LIFE OF VIRGINIA SEPARATE ACCOUNT I
Financial Statements
For the six months ended June 30, 1998
(Unaudited)
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT I
Table of Contents
For the six months ended June 30, 1998
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Page
Financial Statements:
(Unaudited)
Statements of Assets and Liabilities..................................1
Statements of Operations..............................................2
Statements of Changes in Net Assets...................................3
Notes to Financial Statements.............................................4
(Unaudited)
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<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT I
Statements of Assets and Liabilities
As of June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
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GE Investments Funds, Inc.
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S&P 500 Money Total
Index Market Return Income
Assets Fund Fund Fund Fund
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<S> <C>
Investment in GE Investments Funds,
Inc., at
fair value (note 2):
S&P 500 Index Fund (146,336
shares;
cost - $2,325,357) $ 3,307,186 - - -
Money Market Fund (2,027,499
shares;
cost - $1,991,825) - 2,027,499 - -
Total Return Fund (37,084 shares;
cost - $480,786) - - 543,658 -
Income Fund (92,706 shares;
cost - $1,124,002) - - - 1,167,170
Receivable from affiliate (note 3) 10,586 13,087 - -
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Total assets $ 3,317,772 2,040,586 543,658 1,167,170
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Liabilities
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Accrued expenses payable to
affiliate (note 3) 3,481 128 1,989 5,503
Payable for units withdrawn 650 - 93 2
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Total liabilities 4,131 128 2,082 5,505
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Net
assets $ 3,313,641 2,040,458 541,576 1,161,665
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Analysis of Net Assets
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For flexible premium variable life
insurance policies $ 3,313,641 122,378 541,576 39,143
Attributable to The Life Insurance
Company of Virginia - 1,918,080 - 1,122,522
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Net
assets $ 3,313,641 2,040,458 541,576 1,161,665
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Outstanding units 38,738 6,562 12,056 3,767
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Net asset value per unit $ 85.54 18.65 44.92 10.39
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</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
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LIFE OF VIRGINIA SEPARATE ACCOUNT I
Statements of Operations
For the six months ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
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GE Investments Funds, Inc.
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S&P 500 Money Total
Index Market Return Income
Fund Fund Fund Fund
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<S> <C>
Investment income:
Income - Dividends from GE Investments
Funds, Inc. $ - 49,749 - -
Expenses - Mortality and expense risk
charges (note 3) 7,782 297 1,297 108
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Net investment income (expense) (7,782) 49,452 (1,297) (108)
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Net realized and unrealized gain (loss) on investments:
Net realized gain 38,742 743 1,761 446
Unrealized appreciation (depreciation)
on investments 457,745 (743) 52,146 43,969
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Net realized and unrealized gain
on investments 496,487 - 53,907 44,415
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Increase in net assets from operations $ 488,705 49,452 52,610 44,307
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</TABLE>
See accompanying notes to unaudited financial statements.
2
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LIFE OF VIRGINIA SEPARATE ACCOUNT I
Statements of Changes in Net Assets
As of June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
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GE Investments Funds, Inc.
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S&P 500 Money Total
Index Market Return Income
Fund Fund Fund Fund
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<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) $ (7,782) 49,452 (1,297) (108)
Net realized gain 38,742 743 1,761 446
Unrealized appreciation (depreciation)
on investments 457,745 (743) 52,146 43,969
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Increase in net assets from operations 488,705 49,452 52,610 44,307
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From capital transactions:
Net premiums 67,449 2,262 18,700 2,415
Loan interest (2,800) (138) (1,211) (177)
Transfers (to) from the general
account of Life of Virginia:
Death benefits (7,089) - - -
Surrenders (28,252) - (808) (2,195)
Loans (780) - 845 -
Cost of insurance (note 3) (68,153) (5,923) (18,276) (1,807)
Transfer gain (loss) and
transfer fees (note 3) 917 (3,126) (187) 235
Capital contribution (withdrawal) - - - -
Transfers (to) from the Guarantee
Account (note 1) 106 - - -
Interfund transfers (13,984) 33,035 - (19,051)
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Increase (decrease) in net assets from
capital transactions (52,586) 26,110 (937) (20,580)
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Increase in net assets 436,119 75,562 51,673 23,727
Net assets at beginning of year 2,877,522 1,964,896 489,903 1,137,938
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Net assets at end of year $ 3,313,641 2,040,458 541,576 1,161,665
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</TABLE>
See accompanying notes to unaudited financial statements.
3
<PAGE>
Life of Virginia Separate Account I
Notes to Financial Statements
June 30, 1998
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(Unaudited)
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(1) Description of Entity
Life of Virginia Separate Account I (the Account) is a separate investment
account established in 1984 by The Life Insurance Company of Virginia
(Life of Virginia) under the laws of the Commonwealth of Virginia. The
Account operates as a unit investment trust under the Investment Company
Act of 1940. The Account is used to fund certain benefits for flexible
premium variable life insurance policies issued by Life of Virginia prior
to December 31, 1988. The Life Insurance Company of Virginia is a stock
life insurance company operating under a charter granted by the
Commonwealth of Virginia on March 21, 1871. Eighty percent of the capital
stock of Life of Virginia is owned by General Electric Capital Assurance
Corporation. The remaining 20% is owned by GE Financial Assurance
Holdings, Inc. General Electric Capital Assurance Corporation and GE
Financial Assurance Holdings, Inc. are indirectly, wholly-owned
subsidiaries of General Electric Capital Corporation ("GE Capital"). GE
Capital, a diversified financial services company, is a wholly-owned
subsidiary of General Electric Company (GE), a New York corporation. Prior
to April 1, 1996, Life of Virginia was an indirect wholly-owned subsidiary
of Aon Corporation.
(2) Summary of Significant Accounting Policies
Investments
Investments are stated at fair value, which is based on the underlying net
asset value per share of the respective funds. Purchases and sales of
investments are recorded on the trade date and income distributions are
recorded on the ex-dividend date. Realized gains and losses on investments
are determined on the average cost basis. The units and unit values are
disclosed as of the last business day in the applicable year or period.
The aggregate cost of investments acquired and the aggregate proceeds of
investments sold, for the six months ended June 30, 1998 were:
Cost of Shares Proceeds From
Fund Acquired Shares Sold
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GE Investments Funds, Inc.:
S&P 500 Index $ 109,339 168,195
Money Market 119,360 40,569
Total Return 21,091 22,778
Income 12,498 33,171
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4
<PAGE>
Life of Virginia Separate Account I
Notes to Financial Statements
June 30, 1998
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(Unaudited)
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(2) Continued
Capital Transactions
The increase (decrease) in outstanding units from capital transactions for the
six months ended June 30, 1998 is as follows:
GE Investments Funds, Inc.
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S&P 500 Money Total
Index Market Return Income
Fund Fund Fund Fund
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Units outstanding at December 31,1997 39,434 4,958 12,075 5,815
From capital transactions:
Net premiums 878 125 473 238
Loan Interest (36) (8) (31) (17)
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits (92) - - -
Surrenders (368) - (20) (216)
Loans (10) - 21 -
Cost of insurance (887) (325) (462) (178)
Fixed Transfers 1 - - -
Interfund transfers (182) 1,812 - (1,875)
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Net increase (decrease) in units resulting
from capital transactions (696) 1,604 (19) (2,048)
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Units outstanding at June 30, 1998 38,738 6,562 12,056 3,767
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Federal Income Taxes
The Account is not taxed separately because the operations of the Account
are part of the total operations of Life of Virginia. Life of Virginia is
taxed as a life insurance company under the Internal Revenue Code (the
Code). Life of Virginia is included in the General Electric Capital
Assurance Company consolidated federal income tax return. The Account will
not be taxed as a regulated investment company under subchapter M of the
Code. Under existing federal income tax law, no taxes are payable on the
investment income or on the capital gains of the Account.
Use of Estimates
Financial statements prepared in conformity with generally accepted
accounting principles require management to make estimates and assumptions
that affect amounts and disclosures reported therein. Actual results could
differ from those estimates.
5
<PAGE>
Life of Virginia Separate Account I
Notes to Financial Statements
June 30, 1998
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(Unaudited)
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(3) Related Party Transactions
Net premiums transferred from Life of Virginia to the Account represent
gross premiums recorded by Life of Virginia on its flexible premium
variable life insurance policies, less deductions retained as compensation
for certain distribution expenses and premium taxes. A charge equal to the
lesser of $25 or 2% of the amount paid on a partial surrender will be made
to compensate Life of Virginia for the costs incurred in connection with
accomplishing the surrender.
A charge based on the policy specified amount of insurance, death benefit
option, cash values, duration, the insured's sex, issue age and risk class
is deducted from the policy cash values each month to compensate Life of
Virginia for the cost of insurance and any benefits added by rider. In
addition, Life of Virginia charges the Account for the mortality and
expense risk that Life of Virginia assumes. This charge is deducted daily
at an effective annual rate of .50% of the net assets of the Account.
GE Investments Funds, Inc. (the Fund) is an open-end diversified
management investment company.
Capital Brokerage Corporation, an affiliate of Life of Virginia, is a
Washington corporation registered with the Commission under the Securities
Exchange Act of 1934 as a broker-dealer and is a member of the National
Association of Securities Dealers, Inc. Capital Brokerage Corporation also
serves as principal underwriter for variable life insurance policies
issued by Life of Virginia.
GE Investment Management Incorporated (Investment Advisor), a wholly-owned
subsidiary of GE, currently serves as investment advisor to GE Investments
Funds, Inc. As compensation for its services, the Investment Advisor is
paid an investment advisory fee by the Fund based on the average daily net
assets at an effective annual rate of .35% for the S&P 500 Index Fund,
.50% for the Money Market Fund and .50% for the Total Return and Income
Funds.
Certain officers and directors of Life of Virginia are also officers and
directors of Capital Brokerage Corporation.
6
