------ ------------
LIABILITIES:
Net accrued for policy related
transactions due to (from) ReliaStar Life of New York 247,160 36,445 (5,027) 127,156 405,734
Amounts payable to ReliaStar Life of New York 375,000 125,000 1,000,000 1,000,000 2,500,000
------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES 622,160 161,445 994,973 1,127,156 2,905,734
------------ ------------ ------------ ------------ ------------
NET ASSETS - FOR VARIABLE LIFE
INSURANCE POLICIES $ 14,139,773 $ 5,748,801 $ 223,584 $ 5,787,404 $ 25,899,562
============ ============ ============ ============ ============
Investments basis data:
Shares Owned 906,507 5,176,305 129,388 511,448
Cost $ 10,820,517 $ 5,176,305 $ 1,299,255 $ 5,741,617
</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 SIX MONTHS ENDED JUNE 30, 1999
(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 $ 148,204 $ 102,455 $ 29,984 $ 103,223 $ 383,866
Expenses:
Mortality and expense risk charges 31,386 12,651 2,973 14,995 62,005
------------ ------------ ------------ ------------ ------------
NET INVESTMENT INCOME 116,818 89,804 27,011 88,228 321,861
------------ ------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAINS (LOSSES):
Net unrealized gains (losses) on investments 763,145 -- (51,628) 114,526 826,043
Net realized gains (losses) on investments 68,619 -- -- 4,411 73,030
------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) RESULTING FROM INVESTMENTS 831,764 -- (51,628) 118,937 899,073
------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) RESULTING FROM OPERATIONS 948,582 89,804 (24,617) 207,165 1,220,934
------------ ------------ ------------ ------------ ------------
POLICY RELATED TRANSACTIONS:
Transfers in for net premiums 289,334 274,908 18,455 307,810 890,507
Transfers between sub-accounts 30,763 (27,304) -- (3,459) --
Transfers for withdrawal/surrender (357,828) (135,886) (2,779) (194,121) (690,614)
TRANSFER OF INVESTMENT AND OPERATING
RESULTS FROM (TO) RELIASTAR LIFE OF NEW YORK (174,791) (105,654) 12,593 (131,749) (399,601)
------------ ------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS 736,060 95,868 3,652 185,646 1,021,226
NET ASSETS, BEGINNING OF PERIOD 13,403,713 5,652,933 219,932 5,601,758 24,878,336
------------ ------------ ------------ ------------ ------------
NET ASSETS, END OF PERIOD $ 14,139,773 $ 5,748,801 $ 223,584 $ 5,787,404 $ 25,899,562
============ ============ ============ ============ ============
</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, 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.
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, 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 1020604
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.
5
<PAGE>
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE SEPARATE ACCOUNT I -
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999
(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 Yorks'
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, 1999, were:
Cost of Shares Proceeds from
Sub-account Acquired Shares Sold
----------- -------------- -------------
Common Stock $ 148,204 $ 420,937
Money Market 102,936 --
Bond 51,048 --
Asset Allocation 103,223 55,802
---------- ----------
Total $ 405,411 $ 476,739
(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 $398,738, $409,412 and
$417,800 for all sub-accounts for the six months ended June 30, 1999, 1998 and
1997 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 by ReliaStar Life of New York 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 by ReliaStar Life of New York 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. ReliaStar Investment Research, Inc.,
previously known as Washington Square Advisers, 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 ReliaStar Investment Research, Inc.
6
<PAGE>
USLICO SERIES FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
(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 $ 800,435 $ 424 $ 25,322 $ 142,702 $ 968,883
Common stock, at fair value (cost
$27,741,957 and $8,977,054, respectively) 29,636,353 -- -- 9,623,234 39,259,587
Bonds, at fair value (cost
$2,913,277 and $7,447,937, respectively) -- -- 2,764,585 7,157,231 9,921,816
Commercial paper, at amortized
cost which approximates fair value -- 6,104,565 -- -- 6,104,565
Dividends receivable 24,415 -- -- 7,173 31,588
Interest receivable 1,420 17 36,323 84,689 122,449
Securities not settled, net (516,468) -- -- (53,489) (569,957)
------------ ------------ ------------ ------------ ------------
TOTAL ASSETS 29,946,155 6,105,006 2,826,230 16,961,540 55,838,931
------------ ------------ ------------ ------------ ------------
LIABILITIES
Accrued expenses 201,052 41,651 562 51,791 295,056
------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES 201,052 41,651 562 51,791 295,056
------------ ------------ ------------ ------------ ------------
NET ASSETS $ 29,745,103 $ 6,063,355 $ 2,825,668 $ 16,909,749 $ 55,543,875
============ ============ ============ ============ ============
NET ASSET VALUE PER SHARE $ 14.69 $ 1.00 $ 9.38 $ 12.25
============ ============ ============ ============
SHARES OUTSTANDING 2,025,042 6,063,355 301,323 1,379,928
============ ============ ============ ============
NET ASSETS CONSIST OF:
Capital stock ($.001 par value) $ 2,025 $ 6,063 $ 301 $ 1,380
Additional paid-in capital 24,105,454 6,057,292 2,967,650 15,301,867
Accumulated undistributed
net investment income (loss) (1,100) -- 1,142 3,337
Accumulated undistributed net
realized gains (losses) from
investment transactions 3,744,328 -- 5,267 1,247,691
Net unrealized appreciation (depreciation)
of investments 1,894,396 -- (148,692) 355,474
------------ ------------ ------------ ------------
Net assets $ 29,745,103 $ 6,063,355 $ 2,825,668 $ 16,909,749
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
USLICO SERIES FUND-COMMON STOCK PORTFOLIO
STATEMENT OF INVESTMENTS
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK
FAIR FAIR
SHARES VALUE SHARES VALUE
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C>
COMPUTERS & ELECTRONICS - 4.95% INDUSTRIAL - 17.83%
- ------------------------------- -------------------
Intel, Corp. 8,400 $ 499,800 Black & Decker, Corp. 3,200 $ 202,000
International Business Machines, Corp. 5,400 697,950 Consolidated Edison, Inc. 11,100 502,275
Tyco International LTD 2,900 274,775 DuPont E I DeNemours & Co. 2,300 157,119
------------ Ford Motor Co. 13,800 778,838
1,472,525 General Dynamics, Corp. 10,700 732,950
------------ General Motors, Inc. 11,300 745,800
ENERGY - 13.53% Georgia Pacific, Corp. 3,800 180,025
- --------------- Hertz, Corp. 5,200 322,400
BP Amoco 5,500 590,888 Kimberly Clark, Corp. 7,700 438,900
Conoco, Inc. 9,600 267,600 Mead, Corp. 2,100 87,675
Exxon, Corp. 13,300 1,025,763 Textron, Inc. 7,200 592,650
Reliant Energy, Inc. 10,800 298,350 Willamette Industry, Inc. 6,000 276,375
Royal Dutch Pete, Co. 7,500 443,516 Waste Management, Inc. 5,300 286,486
Tenneco, Inc. 24,300 580,162 ------------
Unocal, Corp. 16,100 637,962 5,303,493
Wisconsin Energy, Corp. 7,200 180,450 ------------
------------ TELECOMMUNICATIONS - 14.98%
4,024,691 ---------------------------
------------ A T & T, Corp. 7,800 435,338
FINANCE - 21.97% Bell Atlantic, Corp. 11,964 782,147
- ---------------- BellSouth, Corp. 6,000 281,250
AMBAC Financial Group, Inc. 2,600 148,525 Century Telephone Enterprises, Inc. 20,350 808,913
American International Group, Inc. 4,500 526,781 GTE, Corp. 6,200 469,650
Amsouth Bancorporation 23,200 537,950 Knight Rider, Inc. 8,200 450,488
Bank One, Corp. 7,200 428,850 MCI WorldCom, Inc. 3,500 301,218
Chase Manhattan, Corp. 11,800 1,022,175 SBC Communications, Inc. 3,700 214,600
Citigroup, Inc. 12,700 603,250 US West, Inc. 12,100 710,875
Federal Home Loan Mortgage, Corp. 13,500 783,000 ------------
Federal National Mortgage Assn. 8,300 567,513 4,454,479
Fleet Financial Group, Inc. 13,600 603,500 ------------
Hartford Life, Inc. 3,200 168,400 TRANSPORTATION - 3.25%
Jefferson Pilot, Corp. 4,500 297,844 ----------------------
Marsh & Mclennan Companies, Inc. 2,800 211,400 FDX, Corp. 2,800 151,900
PNC Bank, Corp. 3,800 218,975 ------------
Reynolds RJ TOB Holdings, Inc. 1 10 151,900
Unionbancal, Corp. 6,000 216,750 ------------
Wells Fargo & Co. 4,700 200,925 UTILITIES - 1.29%
------------ -----------------
6,535,848 Ameritech, Corp. 7,400 543,899
------------ Central & Southwest, Corp. 4,100 95,837
FOOD, HOUSE & PERSONAL PRODUCTS - 15.17% Duke Energy, Co. 13,200 717,750
- ---------------------------------------- Florida Progress, Corp. 7,500 309,843
American Stores, Co. 5,800 272,601 GPU, Corp. 3,800 160,313
Best Foods 11,900 589,050 LG & E Energy, Corp. 21,500 451,500
Clorox, Co. 1,500 160,218 Peco Energy, Co. 10,300 435,793
Harrahs Entertainment 15,100 332,200 Puget Sound Energy, Inc. 11,300 271,200
Heinz H J, Co. 11,100 556,388 Southern, Co. 7,400 196,100
Kellogg, Co. 17,600 580,800 ------------
Kroger, Co. 21,100 589,481 3,182,235
Safeway, Inc. 6,200 306,900 ------------
Supervalu, Inc. 10,900 279,994
Tricon Global Restaurants, Inc. 10,800 584,550
Whirlpool, Corp. 3,500 259,000
------------
4,511,182
------------
TOTAL COMMON STOCK 99.63% 29,636,353
OTHER ASSETS AND
LIABILITIES, NET .37% 108,750
------------
NET ASSETS 100.00% $29,745,103
============
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
USLICO SERIES FUND-MONEY MARKET PORTFOLIO
STATEMENT OF INVESTMENTS
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
COMMERCIAL PAPER AMOUNT COST
-------------- --------------
<S> <C> <C>
State Street Repo, 4.70%, Due July 1, 1999 $ 131,000 $ 131,000
Aluminum Company America, 4.8%, Due July 6, 1999 300,000 299,800
Abbott Labs, 4.80%, Due July 8, 1999 300,000 299,720
AT+T Capital, Corp., 4.77%, Due July 12, 1999 300,000 299,563
American Express, Co., 4.80%, Due July 16, 1999 300,000 299,400
Cambell Soup, Co., 4.82%, Due July 16, 1999 300,000 299,398
Pfizer, Inc., 4.84%, Due July 19, 1999 300,000 299,274
Baltimore Gas + Electric, Co., 5.12%, Due July 29, 1999 300,000 298,805
Motorola, Inc., 4.82%, Due July 29, 1999 300,000 298,875
American General Financial, Corp., 4.78%, Due July 30, 1999 300,000 298,845
Dupont EI DeNemours + Co., 4.85%, Due August 3, 1999 300,000 298,666
Gannett, Inc., 4.80%, Due August 4, 1999 300,000 298,640
Procter + Gamble, Co., 4.97%, Due August 5, 1999 300,000 298,550
Bellsouth Telecomm, Inc., 4.92%, Due August 9, 1999 300,000 298,401
Becton Dickinson + Co., 5.01%, Due August 11, 1999 300,000 298,288
Heinz H J, Co., 4.95%, Due August 12, 1999 300,000 298,268
Shell Oil, Co., 4.85%, Due August 13, 1999 300,000 298,262
Johnson + Johnson, 5.12%, Due August 18, 1999 300,000 297,952
Household Financial, Corp. LTD, 4.90, Due August 23, 1999 300,000 297,836
Ford Motor, Co., 4.99%, Due August 27, 1999 300,000 297,630
Walt Disney, Co., 4.89%, Due September 3, 1999 300,000 297,392
TOTAL COMMERCIAL PAPER 100.68 % $ 6,131,000 6,104,565
============
OTHER ASSETS AND
LIABILITIES, NET -.68 % (41,210)
------------
NET ASSETS 100.00 % $ 6,063,355
============
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
USLICO SERIES FUND-BOND PORTFOLIO
STATEMENT OF INVESTMENTS
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
PAR FAIR
BONDS VALUE VALUE
------------ ------------
<S> <C> <C>
GOVERNMENT - 17.96%
-------------------
FHLMC, 5.58%, Due December, 2026 # $ 79,911 $ 81,973
FNMA, 7.50%, Due July, 2027 # 14,750 15,151
FNMA, 6.93%, Due July, 2027 # 21,872 22,611
GNMA Pool 181826, 9.00%, Due March, 2021 # 18,035 19,235
US Trust Security Strips, Due February, 2021 1,040,000 267,404
US Trust Security Strips, Due February, 2019 100,000 28,981
US Trust Security Strips, Due February, 2005 100,000 72,000
------------- -------------
1,374,568 507,355
------------- -------------
DRUGS & HEALTH CARE - 8.69%
---------------------------
American Health PPTYS, Inc., 7.05%, Due January, 2002 100,000 97,054
Columbia/HCA Healthcare, Corp., 6.41%, Due June, 2000 150,000 148,449
------------- -------------
250,000 245,503
------------- -------------
FINANCE - 63.15%
----------------
Abbey National PLC, 7.35%, Due October, 2049 # 100,000 96,825
Advanta Mortgage Loan Trust, 6.06%, Due March, 2028 50,000 50,649
Amerco, 6.65%, Due October, 1999 150,000 149,804
Amresco Residential Securities, Corp., 6.30%, Due January, 2028 100,000 100,500
BHP Finance USA, 6.42%, Due March, 2026 # 100,000 98,354
Equity Office Properties Trust, 6.38%, Due February, 2003 150,000 147,345
Franchise Financial Corp. America, 8.25%, Due October 2003 100,000 99,679
Health Care Reit, Inc.,7.57%, Due April 2000 100,000 99,862
IBJ Preferred Capital, Co., 8.79%, Due December, 2049 # 25,000 20,974
Macsaver Financial Services, Inc., 7.40%, Due February, 2002 150,000 128,250
Malayan Banking Berhad-NY, 7.13%, Due September, 2005 100,000 88,023
Noranda Forest, Inc., 6.88%, Due November, 2005 100,000 96,083
Protection One Alarm Monitor, Inc., 7.38%, Due August 2005 150,000 138,747
Regency Centers, LP., 7.13%, Due July, 2005 100,000 100,079
SB Treasury, Co., 9.40%, Due December, 2049 # 25,000 24,371
Salomon Brothers Mortgage Securities VII, 6.30%, Due June, 2028 145,000 144,909
Salomon Brothers Mortgage Securities VII, 1.00%, Due October , 2028 75,000 75,000
TriNet Corporate Realty Trust, 6.75%, Due March, 2003 100,000 95,500
United Companies Financial, Corp., 9.35%, Due November, 1999 100,000 29,500
------------- -------------
1,920,000 1,784,454
------------- -------------
INDUSTRIAL - 8.04%
------------------
Bantec, Inc., 7.5%, Due June, 2008 100,000 86,343
Conseco, Inc., 7.88%, Due December, 2000 140,000 140,930
------------- -------------
240,000 227,273
------------- -------------
TOTAL BONDS 97.84% $ 3,784,568 2,764,585
=============
OTHER ASSETS AND
LIABILITIES, NET 2.16% 61,083
-------------
NET ASSETS 100.00% $ 2,825,668
=============
</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, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK
FAIR FAIR
SHARES VALUE SHARES VALUE
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
COMPUTERS & ELECTRONICS - 2.92% INDUSTRIAL - 9.48%
- ------------------------------- ------------------
Intel, Corp. 2,800 $ 166,600 Black & Decker, Corp. 1,100 $ 69,438
International Business Machines, Corp. 1,800 232,650 Consolidated Edison, Inc. 3,600 162,900
Tyco International. LTD 1,000 94,750 Du Pont E I De Nemours & Co. 1,000 68,313
------------ Ford Motor, Co. 4,500 253,969
494,000 General Dynamics, Corp. 3,500 239,750
------------ General Motors, Inc. 3,700 244,200
ENERGY - 7.63% Georgia Pacific, Corp. 1,200 56,850
- -------------- Hertz, Corp. 1,700 105,400
BP Amoco 1,800 193,395 Mead, Corp. 700 29,225
Conoco, Inc. 2,900 80,837 Texetron, Inc. 2,300 189,319
Exxon, Corp. 4,400 339,350 Waste Management, Inc. 1,700 91,892
Reliant Energy, Inc. 3,500 96,688 Willamette Industry, Inc. 2,000 92,125
Royal Dutch Pete, Co. 2,000 118,271 ------------
Tenneco, Inc. 8,000 191,000 1,603,379
Unocal, Corp. 5,300 210,013 ------------
Wisconsin Energy, Corp. 2,400 60,150 TELECOMMUNICATIONS - 9.39%
------------ --------------------------
1,289,704 A T & T, Corp. 2,550 142,322
------------ Ameritech, Corp. 2,400 176,400
Bell Atlantic, Corp. 3,842 251,171
FINANCE - 13.51% BellSouth, Corp. 1,800 84,375
- ---------------- Century Telephone Enterprises, Inc. 6,600 262,350
AMBAC Financial Group, Inc. 800 45,700 GTE, Corp. 2,050 155,288
American International Group, Inc. 1,400 163,888 Knight Rider, Inc. 2,700 148,331
Amsouth Banckorportation 10,600 245,788 MCI WorldCom, Inc. 1,000 86,063
Bank One, Corp. 2,200 131,038 SBC Communications, Inc. 1,200 69,600
Chase Manhattan, Corp. 3,700 320,512 US West, Inc. 3,600 211,500
Citigroup, Inc. 4,200 199,500 ------------
Federal Home Loan Mortage, Corp. 4,400 255,200 1,587,399
Federal National Mortage Assn. 2,700 184,612 ------------
Fleet Financial Group, Inc. 4,400 195,250 TRANSPORTATION - .29%
Hartford Life, Inc. 1,000 52,625 ---------------------
Jefferson Pilot, Corp. 1,500 99,281 FDX, Corp. 900 48,825
Marsh & Mclennan Companies, Inc. 900 67,950 ------------
PNC Bank, Corp. 1,200 69,150 48,825
Reynolds RJ TOB Holdings, Inc. 1 10 ------------
Safeway, Inc. 2,100 103,950 UTILITIES - 5.29%
Unionbancal, Corp. 2,000 72,250 -----------------
Wells Fargo & Co. 1,800 76,950 Central & South West, Corp. 1,500 35,063
------------ Duke Energy, Co. 4,300 233,813
2,283,654 Florida Progress, Corp. 3,200 132,200
------------ GPU, Inc. 1,100 46,406
FOOD, HOUSE & PERSONAL PRODUCTS - 8.41% LG&E Energy, Corp. 6,800 142,800
- --------------------------------------- Peco Energy, Co. 3,400 143,854
American Stores, Co. 1,900 89,300 Puget Sound Energy, Inc. 3,700 88,800
Best Foods 3,900 193,050 Southern, Co. 2,700 71,550
Clorox, Co. 300 32,044 ------------
Harrahs Entertainment, Inc. 4,200 92,400 894,485
Heinz H J, Co. 3,600 180,450 ------------
Kellogg, Co. 5,700 188,100
Kimberly Clark, Corp. 2,500 142,500
Kroger, Co. 6,900 192,769
Supervalu, Inc. 3,600 92,475
Tricon Global Restaurants, Inc. 2,400 129,900
Whirlpool, Corp. 1,200 88,800
------------
1,421,788
------------
TOTAL COMMON STOCK 56.91% 9,623,234
------------
</TABLE>
(continued)
See accompanying notes to financial statements.
11
<PAGE>
USLICO SERIES FUND-ASSET ALLOCATION PORTFOLIO
STATEMENT OF INVESTMENTS
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
BONDS PAR FAIR
GOVERNMENT - 9.00% VALUE VALUE
------------------ ------------ -------------
<S> <C> <C>
FHLMC, 9.00%, Due October, 2019 # 7,214 $ 7,690
FHLMC, 5.58%, Due December, 2026 # 209,391 214,795
FNMA, 5.84%, Due July, 2027 # 73,751 75,754
FNMA, 6.00%, Due July, 2027 # 58,180 60,144
GNMA, 10.00%, Due February, 2016 # 8,633 9,467
US Trust Security Strips, Due February, 2005 450,000 324,000
US Trust Security Strips, Due February, 2019 400,000 115,924
US Trust Security Strips, Due February, 2021 2,780,000 714,794
------------
1,522,568
------------
DRUGS & HEALTH CARE - 3.31%
---------------------------
American Health PPTYS, Inc., 7.05%, Due January, 2002 200,000 194,108
Columbia/HCA Healthcare, Corp., 6.41%, Due June, 2000 370,000 366,174
------------
560,282
------------
FINANCE - 27.03%
----------------
Abbey National PLC, 7.35%, Due October, 2049 # 100,000 96,825
Advanta Mortgage Loan Trust, 6.06%, Due March, 2028 100,000 101,299
Amerco, 6.65%, Due October, 1999 300,000 299,607
Amresco Residential Securities, Corp., 6.30%, Due January, 2028 200,000 201,000
BHP Finance USA, 6.42%, Due March, 2026 # 100,000 98,354
Conseco, Inc., 7.88%, Due December, 2000 360,000 362,390
Equity Office Properties Trust, 6.375%, Due February, 2003 300,000 294,690
Franchise Financial, Corp. America, 8.25%, Due October 2003 200,000 199,358
Health Care Reit, Inc., 7.57%, Due April 2000 360,000 359,503
IBJ Preferred Capital, Co., 8.79%, Due December, 2049 # 125,000 104,869
Macsaver Financial Services, Inc., 7.40%, Due February, 2002 350,000 299,250
Malayan Banking Berhad-NY, 7.125%, Due September, 2005 100,000 88,023
Nomura Depositor Trust, 6.18%, Due January, 2003 # 100,000 100,125
Noranda Forest, Inc., 6.88%, Due November, 2005 100,000 96,083
Protection One Alarm Monitor, Inc., 7.38%, Due August 2005 350,000 323,743
Regency Centers, LP., 7.13%, Due July, 2005 300,000 300,237
SB Treasury, Co., 9.40% Due December, 2049 # 125,000 121,853
Salomon Brothers Mortgage Securities VII, 6.30%, Due June, 2028 365,000 364,772
Salomon Brothers Mortgage Securities VII, 1.00%, Due October, 2028 365,000 365,000
TriNet Corporate Realty Trust, 6.75%, Due March, 2003 350,000 334,250
United Companies Financial, Corp., 9.35%, Due November, 1999 200,000 59,000
------------
4,570,231
------------
INDUSTRIAL - 2.38%
------------------
Bantec, Inc., 7.5%, Due June 2008 350,000 302,201
Canadian Pacific, 6.875%, Due April, 2003 100,000 100,629
------------
402,830
------------
UTILITIES - .60%
----------------
Kansas City Power & Light, 7.40%, Due February, 2008 # 100,000 101,320
------------
101,320
------------
TOTAL BONDS 42.33% 9,957,170 7,157,231
============= ============
TOTAL INVESTMENTS 99.24% 16,780,465
OTHER ASSETS AND
LIABILITIES, NET 0.76% 129,284
------------
NET ASSETS 100.00% $16,909,749
============
</TABLE>
# - Callable at the option of the issuer.
See accompanying notes to financial statements.
12
<PAGE>
USLICO SERIES FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Common Money Asset
Stock Market Bond Allocation
Portfolio Portfolio Portfolio Portfolio
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment income:
Income:
Dividends 275,290 -- $ -- $ 91,013
Interest 10,602 146,981 81,676 212,096
------------ ------------ ------------ ------------
Total income 285,892 146,981 81,676 303,109
------------ ------------ ------------ ------------
Expenses:
Accounting fee 15,019 3,210 1,501 8,748
Custodian fee 31,402 6,712 3,138 18,292
Management fee 56,056 7,998 9,377 32,480
Other administrative 43,850 9,373 4,384 25,549
------------ ------------ ------------ ------------
Subtotal 146,327 27,293 18,400 85,069
Less expenses reimbursed by RLNY & RL 21,162 540 5,889 12,151
------------ ------------ ------------ ------------
Total expenses 125,165 26,753 12,511 72,918
------------ ------------ ------------ ------------
Net investment income 160,727 120,228 69,165 230,191
------------ ------------ ------------ ------------
Realized and unrealized gains (losses)
on investments:
Net proceeds from sales 40,338,972 -- 347,273 14,656,204
Cost of securities sold (36,594,644) -- (341,833) (13,408,513)
------------ ------------ ------------ ------------
Net realized gains on investments 3,744,328 -- 5,440 1,247,691
Net unrealized gains (losses) on investments (1,427,234) -- (112,689) (738,464)
------------ ------------ ------------ ------------
Net gains (losses) on investments 2,317,094 -- (107,249) 509,227
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations 2,477,821 120,228 (38,084) 739,418
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
USLICO SERIES FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Common Money Asset
Stock Market Bond Allocation
Portfolio Portfolio Portfolio Portfolio
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income $ (167,637) $ (120,228) $ (70,044) $ (233,839)
Net realized gains on investments (161,690) -- -- (44,774)
CAPITAL SHARE TRANSACTIONS (177,407) 99,628 101,914 113,575
------------ ------------ ------------ ------------
Net increase (decrease) in net assets 1,971,087 99,628 (6,214) 574,380
NET ASSETS, BEGINNING OF YEAR 27,774,016 5,963,727 2,831,882 16,335,369
------------ ------------ ------------ ------------
NET ASSETS, END OF YEAR $ 29,745,103 $ 6,063,355 $ 2,825,668 $ 16,909,749
============ ============ ============ ============
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income $ (206,937) $ (141,520) $ (73,481) $ (246,561)
Net realized gains on investments -- -- -- --
CAPITAL SHARE TRANSACTIONS 206,937 141,520 73,481 246,561
------------ ------------ ------------ ------------
Net increase (decrease) 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 YEAR $ 30,094,496 $ 5,925,832 $ 2,898,210 $ 17,052,333
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
USLICO SERIES FUND - NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999
(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 Life Insurance
Company (ReliaStar Life), previously ReliaStar United Services Life Insurance
Company 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 qualify 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 1999, 1998 and 1997 the adviser was paid a fee
at an annual rate of .25% of the net asset value of the Portfolios. 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. ReliaStar Life will reimburse the Portfolios to the
extent that management fees exceed .25%.. For the six months ended June 30, 1999
ReliaStar Life has reimbursed the Common Stock Portfolio $21,162, the Money
Market Portfolio $540, the Bond Portfolio $5,889 and the Asset Allocation
Portfolio $12,151.
(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 Life 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. Effective June 30, 1998, Washington Square Advisers, Inc.
changed its name to ReliaStar Investment Research, Inc. 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 Life 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 1999 abd 1998. $500 was paid for each meeting attended
during 1997. For the six months ended June 30, 1999, 1998, and 1997, total fees
paid to the Trustees aggregated $8,000, $8,000, and $4,000, respectively, for
all Portfolios combined.
15
<PAGE>
(4) INVESTMENTS - As of June 30, 1999, net unrealized appreciation
(depreciation) for each portfolio was as follows:
<TABLE>
<CAPTION>
Net
Unrealized
Appreciation
Portfolio Appreciation Depreciation (Depreciation)
--------- ------------ ------------ --------------
<S> <C> <C> <C>
Common Stock $2,502,209 $ (607,813) $1,894,396
Money Market N/A N/A N/A
Bond 14,390 (163,082) (148,692)
Asset Allocation 900,082 (544,608) 355,474
</TABLE>
(5) CAPITAL SHARE TRANSACTIONS - Transactions in capital stock for the six
months ended June 30, were as follows:
<TABLE>
<CAPTION>
SHARES AMOUNT
------------------------- -------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
COMMON STOCK PORTFOLIO:
Shares issued in reinvestment of dividends ......... 23,396 14,060 $ 329,327 $ 206,937
Shares purchased/(redeemed) ........................ (35,361) -- (506,734) --
---------- ---------- ---------- ----------
Net increase (decrease) ........................... (11,965) 14,060 $ (177,407) $ 206,937
========== ========== ========== ==========
MONEY MARKET PORTFOLIO:
Shares issued in reinvestment of dividends ........... 120,228 141,520 $ 120,228 $ 141,520
Shares purchased/(redeemed) .......................... (20,600) -- (20,600) --
---------- ---------- ---------- ----------
Net increase (decrease) ......................... 99,628 141,520 $ 99,628 $ 141,520
========== ========== ========== ==========
BOND PORTFOLIO:
Shares issued in reinvestment of dividends ........... 7,451 7,329 $ 70,044 $ 73,481
Shares purchased/(redeemed) ........................ 3,316 -- 31,870 --
---------- ---------- ---------- ----------
Net increase (decrease) ........................... 10,767 7,329 $ 101,914 $ 73,481
========== ========== ========== ==========
ASSET ALLOCATION PORTFOLIO:
Shares issued in reinvestment of dividends ......... 23,380 19,580 $ 278,613 $ 246,561
Shares purchased/(redeemed) ........................ (13,539) -- (165,038) --
---------- ---------- ---------- ----------
Net increase (decrease) ........................... 9,841 19,580 $ 113,575 $ 246,561
========== ========== ========== ==========
</TABLE>
16
<PAGE>
USLICO SERIES FUND
CONDENSED FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON MONEY ASSET
STOCK MARKET BOND ALLOCATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS (PER SHARE)
Net asset value, beginning of year $ 13.64 $ 1.00 $ 9.74 $ 11.92
Income from investment operations:
Net investment income 0.08 0.02 0.24 0.17
Net realized and unrealized
gains (losses) on securities 1.13 -- (0.36) 0.36
------------ ------------ ------------ ------------
Total from investment operations 1.21 0.02 (0.12) 0.53
Distributions:
Distribution of income (0.08) (0.02) (0.24) (0.17)
Distribution of capital gains (0.08) -- -- (0.03)
------------ ------------ ------------ ------------
Net asset value, end of period $ 14.69 $ 1.00 $ 9.38 $ 12.25
============ ============ ============ ============
Total return 8.95% 5.00% -1.33% 4.45%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period $ 29,745,103 6,063,355 $ 2,825,668 $ 16,909,749
Expenses to average net assets 0.44% 0.44% 0.44% 0.44%
Net investment income to average net assets 0.57% 2.00% 2.45% 1.40%
Portfolio turnover rate 266.78% N/A 23.47% 169.63%
Weighted average number of shares outstanding
for period ended June 30, 1999 2,029,473 6,016,381 293,733 1,371,136
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
FINANCIAL HIGHLIGHTS (PER SHARE)
Net asset value, beginning of year $ 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 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 period ended June 30, 1998 2,025,571 5,854,271 282,265 1,332,971
</TABLE>
17
<PAGE>
USLICO SERIES FUND
CONDENSED FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON MONEY ASSET
STOCK MARKET BOND ALLOCATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS (PER SHARE)
Net asset value, beginning of year $ 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% 2.00% 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% 1.96%
Portfolio turnover rate 40.94% N/A 22.09% 31.38%
Weighted average number of shares outstanding
for period ended June 30, 1997 1,759,005 5,858,375 277,117 1,222,311
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
FINANCIAL HIGHLIGHTS (PER SHARE)
Net asset value, beginning of year $ 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 $ 1.00 $ 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 period ended June 30, 1996 1,585,079 5,886,655 297,054 1,161,799
</TABLE>
18
<PAGE>
USLICO SERIES FUND
CONDENSED FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON MONEY ASSET
STOCK MARKET BOND ALLOCATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS (PER SHARE)
Net asset value, beginning of year $ 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 period ended June 30, 1995 1,422,300 5,809,244 266,922 1,042,143
</TABLE>
19
<PAGE>
RELIASTAR LIFE INSURANCE BULK RATE
COMPANY OF NEW YORK U.S. POSTAGE
4601 Fairfax Drive, PO Box 3700 PAID
Arlington, VA 22203 PERMIT NO. 26388
MINNEAPOLIS, MN
