LIFE OF VIRGINIA SERIES FUND INC, 485BPOS, 1995-05-09

LIFE OF VIRGINIA SERIES FUND INC
485BPOS, 1995-05-09

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As filed with the Securities and Exchange Commission on May 1, 1995

File No. 2-91369
File No. 811-4041

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. ___ [ ]
Post-Effective Amendment No. 15 [x]

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 16 [x]

LIFE OF VIRGINIA SERIES FUND, INC.
(Exact Name of Registrant)

6610 West Broad Street
Richmond, Virginia 23230
(Address of Principal Executive Offices)

Registrant's Telephone Number: 1-800-866-3555

John J. Palmer, President
Life of Virginia Series Fund, Inc.
6610 West Broad Street
Richmond, Virginia 23230
(Name and Address of Agent for Service of Process)

Copy to:

Stephen E. Roth, Esquire
Sutherland, Asbill & Brennan
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2404

_____________________________________________________________

It is proposed that this filing become effective:

___ immediately upon filing pursuant to paragraph (b) of Rule 485
_X_ on May 1, 1995 pursuant to paragraph (b) of Rule 485
___ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
___ on Date pursuant to paragraph (a)(1) of Rule 485
___ 75 days after filing pursuant to paragraph (a)(2) of Rule 485
___ on Date pusuant to paragraph (a)(2) of Rule 485

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
registrant has registered an indefinite amount of securities. The
registrant filed a Rule 24f-2 Notice for its fiscal year ending December
31, 1994 on February 27, 1995.

CROSS REFERENCE SHEET

Item No. of Caption
Form N1-A

Part A Prospectus

1.................. Cover Page

3.................. Financial Highlights

4.................. Life of Virginia Series Fund, Inc.; Investment
Objectives and Policies; Investment Practices

5.................. Management of the Fund

6.................. Life of Virginia Series Fund, Inc., Dividends,
Distributions and Taxes; Additional Information

7.................. Purchase and Redemption of Fund Shares

8.................. Purchase and Redemption of Fund Shares

9.................. Not Applicable

Part B Statement of Additional Information

10................. Cover Page

11................. Table of Contents

12................. Not Applicable

13................. General Information; Investment Practices and
Restrictions; Appendix A; Appendix B

14................. Management of the Fund

15................. General Information; Management of the Fund Additional
Information

16................. Management of the Fund; Additional Information

17................. Portfolio Transactions and Brokerage

18................. Dividends and Distributions; Additional Information

19................. Determination of Net Asset Value; Purchase and
Redemption of Fund Shares

20................. Taxes

21................. Not Applicable

22................. Yield Quotation for Money Market Portfolios

23................. Financial Statements

PART A
PROSPECTUS

LIFE OF VIRGINIA SERIES FUND, INC.
6610 W. Broad Street
Richmond, Virginia 23230
(804) 281-6000

Life of Virginia Series Fund, Inc. ("Fund") is an open-end,
diversified management investment company (commonly known as a mutual
fund). The Fund currently has six investment portfolios.

The Government Securities Portfolio has the investment objective of
seeking high current income and protection of capital through
investments in intermediate and long-term debt instruments issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.

The Real Estate Securities Portfolio has the investment objective of
providing maximum total return through current income and capital
appreciation. The Portfolio seeks to achieve this objective by
investing primarily in securities of U.S. issuers that are principally
engaged in or related to the real estate industry including those that
own significant real estate assets. The Portfolio will not invest
directly in real estate.

At the current time, shares of the Fund are offered only to
certain Separate Accounts of The Life Insurance Company of Virginia and
to the Aon Savings Plan.

This Prospectus concisely sets forth information about the Fund
that a prospective investor ought to know before investing. Please read
the Prospectus thoroughly and retain it for future reference. A
Statement of Additional Information, dated May 1, 1995, containing
additional information about the Fund, has been filed with the
Securities and Exchange Commission. The Statement may be obtained
without charge by sending a written request to the Fund at the above
address or calling the telephone number shown. The Statement of
Additional Information is incorporated into this Prospectus by
reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The Date of This Prospectus is May 1, 1995

TABLE OF CONTENTS

Page
Life of Virginia Series Fund, Inc.

Financial Highlights

Investment Objectives and Policies

Common Stock Index Portfolio
Government Securities Portfolio
Money Market Portfolio
Total Return Portfolio
International Equity Portfolio
Real Estate Securities Portfolio

Investment Practices

Loans of Portfolio Securities
Short-Term Money Market Instruments
Foreign Investments and Currency
Writing Covered Call and Put Options and Purchasing Call and Put Options
Financial Futures Contracts and Options on Such Contracts
Restricted Securities and Other Illiquid Investments
Lower-Rated Securities
Borrowing
Real Estate Investment Trusts

Determination of Net Asset Value

Purchase and Redemption of Fund Shares

Dividends, Distributions and Taxes

Dividends and Distributions
Taxes

Management of the Fund

Board of Directors
Investment Adviser
Investment Sub-Advisers
Portfolio Managers

Additional Information

Capital Stock
Contract Owner Voting Rights
Plan Participant Voting Rights
Unaffiliated Plan Participant Voting Rights
Annual Reports
Inquiries
Custodian, Transfer and Dividend Paying Agent
Legal Matters

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY STATE IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE

LIFE OF VIRGINIA SERIES FUND, INC.

Life of Virginia Series Fund, Inc. (the "Fund") is an open-end
management investment company incorporated under the laws of the
Commonwealth of Virginia on May 14, 1984. The Fund consists of six
separate investment portfolios (the "Portfolios" or a "Portfolio"), each
of which is, in effect, a separate mutual fund. The Fund issues a
separate class of capital stock for each Portfolio representing
fractional undivided interests in that Portfolio. An investor, by
investing in a Portfolio, becomes entitled to a pro-rata share of all
dividends and distributions arising from the net income and capital
gains on the investments of that Portfolio. Likewise, an investor
shares pro-rata in any losses of that Portfolio.

Pursuant to investment advisory agreements and subject to the
authority of the Fund's board of directors, Aon Advisors, Inc. ("AAI")
serves as the Fund's investment adviser and conducts the business and
affairs of the Fund. AAI has engaged Perpetual Portfolio Management,
Limited ("Perpetual") as the investment sub-adviser to provide day-
to-day portfolio management for the International Equity Portfolio and
has engaged Genesis Realty Capital Management, L.P. ("Genesis"), as the
investment sub-adviser to provide day- to-day portfolio management for
the Real Estate Securities Portfolio. (As used herein, "Adviser" shall
refer to AAI and, where applicable, either Perpetual or Genesis together
in their respective roles.)

The Fund currently offers each class of its capital stock to
certain separate accounts (the "Accounts") of The Life Insurance Company
of Virginia ("Life of Virginia") as funding vehicles for certain
variable annuity contracts and variable life insurance contracts
("variable contracts") issued by Life of Virginia through the Accounts.
The Fund also currently offers its capital stock to the Aon Savings Plan
(the "Plan"). The Fund does not offer its stock directly to the general
public. Each Account, like the Fund, is registered as an investment
company with the Securities and Exchange Commission ("SEC") and a
separate prospectus describing the particular Account and variable
contract being offered will accompany this prospectus when shares of the
Fund are offered as a funding vehicle for such contracts. The Fund may,
in the future, offer any class of its capital stock to other registered
and unregistered separate accounts of Life of Virginia (or Life of
Virginia's affiliates) supporting other variable annuity contracts or
variable life insurance contracts and to qualified pension and
retirement plans other than the Plan ("unaffiliated plans").

A potential for certain conflicts exists between the interests of
variable annuity contract owners, variable life insurance contract
owners, and Plan participants. A potential for certain conflicts of
interest would also exist between the interests of any of these
investors and participants in a qualified pension and retirement plan
other than the Plan that might invest in the Fund. To the extent that
such classes of investors are invested in the same Portfolio when a
conflict of interest arises that might involve the Portfolio, one or
more such classes of investors could be disadvantaged. The Fund does
not currently foresee any such disadvantage to owners of variable
contracts or to Plan participants. Nonetheless, the board of directors
of the Fund will monitor the Fund for the existence of any
irreconcilable material conflicts of interest. If such a conflict
affecting owners of variable contracts is determined to exist, Life of
Virginia will, to the extent reasonably practicable, take such action as
is necessary to remedy or eliminate the conflict. If such a conflict
were to occur, one or more of the Accounts might be required to withdraw
its investments in one or more Portfolios or it may substitute shares
of one Portfolio for another. This might force a Portfolio to sell its
securities at a disadvantageous price.

Life of Virginia Series Fund,Inc.
Financial Highlights
<TABLE>
Common Stock Index
Portfolio Common Stock Portfolio
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of
period $15.99 $17.04 $16.21 $12.75 $14.67

Net investment income .22 .31 .35 .30 .41
Net realized and unrealized
gain (loss) on investments (.23) 2.16 1.01 4.08 (1.91)
Income (loss) from operations (.01) 2.47 1.36 4.38 (1.50)
Distributions to shareholders
from:
Net investment income (.22) (.31) (.35) (.30) (.41)
Net realized gain (.04) (3.21) (.17) (.61) -
Tax return of capital - - (.01) (.01) (.01)
(.26) (3.52) (.53) (.92) (.42)
Increase (decrease) in net asset
value (.27) (1.05) .83 3.46 (1.92)
Net asset value at end of period $15.72 $15.99 $17.04 $16.21 $12.75

Total Return (0.06%) 14.52% 8.39% 34.43% (10.22%)

Ratios:

Ratio of operating expenses to
average net assets .75% .87% 1.03% 1.08% 1.06%
Ratio of net investment income
to average net assets 2.22% 2.00% 2.24% 2.28% 2.99%
Portfolio turnover 4.31% 73.43% 9.72% 35.87% 57.06%
Net assets at end of period $23,929,572 $8,276,765 $5,178,316 $4,429,044 $3, 154,412
</TABLE>

In 1994, the Common Stock Index portfolio received an expense
reimbursement from the investment advisor. Absent this reimbursement,
the ratio of expenses to average net assets and the ratio of net
investment income to average net assets would have been 1.10% and 1.90%,
respectively, for 1994.

<TABLE>
Government Securities
Portfolio Bond Portfolio
1994 1993 1992 1991 1990

<S> <C> <C> <C> <C>
Net asset value at beginning of
period $10.49 $10.54 $10.54 $9.60 $9.76

Net investment income .42 .45 .69 .75 .64
Net realized and unrealized gain
(loss) on investments (.98) .50 .06 .99 (.15)
Income from investment operations (.56) .95 .75 1.74 .49
Distributions to shareholders from:
Net investment income (.42) (.45) (.69) (.75) (.64)
Net realized gain - (.54) (.05) (.04) -
Tax retum of capital - (.01) (.01) (.01) (.01)
(.42) (1.00) (.75) (.80) (.65)
Increase (decrease) in net asset
value (.98) (.05) - .94 (.16)
Net asset value at end of period $9.51 $10.49 $10.54 $10.54 $9.60

Total Return (5.34%) 8.96% 7.13% 18.16% 5.05%

Ratios:

Ratio of operating expenses to
average net assets .81% .86% .99% .97% .96%
Ratio of net investment income to
average net assets 5.54% 5.41% 6.69% 7.73% 7.78%
Portfolio turnover 565.65% 112.86% 14.43% 23.24% 56.62%

Net assets at end of period $12,598,072 $7,884,928 $5,053,246 $4,444,984 $3,701,835
</TABLE>

<TABLE>
MONEY MARKET PORTFOLIO
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of
period $10.08 $10.04 $10.00 $9.96 $10.18

Net investment income .29 .25 .31 .53 .73
Net realized and unrealized gain
(loss) on investments .09 (.01) - - .01
Income from operations .38 .24 .31 .53 .74
Distributions to shareholders from:
Net investment income (.29) (.20) (.26) (.49) (.94)
Net realized gain - - - - (.01)
Tax return of capital - - (.01) - (.01)
(.29) (.20) (.27) (.49) (.96)
Increase (decrease) in net asset
value .09 .04 .04 .04 (.22)
Net asset value at end of period $10.17 $10.08 $10.04 $10.00 $9.96

Total Return 3.77% 2.39% 3.10% 5.32% 7.28%

Ratios:
Ratio of operating expenses to
average net assets .42% .75% .75% .75% .75%
Ratio of net investment income to
average net assets 4.04% 2.53% 3.06% 5.43% 7.02%
Portfolio turnover N/A N/A N/A N/A N/A

Net assets at end of period $33,528,739 $9,904,184 $5,845,136 $4,092,986 $3,464,661

Effective July l, 1994, the investment advisor agreed to waive a portion
of the advisory fee for the Money Market Portfolio. Absent this waiver,
the ratio of expenses to average net assets and the ratio of net
investment income to average net assets would have been .70% and 3.76%,
respectively, for 1994.

<TABLE>
TOTAL RETURN PORTFOLIO
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of $13.59 $13.00 $12.62 $10.59 $11.60
period

Net investment income .35 .42 .44 .43 .55
Net realized and unrealized gain
(loss) on investments (.01) 1.35 .51 2.47 (1.00)
Income (loss) from investment
operations .34 1.77 .95 2.90 (.45)
Distributions to shareholders
from:
Net investment income (.35) (.41) (.44) (.43) (.56)
Net realized gain (.18) (.76) (.12) (.43) -
Tax return of capital - (.01) (.01) (.01) -
.53 (1.18) (.57) (.87) (.56)
Increase (decrease) in net asset
value (.19) .59 .38 2.03 (1.01)
Net asset value at end of period
$13.40 $13.59 $13.00 $12.62 $10.59
Total Return 2.54% 13.67% 7.53% 27.45% (3.85%)

Ratios:

Ratio of operating expenses to
average net assets .77% 0.85% 0.98% 1.11% 1.10%
Ratio of net investment income
to average net assets 4.00% 3.80% 4.13% 4.39% 4.81%
Portfolio turnover 66.92% 48.12% 12.46% 32.58% 41.80%

Net assets at end of period $34,708,256 $12,609,407 $7,247,897 $4,608,823 $2,937,613

</TABLE>
Due to the significant increase in Fund shares related to the Aon
Savings Plan, the net changes in the 1994 Net Asset Value per share as
calculated in accordance with the requirements of Form N-1 A are not
commensurate with the Statement of Changes in Net Assets.

INVESTMENT OBJECTIVES AND POLICIES

Each Portfolio has one or more investment objectives and related
investment policies and uses various investment practices to pursue
these objectives and policies. There can be no assurance that any of
the Portfolios will achieve its investment objective or objectives.
Investors should not consider any one Portfolio alone to be a complete
investment program. All of the Portfolios are subject to the risk of
changing economic conditions, as well as the risk inherent in the
ability of the Adviser to make changes in the composition of the
Portfolio in anticipation of changes in economic, business, and
financial conditions. As with any security, a risk of loss is inherent
in an investment in the shares of any of the Portfolios.

The different types of securities, investments, and investment
practices used by each Portfolio all have attendant risks of varying
degrees. For example, with respect to equity securities, there can be
no assurance of capital appreciation and there is a substantial risk of
decline. With respect to debt securities, there exists the risk that
the issuer of a security may not be able to meet its obligations on
interest or principal payments at the time required by the instrument.
In addition, the value of debt instruments generally rises and falls
inversely with prevailing current interest rates. As described below, an
investment in certain of the Portfolios entails special additional risks
as a result of their ability to invest a substantial portion of their
assets in either foreign investments or real estate securities.

Certain types of investments and investment practices common to
one or more Portfolios are described in greater detail, including the
risks of each, under "Investment Practices" both in this prospectus and
in the statement of additional information ("SAI"). The Portfolios are
also subject to certain investment restrictions that are described
herein and under the caption "Investment Restrictions" in the SAI.

The investment objective or objectives of each Portfolio are
fundamental and may not be changed without the approval of a majority of
the outstanding voting shares of capital stock of the class related to
that Portfolio. A majority means the lesser of (1) 67% of the
Portfolio's outstanding shares present at a meeting of shareholders if
more than 50% of the outstanding shares are present in person or by
proxy, or (2) more than 50% of the Portfolio's outstanding shares.
Certain investment restrictions described in the SAI also are
fundamental and cannot be changed without shareholder approval. In
contrast, certain other investment restrictions, also described in the
SAI, as well as the investment policies of each Portfolio are not
fundamental and may be changed by the Fund's board of directors without
shareholder approval.

COMMON STOCK INDEX PORTFOLIO

Standard and Poor's Corporation ("Standard & Poor's" or "S&P"1)
chooses the 500 common stocks comprising the S&P 500 Index on the basis
of market values, industry diversification and other factors. Most of
the common stocks in the S&P 500 Index are issued by the 500 largest
companies, in terms of the aggregate market value of their outstanding
stock, and such companies are generally listed on the New York Stock
Exchange. Additional common stocks that are not among the 500 largest
market value stocks are included in the S&P 500 Index for
diversification purposes. S&P may, from time to time, add common stocks
to or delete common stocks from the S&P 500 Index.

The Common Stock Index Portfolio will attempt to achieve its
objective by replicating the total return of the S&P 500 Index. To the
extent that it can do so consistent with the pursuit of its investment
objective, it will attempt to keep transaction costs low and minimize
portfolio turnover. To achieve its investment objective, the Common
Stock Index Portfolio purchases equity securities that will reflect, as
a group, the total investment return of the S&P 500 Index. Like the S&P
500 Index, the Common Stock Index Portfolio will hold both dividend
paying and non-dividend paying common stocks comprising the S&P 500
Index.

Active Portfolio management strategies are not used in making
investment decisions for the Common Stock Index Portfolio. Rather, the
Common Stock Index Portfolio utilizes a passive investment management
approach. From time to time it also may supplement this passive
approach by using statistical selection techniques to determine which
securities it should purchase or sell in order to best replicate the
investment return of the S&P 500 Index over a period of time.

The Common Stock Index Portfolio may choose not to invest in all
the stocks that comprise the S&P 500 Index, and its holdings may be
invested differently by industry segment than the S&P 500 Index. The
Common Stock Index Portfolio may compensate for the omission from its
portfolio of stocks that are included in the S&P 500 Index, or for
purchasing stocks included in the S&P 500 Index in proportions that are
different from their weightings in that Index, by purchasing stocks that
may or may not be included in the S&P 500 Index but which have
characteristics similar to omitted stocks (such as stocks from the same
or similar industry groups having similar market capitalizations and
other investment characteristics). In addition, from time to time
adjustments may be made in the Common Stock Index Portfolio's holdings
due to changes in the composition or weighting of issues comprising the
S&P 500 Index.

The Common Stock Index Portfolio will attempt to achieve a
correlation between its total return and that of the S&P 500 Index of at
least 0.95, without taking expenses into account. A correlation of 1.00
would indicate perfect correlation, which would be achieved when the
Common Stock Index Portfolio's net asset value, including the value of
its dividends and capital gains distributions, increases or decreases in
exact proportion to changes in the S&P 500 Index. Management will
monitor the Common Stock Index Portfolio's correlation to the S&P 500
Index and attempt to minimize any "tracking error" (i.e., the
statistical measure of the difference between the investment results of
the Common Stock Index Portfolio and that of the S&P 500 Index) in its
investment decisions for the Portfolio. However, brokerage and other
transaction costs, as well as other Common Stock Index Portfolio
expenses, in addition to potential tracking error, will tend to cause
the Common Stock Index Portfolio's return to be lower than the return of
the S&P 500 Index. There can be no assurance as to how closely the
Common Stock Index Portfolio's performance will correspond to the
performance of the S&P 500 Index.

1 "Standard and Poor's", "S&P", and "S&P 500" are
trademarks of Standard and Poor's Corporation and have
been licensed for use. The Common Stock Index Portfolio is
not sponsored, endorsed, sold or promoted by S&P, and S&P
makes no representation or warranty, express or implied, to
the investors in this Portfolio or any member of the
public regarding the advisability of investing in this
Portfolio or in securities generally or the ability of the
S&P 500 Index to track general stock market performance.

The Common Stock Index Portfolio will not invest more than 35% of
its total assets in stocks and other securities not included in the S&P
500 Index. In this regard, the Common Stock Index Portfolio may
temporarily invest cash balances, pending withdrawals or investments, in
high quality money market instruments. Nevertheless, the Common Stock
Index Portfolio will not adopt a temporary defensive investment posture
in times of generally declining stock prices, and, therefore, investors
will bear the risk of such general stock market declines.

The Common Stock Index Portfolio may write covered call and put
options on individual securities and stock indices which correlate with
the Common Stock Index Portfolio's investments and may purchase call and
put options on such securities and stock indices, provided such options
written or purchased are listed on a national securities exchange. In
addition, the Common Stock Index Portfolio may purchase and sell
exchange-traded stock index futures contracts and may write covered call
and put options and purchase call and put options on stock index futures
contracts provided such options written or purchased are listed on an
exchange.

Consistent with its investment objective, the Common Stock Index
Portfolio will primarily use call and put options and futures contracts,
as described above, to rapidly invest cash balances and to hedge
exposure to the S&P 500 Index in anticipation of investing cash balances
or expected cash flow into the Portfolio in appropriate common stocks or
in anticipation of liquidating appropriate common stocks to meet
expected redemption requests. See "Writing Covered Call and Put Options
and Purchasing Call and Put Options" and "Financial Futures Contracts
and Options Thereon" in this Prospectus for more information about these
practices and their risks.

S&P's only relationship to the Fund is the licensing of certain
trademarks and trade names of S&P and of the S&P 500 Index which is
determined, composed and calculated by S&P without regard to the Fund.
S&P has no obligation to take the needs of the Fund or the investors in
the Fund into consideration in determining, composing or calculating the
S&P 500 Index. S&P is not responsible for and has not participated in
the determination of the prices or composition of the Common Stock Index
Portfolio or the timing of the issuance or sale of the shares of that
Portfolio.

S&P does not guarantee the accuracy and/or the completeness of the
S&P 500 Index or any data included therein and S&P shall have no
liability for any errors, omissions, or interruptions therein. S&P
makes no warranty, express or implied, as to results to be obtained by
the Fund, or by investors in the Fund, or any other person or entity
from the use of the S&P 500 Index or any data included therein. S&P
makes no express or implied warranties, and expressly disclaims all
warranties of merchantability or fitness for a particular purpose or use
with respect to the S&P 500 Index or any data included therein. Without
limiting any of the foregoing, in no event shall S&P have any liability
for any special, punitive, indirect or consequential damages (including
lost profits), even if notified of the possibility of such damages.

GOVERNMENT SECURITIES PORTFOLIO

The Government Securities Portfolio has the investment objective
of seeking high current income and protection of capital through
investment in intermediate and long-term debt instruments issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.
The Government Securities Portfolio may also invest in U.S. Government
debt instruments having maturities of less than one year and in other
high quality money market instruments. The Government Securities
Portfolio will invest at least 80% of its total assets, valued at the
time of purchase, in U.S. Government securities of various maturities.
Prior to May 1, 1993, this Portfolio was titled the Bond Portfolio. See
"General Information" in the SAI for details.

U.S. Government securities in which the Government Securities
Portfolio may invest include: (1) U.S. Treasury bills, notes, and
bonds; and (2) obligations issued or guaranteed by U.S. Government
agencies and instrumentalities which are supported by any of the
following: (a) the full faith and credit of the U.S. Government (e.g.,
Government National Mortgage Association ("GNMA") Certificates); (b) the
right of the issuer to borrow an amount limited to a specific line of
credit from the U.S. Treasury (e.g., debt of each of the Federal Home
Loan Banks); (c) the discretionary authority of the U.S. Government or
GNMA to purchase certain financial obligations of the agency or
instrumentality (e.g., Federal National Mortgage Association); or (d)
the credit of the issuing agency or instrumentality (e.g., Federal Land
Banks, Farmers Home Administration or Student Loan Marketing
Association). No assurance can be given that the U.S. Government will
provide support to such U.S. Government sponsored agencies or
instrumentalities in the future, since it is not required to do so by
law.

The Government Securities Portfolio may invest up to 50% of its
net assets in GNMA securities. Such securities are (along with certain
Federal National Mortgage Association and Federal Home Loan Corporation
securities in which the Government Securities Portfolio may invest)
securities whose scheduled monthly interest and principal payments
relating to mortgages in the pool are "passed through" to investors.
GNMA and other similar pass-through securities differ from conventional
bonds in that principal is paid back to the certificate holders over the
life of the loan rather than at maturity. As a result, the Government
Securities Portfolio will receive scheduled monthly payments of
principal and interest on its GNMA and other similar securities. In
addition, the Government Securities Portfolio may receive unscheduled
principal payments representing prepayments on the underlying mortgages.
All payments and unscheduled prepayments of principal will be reinvested
in the Government Securities Portfolio in instruments consistent with
the Government Securities Portfolio's investment objectives and
investment program. GNMA and other similar securities may not be an
effective means of "locking in" long-term interest rates due to the need
for the Government Securities Portfolio to reinvest scheduled and
unscheduled principal payments. At the time principal payments or
prepayments are received by the Government Securities Portfolio,
prevailing interest rates may be higher or lower than the current yield
of GNMA and other similar pass-through securities held by the Government
Securities Portfolio.

The Government Securities Portfolio may write covered call and put
options on debt securities, including obligations of the U.S.
Government, its agencies and instrumentalities, whether or not listed on
a national securities exchange and may purchase call and put options on
such debt securities whether or not listed on an exchange. In addition,
the Government Securities Portfolio may purchase and sell
exchange-traded interest rate futures contracts and may write covered
call options and purchase call and put options on interest rate futures
contracts whether or not listed on an exchange. See "Writing Covered
Call and Put Options and Purchasing Call and Put Options" and "Financial
Futures Contracts and Options Thereon" in this Prospectus for more
information about these practices and their risks.

The value of U.S. Government securities owned by the Government
Securities Portfolio will fluctuate in response to various market forces
and will vary inversely with prevailing interest rate levels.
Therefore, the value of an investment in the Government Securities
Portfolio also will fluctuate. In this regard, any government or agency
guarantee of securities held in the Government Securities Portfolio does
not guarantee the value of an investment in the Portfolio.

MONEY MARKET PORTFOLIO

1. obligations issued by or guaranteed as to interest and
principal by the government of the United States or any
agency or instrumentality thereof. These obligations may
include instruments that are supported by the full faith and
credit of the United States, such as Treasury Bills, Notes
and Bonds; instruments that are supported by the right of the
issuer to borrow from the Treasury, such as Home Loan Bank
securities; and securities that are supported only by the
credit of the instrumentality, such as Federal National
Mortgage Association bonds.

2. obligations (including certificates of deposit, time
deposits, and bankers' acceptances) of: (a) U. S. Banks and
other U. S. financial institutions that are members of the
Federal Reserve System, the Federal Deposit Insurance
Corporation or the Federal Savings and Loan Insurance
Corporation when either (i) the principal amount of the
obligation is insured in full by the FDIC or FSLIC, or (ii)
the issuer of the obligation has capital, surplus and
undivided profits in excess of $100 million or total assets
of $1 billion; and (b) U. S. branches of foreign banks having
total assets in excess of $10 billion at the then current
exchange rate.

3. Repurchase agreements with (i) banks or (ii) government
securities dealers recognized as primary dealers by the
Federal Reserve System, provided that:

(a) at the time the repurchase agreement is entered into,
and throughout the duration of the repurchase
agreement, the collateral has a market value at least
equal to the value of the repurchase agreement;

(b) the collateral consists of government securities or
instruments rated in the highest rating category by at
least two nationally recognized statistical rating
organizations; and

4. Commercial paper, which consists of unsecured promissory
notes issued by corporations to finance short-term credit
needs.

The Money Market Portfolio will only invest in instruments
denominated in U. S. dollars that the Adviser, under the supervision of
the board of directors of the Fund, determines present minimal credit
risks and are, at the time of acquisition, either:

(1) rated in the two highest rating categories by at least two
nationally recognized statistical rating organizations as
defined under Rule 2a-7, as amended, under the Investment
Company Act of 1940 (an "NRSRO"), or by only one NRSRO if
only one NRSRO has issued a rating with respect to the
instrument; or

(2) in the case of an unrated instrument, determined by the
Adviser under the supervision of the board of directors to be
of comparable quality to the above; or

(3) issued by an issuer that has received a rating of the type
described in 1. above on other securities that are comparable
in priority and security to the instrument.

All of the Money Market Portfolio money market instruments will
mature in 13 months or less. The average maturity of the Portfolio's
portfolio securities based on their dollar value will not exceed 90 days
at the time of each investment. If the disposition of a portfolio
security results in a dollar-weighted average portfolio maturity in
excess of 90 days, the Portfolio will invest its available cash in such
a manner as to reduce its dollar-weighted average portfolio maturity to
90 days or less as soon as reasonably practicable.

From time to time the Money Market Portfolio may also invest in
short-term corporate obligations which at the date of investment are
rated A or better by Standard & Poor's or A or better by Moody's.

At such time or times as the Board of Directors deems appropriate
and in the best interests of the Money Market Portfolio, assets of the
Money Market Portfolio may be substantially invested in certificates of
deposit of federally insured banks and/or U. S. Government and agency
obligations.

Although the Money Market Portfolio usually holds securities
purchased until maturity, at which time they are redeemable at their
full principal value plus accrued interest, it may, at times, engage in
short-term trading to attempt to take advantage of yield variations in
the short-term market. The Money Market Portfolio may also sell
portfolio securities prior to maturity based on a revised evaluation of
the issuer or to meet redemptions. In the event there are unusually
heavy redemption requests due to changes in interest rates or otherwise,
the Money Market Portfolio may have to sell a portion of its investment
portfolio at a time when it may be disadvantageous to do so. However,
AAI believes that the Money Market Portfolio's ability to borrow funds
to accommodate redemption requests may mitigate the necessity for such
portfolio sales during these periods. This Portfolio should be subject
to relatively little market or financial risk because it invests in debt
obligations that have a short time period until maturity. The rate of
return to shareholders will vary with the general levels of interest
rates applicable to the short-term debt instruments in which the Money
Market Portfolio invests. The rate will also be affected by changes in
the Money Market Portfolio's operating expenses.

TOTAL RETURN PORTFOLIO

The Total Return Portfolio has the investment objective of
providing the highest total return, composed of current income and
capital appreciation, as is consistent with prudent investment risk. It
will attempt to achieve this objective by investing in common stocks,
bonds and money market instruments, the proportion of each being
continuously determined by the Adviser. Total return consists of
current income, including dividends, interest and discount accruals and
capital appreciation. This Portfolio will invest in common stocks and
other equity securities or securities convertible into or with rights to
purchase Common Stocks, securities that are permissible investments for
the Government Securities Portfolio and the Money Market Portfolio.
This Portfolio will also invest in fixed-income obligations described
below:

1. marketable straight corporate or government debt securities
rated at the time of purchase within the three highest
investment grade ratings (A or better) assigned by Moody's
Investors Service, Inc., ("Moody's") or Standard & Poor's
Corporation ("Standard & Poor's") or which, although not
rated by either of the foregoing organizations, are deemed by
the Adviser as being of investment quality equivalent to
securities rated A or better. See the SAI for a description
of such ratings.

2. securities issued or guaranteed by the Canadian Government or
its Provinces, or their respective agencies or
instrumentalities.

3. Other fixed-income debt obligations. Debt securities
purchased with lower ratings generally provide higher yields
but carry a greater risk of default and generally are subject
to greater market fluctuations.

There are no percentage limitations on the types of securities in
which the Total Return Portfolio may invest, so from time to time it may
invest entirely in stocks, entirely in bonds, entirely in money market
instruments, or in any combination of these types of securities in
accordance with the sole discretion of the Adviser and the board of
directors of the Fund. At least 60% of the value of any bonds held by
this Portfolio will be rated within the four highest grades by a
nationally recognized rating service such as Standard and Poor's
Corporation or Moody's Investors Service, Inc. The balance of the value
of any bonds held by this Portfolio may be rated below those four
highest grades, and if these lower-rated bonds were held in the
Portfolio in significant amounts they would increase financial risk and
income volatility. At the current time, the Fund has adopted a
non-fundamental investment restriction limiting this Portfolio's
investment in these lower-rated fixed-income debt securities (i.e.,
rated less than Baa or BBB) to no more than 30% of the Portfolio's total
assets measured at the time of purchase. Lower- rated debt securities
and their attendant risks are described in "Investment Practices" in
this prospectus and in the SAI.

The Total Return Portfolio will be subject to varying levels of
market and financial risk and current income volatility, and may at
times be subject to high levels of market and financial risk and current
income volatility. The market value of non-convertible fixed-income
securities usually reflects yields generally available on securities of
similar quality and type. When such yields decline, the market value of
a portfolio already invested at higher yields can be expected to rise,
if such securities are protected against early call. Similarly, when
such yields increase, the market value of a portfolio already invested
at lower yields can be expected to decline. It is likely that the
portfolio turnover rate for this portfolio will be higher than for other
portfolios due to the frequent fund transactions aimed at maximizing
total return. This higher portfolio turnover rate generates higher
brokerage expenses; however, it is expected that the gain in total
return will more than offset the brokerage expense. It is not
anticipated that higher portfolio turnover will have any adverse tax
consequences.

INTERNATIONAL EQUITY PORTFOLIO

The International Equity Portfolio has the investment objective of
providing long-term capital appreciation. The Portfolio seeks to
achieve its objective by investing primarily in equity and
equity-related securities of companies that are organized outside the
United States or of companies whose securities are principally traded
outside the United States ("foreign issuers") and which the Adviser
believes have long-term potential for capital appreciation. The
Portfolio also may invest in securities (1) of companies organized in
the United States but having their principal activities and interests
outside the United States, (2) denominated or quoted in foreign currency
("non-dollar securities"), and (3) issued by foreign governments or
agencies or instrumentalities of foreign governments (also "foreign
issuers").

The International Equity Portfolio is intended for investors who
can accept the risks involved in investments in equity and
equity-related securities of foreign issuers and in non-dollar
securities. See "Foreign Investments and Currency."

Under normal market conditions, the Portfolio invests at least 65%
of its total assets in the securities of foreign issuers located (or, in
the case of the securities, traded) in at least 5 different countries
other than the United States. Nonetheless, under certain economic and
business conditions the Portfolio may invest up to 35% of its total
assets in the securities of issuers located (or, in the case of the
securities, traded) in any one of the following countries: Australia,
Canada, France, Japan, the United Kingdom or Germany.

The equity and equity-related securities in which the
International Equity Portfolio invests are common stock, preferred
stock, convertible debt obligations, convertible preferred stock and
warrants or other rights to acquire stock. The Portfolio also may
invest in securities of foreign issuers in the form of sponsored and
unsponsored American depository receipts ("ADRs"), European depository
receipts ("EDRs"), and global depository receipts ("GDRs""). ADRs are
receipts typically issued by a U.S. bank or trust company which evidence
ownership of underlying securities of foreign corporate issuers. EDRs
and GDRs are receipts issued by non-U.S. financial institutions
evidencing arrangements similar to ADRs. Generally, ADRs are in
registered form and are designed for trading in U.S. markets while EDRs
are in bearer form and are designed for trading in European securities
markets. GDRs are issued in either registered or bearer form and are
designed for trading on a global basis. See "Foreign Investments and
Currency."

Notwithstanding the foregoing, the International Equity Portfolio
may on occasion, for temporary defensive purposes to preserve capital,
hold part or all of its assets in cash, other money market instruments
of the type in which the Money Market Portfolio may invest, or, subject
to certain tax restrictions, foreign currencies. The International
Equity Portfolio also may, under normal market conditions, invest up to
35% of its total assets in dollar denominated and non-dollar denominated
debt securities of foreign issuers and may on occasion, for temporary
purposes to preserve capital, hold part or all of its assets in foreign
currency or in non-dollar short-term debt securities.

The International Equity Portfolio may invest in the securities of
issuers located in countries with emerging economies or securities
markets. Investment in such countries involves certain risks that are
not present in investments in more developed countries. See "Foreign
Investments and Currency." The International Equity Portfolio may make
investments or engage in investment practices that involve special
risks. These include: convertible securities, when-issued securities,
delayed-delivery securities, options on securities and securities
indices, futures contracts and options thereon, illiquid or restricted
securities, repurchase agreements, lending portfolio securities and
borrowing money for investment purposes. These investment practices and
attendant risks are described in "Investment Practices" in this
prospectus or in the SAI.

The International Equity Portfolio may employ certain currency
management techniques to hedge against currency exchange rate
fluctuations and to seek to increase total return. When used to attempt
to increase total return, these management techniques are speculative.
Such currency management techniques involve risks different from those
associated with investing in dollar-denominated securities of U.S.
issuers. These techniques are transactions in options, futures
contracts, option contracts on futures contracts, forward foreign
currency exchange contracts and currency swaps. To the extent that the
Portfolio is fully invested in securities of foreign issuers or
non-dollar securities while also maintaining currency positions, it may
be exposed to greater combined risk. The Portfolio's net currency
positions may expose it to risks independent of its securities
positions. See "Foreign Investments and Currency."

REAL ESTATE SECURITIES PORTFOLIO

The Real Estate Securities Portfolio has the investment objective
of providing maximum total return through current income and capital
appreciation. The Portfolio seeks to achieve this objective by
investing primarily in securities of U.S. issuers that are principally
engaged in or related to the real estate industry including those that
own significant real estate assets. The Portfolio does not invest
directly in real estate.

The Real Estate Securities Portfolio is intended for investors who
can accept the risks, described below, entailed by indirect investments
in real estate.

Under normal conditions, the Real Estate Securities Portfolio has
at least 65% of its total assets invested in equity or debt securities
of issuers that are principally engaged in or related to the real estate
industry. An issuer is principally "engaged in" or principally "related
to" the real estate industry if at least 50% of its assets
(marked-to-market), gross income, or net profits are attributable to
ownership, construction, management or sale of residential, commercial
or industrial real estate, or to products or services related to the
real estate industry. Issuers engaged in the real estate industry
include equity real estate investment trusts (which directly own real
estate), mortgage real estate investment trusts (which make short-term
construction or real estate development loans or invest in long-term
mortgages or mortgage pools), real estate brokers and developers,
companies that manage real estate, and companies that own substantial
amounts of real estate. Issuers in businesses related to the real
estate industry include manufacturers and distributors of building
supplies and financial institutions that issue or service mortgages.

The Real Estate Equity Portfolio generally invests in common
stocks but may also, without limitation, invest in preferred stock,
convertible securities, warrants and debt securities of the foregoing
issuers as well as publicly traded limited partnerships. In addition to
these securities, the Portfolio may invest up to 35% of its total assets
in (1) equity and debt securities of issuers outside the real estate
industry, including all securities that the Total Return Portfolio may
invest in, and (2) debt securities and convertible preferred stock and
convertible bonds rated less than BBB by Standard and Poor's Corporation
or Baa by Moody's Investors Service, Inc. or that are unrated. If held
in the Portfolio in significant amounts, lower-rated debt securities
would increase financial risk and income volatility. Lower-rated debt
securities and their attendant risks are described in "Investment
Practices" in this prospectus and in the SAI.

The Real Estate Securities Portfolio may make investments or
engage in investment practices that involve special risks. These
include: convertible securities, when-issued securities,
delayed-delivery securities, options on securities and securities
indices, futures contracts and options thereon, illiquid or restricted
securities, repurchase agreements and lending portfolio securities.
These investment practices and attendant risks are described in
"Investment Practices" in this prospectus or in the SAI.

There are significant risks inherent in the investment
objective and policies of the Real Estate Securities Portfolio. Because
of its objective of investing in, among other things, the securities of
issuers that own, construct, manage, or sell residential, commercial, or
industrial real estate, it is subject to all of the risks associated
with the ownership of real estate. These risks include: declines in
the value of real estate, adverse changes in the climate for real
estate, risks related to general and local economic conditions,
over-building and increased competition, increases in property taxes and
operating expenses, changes in zoning laws, casualty or condemnation
losses, limitations on rents, changes in neighborhood values, the appeal
of properties to tenants, leveraging of interests in real estate,
increases in prevailing interest rates and costs resulting from clean-up
of environmental problems or liability to third parties for damages
arising from environmental problems. Likewise, because of its objective
of investing in the securities of issuers whose products and services
are related to the real estate industry, it is subject to the risk that
the value of such securities will be adversely affected by one or more
of the foregoing risks.

Because the Portfolio may acquire debt securities of issuers
primarily engaged in or related to the real estate industry, it also
could conceivably own real estate directly as a result of a default on
such securities. Any rental income or income from the disposition of
such real estate could adversely affect its ability to retain its tax
status as a regulated investment company. See "Taxes."

In addition to the risks discussed above, equity real estate
investment trusts may be affected by any changes in the value of the
underlying property owned by the trusts, while mortgage real estate
investment trusts may be affected by the quality of any credit extended.
Further, equity and mortgage real estate investment trusts are dependent
upon management skill, are not diversified, and are therefore subject to
the risk of financing single or a limited number of projects. Such
trusts are also subject to heavy cash flow dependency, defaults by
borrowers, self liquidation, and the possibility of failing to qualify
for special tax treatment under Subchapter M of the Internal Revenue
Code and to maintain an exemption under the Investment Company Act of
1940. Finally, certain real estate investment trusts may be
self-liquidating in that a specific term of existence is provided for in
the trust document. Such trusts run the risk of liquidating at an
economically inopportune time. See "Investment Practices."

INVESTMENT PRACTICES

In pursuing their investment objectives, the Portfolios may engage
in the following investment practices.

LOANS OF PORTFOLIO SECURITIES

Each Portfolio may from time to time lend securities it holds to
brokers, dealers, and financial institutions, up to a maximum of 20% of
the total value of that Portfolio's assets. Such loans will be secured
by collateral in the form of cash or U.S. Treasury securities, which
will be maintained in an amount at least equal to the current market
value of the loaned securities. Each Portfolio will continue to receive
interest and dividends on the loaned securities during the term of its
loans, and, in addition, will receive either a fee from the borrower or
interest earned from the investment of cash collateral in short-term
securities. Each Portfolio also will receive any gain or loss in the
market value of its loaned securities and of securities in which cash
collateral is invested during the term of the loan. The primary risk
involved in lending securities is that the borrower will fail
financially and not return the loaned securities at a time when the
collateral is insufficient to replace the full amount of the loaned
securities. In order to minimize this risk, the Portfolios will make
loans of securities only to firms determined by the Adviser (under the
supervision of the board of directors) to be creditworthy.

SHORT-TERM MONEY MARKET INSTRUMENTS

All of the Portfolios may, to varying degrees, also invest in
short-term money market instruments, including repurchase agreements,
and when-issued and delayed-delivery securities. A repurchase agreement
is a transaction in which a Portfolio buys a security at one price and
simultaneously agrees to sell that same security back to the original
owner at a higher price. The Adviser (under the supervision of the
board of directors) reviews the creditworthiness of the other party to
the agreement and must find it satisfactory before engaging in a
repurchase agreement. In the event of the bankruptcy of the other
party, the Portfolio could experience delays in recovering its money,
may realize only a partial recovery or even no recovery, and may also
incur disposition costs. When-issued and delayed delivery securities are
discussed in "Investment Practices" in the SAI.

FOREIGN INVESTMENTS AND CURRENCY

The Common Stock Index Portfolio, Government Securities Portfolio
and Total Return Portfolio may each invest up to 10% of their total assets,
taken at market value at the time of acquisition, in securities of
foreign issuers and in non-dollar securities. In addition, each of
these Portfolios may invest up to 25% of their total assets in
securities of foreign issuers and in non-dollar securities if certain
guarantees exist. Foreign investments will qualify as "guaranteed" if
they are issued, assumed or guaranteed by either: (1) a foreign
government or political subdivision or instrumentality thereof; or (2) a
foreign issuer having a class of securities listed for trading on the
New York Stock Exchange; or, in the alternative, if they are assumed or
guaranteed by domestic issuers. These Portfolios will not concentrate
their investments in any particular foreign country. The International
Equity Portfolio may, as described above, invest all of its assets in
the securities of foreign issuers and in non-dollar securities.

Foreign Investments Generally. Investments in the securities of
foreign issuers or investments in non-dollar securities may offer
potential benefits not available from investments solely in securities
of domestic issuers or dollar denominated securities. Such benefits may
include the opportunity to invest in foreign issuers that appear to
offer better opportunity for long-term capital appreciation or current
earnings than investments in domestic issuers, the opportunity to invest
in foreign countries with economic policies or business cycles different
from those of the United States and the opportunity to reduce
fluctuations in portfolio value by taking advantage of foreign
securities markets that do not necessarily move in a manner parallel to
U.S. markets.

Investing in non-dollar securities or in the securities of foreign
issuers involves significant risks that are not typically associated
with investing in U.S. dollar denominated securities or in securities of
domestic issuers. Such investments may be affected by changes in
currency rates, changes in foreign or U.S. laws or restrictions
applicable to such investments and in exchange control regulations. For
example, a decline in the currency exchange rate would reduce the value
of certain portfolio investments. In addition, if the exchange rate for
the currency in which a Portfolio receives interest payments declines
against the U.S. dollar before such interest is paid as dividends to
shareholders, the Portfolio may have to sell portfolio securities to
obtain sufficient cash to pay such dividends. As discussed below, the
International Equity Portfolio may employ certain investment techniques
to hedge its foreign currency exposure; however, such techniques also
entail certain risks. Some foreign stock markets may have substantially
less volume than, for example, the New York Stock Exchange and
securities of some foreign issuers may be less liquid than securities of
comparable domestic issuers. Commissions and dealer mark-ups on
transactions in foreign investments may be higher than for similar
transactions in the United States. In addition, clearance and
settlement procedures may be different in foreign countries and, in
certain markets, on certain occasions, such procedures have been unable
to keep pace with the volume of securities transactions, thus making it
difficult to conduct such transactions. For example, delays in
settlement could result in temporary periods when a portion of the
assets of a Portfolio are uninvested and no return is earned thereon.
The inability of a Portfolio to make intended investments due to
settlement problems could cause it to miss attractive investment
opportunities. Inability to dispose of portfolio securities or other
investments due to settlement problems could result either in losses to
a Portfolio due to subsequent declines in value of the portfolio
investment or, if the Portfolio has entered into a contract to sell the
investment, could result in possible liability to the purchaser.

Foreign issuers are not generally subject to uniform accounting,
auditing and financial reporting standards comparable to those
applicable to domestic companies. There may be less publicly available
information about a foreign issuer than about a domestic one. In
addition, there is generally less government regulation of stock
exchanges, brokers, and listed and unlisted issuers in foreign countries
than in the United States. Furthermore, with respect to certain foreign
countries, there is a possibility of expropriation or confiscatory
taxation, imposition of withholding taxes on dividend or interest
payments, limitations on the removal of funds or other assets of the
Portfolio, or political or social instability or diplomatic developments
which could affect investments in those countries. Individual foreign
economies also may differ favorably or unfavorably from the United
States economy in such respects as growth of gross national product,
rate of inflation, capital reinvestment, resource self-sufficiency and
balance of payments position.

Investments in ADRs, EDRs and GDRs. Many securities of foreign
issuers are represented by ADRs, EDRs and GDRs. The Common Stock Index
Portfolio, Government Securities Portfolio, Total Return Portfolio and
International Equity Portfolio may all invest in ADRs, EDRs and GDRs.
ADRs represent the right to receive securities of foreign issuers
deposited in a domestic bank or a foreign correspondent bank. Prices of
ADRs are quoted in U.S. dollars, and ADRs are traded in the United
States on exchanges or over-the- counter and are sponsored and issued by
domestic banks. ADRs do not eliminate all the risk inherent in
investing in the securities of foreign issuers. To the extent that a
Portfolio acquires ADRs through banks which do not have a contractual
relationship with the foreign issuer of the security underlying the ADR
to issue and service such ADRs, there may be an increased possibility
that the Portfolio would not become aware of and be able to respond to
corporate actions such as stock splits or rights offerings involving the
foreign issuer in a timely manner. In addition, the lack of information
may result in inefficiencies in the valuation of such instruments.
However, by investing in ADRs rather than directly in the stock of
foreign issuers, a Portfolio will avoid currency risks during the
settlement period for either purchases or sales. In general, there is a
large, liquid market in the United States for ADRs quoted on a national
securities exchange or the NASD's national market system. The
information available for ADRs is subject to the accounting, auditing
and financial reporting standards of the domestic market or exchange on
which they are traded, which standards are more uniform and more
exacting than those to which many foreign issuers may be subject.

EDRs and GDRs are receipts evidencing an arrangement with a
non-U.S. bank similar to that for ADRs and are designed for use in
non-U.S. securities markets. EDRs and GDRs are not necessarily quoted
in the same currency as the underlying security.

Investments in Emerging Markets. The International Equity
Portfolio may invest in securities of issuers located in countries with
emerging economies and or securities markets. These countries are
located in the Asia-Pacific region, Eastern Europe, Central and South
America and Africa. Political and economic structures in many of these
countries may be undergoing significant evolution and rapid development,
and such countries may lack the social, political and economic stability
characteristic of more developed countries. Certain of these countries
may have in the past failed to recognize private property rights and
have at times nationalized or expropriated the assets of private
companies. As a result, the risks of foreign investment generally
including the risks of nationalization or expropriation of assets, may
be heightened. In addition, unanticipated political or social
developments may affect the values of the International Equity
Portfolio's investments in those countries and the availability to the
Portfolio of additional investments in those countries.

The small size and inexperience of the securities markets in
certain of these countries and the limited volume of trading in
securities in those countries may also make the International Equity
Portfolio's investments in such countries illiquid and more volatile
than investments in Japan or most Western European countries, and the
Portfolio may be required to establish special custody or other
arrangements before making certain investments in those countries. There
may be little financial or accounting information available with respect
to issuers located in certain of such countries, and it may be difficult
as a result to assess the value or prospects of an investment in such
issuers. The laws of some foreign countries may limit the ability of the
Portfolio to invest in securities of certain issuers located in those
countries.

Foreign Currency Transactions. Because investment in foreign
issuers will usually involve currencies of foreign countries, and
because the Common Stock Index Portfolio, Government Securities
Portfolio, Total Return Portfolio and International Equity Portfolio may
have currency exposure independent of their securities positions, the
value of the assets of these Portfolios as measured in U.S. dollars may
be affected by changes in foreign currency exchange rates. To the
extent that a Portfolio's assets consist of investments quoted or
denominated in a particular currency, the Portfolio's exposure to
adverse developments affecting the value of such currency will increase.
The International Equity Portfolio often has substantial currency
exposure both from investments quoted or denominated in foreign
currencies and from its currency positions.

Currency exchange rates may fluctuate significantly over short
periods of time causing, along with other factors, a Portfolio's net
asset value to fluctuate as well. They generally are determined by the
forces of supply and demand in the foreign exchange markets and the
relative merits of investments in different countries, actual or
anticipated changes in interest rates and other complex factors, as seen
from an international perspective. Currency exchange rates also can be
affected unpredictably by intervention by U.S. or foreign governments or
central banks, or the failure to intervene, or by currency controls or
political developments in the U.S. or abroad. To the extent that a
substantial portion of a Portfolio's total assets, adjusted to reflect
the Portfolio's net position after giving effect to currency
transactions, is denominated or quoted in the currencies of foreign
countries, the Portfolio will be more susceptible to the risk of adverse
economic and political developments within those countries.

In addition to investing in securities denominated or quoted in a
foreign currency, the International Equity Portfolio may engage in a
variety of foreign currency management practices described below. It
also may hold foreign currency received in connection with investments
in foreign securities when, in the judgment of the Adviser, it would be
beneficial to convert such currency into U.S. dollars at a later date,
based on anticipated changes in the relevant exchange rate. The
Portfolio will incur costs in connection with conversions between
various currencies.

Forward Foreign Currency Exchange Contracts. The International
Portfolio may purchase or sell forward foreign currency exchange
contracts for hedging purposes and to seek to increase total return.
When purchased or sold for the purpose of seeking to increase total
return, forward foreign currency exchange contracts are considered
speculative. In addition, the Portfolio may enter into forward foreign
currency exchange contracts in order to protect against anticipated
changes in future foreign currency exchange rates. The International
Equity Portfolio also may engage in cross-hedging by using forward
contracts in a currency different from that in which the hedged security
is denominated or quoted if the Adviser determines that there is a
pattern of correlation between the two currencies.

The International Equity Portfolio may enter into contracts to
purchase foreign currencies to protect against an anticipated rise in
the U.S. dollar price of securities it intends to purchase. It may
enter into contracts to sell foreign currencies to protect against the
decline in value of its foreign currency denominated or quoted portfolio
securities, or a decline in the value of anticipated dividends from such
securities, due to a decline in the value of foreign currencies against
the U.S. dollar. Contracts to sell foreign currency could limit any
potential gain that might be realized by the Portfolio if the value of
the hedged currency increased. If the International Equity Portfolio
enters into a forward foreign currency exchange contract to sell foreign
currency to seek to increase total return or to buy foreign currency for
any reason, the Portfolio will be required to place cash, U.S.
Government Securities or high grade liquid debt securities in a
segregated account with the Fund's custodian in an amount equal to the
value of the Portfolio's total assets committed to the consummation of
the forward contract. If the value of the securities placed in the
segregated account declines, additional cash or securities will be
placed in the segregated account so that the value of the account will
equal the amount of the Portfolio's commitment with respect to the
contract.

Forward contracts are subject to the risk that the counterparty to
such contract will default on its obligations. Since a forward foreign
currency exchange contract is not guaranteed by an exchange or
clearinghouse, a default on the contract would deprive the Portfolio of
unrealized profits, transaction costs or the benefits of a currency
hedge or force the Portfolio to cover its purchase or sale commitments,
if any, at the current market price.

Options on Currencies. The International Equity Portfolio may
purchase and sell (write) put and call options on foreign currencies for
the purpose of protecting against declines in the U.S. dollar value of
foreign portfolio securities and anticipated dividends on such
securities and against increases in the U.S. dollar cost of foreign
securities to be acquired. The International Equity Portfolio may use
options on currency to cross-hedge, which involves writing or purchasing
options on one currency to hedge against changes in exchange rates for a
different currency, if there is a pattern of correlation between the two
currencies. As with other kinds of option transactions, however, the
writing of an option on foreign currency will constitute only a partial
hedge, up to the amount of the premium received. The Portfolio could be
required to purchase or sell foreign currencies at disadvantageous
exchange rates, thereby incurring losses. The purchase of an option on
foreign currency may constitute an effective hedge against exchange rate
fluctuations; however, in the event of exchange rate movements adverse
to the Portfolio's position, the Portfolio may forfeit the entire amount
of the premium plus related transaction costs. In addition, the
Portfolio may purchase call or put options on currency to seek to
increase total return when the Adviser anticipates that the currency
will appreciate or depreciate in value, but the securities quoted or
denominated in that currency do not present attractive investment
opportunities and are not being held in the Portfolio. When purchased
or sold to increase total return, options on currencies are considered
speculative. Options on foreign currencies to be written or purchased
by the Portfolio will be traded on U.S. and foreign exchanges or
over-the- counter. See "Writing Covered Call and Put Options and
Purchasing Call and Put Options" below for a discussion of the liquidity
risks associated with options transactions.

Currency Swaps. The International Equity Portfolio may enter into
currency swaps for both hedging purposes and to seek to increase total
return. Currency swaps involve the exchange by the Portfolio with
another party of their respective rights to make or receive payments in
specified currencies. Since currency swaps are individually negotiated,
the Portfolio is expected to achieve an acceptable degree of correlation
between its portfolio investments and its currency swap positions
entered into for hedging purposes. Currency swaps usually involve the
delivery of the entire principal value of one designated currency in
exchange for the other designated currency. Therefore, the entire
principal value of a currency swap is subject to the risk that the other
party to the swap will default on its contractual delivery obligations.
The Fund will maintain in a segregated account with its custodian cash
and liquid high-grade debt securities equal to the net amount, if any,
of the excess of the Portfolio's obligations over its entitlements with
respect to swap transactions. To the extent that the net amount of a
swap is held in a segregated account consisting of cash and high-grade
liquid debt securities, the Fund believes that swaps do not constitute
senior securities under the Investment Company Act of 1940 and,
accordingly, will not treat them as being subject to the Portfolio's
borrowing restriction.

The use of currency swaps is a highly specialized activity which
involves investment techniques and risks different from those associated
with ordinary portfolio securities transactions. If the Adviser is
incorrect in its forecasts of market values and currency exchange rates,
the investment performance of the International Equity Portfolio would
be less favorable than it would have been if swaps were not used.

Writing Covered Call and Put Options and Purchasing Call and Put Options

The Common Stock Index Portfolio, Government Securities Portfolio,
International Equity Portfolio and the Real Estate Securities Portfolio
may write exchange-traded covered call and put options on or relating to
specific securities in order to earn additional income or, in the case
of a call written, to minimize or hedge against anticipated declines in
the value of its portfolio securities. The Total Return Portfolio may
write covered call options on its portfolio securities in amounts up to
10% of its total assets in order to earn additional income or to
minimize or hedge against anticipated declines in the value of those
securities. All call options written by these Portfolios are covered,
which means that the Portfolio will own the securities subject to the
option as long as the option is outstanding. All put options written by
these Portfolios are covered, which means that the Portfolio has
deposited with its custodian cash, U.S. Government securities or other
high-grade liquid debt securities with a value at least equal to the
exercise price of the option. Call and put options written by a
Portfolio may also be covered to the extent that the Portfolio's
liabilities under such options are offset by its rights under call or
put options purchased by the Portfolio and call options written by a
Portfolio may also be covered by depositing cash or securities with its
custodian in the same manner as written puts are covered.

Through the writing of a covered call option a Portfolio receives
premium income but obligates itself to sell to the purchaser of such an
option the particular security underlying the option at a specified
price at any time prior to the expiration of the option period,
regardless of the market value of the security during this period.
Through the writing of a covered put option, a Portfolio receives
premium income but obligates itself to purchase a particular security
underlying the option at a specified price at any time prior to the
expiration of the option period, regardless of market value during the
option period.

The Common Stock Index Portfolio, International Equity Portfolio
and Real Estate Securities Portfolio may each, in accordance with its
investment objective and investment program, also write exchange-traded
covered call and put options on stock indices. These Portfolios may
write such options for the same purposes as each may engage in such
transactions with respect to individual portfolio securities, that is,
to generate additional income or as a hedging technique to minimize
anticipated declines in the value of the Portfolio's securities. In
economic effect, a stock index call or put option is similar to an
option on a particular security, except that the value of the option
depends on the weighted value of the group of securities comprising the
index, rather than a particular security, and settlements are made in
cash rather than by delivery of a particular security.

The Common Stock Index Portfolio, Government Securities Portfolio,
International Equity Portfolio and Real Estate Securities Portfolio may
each also purchase exchange-traded call and put options with respect to
securities and, except for the Government Securities Portfolio, with
respect also to stock indices that correlate with its particular
portfolio securities. All four Portfolios may purchase put options for
defensive purposes in order to protect against an anticipated decline in
the value of their portfolio securities. As the holder of a put option
with respect to individual securities, each has the right to sell the
securities underlying the options and to receive a cash payment at the
exercise price at any time during the option period. As the holder of a
put option on an index, a Portfolio has the right to receive, upon
exercise of the option, a cash payment equal to a multiple of any excess
of the strike price specified by the option over the value of the index.

These four Portfolios may purchase call options on individual
securities (or, except for the Government Securities Portfolio, on stock
indices) in order to take advantage of anticipated increases in the
price of those securities by purchasing the right to acquire the
securities underlying the option (or, with respect to options on
indices, to receive income equal to the value of such index over the
strike price). As the holder of a call option with respect to
individual securities, the Portfolios obtain the right to purchase the
underlying securities at the exercise price at any time during the
option period. As the holder of a call option on a stock index, a
Portfolio obtains the right to receive, upon exercise of the option, a
cash payment equal to the multiple of any excess of the value of the
index on the exercise date over the strike price specified in the
option.

The Government Securities Portfolio and the International Equity
Portfolio may also write and purchase unlisted covered call and put
options. Such options are not traded on an exchange and may not be as
actively traded as listed securities, making the valuation of these
securities more difficult. In addition, an unlisted option entails a
risk not found in connection with listed options -- that the party on
the other side of the option transaction will default. This may make it
impossible to close out an unlisted option position in some cases, and
profits may be lost thereby. Except as described below, such unlisted
over-the-counter options will generally be considered illiquid
securities. The Government Securities Portfolio and International
Equity Portfolio will engage in such transactions only with firms of
sufficient credit to minimize these risks. Where one of these
Portfolios has entered into agreements with primary dealers with respect
to the unlisted options it has written, and such agreements would enable
the Portfolio to have an absolute right to repurchase, at a
pre-established formula price, the over-the-counter options written by
it, the Portfolio will treat as illiquid only the amount equal to the
formula price described above less the amount by which the option is
"in-the-money."

Option-related investment practices involve certain risks that are
different in some respects from investment risks associated with similar
funds which do not engage in such activities. These risks include the
following: writing covered call options -- the inability to effect
closing transactions at favorable prices and the inability to
participate in the appreciation of the underlying securities above an
amount equal to the exercise price plus the premium; writing covered put
options -- the inability to effect closing transactions at favorable
prices and the obligation to purchase the specified securities or to
make a cash settlement on a stock index at prices that may not reflect
current market values; and purchasing put and call options -- possible
loss of the entire premium paid.

In addition, the effectiveness of hedging the Common Stock Index
Portfolio, International Equity Portfolio and Real Estate Securities
Portfolio through the purchase or sale (writing) of stock index options
will depend upon the extent to which price movements in the Portfolio's
holdings being hedged correlate with price movements in the selected
stock index. Perfect correlation may not be possible because the
securities held or to be acquired by the Portfolio may not exactly match
the composition of the stock index on which options are purchased or
written.

As to all options, if the Advisers' forecasts regarding movements
in securities prices or interest rates are incorrect, a Portfolio's
investment results might have been more favorable without the hedge.
Because of these risks, the use of "options" related investment
practices requires special skills in addition to those needed to select
portfolio securities. A more detailed description of these investment
practices and their associated risks is contained in the SAI.

FINANCIAL FUTURES CONTRACTS AND OPTIONS ON SUCH CONTRACTS

The Common Stock Index Portfolio, Government Securities Portfolio,
International Equity Portfolio, and Real Estate Securities Portfolio may
purchase and sell exchange-traded financial futures contracts and may
write covered call options and purchase put and call options on
financial futures contracts as a hedge to protect against anticipated
changes in prevailing interest rates, currency exchange rates, overall
prices of securities in which each may invest, or to earn additional
income. The Common Stock Index Portfolio may write covered put options
on financial futures contracts for the same purposes.

Financial futures contracts consist of interest rate futures
contracts, stock index futures contracts and currency futures contracts.
An interest rate futures contract is a contract to buy or sell specified
debt securities at a future time for a fixed price. A stock index
futures contract is similar in economic effect, except that rather than
being based on specified debt securities, it is based on a specified
index of stocks and not the stocks themselves. A currency futures
contract is a contract to purchase or sell a specific amount of foreign
currency at a future time at a fixed price.

To hedge against the possibility that increases in interest rates
or other factors may result in a general decline in prices of securities
owned by it, the Government Securities Portfolio and Real Estate
Securities Portfolio may sell interest rate futures contracts. To hedge
against the possibility of a general decline in the prices of securities
owned by it, the Common Stock Index Portfolio, International Equity
Portfolio and Real Estate Securities Portfolio may sell stock index
futures contracts. To hedge against the possibility of an adverse
change in currency exchange rates, the International Equity Portfolio
may sell currency futures contracts. Assuming that any decline in the
securities or currency being hedged is accompanied by a decline in the
debt instrument or stock index or currency chosen as a hedge, the sale
of a futures contract on that debt instrument, stock index or currency
may generate gains that can wholly or partially offset any decline in
the value of the Portfolio's securities or currency exposure which have
been hedged.

To hedge against the possibility of lower long-term interest rates
and likely concomitant increase in prices of securities owned by it, the
Government Securities Portfolio and Real Estate Securities Portfolio may
purchase interest rate futures contracts. Likewise, to hedge against
increases in equity prices, the Common Stock Index Portfolio,
International Equity Portfolio and Real Estate Securities Portfolio may
purchase stock index futures contracts. To hedge against the
possibility of an adverse change in currency exchange rates, the
International Equity Portfolio may purchase currency futures contracts.
For these Portfolios, such a strategy is intended to secure a position
in the futures market intended to approximate the economic equivalent of
a position in the securities market. When used as hedges, the
Portfolios will purchase appropriate financial futures contracts only
when each intends to purchase the underlying securities that may be
affected by such increases in equity prices or decreases in interest
rates (as the case may be) and will purchase such financial futures
contracts in approximately the amount being hedged. When used as
hedges, the Advisers expect that purchases of the underlying securities
will, in fact, be made a substantial majority of the time.

All four Portfolios may purchase and sell exchange-traded
financial futures contracts for non-hedging purposes such as seeking
additional income or otherwise seeking to increase total return.

All four Portfolios may write covered call options and may
purchase put and call options on futures contracts of the type which
that Portfolio is permitted to purchase and sell in accordance with its
investment objective and investment program, and may enter into closing
transactions with respect to such options on futures contracts written
or purchased. Likewise, the Common Stock Index Portfolio may write
covered put options on stock index futures contracts. An option to
acquire a financial futures contract gives the purchaser thereof the
right to assume a position in the underlying futures contract, and,
therefore, can serve the same hedging function as owning the futures
contract directly.

The Common Stock Index Portfolio may seek to close out (at its
market price in the secondary market) a put option it has written before
the option has expired. If the secondary market is not liquid for that
option, however, the Portfolio must continue to be prepared to pay the
strike price while the option remains outstanding, regardless of price
changes, and must continue to set aside liquid assets to cover this
position.

None of the Portfolios will enter into any financial futures
contract or purchase any option thereon, if, immediately thereafter, the
total amount of its assets required to be on deposit as margin to secure
its obligations under open futures contracts, plus the amount of
premiums paid by the Portfolio for outstanding options to purchase
futures contracts, would exceed 5% of the market value of the
Portfolio's total assets.

The use of futures contracts by these Portfolios entails certain
risks, including but not limited to the following: no assurance that
futures contract transactions can be offset at favorable prices;
possible reduction of a Portfolio's income due to the use of hedging;
possible reduction in value of both the securities hedged and the
hedging instrument; possible lack of liquidity due to daily limits on
price fluctuations; imperfect correlation between the futures contract
and the securities being hedged; and potential losses in excess of the
amount initially invested in the futures contracts themselves. If
expectations regarding movements in securities prices or interest rates
are incorrect, a Portfolio might have experienced better investment
results without hedging. The use of futures contracts and options on
futures contracts requires special skills in addition to those needed to
select portfolio securities. A further discussion of futures contracts
and their associated risks is contained in the SAI.

RESTRICTED SECURITIES AND OTHER ILLIQUID INVESTMENTS

The Adviser is responsible for determining the value and liquidity
of investments held by each Portfolio. Investments may be illiquid
because of the absence of a trading market, making it difficult to value
them or dispose of them promptly at an acceptable price. The Common
Stock Index Portfolio, Government Securities Portfolio, Money Market
Portfolio and Total Return Portfolio will each not purchase or otherwise
acquire any investment, if as a result, more than 10% of its net assets
(taken at current value) would be invested instruments that are illiquid
by virtue of the absence of a readily available market. The
International Equity Portfolio and the Real Estate Securities Portfolio
will each not purchase or otherwise acquire any investment, if as a
result, more than 15% of its net assets (taken at current value) would
be invested instruments that are illiquid by virtue of the absence of a
readily available market or because they are "restricted securities".

Illiquid investments include most repurchase agreements maturing
in more than seven days, currency swaps, time deposits with a notice or
demand period of more than seven days, certain over-the-counter option
contracts (and segregated assets used to cover such options),
participation interests in loans, and restricted securities. A
restricted Security is one that has a contractual restriction on resale
or cannot be resold publicly until it is registered under the Securities
Act of 1933.

The foregoing illiquid investment restrictions do not apply to
purchases of restricted securities by the International Equity or Real
Estate Securities Portfolios eligible for sale to qualified
institutional purchasers in reliance upon Rule 144A under the Securities
Act of 1933 that are determined to be liquid by the Fund's board of
directors or by the Adviser under board-approved procedures. Such
guidelines would take into account trading activity for such securities
and the availability of reliable pricing information, among other
factors. To the extent that qualified institutional buyers become for a
time uninterested in purchasing these restricted securities, a
Portfolio's holdings of those securities may become illiquid. The
foregoing investment restrictions also do not apply to purchases by the
International Equity Portfolio of securities of foreign issuers offered
and sold outside the United States in reliance upon the exemption from
registration provided by Regulation S under the Securities Act of 1933.

LOWER-RATED SECURITIES

The Total Return Portfolio and the Real Estate Securities
Portfolio may invest in debt securities (and the Real Estate Securities
Portfolio in convertible securities) with lower ratings which generally
carry greater risk of default and are generally subject to greater
market value fluctuations. If held by either Portfolio in significant
amounts, such securities would increase financial risk and income
fluctuation. Lower-rated debt and convertible securities have
speculative characteristics and changes in economic conditions and other
circumstances are more likely to weaken the capacity of issuers of such
securities to make principal and interest payments than would be the
case as to issuers of higher rated (i.e., investment grade) debt
securities. In some cases, lower-rated debt and convertible securities
may be highly speculative, have poor prospects of reaching investment
grade standing or even be in default. See the SAI for a description of
securities ratings and of lower-rated securities, including further
discussion of the risks of investing in such instruments.

BORROWING

From time to time, the International Equity Portfolio may increase
its ownership of various investments by borrowing from banks and
investing the borrowed funds (on which the Portfolio pays interest).
The Portfolio may borrow only up to 10% of the value of its total
assets, subject to the 300% asset coverage requirement under the
Investment Company Act of 1940. Purchasing investments with borrowed
funds is a speculative investment method known as "leverage," that may
subject the Portfolio to relatively greater risks and costs (which may
include commitment fees and/or the cost of maintaining minimum average
balances with the lender) than would otherwise be the case, including
possible reduction of income and increased fluctuation of net asset
value per share. A further discussion of borrowing is contained in the
SAI.

REAL ESTATE INVESTMENT TRUSTS

The Real Estate Securities Portfolio may invest in shares of real
estate investment trusts ("REITs"). REITs are pooled investment
vehicles that invest primarily in income producing real estate or real
estate related loans or interests therein. REITs are generally
classified as equity REITs, mortgage REITs or a combination of equity
and mortgage REITs. Equity REITs invest the majority of their assets
directly in real property and derive income primarily from the
collection of rents. Equity REITs can also realize capital gains by
selling properties that have appreciated in value. Mortgage REITs
invest the majority of their assets in real estate mortgages and derive
income from the collection of interest payments. REITs are not taxed on
income distributed to shareholders provided they comply with several
requirements of the Code.

DETERMINATION OF NET ASSET VALUE

The net asset value of each Portfolio is determined as of the
time of the close of trading on the New York Stock Exchange, (currently
at 4:00 PM, New York City time) on each day when the New York Stock
Exchange is open except as noted below. The New York Stock Exchange is
scheduled to be open Monday through Friday throughout the year, except
for certain federal and other holidays. The net asset value of each
Portfolio will not be calculated on the Friday following Thanksgiving or
on December 31 when December 31 falls on a weekday. The net asset value
of a Portfolio is determined by adding the values of all securities,
cash and other assets (including accrued but uncollected interest and
dividends) of that Portfolio and subtracting all liabilities (including
accrued expenses but excluding capital and surplus). The net asset
value of a share is determined by dividing the net asset value of a
Portfolio by the number of outstanding shares of that Portfolio. Except
for debt instruments with remaining maturities of 60 days or less,
portfolio securities generally will be valued based upon their market
value. Debt instruments with remaining maturities of 60 days or less
will be valued, generally, on an amortized cost basis. Expenses,
including the investment advisory fee payable to AAI, are accrued daily.

PURCHASE AND REDEMPTION OF FUND SHARES

Pursuant to a distribution agreement, Forth Financial Securities
Corporation ("FFSC") acts without remuneration as the Fund's distributor
in the distribution of the shares of each Portfolio. FFSC is a
wholly-owned subsidiary of Forth Financial Resources, Ltd., which is in
turn a wholly-owned subsidiary of Aon Corporation (which also owns Life
of Virginia and AAI). FFSC is located at 6610 West Broad Street,
Richmond, Virginia 23230. Mr. John J. Palmer, President of the Fund,
and Mr. Scott Reeks, Treasurer of the Fund, are both affiliated with
FFSC. FFSC has no obligation under the distribution agreement to sell
any stated number of shares.

Shares of the Portfolios are sold in a continuous offering and are
authorized to be offered to the Accounts to support the variable
contracts and to the Plan and to unaffiliated plans for the benefit of
Plan and unaffiliated plan participants. Net purchase payments under
the variable contracts are placed in one or more subaccounts of the
Accounts and the assets of each such subaccount are invested in the
shares of the Portfolio corresponding to that subaccount. The Accounts
purchase and redeem shares of the Portfolios for its subaccounts at net
asset value without sales or redemption charges. Likewise, the Plan
purchases and redeems shares of the Portfolios for its participants at
net asset value without sales or redemption charges. In the future,
unaffiliated plans may purchase and redeem shares of the Portfolios on a
basis to be negotiated between the Fund or FFSC or both and such plans.

For each day on which a Portfolio's net asset value is calculated,
the Accounts transmit to the Fund any orders to purchase or redeem
shares of the Portfolio(s) based on the net purchase payments,
redemption (surrender) requests, and transfer requests from variable
contract owners, annuitants and beneficiaries that have been processed
on that day. Similarly, the Plan transmits to the Fund any orders to
purchase or redeem shares of the Portfolio(s) based on the instructions
of Plan participants. The Accounts and the Plan purchase and redeem
shares of each Portfolio at the Portfolio's net asset value per share
calculated as of the day the Fund receives the order, although such
purchases and redemptions may be executed the next morning. Money
received by the Fund from the Accounts or the Plan for the purchase of
shares of International Equity Portfolio may not be invested by the
Portfolio until the day following the execution of such purchases.
Payment for shares redeemed will be made within seven days after receipt
of a proper notice of redemption, except that the right of redemption
may be suspended or payments postponed when permitted by applicable laws
and regulations.

DIVIDENDS, DISTRIBUTIONS AND TAXES

DIVIDENDS AND DISTRIBUTIONS

It is the Fund's intention to distribute, as dividends,
substantially all of the net investment income, if any, from each of the
Portfolios. All dividends of a Portfolio are subsequently reinvested in
additional shares of that Portfolio at net asset value. For dividend
purposes, net investment income of a Portfolio consists of all payments
of dividends or interest received by that Portfolio less realized
investment losses, if any, and estimated expenses (including the
investment advisory fee). All net realized investment gains, if any, of
a Portfolio are expected to be declared and distributed annually.

TAXES

The Fund believes that each of the Portfolios will qualify as a
regulated investment company under Subchapter M of Chapter 1 of the
Internal Revenue Code of 1986 (the "Code"). Since the Fund intends to
annually distribute substantially all of its net income and gains to its
shareholders, then under the provisions of Subchapter M, the Fund should
have little or no income taxable to it under the Code. Distributions
will be made, however, consistent with the Code's rules defining a
regulated investment company.

Each Portfolio of the Fund must meet several requirements to
maintain its status as a regulated investment company. These
requirements include the following: (1) at least 90% of the portfolio's
gross income must be derived from dividends, interest, payments with
respect to securities loaned, and gains from the sale or disposition of
securities; (2) the portfolio's gains (without reduction for losses)
derived from sales of securities held for less than three months must
account for less than 30% of the Portfolio's gross income; and (3) at
the close of each quarter of the portfolio's taxable year, (a) at least
50% of the value of the portfolio's assets must consist of cash, United
States Government securities and other securities (no more than 5% of
the value of the portfolio may consist of such other securities of any
one issuer, and the portfolio must not hold more than 10% of the
outstanding voting stock of any issuer), and (b) the portfolio must not
invest more than 25% of the value of its assets in the securities of any
one issuer (other than United States Government securities).

The Internal Revenue Service (the "Service") has ruled publicly
that, for purposes of various of the requirements described above, an
exchange-traded call option is a security and its issuer is the issuer
of the underlying security, not the writer of the option. Also, the
Service has ruled privately (at the request of a taxpayer other than the
Fund) that, for purposes of the various requirements described above (1)
certain instruments on stock indices (including exchange-traded options
on a stock index, stock index futures, and options on stock index
futures) are treated as securities, the issuers of which are the issuers
of the stock underlying each index in proportion to the weighting of the
stocks in the computation of the index, and (2) certain instruments on
United States Government securities (including exchange-traded futures
contracts, options, and options on futures contracts) are treated as
securities, the issuer of which is the United States Government. In
addition, with respect to certain instruments, the Service has ruled
privately (at the request of a taxpayer other than the Fund) that gains
includable in income solely by reason of mark-to-market rules in the
Code will be treated as gains derived from securities held for at least
three months for purposes of the 30% test described above.

Since taxpayers other than the taxpayer requesting a private
ruling from the Service are not entitled to rely on the ruling, the Fund
may, in its business judgment, restrict a Portfolio's ability to enter
into options or futures transactions or engage in short-term trading and
transactions in securities (including options and futures contracts).
For the same reason, the Fund may, in its business judgment, require a
Portfolio to defer the closing out of a contract beyond the time when it
might otherwise be advantageous to do so.

Each of the Portfolios also intends to comply with section 817(h)
of the Code and the regulations issued thereunder, which impose certain
investment diversification requirements on life insurance companies'
separate accounts (such as the Accounts) that are used to fund benefits
under variable life insurance and variable annuity contracts. These
requirements are in addition to the requirements of subchapter M and of
the Investment Company Act of 1940, and may affect the securities in
which a Portfolio may invest. In order to comply with the current or
future requirements of section 817(h) (or related provisions of the
Code), the Fund may be required, e.g., to alter the investment
objectives of one or more of the Portfolios. No such change of
investment objectives will take place without notice to the shareholders
of an affected Portfolio, the approval of a majority of the outstanding
voting shares, and the approval of the Securities and Exchange
Commission, to the extent legally required.

Foreign Investments. Portfolios investing in foreign securities
or currencies may be required to pay withholding or other taxes to
foreign governments. Foreign tax withholding from dividends and
interest, if any, is generally at a rate between 10% and 35%. The
investment yield of any Portfolio that invests in foreign securities or
currencies will be reduced by these foreign taxes. Shareholders will
bear the cost of any foreign tax withholding, but may not be able to
claim a foreign tax credit or deduction for these foreign taxes.
Portfolios investing in securities of passive foreign investment
companies may be subject to U.S. Federal income taxes and interest
charges, and the investment yield of a Portfolio making such investments
will be reduced by these taxes and interest charges. Shareholders will
bear the cost of these taxes and interest charges, but will not be able
to claim a deduction for these amounts.

Additional Tax Considerations. If a Portfolio failed to qualify
as a regulated investment company, owners of variable life insurance and
annuity contracts based on the Portfolio (1) might be taxed currently on
the investment earnings under their contracts and thereby lose the
benefit of tax deferral, and (2) the Portfolio might incur additional
taxes. In addition, if a Portfolio failed to comply with the
diversification requirements of the regulations under Subchapter L of
the Code, owners of variable life insurance and annuity contracts based
on the Portfolio would be taxed on the investment earnings under their
contracts and thereby lose the benefit of tax deferral. Accordingly,
compliance with the above rules is carefully monitored by the Advisers
and it is intended that each Portfolio will comply with these rules as
they exist or as they may be modified from time to time. Compliance
with the tax requirements described above may result in a reduction in
the return under a Portfolio, since, to comply with the above rules, the
investments utilized (and the time at which such investments are entered
into and closed out) may be different from what the Advisers might
otherwise believe to be desirable.

It is not feasible to comment on all of the federal tax
consequences concerning the Portfolios. Since the shareholders of the
Portfolios are currently limited to the Accounts and the Plan, no
further discussion of those consequences is included herein. For
information concerning the federal income tax consequences to the owners
of variable life insurance and annuity contracts, see the prospectuses
for the contracts.

MANAGEMENT OF THE FUND

BOARD OF DIRECTORS

The Fund has a board of directors, the members of which are
elected by the shareholders. A majority of the directors are not
associated with Life of Virginia or an affiliated company. The
Directors are responsible for the overall management of the Fund and
their duties include reviewing the results of the Fund, monitoring
investment activities and practices, and receiving and acting upon
future plans for the Fund.

INVESTMENT ADVISER

Aon Advisors, Inc. ("AAI"), a wholly-owned subsidiary of Aon
Corporation ("Aon"), is the investment adviser for the Fund. It is
registered under the Investment Advisers Act of 1940 and its principal
office is located at 6604 West Broad Street, Richmond, Virginia 23230.
As of December 31, 1994, Mr. Patrick G. Ryan, President and Chief
Executive Officer of Aon, 123 North Wacker Drive, Chicago, Illinois,
60606, owned directly and beneficially 12,886,408 shares (12%) of the
common stock of Aon.

In addition to the Fund, AAI provides investment advice and
management to other investment companies, pension plans, corporations,
and other organizations. As of December 31, 1994, the aggregated assets
under management were approximately $__.__ billion.

AAI manages the investments of the Common Stock Index Portfolio,
Government Securities Portfolio, Money Market Portfolio and Total Return
Portfolio, determining which securities to buy and sell for each,
selecting the brokers and dealers to effect the transactions, and
negotiating commissions. In placing orders for securities transactions,
AAI's policy is to attempt to obtain the most favorable price and
efficient execution available. Subject to this policy, AAI may also
allocate brokerage to broker/dealers based upon their sale of Life of
Virginia variable life insurance and variable annuity contracts. AAI
has engaged investment sub-advisers to provide the day-to-day portfolio
management of the International Equity and Real Estate Securities
Portfolios.

AAI provides administrative services to the Fund and manages its
business affairs. In addition, AAI provides all executive,
administrative, clerical and other personnel necessary to operate the
Fund and pays the salaries and other costs of employing all these
persons. AAI furnishes the Fund with office space, facilities, and
equipment and pays the day-to-day expenses related to the operating and
maintenance of such office space, facilities and equipment. Legal,
accounting and all other expenses incurred in registering securities of
the Fund under federal and state securities laws, and of organizing any
new Portfolios of the Fund are also paid by AAI.

The Fund is responsible for payment of all expenses it may incur
in its operation and all of its general administrative expenses except
those expressly assumed by AAI as described in the preceding paragraph.
These include (by way of description and not of limitation), any share
redemption expenses, expenses of portfolio transactions, shareholder
servicing costs, pricing costs (including the daily calculation of net
asset value), interest on borrowings by the Fund, charges of the
custodian and transfer agent, if any, cost of auditing services,
non-interested directors' fees, legal expenses, state franchise taxes,
certain other taxes, investment advisory fees, certain insurance
premiums, cost of maintenance of corporate existence, investor services
(including allocable personnel and telephone expenses), costs of
printing and mailing updated Fund prospectuses to shareholders, proxy
statements and shareholder reports, the cost of paying dividends and
capital gains distribution, capital stock certificates, costs of
directors and shareholder meetings, and any extraordinary expenses,
including litigation costs in legal actions involving the Fund, or costs
related to indemnification of directors, officers and employees of the
Fund.

AAI has agreed to reimburse the Fund for any amount by which the
total operating expenses of the Common Stock Index and Money Market
Portfolios in any fiscal year exceed .75% of the aggregate average daily
net assets of those Portfolios. AAI also has agreed to reimburse the
Fund for any amount by which the total operating expenses of the
International Equity Portfolio in any fiscal year exceeds 1.75% of the
first $30 million of the aggregate average daily net assets of that
Portfolio and 1% of the aggregate average daily net assets in excess of
$30 million. With respect to Portfolios other than the foregoing three
Portfolios, AAI has agreed to reimburse the Fund for any amount by which
the total operating expenses of such Portfolios exceeds 1.5% of the
first $30 million of the average daily net assets of those Portfolios
and 1% of the amount by which the average daily net assets of each of
these Portfolios exceed $30 million. For purposes of this reimbursement
formula, "operating expenses" do not include attorney's fees, court
judgments or other litigation expenses or certain costs relating to
indemnification. Reimbursement of excess operating expenses, as
described above, cannot be changed without shareholder approval.

During the Fund's fiscal year ended December 31, 1994, the total
operating expenses incurred by the Fund's Portfolios (including the
advisory fees paid to AAI), before reimbursement, represented 1.10% of
the average net assets of the Common Stock Index Portfolio (formerly
Common Stock Portfolio), 0.81% of the average net assets of the
Government Securities Portfolio (formerly Bond Portfolio), 0.42% of the
average net assets of the Money Market Portfolio, and 0.77% of the
average net assets of the Total Return Portfolio. During the Fund's
fiscal year ended December 31, 1994, AAI reimbursed the Fund for
expenses in an amount representing 0.35% of the average net assets of
the Common Stock Index Portfolio.

The Fund pays AAI monthly compensation in the form of an
investment advisory fee. The fee is accrued daily but paid to AAI
monthly. The investment advisory fee for each portfolio is based upon
the average daily net assets of the portfolio (see "Determination of Net
Asset Value"), at the following annual rates:

Common Stock Index Portfolio: .35%

Government Securities Portfolio, Money Market Portfolio and
Total Return Portfolio: .50% of the first $100,000,000; .45%
of the next $100,000,000; .40% of the next $100,000,000; .35%
of the next $100,000,000 and .30% of amounts in excess of
$400,000,000.

International Equity Portfolio: 1.00% of the first
$100,000,000; .95% of the next $100,000,000; and .90% of
amounts in excess of $200,000,000.

Real Estate Securities Portfolio: .85% of the first
$100,000,000; .80% of the next $100,000,000; and .75% of
amounts in excess of $200,000,000.

During the Fund's fiscal year ended December 31, 1994, the Fund paid AAI
investment advisory fees in an amount representing .35% of the average
net assets of the Common Stock Index Portfolio (formerly Common Stock
Portfolio) and .50% of the average net assets of the Government
Securities Portfolio (formerly Bond Portfolio), Money Market Portfolio
and the Total Return Portfolio.

INVESTMENT SUB-ADVISERS

Perpetual Portfolio Management, Limited ("Perpetual"), a
wholly-owned subsidiary of Perpetual plc, is the investment sub-adviser
for the International Equity Portfolio. It is registered under the
Investment Advisers Act of 1940 as an investment adviser and has its
principal offices at 48 Hart Street, Henley-on-Thames, Oxfordshire,
England RG9 2AZ. In addition to the International Equity Portfolio,
Perpetual provides investment advice and management to pension plans,
corporations and other institutional and individual clients. Although
Perpetual has no prior experience advising a U.S. mutual fund, it and
its affiliates currently manage over __ unit trusts (the British term
for mutual funds) in the United Kingdom and overseas. As of December
31, 1994, Perpetual and its affiliates managed approximately $__.__ in
assets. As of September 30, 1994, Mr. Martyn Abib, Chairman of
Perpetual plc, owned directly and beneficially approximately 17,690,000
(67%) of the ordinary shares (i.e., common stock) of Perpetual plc.
Perpetual plc has the same address as Perpetual.

Genesis Realty Capital Management, L.P. ("Genesis"), a recently
formed limited partnership, is the investment sub-adviser for the Real
Estate Securities Portfolio. Genesis is registered under the Investment
Advisers Act of 1940 as an investment adviser and has offices at 909
Montgomery Street, San Francisco, CA 94133 and 885 Third Avenue, New
York, N.Y. 10022. Genesis and its general partners have no previous
experience advising mutual funds. Genesis has three principal general
partners: Zell Capital Associates, L.P. (an Illinois limited
partnership indirectly controlled by Samuel Zell) which holds
approximately 50.00% of the stock of Genesis. Genesis Realty
Investments, L.P. is a California limited partnership whose general
partner is Genisis Realty Advisors, Inc. a Delaware corporation owned by
Will K. Weinstein, Gail P. Seneca and Philip C. Stapleton. Genesis
Realty Investments, L.P. holds approximately 25.00% of the stock of
Genesis, and BG Realty Capital Management, L.P. holds approximately
25.00% of the stock of Genesis.

Perpetual and Genesis manage the investments of the International
Equity Portfolio and the Real Estate Securities Portfolio, respectively,
determining which securities or other investments to buy and sell for
each, selecting the brokers and dealers to effect the transactions, and
negotiating commissions. In placing orders for securities transactions,
both Perpetual and Genesis follow the AAI's policy of seeking to obtain
the most favorable price and efficient execution available.

For their services, AAI pays Perpetual and Genesis monthly
compensation in the form of an investment sub-advisory fee. The fee is
paid by AAI monthly and is based upon the average daily net assets (see
"Purchase and Redemption of Fund Shares") of the Portfolio that each
sub-adviser manages, at the following annual rates:

International Equity Portfolio: .50% of the first
$100,000,000; .475% of the next $100,000,000; and .45% of
amounts in excess of $200,000,000.

Real Estate Securities Portfolio: .425% of the first
$100,000,000; .40% of the next $100,000,000; and .375% of
amounts in excess of $200,000,000.

THE PORTFOLIO MANAGERS

Michael A. Conway has been President of AAI since 1990. In that
capacity he oversees the investment management of all portfolios of the
Fund. From 1985-1990 Mr. Conway was president of Manhattan National
Corporation. Mr. Conway holds a B.A. degree from the University of
Illinois. He is a Chartered Financial Analyst and a charter member of
the International Society of Financial Analysts.

Anthony A. Rettino, Jr., Portfolio Manager of the Government
Securities Portfolio and the Common Stock Index Portfolio, has been
employed as a Senior Portfolio Manager of AAI since 1992. Mr. Rettino
holds a B.A. degree from the University of Notre Dame and an M.B.A.
degree from the University of Chicago. Prior to joining AAI, Mr.
Rettino was employed as a Project Manager for Morgan Stanley and Company
Inc. (from 1989-1991) and as a Senior Accountant for Price Waterhouse
(from 1986-1989).

Keith C. Lemmer, Portfolio Manager of the Money Market Portfolio,
has been employed as Senior Portfolio Manager of AAI since 1992. Mr.
Lemmer holds a B.A. degree from Western Illinois University and an
M.B.A. degree from DePaul University. He is a Certified Public
Accountant and a Chartered Financial Analyst. He is a member of the
Association for Investment Management and Research and the Investment
Analysts Society of Chicago. Prior to 1992, Mr. Lemmer was employed by
AAI as a Portfolio Manager (from 1991-1992) and a Fixed Income Analyst
(from 1987-1991).

Rimas M. Milaitis, Portfolio Manager of the Total Return
Portfolio, has been employed as a Senior Portfolio Manager of AAI since
1993. Mr. Milaitis holds a B.S. degree from Illinois State University
and an M.B.A. degree from DePaul University. Mr. Milaitis has been
employed by AAI since 1990. During that time he served as Equity Trader
(from 1990-1991), Portfolio Manager (from 1991-1993) and Senior
Portfolio Manager. From 1987-1990, Mr. Milaitis was an Equity Portfolio
Assistant with the Illinois State Board of Investment.

Michael B. Berman, Portfolio Manager of the Real Estate Securities
Portfolio, has been a principal of Genesis since its establishment in
September of 1994. Mr. Berman holds a B.A. degree from the State
University of New York at Binghamton and a J.D. from Boston University
School of Law. Prior to joining Genesis, he was a Director in the Real
Estate Investment Banking Group at Merrill Lynch, Pierce Fenner & Smith,
Inc. (from 1989-1994).

No single person or persons acts as portfolio manager(s) for the
International Equity Portfolio. All investment decisions for the
International Equity Portfolio are made by an investment committee at
Perpetual.

ADDITIONAL INFORMATION
CAPITAL STOCK

The Fund is currently issuing six classes of capital stock,
representing interests in the Common Stock Index Portfolio, the
Government Securities Portfolio, the Money Market Portfolio, the Total
Return Portfolio, the International Equity Portfolio and the Real Estate
Securities Portfolio. All shares of capital stock (including fractional
shares) have equal rights with regard to voting, redemptions, dividends,
distributions, and liquidations with respect to the portfolio in which
they represent an interest. When issued, shares are fully paid and
nonassessable and do not have preemptive or conversion rights or
cumulative voting rights.

CONTRACT OWNER VOTING RIGHTS

With regard to matters for which the Investment Company Act of
1940 requires a shareholder vote, Life of Virginia votes Fund shares
held in an Account in accordance with instructions received from owners
of variable life insurance and variable annuity contracts (or annuitants
or beneficiaries thereunder) having a voting interest in that Account.
Each share has one vote and votes are counted on an aggregate basis
except as to matters where the interests of Portfolios differ (such as
approval of an investment advisory agreement or a change in the
fundamental investment policies). In such a case, the voting is on a
Portfolio-by-Portfolio basis. Fractional shares are counted. Shares
held by the Accounts for which no instructions are received are voted by
Life of Virginia for or against any proposition, or in abstention, in
the same proportion as the shares for which instructions have been
received.

PLAN PARTICIPANT VOTING RIGHTS

With regard to matters for which the Investment Company Act of
1940 requires a shareholder vote, Plan Trustees vote Fund shares held in
the Plan in accordance with instructions received from Plan participants
having a voting interest in the Plan. Each share has one vote and votes
are counted on an aggregate basis except as to matters where the
interests of Portfolios differ (such as approval of an investment
advisory agreement or a change in the fundamental investment policies).
In such a case, the voting is on a Portfolio-by-Portfolio basis.
Fractional shares are counted. Shares for which no instructions are
received are voted by the Plan Trustees for or against any proposition,
or in abstention, in the same proportion as the shares for which
instructions have been received.

UNAFFILIATED PLAN PARTICIPANT VOTING RIGHTS

With regard to matters for which the Investment Company Act of
1940 requires a shareholder vote, trustees of unaffiliated plans are
expected to vote Fund shares held by their plans either in their own
discretion or in accordance with instructions received from participants
in such plans if such participants have a voting interest in such plans.

ANNUAL REPORTS

The Fund's annual report to shareholders contains additional
performance information that will be made available upon request and
without charge.

INQUIRIES

Contract owner and Plan participant inquiries should be sent to
Life of Virginia Series Fund, Inc. 6610 W. Broad Street, Richmond,
Virginia 23230.

CUSTODIAN, TRANSFER AND DIVIDEND PAYING AGENT

Crestar Bank acts as Custodian of the Fund's (other than those of the
International Equity Portfolio) assets and also acts as its Transfer and
Dividend agent. The principal office of Crestar Bank is located at 919
East Main Street, Richmond, Virginia 23219. Firstar Trust Company, 777
E. Wisconsin Avenue, Milwaukee, Wisconsin 53202, is the Fund's custodian
for the International Equity Portfolio. Pursuant to a sub-custody
agreement with Firstar Trust Company, Chase Manhattan Bank, N.A., 1211
6th Avenue, New York, N.Y. 10036, serves as custodian for the overseas
assets of the International Equity Portfolio.

LEGAL MATTERS

Sutherland, Asbill & Brennan of Washington, D.C. is Counsel for
the Fund. There are no material legal proceedings in which the Fund is
a party.

PART B

STATEMENT OF ADDITIONAL INFORMATION

LIFE OF VIRGINIA SERIES FUND, INC.

STATEMENT OF ADDITIONAL INFORMATION

May 1, 1995

This Statement of Additional Information is not a prospectus. Much
of the information contained in this Statement expands upon matters
discussed in the prospectus and should, therefore, be read in
conjunction with the prospectus. To obtain a copy of a prospectus with
the same date as this Statement of Additional Information, send a
written request to Life of Virginia Series Fund, Inc., 6610 W. Broad
Street, Richmond, Virginia 23230, or call (804)281-6000.

TABLE OF CONTENTS

Page

General Information

Prior History
The Portfolios
Portfolio Turnover Rate Calculation

Investment Practices and Restrictions

Investment Practices
Investment Restrictions

Management of the Fund

Directors and Officers
AAI
Advisory Agreement
Investment Advisory Fee
Investment Sub-Advisers
Investment Sub-Advisory Agreements
Investment Sub-Advisory Fees
Reimbursement of Excess Operating Expenses
Securities Activities of the Adviser

Portfolio Transactions and Brokerage

Determination of Net Asset Value

Dividends and Distributions

Redemption of Fund Shares

Additional Information

Life of Virginia
Custodian, Dividend and Transfer Agent
Independent Auditors
Legal Counsel
Capital Stock
Voting Rights
Other Information

Audited Financial Statements

Appendix A

Appendix B

GENERAL INFORMATION

PRIOR HISTORY

On May 1, 1993, pursuant to shareholder approval obtained on April
20, 1993, the names and the investment objectives, policies and
fundamental restrictions of the Common Stock Index Portfolio, (formerly
the Common Stock Portfolio), and the Government Securities Portfolio,
(formerly the Bond Portfolio) were changed. The investment objective of
the Common Stock Portfolio was intermediate and long-term growth of
capital, with reasonable income a consideration. The Common Stock
Portfolio sought to achieve this objective by investing principally in
common stocks and securities convertible into or with rights to purchase
common stocks. The investment objective of the Bond Portfolio was
providing as high a level of income as is consistent with the
preservation of capital. It sought to achieve this objective by
investing primarily in corporate bonds and government obligations.

THE PORTFOLIOS

The Common Stock Index Portfolio has the investment objective of
providing capital appreciation and accumulation of income that
corresponds to the investment return of the Standard & Poor's 500
Composite Stock Price (the "S&P 500 Index"), through investment in
common stocks traded on the New York Stock Exchange and the American
Stock Exchange and, to a limited extent, in the over-the-counter
markets. The Common Stock Index Portfolio will attempt to achieve its
objective by replicating the total return of the S&P 500 Index. To the
extent that it can do so consistent with the pursuit of its investment
objective, it will attempt to keep transaction costs low and minimize
portfolio turnover. To achieve its investment objective, the Common
Stock Index Portfolio purchases equity securities that will reflect, as
a group, the total investment return of the S&P 500 Index. Like the S&P
500 Index, the Common Stock Index Portfolio will hold both dividend
paying and non-dividend paying common stocks comprising the S&P 500
Index. From time to time, adjustments will be made in the Common Stock
Index Portfolio's holdings due to changes in the composition or
weightings of issues comprising the S&P 500 Index. For the year ended
December 31, 1993, the portfolio turnover rate for the Common Stock
Index Portfolio was 73.45%. The reinvestment of assets occasioned by
the change of this Portfolio's investment objective (described above)
during the year increased portfolio turnover over what it otherwise
would have been. For the year ended December 31, 1994, the portfolio
turnover rate for the Common Stock Index Portfolio was 4.31%.

The Government Securities Portfolio has the investment objective
of seeking high current income and protection of capital through
investment in intermediate and long-term debt instruments issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.
The Government Securities Portfolio may also invest in U.S. Government
debt instruments having maturities of less than one year and in other
high quality money market instruments. The Government Securities
Portfolio will invest at least 80% of its total assets, valued at the
time of purchase, in U.S. Government securities of various maturities.
For the year ended December 31, 1993, the portfolio turnover rate for
the Government Securities Portfolio was 112.86%. For the year ended
December 31, 1994, the portfolio turnover rate for the Government
Securities Portfolio was 565.65%.

The Money Market Portfolio has the investment objective of
providing the highest level of current income as is consistent with high
liquidity and safety of principal by investing in good quality money
market securities. Such securities include U.S. Treasury bills, notes
and bonds; obligations of agencies and instrumentalities of the U.S.
Government; bank certificates of deposit; commercial paper; bankers'
acceptances; and repurchase agreements. From time to time the Money
Market Portfolio may also invest in short-term corporate obligations.

The Total Return Portfolio has the investment objective of
providing the highest total return, composed of current income and
capital appreciation, as is consistent with prudent investment risk. It
will attempt to achieve this objective by investing in common stocks,
bonds and money market instruments, the proportion of each being
continuously determined by the Adviser (under the supervision of the
Board of Directors). Total return consists of current income, including
dividends, interest and discount accruals and capital appreciation.
This Portfolio will invest in common stocks and other equity securities
or securities convertible into or with rights to purchase common stocks,
securities that are permissible investments for the Government
Securities Portfolio and the Money Market Portfolio. This Portfolio
will also invest in fixed-income obligations.

There are no percentage limitations on the types of securities in
which the Total Return Portfolio may invest, so from time to time it may
invest entirely in stocks, entirely in bonds, entirely in money market
instruments, or in any combination of these types of securities in
accordance with the sole discretion of the Adviser and the Board of
Directors of the Fund. At least 60% of the value of any bonds held by
this Portfolio will be rated within the four highest grades by a
nationally recognized rating service such as Standard and Poor's
Corporation or Moody's Investors Service, Inc. The portfolio turnover
rate for the year ended December 31, 1993, was 48.12%. Stocks in the
Portfolio had a turnover ratio of 89.15%. Bonds in the portfolio had a
turnover ratio of 7.09%. The portfolio turnover rate for the year ended
December 31, 1994, was 66.92%. Stocks in the Portfolio had a turnover
ratio of 65.37%. Bonds in the portfolio had a turnover ratio of 56.74%.

PORTFOLIO TURNOVER RATE CALCULATION

The turnover rate for each Portfolio is calculated by dividing the
lesser of purchases or sales of portfolio securities during the fiscal
year by the monthly average of the value of the Portfolio's securities
(excluding from the computation all securities, including options, with
maturities at the time of acquisition of one year or less). For
example, a portfolio turnover rate of 100% would mean that all of a
Portfolio's securities (except those excluded from the calculation) were
replaced once in a period of one year. A high rate of portfolio turnover
generally involves correspondingly greater brokerage commission
expenses. Turnover rates may vary greatly from year to year as well as
within a particular year and may also be affected by cash requirements
for redemptions of a Portfolio's shares and by requirements, the
satisfaction of which enable the Fund to receive certain favorable tax
treatment. Because the rate of portfolio turnover is not a limiting
factor, however, particular holdings may be sold at any time, if
investment judgment or Portfolio operations make a sale advisable. As a
result, the annual portfolio turnover rates in future years may exceed
the percentages shown above. Since short term instruments are excluded
from the calculation of a portfolio turnover rate, no meaningful
portfolio turnover rate can be estimated or calculated for the Money
Market Portfolio.

INVESTMENT PRACTICES AND RESTRICTIONS

INVESTMENT PRACTICES

The policies by which the Portfolios will pursue their objectives
are generally set forth in the prospectus. This section is intended to
augment the explanation found in the prospectus.

When-Issued and Delayed Delivery Securities. From time to time,
in the ordinary course of business, each Portfolio may purchase
securities on a when-issued basis or delayed-delivery basis, i.e.,
delivery and payment can take place a month or more after the date of
the transaction. The securities so purchased are subject to market
fluctuation, and no interest accrues to the purchaser during this
period. At the time a Portfolio makes the commitment to purchase
securities on a when-issued or delayed-delivery basis, the Fund will
record the transaction and thereafter reflect the value, each day, of
such security in determining the net asset value of that Portfolio. At
the time of delivery of the securities, the value may be more or less
than the purchase price. Each Portfolio will also establish a
segregated account with the Fund's custodian bank in which it will
maintain cash or cash equivalents or other liquid portfolio securities
equal in value, marked to market on a daily basis, to commitments for
such when-issued or delayed-delivery securities. As a general matter
each Portfolio will hold less than 5% of its assets in commitments to
purchase securities on a delayed-delivery or when-issued basis and will
not, under any circumstances, purchase securities on a when-issued or
delayed-delivery basis if, as a result, more than 10% of the net assets
of the Portfolio would be so invested.

Loans of Portfolio Securities. The Portfolios may from time to
time lend securities each Portfolio holds to brokers, dealers and
financial institutions, up to a maximum of 20% of the total value of
each Portfolio's assets. This percentage may not be increased without
approval of a majority of the outstanding voting securities of the
respective Portfolios. (See "Fundamental Restrictions" on page 18.)
Such loans will be secured by collateral in the form of cash or United
States Treasury securities, which at all times while the loan is
outstanding, will be maintained in an amount at least equal to the
current market value of the loaned securities. The Portfolios will
continue to receive interest and dividends on the loaned securities
during the term of the loans, and, in addition, will receive a fee from
the borrower or interest earned from the investment of cash collateral
in short-term securities. The Portfolio will also receive any gain or
loss in the market value of loaned securities and of securities in which
cash collateral is invested during the term of the loan.

The right to terminate a loan of securities, subject to
appropriate notice, will be given to either party. When a loan is
terminated, the borrower will return the loaned securities to the Fund.
The Fund will not have the right to vote securities on loan, but would
terminate the loan and regain the right to vote if that were important
with respect to the investment.

For tax purposes, the dividends, interest and other distributions
which the Fund receives on loaned securities may be treated as other
than qualified income for the 90% test discussed under "Taxes" in the
prospectus. The Fund intends to lend portfolio securities only to the
extent that this activity does not jeopardize the Fund's status as a
regulated investment company under the Internal Revenue Code of 1986
(the "Code").

The primary risk involved in lending securities is that the
borrower will fail financially and not return the loaned securities at a
time when the collateral is insufficient to replace the full amount of
the loaned securities. The borrower would be liable for the shortage,
but the Fund would be an unsecured creditor with respect to such
shortage and might not be able to recover all or any of it. In order to
minimize this risk, the Fund will make loans of securities only to firms
the Adviser (under the supervision of the board of directors) deems
creditworthy.

Convertible Securities. The Total Return Portfolio,
International Equity Portfolio and Real Estate Securities Portfolio may
each invest in convertible securities. Convertible securities may
include corporate notes or preferred stock but are ordinarily a
long-term debt obligation of the issuer convertible at a stated exchange
rate into common stock of the issuer. As with all debt securities, the
market value of convertible securities tends to decline as interest
rates increase and, conversely, to increase as interest rates decline.
Convertible securities generally offer lower interest or dividend yields
than non-convertible securities of similar quality. However, when the
market price of the common stock underlying a convertible security
exceeds the conversion price, the price of the convertible security
tends to reflect the value of the underlying common stock. As the
market price of the underlying common stock declines, the convertible
security tends to trade increasingly on a yield basis, and thus may not
depreciate to the same extent as the underlying common stock.
Convertible securities generally rank senior to common stocks in an
issuer's capital structure and are consequently of higher quality and
entail less risk of declines in market value than the issuer's common
stock. However, the extent to which such risk is reduced depends in
large measure upon the degree to which the convertible security sells
above its value as a fixed-income security. In evaluating a convertible
security, an Adviser usually gives primary emphasis to the
attractiveness of the underlying common stock. The convertible debt
securities in which these Portfolios may invest are subject to the same
rating criteria as each Portfolio's investment in non- convertible debt
securities.

Warrants. The International Equity Portfolio and Real Estate
Securities Portfolio may each invest up to 5% of its total assets,
calculated at the time of purchase, in warrants or rights (other than
those acquired in units or attached to other securities) which entitle
the holder to buy equity securities at a specific price for a specific
period of time. The Portfolios will not invest more than 2% of their
total assets, calculated at the time of purchase, in warrants or rights
which are not listed on the New York or American Stock Exchanges.
Warrants and rights have no voting rights, receive no dividends and have
no rights with respect to the assets of the issuer.

Risks of Foreign Investments. Investing in the securities of
companies organized outside the United States or of companies whose
securities are principally traded outside the United States ("foreign
issuers") or investments in securities denominated or quoted in foreign
currency ("non-dollar securities") involves certain special
considerations, including those set forth below, which are not typically
associated with investing in securities of domestic issuers or U.S.
dollar denominated securities.

Since investments in foreign issuers may involve currencies of
foreign countries and since a Portfolio may temporarily hold funds in
bank deposits in foreign currencies during completion of investment
programs and since a Portfolio may be subject to currency exposure
independent of its securities positions, the Portfolio may be affected
favorably or unfavorably by changes in currency rates and in exchange
control regulations and may incur costs in connection with conversions
between various currencies.

Since foreign issuers are not subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to U.S. issuers, there may be less
publicly available information about a foreign issuer than about a
domestic issuer. Volume and liquidity in most foreign securities
markets are less than in the United States and securities of many
foreign issuers are less liquid and more volatile than securities of
comparable domestic issuers. Fixed commissions on foreign securities
exchanges are generally higher than negotiated commissions on U.S.
exchanges, although a Portfolio may endeavor to achieve the most
favorable net results on its portfolio transactions. There is generally
less government supervision and regulation of securities exchanges,
brokers, dealers and listed and unlisted issuers than in the United
States. Mail service between the United States and foreign countries
may be slower or less reliable than within the United States, thus
increasing the risk of delayed settlements of portfolio transactions or
loss of certificates for portfolio securities.

Foreign investment markets also have different clearance and
settlement procedures, and in certain markets there have been times when
settlements have been unable to keep pace with the volume of
transactions, making it difficult to conduct such transactions. Such
delays in settlement could result in temporary periods when a portion of
the assets of a Portfolio are uninvested and no return is earned on such
assets. The inability of a Portfolio to make intended security
purchases due to settlement problems could cause the Portfolio to miss
attractive investment opportunities. Inability to dispose of portfolio
investments due to settlement problems could result either in losses to
a Portfolio due to subsequent declines in value of the portfolio
securities or, if the Portfolio has entered into a contract to sell the
securities, could result in possible liability to the purchaser. In
addition, with respect to certain foreign countries, there is the
possibility of expropriation or confiscatory taxation, political or
social instability, or diplomatic developments which could affect a
Portfolio's investments in those countries. Moreover, individual foreign
economies may differ favorably or unfavorably from the U.S. economy in
such respects as growth of gross national product, rate of inflation,
capital reinvestment, resource self-sufficiency and balance of payments
position.

Forward Foreign Currency Exchange Contracts. The International
Equity Portfolio may enter into forward foreign currency exchange
contracts. A forward foreign currency exchange contract involves an
obligation to purchase or sell a specific currency at a future date,
which may be any fixed number of days from the date of the contract
agreed upon by the parties, at a price set at the time of the contract.
These contracts are traded in the interbank market conducted directly
between currency traders (usually large commercial banks) and their
customers. A forward contract generally has no deposit requirement, and
no commissions are generally charged at any stage for trades. At
the maturity of a forward contract, the Portfolio may either accept or
make delivery of the currency specified in the contract or, at or prior
to maturity, enter into a closing purchase transaction involving the
purchase or sale of an offsetting contract. Closing purchase
transactions with respect to forward contracts are usually effected with
the currency trader who is a party to the original forward contract.

The International Equity Portfolio may enter into forward foreign
currency exchange contracts in several circumstances. First, when it
enters into a contract for the purchase or sale of a security
denominated or quoted in a foreign currency, or when it anticipates the
receipt in a foreign currency of dividend or interest payments on such a
security which it holds, the Portfolio may desire to "lock in" the U.S.
dollar price of the security or the U.S. dollar equivalent of such
dividend or interest payment, as the case may be. By entering into a
forward contract for the purchase or sale, for a fixed amount of
dollars, of the amount of foreign currency involved in the underlying
transactions, the Portfolio will attempt to protect itself against an
adverse change in the relationship between the U.S. dollar and the
subject foreign currency during the period between the date on which the
security is purchased or sold, or on which the dividend or interest
payment is declared, and the date on which such payments are made or
received.

Additionally, when the Portfolio's Adviser believes that the
currency of a particular foreign country may suffer a substantial
decline against the U.S. dollar, it may enter into a forward contract to
sell, for a fixed amount of dollars, the amount of foreign currency
approximating the value of some or all of the Portfolio's portfolio
securities denominated in such foreign currency. The precise matching
of the forward contract amounts and the value of the securities involved
will not generally be possible because the future value of such
securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date on which the
contract is entered into and the date it matures. Using forward
contracts to protect the value of the Portfolio's portfolio securities
against a decline in the value of a currency does not eliminate
fluctuations in the underlying prices of the securities. It simply
establishes a rate of exchange which the Portfolio can achieve at some
future point in time. The precise projection of short-term currency
market movements is not possible, and short-term hedging provides a
means of fixing the dollar value of only a portion of the Portfolio's
foreign assets.

The International Equity Portfolio may engage in cross-hedging by
using forward contracts in one currency to hedge against fluctuations in
the value of securities quoted or denominated in a different currency if
the Adviser determines that there is a pattern of correlation between
the two currencies. The Portfolio also may purchase and sell forward
contracts to seek to increase total return when the Adviser anticipates
that the foreign currency will appreciate or depreciate in value, but
securities denominated or quoted in that currency do not present
attractive investment opportunities and are not held by the Portfolio.

The Fund's custodian will place cash or high grade liquid debt
securities (i.e., securities rated in one of the top three ratings
categories by S&P or by Moody's or, if unrated, deemed by the Adviser to
be of comparable credit quality) into a segregated account of the
Portfolio in an amount equal to the value of the Portfolio's total
assets committed to the consummation of forward foreign currency
exchange contracts requiring the Portfolio to purchase foreign
currencies or forward contracts entered into to seek to increase total
return. If the value of the securities placed in the segregated account
declines, additional cash or securities will be placed in the account on
a daily basis so that the value of the account will equal the amount of
the Portfolio's commitments with respect to such contracts. The
segregated account will be marked-to-market on a daily basis. Although
the contracts are not presently regulated by the CFTC, the CFTC may in
the future assert authority to regulate these contracts. In such event,
the Portfolio's ability to utilize forward foreign currency exchange
contracts may be restricted.

While the International Equity Portfolio will enter into forward
contracts to reduce currency exchange rate risks, transactions in such
contracts involve certain other risks. Therefore, while the Portfolio
may benefit from such transactions, unanticipated changes in currency
prices may result in a poorer overall performance for the Portfolio than
if it had not engaged in any such transactions. Moreover, there may be
imperfect correlation between the Portfolio's portfolio holdings of
securities quoted or denominated in a particular currency and forward
contracts entered into by the Portfolio. Such imperfect correlation may
cause the Portfolio to sustain losses which will prevent the Portfolio
from achieving a complete hedge or expose the Portfolio to risk of
foreign exchange loss.

Writing and Purchasing Currency Call and Put Options. The
International Equity Portfolio may write covered put and call options
and purchase put and call options on foreign currencies for the purpose
of protecting against declines in the U.S. dollar value of portfolio
securities and against increases in the dollar cost of securities to be
acquired. The International Equity Portfolio also may use options on
currency to cross-hedge, which involves writing or purchasing options on
one currency to hedge against changes in exchange rates for a different
currency if a pattern of correlation exists between the values of the
currencies. In addition, the Portfolio may purchase call options on
currency when the Adviser anticipates that the foreign currency will
appreciate in value, but securities denominated or quoted in that
currency do not present attractive investment opportunities and are not
held by the Portfolio.

A call option written by the International Equity Portfolio
obligates the Portfolio to sell specified currency to the holder of the
option at a specified price at any time before the expiration date. A
put option written by a Portfolio would obligate the Portfolio to
purchase specified currency from the option holder at a specified price
at any time before the expiration date. The writing of currency options
involves a risk that a Portfolio will, upon exercise of the option, be
required to sell currency subject to a call at a price that is less than
the currency's market value or be required to purchase currency subject
to a put at a price that exceeds the currency's market value.

The International Equity Portfolio may terminate its obligations
under a call or put option by purchasing an option identical to the one
it has written. Such purchases are referred to as "closing purchase
transactions." The Portfolio would also be able to enter into closing
sale transactions in order to realize gains or minimize losses on
options purchased by it.

The International Equity Portfolio would normally purchase call
options in anticipation of an increase in the U.S. dollar value of
currency in which securities to be acquired by the Portfolio are quoted
or denominated. The purchase of a call option would entitle the
Portfolio, in return for the premium paid, to purchase specified
currency at a specified price during the option period. The Portfolio
would ordinarily realize a gain if, during the option period, the value
of such currency exceeded the sum of the exercise price, the premium
paid and transaction costs; otherwise the Portfolio would realize either
no gain or a loss on the purchase of the call option.

The International Equity Portfolio would normally purchase put
options in anticipation of a decline in the dollar value of currency in
which securities in its portfolio are quoted or denominated ("protective
puts"). The purchase of a put option would entitle the Portfolio, in
exchange for the premium paid, to sell specified currency at a specified
price during the option period. The purchase of protective puts is
designed merely to offset or hedge against a decline in the dollar value
of the Portfolio's portfolio securities due to currency exchange rate
fluctuations. The Portfolio would ordinarily realize a gain if, during
the option period, the value of the underlying currency decreased below
the exercise price sufficiently to more than cover the premium and
transaction costs; otherwise the Portfolio would realize either no gain
or a loss on the purchase of the put option. Gains and losses on the
purchase of protective put options would tend to be offset by
countervailing changes in the value of underlying currency.

In addition to using options for the hedging purposes described
above, the International Equity Portfolio may use options on currency to
seek to increase total return. It may write (sell) covered put and call
options on any currency in order to realize greater income than would be
realized on portfolio securities transactions alone. However, in writing
covered call options for additional income, the Portfolio may forgo the
opportunity to profit from an increase in the market value of the
underlying currency. Also, when writing put options, the Portfolio
accepts, in return for the option premium, the risk that it may be
required to purchase the underlying currency at a price in excess of the
currency's market value at the time of purchase.

The International Equity Portfolio would normally purchase call
options to seek to increase total return in anticipation of an increase
in the market value of a currency. It would ordinarily realize a gain
if, during the option period, the value of such currency exceeded the
sum of the exercise price, the premium paid and transaction costs.
Otherwise the Portfolio would realize either no gain or a loss on the
purchase of the call option. Put options may be purchased by the
Portfolio for the purpose of benefiting from a decline in the value of
currencies which it does not own. It would ordinarily realize a gain
if, during the option period, the value of the underlying currency
decreased below the exercise price sufficiently to more than cover the
premium and transaction costs. Otherwise it would realize either no gain
or a loss on the purchase of the put option.

Special Risks Associated With Options on Currency. An exchange
traded options position may be closed out only on an options exchange
which provides a secondary market for an option of the same series.
Although the International Equity Portfolio will generally purchase or
write only those options for which there appears to be an active
secondary market, there is no assurance that a liquid secondary market
on an exchange will exist for any particular option, or at any
particular time. For some options no secondary market on an exchange
may exist. In such event, it might not be possible to effect closing
transactions in particular options, with the result that a Portfolio
would have to exercise its options in order to realize any profit and
would incur transaction costs upon the sale of underlying securities
pursuant to the exercise of put options. If a Portfolio as a covered
call option writer is unable to effect a closing purchase transaction in
a secondary market, it will not be able to sell the underlying currency
(or security quoted or denominated in that currency) until the option
expires or it delivers the underlying currency upon exercise.

There is no assurance that higher than anticipated trading
activity or other unforeseen events might not, at times, render certain
of the facilities of the Options Clearing Corporation inadequate, and
thereby result in the institution by an exchange of special procedures
which may interfere with the timely execution of customers' orders.

The International Equity Portfolio may purchase and write
over-the-counter options to the extent consistent with its limitation on
investments in illiquid investments. See "Investment Restrictions."
Trading in over-the-counter options is subject to the risk that the
other party will be unable or unwilling to close-out options purchased
or written by the Portfolio. See "Investment Practices" in the
Prospectus.

Currency Swaps. The International Equity Portfolio may enter into
currency swaps for hedging purposes. Inasmuch as swaps are entered into
for good faith hedging purposes (or are offset by a segregated account
as described below), the Fund and the Adviser believe that swaps do not
constitute senior securities as defined in the Investment Company Act of
1940 and, accordingly, will not treat them as being subject to the
Portfolio's borrowing restrictions. The net amount of the excess, if
any, of the Portfolio's obligations over its entitlement with respect to
each currency swap will be accrued on a daily basis and an amount of
cash or liquid high grade debt securities (i.e., securities rated in one
of the top three ratings categories by Moody's or S&P, or, if unrated,
deemed by the Investment Adviser to be of comparable credit quality)
having an aggregate net asset value at least equal to such accrued
excess will be maintained in a segregated account by the Fund's
custodian. The Portfolio will not enter into any currency swap unless
the credit quality of the unsecured senior debt or the claims-paying
ability of the other party thereto is considered to be investment grade
by the Adviser. If there is a default by the other party to such a
transaction, the Fund will have contractual remedies pursuant to the
agreement, related to the transaction. The swap market has grown
substantially in recent years with a large number of banks and
investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the swap market
has become relatively liquid in comparison with the markets for other
similar instruments which are traded in the interbank market.
Nevertheless, the SEC staff takes the position that currency swaps are
illiquid investments subject to the Portfolio's limitation on such
investments. See "Investment Practices" in the prospectus.

Options on Securities and Securities Indices. The Common Stock
Index Portfolio, Government Securities Portfolio, International Equity
Portfolio and the Real Estate Securities Portfolio may write
exchange-traded covered call and put options on or relating to specific
securities in order to earn additional income or, in the case of a call
written, to minimize or hedge against anticipated declines in the value
of its portfolio securities. The Total Return Portfolio may write
covered call options on its portfolio securities in amounts up to 10% of
its total assets in order to earn additional income or to minimize or
hedge against anticipated declines in the value of those securities. All
call options written by these Portfolios are covered, which means that
the Portfolio will own the securities subject to the option as long as
the option is outstanding. All put options written by these Portfolios
are covered, which means that the Portfolio has deposited with its
custodian cash, U.S. Government securities or other high-grade liquid
debt securities with a value at least equal to the exercise price of the
option. Call and put options written by a Portfolio may also be covered
to the extent that the Portfolio's liabilities under such options are
offset by its rights under call or put options purchased by the
Portfolio and call options written by a Portfolio may also be covered by
depositing cash or securities with its custodian in the same manner as
written puts are covered.

If a Portfolio writes an option which expires unexercised or is
closed out by the Portfolio at a profit, it will retain the premium
received for the option, which will represent a capital gain to the
Portfolio. If the price of the underlying security moves adversely to
the Portfolio's position, the option may be exercised and the Portfolio,
as the writer of the option, will be required to sell or purchase the
underlying security at a disadvantageous price, which may only be
partially offset by the amount of premium received.

When a Portfolio writes an option on an index, and the underlying
index moves adversely to its position, the option may be exercised.
Upon such exercise, the Portfolio, as the writer of the option, will be
required to pay in cash an amount equal to the difference between the
exercise settlement value of the underlying index and the exercise price
of the option, multiplied by a specified index "multiplier."

Call or put options on a stock index may be written at an exercise
or "strike" price which is either below or above the current value of
the index. If the exercise price at the time of writing the option is
below the current value of the index for a call option or above the
current value of the index for a put option, the option is considered to
be "in the money." In such a case, the Portfolio will cover such
options written by segregating with its custodian or pledging to its FCM
as collateral, cash, U.S. Government or other high-grade, short-term
debt obligations equal in value to the amount by which the option
written is in the money, times the multiplier, times the number of
contracts.

Stock indices for which options are currently traded include the
S&P 500 Index, Value Line Index, National OTC Index, Major Market Index,
and NYSE Beta Index. The Portfolios may also use options on such other
indices as may now or in the future be available.

The three Portfolios may also purchase put or call options on
securities indices in order to (i) hedge against anticipated changes in
stock prices that may adversely affect the prices of securities that
they intend to purchase at a later date, (ii) hedge their investments
against an anticipated decline in value, or (iii) attempt to reduce the
risk of missing a general market advance. In the event that the
anticipated changes in stock prices occur, these Portfolios may be able
to offset the resulting adverse effect, in whole or in part, through the
options purchased.

The premium paid for a put or call option plus any transaction
costs will reduce the benefit, if any, realized by a Portfolio upon
exercise or liquidation of the option, and, unless the price of the
underlying securities index changes sufficiently, the option may expire
without value to the Portfolio. To close option positions purchased by
it, the Common Stock Index Portfolio may sell put or call options
identical to options previously purchased, which could result in a net
gain or loss depending on whether the amount received on the sale is
more or less than the premium and other transaction costs paid on the
put or call option purchased.

All five Portfolios (other than the Money Market Portfolio) may
use options traded on a national securities exchange. Only the
Government Securities Portfolio and the International Equities
Portfolio, however, may use over-the-counter (i.e., unlisted) options.
Options traded in the over-the-counter market may not be as actively
traded as those on an exchange. Accordingly, it may be more difficult
to value such options. In addition, it may be more difficult to enter
into closing transactions with respect to options traded
over-the-counter. In this regard, the Government Securities Portfolio
may enter into contracts with the primary dealers with whom they write
over-the-counter options. The contracts will provide that the
Government Securities Portfolio has the absolute right to repurchase an
option it writes at any time at a repurchase price which represents the
fair market value of such option, as determined in good faith through
negotiations between the parties, but which in no event will exceed a
price determined pursuant to a formula contained in the contract.
Although the specific details of the formula may vary between contracts
with different primary dealers, the formula will generally be based on a
multiple of the premium received by the Government Securities Portfolio,
plus the amount, if any, of the option's intrinsic value (i.e., the
amount the option is "in-the-money"). The formula will also include a
factor to account for the difference between the price of the security
and the strike price of the option if the option is written
"out-of-the-money." Although the specific details of the formula may
vary with different primary dealers, each contract will provide a
formula to determine the maximum price at which the Government
Securities Portfolio can repurchase the option at any time. The
Government Securities Portfolio has established standards of
creditworthiness for these primary dealers.

Financial Futures Contracts. The Common Stock Index Portfolio,
Government Securities Portfolio, International Equity Portfolio and Real
Estate Securities Portfolio, each in accordance with its investment
objective, investment program, policies, and restrictions may purchase
and sell exchange-traded financial futures contracts as a hedge to
protect against anticipated changes in prevailing interest rates or
overall stock prices, or to efficiently and in a less costly manner
implement either increases or decreases in exposure to the equity or
government bond markets. Likewise, the International Equity Portfolio
may purchase and sell exchange-traded currency futures contracts as a
hedge to protect against anticipated adverse changes in currency
exchange rates. All four Portfolios also may purchase and sell
exchange-traded financial futures contracts to earn additional income or
otherwise seek to increase total return.

Financial futures contracts consist of interest rate futures
contracts, stock index futures contracts and currency futures contracts.
An interest rate futures contract is a contract to buy or sell specified
debt securities at a future time for a fixed price. A stock index
futures contract is similar in economic effect, except that rather than
being based on specific securities, it is based on a specified index of
stocks and not the stocks themselves. A currency futures contract is a
contract to purchase or sell a specific amount of foreign currency at a
future time for a fixed price.

An interest rate futures contract binds the seller to deliver to
the purchaser on a specified future date a specified quantity of one of
several listed financial instruments, against payment of a settlement
price specified in the contract. A public market currently exists for
futures contracts on GNMA Certificates, long-term U.S. Treasury Bonds,
three-month U.S. Treasury Bills, short-term U.S. Treasury Notes, and
bank certificates of deposit.

Stock index futures contracts bind purchaser and seller to
deliver, at a future date specified in the contract, a cash amount equal
to a multiple of the difference between the value of a specified stock
index on that date and the settlement price specified by the contract.
That is, the seller of the futures contract must pay and the purchaser
would receive a multiple of any excess of the value of the index over
the settlement price, and conversely, the purchaser must pay and the
seller would receive a multiple of any excess of the settlement price
over the value of the index. A public market currently exists for stock
index futures contracts based on the S&P 500 Index, the New York Stock
Exchange Composite Index, the Value Line Stock Index, and the Major
Market Index. It is expected that financial instruments related to
broad-based indices, in addition to those for which futures contracts
are currently traded, will in the future be the subject of
publicly-traded futures contracts. Each Portfolio may use those indices
which are appropriate to its hedging strategies.

A financial futures contract is an agreement to buy or sell a
security or currency (or deliver a final cash settlement price, in the
case of a contract relating to an index or otherwise not calling for
physical delivery of a specified security) for a set price in the
future. Exchange-traded futures contracts are designated by boards of
trade which have been designated "contracts markets" by the Commodity
Futures Trading Commission ("CFTC").

Positions taken in the futures markets are not normally held until
delivery or cash settlement is required, but instead are liquidated
through offsetting transactions which may result in a gain or a loss.
While futures positions taken by a Portfolio are usually liquidated in
this manner, a Portfolio may instead make or take delivery of underlying
securities whenever it appears economically advantageous to do so. A
clearing organization associated with the relevant exchange assumes
responsibility for closing out transactions and guarantees that, as
between the clearing members of the exchange, the sale and purchase
obligations will be performed with regard to all positions that remain
open at the termination of the contract.

When financial futures contracts are entered into by a Portfolio,
either as the purchaser or the seller of such contracts, the Portfolio
is required to deposit with its custodian in a segregated account in the
name of the FCM an initial margin of cash or U.S. Treasury bills
equalling as much as 5% to 10% or more of the contract settlement price.
The nature of initial margin requirements in futures transactions
differs from traditional margin payments made in securities transactions
in that initial margins for financial futures contracts do not involve
the borrowing of funds by the customer to finance the transaction.
Instead, a customer's initial margin on a financial futures contract
represents a good faith deposit securing the customer's contractual
obligations under the financial futures contract. The initial margin
deposit is returned, assuming these obligations have been met, when the
financial futures contract is terminated. In addition, subsequent
payments to and from the FCM, called "variation margin," are made on a
daily basis as the price of the underlying security or stock index
fluctuates reflecting the change in value in the long (purchase) or
short (sale) positions in the financial futures contract, a process
known as "marking to market."

Financial future contracts generally are not entered into to
acquire the underlying asset and generally are not held to term. Prior
to the contract settlement date, a Portfolio will normally close all
futures positions by entering into an off-setting transaction which
operates to cancel the position held, and which usually results in a
profit or loss.

Options on Financial Futures Contracts. The Common Stock Index
Portfolio, Government Securities Portfolio, International Equity
Portfolio and Real Estate Securities Portfolio may also purchase call
and put options on financial futures contracts and write covered call
options on financial futures contracts of the type which the particular
Portfolio is authorized to enter into. The Common Stock Index Portfolio
also may write covered put options on stock index futures contracts.
Covered put and call options on futures contracts will be covered in the
same manner as covered options on securities and securities indices.
The Portfolios may invest in such options for the same hedging purposes
as they may each purchase or sell financial futures contracts or in
order to earn additional income or otherwise seek to increase total
return.

Options on financial futures contracts are traded on exchanges
that are licensed and regulated by the CFTC. A call option on a
financial futures contract gives the purchaser the right in return for
the premium paid, to purchase a financial futures contract (assume a
"long" position) at a specified exercise price at any time before the
option expires. A put option gives the purchaser the right, in return
for the premium paid, to sell a financial futures contract (assume a
"short" position), for a specified exercise price, at any time before
the option expires.

Unlike entering into a financial futures contract itself,
purchasing options on financial futures contracts allows a buyer to
decline to exercise the option, thereby avoiding any loss beyond
forgoing the purchase price (or "premium") paid for the options.
Therefore, the purchase of options on financial futures contracts may be
a preferable hedging strategy when the Portfolio desires maximum
flexibility. Whether, in order to achieve a particular objective, the
Portfolio enters into a financial futures contract, on the one hand, or
an option contract on a financial futures contract, on the other, will
depend on all the circumstances, including the relative costs,
liquidity, availability and capital requirements of such financial
futures and options contracts. Each Portfolio will consider the
relative risks involved, which may be quite different. These factors,
among others, will be considered in light of market conditions and the
particular objective to be achieved.

Certain Additional Risks of Options and Financial Futures
Contracts. In addition to the risks described in the Prospectus, the
use of options and financial futures contracts may entail the following
risks. First, although such instruments when used by a Portfolio are
intended to correlate with the Portfolio's portfolio securities, in many
cases the options or financial futures contracts used may be based on
securities or currencies which, or stock indices the components of
which, are not identical to the portfolio securities owned or intended
to be acquired by the Portfolio. Second, due to supply and demand
imbalances and other market factors, the price movements of financial
futures contracts, options thereon, and stock index options may not
necessarily correspond exactly to the price movements of the securities,
currencies or stock indices on which such instruments are based.
Accordingly, there is a risk that a Portfolio's transactions in those
instruments will not in fact offset the impact on the Portfolio of
adverse market developments in the manner or to the extent contemplated
or that such transactions will result in losses to the Portfolio which
are not offset by gains with respect to corresponding portfolio
securities owned or to be purchased by that Portfolio.

To some extent, these risks can be minimized by careful management
of hedging activities. For example, where price movements in a
financial futures or option contract are expected to be less volatile
than price movements in the related portfolio securities owned or
intended to be acquired by a Portfolio, it may, in order to compensate
for this difference, use an amount of financial futures or option
contracts which is greater than the amount of such portfolio securities.
Similarly, where the price movement of a financial futures or option
contract is anticipated to be more volatile, a Portfolio may use an
amount of such contract which is smaller than the amount of portfolio
securities to which such contracts relate.

The risk that the hedging technique used will not actually or
entirely offset an adverse change in the value of a Portfolio's
securities is particularly relevant to financial futures contracts and
options written on stock indices. A Portfolio in entering into a
futures purchase contract, potentially could lose any or all of the
contract's settlement price. In entering into a futures sale contract,
a Portfolio could potentially lose a sum equal to the excess of the
contract's value (marked to market daily) over the contract's settlement
price. In writing options on stock indices, a Portfolio could
potentially lose a sum equal to the excess of the value of the index
(marked to market daily) over the exercise price. In addition, because
financial futures contracts require delivery at a future date of either
a specified security or an amount of cash equal to a multiple of the
difference between the value of a specified stock index on that date and
the settlement price, an algebraic relationship exists between any price
movement in the underlying security or index and the potential cost of
settlement to a Portfolio. A small increase or decrease in the value of
the underlying security or stock index can, therefore, result in a much
greater increase or decrease in the cost to the Portfolio.

Stock index call options written also pose another risk as hedging
tools. Because exercises of stock index options are settled in cash,
there is an inherent timing risk that the value of a Portfolio's
securities "covering" a stock index call option written by it may
decline during the time between exercise of the option by the option
holder and notice to the Portfolio of such exercise (usually one day or
more) thereby requiring the Portfolio to use additional assets to settle
the transaction. This risk is not present in the case of covered call
options on individual securities, which are settled by delivery of the
actual securities.

Although the Portfolios intend to establish positions in these
instruments only when there appears to be an active market, there is no
assurance that a liquid market for such instruments will exist when they
seek to "close out" (i.e. terminate) a particular financial futures
contract or option position. This is particularly relevant for
over-the-counter options. Trading in such instruments could be
interrupted, for example, because of a lack of either buyers or sellers.
In addition, the futures and options exchanges may suspend trading after
the price of such instruments has risen or fallen more than the maximum
amount specified by the exchange. Exercise of options could also be
restricted or delayed because of regulatory restrictions or other
factors. A Portfolio may be able, by adjusting investment strategy in
the cash or other contract markets, to offset to some extent any adverse
effects of being unable to liquidate a hedge position. Nevertheless, in
some cases, a Portfolio may experience losses as a result of such
inability. Therefore it may have to liquidate other more advantageous
investments to meet its cash needs.

In addition, FCMs or brokers in certain circumstances will have
access to the Portfolios' assets posted as margin in connection with
these transactions as permitted under the Investment Company Act of
1940. See "Custodian, Dividend and Transfer Agent," in this Statement
of Additional Information. The Portfolios will use only FCMs or brokers
in whose reliability and financial soundness they have full confidence
and have adopted certain other procedures and limitations to reduce the
risk of loss with respect to any assets which brokers hold or to which
they may have access. Nevertheless, in the event of a broker's
insolvency or bankruptcy, it is possible that a Portfolio could
experience a delay or incur costs in recovering such assets or might
recover less than the full amount due. Also the value of such assets
could decline by the time the Portfolio could effect such recovery.

The success of any Portfolio in using hedging techniques depends,
among other things, on the Adviser's ability to predict the direction
and volatility of price movements in both the futures and options
markets as well as the securities markets and on its ability to select
the proper type, time, and duration of hedges. There can be no
assurance that these techniques will produce their intended results. In
any event, the Adviser will use financial futures contracts, options
thereon, and stock index options only when it believes the overall
effect is to reduce, rather than increase, the risks to which the
Portfolio is exposed. Hedging transactions also, of course, may be
more, rather than less, favorable to a Portfolio than originally
anticipated.

GNMA Certificates. The Government Securities Portfolio may invest
up to 50% of its net assets in Government National Mortgage Association
("GNMA") Certificates. GNMA Certificates are securities representing
part ownership of a pool of mortgage loans. These loans, issued by
lenders such as mortgage bankers, commercial banks and savings and loan
associations, are insured either by the Federal Housing Administration
or by the Veterans Administration. Each pool of mortgage loans is
assembled and, after being approved by GNMA, is sold to investors
through broker-dealers in the form of certificates representing
participations in the pool. GNMA guarantees the timely payment of
principal and interest of each mortgage in the pool and its guarantee is
backed by the full faith and credit of the U.S. Government. GNMA
Certificates differ from bonds in that a borrower pays the principal
over the term of the loan rather than in a lump sum at maturity. GNMA
Certificates are called "pass-through" certificates because both
principal and interest payments on the mortgages (including prepayments)
are passed through to the holder of the certificate.

The average life of GNMA Certificates varies with the maturities
of the underlying mortgages. The Government Securities Portfolio may
use principal payments it receives to purchase additional GNMA
Certificates or other investments permitted to it. Prepayments of any
mortgages in the pool will usually result in the return of the greatest
part of principal invested well before the maturity of the mortgages in
the pool. The volume of such prepayments of principal in a given pool
of mortgages will influence the actual yield of the GNMA Certificate.
Also, the Government Securities Portfolio may reinvest principal repaid
to it in instruments whose yield may be higher or lower than that of the
GNMA Certificate had such prepayments not been made.

Borrowing. From time to time the International Equity Portfolio
may increase its ownership of investments by borrowing from banks on an
unsecured basis and investing the borrowed funds, subject to the
restrictions stated in the prospectus. The Portfolio may not borrow
more than 10% of the value of its assets for this purpose and may not
borrow unless the value of its assets, less its liabilities other than
borrowing, is equal to at least 300% of all borrowings, including any
additional proposed borrowings. If the value of the Portfolio's assets
so computed should fail to meet the 300% asset coverage requirement, the
Portfolio must, within three days, reduce its borrowing to the extent
necessary to meet the coverage requirement and may have to sell a
portion of its investments at an inopportune time. Borrowing for
investment increases both investment opportunity and risk. Interest on
borrowed money is an expense that the Portfolio would not otherwise
incur, so that it may have little or no net investment income during
periods of borrowing. Since substantially all of the Portfolio's assets
fluctuate in value whereas borrowing obligations are fixed, when the
Portfolio has outstanding borrowings, its net asset value tends to
increase and decrease more when portfolio investments increase and
decrease than would otherwise be the case.

Lower-Rated, Lower Quality Debt Instruments. Up to 30% of the
total assets of the Total Return Portfolio and 35% of the assets of the
Real Estate Securities Portfolio may be invested in debt instruments
that are unrated or are rated lower than the four highest rating
categories assigned by Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Corporation ("Standard & Poor's"). Furthermore, debt
instruments that are rated in the four highest categories assigned by
Moody's or Standard & Poor's (i.e. investment grade debt instruments),
and especially those which are investment grade but are not high quality
(i.e. rated Baa by Moody's or BBB by Standard & Poor's) may, after
purchase by the Portfolio, have their ratings lowered due to the
deterioration of the issuer's financial position.

Risks of Lower-Rated, Lower Quality Debt Instruments. Lower-rated
fixed income securities (i.e. those rated Ba or lower by Moody's or BB
or lower by Standard & Poor's) are considered, on balance, as
predominantly speculative with respect to capacity to pay interest and
repay principal in accordance with the terms of the obligation and will
generally involve more credit risk than securities in the higher rated
categories. Reliance on credit ratings entails greater risks with regard
to lower-rated securities than it does with regard to higher-rated
securities and the Adviser's success is more dependent upon its own
credit analysis with regard to lower-rated securities than is the case
with regard to higher-rated securities. The market values of such
securities tend to reflect individual corporate developments to a
greater extent than do higher-rated securities, which react primarily to
fluctuations in the general level of interest rates. Such lower-rated
securities also tend to be more sensitive to economic conditions than
are higher-rated securities. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, regarding
lower-rated bonds may depress prices and liquidity for such securities.
To the extent the Total Return or Real Estate Securities Portfolios
invest in these securities, factors adversely affecting the market value
of high-yielding securities will adversely affect the Portfolios' net
asset value. In addition, the Portfolios may incur additional expenses
to the extent it is required to seek recovery upon a default in the
payment of principal or interest on its portfolio holdings. Although
some risk is inherent in all securities ownership, holders of
fixed-income securities have a claim on the assets of the issuer prior
to the holders of common stock. Therefore, an investment in fixed-income
securities generally entails less risk than an investment in common
stock of the same issuer.

High yielding securities may be issued by corporations in the
growth stage of their development. They may also be issued in
connection with corporate reorganization or as a part of a corporate
takeover. Companies that issue such high-yielding securities are often
highly leveraged and may not have available to them more traditional
methods of financing. Therefore, the risk associated with acquiring the
securities of such issuers generally is greater than is the case with
higher rated securities. For example, during an economic downturn or a
sustained period of rising interest rates, highly leveraged issuers of
high-yielding securities may experience financial stress. During such
periods, such issuers may not have sufficient revenues to meet their
interest payment obligations. The issuer's ability to service its debt
obligations may also be adversely affected by specific corporate
developments or the issuer's inability to meet specific projected
business forecasts, or the unavailability of additional financing. The
risk of loss due to default by the issuer is significantly greater for
the holders of high-yielding securities because such securities are
generally unsecured and are often subordinated to other creditors of the
issuer.

High yielding securities frequently have call or buy-back features
that would permit an issuer to call or repurchase the security from
either Portfolio. If a call were exercised by the issuer during a
period of declining interest rates, the Portfolio would likely have to
replace such called security with a lower yielding security, thus
decreasing the net investment income to the Portfolio.

The Total Return or Real Estate Securities Portfolio may have
difficulty disposing of certain high-yielding securities for which there
is a thin trading market. Because not all dealers maintain markets in
all high-yielding securities, there is no established retail secondary
market for many of these securities, and the Fund anticipates that they
could be sold only to a limited number of dealers or institutional
investors. To the extent there is a secondary trading market for
high-yielding securities, it is generally not as liquid as that for
higher-rated securities. The lack of a liquid secondary market for
certain securities may make it more difficult for the Fund to obtain
accurate market quotations for purposes of valuing a Portfolio's assets.
Market quotations are generally available on many high-yield issues only
from a limited number of dealers and may not necessarily represent firm
bids of such dealers or prices for actual sales. When market quotations
are not readily available, lower-rated securities must be valued by (or
under the direction of) the Fund's board of directors. This valuation
is more difficult and judgement plays a greater role in such valuation
when there is less reliable objective data available.

The market for high-yielding securities has not weathered a major
economic recession, and it is not known how one might affect that
market. It is likely, however, that any such recession could severely
affect the market for and the values of such securities, as well as the
ability of the issuers of such securities to repay principal and pay
interest thereon.

The Total Return or Real Estate Securities Portfolio may acquire
high-yielding securities that are sold without registration under the
federal securities laws and therefore carry restrictions on resale.
These Portfolios may incur special costs in disposing of such
securities, but will generally incur no costs when the issuer is
responsible for registering the securities. The Portfolios also may
acquire high-yielding securities during an initial underwriting. Such
securities involve special risks because they are new issues. The Fund
has no arrangement with any person concerning the acquisition of such
securities, and the Adviser will carefully review the credit and other
characteristics pertinent to such new issues.

From time to time, there have been proposals for legislation
designed to limit the use of certain high-yielding securities in
connection with leveraged buy-outs, mergers and acquisitions, or to
limit the deductibility of interest payments on such securities. Such
proposals if enacted into law could reduce the market for such
securities generally, could negatively affect the financial condition of
issuers of high-yield securities by removing or reducing a source of
future financing, and could negatively affect the value of specific
high-yield issues. However, the likelihood of any such legislation or
the effect thereof is uncertain.

INVESTMENT RESTRICTIONS

Fundamental Restrictions. Each class of capital stock of the Fund
represents interests in separate Investment Portfolios of the Fund. The
Portfolios are subject to certain fundamental restrictions on their
investments. These restrictions may not be changed without the approval
of the holders of a majority of the outstanding voting shares of the
Portfolios affected by the change. Except where otherwise noted, each
Portfolio may not:

1. Issue senior securities except: (a) to the extent that
borrowings under paragraph (10) below exceeding 5% may be
deemed to be senior securities under the Investment Company
Act of 1940, or (b) in connection with investments of
certain Portfolios in options and futures contracts.

2. As to 75% of its total assets, invest more than 5% of its
total assets taken at market value at the time of each
investment in the securities (other than United States
government or government agency securities) of any one
issuer (including repurchase agreements with any one bank).

3. Purchase more than either: (i) 10% in principal amount of
the outstanding debt securities of an issuer; or (ii) 10% of
the outstanding voting securities of an issuer, except that
such restriction shall not apply to securities issued or
guaranteed by the United States Government or its agencies,
bank money market instruments or bank repurchase agreements.

4. Invest more than 25% of its total assets (taken at market
value at the time of each investment) in the securities of
issuers primarily engaged in the same industry; utilities
will be divided according to their services; for example,
gas, gas transmission, electric and telephone each will be
considered a separate industry for purposes of this
restriction. This restriction does not apply to the Real
Estate Securities Portfolio.

5. Purchase real estate or any interest therein, except through
the purchase of corporate or certain government securities
(including securities secured by a mortgage or a leasehold
interest or other interest in real estate). A security
issued by a real estate or mortgage investment trust is not
treated as an interest in real estate.

6. Purchase securities which are subject to legal or
contractual delays in or restrictions on resale. This
restriction does not apply to the International Equity
Portfolio or the Real Estate Securities Portfolio.

7. Purchase any securities on margin except: (a) that a
Portfolio may obtain such short-term credit as may be
necessary for the clearance of purchases and sales of
Portfolio securities, or (b) that in connection with
investments of the Common Stock Index Portfolio and the
Government Securities Portfolio in options and futures
contracts.

8. Make loans, except as provided in (9) below and except
through the purchase of obligations in private placements
(the purchase of publicly-traded obligations not being
considered the making of a loan).

9. Lend its portfolio securities in excess of 20% of its total
assets, taken at market value at the time of the loan, and
provided that such loan shall be made in accordance with the
Portfolio's guidelines.

10. Borrow amounts in excess of 10% (20% in the case of the
Common Stock Index Portfolio) of its total assets, taken at
market value at the time of the borrowing, and then only
from banks as a temporary measure for extraordinary or
emergency purposes or to meet redemption requests that might
otherwise require the untimely disposition of securities,
and not for investment or leveraging. The International
Equity Portfolio, however, may borrow amounts up to an
additional 10% of its net asset value from banks to increase
its holdings of portfolio investments.

11. Mortgage, pledge, hypothecate or in any manner transfer, as
security for indebtedness, any securities owned or held by
such Portfolio except: (a) as may be necessary in
connection with borrowings mentioned in (10) above, and then
such mortgaging, pledging or hypothecating may not exceed
10% of the Portfolio's total assets, taken at market value
at the time thereof, or (b) in connection with investments
of certain Portfolios in options and futures contracts. In
order to comply with certain state statutes, the Portfolios
will not, as a matter of operating policy, mortgage, pledge
or hypothecate their portfolio securities to the extent that
at any time the percentage of the value of pledged
securities plus the maximum sales charge will exceed 10% of
the value of such Portfolio's shares at the maximum offering
price.

12. Underwrite securities of other issuers except insofar as the
Fund may be deemed an underwriter under the Securities Act
of 1933 in selling portfolio securities.

13. Invest more than 10% of its net assets (15% for the
International Equity Portfolio and Real Estate Securities
Portfolio) in repurchase agreements maturing in more than
seven days and other illiquid investments.

Nonfundamental Restrictions. The Fund has also adopted the
following additional investment restrictions applicable (except as
noted) to all Portfolios. These are not fundamental and may be changed
by the board of directors without shareholder approval. Under these
restrictions, each Portfolio may not:

1. Invest in securities of foreign issuers if at the time of
acquisition more than 10% of its total assets, taken at
market value, would be invested in such securities.
However, up to 25% of the total assets of the Portfolio may
be invested in securities (i) issued, assumed or guaranteed
by foreign governments, or political subdivisions or
instrumentalities thereof, (ii) assumed or guaranteed by
domestic issuers, including Eurodollar securities, or (iii)
issued, assumed or guaranteed by foreign issuers having a
class of securities listed for trading on the New York Stock
Exchange. This restriction is not applicable to the
International Equity Portfolio.

2. Participate on a joint (or a joint and several) basis in any
trading account in securities (but this does not include the
"bunching" of orders for the sale or purchase of portfolio
securities with other Portfolios or with individually
managed accounts advised or sponsored by the Adviser or any
of its affiliates to reduce brokerage commissions or
otherwise to achieve best overall execution).

3. The Portfolios other than the Real Estate Securities
Portfolio may not purchase or retain the securities of any
issuer if the individual officers and directors of the Fund,
AAI, or any of its affiliates own beneficially more than 1/2
of 1% of the securities of such issuer or together own in
the aggregate more than 5% of the securities of such issuer.

4. Alone, or together with any other portfolio or portfolios,
make investments for the purpose of exercising control over,
or management of any issuer.

5. Purchase securities of other investment companies if, as a
result thereof, the Portfolio would own more than 3% of the
total outstanding voting stock of any one investment
company, or more than 5% of the Portfolio's assets would be
invested in any one investment company, or more than a total
of 10% of the Portfolio's assets would be invested in
investment company securities. These limitations do not
apply to securities acquired in connection with a merger,
consolidation, acquisition or reorganization, or by purchase
in the open market of securities of closed-end investment
companies where no underwriter or dealer's commission or
profit, other than customary broker's commission, is
involved, and so long as immediately thereafter not more
than 10% of such Portfolio's total assets, taken at market
value, would be invested in such securities.

6. Purchase or sell interests in oil, gas, or other mineral
exploration or development programs, commodities, or
commodity contracts, except that certain Portfolios may
invest in financial futures contracts and related options.

7. Invest more than 30% (35% for the Real Estate Securities
Portfolio) of its assets, measured at time of purchase, in
debt securities (other than U.S. Government securities) that
are unrated by Moody's Investors Service, Inc. ("Moody's")
or Standard & Poor's Corporation ("Standard & Poor's") or
are rated lower than the four highest rating categories
assigned by Moody's or Standard & Poor's.

8. The Total Return Portfolio may not write, purchase or sell
puts, calls (other than covered call options on individual
securities) or combinations thereof.

9. The Money Market Portfolio may not invest more than 5% of
its total assets taken at market value at the time of each
investment in the securities (other than United States
government or government agency securities) of any one
issuer (including repurchase agreements with any one bank).

10. The Common Stock Index Portfolio, Government Securities
Portfolio, International Equity Portfolio and Real Estate
Securities Portfolio may not enter into a financial futures
contract (by exercise of any option or otherwise) or acquire
any options thereon, if, immediately thereafter, the total
of the initial margin deposits required with respect to all
open futures positions, at the time such positions were
established, plus the sum of the premiums paid for all
unexpired options on futures contracts would exceed 5% of
the value of its total assets.

11. The International Equity Portfolio will not invest in the
securities of foreign issuers unless after such investment
issuers in at least the following number of different
countries are represented in the Portfolio: if up to 40% of
the Portfolio's total assets are invested in foreign
issuers, two foreign countries; if between 40% and 60% of
the Portfolio's total assets are invested in foreign
issuers, three foreign countries; if between 60% and 80% of
the Portfolio's total assets are invested in foreign
issuers, four foreign countries; and if over 80% of the
Portfolio's total assets are invested in foreign issuers,
five foreign countries.

MANAGEMENT OF THE FUND

DIRECTORS AND OFFICERS

The directors and officers of the Fund and their principal
occupations for the last five years are set forth below. Unless
otherwise noted, the address of each director and officer is 6610 W.
Broad Street, Richmond, VA 23230.

Names, Positions, and Addresses of Directors and Officers of the Fund
Occupation During the Past 5 Years

Wallace L. Chandler, Director
Hamilton & Broad Street
Richmond, VA 23260
Retired Vice Chairman, Universal Corporation. Director Universal
Corporation, since 1986. Director, Lawyers Title Corporation,
since 1991. Director, Regency Financial Shares, Inc., since 1987
and Chairman, since 1992. (Director, Regency Bank since 1987 and
Chairman, since 1992). Director, Aon Asset Management Fund, Inc.,
since 1991.

John E. Leard, Director
6207 Monument Ave.
Richmond, VA
Retired-Vice President, Richmond Newspapers, Inc. Retired
Executive Editor, Richmond Times Dispatch and the Richmond News
Leader; Director, Aon Asset Management Fund, Inc. since 1991.

J. Clifford Miller, III, Director
7103 Glen Parkway
Richmond, VA 23229
Account Executive, Davenport & Co. of Virginia, Inc., since 1992;
Self Employed Consultant from 1988 to 1992; Head--Upper School,
Collegiate Schools until 1988; Director, Miller Manufacturing Co.,
Inc., from 1977 to 1990; General Partner, Miller Land Company,
since l981; Director, Aon Asset Management Fund, Inc. since 1991.

John J. Palmer */, President & Director
Director, Life of Virginia, since 1986; Senior Vice
President--Life of Virginia, since l980; President, Life of
Virginia Series Fund, Inc., since l986; Director, Forth Financial
Securities Corporation, since l986; President, Forth Financial
Securities Corporation, since February 10, 1992; Director and
President, Aon Asset Management Fund, Inc. since 1991.

Lee A. Putney, Director
4208 Sulgrave Road
Richmond, VA
Director, Regency Financial Shares, Inc., since 1989; Chairman of
Board of Directors, Regency Bank, since 1987; Director, Aon Asset
Management Fund, Inc. since 1991.

Robert P. Martin, Jr., Director
115 Granite Avenue
Richmond, VA 23226
Self-employed investment consultant, since 1985; Director, Aon
Asset Management Fund, Inc. since 1991.

J. Garnett Nelson, Director
Route 1, Box 195
Montpelier, VA 23192
Senior Vice President 1988-1995 and Director 1989-1995, The Life
Insurance Company of Virginia; Director, 1986-1995, Executive
Director 1987-1995, and Senior Executive Director, 1990-1995, Aon
Advisors, Inc.; President, CIA, Ltd. from 1986 to 1987; Director,
Aon Asset Management Fund, Inc. since 1991; Director, Combined
Insurance Company of America, 1990-1995; Director RAC Income Fund,
Inc., since 1991; Director, Lawyers Title Corporation, since 1991.

Jerry G. Overman */, Vice President
Treasurer and Director of Investment Services of Aon Advisors,
Inc., since l985; Treasurer, Life of Virginia, since 1988; Vice
President, Aon Asset Management Fund, Inc. since 1991.

Scott R. Reeks */, Treasurer
Director - Marketing Administration and Equity Operations, Life of
Virginia, since 1991; Manager-Equity Operations, Life of Virginia,
from 1986 to 1991; Treasurer, Vice President and Manager of
Operations, Forth Financial Securities Corporation, since 1985;
Treasurer, Aon Asset Management Fund, Inc. since 1991.

Linda L. Lanam */, Secretary
Corporate Secretary for Life of Virginia and for a number of Life
of Virginia affiliates, since 1992. Vice President and Senior
Counsel of Life of Virginia, since 1989. Vice President and
Senior Counsel, Union Fidelity Life Insurance Company from 1986 to
1989.

- -------------------------------------------------------------------------------
*/ Directors and officers identified with an asterisk are considered
"interested persons" of the Fund as that term is defined in the
Investment Company Act of 1940 because of their employment or other
affiliation with Life of Virginia and/or Aon Advisors, Inc.

Directors or officers who are interested persons of the Fund do
not receive any compensation from the Fund for their services to the
Fund. The directors who are not interested persons of the Fund receive
compensation from the Fund at a rate of $2,000 annually, plus $250 per
meeting attended. In addition, directors who are not interested persons
of the Fund are reimbursed for any out-of-pocket expenses incurred in
connection with affairs of the Fund. During 1994 the Fund paid
directors' fees of $16,000 to the directors who were not interested
persons of the Fund.

Each director of the Fund also serves as a director of Aon Asset
Management Fund, Inc. ("AAMF"), an open-end management investment
company advised by Aon Advisors, Inc.

TABLE OF DIRECTORS COMPENSATION

Aggregate Compensation Total Compensation From the Fund
Name of Director From the Fund and AAMF

Mr. Chandler $3,250 $8,250

Mr. Leard $3,250 $8,250

Mr. Martin $3,250 $8,250

Mr. C. Miller $3,250 $8,250

Mr. G. Nelson 0 0

Mr. J. Palmer 0 0

Mr. L. Putney $3,000 $8,000

Directors and officers of the Fund do not receive any benefits from the
Fund upon retirement nor does the Fund accrue any expenses for pension
or retirement benefits.

AAI

The investment adviser for the Fund is Aon Advisors, Inc.
("AAI"), a wholly-owned subsidiary of Aon Corporation ("Aon"). The
officers of AAI have extensive experience in managing investment assets.
In addition to the Fund, AAI provides investment advice and management
to pension plans, corporations, and other organizations. The amount of
aggregate assets under management is approximately $__.__ billion. Aon,
a publicly owned Delaware corporation, is an insurance holding company
organization principally engaged through subsidiaries in the insurance
and insurance brokerage business. As of December 31, 1994, Mr. Patrick
G. Ryan, President and Chief Executive Officer of Aon, 123 North Wacker
Drive, Chicago, Illinois 60606, owned directly and beneficially
12,886,408 shares (12%) of the common stock of Aon.

AAI has been retained to manage the Fund's assets. AAI is at all
times subject to the direction and supervision of the board of directors
of the Fund. The principal officers of AAI are:

Position with the Position with
Name AAI the Fund

Michael A. Conway President* None
Lawrence R. Miller Senior Executive Director* None
Pendleton M. Shiflett, III Executive Director None
Mark B. Burka Executive Director None
Jerry G. Overman Treasurer & Director- Vice President
Investment Services

*Messrs. Conway and Miller are also directors of AAI.

INVESTMENT ADVISORY AGREEMENT

The duties and responsibilities of AAI are specified in the
Investment Advisory Agreement ("Agreement") between the Fund and AAI.
The Agreement was approved for each Portfolio by the board of directors
of the Fund (including a majority of directors who are not parties to
the Agreement or interested persons, as defined by the Investment
Company Act of 1940, of any such party) at a meeting held for that
purpose on January 27, 1993. It was also approved by the shareholders of
each Portfolio at a meeting held on April 20, 1993. Likewise, the board
of directors approved substantially identical additional agreements
("Additional Agreements") covering the International Equity Portfolio
and the Real Estate Securities Portfolio at a meeting held for that
purpose on January 25, 1995. The Additional Agreements were approved by
the shareholders of these Portfolios on May _, 1995. The Agreement and
the Additional Agreements are not assignable and may be terminated
without penalty upon 60 days written notice at the option of either the
Fund or AAI or by a vote of shareholders. The Agreement provides that
it can be continued for each Portfolio from year to year so long as such
continuance is specifically approved annually (a) by the board of
directors of the Fund or by a majority of the outstanding shares of the
Portfolio and (b) by a majority vote of the Directors who are not
parties to the Agreement, or interested persons of any such party, cast
in person at a meeting held for that purpose. Each Additional Agreement
provides that it can be continued from year to year so long as such
continuance is specifically approved annually (a) by the board of
directors of the Fund or by a majority of the outstanding shares of the
Portfolio and (b) by a majority vote of the Directors who are not
parties to the Agreement, or interested persons of any such party, cast
in person at a meeting held for that purpose.

AAI (under the supervision of the board of directors) continuously
furnishes an investment program for the Portfolios other than the
International Equity Portfolio and the Real Estate Securities Portfolio,
is responsible for the actual managing of the investments of such
Portfolios and has responsibility for making decisions governing whether
to buy, sell or hold any particular security. In carrying out its
obligations to manage the investment and reinvestment of the assets of
these Portfolios, AAI performs research and obtains and evaluates
pertinent economic, statistical and financial data relevant to the
investment policies of these Portfolios.

As described below, AAI has engaged Perpetual Portfolio
Management, Limited ("Perpetual") as the investment sub-adviser to
provide day-to-day portfolio management for the International Equity
Portfolio and has engaged Genesis Realty Capital Management, L.P.
("Genesis"), as the investment sub-adviser to provide day-to-day
portfolio management for the Real Estate Securities Portfolio.

In addition to performing management duties and providing the
investment advice described above, AAI is responsible for the
administrative services in connection with the management of the Fund
and the portfolios, including financial reporting.

AAI is responsible for payment of all expenses it may incur in
performing the services described. These expenses include costs
incurred in providing investment advisory services, compensating and
furnishing office space for officers and employees of AAI connected with
investment and economic research, trading and investment management of
the Fund and the payment of any fees to interested directors of the
Fund. AAI provides all executive, administrative, clerical and other
personnel necessary to operate the Fund and pays the salaries and other
employment related costs of employing those persons. AAI furnishes the
Fund with office space, facilities and equipment and pays the day-to-day
expenses related to the operation and maintenance of such office space
facilities and equipment. Legal, accounting and all other expenses
incurred in the organization of the Fund or of new Portfolios of the
Fund, including costs of registering under federal and state securities
laws, are also paid by AAI. AAI has entered into an indemnity agreement
with Life of Virginia, whereby Life of Virginia has agreed to reimburse
it if certain expenses it bears during any month exceed the investment
advisory fee paid by the Fund during that period.

The Fund is responsible for payment of all expenses it may incur
in its operation and all of its general administrative expenses except
those expressly assumed by the advisor as described in the preceding
paragraph. These include (by way of description and not of limitation),
any share redemption expenses, expenses of portfolio transactions,
shareholder servicing costs, pricing costs (including the daily
calculation of net asset value), interest on borrowings by the Fund,
charges of the custodian and transfer agent, if any, cost of auditing
services, non-interested directors' fees, legal expenses, state
franchise taxes, certain other taxes, investment advisory fees, certain
insurance premiums, cost of maintenance of corporate existence, investor
services (including allocable personnel and telephone expenses), costs
of printing and mailing updated Fund prospectuses to shareholders, proxy
statements and shareholder reports, the cost of paying dividends and
capital gains distribution, capital stock certificates, costs of
directors and shareholder meetings, and any extraordinary expenses,
including litigation costs in legal actions involving the Fund, or costs
related to indemnification of directors, officers and employees of the
Fund.

The board of directors of the Fund determines the manner in which
expenses are allocated among the Portfolios of the Fund.

The Agreement and the Additional Agreements also provide that AAI
shall not be liable to the Fund or to any shareholder or policyowner for
any error of judgment or mistake of law or for any loss suffered by the
Fund or by any shareholder in connection with matters to which the such
Agreements relate, except for a breach of fiduciary duty or a loss
resulting from willful misfeasance, bad faith, gross negligence, or
reckless disregard on the part of AAI in the performance of its duties
thereunder.

INVESTMENT ADVISORY FEE

AAI receives investment advisory fees as compensation for its
services. The fees are accrued by each Portfolio of the Fund daily but
paid to AAI monthly. The investment advisory fee for each portfolio is
based upon the average daily net assets of the portfolio (as computed in
accordance with the description in the Fund prospectus) at the following
annual rates:

Common Stock Index Portfolio: .35%

Government Securities Portfolio: .50% of the first $100,000,000;
.45% of the next $100,000,000; .40% of the next $100,000,000; .35%
of the next $100,000,000; and .30% of amounts in excess of
$400,000,000.

Money Market Portfolio: .50% of the first $100,000,000; .45% of
the next $100,000,000; .40% of the next $100,000,000; .35% of the
next $100,000,000; and .30% of amounts in excess of $400,000,000.

Total Return Portfolio: .50% of the first $100,000,000; .45% of
the next $100,000,000; .40% of the next $100,000,000; .35% of the
next $100,000,000; and .30% of amounts in excess of $400,000,000.

International Equity Portfolio: 1.00% of the first $100,000,000;
.95% of the next $100,000,000; and .90% of amounts in excess of
$200,000,000.

Real Estate Securities Portfolio: .85% of the first $100,000,000;
.80% of the next $100,000,000; and .75% of amounts in excess of
$200,000,000.

Under the previous investment advisory agreement (see below), the
total advisory fee paid by the Fund for the year ended December 31,
1992, was $96,821, of which $23,107 was paid by the Common Stock
Portfolio (now Common Stock Index Portfolio), $23,003 was paid by the
Bond Portfolio (now Government Securities Portfolio), $22,443 was paid
by the Money Market Portfolio, and $28,268 was paid by the Total Return
Portfolio. For the year ended December 31, 1993, the total advisory
fees paid by the Fund under the previous Investment Advisory Agreement
(in effect until May 1, 1993) and the current Investment Advisory
Agreement (in effect since May 1, 1993) were $136,623 of which $26,183
was paid by the Common Stock Index Portfolio (Common Stock Portfolio
prior to May 1, 1993), $27,905 was paid by the Government Securities
Portfolio (Bond Portfolio prior to May 1, 1993), $35,848 was paid by the
Money Market Portfolio, and $46,687 was paid by the Total Return
Portfolio. For the fiscal year ended December 31, 1994, the total
advisory fee paid was $326,133 of which $51,712 was paid by the Common
Stock Index Portfolio, $49,571 was paid by the Government Securities
Portfolio, $114,126 was paid by the Money Market Portfolio, and $110,724
was paid by the Total Return Portfolio.

Under the previous Investment Advisory Agreement, the fee was
deducted daily and was equal to an annual rate of .50% on the first $250
million of the aggregate average daily net assets of the Fund; .45% on
the next $50 million of the aggregate average daily net assets of the
Fund; .40% on the next $100 million of the aggregate average daily net
assets of the Fund; .35% on the next $400 million of the aggregate
average daily net assets of the Fund; and .30% on the aggregate average
daily net assets of the Fund in excess of $800 million. During the
period between January 1, 1993 and May 1, 1993 the previous Investment
Advisory Agreement was in effect, and AAI received investment advisory
fees in an amount representing .50% of the average net assets of the
Common Stock Portfolio (currently Common Stock Index Portfolio), the
Bond Portfolio (currently Government Securities Portfolio), the Money
Market Portfolio, and the Total Return Portfolio.

INVESTMENT SUB-ADVISERS

Pursuant to separate sub-advisory agreements described below, AAI
has engaged Perpetual as the investment sub-adviser to provide
day-to-day portfolio management for the International Equity Portfolio
and has engaged Genesis as the investment sub-adviser to provide
day-to-day portfolio management for the Real Estate Securities
Portfolio.

Perpetual, a wholly-owned subsidiary of Perpetual plc, is the
investment sub-adviser for the International Equity Portfolio. It is
registered under the Investment Advisers Act of 1940 as an investment
adviser and has its principal offices at 48 Hart Street,
Henley-on-Thames, Oxfordshire, England RG9 2AZ. In addition to the
International Equity Portfolio, Perpetual provides investment advice and
management to [pension plans, corporations and other institutional and
individual clients]. Although Perpetual has no prior experience
advising a U.S. mutual fund, it and its affiliates currently manage over
__ unit trusts (the British term for mutual funds) in the United Kingdom
and overseas. As of December 31, 1994, Perpetual and its affiliates
managed approximately $__.__ in assets. As of September 30, 1994, Mr.
Martyn Abib, Chairman of Perpetual plc, owned directly and beneficially
approximately 17,690,000 (67%) of the ordinary shares (i.e., common
stock) of Perpetual plc. Perpetual plc has the same address as
Perpetual.

Genesis, a recently formed limited partnership, is the investment
sub-adviser for the Real Estate Securities Portfolio. Genesis is
registered under the Investment Advisers Act of 1940 as an investment
adviser and has offices at 909 Montgomery Street, San Francisco, CA
94133 and 885 Third Avenue, New York, N.Y. 10022. Genesis and its
general partners have no previous experience advising mutual funds.
Genesis has three principal general partners: Zell Capital Associates,
L.P. (an Illinois limited partnership indirectly controlled by Samuel
Zell) which holds approximately 50.00% of the stock of Genesis. Genesis
Realty Investments, L.P. is a California limited partnership whose
general partner is Genesis Realty Advisors, Inc. a Delaware corporation
owned by Will K. Weinstein, Gail P. Seneca and Philip C. Stapleton.
Genesis Realty Investments, L.P. holds approximately 25.00% of the stock
of Genesis, and BG Realty Capital Management, L.P. holds approximately
25.00% of the stock of Genesis.

INVESTMENT SUB-ADVISORY AGREEMENTS

AAI has entered into a separate sub-advisory agreement (the
"Sub-advisory Agreements") with Perpetual and with Genesis for the
day-to-day portfolio management of the International Equity Portfolio
and the Real Estate Securities Portfolio. The Sub-Advisory Agreements
were approved for each Portfolio by the board of directors of the Fund
(including a majority of directors who are not parties to such
Agreements or interested persons, as defined by the Investment Company
Act of 1940, of any such party) at a meeting held for that purpose on
January 25, 1995. Each Sub-advisory Agreement was also approved by the
initial shareholder of each Portfolio on May _, 1995. The Sub-advisory
Agreements are not assignable and may be each be terminated without
penalty upon 60 days written notice at the option of AAI or either
Perpetual or Genesis, as the case may be, or by the board of directors
of the Fund or by a vote of a majority of the outstanding shares of the
class of stock representing an interest in the appropriate Portfolio.
Each Sub-advisory Agreement provides that it shall continue in effect
for two years and can than thereafter be continued for its Portfolio
from year to year so long as such continuance is specifically approved
annually (a) by the board of directors of the Fund or by a majority of
the outstanding shares of the Portfolio and (b) by a majority vote of
the Directors who are not parties to the Agreement, or interested
persons of any such party, cast in person at a meeting held for that
purpose.

INVESTMENT SUB-ADVISORY FEES

International Equity Portfolio: .50% of the first
$100,000,000; .475% of the next $100,000,000; and .45% of
amounts in excess of $200,000,000.

Real Estate Securities Portfolio: .425% of the first
$100,000,000; .40% of the next $100,000,000; and .375% of
amounts in excess of $200,000,000.

REIMBURSEMENT OF EXCESS OPERATING EXPENSES

If the operating expenses allocable to the following Portfolios of
the Fund for any fiscal year should exceed the amounts indicated below,
AAI will reimburse the Fund for the excess:

(1) With respect to the Government Securities Portfolio, the
Total Return Portfolio and the Real Estate Securities
Portfolio, 1.5% of the first $30,000,000 of the average
daily net assets of each of those portfolios and 1% of the
amount by which the average daily net assets of each of
those Portfolios exceed $30,000,000.

(2) With respect to the Money Market Portfolio and the Common
Stock Index Portfolio, 0.75% of the average daily net assets
of each of those Portfolios.

(3) With respect to the International Equity Portfolio, 1.75% of
the first $30,000,000 of the average daily net assets of the
portfolio and 1% of the amount by which the average daily
net assets of the Portfolio exceeds $30,000,000.

For purposes of this reimbursement formula, "operating expenses"
do not include attorneys' fees, court judgements, decrees or awards, or
any other litigation costs in legal actions involving the Fund, or costs
related to indemnification of directors, officers or employees of the
Fund where such costs are not covered by director and officer liability
insurance.

Expenses that are reimbursable as described above, if any, will be
calculated daily and credited to the Fund on a monthly basis.

Reimbursement of operating expenses paid to the Fund by AAI for
the fiscal year ended December 31, 1992, amounted to $14,308 which
pertains exclusively to the Money Market Portfolio. For the fiscal year
ended December 31, 1993, total reimbursements paid to the Fund by AAI
amounted to $41,400. Of this amount, $34,066 pertains to the Common
Stock Index Portfolio and $7,334 pertains to the Money Market Portfolio.
For the fiscal year ended December 31, 1994, total reimbursements paid
to the Fund by AAI amounted to $53,529, all of which pertains to the
Common Stock Index Portfolio.

SECURITIES ACTIVITIES OF THE ADVISERS

Securities held by the Fund may also be held by Life of Virginia,
or by separate accounts or mutual funds for which AAI acts as an
adviser. Because of different investment objectives or other factors, a
particular security may be bought by Life of Virginia or by AAI or for
one or more of its clients, when one or more other clients are selling
the same security. If purchases or sales of securities for a Portfolio
or other client of AAI or Life of Virginia arise for consideration at or
about the same time, transactions in such securities will be made,
insofar as feasible, for the Portfolio, Life of Virginia, and other
clients in a manner deemed equitable to all. To the extent that
transactions on behalf of more than one client of AAI during the same
period may increase the demand for securities being purchased or the
supply of securities being sold, there may be an adverse effect on
price.

On occasions when AAI (under the supervision of the board of
directors) deems the purchase or sale of a security to be in the best
interests of the Fund as well as other accounts or companies, it may, to
the extent permitted by applicable laws and regulations, but will not be
obligated to, aggregate the securities to be sold or purchased for the
Fund with those to be sold or purchased for other accounts or companies
in order to obtain favorable execution and low brokerage commissions. In
that event, allocation of the securities purchased or sold, as well as
the expenses incurred in the transaction, will be made by AAI in the
manner it considers to be most equitable and consistent with its
fiduciary obligations to the Fund and to such other accounts or
companies. In some cases this procedure may adversely affect the size
of the position obtainable for a Portfolio. Likewise, Perpetual or
Genesis may, to the extent permitted by applicable laws and regulations,
but will not be obligated to, aggregate the securities to be sold or
purchased for the Fund with those to be sold or purchased for other
accounts or companies in order to obtain favorable execution and low
brokerage commissions. Like AAI, Perpetual or Genesis allocates the
securities purchased or sold, as well as the expenses incurred in the
transaction, in the manner that each considers to be most equitable and
consistent with its fiduciary obligations to the Fund and to such other
accounts or companies.

In performing their functions, AAI, Perpetual, and Genesis will
not execute private sales of securities among the Portfolios or between
a Portfolio and any other investment account it manages.

PORTFOLIO TRANSACTIONS AND BROKERAGE

As described above, AAI, Perpetual or Genesis determines which
securities to buy and sell for the Portfolios, selects brokers and
dealers to effect the transactions, and negotiates commissions.
Transactions in equity securities will usually be executed through
brokers who will receive a commission paid by the Portfolio. Fixed
income securities are generally traded with dealers acting as principals
for their own accounts without a stated commission. The dealer's margin
is reflected in the price of the security. Money market obligations may
be traded directly with the issuer. Underwritten offerings of stock may
be purchased at a fixed price including an amount of compensation to the
underwriter.

In placing orders for securities transactions, AAI's policy
(followed by Perpetual and Genesis) is to attempt to obtain the most
favorable price and efficient execution available. These entities,
subject to the review of the Fund's board of directors, may pay higher
than the lowest possible commission in order to obtain better than
average execution of transactions and/or valuable investment research
information described below, if, in their opinion, improved execution
and investment research information will benefit the performance of each
of the Portfolios.

When selecting broker-dealers to execute portfolio transactions,
the Adviser considers factors including the rate of commission or size
of the broker-dealer's "spread", the size and difficulty of the order,
the nature of the market for the security, the willingness of the
broker-dealer to position, the reliability, financial condition and
general execution and operational capabilities of the broker-dealer, and
the research, statistical and economic data furnished by the
broker-dealer to the Adviser. In some cases, the Adviser may use such
information to advise other investment accounts that it advises.
Brokers or dealers which supply research may be selected for execution
of transactions for such other accounts, while the data may be used by
the Adviser in providing investment advisory services to the Fund. In
addition, the Adviser may select broker-dealers to execute portfolio
transactions based upon sales by that broker-dealer of Life of Virginia
variable life insurance or annuity contracts and may select
broker-dealers who are affiliated with the Fund or AAI. However, all
such directed brokerage will be subject to AAI's policy to attempt to
obtain the most favorable price and efficient execution possible.

During the year ended December 31, 1994, the Fund paid brokerage
commissions of $48,969, based on $34,724,499 of transactions. During
the year ended December 31, l993, the Fund paid brokerage commissions of
$27,259, based on $21,057,044 of transactions. During the year ended
December 31, 1992, the Fund paid brokerage commissions of $7,446, based
on $2,353,014 of transactions.

DETERMINATION OF NET ASSET VALUE

Equity securities (including common stocks, preferred stocks,
convertible securities and warrants) and call options written on all
portfolio securities, listed or traded on a national exchange are valued
at their last sale price on that exchange prior to the time when assets
are valued. In the absence of any exchange sales on that day and for
unlisted equity securities, such securities are valued at the last sale
price on the NASDAQ (National Association of Securities Dealers
Automated Quotations) National Market System. In the absence of any
National Market System sales on that day, equity securities are valued
at the last reported bid price.

Debt securities traded on a national exchange are valued at their
last sale price on that exchange prior to the time when assets are
valued, or, lacking any sales, at the last reported bid price. Debt
securities other than money market instruments traded in the
over-the-counter market are valued at the last reported bid price or at
yield equivalent as obtained from one or more dealers that make markets
in the securities. Debt securities traded in both the over-the-counter
market and on a national exchange are valued according to the broadest
and most representative market, and it is expected that this ordinarily
will be the over-the-counter market.

Securities that are primarily traded on foreign securities
exchanges are generally valued at the last sale price on the exchange
where they are primarily traded. All foreign securities traded on the
over-the-counter market are valued at the last sale quote, if market
quotes are available, or the last reported bid price if there is no
active trading in a particular security on a given day. Quotations of
foreign securities in foreign currencies are converted, at current
exchange rates, to their U. S. dollar equivalents in order to determine
their current value. In addition, because of the need to value foreign
securities (other than ADRs) as of the close of trading on various
exchanges and over-the-counter markets throughout the world, the
calculation of the net asset value of Portfolios investing in foreign
securities may not take place contemporaneously with the valuation of
such foreign securities in such Portfolios.

Securities for which market quotations are not readily available
are valued at fair value as determined in good faith by or under the
direction of the board of directors of the Fund, including valuations
provided by a pricing service retained for this purpose.

Debt instruments held with a remaining maturity of 60 days or less
are generally valued on an amortized cost basis. Under the amortized
cost basis method of valuation, the security is initially valued at its
purchase price (or in the case of securities purchased with more than 60
days remaining to maturity, the market value on the 61st day prior to
maturity), and thereafter by amortizing any premium or discount
uniformly to maturity. If for any reason the Fund Directors believe the
amortized cost method of valuation does not fairly reflect the fair
value of any security, fair value will be determined in good faith by or
under the direction of the board of directors of the Fund as in the case
of securities having a maturity of more than 60 days.

Exchange listed put options written and options purchased are
valued on the primary exchange on which they are traded.
Over-the-counter options written or purchased by a Portfolio are valued
based upon prices provided by market-makers in such securities.
Exchange-traded financial futures contracts are valued at their
settlement price established each day by the board of trade or exchange
on which they are traded.

DIVIDENDS AND DISTRIBUTIONS

It is the Fund's intention to distribute substantially all the net
investment income, if any, of a Portfolio. For dividend purposes, net
investment income of a Portfolio will consist of all payments of
dividends or interest received by that Portfolio less realized
investment losses, if any, and the estimated expenses of that Portfolio
(including fees payable to AAI). Dividends from net investment income
of a Portfolio will be paid at least semi-annually and are expected to
be reinvested in additional full and fractional shares of that
Portfolio. Shares will begin accruing dividends on the day following
the date on which the shares are issued, the date of issuance
customarily being the "settlement" date. All net realized investment
gains of the Fund, if any, are declared and distributed annually after
the close of the Fund's fiscal year to the shareholders of the Fund and
are expected to be reinvested in additional full and fractional shares
of the Fund.

REDEMPTION OF FUND SHARES

The Fund is required to redeem all full and fractional shares of
the Fund for cash. The redemption price is the net asset value per share
next determined after the receipt of proper notice of redemption.
Payment for redeemed shares will generally occur within seven days of
receipt of a proper notice of redemption.

The right to redeem shares or to receive payment with respect to
any redemption may be suspended for any period during which trading on
the New York Stock Exchange is restricted as determined by the
Securities and Exchange Commission or when such Exchange is closed
(other than customary weekend and holiday closings) for any period
during which an emergency exists, as defined by the Securities and
Exchange Commission, which makes disposal of a Portfolio's securities or
determination of the net asset value of a Portfolio not reasonably
practicable, and for any other periods as the Securities and Exchange
Commission may by order permit for the protection of shareholders of the
Portfolio.

ADDITIONAL INFORMATION

LIFE OF VIRGINIA

Life of Virginia contributed the initial capital necessary for the
Fund to commence operations. Life of Virginia is a stock life insurance
company operating under a charter granted by the Commonwealth of
Virginia on March 21, 1871. Life of Virginia is a wholly-owned
subsidiary of Aon. Life of Virginia ranks among the 25 largest stock
life insurance companies in the United States in terms of assets and
business in force. The principal offices of Life of Virginia are at
6610 W. Broad Street, Richmond, Virginia 23230.

CUSTODIAN, DIVIDEND AND TRANSFER AGENT

For the Portfolios other than the International Equity Portfolio,
the Fund's Custodian, Dividend and Transfer Agent is Crestar Bank, 919
East Main Street, Richmond, Virginia 23219. Under its Custodian
Agreement with the Fund, Crestar Bank maintains the portfolio securities
acquired by the Fund, administers the purchases and sales of portfolio
securities, collects interest and dividends and other distributions made
on the securities held in the portfolios of the Fund, and performs such
other ministerial duties as are included in the Custody Agreement, a
copy of which is on file with the Securities and Exchange Commission.
Firstar Trust Company, 777 E. Wisconsin Avenue, Milwaukee, Wisconsin
53202, is the Fund's custodian for the International Equity Portfolio
and performs the same duties as Crestar Bank. Pursuant to a sub-custody
agreement with Firstar Trust Company, Chase Manhattan Bank, N.A., 1211
6th Avenue, New York, N.Y. 10036, serves as custodian for the overseas
assets of the International Equity Portfolio.

Crestar Bank and Firstar Trust Company may hold securities of the
Portfolios on which call options are written and cash or liquid assets
in amounts sufficient to cover put options written on securities, in a
segregated account by transferring (upon the Fund's instructions) assets
from a Portfolio's general (regular) custody account. Likewise, such
segregated accounts may be used in connection with the covering of put
and call options written on futures contracts. The Custodians also will
hold certain assets of certain of the Portfolios constituting margin
deposits with respect to financial futures contracts at the disposal of
FCMs through which such transactions are effected. These Portfolios may
also be required to post margin deposits with respect to covered call
and put options written on stock indices and for this purpose certain
assets of the Portfolio may be held by the Custodians pursuant to
similar arrangements with the brokers involved.

INDEPENDENT AUDITORS

Ernst & Young LLP acts as independent auditors for the Fund. Its
offices are at One James Center, Suite 1000, Richmond, Virginia 23219.
Ernst & Young LLP performs an audit of the financial statements of the
Fund annually.

LEGAL COUNSEL

Sutherland, Asbill & Brennan, 1275 Pennsylvania Avenue, NW,
Washington, DC 20004-2404, is counsel for the Fund.

CAPITAL STOCK

The Fund was incorporated in the Commonwealth of Virginia on May
14, 1984. The authorized capital stock of the Fund consists of 2.75
billion shares of capital stock, par value one cent ($0.0l) per share.
All of the shares of the authorized capital stock have been divided into
and may be issued in a designated class as follows: 250 million shares
have been designated as Class A shares, representing interests in the
Common Stock Index Portfolio; 250 million shares have been designated as
Class B shares, representing interests in the Government Securities
Portfolio; 250 million shares have been designated as Class C shares
representing interests in the Money Market Portfolio; 250 million shares
have been designated as Class D shares, representing interests in the
Total Return Portfolio; 250 million shares have been designated as
Class E shares, representing interests in the International Equity
Portfolio; and 250 million shares have been designated as Class F
shares, representing interests in the Real Estate Securities Portfolio.
Classes G through K have also been designated with 250 million shares
each. These shares, however, do not yet represent interests in any
Portfolio.

Each issued and outstanding of a class share is entitled to
participate equally in dividends and distributions declared by the
respective class and, upon liquidation or dissolution, in net assets
allocated to such class remaining after satisfaction of outstanding
liabilities. The shares of each class, when issued, will be fully paid
and non-assessable and have no preemptive or conversion rights.

Life of Virginia provided the initial capital for the Fund by
purchasing $500,000 worth of Class A shares representing interests in
the Common Stock Index Portfolio (at that time called the Common Stock
Portfolio). Life of Virginia also provided the initial capital for the
Government Securities Portfolio, the Money Market Portfolio and the
Total Return Portfolio by purchasing $2,000,000 of Class B shares,
$500,000 of Class C shares, and $1,000,000 of Class D Shares,
respectively. Additionally, Life of Virginia purchased $500,000 of
Class C Money Market Portfolio shares in January, l987. Such shares
were acquired for investment and can only be disposed of by redemption.
Life of Virginia, the Accounts and the Plan currently are the only
shareholders of record. As of December 31, 1994, there were no contract
owners or Plan participants who beneficially owned a 5% or greater
voting interest in any Portfolio. As of December 31, 1994, officers and
directors of the Fund beneficially owned, as owners of variable annuity
or variable life insurance contracts or as Plan participants, 0.29% of
the Common Stock Index Portfolio and 0.02_% of the Total Return
Portfolio.

VOTING RIGHTS

All shares of capital stock have equal voting rights, except that
only shares representing interests in a particular Portfolio will be
entitled to vote on matters affecting only that Portfolio. The shares
do not have cumulative voting rights. Accordingly, owners of variable
annuity or variable life insurance contracts or Plan participants having
voting interests in more than 50% of the shares of the Fund voting for
the election of directors could elect all of the directors of the Fund
if they choose to do so, and in such event, contract owners or Plan
participants having voting interests in the remaining shares would not
be able to elect any directors. Life of Virginia (directly or through
the Accounts) or the Plan owns all shares of the Fund. Life of Virginia
or the Plan will vote all shares of the Fund (or a Portfolio) as
described in the prospectus.

Matters requiring separate shareholder voting by Portfolio shall
have been effectively acted upon with respect to any Portfolio if a
majority of the outstanding voting interests of that Portfolio vote for
approval of the matter, notwithstanding that: (1) the matter has not
been approved by a majority of the outstanding voting interests of any
other Portfolio; or (2) the matter has not been approved by a majority
of the outstanding voting interests of the Fund.

OTHER INFORMATION

This Statement of Additional Information and the prospectus for
the Fund do not contain all the information set forth in the
registration statement and exhibits relating thereto, which the Fund has
filed with the Securities and Exchange Commission, Washington, D.C.
under the Securities Act of 1933 and the Investment Company Act of 1940,
to which reference is hereby made.

AUDITED FINANCIAL STATEMENTS

The financial statements of the Fund appearing in this
Registration Statement have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon appearing in
the registration statement, and are included in reliance upon such
reports given upon the authority of such firm as experts in accounting
and auditing.

APPENDIX A

Description of Money Market Securities

The following information includes a description of certain money
market instruments in which a Portfolio may invest to the extent
consistent with its investment objective.

Bank Money Instruments. These include instruments, such as
certificates of deposit and bankers' acceptances. Certificates of
deposit are generally short-term, interest-bearing negotiable
certificates issued by commercial banks or savings and loan associations
against funds deposited in the issuing institution. A bankers'
acceptance is a time draft drawn on a commercial bank by a borrower
usually in connection with an international commercial transaction (to
finance the import, export, transfer or storage of goods). The borrower
is liable for payment as well as the bank, which unconditionally
guarantees to pay the draft at its face amount on the maturity date.
Most acceptances have maturities of six months or less and are traded in
secondary markets prior to maturity.

A Portfolio may not invest in any security issued by a commercial
bank or a savings and loan association unless the bank or association is
organized and operating in the United States, has total assets of at
least one billion dollars and is a member of the Federal Deposit
Insurance Corporation, in the case of banks, or the Federal Savings and
Loan Insurance Corporation, in the case of savings and loan associations
provided that this limitation shall not prohibit investments in foreign
branches of banks which meet the foregoing requirements.

Government Agency Securities. These include debt securities
issued by government-sponsored enterprises, federal agencies or
instrumentalities and international institutions. Such securities are
not direct obligations of the U.S. Treasury but involve government
sponsorship or guarantees. Thus the Fund may not be able to assert a
claim against the United States itself in the event the agency or
instrumentality does not meet its commitment.

United States Government Securities. These include marketable
securities issued by the United States Treasury, which consist of bills,
notes and bonds. Such securities are direct obligations of the United
States government and differ mainly in the length of their maturity.
Treasury bills, the most frequently issued marketable government
security, have a maturity of up to one year and are issued on a discount
basis.

Short-Term Corporate Debt Instruments. These include commercial
paper (including variable amount master demand notes), which refers to
short-term unsecured promissory notes issued by corporations to finance
short-term credit needs. Commercial paper is usually sold on a discount
basis and has a maturity at the time of issuance not exceeding nine
months. Variable amount master demand notes are demand obligations that
permit the investment of fluctuating amounts at varying market rates of
interest pursuant to arrangements between the issuer and a commercial
bank acting as agent for the payees of such notes, whereby both parties
have the right to vary the amount of the outstanding indebtedness on the
notes.

Because variable amount master notes are direct lending
arrangements between the lender and borrower, it is not generally
contemplated that such instruments will be traded and there is no
secondary market for the notes. Typically, agreements relating to such
notes provide that the lender may not sell or otherwise transfer the
note without the borrower's consent. Such notes provide that the
interest rate on the amount outstanding is adjusted periodically,
typically on a daily basis in accordance with a stated short-term
interest rate benchmark. Since the interest rate of a variable amount
master note is adjusted no less often than every 60 days and since
repayment of the note may be demanded at any time, the Fund values such
a note in accordance with the amortized cost basis at the outstanding
principal amount of the note. (See Determination of Net Asset Value, on
page 29.)

Also included are nonconvertible corporate debt securities (e.g.,
bonds and debentures) with no more than one year remaining to maturity
at the date of settlement. Corporate debt securities with a remaining
maturity of less than one year tend to become extremely liquid and are
traded as money market securities. Such issues with less than one year
remaining to maturity tend to have greater liquidity and considerably
less market value fluctuations than longer term issues.

Commercial paper investments at the time of purchase will be rated
at least "A" by Standard and Poor's Corporation or "Prime" by Moody's
Investors Service, Inc., or, if not rated, issued by companies having an
outstanding debt issue rated at least "A" by Standard and Poor's or by
Moody's. (See Corporate Bond Ratings, Appendix B.)

Repurchase Agreements. A repurchase agreement is an instrument
under which the purchaser (i.e., a Portfolio) acquires ownership of the
obligation (debt security) and the seller agrees, at the time of the
sale, to repurchase the obligation at a mutually agreed upon time and
price, thereby determining the yield during the purchaser's holding
period. This results in a fixed rate of return insulated from market
fluctuations during such period. The underlying securities will consist
only of U.S. government or government agency securities, certificates of
deposit, commercial paper or bankers' acceptances.

Repurchase agreements usually are for short periods, such as under
one week. Repurchase agreements are considered to be loans under the
Investment Company Act of 1940, with the security subject to repurchase,
in effect, serving as "collateral" for the loan. The Fund will require
the seller to provide additional collateral if the market value of the
securities falls below the repurchase price at any time during the term
of the repurchase agreement. In the event of a default by the seller
because of bankruptcy or otherwise, the Fund may suffer time delays and
incur costs or losses in connection with the disposition of the
collateral. Repurchase agreements will be entered into with primary
dealers for periods not to exceed 30 days and only with respect to
underlying money market securities in which the Portfolio may otherwise
invest. Because a repurchase agreement maturing in more than seven days
is deemed an illiquid investment, investments in such repurchase
agreements and other illiquid assets cannot exceed 10% of the
Portfolio's net assets.

APPENDIX B

Description of Corporate Bond Ratings

Moody's Investors Services, Inc.

Aaa - Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt-edge." Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.

Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities
or fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long-term risks
appear somewhat larger than in Aaa securities.

A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment
sometime in the future.

Baa - Bonds which are rated Baa are considered as medium grade
obligations i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well.

Ba - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection
of interest and principal payments may be very moderate and thereby not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B - Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.

Caa - Bonds which are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect to
principal or interest.

Ca - Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have
other marked shortcomings.

C - Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.

Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system.
The modifier 1 indicates that the security ranks in the higher end of
its generic rating category; the modifier 2 indicates a midrange
ranking; and the modifier 3 indicates that the issue ranks in the lower
end of its generic rating category.

Standard & Poor's Corporation

AAA - This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal
and interest.

AA - Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the
majority of instances they differ from AAA issues only in small degree.

A - Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.

BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection
parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay principal and interest
for bonds in this category than for bonds in the A category.

BB-B-CCC-CC - Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay
interest and repay principal in accordance with the terms of the
obligation. BB indicates the lowest degree of speculation and CC the
highest degree of speculation. While such bonds will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.

C - The rating C is reserved for income bonds on which no interest is
being paid.

D - Debt rated D is in default, and payment of interest and/or repayment
of principal is in arrears.

The ratings from "AA" to "B" may be modified by the addition of a
plus or minus sign to relative standing within the major rating
categories.

Description of Commercial Paper Ratings

Commercial paper rated A-1 by Standard & Poor's has the following
characteristics: Liquidity ratios are adequate to meet cash
requirements. Long-term senior debt is rated "A" or better, although in
some cases "BBB" credits may be allowed. The issuer has access to at
least two additional channels of borrowing. Basic earnings and cash
flow have an upward trend with allowance made for unusual circumstances.
Typically, the issuer's industry is well established and the issuer has
a strong position within the industry. The reliability and quality of
management are unquestioned. Relative strength or weakness of the above
factors determine whether the issuer's commercial paper is rated A-1,
A-2 or A-3.

The rating Prime-1 is the highest commercial paper rating assigned
by Moody's Investor's Service, Inc. Among the factors considered by
Moody's in assigning ratings are the following: (1) evaluation of the
management of the issuer; (2) economic evaluation of the issuer's
industry or industries and an appraisal of speculative-type risks which
may be inherent in certain areas; (3) evaluation of the issuer's
products in relation to competition and customer acceptance; (4)
liquidity; (5) amount and quality of long-term debt; (6) trends of
earnings over a period of ten years; (7) financial strength of a parent
company and the relationships which exist with the issuer, and (8)
recognition by the management of obligations which may be present or may
arise as a result of public interest questions and preparations to meet
such obligations.

Life of Virginia Series Fund, Inc.

Audited Financial Statements

Year Ended December 31, 1994

TABLE OF CONTENTS

Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . 1

Financial Statements

Statements of Assets and Liabilities . . . . . . . . . . . . . . . . . . 2
Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . 3
Statements of Changes in Net Assets . . . . . . . . . . . . . . . . . . 4
Portfolio of Investments . . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . 50
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . 55

REPORT OF INDEPENDENT AUDITORS

Board of Directors
Life of Virginia Series Fund, Inc.

We have audited the accompanying statements of assets and liabilities,
including the portfolio of investments, of Life of Virginia Series Fund,
Inc. (comprising the Common Stock Index, Government Securities, Money
Market and Total Return portfolios) as of December 31, 1994, and the
related statements of operations for the year then ended, the statements
of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the fiscal periods since
1990. These financial statements and financial highlights are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and financial
highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned at December 31, 1994, by correspondence
with the custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of each of the respective portfolios constituting the
Life of Virginia Series Fund, Inc. at December 31, 1994, the results of
their operations for the year then ended, the changes in their net
assets for each of the two years in the period then ended, and the
financial highlights for each of the fiscal periods since 1990, in
conformity with generally accepted accounting principles.

Ernst & Young LLP

Richmond, Virginia
February 9, 1995

Life of Virginia Series Fund, Inc.

Statements of Assets and Liabilities

December 31, 1994

<TABLE>
Common Stock Government
Index Securities Money Market Total Return
Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C>
Assets

Investments in securities at fair
value (cost: Common Stock
Index Portfolio - $23,513,924;
Government Securities Portfolio-
$12,568,351; Money Market
Portfolio - $33,480,320;
Total Return Portfolio -
$33,922,021) $24,102,453 $12,465,197 $33,480,320 $34,584,133

Cash (overdraft) 44,014 46,586 25,028 (4,317)
Dividends receivable 55,220 - - 18,304
Interest receivable 198 102,290 37,336 203,486

24,201,885 12,614,073 33,542,684 34,801,606

Liabilities
Payable to security dealers 243,317 - - 51,840
Payable to affiliate - Note 4 28,996 16,001 13,945 41,510

272,313 16,001 13,945 93,350
Net assets $23,929,572 $12,598,072 $33,528,739 $34,708,256

Outstanding shares 1,521,763.402 1,324,525.855 3,295,804.202 2,589,602.617

Net asset value per share $15.72 $9.51 $10.17 $13.40
</TABLE>

See accompanying notes.

Life of Virginia Series Fund, Inc.

Statements of Operations

Year Ended December 31, 1994

<TABLE>
Common Stock Government
Index Securities Money Market Total Return
Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C>

Investment Income
Interest $ 23,714 $ 620,315 $ 1,018,838 $ 892,768
Dividends 416,945 - - 163,517
440,659 620,315 1,018,838 1,056,285
Expenses
Investment advisory fee-Note 4 51,712 49,571 114,126 110,724
Directors' fees 4,063 4,063 4,063 4,063
Accounting fees 7,500 7,500 7,500 7,500
Insurance 1,745 1,745 1,745 1,745
Custodian fees 92,681 11,206 27,629 39,504
Miscellaneous 8,821 6,639 6,639 7,766
166,522 80,724 161,702 171,302

Less expense waiver-Note 4 65,980
Less expense reimbursement-
Note 4 53,529 - - -
112,993 80,724 95,722 171,302

Net investment income 327,666 539,591 923,116 884,983

Realized and Unrealized
Gain (Loss) on Investments

Net realized gain (loss) on
investments 62,321 (843,165) 1,405 453,394

Change in net unrealized
gain (loss) on investments 30,617 (182,328) 5,684 (300,482)

Net realized and unrealized gain
(loss) on investments 92,938 (1,025,493) 7,089 152,912

Increase (decrease) in net assets from
operations $ 420,604 $(485,902) $ 930,205 $ 1,037,895

</TABLE>

See accompanying notes.

Life of Virginia Series Fund, Inc.

Statements of Changes in Net Assets

<TABLE>
Common Stock Index Portfolio Government Securities Portfolio
Year Ended December 31 Year Ended December 31
1994 1993 1994 1993
<S> <C> <C> <C> <C>

Increase (Decrease) in Net
Assets from Operations
Net investment income $ 327,666 $ 130,674 $ 539,591 $ 302,380
Net realized gain (loss) on
investments 62,321 1,359,119 (843,165) 364,414
Change in unrealized gain (loss) on
investments 30,617 (614,398) (182,328) (214,349)

Increase (decrease) in net assets from
operations 420,604 875,395 (485,902) 452,445

Distributions to Shareholders
from:
Net investment income (326,881) (131,098) (533,755) (303,258)
Net realized gain on investments (62,321) (1,358,857) - (364,414)
Tax return of capital - - - (6,117)
(389,202) (1,489,955) (533,755) (673,789)

Capital Share Transactions

Proceeds from sale of shares 18,236,292 2,777,033 8,356,373 4,662,303
Net asset value of shares issued
upon reinvestment of dividends 389,202 1,489,955 533,755 673,789
Cost of redemption of shares (3,004,089) (553,979) (3,157,327) (2,283,066)
Increase in net assets from capital
transactions 15,621,405 3,713,009 5,732,801 3,053,026

Increase in net assets 15,652,807 3,098,449 4,713,144 2,831,682

Net assets at beginning of year 8,276,765 5,178,316 7,884,928 5,053,246

Net assets at end of year $23,929,572 $ 8,276,765 $ 12,598,072 $ 7,884,928

Undistributed net investment income $ 1,007 $ 222 $ 5,836 $ -

</TABLE>

See accompanying notes.

Life of Virginia Series Fund, Inc.

Statements of Changes in Net Assets - continued

<TABLE>
Money Market Portfolio Total Return Portfolio
Year Ended December 31 Year Ended December 31
1994 1993 1994 1993

<S> <C> <C> <C> <C>
Increase in Net Assets
from Operations
Net investment income $ 923,116 $ 181,659 $ 884,983 $ 354,717
Net realized gain (loss) on
investments 1,405 (85) 453,394 646,189
Change in unrealized
gain (loss) on investments 5,684 (6,188) (300,482) 165,262

Increase in net assets from
operations 930,205 175,386 1,037,895 1,166,168

Distributions to Shareholders
from:
Net investment income (923,116) (181,815) (866,448) (355,285)
Net realized gain on investments (1,405) _ (453,394) (646,129)
Tax return of capital (6,627) (4,209) - (1,939)
(931,148) (186,024) (1,319,842) (1,003,353)

Capital Share Transactions
Proceeds from sale of shares 89,250,596 19,329,541 25,353,095 5,033,976
Net asset value of shares
issued upon reinvestment of
dividends 931,148 186,024 1,319,842 1,003,353
Cost of redemption of shares (66,556,246) (15,445,879) (4,292,141) (838,634)
Increase in net assets from
capital transactions 23,625,498 4,069,686 22,380,796 5,198,695

Increase in net assets 23,624,555 4,059,048 22,098,849 5,361,510

Net assets at beginning of year 9,904,184 5,845,136 12,609,407 7,247,897

Net assets at end of year $ 33,528,739 $ 9,904,184 $ 34,708,256 $ 12,609,407

Undistributed net investment income $ _ $ _ $ 18,535 $ _

</TABLE>

See accompanying notes.

Life of Virginia Series Fund, Inc

Portfolio of Investments

December 31, 1994
<TABLE>
<CAPTION>

Percentage Principal/ Fair
of Net Assets Shares Value

COMMON STOCK INDEX PORTFOLIO

COMMON STOCKS

<S> <C> <C> <C>
Aerospace/Defense
Boeing Co. 2.02% 2,400 $ 112,200
E Systems Inc. 250 10,406
E G & G Inc. 400 5,650
General Dynamics Corp. 400 17,400
Lockheed Corp. Del. 400 29,050
Loral 600 22,725
McDonnell Douglas Corp. 300 42,600
Martin Marietta Corp. (A) 700 31,063
Northrop Grumman Corp. 350 14,700
Raytheon Co. 900 57,488
Rockwell Int'l. Corp. 1,600 57,200
TRW Inc. 400 26,400
United Technologies Corp. 900 56,588
483,470
Airlines 0.27%
AMR Corp. (A) 500 26,625
Delta Air Lines Inc. Del 400 20,200
Southwest Airlines Co. 1,000 16,750
USAir Group Inc. (A) 400 1,750
65,325
Automobiles 2.33%
Chrysler Corp. 2,500 122,500
Ford Motor Co. 7,200 201,600
General Motors Corp. 5,200 219,700
Paccar Inc. 300 13,275
557,075
Auto Parts After Market 0.60%
Cooper Tire & Rubber Co. 600 14,175
Dana Corp. (A) 700 16,362
Eaton Corp. 500 $ 24,750
Echlin Inc. 400 12,000
Genuine Parts Co. 800 28,800
Goodyear Tire & Rubber Co. 1,100 36,987
Snap-on Tools Inc. 300 9,975
SPX Corp. 100 1,663
144,712
Banks 1.44%
First Interstate Bankcorp 500 33,813
Fleet Financial Group New (A) 900 29,250
Keycorp 1,700 42,500
Mellon Bank Corp. 1,000 30,625
National City Corp. 1,000 25,875
Nationsbank Corp. 1,900 85,738
NBD Bancorp Inc. 1,100 30,112
Norwest Corp. 2,200 51,425
US Bancorp 700 15,837
345,175
Beverages-Alcoholic 0.81%
Anheuser Busch Cos. Inc. 1,900 96,662
Brown Forman Corp. 500 15,250
Coors Adolph Co. Class B 300 5,025
Seagrams Ltd. 2,600 76,700
193,637
Beverages-Soft Drinks 2.75%
Coca-Cola Co. 8,900 458,350
Pepsico Inc. 5,500 199,375
657,725

Broadcast Media/Cable TV 0.77%
Telecommunications Inc. (A) 4,000 $ 87,000
Time Warner Inc. 2,800 98,350
185,350
Broker-Dealers 0.11%
Salomon Inc. 700 26,250
26,250
Building Materials 0.04%
Owens Corning Fiberglass Corp. (A) 300 9,600

Business Services 0.24% 9,600
Beneficial Corp. 400 15,600
Block H & R Inc. 700 25,987
Interpublic Group Cos. 500 16,062
57,649
Chemicals 1.67%
Eastman Chemical Co. 600 30,300
First Mississippi Corp. 150 3,750
FMC Corp. New (A) 250 14,438
Goodrich B F Co. 200 8,675
Grace W R & Co. 600 23,175
Great Lakes Chemical Corp. 500 28,500
Hercules Inc. 275 31,728
Mallinckrodt Group Inc. 500 14,937
Monsanto Co. 800 56,400
Morton International Inc. 1,000 28,500
Nalco Chemical Co. 500 16,750
PPG Industries Inc. 1,500 55,687
Praxair Inc. 900 18,450
Rohm & Haas Co. 500 28,563
Sigma Aldrich Corp . 350 $ 11,550
Union Carbide Corp . 1,000 29,375
400,778
Chemicals-Other 1.86%
Air Products & Chems Inc. 800 35,700
Dow Chemical Co. 1,900 127,775
Du Pont E I DE Nemours & Co. 4,800 270,000
Ecolab Inc. 500 10,500
443,975
Chemicals-Specialty 0.16%
Avery Dennison Corp. (A) 400 14,200
Englehard Corp. 600 13,350
Raychem Corp. 300 10,688
38,238
Coal 0.52%
Coastal Corp. 700 18,025
Eastern Enterprises (A) 150 3,938
Enron Corp. (A) 1,800 54,900
Ensearch Corp. 500 6,563
Nacco Industries Inc. Class A 75 3,628
Panhandle Eastern Corp. 1,000 19,750
Pittston Services Group 300 7,950
Santa Fe Energy Resources (A) 600 4,800
Transco Energy Co. 300 4,987
124,541
Communication Equipment - Manufacturing 0.04%
Andrew Corp. 175 9,144
9,144
Computer Software & Services 2.99%
Autodesk Inc. (A) 450 17,831
Automatic Data Processing 1,000 $ 58,500
Cisco Systems Inc. (A) 1,800 63,225
Compaq Computer Corp. (A) 1,900 75,050
Computer Assoc. Int'l. Inc. 1,100 53,350
Computer Sciences Corp. (A) 350 17,850
First Data Corp. 800 37,900
Lotus Dev Corp. (A) 300 12,300
Microsoft Corp. (A) 4,000 244,500
Novell Inc. 2,500 42,813
Oracle Systems Corp. (A) 2,000 88,250
Shared Medical System Corp. 150 4,912
716,481
Computer Systems 2.47%
Apple Computer Inc. 800 31,200
Ceridian Corp. (A) 300 8,063
Cray Research Inc. (A) 200 3,150
Data Gen. Corp. (A) 250 2,500
Digital Equipment Corp. (A) 1,000 33,250
Hewlett Packard Co. 1,700 169,787
IBM Corp. 4,000 294,000
Sun Microsystems Inc. (A) 700 24,850
Tandem Computers (A) 800 13,700
Unisys Corp. (A) 1,200 10,350
590,850
Conglomerates 0.97%
ITT Corp. 800 70,900
Minnesota Mining & Manufacturing Co. 2,900 154,787
Ogden Corp. 300 5,625
231,312
Consumer Finance 0.10%
Transamerica Corp. 500 $ 24,875
24,875
Containers-Metal & Glass 0.15%
Ball Corp. 200 6,300
Bemis Inc. 300 7,200
Crown Cork & Seal Inc. (A) 600 22,650
36,150
Cosmetics 2.58%
Alberto Culver Co. Class B 200 5,450
Avon Products Inc. 500 29,875
Clorox Co. Del 400 23,550
Colgate Palmolive Co. 1,000 63,375
Gillette Co. 1,500 112,125
International Flavors & Fragrances Inc. 800 37,000
Kimberley Clark Corp. 1,100 55,550
Procter & Gamble Co. 4,700 291,400
618,325
Drugs 5.21%
Alza Corp. Del (A) 600 10,800
American Home Products Corp. 2,200 138,050
Amgen Inc. 900 53,100
Bristol Myers Squibb Inc. 3,600 208,350
Eli Lilly & Co. 2,000 131,250
Merck & Co. Inc. 8,700 331,688
Pfizer Inc. 2,200 169,950
Schering Plough Corp. 1,300 96,200
Upjohn Co. 1,200 36,900
Warner Lambert Co. 900 69,300
1,245,588
Electric Companies 3.87%
American Electric Power Inc. 1,300 $ 42,737
Baltimore Gas & Electric Co. 1,000 22,125
Carolina Power & Light Co. 1,100 29,287
Central & Southwest Corp. 1,300 29,413
Cinergy Corp. 1,009 23,585
Consolidated Edison Co. 1,600 41,200
Detroit Edison Co. 1,000 26,125
Dominion Resources Inc. VA 1,200 42,900
Duke Power Co. 1,400 53,375
Entergy Corp. 1,600 35,000
FPL Group Inc. 1,300 45,663
Houston Industries Inc. 900 32,062
Niagara Mohawk Power Corp. 1,000 14,250
Northern States Power Co. 500 22,000
Ohio Edison Co. 1,100 20,350
Pacific Gas & Electric Co. 3,100 75,563
Pacificorp 2,100 38,062
Peco Energy 1,600 39,200
Public Service Enterprise Group 1,700 45,050
SCE Corp Holding Corp. 3,100 45,338
Southern Company 4,500 90,000
Texas Utilities Co. (A) 1,600 51,200
Unicom Corp. 1,500 36,000
Union Electric Co. (A) 700 24,762
925,247
Electrical Equipment 3.29%
Emerson Electric Co. 1,600 100,000
General Electric Co. 11,800 601,800
Grainger W W Inc. 350 20,213
Honeywell Inc. 900 $ 28,350
Thomas & Betts Corp. 125 8,391
Westinghouse Electric Corp. 2,400 29,400
788,154
Electronics 2.64%
Advanced Micro Devices Inc. (A) 700 17,412
AMP Inc. 700 50,925
Harris Corp. DEL 300 12,750
Intel Corp. 3,000 191,625
Intergraph Corp. (A) 300 2,438
Micron Technology Inc. 700 30,888
Motorola Inc. 4,000 231,500
National Semi-Conductor Co. (A) 800 15,600
Perkin Elmer Corp. (A) 300 7,688
Tektronix Inc. 200 6,850
Texas Instruments Inc. 600 44,925
Western Atlas Inc. (A) 400 15,050
Zenith Electronics (A) 300 3,487
631,138
Engineering and Construction 0.15%
Centex Corp. 200 4,550
Crane Co. 200 5,375
Masco Corp. 1,100 24,888
34,813
Entertainment 0.04%
King World Productions Inc. (A) 250 8,625
8,625
Financial Services 5.28%
Alexander & Alexander Svcs Inc. 300 5,550
American Express Co. 3,500 $ 103,250
Dean Witter Discover & Co. 1,200 40,650
Federal Home Loan Mortgage 1,200 60,600
Federal National Mortgage Assoc. (A) 1,800 131,175
Household International Inc. 600 22,275
M B N A Corp. 1,000 23,375
Merrill Lynch & Co. Inc. 1,400 50,050
Marsh & McLennan Cos. Inc. 500 39,625
S&P 500 Dep Receipts (A) 15,700 715,821
Travelers 2,200 71,500
1,263,871
Food-Grain & Agricultural 0.91%
Borden Inc. 900 11,138
Campbell Soup Co. 1,800 79,425
Conagra Inc. 1,700 53,125
CPC International Inc. 1,000 53,250
Pioneer Hybred Intl. 600 20,700
217,638
Food Processing 2.46%
Archer Daniels Midland Co. 3,750 77,344
General Mills Inc. 1,100 62,700
Heinz H J Co. 1,700 62,475
Hershey Foods Corp. 600 29,025
Kellogg Corp. 1,500 87,188
Quaker Oats Co. 900 27,675
Ralston Purina Group 700 31,237
Sara Lee Corp. 3,300 83,325
Unilever 1,100 128,150
589,119
Food Wholesalers 0.61%
Albertsons Inc. 1,850 $ 53,650
Fleming Companies 250 5,813
Giant Food Inc. Class A 400 8,700
Great Atlantic & Pacific Tea Co. 250 4,531
Kroger Co. (A) 800 19,300
PET Inc. 700 13,825
Wrigley Wm. Jr. Co. 800 39,500
145,319
Healthcare-Diversified 1.23%
Johnson & Johnson 4,400 240,900
United Healthcare Corp. (A) 1,200 54,150
295,050
Healthcare-Miscellaneous 0.11%
Manor Care Inc. 400 10,950
National Med Enterprises Inc. (A) 1,100 15,537
26,487
Homebuilding 0.23%
Fluor Corp. 600 25,875
Kaufman & Broad Home Corp. 200 2,575
Morrison Knudsen Corp. 225 2,869
Pulte Corporation 200 4,600
Sherwin-Williams 600 19,875
55,794
Hotels/Motels 0.30%
Hilton Hotels Corp. 350 23,581
Marriott International Inc. 900 25,312
Promus Co. Inc. (A) 700 21,700
70,593
Household Furnishings 0.65%
Armstrong World Industries 300 $ 11,550
Bassett Furniture Industries Inc. 100 2,850
Black & Decker Corp. 600 14,250
Maytag Corp. (A) 700 10,500
Newell Co. 1,450 30,450
Premark International 400 17,900
Rubbermaid Inc. 1,100 31,625
Stanley Works 300 10,725
Whirlpool Corp. (A) 500 25,375
155,225
Insurance 2.61%
Aetna Life & Casualty Co. 800 37,700
American General Corp. (A) 1,400 39,550
American International Group Inc. 2,300 225,400
Chubb Corp. 600 46,425
Cigna Corp. 500 31,812
Continental Corp. (A) 400 7,600
General RE Corp. (A) 600 74,250
Jefferson Pilot 350 18,156
Lincoln National Corp. Ind. 700 24,500
Providian Corp. 700 21,612
Safeco Corp. 400 20,800
St. Paul Companies Inc. 600 26,850
Torchmark Corp. 500 17,437
U S F & G Corp. 600 8,175
UNUM Corp. 500 18,875
US Life Corp. 150 5,231
624,373
Leisure/Entertainment 0.81%
Bally Entertainment Corp. (A) 300 $ 1,837
Brunswick Corp. 600 11,325
Capital Cities / ABC Inc. 1,100 93,775
CBS Inc. 500 27,687
Comcast Corp. Class A Spl. 1,700 26,669
Mattell Inc. 1,300 32,662
193,955
Leisure Time 1.28%
Disney Walt Co. DEL 3,800 175,275
Fleetwood Enterprises 300 5,625
Handleman Co. DEL (A) 225 2,559
Hasbro Inc. 600 17,550
Outboard Marine Corp. 150 2,944
Skyline Corp. 100 1,925
Viacom Class B (A) 2,501 101,587
307,465
Machine Tools 0.02%
Cincinnati Milacron Inc. 225 5,316
5,316
Machinery-Diversified 1.40%
Briggs & Stratton Corp. 200 6,550
Caterpillar Inc. DEL 1,400 77,175
Clark Equipment Co. (A) 125 6,781
Cooper Industries Inc. 800 27,300
Cummins Engine Inc. (A) 300 13,575
Deere & Co. 600 39,750
Dover Corp. 400 20,650
Foster Wheeler Corp. 300 8,925
General Signal Corp. 300 9,563
Giddings & Lewis Inc. Wisc. 250 $ 3,688
Harnishfeger Ind. Inc. 300 8,438
Illinois Tool Works 800 35,000
Ingersoll Rand Co. 800 25,200
Pall Corp. 800 15,000
Parker Hannifin Corp. 300 13,650
Timken Co. 200 7,050
Trinova Corp. 200 5,875
Varity Corp. (A) 300 10,875
335,045
Major Banks 3.35%
Banc One Corp. 2,800 71,050
Bank of Boston Corp. 700 18,113
Bankamerica Corp. 2,600 102,700
Bankers Trust NY Corp. 500 27,687
Barnett Banks Inc. 700 26,862
Boatmens Bancshares Inc. 700 18,987
Chase Manhattan Corp. 1,300 44,688
Chemical Banking Corp. 1,800 64,575
Citicorp 2,700 111,713
Corestates Financial Corp. 1,000 26,000
First Chicago Corp. 600 28,650
First Fidelity Bancorp New 600 26,925
First Union Corp. 1,200 49,650
J P Morgan & Co. 1,300 72,800
PNC Financial Corp. 1,600 33,800
Suntrust Banks 800 38,200
Wachovia Corp. 1,200 38,700
801,100
Medical Products 2.20%
Abbott Labs 5,800 $ 189,225
Allergan Inc. 400 11,300
Bard CR Inc. 300 8,100
Bausch & Lomb Inc. 400 13,550
Baxter International Inc. 2,000 56,500
Becton Dickinson & Co. 500 24,000
Beverly Enterprises Inc. (A) 600 8,625
Biomet Inc. (A) 800 11,200
Columbia/HCA Healthcare Corp. 2,500 91,250
Community Psychiatric Center (A) 300 3,300
Medtronic Inc. 800 44,500
St. Jude Medical Inc. (A) 300 11,925
United States Surg. (A) 400 7,600
US Healthcare Inc. 1,100 45,375
526,450
Metals/Mining 1.24%
Alcan Aluminum LTD. NEW 1,600 40,600
Alcoa 600 51,975
American Barrick Resources 2,500 55,625
Asarco Inc. 350 9,975
Homestake Mining Co. 1,000 17,125
Newmont Mining Corp. 600 21,600
Phelps Dodge Corp. 500 30,938
Placer Dome Inc. 1,700 36,975
Reynolds Metals Co. 400 19,600
Santa Fe Pacific Gold Corp. (A) 973 12,528
296,941
Metals - Miscellaneous 0.04%
Echo Bay Mines Ltd. 800 8,500
8,500
Mining - United States 0.07%
Cyprus-Amax Minerals Co. 600 $ 15,675
15,675
Miscellaneous 1.07%
Alco Std. Corp. 400 25,100
Allied Signal Inc. 2,000 68,000
Corning Inc. 1,600 47,800
Dial Corp. Del. 600 12,750
Teledyne Inc. (A) 400 8,050
Tenneco Inc. 1,200 51,000
Textron Inc. 600 30,225
Whitman Corp. 700 12,075
255,000
Money Center Banks 0.30%
Shawmut National Corp. 900 14,738
Wells Fargo & Co. 400 58,000
72,738
Natural Gas 0.40%
Columbia Gas System Inc. (A) 350 8,225
Consolidated National Gas Co. 600 21,300
Nicor Inc. 400 9,100
Oneok Inc. 200 3,600
Pacific Enterprises 600 12,750
Peoples Energy Corp. 250 6,531
Sonat Inc. 600 16,800
Williams Companies (A) 700 17,588
95,894
Natural Gas-Transporters 0.02%
Noram Energy Corp. 800 4,300
4,300
Office Equipment 0.15%
Pitney Bowes Inc. 1100 $ 34,925
34,925
Office Equipment & Supplies 0.38%
Amdahl Corp. (A) 800 8,800
Moore Ltd. 700 13,213
Xerox Corp. (A) 700 69,300
91,313
Oil-Integrated Domestic 5.03%
Amerada Hess 600 27,375
Amoco Corp. 3,500 206,937
Ashland Oil Inc. 400 13,800
Atlantic Richfield Co. 1,100 111,925
Exxon Corp. 8,600 522,450
Kerr McGee Corp. 350 16,100
Louisiana Land & Expl. Co. (A) 225 8,184
Maxus Energy Corp. (A) 900 3,038
Oryx Energy Company (A) 700 8,313
Pennzoil Co. 300 13,237
Phillips Petroleum Co. 2,000 65,500
Sun Company Inc. 700 20,125
Texaco Inc. 1,800 107,775
Unocal Corp. 1,700 46,325
USX Marathon Group 2,000 32,750
1,203,834
Oil-Integrated International 3.65%
Chevron Corporation 4,600 205,275
Mobil Corp. 2,700 227,475
Occidental Pete Corp. Del 2,200 42,350
Royal Dutch Petro 3,700 397,750
872,850
Oil & Gas Drilling 0.74%
Baker Hughes Inc. 1,000 $ 18,250
Burlington Resources Inc. 900 31,500
Dresser Industries Inc. (A) 1,300 24,537
Helmerich & Payne Inc. 175 4,484
McDermott International Inc. 400 9,900
Rowan Companies Inc. (A) 600 3,675
Schlumberger Ltd. 1,700 85,638
177,984
Oil Well Services & Equipment 0.11%
Halliburton Co. 800 26,500
26,500
Paper & Forest Products 1.54%
Boise Cascade Corp. 300 8,025
Champion International Corp. 600 21,900
Federal Paper Board Inc. 300 8,700
Georgia Pacific Corp. 600 42,900
International Paper Co. 900 67,838
James River Corp. VA 600 12,150
Louisiana Pacific Corp. 800 21,800
Mead Corp. 400 19,450
Potlatch Corp. 200 7,450
Scott Paper Company 500 34,562
Stone Container Corp. (A) 600 10,350
Temple Inland Inc. 400 18,050
Union Camp Corp. 500 23,563
Westvaco (A) 500 19,625
Weyerhauser Co. 1,400 52,500
368,863

Photographic 0.52%
Eastman Kodak Co. 2,400 $ 114,600
Polaroid Corp. 300 9,750
124,350
Pollution Control 0.79%
Browning Ferris Industries Inc. 1,400 39,725
Johnson Controls Inc. 300 14,700
Millipore Corp. 175 8,466
Rollins Environmental Svcs Inc. 400 1,950
Safety Kleen 400 5,900
Tyco Intl. Ltd. 500 23,750
WMX Technologies Inc. 3,500 91,875
Zurn Industries Inc. 100 1,800
188,166
Publishing 1.29%
American Greeting Corp. Class A 500 13,500
Deluxe Corp. 600 15,900
Donnelley R R & Sons Co. 1,100 32,450
Dow Jones & Co. Inc. 700 21,700
Dun & Bradstreet Crop. 1,200 66,000
Gannet Inc. 1,050 55,912
Harcourt General Inc. 500 17,625
John H. Harland Co. 200 4,000
Josten Inc. 300 5,588
Knight Ridder Inc. 400 20,200
McGraw Hill Inc. 350 23,406
Meredith Corp. 100 4,662
Tribune Co. 500 27,375
308,318
Publishing-Newspapers 0.18%
New York Times Co. A 700 $ 15,488
Times Mirror Co. Ser. A 900 28,237
43,725
Railroads 1.06%
Burlington Northern Inc. 600 28,875
Conrail 600 30,300
CSX Corp. 700 48,738
Norfolk Southern Corp. 900 54,562
Santa Fe Pacific Corp. 1,300 22,750
Union Pacific Corp. 1,500 68,438
253,663
Restaurants 0.68%
Luby's Cafeterias 200 4,475
McDonald's Corp. 4,800 140,400
Ryans Family Steak House Inc. (A) 400 3,000
Shoney's Inc. (A) 300 3,825
Wendys International Inc. 700 10,063
161,763
Retail Stores - Department Stores 1.79%
K-Mart Corp. 3,200 41,600
Longs Drug Stores Inc. 150 4,763
Nordstrom Inc. 600 25,200
TJX Companies Inc. 500 7,813
Walmart Stores Inc. (A) 15,800 335,749
Woolworth Corp. 900 13,500
428,625
Retail Stores-Drug 0.06%
Rite Aid Corp. (A) 600 14,025
14,025
Retail Stores- Food Chain 0.43%
American Stores Co. 1,000 $ 26,875
Brunos Inc. 500 4,188
Supervalu Inc. (A) 500 12,250
Sysco Corp. 1,300 33,475
Winn Dixie Stores Inc. 500 25,688
102,476
Retail Stores-General Merchandise 1.21%
Dayton Hudson Corp. 500 35,375
Dillard Department Stores Inc.Class A 800 21,400
Melville Corp. 700 21,612
Mercantile Stores Inc. 250 9,875
Penney, J C Inc. 1,600 71,400
Price/Costco Inc. (A) 1,500 19,312
Sears Roebuck & Co. 2,400 110,400
289,374
Retail Stores-Specialty 1.98%
Charming Shoppes Inc. 700 4,638
Circuit City Store Inc. 700 15,575
GAP Inc. 1,000 30,500
Home Depot Inc. 3,100 142,600
Lowes Cos., Inc. 1,200 41,700
May Dept. Stores Co. 1,750 59,062
Pep Boys Manny Moe & Jack 400 12,400
Tandy Corp. 400 20,050
The Limited Inc. 2,600 47,125
Toys R Us (A) 2,000 61,000
Walgreen Co. 900 39,375
474,025

Savings & Loans/Holding Companies 0.17%
Ahmanson H F & Co. 800 $ 12,900
Golden West Financial Corp. Del 400 14,100
Great Western Financial Corp. 900 14,400
41,400
Services 0.07%
National Education Corp. (A) 200 825
Service Corp. International 600 16,650
17,475
Steel 0.48%
Armco Inc. (A) 700 4,638
Bethlehem Stl Corp. (A) 800 14,400
Inco Ltd. 800 22,900
Inland Stl Industries Inc. (A) 300 10,537
Nucor Corp. 600 33,300
USX-US Steel 500 17,750
Worthington Industries Inc. 600 12,000
115,525
Telecommunications 0.42%
DSC Communications (A) 800 28,700
M/A Com. Inc. (A) 175 1,269
Northern Telecom Ltd. 1,700 56,738
Scientific Atlanta Inc. 700 14,700
101,407
Telephone 8.25%
Airtouch Communications (A) 3,500 101,936
Ameritech Corp. 3,900 157,462
AT&T 10,800 542,700
Bell Atlantic Corp. 3,000 149,250
Bellsouth Corp. 3,500 189,437
GTE Corp. 6,600 $ 200,475
M C I Corp. 4,700 86,363
Nynex Corp. 3,200 117,600
Pacific Telesis Group 2,900 82,650
Southwestern Bell 4,100 169,575
Sprint Corp. 2,400 66,300
US West Inc. 3,100 110,437
1,974,185
Textile/Apparel 0.01%
Oshkosh B Gosh Inc. Class A 100 1,400
1,400
Textiles- Apparel Manufacturers 0.51%
Brown Group 125 4,000
Hartmax Corp. (A) 225 1,322
Liz Claiborne Inc. 500 8,438
National Service Industries Inc. 350 8,969
Nike Corp. Class B 500 37,312
Reebok International Ltd. 600 23,700
Russell Corp. 275 8,628
Springs Industries Inc. Class A 125 4,625
Stride Rite Corp. 350 3,894
VF Corp. 450 21,881
122,769
Tobacco 1.84%
American Brands Inc. DEL 1,400 52,500
Philip Morris Cos. Inc. 6,000 345,000
UST Inc. 1,500 41,625
439,125

Truckers 0.29%
Consolidated Freightways Inc. 300 $ 6,713
Federal Express Corp. (A) 400 24,100
Navistar International Corp. (A) 500 7,563
Roadway Services Inc. 250 14,187
Ryder Systems Inc. 500 11,000
Yellow Corporations 200 4,775
68,338
TOTAL COMMON STOCKS -
(Cost - $23,413,924) 100.30% 24,002,453

COMMERCIAL PAPER
Beneficial Corp.
6% due January 19, 1995 100,000

TOTAL COMMERCIAL PAPER -
(Cost - $100,000) 0.42% 100,000

TOTAL INVESTMENTS -
(Cost - $23,513,924) 100.72% $24,102,453

Liabilities, less cash and other
assets - (0.72%) (172,881)

Net Assets - 100.00% $23,929,572

(A) - Non-income producing security

GOVERNMENT SECURITIES PORTFOLIO

U.S. GOVERNMENT OBLIGATIONS

U.S. Treasury Bill
5.03% due January 26, 1995 1,465,000 $1,459,678
U.S. Treasury Bill
5.00% due January 26, 1995 200,000 199,278
U.S. Treasury Bill
5.225% due February 9, 1995 1,085,000 1,078,702
U.S. Treasury Bill
5.44% due February 16, 1995 50,000 49,645
U.S. Treasury Bill
5.58% due May 11, 1995 1,535,000 1,503,832
U.S. Treasury Bill
5.44% due February 16, 1995 135,000 134,036
U.S. Treasury Bill
5.50% due March 23, 1995 125,000 123,383
U.S. Treasury Bill
5.62% due April 13, 1995 500,000 491,960
U.S. Treasury Bond
10.375% due November 15, 2012 500,000 595,000
U.S. Treasury Bond
7.125% due February 15, 2023 1,200,000 1,091,250
U.S. Treasury Note
5.875% due May 31, 1996 2,000,000 1,956,872
U.S. Treasury Note
7.125% due September 30, 1999 2,350,000 2,283,906
U.S. Treasury Note
7.75% November 30, 1999 1,000,000 996,250
U.S. Treasury Note
7.875% due November 15, 2004 500,000 501,405

TOTAL INVESTMENTS -
(Cost - $12,568,351) 98.95% $12,465,197
Cash and other assets
less liabilities 1.05% $ 132,875

Total Net Assets 100.00% $12,598,072

MONEY MARKET PORTFOLIO

COMMERCIAL PAPER

American Express Credit Corp
5.85% due January 20, 1995 900,000 $ 900,000
Anheuser Busch
5.85% due January 13, 1995 1,300,000 1,297,183
Associates Corp.
6.0% due January 19, 1995 650,000 650,000
Associates Corp.
6.02% due January 23, 1995 750,000 750,000
AT&T
6.10% due February 9, 1995 1,000,000 993,222
Bankers Trust Floating Rate Note
due June 20, 1995 500,000 500,000
Bell South Telecom.
5.77% due February 24, 1995 1,086,000 1,076,427
Beneficial Corp.
6.07% due January 12, 1995 575,000 575,000
Beneficial Corp.
6.0% due January 5, 1995 175,000 175,000
Beneficial Corp.
6.09% due February 31, 1995 650,000 650,000
Ford Motor Cred. Corp.
6.05% due January 27, 1995 700,000 700,000
Ford Motor Cred. Corp.
5.95% due January 6, 1995 130,000 130,000
Ford Motor Cred. Corp.
6.15% due January 28, 1995 610,000 610,000
GE Cap.
5.47% due January 3, 1995 1,200,000 1,199,453
Household Finance Corp.
5.875 due January 30, 1995 475,000 475,000
Household Finance Corp.
6.0% due January 18, 1995 930,000 $ 930,000
International Lease Finance
5.60% due January 17, 1995 510,000 508,651
Intl Lease
5.75% due February 6, 1995 520,000 516,927
McGraw Hill
6.00% due January 12, 1995 700,000 698,600
McGraw Hill
5.91% due January 6, 1995 600,000 599,405
Merrill Lynch
5.78% due February 15, 1995 650,000 645,199
Merrill Lynch
5.80% due January 6, 1995 440,000 439,575
Morgan Stanley
5.96% due January 5, 1995 550,000 549,545
Morgan Stanley Floating Rate
due May 17, 1995 500,000 500,000
Morgan Stanley Group
6.08% due January 17, 1995 350,000 348,995
Northern Illinois Gas Co.
6.00% due January 4, 1995 1,300,000 1,299,133
Pepsico Floating Rate Note
due April 13, 1995 500,000 500,000
PHH Corp.
5.90% due January 10, 1995 1,100,000 1,098,197
Philip Morris
5.80% due January 25, 1995 1,300,000 1,294,764
Pitney Bowes Credit Corp.
5.73% due January 26, 1995 1,300,000 $1,294,620
Prudential Funding Corp.
5.8% due January 24, 1995 825,000 825,000
Prudential Funding Corp.
5.88% due January 31, 1995 610,000 610,000
Raytheon
5.97% due January 5, 1995 1,320,000 1,318,906
Sara Lee
5.91% due January 9, 1995 1,000,000 998,513
Southwestern Bell
6.08% due February 21, 1995 650,000 644,292
Southwestern Bell
5.95% due January 20, 1995 550,000 548,182
USWest
5.58% due January 9, 1995 1,220,000 1,218,298

TOTAL COMMERCIAL PAPER -
(Cost - $28,068,087) 83.71% 28,068,087

US GOVERNMENT SECURITIES

Fed. Farm Cred. Bank
5.35% due January 11, 1995 750,000 748,790
Fed. Farm Cred. Bank
6.01% due March 2, 1995 1,000,000 989,816
FNMA
5.80% due February 27, 1995 1,500,000 1,485,983
FNMA
5.57% due January 11, 1995 625,000 623,936
FNMA
5.70% due February 17, 1995 1,000,000 992,400
US Treasury Bills
5.62% due April 6, 1995 580,000 571,308

TOTAL U.S. GOVERNMENT SECURITIES -
(Cost - $5,412,233) 16.14% 5,412,233

TOTAL INVESTMENTS -
(Cost - $33,480,320) 99.86% $33,480,320

Cash and other assets
less liabilities 0.14% 48,419

Net Assets 100.00% $33,528,739
TOTAL RETURN PORTFOLIO

U.S. GOVERNMENT SECURITIES

Agency-Government Sponsored 5.40%
Federal Home Loan Bank
6.32% due December 4, 1997 500,000 $ 478,965
Federal Home Loan Bank
8.25% due September 25, 1996 100,000 100,631
Federal Home Loan Bank
8.25% May 27, 1996 150,000 150,801
Federal National Mortgage
7.05% due December 10, 1998 250,000 240,391
FNMA
5.80% due February 27, 1995 585,000 579,534
FNMA
6.03% due March 8, 1995 245,000 242,250
FNMA
5.45% due October 10, 2003 100,000 83,300
1,875,872
U.S. Government Obligations 7.75%
U.S. Treasury Bond
6.25% due August 15, 2023 1,000,000 812,187
U.S. Treasury Note
5.75% due August 15, 2003 350,000 304,171
U.S. Treasury Note
7.875% due August 15, 2001 300,000 300,375
U.S. Treasury Note
7.125% due September 30, 1999 800,000 777,500
U.S. Treasury Note
7.25% due November 30, 1996 500,000 496,093
2,690,326
TOTAL US GOVERNMENT SECURITIES 13.16%

(Cost - $4,676,511) 4,566,198

PREFERRED STOCK

Broker-Dealers 0.46%
Morgan Stanley Group 5,000 $ 161,250
161,250
Real Estate 0.22%
Prime Retail 4,000 76,000
76,000
Metals/Mining 0.49%
Reynolds Metals Prfd 3,500 169,312
169,312
TOTAL PREFERRED STOCK 1.17%
(Cost - $442,876) 406,562

COMMON STOCKS

Aerospace /Defense 0.23%
Boeing Co. 1,700 79,475
79,475
Automobiles 0.56%
Harley Davidson Inc. 7,000 196,000
196,000
Banks 0.22%
Nationsbank Corp. 1,700 76,712
76,712
Beverages-Alcoholic 0.21%
Anheuser Busch Cos. Inc 1,400 71,225
71,225
Beverages-Soft Drinks 0.21%
Pepsico Inc. 2,000 72,500
72,500
Broadcast Media 1.67%
Comcast UK Cable (A) 10,000 $ 160,000
United Video Satellite (A) 5,400 129,600
Viacom Class A (A) 800 33,300
Viacom Class B (A) 6,061 246,228
Viacom Variable Rights (A) 10,000 11,250
580,378
Broadcast Media/Cable TV 1.71%
Comcast Corp. Class A Spl 4,000 62,750
Grupo Televisa SA de CV (A) 1,600 52,109
Infinity Broadcast Corp. Class A (A) 6,200 195,300
Jones Intercable Invest (A) 3,000 32,625
Telecommunications Inc. 3,500 76,125
Time Warner 5,000 175,625
594,534
Business Services 0.31%
Cherry Corp. (A) 7,500 108,750
108,750
Chemicals-Other 0.87%
Air Products & Chems. Inc. 5,000 223,125
DuPont E I De Nemours 1,400 78,750
301,875
Chemicals-Specialty 0.08%
Triple S Plastics (A) 2,500 26,875
26,875
Computer Software & Services 2.03%
Compuware Corp. (A) 3,300 118,800
Keane Inc. (A) 4,000 95,000
Sterling Software (A) 7,000 257,250
Systems Software Assoc. (A) 14,800 233,100
704,150

Computer Systems 0.47%
EMCare Holdings 7,000 $ 101,500
EP Technologies (A) 7,000 63,000
164,500
Conglomerates 0.70%
Career Horizons Inc. (A) 4,000 65,000
ITT Corp. 2,000 177,250
242,250
Containers-Metal & Glass 1.32%
Aptar Group 8,000 230,000
Crown Cork & Seal 6,000 226,500
456,500
Drugs 0.54%
Schering Plough 1,300 96,200
Watson Pharmeceutica (A) 3,500 91,875
188,075
Electronics 3.75%
AER Energy Resources (A) 20,000 90,000
Amtel Corp. (A) 6,000 201,000
California Microware Inc. (A) 5,400 197,100
Integrated Device Technology (A) 2,100 61,950
Itron Inc. (A) 6,000 121,500
Motorola Inc. 5,000 289,375
Reptron Electronics (A) 3,000 26,625
Three Five Systems Inc. (A) 1,500 54,562
U.S. Robotics (A) 5,000 216,250
Watsco Inc. Class A (A) 2,500 41,563
1,299,925
Electronics-Instrumentation 0.62%
Sensormatic Elec. 6,000 216,000
216,000

Electronics-Semiconductor 0.21%
Tower Semiconductor Ltd. (A) 6,700 $ 73,700
73,700
Financial Services Misc. 1.58%
Federal Realty 2,000 41,250
First Financial Management 4,000 246,500
Health & Rehabilitation PPT 5,000 66,875
Omega Healthcare Investors 8,000 193,000
547,625
Food Processing 0.49%
Archer Daniels Midland 4,358 89,884
Unilever 700 81,550
171,434
Healthcare-Diversified 0.79%
Johnson & Johnson 5,000 273,750
273,750
Healthcare-Miscellaneous 2.90%
Dentsply International 3,000 94,500
Inphynet (A) 17,000 212,500
Integrated Health Services Inc. 7,300 288,350
Interim Services (A) 7,000 172,375
Orthodontic Centers of America (A) 17,000 212,500
Sun Healthcare Group (A) 1,000 25,375
1,005,600
Homebuilding 0.09%
Grupo Mexicano De Desarrollo (A) 3,444 30,566
30,566
Household Furnishings 0.35%
Mikasa (A) 7,500 122,812
122,812

Insurance-Life 0.74%
American General Corp. 5,900 $ 166,675
American Intl Group Inc. 937 91,826
258,501
Insurance-Multi Line 0.15%
USLife Corp. 1,500 52,313
52,313
Leisure Time 0.21%
Walt Disney Co. 4,000 184,500
184,500
Machinery-Diversified 0.47%
Illinois Tool Works 2,000 87,500
Watsco Class B (A) 4,500 74,250
161,750
Medical Products 0.47%
Abbott Labs 2,500 81,563
Becton Dickinson & Co. 1,700 81,600
163,163
Miscellaneous 0.72%
Alco Std. Corp. 4,000 251,000
251,000
Office Equipment & Supplies 0.57%
Xerox Corp. 2,000 198,000
198,000
Oil-Integrated Domestic 1.33%
Amoco Corp. 3,900 230,588
Enron Global Power Pipelines (A) 8,000 176,000
Northern Border Partners 2,600 53,950
460,538

Oil-Integrated International 1.02%
Mobil Corp. 2,300 $ 193,775
Royal Dutch Petroleum 1,500 161,250
355,025
Paper & Forest Products 0.44%
Temple Inland 3,400 153,425
153,425
Publishing 0.51%
Harcourt General 5,000 176,250
176,250
Railroads 0.41%
CSX Corp. 900 62,663
Norfolk Southern Corp. 1,300 78,812
141,475
Real Estate 0.65%
Bay Apartment Communities 3,000 60,375
Beacon Properties 4,500 85,500
Duke Realty Invest. 8,000 226,000
Equity Residential Investors 7,000 210,000
First Industry Realty 2,000 39,000
Healthcare Realty Trust 6,000 126,000
Macerich Co. 3,500 74,813
Paragon Group 10,000 190,000
Storage USA 7,000 192,500
1,204,188
Retail Stores-General Mechandise 0.45%
Horizon Outlet Centers Inc. 6,000 156,750
156,750
Retail Stores-Specialty 0.81%
General Nutrition Cos. Inc. (A) 6,000 174,000
Office Max (A) 4,000 106,000
280,000

Steel 0.15%
Reliance Steel 4,000 $ 50,500
50,500
Telecommunications 0.06%
Ericcson (A) 2,000 110,251
National Wireless Holdings I (A) 2,300 20,987
131,238
Telephone 0.70%
AT&T 3,800 190,950
US West Inc. 1,500 53,438
244,388
Textile/Apparel 0.50%
Fruit of the Loom (A) 1,700 45,900
Tommy Hilfiger Corp. (A) 2,800 126,350
172,250
Tobacco 0.25%
Philip Morris Cos. Inc. 1,500 86,250
86,250
Truckers 0.42%
MTL Inc. (A) 13,000 146,250
146,250

TOTAL COMMON STOCKS -
(Cost - $11,416,991) 12,632,965

BONDS

Aerospace/Defense 0.63%
Martin Marietta
6.5% due April 15, 2003 250,000 220,069
220,069

Automobiles 0.25%
Ford Motor
6.625% due June 30, 2003 100,000 $ 87,921
87,921
Beverages-Alcoholic 0.92%
Canadaigua Wine
8.75% due December 15, 2003 350,000 318,500
318,500
Broker-Dealers 0.37%
Salomon
6.75% due September 15, 2003 150,000 126,882
126,882
Computer Systems 0.53%
Compaq
7.25% due March 15, 2004 200,000 183,625
183,625
Conglomerates 0.58%
Hercules
6.625% due June 1, 2003 120,000 107,480
WR Grace
7.4% due February 1, 2000 100,000 94,429
201,909
Drugs 1.15%
Merck & Co.
7.75% due May 1, 1996 400,000 398,842
398,842
Electric Companies 1.01%
Georgia Power
6.125% due September 1, 1999 75,000 68,250
Montana Power
7.5% due April 1, 2001 50,000 47,626
Niagara Mohawk
7.375% due August 1, 2003 100,000 $ 88,537
Philadelphia Elec.
8.0% due April 1, 2002 150,000 145,250
349,663
Financial Services 1.70%
Associates
6.25% due March 15, 1999 350,000 321,767
Commercial Credits
6.0% due June 15, 2000 150,000 134,022
Dean Witter
6.875% due March 1, 2003 150,000 134,176
589,965
Financial Services Misc. 0.64%
VF Corp.
6.625% due March 15, 2003 250,000 222,207
222,207
Insurance-Multi Line 0.38%
Allstate
6.75% due June 15, 2003 150,000 132,094
132,094
Leisure Time 1.37%
Carnival Mtn.
7.0% due May 5, 1999 500,000 473,994
473,994
Major Banks-Regional 1.41%
Nationsbank
5.375% due December 1, 1995 500,000 490,141
490,141

Money Center Banks 0.65%
Citicorp
7.125% due March 15, 2004 250,000 $ 225,603
225,603
Miscellaneous 1.45%
Harsco
6.0% due September 15, 2003 150,000 126,993
Rhone Poulenc
6.75% due October 15, 1999 300,000 279,829
Tenneco
8.0% due November 15, 1999 100,000 96,000
502,822
Natural Gas 0.27%
Consolidated Natural Gas
5.875% due October 1, 1998 100,000 92,360
92,360
Oil-Integrated International 0.29%
BP American
8.75% due February 1, 2003 100,000 101,751
101,751
Paper & Forest Products 0.96%
International Paper
7.5% due May 15, 2004 250,000 235,561
James River
8.375% due November 15, 2001 100,000 98,290
333,851
Railroads 0.60%
CSX
9.5% due November 15, 1995 65,000 66,015
Union Pacific
7.0% due June 15, 2000 150,000 141,082
207,097
Restaurants 0.69%
McDonald's
7.735% due July 15, 2002 250,000 $ 238,750
238,750
Retail Stores-Department Stores 0.82%
Walmart
7.5% due May 5, 2004 300,000 284,716
284,716
Retail Stores-Specialty 0.27%
Hertz
7.625% due August 1, 2002 100,000 94,918
94,918
Telecommunications 0.57%
MFS Communications (A)
due January 15, 2004 150,000 88,875
Paging Network
8.875% due February 1, 2006 250,000 197,500
286,375
Telephone 1.38%
GTE Florida
7.5% due August 1, 2002 50,000 47,204
GTE Midwest
7.625% due January 1, 2003 50,000 47,484
Norwest Financial
6.25% due February 15, 1997 400,000 384,635
479,323
TOTAL BONDS-
(Cost - $7,043,362) 6,643,378

CONVERTIBLE BONDS

Gaming/Hotel 0.27%
Argosy Gaming
12.0% due June 1, 2001 100,000 $ 94,250
94,250
Real Estate 0.14%
Liberty Property
8.0% due July 1, 2001 50,000 48,500
48,500
TOTAL CONVERTIBLE BONDS-
(Cost - $150,000) 142,750

COMMERCIAL PAPER

Associates Corp.
5.75% due January 19, 1995 115,000 115,000
Associates Corp.
6.07% due February 3, 1995 330,000 330,000
Associates Corp. of North America
6.07% due January 19, 1995 165,000 165,000
AT&T Cap. Corp.
5.42% due January 3, 1995 665,000 664,700
BellSouth Corp.
6.00% due January 9, 1995 700,000 698,950
Beneficial
5.77% due January 27, 1994 450,000 450,000
Beneficial Corp
5.95% due January 19, 1995 150,000 150,000
Federal Farm Credit
5.28% due January 11, 1995 725,000 723,830
FMCC
5.72% due January 17, 1995 120,000 $ 120,000
FMCC
5.28% due January 23, 1995 100,000 100,000
Ford Motor Credit Corp
6.05% due January 17, 1995 120,000 120,000
Ford Motor Credit Corp
6.0% due January 13, 1995 360,000 360,000
GE Capital
5.5% due January 9, 1995 500,000 500,000
HFC
5.75% due February 15, 1995 550,000 550,000
McGraw Hill
6.00% due January 12, 1995 700,000 698,600
Morgan Stanley Group
6.08% due January 10, 1995 415,000 414,299
PHH Corp.
6.00% due January 27, 1995 700,000 696,850
Philip Morris
5.45% due January 17,1995 700,000 698,198
Prudential Funding Corp.
5.84% due January 23, 1995 220,000 220,000
Raytheon Co.
5.95% due January 5, 1995 575,000 574,525
Sara Lee
6.00% due January 10, 1995 475,000 474,208
Southwestern Bell Cap. Corp.
6.00% due February 21, 1995 700,000 695,162
US West Capital Funding
6.05% due January 18, 1995 675,000 672,958

TOTAL COMMERCIAL PAPER - 29.37%
(Cost - $10,192,280) $10,192,280

TOTAL INVESTMENTS
(Cost - $33,922,021) 99.64% $34,584,133

Cash and other assets
less liabilities 0.36% 124,123

Net Assets 100.00% $34,708,256
</TABLE>

Life of Virginia Series Fund, Inc.

Notes to Financial Statements

December 31, 1994

1. DESCRIPTION OF ENTITY

Life of Virginia Series Fund, Inc. (the Fund), incorporated in Virginia
in 1984, is registered under the Investment Company Act of 1940, as an
open-end diversified management investment company whose shares are sold
to the Life of Virginia Separate Accounts (the Separate Accounts) and to
the Aon Corporation Savings Plan, a retirement savings plan maintained
by Aon Corporation (Aon) for its employees and subsidiaries under the
provisions of Section 401(K) of the Internal Revenue Code. The Separate
Accounts fund certain benefits for flexible and single premium variable
life insurance and annuity policies issued by The Life Insurance Company
of Virginia (Life of Virginia). Life of Virginia is an indirect
wholly-owned subsidiary of Aon.

To facilitate the commencement of operations, in 1984, Life of Virginia,
through its Separate Account I, invested $500,000 in 50,000 shares of
capital stock of the Common Stock portfolio of the Fund and in 1985
invested $2,000,000 in 200,000 shares, $500,000 in 50,000 shares and
$1,000,000 in 100,000 shares of capital stock of the Government
Securities, Money Market and Total Return portfolios, respectively, of
the Fund. In 1987, Life of Virginia, through its Separate Account I,
invested an additional $500,000 in 49,950 shares of capital stock of
the Money Market portfolio of the Fund. As of December 31, 1994, Life
of Virginia owned $1,287,386 in 81,869 shares, $2,174,582 in 228,629
shares, $1,581,211 in 155,430 shares and $1,146,083 in 85,510 shares of
the Common Stock, Government Securities, Money Market and Total Return
portfolios, respectively.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Valuation of Investments: Securities traded on a national exchange are
valued at the last reported sales price on the last business day of the
fiscal year. Securities traded on the over-the-counter market are stated
at a price between the bid and asked quotations. Securities for which
quotations are not readily available are valued at the estimated fair
value obtained from yield data relating to instruments or securities
with similar characteristics. Commercial paper is purchased and valued
at par which approximates fair value. Short-term securities purchased at
a premium or discount are valued at amortized cost, which approximates
fair value.

Investment Transactions and Income: Security transactions are accounted
for on the trade date (the date the order to buy or sell is executed).
Interest income is recorded on the accrual basis and dividend income is
reported on the ex-dividend date. Realized gains and losses on
investments are determined on a first-in, first-out basis. Discounts and
premiums on securities purchased are amortized over the life of the
respective securities.

Distribution to Shareholders: Distributions of net investment income and
capital gains are determined in accordance with income tax regulations
and are declared and paid yearly. The Fund has no material differences
between book and tax income.

3. FEDERAL INCOME TAXES

The Fund's policy is to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no
federal income tax provision is required. The Government Securities
Portfolio s accumulated net realized loss on sales of investments for
the Federal income tax purposes at December 31, 1994 of $843,165 is
available to offset future tax gains. If unused, this loss carryover
expires in 2002.

4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Under the terms of an investment advisory contract with Aon Advisors,
Inc. (Investment Advisor), a subsidiary of Aon, investment advisory fees
are based on a percentage of aggregate average daily net assets and will
be deducted from the Fund daily and paid monthly. The schedule of
investment advisory fees follows:

Common Stock Index Fund: .35%

Government Securities Portfolio, Money Market Portfolio and Total Return
Portfolio:

Aggregate Average Daily Net Assets Fee Percentage
(in millions) (on an annual basis)
First $100 .50%
Next 100 .45
Next 100 .40
Next 100 .35
Over 400 .30

Effective July 1, 1994, the investment advisor agreed to waive a portion
of the advisory fee for the Money Market Portfolio such that the
effective annual rate is .10%.

Prior to May 1, 1993 the schedule of fees for the investment advisor
were as follows:

Aggregate Average Daily Net Assets Fee Percentage
(in millions) (on an annual basis)
First $250 .50%
Next 50 .45
Next 100 .40
Next 400 .35
Over 800 .30

4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED)

The Investment Advisor provides administrative services to the Fund and
manages its business affairs, including personnel, facilities and
equipment and all legal, accounting and other costs incurred in the
operation of the Fund. Expenses of each portfolio of the Fund are
subject to reimbursement to the extent that ordinary business expenses
of the Fund (including the advisory fees but excluding attorneys' fees,
court judgments, decrees or awards, or any other litigation costs in
legal actions involving the Fund, or costs relating to the
indemnification of directors, officers, or employees of the Fund, not
covered by directors' and officers' liability insurance) in any year
exceed (a) 1.5% of the first $30 million of aggregate average daily net
assets and 1% of any excess of the aggregate average daily net assets
over $30 million of the Government Securities and Total Return
portfolios of the Fund and (b) .75% of the average daily net assets of
the Common Stock Index and Money Market portfolios of the Fund.

Certain officers and directors of the Fund were also officers and
directors of the Investment Advisor, Life of Virginia and Aon. The Fund
incurred fees and expenses for attendance by unaffiliated directors at
meetings during 1994 of $16,250.

5. CAPITAL STOCK

At December 31, 1994, there were 250,000,000 shares of $.01 par value
common stock authorized in each portfolio of the Fund. An analysis of
net assets at December 31, 1994 follows:

<TABLE>
Common Stock Government
Index Securities Money Market Total Return
Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C>
Common stock - $.01
par value $ 15,218 $ 13,245 $ 32,958 $ 25,896

Accumulated net realized
loss on sales of
investments - (843,165) - -
Paid in capital 23,324,818 13,525,310 33,495,781 34,001,713
Undistributed net
investment income 1,007 5,836 - 18,535
Unrealized gain (loss)
on investments 588,529 (103,154) - 662,112

Net assets $23,929,572 $12,598,072 $33,528,739 $34,708,256
</TABLE>

A summary of capital stock transactions follows:

<TABLE>
Common Stock Government
Index Securities Money Market Total Return
Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C>
Balance at January 1,
1993 303,835.147 479,657.981 582,260.540 557,437.248

Shares sold 151,068.875 411,160.587 1,900,890.828 356,096.103
Shares issued to
shareholders in rein-
vestment of dividends
and distributions 93,297.140 63,866.427 18,454.720 74,267.416

Total issued 244,366.015 475,027.014 1,919,345.548 430,363.519

Shares reacquired (30,534.225) (202,840.146) (1,519,106.620) (59,896.297)
Net increase in
shares 213,831.790 272,186.868 400,238.928 370,467.222

Balance at
December 31, 1993 517,666.937 751,844.849 982,499.468 927,904.470

Shares sold 1,165,778.229 835,658.172 8,746,017.333 1,876,652.288
Shares issued to
shareholders in rein-
vestment of dividends
and distributions 24,742.640 56,125.692 91,648.456 99,535.585

Total issued 1,190,520.869 891,783.864 8,837,665.789 1,976,187.873

Shares reacquired (186,424.404) (319,102.858) (6,524,361.055) (314,489.726)

Net increase in
shares 1,004,096.465 572,681.006 2,313,304.734 1,661,698.147

Balance at
December 31, 1994 1,521,763.402 1,324,525.855 3,295,804.202 2,589,602.617
</TABLE>

6. INVESTMENTS

Effective May 1, 1993, the Fund changed the name of the Common Stock and
Bond portfolios to the Common Stock Index and Government Securities
portfolios, respectively, in conjunction with changing the portfolios
underlying investment strategies. See the May 1993 Prospectus for
additional information.

Purchases and sales, excluding maturities, of investment securities
during 1994 were as follows:
<TABLE>
<CAPTION>
COMMON STOCK GOVERNMENT
INDEX SECURITIES MONEY MARKET TOTAL RETURN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
PURCHASES
U.S. Government
and Agency
Obligations - $ 55,010,335 $ - $ 15,581,804
Corporate bonds - - - 8,451,256
Commercial paper $ 13,475,000 - $ 231,688,066 58,234,972
Common stock 16,416,651 - - 12,002,929

Total purchases $ 29,891,651 $ 55,010,335 $ 231,688,066 $ 94,270,961

SALES
U.S. Government
and Agency
Obligations - $ 43,418,016 - $ 2,265,129
Corporate bonds - - - 3,774,581

Commercial paper $ 4,425,000 - $ 2,824,292 2,500,000
Common stock 629,455 - - 5,675,464

Total sales $ 5,054,455 $ 43,418,016 $ 2,824,292 $ 14,215,174
</TABLE>

At December 31, 1994, based on cost for federal income tax purposes, net
unrealized appreciation of portfolio securities consisted of the
following:
<TABLE>
<CAPTION>

COMMON STOCK GOVERNMENT
INDEX SECURITIES MONEY MARKET TOTAL RETURN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
Appreciated Securities $ 1,490,724 $ 18,750 $ - $ 1,618,448
Depreciated Securities (902,195) (121,904) - (956,336)
Net unrealized
appreciation
(depreciation) $ 588,529 $ (103,154) $ - $ 662,112

</TABLE>

<TABLE>
<CAPTION>
COMMON STOCK INDEX
PORTFOLIO COMMON STOCK PORTFOLIO
1994 1993 1992 1991 1990

<S> <C> <C> <C> <C> <C>
Net asset value at beginning of
period $15.99 $17.04 $16.21 $12.75 $14.67

Net investment income .22 .31 .35 .30 .41
Net realized and unrealized gain
(loss) on investments (.23) 2.16 1.01 4.08 (1.91)
Income (loss) from operations (.01) 2.47 1.36 4.38 (1.50)

Distributions to shareholders from:
Net investment income (.22) (.31) (.35) (.30) (.41)
Net realized gain (.04) (3.21) (.17) (.61) -
Tax return of capital - - (.01) (.01) (.01)

(.26) (3.52) (.53) (.92) (.42)

Increase (decrease) in net asset
value (.27) (1.05) .83 3.46 (1.92)
Net asset value at end of period $15.72 $15.99 $17.04 $16.21 $12.75

Total Return (0.06%) 14.52% 8.39% 34.43% (10.22%)

Ratios:

Net assets at end of period $23,929,572 $8,276,765 $5,178,316 $4,429,044 $3,154,412

</TABLE>

<TABLE>
<CAPTION>
GOVERNMENT SECURITIES
PORTFOLIO BOND PORTFOLIO
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $10.49 $10.54 $10.54 $9.60 $9.76

Net investment income .42 .45 .69 .75 .64
Net realized and unrealized gain (loss)
on investments (.98) .50 .06 .99 (.15)
Income from investment operations (.56) .95 .75 1.74 .49

Distributions to shareholders from:
Net investment income (.42) (.45) (.69) (.75) (.64)
Net realized gain - (.54) (.05) (.04) -
Tax return of capital - (.01) (.01) (.01) (.01)

(.42) (1.00) (.75) (.80) (.65)

Increase (decrease) in net asset value (.98) (.05) - .94 (.16)
Net asset value at end of period $9.51 $10.49 $10.54 $10.54 $9.60

Total Return (5.34%) 8.96% 7.13% 18.16% 5.05%

Ratios:

Ratio of operating expenses to average
net assets .81% .86% .99% .97% .96%
Ratio of net investment income to average
net assets 5.44% 5.41% 6.69% 7.73% 7.78%
Portfolio turnover 565.65% 112.86% 14.43% 23.24% 56.62%

Net assets at end of period $12,598,072 $7,884,928 $5,053,246 $4,444,984 $3,701,835
</TABLE>

Due to the significant increase in Fund shares related to the Aon
Savings Plan, the net changes in the 1994 Net Asset Value per share as
calculated in accordance with the requirements of Form N-1A are not
commensurate with the Statement of Changes in Net Assets.
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $10.08 $10.04 $10.00 $9.96 $10.18

Net investment income .29 .25 .31 .53 .73
Net realized and unrealized gain (loss)
on investments .09 (.01) - - .01

Income from operations .38 .24 .31 .53 .74
Distributions to shareholders from:
Net investment income (.29) (.20) (.26) (.49) (.94)
Net realized gain - - - - (.01)
Tax return of capital - - (.01) - (.01)

(.29) (.20) (.27) (.49) (.96)

Increase (decrease) in net asset value .09 .04 .04 .04 (.22)
Net asset value at end of period $10.17 $10.08 $10.04 $10.00 $9.96

Total Return 3.77% 2.39% 3.10% 5.32% 7.28%

Ratios:
Ratio of operating expenses to average
net assets .42% .75% .75% .75% .75%
Ratio of net investment income to average
net assets 4.04% 2.53% 3.06% 5.43% 7.02%
Portfolio turnover N/A N/A N/A N/A N/A

Net assets at end of period $33,528,739 $9,904,184 $5,845,136 $4,092,986 $3,464,661
</TABLE>

Effective July 1, 1994, the investment advisor agreed to waive a portion
of the advisory fee for the Money Market Portfolio. Absent this waiver,
the ratio of expenses to average net assets and the ratio of net
investment income to average net assets would have been .70% and 3.76%,
respectively, for 1994.

Total Return Portfolio
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $13.59 $13.00 $12.62 $10.59 $11.60

(.53) (1.18) (.57) (.87) (.56)

Increase (decrease) in net asset value (.19) .59 .38 2.03 (1.01)
Net asset value at end of period $13.40 $13.59 $13.00 $12.62 $10.59

Total Return 2.54% 13.67% 7.53% 27.45% (3.85%)

Ratios:

Ratio of operating expenses to average
net assets .77% 0.85% 0.98% 1.11% 1.10%
Ratio of net investment income to average
net assets 4.00% 3.80% 4.13% 4.39% 4.81%

Portfolio turnover 66.92% 48.12% 12.46% 32.58% 41.80%

Net assets at end of period $34,708,256 $12,609,407 $7,247,897 $4,608,823 $2,937,613
</TABLE>

PART C - ADDITIONAL INFORMATION

PART C - OTHER INFORMATION

LIFE OF VIRGINIA SERIES FUND, INC.

Item 24. Financial Statements and Exhibits

(a) Financial Statements

The financial statements of Life of Virginia Series Fund, Inc. are
included in Part B of post-effective amendment No. 15 to this registration
statement.

(b) Exhibits

1.(a) Articles of Incorporation of Life of Virginia Series Fund, Inc.
incorporated herein by reference to the initial Form N-1A
registration statement, File No. 2-91369.

1.(b) Articles of Amendment to the Articles of Incorporation of Life of
Virginia Series Fund, Inc. incorporated herein by reference to
post-effective amendment #1 to this Form N-1A registration
statement (File No. 2-91369), filed with the Securities and
Exchange Commission on 6/28/85.

1.(c) Amended and restated Articles of Incorporation of Life of Virginia
Series Fund, Inc.

2.(a) By-laws of Life of Virginia Series Fund, Inc. incorporated herein
by reference to the initial Form N-1A registration statement, File
No. 2-91369.

2.(b) Amendment to By-laws of Life of Virginia Series Fund, Inc.
incorporated herein by reference to post-effective amendment #1 to
this Form N-1A registration statement (File No. 2-91369), filed
with the Securities and Exchange Commission on 6/28/85.

2.(c) Amended By-laws of Life of Virginia Series Fund, Inc.,
incorporated herein by reference to post-effective amendment #8 to
this Form N-1A registration statement (File No. 2-91369), filed
with the Securities and Exchange Commission on 4/26/90.

2.(d) Amendment to By-Laws of Life of Virginia Series Fund, Inc.,
incorporated herein by reference to post-effective amendment #10
to this Form N-1A registration statement (File No. 2-91369), filed
with the Securities and Exchange Commission on 3/2/92.

2.(e) Amendment to By-Laws of Life of Virginia Series Fund, Inc.
incorporated herein by reference to post-effective amendment #12
to this Form N-1A registration statement (File No. 2-91369), filed
with Securities and Exchange Commission on 4/29/93.

2.(f) Amended and restated By-Laws of Life of Virginia Series Fund,
Inc., dated January 25, 1995.

3. Not Applicable

4. Not Applicable

5.(a) Investment Advisory Agreement between Life of Virginia Series
Fund, Inc. and Aon Advisors, Inc., dated May 1, 1993 incorporated
herein by reference to post-effective amendment #13 to this
registration statement (File No. 2-91369), filed with the
Securities and Exchange Commission on 4/29/94.

5.(b) New Investment Advisory Agreement between Life of Virginia Series
Fund, Inc. and Aon Advisors, Inc. dated April 27, 1995, covering
the International Equity Portfolio.

5.(c) New Investment Advisory Agreement between Life of Virginia Series
Fund, Inc. and Aon Advisors, Inc. dated April 27, 1995, covering
the Real Estate Securities Portfolio.

5.(d) Form of Investment Sub-Advisory Agreement between Aon Advisors,
Inc. and Perpetual Portfolio Management, Limited.

5.(e) Form of Investment Sub-Advisory Agreement between Aon Advisors,
Inc. and Genesis Realty Capital Management, L.P.

6. Underwriting Agreement between Life of Virginia Series Fund, Inc.
and Forth Financial Securities Corporation, dated June 30, 1994.

7. Not Applicable

8.(a) Custody Agreement between Life of Virginia Series Fund, Inc. and
Crestar Bank incorporated herein by reference to post-effective
amendment #4 to this Form N-1A registration statement (File No. 2-
91369), filed with the Securities and Exchange Commission on
4/10/87.

8.(b) Form of Custody Agreement between Life of Virginia Series Fund,
Inc. and Firstar Trust Company.

8.(c) Form of Sub-custody Agreement between Firstar Trust Company and
Chase Manhattan Bank, N.A.

9.(a)(i) Stock Sale Agreement incorporated herein by reference to
pre-effective amendment #1 to this Form N-1A registration
statement (File No. 2-91369), filed with the Securities and
Exchange Commission on 12/21/84.

9.(a)(ii)Stock Sale Agreements for Separate Accounts III and 4;
Amendments to Stock Sale Agreements for Separate Accounts I and
II incorporated herein by reference to post-effective amendment #7
to this Form N-1A registration statement (File No. 2-91369), filed
with the Securities and Exchange Commission on 4/19/89.

9.(a)(iii) Stock Sale Agreement relating to the International
Equity Portfolio and the Real Estate Securities
Portfolio. (To be filed by amendment.)

9.(b) Indemnity Agreement between The Life Insurance Company of Virginia
and Aon Advisors, Inc., dated May 1, 1993, incorporated herein by
reference to post-effective amendment #13 to this registration
statement (File No. 2-91369), filed with the Securities and
Exchange Commission on 4/29/94.

9.(c) Form of Accounting Services Agreement between Life of Virginia
Series Fund, Inc. and Firstar Trust Company.

10. Opinnion and consent of William E.Daner, Jr., Esq. incorporated
herein by reference to pre-effective amendment #1 to this
registration statement (File No. 2-91369), filed with the
Securities and Exchange Commission on 12/21/84.

11.(a) Consent of Messrs. Sutherland, Asbill & Brennan.

11.(b) Consent of Ernst & Young LLP.

12. Not Applicable

13. Letter regarding initial capital incorporated herein by reference
to post-effective amendment #1 to this Form N-1A registration
statement (File No. 2-91369), filed with the Securities and
Exchange Commission on 6/28/85.

14. Not Applicable

15. Not Applicable

16. Power of Attorney incorporated herein by reference to post-
effective amendment #8 to this Form N-1A registration statement
(File No. 2-91369), filed with the Securities and Exchange
Commission on 4/26/90.

Item 25. Persons Controlled by or Under Common Control with Registrant.

Life of Virginia Series Fund, Inc. ("Fund") is a Virginia corporation
organized on May 14, 1984. The Life Insurance Company of Virginia, a
corporation chartered under the Laws of the Commonwealth of Virginia, has
provided the initial investment in the Fund. The Life Insurance Company of
Virginia owns a significant amount of the shares of each class of the
Fund's stock through the Separate Accounts to support the variable life
insurance and variable annuity contracts which it offers. In addition, Aon
Savings Plan, an affiliated person of The Life Insurance Company of
Virginia, owns the remaining shares of the Fund not owned by Life of
Virginia.

The Life Insurance Company of Virginia is a wholly-owned subsidiary of
Combined Insurance Company of America, which in turn is a wholly owned
subsidiary of Aon Corporation ("Aon"). The chart illustrating the
structure of Aon and its subsidiaries is incorporated herein by reference
to post-effective amendment #13 to this registration statement (File No. 2-
91369), filed with the Securities and Exchange Commission on 4/29/94.

Item 26. Number of Holders of Securities

Title of Class Number of Record Holders
as of March 30, 1995

Capital Stock, Class A 5

Capital Stock, Class B 5

Capital Stock, Class C 5

Capital Stock, Class D 5

Item 27. Indemnification

Under Section 13.1-697.A of the Virginia Stock Corporation Act, with
respect to any threatened, pending or completed proceeding against a
present or former director, officer, employee or agent ("corporate
representative") of the registrant, except a proceeding brought by or on
the behalf of the registrant, the registrant may indemnify the corporate
representative against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement actually and reasonably incurred by
him in connection with such proceedings, if: (i) he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interest of the registrant; and (ii) with respect to any criminal action or
proceeding, he had no reasonable cause to believe his conduct was unlawful.
The registrant is also authorized under Section 13.1-3.1(b) of the Virginia
Stock Corporation Act to indemnify a corporate representative under certain
circumstances against expenses incurred in connection with any threatened,
pending, or completed proceeding brought by or in the right of the
registrant.

The Articles of Incorporation of the Fund (Exhibit 1.(c) to this
Registration Statement) provide that the Fund may indemnify its corporate
representatives, in a manner that is consistent with the laws of the
Commonwealth of Virginia. The Articles preclude indemnification for
"disabling conduct" (willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of office) and
sets forth reasonable and fair means for determining whether
indemnification shall be made.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the Fund
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of such
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

Item 28. Business and Other Connections of Investment Advisor.

The Fund's investment advisor, Aon Advisors, Inc., is a wholly-owned
subsidiary of Aon. Aon Advisors, Inc. markets its investment advisory
services to pension funds and corporations. In addition to the Fund, it
currently provides investment advice and management to pension plans,
corporations, and other organizations.

Set forth below is a list of the principal officers of Aon Advisors,
Inc., indicating each business, profession, vocation, or employment of a
substantial nature in which each person has been engaged at any time during
the past two fiscal years, for his or her own account or in the capacity of
director, officer, partner or trustee. The principal business address for
Aon Advisors, Inc. is 6604 West Broad Street, Richmond, Virginia 23230.
The principal business address of The Life Insurance Company of Virginia is
6610 West Broad Street, Richmond, Virginia 23230.

Name and Position With Other Business, Profession
Aon Advisors, Inc. Vocation, or Employment

John J. Palmer Director, Life of Virginia
Director since 1986; Director (since 1984) and
President (since 1986), Life of Virginia
Series Fund, Inc.; Senior Vice President,
Life of Virginia, since 1980; President
Forth Financial Securities Corporation,
since 1992; Director and President, Aon
Asset Management Fund, since 1991.

Michael A. Conway Director and President, Aon
Director and President Advisors, Inc., since 1990; Director and
Senior Vice President - Investments,
Combined Insurance Company of America,
since 1990; Senior Vice President and
Senior Investment Officer, Aon
Corporation, since 1990; President and
Chief Executive Officer, Manhattan
National Corporation, from 1985 to 1990

Jerry G. Overman Vice President, Life of
Treasurer Virginia Series Fund, Inc., since 1986;
Director of Investment Services, Aon
Advisors, Inc., since 1985; Treasurer, The
Life Insurance Company of Virginia, since
1988; Vice President, Aon Asset Management
Fund, since 1991.

Lawrence R. Miller Director and Senior Executive
Senior Executive Director Director, Aon Advisors, Inc., since 1991;
Executive Director, Aon Advisors, Inc.,
since 1987; Vice President - Investments,
Combined Insurance Company of America,
since 1978; Director, Aon Asset Management
Fund, since 1991.

Mark B. Burka Executive Director, Aon Advisors,
Executive Director Inc., since 1990; Managing Director, Aon
Advisors, Inc., from 1987 to 1990; Vice
President - Investments, Combined
Insurance Company of America, since 1984

Pendleton M. Shiflett, III Vice President, Life of Virginia
Executive Director since 1988; Executive Director, Aon
Advisors, since 1990; Managing Director,
Aon Advisors, from 1986 to 1990

Linda L. Lanam Corporate Secretary for Life of
Secretary Virginia and for a number of Life of
Virginia affiliates, since 1992. Vice
President and Senior Counsel of Life of
Virginia since 1989. Vice President and
Senior Counsel, Union Fidelity Life
Insurance Company, from 1986 to 1989.

Item 29. Principal Underwriters

(a) Forth Financial Securities, Inc. ("FFSC") serves as principal
underwriter for the registrant and also acts as principal underwriter
for the variable life insurance contracts and variable annuity
contracts issued by The Life Insurance Company of Virginia. The
principal business address of FFSC is 6604 West Broad Street,
Richmond, Virginia 23230.

(b) The principal business address of director and officer of FFSC is the
same as that of FFSC. Set forth below is a list of each director and
officer of FFSC.

Name and Position With FFSC Position With Registrant

John J. Palmer, President President and Director

Scott R. Reeks, Vice President Treasurer
Manager of Operations,
Treasurer, and Compliance
Officer

Jerry G. Overman, Assistant Vice President
Treasurer

William E. Daner, None
General Counsel

Linda L. Lanam Secretary
Secretary

Marianne O'Doherty None
Secretary

Item 30. Location of Accounts and Records

All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules thereunder will be maintained
at the office of the Fund or at Crestar Bank, 919 East Main Street,
Richmond, Virginia 23219, Firstar Trust Company, 777E Wisconsin Avenue,
Milwaukee, Wisconsin 53201, or at Chase Manhattan Bank, N.A., 1211 6th
Avenue, New York, N.Y. 10036.

Item 31. Management Services

None.

Item 32. Undertakings

(a) Not applicable.

(b) The Registrant undertakes to file a post-effective amendment,
containing reasonably current financial statements for the
International Portfolio and the Real Estate Securities Portfolio (that
need not be certified) within four to six months from the effective
date of this post-effective amendment number 14.

(c) The Registrant will furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.

(d) The Registrant undertakes that, so long as its shares are sold to the
Separate Accounts of The Life Insurance Company of Virginia, and the
Separate Accounts are relying on the provisions of Rule
6e-3(T)(b)(13)(iii) and are making a representation based upon
paragraph (F)(4)(ii)(A) thereunder, its board of directors, a majority
of which will not be interested persons of the Registrant, will
formulate and approve any plan under Rule 12b-1 under the Investment
Company Act of 1940 to finance distribution expenses.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, Life of Virginia Series Fund, Inc.
certifies that it meets all of the requirements for effectiveness of this
registration statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this post-effective amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the County of
Henrico, Commonwealth of Virginia, on the __ day of April, 1995.

Life of Virginia Series Fund, Inc.

Attest: M. O. Doherty By: John J. Palmer
John J. Palmer, President

Pursuant to the requirements of the Securities Act of 1933, this post-
effective amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the date indicated.

Signature Title

JOHN J. PALMER* , President (Principal
John J. Palmer Executive Officer) and
Director

SCOTT R. REEKS , Treasurer (Principal
Scott R. Reeks Financial and Accounting
Officer)

WALLACE L. CHANDLER* , Director
Wallace L. Chandler

JOHN E. LEARD* , Director
John E. Leard

J. CLIFFORD MILLER, III* , Director
J. Clifford Miller, III

LEE A. PUTNEY* , Director
Lee A. Putney

ROBERT P. MARTIN* , Director
Robert P. Martin, Jr.

*/ By SCOTT R. REEKS pursuant to Power of
Scott R. Reeks Attorney

Date: April , 1995

INDEX OF EXHIBITS

1.(c) Amended and restated Articles of Incorporation of Life of Virginia
Series Fund, Inc.

2.(f) Amended and restated By-Laws of Life of Virginia Series Fund, Inc.,
dated January 25, 1995.

5.(b) New Investment Advisory Agreement between Life of Virginia Series
Fund, Inc. and Aon Advisors, Inc., dated April 27, 1995, covering the
International Equity Portfolio.

5.(c) New Investment Advisory Agreement between Life of Virginia Series
Fund, Inc. and Aon Advisors, Inc., dated April 27, 1995, covering the
Real Estate Securities Portfolio.

5.(d) Form of Investment Sub-Advisory Agreement between Aon Advisors, Inc.
and Perpetual Portfolio Management, Limited.

5.(e) Form of Investment Sub-Advisory Agreement between Aon Advisors, Inc.
and Genesis Realty Capital Management, L.P.

6. Underwriting Agreement between Life of Virginia Series Fund, Inc. and
Forth Financial Securities Corporation, dated June 30, 1994.

8.(b) Form of Custody Agreement between Firstar Trust Company and Life of
Virginia Series Fund, Inc.

8.(c) Form of Sub-Custody Agreement between Firstar Trust Company and Chase
Manhattan Bank, N.A.

9.(c) Form of Accounting Services Agreement between Life of Virginia Series
Fund, Inc. and Firstar Trust Company.

11.(a) Consent of Sutherland, Asbill & Brennan

11.(b) Consent of Ernst & Young LLP.

ARTICLES OF INCORPORATION
OF
LIFE OF VIRGINIA SERIES FUND, INC.

(AMENDED AND RESTATED)

October 25, 1994

The Undersigned person, pursuant to Chapter 9 of Title 13.1 of the
Code of Virginia, hereby executes the following amended and restated
Articles of Incorporation and sets forth the following:

FIRST: The name of the corporation is Life of Virginia Series Fund,
Inc. (hereinafter the "Corporation")

SECOND: The purposes for which the Corporation is formed are:

(1) to conduct, operate and carry on the business of an open-end
management investment company described in and regulated by the Investment
Company Act of 1940 (hereinafter the "1940 Act");

(2) to subscribe for, invest in, reinvest in, purchase or
otherwise acquire, hold, pledge, sell, assign, transfer, exchange,
distribute or otherwise dispose of notes, bills, bonds, debentures and
other negotiable or non-negotiable instruments, obligations and evidences
of indebtedness issued or guaranteed as to principal or interest by the
United States Government, or any agency or instrumentality thereof, any
State, local or foreign government, or any agency or instrumentality
thereof, or any other securities or other investments of any kind issued by
any corporation or other issuer whether organized under the laws of the
United States or any State, territory or possession thereof or the laws of
any foreign country or any political subdivision, territory or possession
thereof, to pay for the same in cash or by the issue of stock, including
treasury stock, bonds or notes of the Corporation or otherwise;

(3) to exercise any and all rights, powers and privileges of
ownership or interest in respect of any and all such investments of every
kind and description, including and without limitation, the right to
consent and otherwise act with respect thereto, with power to designate one
or more persons, firms, associations or corporations to exercise any of
said rights, powers and privileges in respect of any said investments;

(4) to conduct research and investigations in respect of
securities or other investments, organizations and general business and
financial conditions in the United States of America and elsewhere for the
purpose of obtaining information pertinent to the investment and employment
of the assets of the Corporation and to procure any or all of the foregoing
to be done by others as independent contractors and to pay compensation
therefor;

(5) to borrow money or otherwise obtain credit and, if required,
to secure the same by mortgaging, pledging or otherwise subjecting as
security the assets of the Corporation, and to endorse, guarantee or
undertake the performance of any obligation, contract or engagement of any
other persons, firm, association or corporation, each subject to the 1940
Act;

(6) to issue, sell, repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, transfer, and otherwise deal in,
redeemable shares of Common Stock of the Corporation, including shares of
Common Stock of the Corporation in fractional denominations, and to apply
to any such repurchase, redemption, retirement, cancellation or acquisition
of shares of Common Stock of the Corporation, any funds or property of the
Corporation, whether capital or surplus or otherwise, to the full extent
now or hereafter permitted by the 1940 Act, the laws of the Commonwealth of
Virginia and by these Articles of Incorporation;

(7) to enter into investment advisory, distribution,
administration, custodian contracts, and such other contracts as may be
appropriate;

(8) to have and exercise all of the powers and privileges
conferred by the laws of the Commonwealth of Virginia upon corporations
formed under the laws of such Commonwealth; and

(9) to do any and all such further acts and to exercise any and
all such further powers and privileges as may be necessary, incidental,
relative, conducive, appropriate or desirable for the foregoing purposes.

The enumeration herein of the objects and purposes of the Corporation
shall be construed as powers as well as objects and purposes and shall not
be deemed to exclude by inference any powers, objects or purposes which the
Corporation is empowered to exercise, whether expressly by force of the
laws of the Commonwealth of Virginia now or hereafter in effect, or
impliedly by the reasonable construction of the said laws.

THIRD: The total number of shares of Capital Stock which the
Corporation shall have authority to issue is two billion seven hundred
fifty million (2,750,000,000) having a par value of one cent.

(1) The shares of such Capital Stock are hereby divided into and
will be issued in the following classes, such classes comprising the number
of shares and having the designations indicated:

CLASSES OF CAPITAL STOCK NUMBER OF SHARES

Capital Stock, Class A
(Common Stock Index Portfolio) 250,000,000

Capital Stock, Class B
(Government Securities Portfolio) 250,000,000

Capital Stock, Class C
(Money Market Portfolio) 250,000,000

Capital Stock, Class D
(Total Return Portfolio) 250,000,000

Capital Stock, Class E 250,000,000

Capital Stock, Class F 250,000,000

Capital Stock, Class G 250,000,000

Capital Stock, Class H 250,000,000

Capital Stock, Class I 250,000,000

Capital Stock, Class J 250,000,000

Capital Stock, Class K 250,000,000

(2) The Board of Directors may, without shareholder action,
amend these Articles of Incorporation to designate investment portfolios
for Class E, F, G, H, I, J and K Capital Stock. The Board of Directors may
redesignate any shares of any series theretofore established that have not
been issued, or that have been issued and reacquired, as shares of some
other series, and may delete from the Articles of Incorporation any
provisions originally adopted by the Board of Directors without shareholder
action fixing the preferences, limitations and relative rights of any class
of shares or series within a class, provided there are no shares of such
class or series then outstanding.

(3) The Corporation may issue fractions of shares of each class
of the Capital Stock of the Corporation (calculated three places beyond the
decimal) having pro rata all the rights of full shares, including, without
limitation, the right to vote and to receive dividends and distributions,
as and when declared by the Board of Directors, and the right to
participate upon liquidation of the Corporation. Where the words "share"
or "shares" are used in these Articles of Incorporation or in the By-Laws,
they shall be deemed to include fractions of shares where the context does
not clearly indicate that only full shares are intended.

(4) With the approval of a majority of the shareholders of each
affected class of Capital Stock, the Board of Directors may transfer the
assets allocated to any particular class to any other class. Upon such a
transfer, the Corporation shall issue shares of Capital Stock representing
interests in the class to which the assets were transferred, in exchange
for all shares of the Capital Stock representing interest in the class from
which the assets were transferred. Such shares shall be exchanged at their
respective net asset values.

(5) Each share of a class shall have the same rights and
privileges with respect to the assets allocated to such class and shall be
entitled to participate equally in any dividends or distributions that may
be declared as any other share of that class. Each fractional share of a
class of Capital Stock shall have proportionately the same rights and
privileges with respect to the assets allocated to such class as a whole
share and shall participate proportionately in dividends or distributions
declared.

(6) Each shareholder of the Capital Stock of the Corporation
shall be entitled to one vote for each full share, and a fractional vote
for each fractional share, of Capital Stock, irrespective of the class,
then standing in his name on the books of the Corporation. On any matter
submitted to a vote of shareholders, all shares of the Capital Stock of the
Corporation then issued and outstanding and entitled to vote shall be voted
in the aggregate and not by class except:

(i) when otherwise expressly required by law, shares of the
Capital Stock shall be voted by individual class; or

(ii) if the Board of Directors, in its sole discretion,
determines that any matter concerns only one or more particular class or
classes, it may direct that only holders of that class or those classes may
vote on the matter.

(7) Each shareholder of any class of the Capital Stock of the
Corporation may require the Corporation to redeem all or any part of the
shares of any class of the Capital Stock of the Corporation standing in the
name of such holder on the books of the Corporation. The Corporation shall
redeem all shares of such Capital Stock tendered to it for redemption at
the redemption price of such shares in effect as determined by the Board of
Directors of the Corporation. This right of redemption is subject to the
right of the Board of Directors of the Corporation to suspend the right of
redemption of any class of shares of the Capital Stock of the Corporation
or postpone the date of payment of such redemption price in accordance with
provisions of applicable law. Redemptions shall be conditioned upon the
Corporation's having funds legally available therefor. The redemption
price of shares of any class of the Capital Stock of the Corporation shall
be the net asset value thereof as determined by the Board of Directors of
the Corporation in accordance with the provisions of applicable law or
these Articles, less such redemption fee or other charge, if any, as may be
fixed by resolution of the Board of Directors of the Corporation. Payment
of the redemption price shall be made in cash by the Corporation at such
time and in such manner as may be determined by the Board of Directors of
the Corporation, except that the shares of any class of the Capital Stock
may be redeemed in kind with the assets allocated to that class if the
Board of Directors deems such action desirable.

(8) Each class of the Capital Stock of the Corporation shall
have the following additional rights, qualifications, restrictions and/or
limitations:

(i) The shares of each class of the Capital Stock, when
issued, will be fully paid and non-assessable, have no preemptive,
conversion, exchange, or similar rights, except as set forth in (ii) below.

(ii) All consideration received by the Corporation for the
issue or sale of the Capital Stock of each class, together with all assets
in which such consideration is invested or reinvested, all income,
earnings, profits and proceeds thereof, including any proceeds derived from
the sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds in whatever form, shall for
all purposes be allocated to the assets of that class, subject only to the
liabilities of that class. Each share of such class of the Capital Stock
shall have a pro rata interest in the assets allocated to that class but
shall not have any interest in the assets allocated to any other class.
Any assets, income, earnings, profits, and proceeds thereof, and funds or
payments which are not readily identifiable as allocable to any particular
class, shall be allocated by or under the general supervision of the Board
of Directors to and among one or more of the classes established and
designated in such a manner and on such basis as the Board of Directors, in
its sole discretion, deems fair and equitable.

(iii) The Board of Directors may declare and pay dividends
or distributions, in stock or in cash, upon the shares of any or all
classes of the Capital Stock, the declaration and the amounts of such
dividends and distributions being wholly in the discretion of the Board of
Directors subject to the following conditions:

(a) Dividends or distributions upon shares of any
class of the Capital Stock, when declared by the Board of Directors, shall
be paid only out of earned surplus or other lawfully available assets
allocated to such class.

(b) Insomuch as one goal of the Corporation is to
qualify as a "regulated investment company" under the Internal Revenue Code
of 1986, as amended, or any successor or comparable statute, and inasmuch
as the computation of net income and gains for Federal income tax purposes
may vary from the computation thereof on the books of the Corporation, the
Board of Directors shall have the power in its discretion to distribute in
any fiscal year as dividends, including dividends designated in whole or in
part as capital gains distributions, amounts sufficient in the opinion of
the Board of Directors, to enable the Corporation to qualify as a regulated
investment company and to avoid liability of the Corporation for Federal
income tax in respect of that year. In furtherance, and not in limitation
of the foregoing, in the event that a class of shares of the Capital Stock
has a net capital loss for a fiscal year, and to the extent that a net
capital loss for a fiscal year offsets net capital gains from one or more
of the other classes, the amount to be deemed available for distribution to
the class or classes with the net capital gains may be reduced by the
amount of the offset.

(iv) The assets allocated to any class of the Capital Stock
shall be charged with the liabilities in respect to such class, and shall
also be charged with their share of the general liabilities of the
Corporation in proportion to the net asset values of the assets allocated
to the respective classes before allocation of general liabilities. The
determination of the Board of Directors shall be conclusive as to the
amount of liabilities or the amount of any general assets of the
Corporation, as to whether such liabilities or assets are allocable to one
or more classes, and as to the allocation of such liabilities or assets to
a given class or among several classes.

(v) In the event of a liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, the assets
allocated to any class of the Capital Stock of the Corporation shall be
charged with the liabilities in respect to such class and shall also be
charged with their share of the general liabilities of the Corporation in
proportion to the net asset values of the assets allocated to the
respective classes. The determination of the Board of Directors shall be
conclusive as to the amount of liabilities or the amount of any general
assets of the Corporation and as to whether such liabilities or assets are
allocable to one or more classes.

FOURTH: The address of the Corporation's registered office is 6610
West Broad Street Road, Richmond, Virginia 23230, which is located in the
County of Henrico.

FIFTH: The name of the registered agent is William E. Daner, Jr.,
who is a Virginia resident and a member of the Virginia State Bar, whose
business address is identical with the Corporation's registered office.

SIXTH: (1) The number of Directors constituting the Board of
Directors shall be fixed by the By-Laws, or in the absence of a By-Law
fixing the number, the number shall be seven. At the annual meeting of
shareholders, the shareholders shall elect said number of directors.

(2) The following Directors shall serve until the next annual
meeting of shareholders or until their successors are duly elected and
qualified:

Name Address

John J. Palmer 6610 West Broad Street
Richmond, Virginia 23230

Wallace L. Chandler P. O. Box 25099
Richmond, Virginia 23260

John E. Leard 6207 Monument Avenue
Richmond, Virginia 23226

Robert P. Martin, Jr. P. O. Box 12085
Richmond, Virginia 23241

J. Clifford Miller, III 7103 Glen Parkway
Richmond, Virginia 23229

J. Garnett Nelson 6610 West Broad Street
Richmond, Virginia 23230

Lee A. Putney 4208 Sulgrave Road
Richmond, Virginia 23221

(3) A Director may be removed with or without cause, but only by
action of the shareholders at a meeting called for such purposes by the
holders of ten percent (10%) of the Capital Stock of the Corporation at the
time issued and outstanding and entitled to vote in any election of
Directors.

(4) The Board of Directors of the Corporation is hereby
empowered to authorize the issuance from time to time of shares of the
Capital Stock of any class, whether now or hereafter authorized, subject to
such limitations as may be set forth in these Articles of Incorporation or
in the By-Laws of the Corporation or in the Virginia Stock Corporation Act
or in the 1940 Act.

SEVENTH: Unless the Board of Directors conditions its submission of a
proposed extraordinary corporate event on a receipt of a greater vote, any
extraordinary corporate event that requires shareholder approval under the
Virginia Stock Corporation Act, shall be approved by the holders of not
less than two-thirds of the Capital Stock of the Corporation at the time
outstanding and entitled to vote at a meeting at which a quorum is present
in person or by proxy.

The provisions of this Article shall not be deemed to affect any
shareholder vote required by the Virginia Stock Corporation Act.

EIGHTH: Any Article of these Articles of Incorporation may be
amended, altered or repealed, upon the vote of a majority of the holders of
the Capital Stock of the Corporation who are present in person or by proxy
at a meeting at which a quorum is present. Provisions which might, under
the laws of the Commonwealth of Virginia at the time in force, be lawfully
contained in these Articles of Incorporation, may be added or inserted upon
a vote of holders of the Capital Stock of the Corporation who are present
at a meeting in person or by proxy at a meeting at which a quorum is
present. All rights at any time conferred upon the shareholders of the
Corporation by these Articles of Incorporation are granted subject to the
provisions of this Article.

Notwithstanding any other Article of these Articles of Incorporation
or the By-Laws of the Corporation, the amendment or repeal of the Seventh
Article of these Articles of Incorporation requires the affirmative vote of
holders of at least two-thirds of the Capital Stock of the Corporation at
the time outstanding and entitled to vote.

NINTH: As indicated in this Article, the Corporation shall
indemnify its currently acting, former or future directors and officers
against liability incurred in any proceeding. As used in this Article,
"liability" means the obligation to pay a judgement, settlement, penalty,
fine and all reasonable expenses incurred with respect to a proceeding,
including attorney's fees, and "proceeding" means any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative, and whether formal or
informal.

(1) The Corporation shall indemnify a director or officer made a
party to a proceeding because he/she is or was a director or officer of the
Corporation against liability incurred in the proceeding if:

(i) he/she conducted himself/herself in good faith, and

(ii) he/she reasonably believed that his/her conduct was
in, or not opposed to, the Corporation's best interest, and

(iii) he/she was not guilty of willful misconduct, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his/her office, and

(iv) in the case of any criminal proceeding, he/she had no
reasonable cause to believe his/her conduct was unlawful.

The termination of a proceeding by an adverse judgement or
order, by settlement or by conviction will not, of itself, be determinative
that the officer or director did not meet the standard of conduct described
in this section.

(2) Indemnification provided pursuant to Section (1) shall be
limited to reasonable expenses incurred in connection with the proceeding.

(3) The Corporation shall indemnify a director or officer who
entirely prevails in the defense of any proceeding to which he/she was a
party because he/she is or was a director or officer of the Corporation
against reasonable expenses incurred by him/her in connection with the
proceeding.

(4) The Corporation may pay for or reimburse the reasonable
expenses incurred by a director or officer who is a party to a proceeding
in advance of final disposition of the proceeding if:

(i) the director or officer furnishes the Corporation a
written statement of his/her good faith belief that he/she has met the
standard of conduct described in Section (1) of this Ninth Article, and

(ii) the director or officer furnishes the Corporation a
written undertaking (which shall be an unlimited general obligation of the
director or officer but need not be secured and may be accepted without
reference to financial ability to make repayment), executed personally or
on his/her behalf to repay the advance if it is ultimately determined that
he/she did not meet the standard of conduct specified in Section (1), and

(iii) a determination is made that the facts then known to
the persons making the determination would not preclude indemnification
under this Ninth Article.

(5) The Corporation shall not indemnify a director or officer
under Section (1) of this Ninth Article unless authorized in the specific
case after a determination has been made that indemnification is
permissible in the circumstances because the director or officer has met
the standard of conduct set forth in Section (1). The determination shall
be made:

(i) By a majority of a quorum of directors who are
neither interested persons nor parties to the proceeding or a proceeding on
the same or similar grounds; or

(ii) If a quorum cannot be obtained under Subsection
(5)(i), by a written opinion of special legal counsel (a) selected by the
Board of Directors in the manner prescribed in Subsection (5)(i), or (b) if
a quorum cannot be obtained under Subsection (5)(i) selected by a majority
vote of the full Board of Directors, in which selection directors who are
parties may participate; or

(iii) By the shareholders, but shares owned by or voted
under the control of directors or officers who are at the time parties to
the proceeding may not be voted on the determination.

(6) Authorizations of indemnification and evaluations as to the
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible, except that if the
determination is made by special legal counsel, authorization of
indemnification and determination of reasonableness of expenses shall be
made by those entitled under Subsection (5)(ii) to select special legal
counsel.

(7) Every reference herein to director or officer shall include
every director or officer or former director or officer of the Corporation
and shall enure to the benefit of the heirs, executors and administrators
of such person.

(8) The foregoing rights of indemnification shall not be
exclusive of any other rights and indemnifications to which the directors
and officers of the Corporation may be entitled according to law.

(9) The Corporation shall have the power to make any other or
further indemnity to its directors and officers except an indemnity against
willful misconduct, willful misfeasance, bad faith, gross negligence,
reckless disregard of the duties involved in the conduct of his/her office,
or a knowing violation of criminal law.

TENTH: Any determination made in good faith, so far as accounting
matters are involved, and in accordance with generally accepted accounting
principles, by or pursuant to the direction of the Board of Directors is
considered final and conclusive. This includes determinations as to:

(1) the amount of assets, obligations or liabilities of the
Corporation, the amount of net income of the Corporation from dividends and
interest for any period and amounts at any time legally available for the
payment of dividends,

(2) the amount of any reserves or charges set up and the
propriety thereof, the time of or purpose for creating reserves and the
use, alteration or cancellation of any reserves or charges (whether or not
any obligation or liability for which such reserves or charges have been
created shall have been paid or discharged or shall be then or thereafter
required to be paid or discharged),

(3) the value of any investment owned by the Corporation, the net
asset value per share of the outstanding Capital Stock of the Corporation
and the establishment or designation or methods to be employed for valuing
any asset of the Corporation or for determining the net asset value per
share of Capital Stock of the Corporation, and

(4) any other matters relating to the issuance, sale, redemption
or other acquisition or disposition of investments or shares of the Capital
Stock of the Corporation.

Any reasonable determination made in good faith by or at the direction
of the Board of Directors shall be final and conclusive, and shall be
binding upon the Corporation and all holders of its Capital Stock, past,
present and future. Shares of the Capital Stock of the Corporation are
issued and sold on the condition and understanding, evidenced by the
purchase of shares of Capital Stock, that any and all such determinations
shall be binding.

ELEVENTH: The holders of not less than one-third of the shares of the
Corporation's Capital Stock issued and outstanding and entitled to vote,
represented in person or by proxy, shall constitute a quorum for the
transaction of business at any meeting of the Corporation's shareholders.
The vote of a majority of the shares cast on any matter at a meeting of
shareholders at which a quorum is present shall be the act of the
shareholders on that matter, unless the vote of a greater number of shares
is required by law, including the 1940 Act, or by these Articles of
Incorporation or the By-Laws of the Corporation.

TWELFTH: The By-Laws of the Corporation shall be adopted by the
directors of the Corporation. Thereafter the Board of Directors shall have
the power to make, alter or repeal the By-Laws except any By-Law in effect
which may require shareholder action for adoption, alteration or repeal.

THIRTEENTH: The net asset value per share of each share of the
Capital Stock of the Corporation shall be determined by or pursuant to the
discretion of the Board of Directors and
shall be final and conclusive. Such values shall be determined in the
manner and subject to such applicable requirements as may be set forth in
the By-Laws of the Corporation and any applicable law.

FOURTEENTH: No provision of these Articles of Incorporation shall be
effective to require a waiver of compliance with any provision of the
Securities Act of 1933, as amended, or the 1940 Act, or of any valid rule,
regulation or order of the Securities and Exchange Commission thereunder.

December ____, 1994 __________________________________
John J. Palmer, President

BY-LAWS

LIFE OF VIRGINIA SERIES FUND, INC.

(Amended and Restated January 25, 1995)

ARTICLE I

MEETINGS OF SHAREHOLDERS

Section 1. Place of meeting. All meetings of the shareholders shall
be held at the Corporation's principal office located at 6610 West Broad
Street, Richmond, Virginia 23230, in the County of Henrico, or at such
other place, either within or without the State of Virginia, as shall be
designated in the notice of the meeting.

Section 2. Annual Meetings. Annual meetings of shareholders may be
held on a date fixed from time to time by the Board of Directors for the
election of directors and the transaction of any other business within the
powers of the Corporation. The Board of Directors shall not be required to
hold an annual meeting of the shareholders in any particular year in which
the election of directors is not required to be held under the Investment
Company Act of 1940 (the 1940 Act).

Section 3. Notice of Meetings. Written or printed notice of the
annual meeting stating the place, date and hour, shall be given to each
shareholder entitled to vote not less than ten nor more than sixty days
before the date of the meeting. Notice of a meeting to act upon an
amendment to the Articles of Incorporation, a plan of merger or share
exchange, a proposed sale of assets pursuant to (S)13.1-724 of the Virginia
Stock Corporation Act or the dissolution of the Corporation shall be given
not less than twenty-five nor more than sixty days before the meeting date.
When a meeting is adjourned, it shall not be necessary to give any notice
of the adjourned meeting other than by announcement at the meeting at which
the adjournment is taken.

Section 4. Substitute Annual Meeting. If the annual meeting shall
not be held on the date fixed by the Board of Directors, a substitute
annual meeting may be called and a meeting so called shall be designated
and treated for all purposes as the annual meeting.

Section 5. Special Meetings. Special meetings of the shareholders
may be called at any time by the President, by the Board of Directors, or
by any shareholder pursuant to the written request of the holders of not
less than ten percent of all the then outstanding shares of the capital
stock of the Corporation entitled to vote at the meeting.

Section 6. Notice of Special Meeting. Written or printed notice of
a special meeting of shareholders, stating the place, date, hour and
purpose shall be given by the Secretary to each shareholder entitled to
vote not less than ten nor more than sixty days before the date fixed for
the meeting. Notice of a meeting to act upon an amendment to the Articles
of Incorporation, a plan of merger or share exchange, a proposed sale of
assets pursuant to (S)13.1-724 of the Virginia Stock Corporation Act or the
dissolution of the Corporation shall be given not less than twenty-five nor
more than sixty days before the meeting date.

Section 7. Voting Lists. At least ten days before each meeting of
shareholders, the Secretary shall prepare an alphabetical list of the
shareholders entitled to vote at such meeting, with the address and number
of shares held by each, which list shall be kept on file at the registered
office of the Corporation for a period of ten days prior to the meeting,
and shall be subject to inspection by any shareholder at any time during
the usual business hours of the Corporation. This list shall also be
produced and kept open at the time and place of the meeting and shall be
subject to inspection by any shareholder during the whole time of the
meeting.

Section 8. Proxies. Each shareholder shall at every meeting of the
shareholders be entitled to one vote (or fraction thereof) in person or by
proxy for each share (or fraction thereof) of Capital Stock held by such
shareholder, but no proxy shall be voted after eleven months from its date,
unless expressly provided in the proxy. Proxies shall be filed with the
Secretary of the Corporation prior to the meeting of shareholders at which
votes will be cast pursuant to such proxies.

Section 9. Quorum. If a quorum shall not be present at any meeting
of the shareholders, the shareholders present may adjourn the meeting from
time to time, without notice, other than announcement at the meeting, until
a quorum shall be present. At an adjourned meeting at which a quorum is
present any business may be transacted which might have been transacted at
the original meeting.

Section 10. Voting of Shares. Each outstanding share of the Capital
Stock of the Corporation or fraction thereof, shall be entitled to one vote
or appropriate fraction thereof, on each matter submitted to a vote at a
meeting of shareholders. The vote of a "majority of the outstanding voting
securities," required for changes in fundamental policies, approval of
an investment advisory agreement, and certain other matters specified
in the Investment Company Act, means the lesser of: (a) the vote of
shareholders having more than fifty percent (50%) of the outstanding votes,
or (b) the vote of shareholders having sixty-seven (67%) or more of the
eligible votes represented at a meeting if more than fifty (50%) of the
outstanding votes are present or represented by proxy. Fractional votes
shall be counted.

Section 11. Record Date. In order that the Corporation may
determine the shareholders entitled to notice of or to vote at any meeting
of shareholders or any adjournment thereof, or to receive payment of any
dividend or other distribution or allotment of any rights (other than
dividends equal to the entire undistributed net income of the Corporation
that accrue automatically on a daily basis), or entitled to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix in
advance, a record date which shall be not more than seventy days and, in
the case of a meeting of shareholders, not less than ten days prior to the
date on which the particular action requiring such determination of
shareholders is to be taken.

With respect to an annual meeting of shareholders, if the stock
transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice of and to vote at such
meeting, the record date for such purpose shall be the close of business
on the 20th day (not counting the date of the annual meeting) next
preceding the date of the annual meeting. With respect to any meeting
other than the annual meeting of shareholders, if the stock transfer
books are not closed and no record date is fixed for the determination
of shareholders entitled to notice of or to vote at a meeting of
shareholders the record date shall be the close of business ten business
days prior to the date on which notice of the meeting is mailed.

Section 12. Inspectors of Election. The Corporation, in advance of
any meeting of shareholders, shall appoint one or more inspectors to act at
the meeting or any adjournment thereof, and make a written report of such
appointment. The Corporation may designate one or more persons as
alternate inspectors to replace any inspector who fails to act. In case
any person who may be appointed as an inspector or as an alternate fails to
appear or act, the vacancy may be filled by appointment made by the Board
of Directors (in advance of the meeting) or by the person presiding at such
meeting. Each inspector, if any, before entering upon the discharge of his
duties, shall take and sign an oath faithfully to execute the duties of
inspector at such meeting with strict impartiality and according to the
best of his ability. The inspectors shall determine the number of shares
outstanding and the voting power of each, the shares represented at the
meeting, the existence of a quorum and the validity and effect of proxies
and ballots. The inspectors shall receive votes, ballots or consents, hear
and determine all challenges and questions arising in connection with the
right to vote (retaining a record of the disposition of any challenges made
to the determination by the inspector or inspectors), count and tabulate
all votes, ballots or consents, certify their determination of the number
of shares represented at the meeting and their count of all votes and
ballots and do such acts as are proper to conduct the election or vote with
fairness to all shareholders. On request of the person presiding at the
meeting or of any shareholders, the inspector or inspectors shall make a
report in writing of any challenge, question or matter determined by him or
them and execute a certificate of any fact found by him or them.

ARTICLE II

BOARD OF DIRECTORS

Section 1. Number of Directors. The number of directors which
shall constitute the entire Board of Directors shall be seven. By
amendment of this By-Law the number of Directors may be increased or
decreased, to the extent permitted by law including (S)13.1-675 of the
Virginia Stock Corporation Act, from time to time by the vote of a majority
of the entire Board of Directors, but the tenure of office of a director in
office at the time of any decrease in the number of directors shall not be
affected as a result thereof. The composition of the Board of Directors
shall conform to the requirements of the 1940 Act. Each Director shall
serve indefinitely or until any successor is duly elected and qualified.
Any director may resign at any time upon written notice to the Corporation
or the Board of Directors. Any director may be removed, with or without
cause, at any meeting of shareholders called for such purpose and at which
a quorum is present by the vote of holders of not less than a majority of
the capital stock of the Corporation issued and outstanding and entitled to
vote in any election of Directors. The vacancy in the Board of Directors
caused by such removal shall be filled in accordance with Section 2 below.
Directors need not be shareholders or residents of the Commonwealth of
Virginia.

Section 2. Vacancies and Newly-created Directorships. Any
vacancy occurring in the Board of Directors for any cause other than by
reason of an increase in the number of directors may, subject to the
requirements of the 1940 Act, be filled by the affirmative vote of a
majority of the remaining members of the Board of Directors, even if such
majority is less than a quorum. Any vacancy occurring by reason of an
increase in the number of directors may be filled by a majority of the
directors then in office, even if such majority is less than a quorum,
unless prohibited by the 1940 Act. If at any time after filling a vacancy,
less than 2/3rds of the directors then holding office were not duly elected
by the shareholders, a special meeting of the shareholders shall be called
within 60 days for the purpose of electing directors. A director elected
by the Board of Directors to fill a vacancy shall be elected to hold office
until the next annual meeting of shareholders or until his successor is
elected and qualifies. The shareholders may elect a director at any time
to fill any vacancy not filled by the Board of Directors.

Section 3. Powers. The business and affairs of the Corporation
shall be managed under the direction of the Board of Directors which shall
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Articles of Incorporation or by
these By-Laws conferred upon or reserved to the shareholders.

Section 4. Meetings. The Board of Directors of the Corporation or
any committee thereof may hold meetings, both regular and special, either
within or without the Commonwealth of Virginia. Regular meetings of the
Board of Directors shall be held at such time and at such place as shall
from time to time be determined by resolution of the Board of Directors.
Special meetings of the Board of Directors may be called by the President.
Notice of special meetings of the Board of Directors shall be given by the
Secretary to each director at least five days before the meeting if by mail
or at least 24 hours before the meeting if given in person or by telephone
or by telegraph. The notice need not specify the business to be
transacted.

Section 5. Quorum and Voting. At meetings of the Board of
Directors, a majority of the entire Board of Directors shall constitute a
quorum for the transaction of business. Subject to the requirements of the
1940 Act, the action of a majority of the directors present at a meeting at
which a quorum is present shall be the action of the Board of Directors.
If a quorum is not present at any meeting of the Board of Directors, the
directors present may adjourn the meeting, from time to time, without
notice, other than announcement at the meeting, until a quorum shall be
present.

Section 6. Committees. The Board of Directors may, by
resolution passed by a majority of the entire Board of Directors, appoint
from among its members an executive committee and other committees of the
Board of Directors, each committee to be composed of two or more of the
Directors of the Corporation. The Board of Directors may, to the extent
provided in the resolution, delegate to such committees, in the intervals
between meetings of the Board of Directors, any or all of the powers of the
Board of Directors in the management of the business and affairs of the
Corporation except the powers specifically withheld by (S)13.1-689D of the
Virginia Stock Corporation Act. At meetings of any such committee, a
majority of the members of such committee shall constitute a quorum for the
transaction of business and the act of a majority of the members present at
any meeting at which a quorum is present shall be the act of the committee.

Section 7. Minutes of Committee Meetings. All of the
committees shall keep regular minutes of their proceedings.

Section 8. Informal Action by Board of Directors and
Committees. Subject to the requirements of the 1940 Act, any action
required or permitted to be taken at any meeting of the Board of Directors
or of any committee thereof may be taken without a meeting if a written
consent is signed either before or after such action, by all members of the
Board of Directors or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board of
Directors or committee.

Section 9. Meetings by Conference Telephone. Subject to the
requirements of the 1940 Act, the members of the Board of Directors or any
committee thereof may participate in a meeting of the Board of Directors or
committee by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
hear each other at the same time and such participation shall constitute
presence in person at such meeting.

Section 10. Fees and Expenses. Directors shall not receive any
compensation for their service except that by resolution of the Board of
Directors a fixed sum and expenses for attendance at each meeting of the
Board of Directors, if any, may be allowed for Board service and for
attendance at each regular meeting or special meeting of the Board or any
committee thereof. No such payment shall preclude any director from serving
the Corporation in any other capacity and receiving compensation. No
director, who is regularly employed by the Corporation or by any affiliated
company in the Aon Corporation affiliated group of corporations (other than
a person serving as a disinterested director of Aon Asset Management Fund,
Inc. or Life of Virginia Series Fund, Inc.) shall receive from the
Corporation any director fees or be reimbursed for any expenses by the
Corporation.

ARTICLE III

OFFICERS

Section 1. Titles and Duties. The officers of the Corporation shall
be a President, a Secretary and a Treasurer. The Board of Directors may
also elect a Chairman of the Board of Directors, an Executive Vice
President, one or more Vice Presidents, one or more Assistant Secretaries,
one or more Assistant Treasurers, and such other officers as it shall deem
necessary. Except as otherwise specifically provided in these By-Laws,
such additional officers shall have such authority and perform such
duties as from time to time may be prescribed by the Board of Directors.
Any two or more offices may be held by the same person.

The officers of the Corporation shall have such duties as generally
pertain to their respective offices as well as such powers and duties as
from time to time may be delegated to them by the Board of Directors.

Section 2. Election and Term. The officers of the Corporation shall
be elected by the Board of Directors from time to time for such terms as
the Board of Directors may determine. Each officer shall hold office until
his successor is elected and qualified.

Section 3. Removal. Any officer elected or appointed by the Board of
Directors may resign or be removed by the Board of Directors with or
without cause whenever the Board of Directors, in its absolute discretion,
shall consider that the best interest of the Corporation shall be served
thereby, but such removal shall be without prejudice to the contract
rights, if any, of the individual so removed.

Section 4. Vacancies. Vacancies among the officers of the
Corporation may be filled by a vote of the majority of the whole Board of
Directors at any regular or special meeting of the Board.

Section 5. Compensation. The compensation of all officers of the
Corporation shall be fixed by the Board of Directors.

Section 6. Voting Upon Stocks. Unless otherwise ordered by the Board
of Directors, the President or the Treasurer or the Secretary shall have
full power and authority in behalf of the Corporation either to appoint
attorneys or vote any stock held by this Corporation at any meetings of the
shareholders of any corporation in which this Corporation may hold stock
and at or in connection with any such meetings shall possess and may
exercise any and all rights and powers incident to the ownership of such
stock and which, as the owner thereof, the Corporation might have possessed
and exercised if present. The Board of Directors may by resolution from
time to time confer such power and authority upon any other person or
persons.

ARTICLE IV

CAPITAL STOCK

Section 1. Certificates. The Corporation may, but shall not be
required to issue certificates evidencing the shares of capital stock held
by its shareholders. In the event that the Corporation elects to issues
certificates, each certificate shall be in such form as the Board of
Directors shall adopt. Each certificate shall be signed by the President
or a Vice President and by the Secretary or Assistant Secretary or the
Treasurer or Assistant Treasurer or by any other officer authorized by
resolution of the Board of Directors. If a certificate is signed by a
transfer agent of the Corporation the signatures of such officers of the
Corporation may be by facsimile, engraved or printed. Each certificate
shall have the seal of the Corporation impressed on the certificate or a
facsimile of the seal printed, engraved or reproduced on the certificate.
In the event any officer who shall have signed or whose facsimile signature
shall have been used on any such certificate, shall cease to be such
officer of the Corporation, whether because of death, resignation or
otherwise, before such certificate has been delivered by the Corporation,
such certificate nevertheless may be issued and delivered as though the
person who signed such certificate or whose facsimile signature has been
used had not ceased to be an officer of the Corporation.

Section 2. Consideration for Initial Sales of Shares. The initial
sale of shares of the capital stock of the Corporation shall be for the
following consideration:

CAPITAL STOCK CONSIDERATION

Class A (Common Stock
Index Portfolio) $10.00

Class B (Government
Securities Portfolio) $10.00

Class C (Money Market
Portfolio) $10.00

Class D (Total Return
Portfolio) $10.00

Class E $10.00

Class F $10.00

Class G $10.00

Class H $10.00

Class I $10.00

Class J $10.00

Class K $10.00

Section 3. Consideration for Subsequent Sales of Shares. After the
initial sale of shares of a class of capital stock of the Corporation, the
subsequent sale of shares of that class shall be for a consideration equal
to the net asset value per share of that class next determined after the
Corporation receives the purchase order. The net asset value shall be
determined in accordance with the provisions of Article V of these By-Laws.

Section 4. Issuance of Shares of Capital Stock. The Corporation
shall not issue any share or fractional share, of its capital stock unless
and until is has received the consideration for the shares being purchased,
as specified in Section 2 or Section 3 above, whichever is applicable.

Section 5. Lost Certificates. Upon receipt of evidence satisfactory
to the Board of Directors that a certificate of capital stock has been lost
or destroyed, and upon receiving indemnity satisfactory to the Board of
Directors against loss to the Corporation plus the payment of such
reasonable service charge as the Board of Directors may determine, the
Board of Directors may authorize the issue of a new certificate.

Section 6. Fractional Share Interests. The Corporation may issue
fractions of a share of Capital Stock, and pay in cash the fair value of
fractions of a share of Capital Stock as of the time when those entitled to
redeem such fractions are determined. Fractional shares of Capital Stock
shall have proportionately to the respective fractions represented thereby
all the rights of whole shares, including the right to vote, the right to
receive dividends and distributions, and the right to participate upon
liquidation of the Corporation.

Section 7. Transfer of Shares. Transfer of shares shall be made on
the stock transfer books of the Corporation only upon the surrender of the
certificate (if a certificate has been issued) for the shares sought to be
transferred by the record holder or his duly authorized agent, transferee
or legal representative. All certificates surrendered for transfer shall
be cancelled before new certificates for the transferred shares shall be
issued.

Section 8. Registered Owners. The Corporation shall be entitled
to recognize the right of a person registered on its books as the owner of
shares to be the exclusive owner of such shares for all purposes including
redemption, voting and dividends, and the Corporation shall not be bound to
recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws
of the Commonwealth of Virginia.

Section 9. Transfer Agent. The Board of Directors may appoint one
or more transfer agents and may require all stock certificates to be signed
or countersigned by the transfer agent.

Section 10. Regulations. The Board of Directors shall have the
power and authority to make all such rules and regulations as they may deem
expedient concerning the issue, transfer and registration of certificates
for shares of the capital stock of the Corporation.

ARTICLE V

DETERMINATION OF NET ASSET VALUE PER SHARE
OF THE CAPITAL STOCK OF THE CORPORATION

Section 1. Net Asset Value. The net asset value per share of each
class of the capital stock of the Corporation shall be computed once a day,
Monday through Friday, on each day that the New York Stock Exchange is open
for business other than those holidays or other days listed in the
Corporation's Prospectus. The value of the assets of each class of stock
shall be computed as of the time of the close of trading on the New York
Stock Exchange.

Section 2. Determination of Net Asset Value. The net asset value of
each class of the capital stock of the Corporation shall be computed by
deducting from the assets allocated to each class of capital stock, (a) the
specific liabilities of each class (including brokerage commissions or fees
or any reserves for contingencies or taxes allocable to the assets
allocated to each class), and (b) the general liabilities of the
Corporation allocated to each class in proportion to the net asset values
of the respective class.

Section 3. Net Asset Value per Share. The net asset value of each
class of the capital stock of the Corporation shall be divided by the
number of shares of the capital stock of such class then outstanding on the
books of the Corporation (whether or not certificates have been issued) and
adjusted to the nearest whole cent to determine the net asset value per
share of each share of the capital stock or fraction thereof of that class.

ARTICLE VI

GENERAL PROVISIONS

Section 1. Seal. The seal of the Corporation shall be circular in
form bearing the inscription "Life of Virginia Series Fund, Inc. -
Virginia" around the circumference with the word "SEAL" in the center.

Section 2. Fiscal Year. The fiscal year of the Corporation shall end
on December 31.

Section 3. Audit. The accounts of the Corporation shall be audited
as of each fiscal year-end by a firm of certified public accountants
selected in accordance with the provisions of the 1940 Act.

Section 4. Reserves. There may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board of
Directors from time to time, in its absolute discretion, thinks proper as a
reserve or reserves to meet contingencies, or for such other purposes as
the Board of Directors shall think conducive to the interests of the
Corporation, and the Board of Directors may modify or abolish any such
reserve at any time.

Section 5. Annual Report. The books of account of the Corporation
shall be examined by an independent firm of public accountants, selected
and ratified in accordance with the provisions of the 1940 Act, at the
close of each annual fiscal period of the Corporation and at such other
times, if any, as may be directed by the Board of Directors of the
Corporation.

Section 6. Capital Stock Ledger. The Corporation shall maintain at
its principal office within the Commonwealth of Virginia an original or a
duplicate Capital Stock ledger containing the names and addresses of all
shareholders and the number of shares of Capital Stock held by each
shareholder. Such Capital Stock ledger may be in written form or in any
other form capable of being converted into written form within a reasonable
time for visual inspection.

Section 7. Shareholder Access To Corporate Records. To the extent
required by Section 13.1-771 of the Virginia Stock Corporation Act,
shareholders shall be given access to records of the Corporation. Any
person who has been a shareholder of record for at least six months
immediately preceding a demand to have access to the Corporation's records
or who shall be the holder of record of at least five percent of all the
outstanding shares of the Corporation, upon written notice of at least five
business days in advance, stating the purpose for the request, shall have
the right to inspect and copy, during regular business hours at a
reasonable business location specified by the Corporation and the Virginia
Stock Corporation Act, the records of the Corporation.

ARTICLE VII

AMENDMENTS

Section 1. These By-laws may be repealed or changed, and new By-laws
made, by shareholder action meeting the requirements of the Virginia Stock
Corporation Act and the Investment Company Act of 1940. Subject to the
provisions of the Virginia Stock Corporation Act and the Investment Company
Act of 1940, they may also be altered, amended or repealed by the Board of
Directors at any meeting by a vote of the majority of the whole Board of
Directors. Any By-law provisions adopted by the Board of Directors shall
be subject to repeal or change at any time by the shareholders by
shareholder action meeting the requirements of the Virginia Stock
Corporation Act and the Investment Company Act of 1940.

BY-LAWS

LIFE OF VIRGINIA SERIES FUND, INC.

(AMENDED AND RESTATED APRIL 21, 1993)

ARTICLE I

MEETINGS OF SHAREHOLDERS

Section l. Place of meeting. All meetings of the
shareholders shall be held at the Corporation's principal office
located at 6610 West Broad Street, Richmond, Virginia 23230, in
the County of Henrico, or at such other place, either within or
without the State of Virginia, as shall be designated in the notice
of the meeting.

Section 2. Annual Meetings. Annual meetings of shareholders
may be held on a date fixed from time to time by the Board of
Directors for the election of directors and the transaction of any
other business within the powers of the Corporation. The Board of
Directors shall not be required to hold an annual meeting of the
shareholders in any particular year in which the election of
directors is not required to be held under the Investment Company
Act of 1940.

Section 3. Special Meetings. Special meetings of the
shareholders may be called at any time by the President, by the
Board of Directors, or by any shareholder pursuant to the written
request of the holders of not less than twenty percent of all
the then outstanding shares of the capital stock of the Corporation
entitled to vote at the meeting.

Section 4. Notice of Meetings. Written or printed notice
stating the time and place of the meeting and, in the case of a
special meeting, the purpose or purposes for which the meeting is
called, shall be mailed not less than ten nor more than sixty days
before the date of the meeting to each shareholder of record
entitled to vote at the meeting. If a matter to be considered
involves an amendment to the articles of incorporation, a plan of
merger or share exchange, a proposed sale of assets of the
dissolution of the corporation the notice to shareholders shall be
given not less than twenty five nor more than sixty days before the
meeting. When a meeting is adjourned, it shall not be necessary
to give any notice of the adjourned meeting other than by
announcement at the meeting at which the adjournment is taken.

Section 5. Voting Lists. At least ten days before each
meeting of shareholders, the Secretary shall prepare an
alphabetical list of the shareholders entitled to vote at such
meeting, with the address and number of shares held by each, which
list shall be kept on file at the registered office of the
Corporation for a period of ten days prior to the meeting, and
shall be subject to inspection by any shareholder at any time
during the usual business hours of the Corporation. This list
shall also be produced and kept open at the time and place of
the meeting and shall be subject to inspection by any shareholder
during the whole time of the meeting.

Section 6. Proxies. A shareholder entitled to vote may vote
either in person or by proxy duly executed in writing by the
shareholder or the shareholder's duly authorized attorney-in-fact.
A proxy for any meeting shall be valid for any adjournment of such
meeting.

Section 7. Quorum. The holders of a majority of the shares
entitled to vote, represented in person or by proxy, shall
constitute a quorum at meetings of shareholders. If there is no
quorum at the opening of a meeting of shareholders, such meeting
may be adjourned from time to time by the vote of a majority of the
shares voting on the motion to adjourn; and, at an adjourned
meeting, at which a quorum is present, any business may be
transacted which might have been transacted at the original
meeting.

Section 8. Voting of Shares. Each outstanding share of the
Capital Stock of the Corporation or fraction thereof, shall be
entitled to one vote or appropriate fraction thereof, on each
matter submitted to a vote at a meeting of shareholders. The vote
of a majority of the shares voted on any matter at a meeting of
shareholders at which a quorum is present shall be the act of the
shareholders on that matter, unless the vote of a greater number is
required by law or by the Articles of Incorporation or the By-Laws
of the Corporation. The vote of a "majority of the outstanding
voting securities, "required for changes in fundamental policies,
approval of an investment advisory agreement, and certain other
matters specified in the Investment Company Act, means the lesser
of: (a) the vote of shareholders having more than 50% of the
outstanding votes, or (b) the vote of shareholders having 67% or
more of the eligible votes represented at a meeting if more than
50% of the outstanding votes are present or represented by proxy.
Fractional votes shall be counted.

ARTICLE II
BOARD OF DIRECTORS

Section 1. General Powers. The business and affairs of the
Corporation shall be managed by the Board of Directors except as
otherwise provided by law or by the Articles of Incorporation of
the Corporation.

Section 2. Number, Term and Qualification. The number of
directors of the Corporation shall be seven. This number may be
increased or decreased at any time by amendment of these By-laws,
but shall always be a number not less than three. Each director
shall hold office until the next annual meeting of the shareholders
and until his successor is elected and qualifies. Directors need
not be residents of the Commonwealth of Virginia or shareholders of
the Corporation.

Section 3. Removal. At a meeting called especially for that
purpose, directors may be removed from office, with or without
cause, and vacancies may be filled, by a vote of shareholders
holding a majority of the shares entitled to vote at an election of
directors.

Section 4. Vacancies. A vacancy occurring in the Board of
Directors, including any vacancy resulting from an increase in the
number of directors, may be filled by a majority of the remaining
directors, though less than a quorum, provided that immediately
after filling such vacancy or new directorship, at least seventy
percent of the directors then holding office shall have been
elected to such office by the shareholders. If at any time after
filling a vacancy, other than the time preceding the first annual
meeting of shareholders, less than seventy percent of the directors
then holding office were not duly elected by the shareholders, a
special meeting of the shareholders shall be called within ninety
(90) days for the purpose of electing directors (unless this period
is otherwise extended in order to comply with proxy solicitation
rules of the Securities and Exchange Commission). The shareholders
may elect a director at any time to fill any vacancy not filled by
the directors.

Section 5. Compensation. Directors as such shall not receive
any compensation for their services except that by resolution of
the Board of Directors a fixed sum and expenses of attendance, if
any, may be allowed for Board service and for attendance at each
regular meeting or special meeting of the Board or any committee
thereof, provided, that nothing herein contained shall be construed
to preclude any director from serving the Corporation in any other
capacity and receiving compensation therefore.

ARTICLE III
MEETINGS OF DIRECTORS

Section 1. Regular Meetings. Regular meetings of the Board
of Directors shall be held at the principal office of the
Corporation on such days as the Board by resolution may from time
to time fix. Notice of regular meetings shall not be required.

Section 2. Special Meetings. Special meetings of the Board
of Directors may be called by or at the request of the Chairman of
the Board, of the President or of any two directors. Such meetings
may be held either within or without the State of Virginia.

Section 3. Notice of Meetings. The Secretary or other person
or persons calling a special meeting shall give notice thereof by
mailing such notice to each director at least five days before the
meeting or by telephone or telegraph not less than one day before
the meeting. Unless otherwise indicated in the notice thereof, any
and all business may be transacted at a special meeting.
Attendance by a director at or participation in a special meeting
shall constitute a waiver of notice of such meeting, except where
a director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not
lawfully called and does not thereafter vote for or assent to
action taken at the meeting.

Section 4. Quorum. A majority of the directors fixed by
these By-laws shall constitute a quorum for the transaction of any
business at any meeting of the Board of Directors.

Section 5. Manner of Acting. Except as otherwise provided in
these By-laws or by law, the act of the majority of the
directors present at a meeting at which a quorum is present shall
be the act of the Board of Directors.

Section 6. Any action required to be taken or which may be
taken at a meeting of the directors, or a committee thereof may be
taken without a meeting if a consent in writing, setting forth the
action so to be taken, is signed either before or after such action
by all of the directors or members of such committee. Such consent
shall have the same force and effect as a unanimous vote.

ARTICLE IV
EXECUTIVE COMMITTEE

The Board of Directors may designate by resolution adopted by
a majority of all the directors three or more of the directors to
constitute an Executive Committee. The Executive Committee, when
the Board of Directors is not in session, may, to the extent
permitted by law, exercise all of the powers of the whole Board of
Directors. The Executive Committee may make rules for the holding
and conduct of its meetings, the notice thereof required and the
keeping of its records.

ARTICLE V
OFFICERS

Section 1. Titles and Duties. The officers of the
Corporation shall be a President, a Secretary and a Treasurer. The
Board of Directors may also elect a Chairman of the Board of
Directors, an Executive Vice President, one or more Vice
Presidents, one or more Assistant Secretaries, one or more
Assistant Treasurers, and such other officers as it shall deem
necessary. Except as otherwise specifically provided in these By-
laws, such additional officers shall have such authority and
perform such duties as from time to time may be prescribed by the
Board of Directors. Any two or more offices may be held by the
same person.

The officers of the Corporation shall have such duties as
generally pertain to their respective offices as well as such
powers and duties as from time to time may be delegated to them by
the Board of Directors.

Section 2. Election and Term. The officers of the
Corporation shall be elected by the Board of Directors at the
regular meeting of the Board held each year immediately following
the annual meeting of the shareholders. Each officer shall hold
office until the next regular meeting at which directors are to be
elected and until his successor is elected and qualified.

Section 3. Removal. Any officer elected or appointed by the
Board of Directors may be removed by the Board of directors with or
without cause whenever the Board of Directors, in its absolute
discretion, shall consider that the best interest of the
Corporation shall be served thereby, but such removal shall be
without prejudice to the contract rights, if any, of the individual
so removed.

Section 4. Vacancies. Vacancies among the officers of the
Corporation may be filled by a vote of the majority of the whole
Board of Directors at any regular or special meeting of the Board.

Section 5. Compensation. The compensation of all officers of
the Corporation shall be fixed by the Board of Directors.

Section 6. Voting Upon Stocks. Unless otherwise ordered by
the Board of Directors, the President or the Treasurer or the
Secretary shall have full power and authority in behalf of the
Corporation either to appoint attorneys or vote any stock held by
this Corporation at any meetings of the stockholders of any
corporation in which this Corporation may hold stock and at or in
connection with any such meetings shall possess and may exercise
any and all rights and powers incident to the ownership of such
stock and which, as the owner thereof, the Corporation might have
possessed and exercised if present. The Board of Directors may by
resolution from time to time confer such power and authority upon
any other person or persons.

ARTICLE VI
CAPITAL STOCK

Section 1. Certificates. Upon request to the
Corporation (or to its transfer agent) every shareholder shall be
entitled to receive a certificate or certificates evidencing the
shares (other than fractional shares) of capital stock held by the
shareholder which shall be in such form as the Board of Directors
shall adopt. Each certificate shall be signed by the President or
a Vice President and by the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer or by any other officer
authorized by resolution of the Board of Directors; provided, that
where a certificate is signed by a transfer agent of the
Corporation the signatures of such officers of the Corporation upon
the certificate may be facsimile, engraved or printed. Each
certificate shall have the seal of the Corporation impressed on the
certificate, or a facsimile of the seal printed, engraved or
reproduced on the certificate. In the event any officer or
officers who shall have signed or whose facsimile signature or
signatures shall have been used on any such certificate or
certificates, shall cease to be such officer or officers of the
Corporation, whether because of death, resignation or otherwise,
before such certificate or certificates shall have been delivered
by the Corporation, such certificate or certificates may
nevertheless be issued and delivered as though the person or
persons who signed such certificate or certificates or whose
facsimile signature or signatures shall have been used thereon had
not ceased to be such officer or officers of the Corporation.

Section 2. Transfer of Shares. Transfer of shares shall be
made on the stock transfer books of the Corporation only upon
surrender of the certificate (if a certificate has been issued) for
the shares sought to be transferred by the record holder thereof or
by his duly authorized agent, transferee or legal representative.
All certificates surrendered for transfer shall be cancelled before
new certificates for the transferred shares shall be issued.

Section 3. Transfer Agent. The Board of Directors may
appoint one or more transfer agents and may require all stock
certificates to be signed or countersigned by such a transfer
agent.

Section 4. Regulations. The Board of Directors shall have
power and authority to make all such rules and regulations as they
may deem expedient concerning the issue, transfer and registration
of certificates for shares of the capital stock of the Corporation.

Section 5. Fixing Record Date. For the purpose of
determining shareholders entitled to notice of or to vote at any
meetings of shareholders, or entitled to receive payment of any
dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors may fix in advance
a date as the record date for any such determination of
shareholders, such record date in any case to be not more than
seventy days prior to the date on which the particular action,
requiring such determination of stockholders is to be taken.

Section 6. Lost Certificate. Upon receipt of evidence
satisfactory to the Board of Directors that a certificate of
capital stock has been lost or destroyed, and upon receiving
indemnity satisfactory to the Board of Directors against loss to
the Corporation, plus the payment of such reasonable service charge
as the Board of Directors may determine, the Board of Directors may
authorize the issue of a new certificate in place thereof.

Section 7. Stockholder Access To Corporate Records. Any
person who shall have been a shareholder of record for at least six
months immediately preceding his demand or who shall be the holder
of record of at least five per centum of all the outstanding shares
of the Corporation, upon written notice at least five business days
in advance, stating the purpose thereof, shall have the right to
inspect and copy, during regulation business hours at a reasonable
business location specified by the Corporation, ln Subsection E of
Section 13.1-770 of the Virginia Stock Corporation Act.

ARTICLE VII
INVESTMENT RESTRICTIONS

Section 1. Fundamental Restrictions. Each class of capital
stock of the corporation represents interests in separate
investment Portfolios. The Portfolios are subject to certain
restrictions on their investments. These restrictions may not be
changed without the approval of the holders of a majority of the
outstanding voting shares of the Portfolio or Portfolios to be
affected by the change. Each Portfolio may not:

(a) Issue senior securities (except to the extent that
borrowings under Paragraph (j) below exceeding 5 percent may be
deemed to be senior securities under the investment Company Act of
1940);

(b) As to 75% of its total assets, invest more than 5%
of its total assets taken at market value at the time of each
investment in the securities (other than United States government
or government agency securities) of any one issuer (including
repurchase agreements with any one bank);

(c) Purchase more than either (i) 10% in principal
amount of the outstanding debt securities of an issuer, or (ii) 10%
of the outstanding voting securities of an issuer, except that such
restriction shall not apply to securities issued or guaranteed by
the United States government or its agencies, bank money market
instruments or bank repurchase agreements;

(d) Invest more than 25 percent of its total assets
(taken at market value at the time of each investment) in the
securities of issuers primarily engaged in the same industry;
utilities will be divided according to their services; for example,
gas, gas transmission, electric and telephone each will be
considered a separate industry for purpose of this restriction;

(e) Purchase real estate or any interest therein, except
through the purchase of corporate or certain government securities
(including securities secured by a mortgage or a leasehold interest
or other interest in real estate). A security issued by a real
estate or mortgage investment trust is not treated as an interest
in real estate;

(f) Purchase securities which are subject to legal or
contractual delays in or restrictions on resale;

(g) Purchase any securities on margin (except that the
Portfolio may obtain such short-term credit as may be necessary for
the clearance of purchases and sales of Portfolio securities) or
make short sales of securities or maintain a short position;

(h) Make loans, except as provided in (j) below and
except through the purchase of obligations in private placements
(the purchase of publicly-traded obligations not being considered
the making of a loan);

(i) Lend its portfolio securities in excess of 20
percent of its total assets, taken at market value at the time of
the loan, and provided that such loan shall be made in accordance
with the Portfolio's guidelines;

(j) Borrow amounts in excess of 10 percent of its total
assets, taken at market value at the time of the borrowing, and
then only from banks as a temporary measure for extraordinary or
emergency purposes or to meet redemption requests that might
otherwise require the untimely disposition of securities, and not
for investments or leveraging;

(k) Mortgage, pledge, hypothecate or in any manner
transfer, as security for indebtedness, any securities owned or
held by such Portfolio except as may be necessary in connection
with borrowings mentioned in (j) above, and then such mortgaging,
pledging or hypothecating may not exceed 10 percent or such
Portfolio's total assets, taken at market value at the time
thereof. In order to comply with certain state statutes, such
Portfolio will not, as a matter of operating policy, mortgage,
pledge or hypothecate its portfolio securities to the extent that
at any time the percentage of the value of pledged securities plus
the maximum sales charge will exceed 10 percent of the value of
such Portfolio's shares at the maximum offering price;

(l) Underwriter securities of other issuers except
insofar as the Fund may be deemed an underwriter under the
Securities Act of 1933 in selling portfolio securities;.

(m) Invest more than 10% of its total net assets in
repurchase agreements maturing in more than seven days and other
illiquid investments.

Section 2. Nonfundamental Restrictions. The Fund has also
adopted the following additional investment restrictions applicable
to all Portfolios that are not fundamental and may be changed by
the Board of Directors without shareholder approval. Under these
restrictions, each Portfolio may not:

(a) Write, purchase or sell puts, calls (other than
covered call options) or combinations thereof;

(b) Invest in securities of foreign issuers if at the
time of acquisition more than 10% of its total assets, taken at
market value at the time of the investment, would be invested in
such securities. However, up to 25% of the total assets of the
Portfolio may be invested in securities (i) issued, assumed or
guaranteed by foreign governments, or political subdivisions or
instrumentalities thereof, (ii) assumed or guaranteed by domestic
issuers, including Eurodollar securities, or (iii) issued, assumed
or guaranteed by foreign issuers having a class of securities
listed for trading on the New York Stock Exchange;

(c) Participate on a joint (or a joint and several)
basis in any trading account in securities (but this does not
include the "bunching" of orders for the sale or purchase of
portfolio securities with other Portfolios or with individually
managed accounts advised or sponsored by the Investment Adviser or
any of its affiliates to reduce brokerage commissions or otherwise
to achieve best overall execution);

(d) Purchase or retain the securities of any issuer if
the individual officers and directors of the Fund, the Investment
Adviser, or any of its affiliates own beneficially more than 1/2 of
1% of the securities of such issuer or together own in the
aggregate more than 5% of the securities of each issuer;

(e) Alone, or together with any other portfolio or
portfolios, make investments for the purpose of exercising control
over, or management of any issuer;

(f) Purchase securities of other investment companies
result thereof, the Portfolio would own more than 30% of
the total outstanding voting stock of any one investment company,
or more than 5% of the Portfolio's assets would be invested in any
one investment company, or more than a total of 10% of the
Portfolio's assets would be invested in investment company
securities. These limitations do not apply to securities acquired
in connection with a merger, consolidation, acquisition or
reorganization, or by purchase in the open market of securities of
closed-end investment companies where no underwriter or dealer's
commission or profit, other than customary broker's commission, is
involved, and so long as immediately thereafter not more than 10%
of such Portfolio's total assets, taken at market value, would be
invested in such securities;

(g) Purchase or sell interests in oil, gas, or other
mineral explorations or development programs, commodities, or
commodity contracts, except that the Common Stock and Bond
Portfolios may purchase securities of issuers which invest or deal
in any of the above.

(h) Invest more than 30% of its assets, measured at
time of purchase, in debt securities that are unrated by Moody's
Investors Service, Inc. ("Moody's") or Standard & Poor's
Corporation ("Standard & Poor's") or are rated lower than the four
highest rating categories assigned by Moody's or Standard &
Poor's.

ARTICLE VIII
DETERMINATION OF NET ASSET VALUE PER SHARE
OF THE CAPITAL STOCK OF THE CORPORATION

Section 1. The net asset value per share of each class of the
Capital Stock of the Corporation shall be calculated as of the
close of business on each business day the New York Stock Exchange
is open for trading and on each day on which there is sufficient
trading to cause a material change in the value of the assets
allocated to the class, by deducting from the assets allocated to
each class of the Capital Stock (as established in these By-Laws or
by action of the Board of Directors), (a) the specific liabilities
of each class (including brokerage commissions or fees or any
reserves for contingencies or taxes allocable to the assets
allocated to each class), and (b) the general liabilities of the
Corporation allocated to each class in proportion to the net asset
values of the assets allocated to the respective class. The net
asset value of the assets of each Class so determined shall be
final and conclusive.

Section 2. The net asset value of each class of the Capital
Stock of the Corporation shall be divided by the number of shares
of the Capital Stock of such class then outstanding on the books of
the Corporation (whether or not certificates therefor have been
issued), and adjusted to the nearest whole cent, to determine the
net asset value per share of each share of the Capital Stock (or
fraction thereof) of that class.

Section 3. Any security listed on a national securities
exchange will be valued at its closing sales price on the
exchange where it is principally traded or, if there has been no
such sale, at the mean between the last bid and asked price on such
exchange. All other securities for which market quotations are
readily available will be valued on the basis of the last bid
price. When market quotations are not readily available,
securities will be valued at their fair value as determined in good
faith by the Board of Directors of the Corporation.

ARTICLE IX
INDEMNIFICATION OF DIRECTORS AND OFFICERS
OF THE CORPORATION

Section 1. The Corporation shall indemnify each director and
officer of this Corporation who was or is a party or is threatened
to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he is or was
a director or officer of the Corporation, or is or was serving at
the request of the Corporation as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding if he acted in
good faith and in a manner he reasonably believed to be in the best
interests of the Corporation, and with respect to any criminal
action, had no cause to believe his conduct unlawful, except that
no such person shall be indemnified for any liabilities or expenses
arising out of disabling conduct whether or not there is an
adjudication of liability by any tribunal of competent
jurisdiction. The termination of any action, suit or proceeding,
by judgement, order, settlement, conviction, or upon a plea of nolo
contendere, shall not of itself create a presumption that the
person did not act in good faith, or in a manner opposed to the
best interests of the Corporation, and, with respect to any
criminal action or proceeding, believed his conduct unlawful.
"Disabling conduct" means willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the
conduct of office.

Section 2. The Corporation shall indemnify each director or
officer of the Corporation who was or is a party or is threatened
to be made a party to any threatened, pending or completed action
or suit by or in the right of the Corporation to procure a
judgement in its favor by reason of the fact that he is or was a
director or officer of the Corporation, or is or was serving at the
request of the Corporation as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation and except that no indemnification
shall be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable for negligence or
misconduct or disabling conduct in the performance
of his duty to the Corporation unless and only to the extent that
the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such
court shall deem proper. "Disabling conduct" means willful
misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of office.

Section 3. Any indemnification under subsections (1) and (2)
(unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the
circumstances because he has met the applicable standard of conduct
set forth in subsections (1) and (2). Whether any such liability
or expense arose out of disabling conduct shall be determined:

(a) by a final decision on the merits (including, but not
limited to, a dismissal for insufficient evidence of any disabling
conduct) by a court or other body before whom the proceeding was
brought, that the person to be indemnified was not liable by reason
of disabling conduct; or

(b) in the absence of such a decision, by a reasonable
determination, based upon a review of the facts, (i) by the vote of
a majority of a quorum of directors who are neither interested
persons nor parties to the action, suit, or proceeding in question
or another action, suit, or proceeding on the,same or similar
grounds; or (ii) by independent legal counsel in a written opinion.

Section 4. Expenses (including attorneys' fees) incurred in
defending an action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative, may be paid by the
Corporation in advance of the final disposition of such action,
suit or proceeding as authorized in the manner provided in
subsection (3) upon receipt of an undertaking by or on behalf of
the director or officer to repay such amount to the Corporation
unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation as authorized in this Article.

Section 5. The Corporation shall have the power to make any
other or further indemnity to any person referred to in this
Article except as indemnity against gross negligence or willful
misconduct or other disabling conduct.

Section 6. Every reference herein to director or officer
shall include every director or officer or former director or
officer of the Corporation and shall enure to the benefit of the
heirs, executors and administrators of such person.

Section 7. The foregoing rights and indemnification shall not
be exclusive of any other rights and indemnifications to which the
directors and officers of the Corporation may be entitled according
to law.

ARTICLE X
GENERAL PROVISIONS

Section 1. Seal. The seal of the Corporation shall be
circular in form bearing the inscription "Life of Virginia Series
Fund, Inc. - Virginia" around the circumference with the word
"SEAL" in the center.

Section 2. Fiscal Year. The fiscal year of the Corporation
shall end on December 31.

Section 3. Audit. The accounts of the Corporation shall be
audited as of each fiscal year-end by a firm of certified public
accountants selected in accordance with the provisions of the
Investment Company Act of 1940.

ARTICLE XI
AMENDMENTS

Section 1. These By-laws may be repealed or'changed, and new
By-laws made, by shareholder action meeting the requirements of the
Virginia Stock Corporation Act and the Investment Company Act of
1940. Subject to the provisions of the Virginia Stock Corporation
Act and the Investment Company Act of 1940, they may also be
altered, amended or repealed by the Board of Directors at any
meeting by a vote of the majority of the whole Board of Directors.
Any By-law provisions adopted by the Board of Directors shall be
subject to repeal or change at any time by the shareholders by
shareholder action meeting the requirements of the Virginia Stock
Corporation Act and the Investment Company Act of 1940.

INVESTMENT ADVISORY AGREEMENT

INVESTMENT ADVISORY AGREEMENT made this 27 day of
April, 1995, by and between LIFE OF VIRGINIA SERIES FUND,INC., (the "Fund") a
Virginia corporation and AON ADVISORS, INC., (the"Adviser") a corporation,
which is registered as an investment adviser under the Investment Advisers Act
of 1940, whereby the Adviser will act as investment adviser to the Fund as
follows:

ARTICLE I

Duties of the Adviser

The Fund is an open-end, diversified management investment company,
incorporated under the laws of the Commonwealth of Virginia on May 14,
1984. The Fund, organized as a series company as defined in Rule 18f-2
under the Investment Company Act of 1940, as amended (the "Act") has six
classes of Capital Stock currently outstanding (designated classes A, B, C,
D, E and F). The Fund also currently has or will have six investment
portfolios: the Common Stock Index Portfolio, the Government Securities
Portfolio, the Money Market Portfolio, the Total Return Portfolio, the
International Equity Portfolio and the Real Estate Securities Portfolio.
Additional portfolios may be created in the future. Each current or future
portfolio will have different investment objectives.

The Fund hereby employs the Adviser to act as the investment adviser
to and manager of the Fund, and, subject to the supervision of the Board of
Directors of the Fund (the "Board"), to manage the investment and
reinvestment of the assets of the Fund's International Equity Portfolio
(the "Portfolio") for the period and on the terms and conditions set forth
in this Agreement. The Adviser hereby accepts such employment and agrees
during such period, at its own expense, to render the services and to
assume the obligations herein set forth for the compensation provided for
herein. The Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly
provided or authorized herein, have no authority to act for or
represent the Fund in any way or otherwise be deemed an agent of
the Fund. The Adviser shall, for purposes of this agreement,
have and exercise full investment discretion and authority to act
as agent for the Fund in buying, selling or otherwise disposing
of or managing the Fund's investments, subject to the supervision of the
Board.

A. Investment Advisory Services. In carrying out its
obligations to manage the investment and reinvestment of the assets of the
Fund, the Adviser shall, as appropriate and consistent with the limitations
set forth in Section C hereof:

(a) perform research and obtain and evaluate pertinent
economic, statistical, and financial data relevant to the investment
policies of the Portfolio or the Fund as set forth in the Prospectus for
the Fund, as amended from time to time;

(b) consult with the Board and furnish to the Board
recommendations with respect to an overall investment strategy of the
Portfolio for approval, modification, or rejection the Board;

(c) seek out and implement specific investment
opportunities, consistent with any investment strategies approved by the
Board;

(d) take such steps as are necessary to implement any
overall investment strategies approved by the Board, including making and
carrying out day-to-day decisions to acquire or dispose of permissible
investments, management of investments and any other property of the
Portfolio, and providing or obtaining such services as may be necessary in
managing, acquiring or disposing of investments;

(e) regularly report to the Board with respect to the
implementation of any approved overall investment strategy
and any other activities in connection with management of the assets of the
Portfolio, including furnishing, within 30 days after the end of each
calendar quarter, a statement of all purchases and sales during the quarter
and a schedule of investments and other assets of the Portfolio as of the
end of the quarter;
(f) maintain all required accounts, records, memoranda,
instructions or authorizations relating to the acquisition or disposition
of investments for the Portfolio;

(g) assist the Fund officers in determining each business
day the net asset value of the shares of the Portfolio in
accordance with applicable law; and,

(h) Subject to the approval of the Board and to other
applicable legal requirements, the Adviser may enter into any advisory or
sub-advisory agreement or contract with another affiliated or unaffiliated
entity pursuant to which such entity will carry out some or all of the
Adviser's responsibilities listed above.

B. Administrative Services. In addition to the performance of
investment advisory services, the Adviser shall perform, or supervise the
performance of, administrative services in connection with the management
of the Fund and the portfolios, including financial reporting by the Fund.
In this connection, the Adviser agrees to supervise the coordination of all
matters relating to the functions of the custodian or other shareholder
service agents, if any, and accountants, attorneys and other parties
performing services for the Fund.

Nothing contained herein will be construed to restrict the Fund's
right to hire its own employees or to contract for services to be performed
by third parties.

C. Limitations on Services. The Adviser shall perform all
services under this Agreement subject to the supervision and
review of the Board and in a manner consistent with the investment
objectives, policies, and restrictions of the Portfolio as stated in the
Fund's Registration Statement, as amended from time to time, filed with the
Securities and Exchange Commission, with its Articles of Incorporation and
By-laws, as amended from time to time, and with the provisions of the Act.

The Fund has furnished or will furnish the Adviser with copies of the
Fund's Registration Statement, Articles of Incorporation, and By-laws as
currently in effect and agrees during the continuance of this agreement to
furnish the Adviser with copies of any amendment or supplements thereto
before or at the time the amendments or supplements become effective. The
Adviser will be entitled to rely on all documents furnished by the Fund.

ARTICLE II

Compensation of the Adviser

A. Investment Advisory Fee. For the services rendered, the
facilities furnished and the expenses assumed by the Adviser, the Fund
shall pay to the Adviser at the end of each calendar month, a fee for the
Portfolio based upon the average daily net assets of the Portfolio (as
computed in accordance with the description of the determination of the net
asset value in the currently effective prospectus for the Fund at the time
of the computation) at the following annual rates:

International Equity Portfolio: 1.00% of the first
$100,000,000; .95% of the next $100,000,000; and .80% of the amounts in
excess of $200,000,000.

B. Allocation of Expenses. The Adviser shall be responsible for
payment of all expenses it may incur in performing the services set forth
in Article I hereunder. These expenses include costs incurred in providing
investment advisory services, compensating and furnishing office space for
officers and employees of the Adviser connected with investment and
economic research, trading and investment management of the Fund and the
payment of any fees to interested directors of the Fund. The Adviser will
provide all executive, administrative, clerical and other personnel
necessary to operate the Fund and will pay the salaries and other
employment-related costs of employing these persons. The Adviser will
furnish the Fund with office space, facilities and equipment and will pay
the day-to-day expenses related to the operation and maintenance of such
office space facilities and equipment. Legal, accounting and all other
expenses incurred in the organization of the Fund or of new Portfolios of
the Fund, including costs of registering under Federal and State securities
laws, will also be paid by the Adviser.

The Fund shall be responsible for payments of all expenses it may
incur in its operation and all of its general administrative expenses
except those expressly assumed by the Adviser in the foregoing paragraph.
These include, by way of description and not of limitation, any share
redemption expenses, expenses of portfolio transactions, shareholder
servicing costs, pricing costs (including the daily calculation of net
asset value), interest on borrowings by the Fund, charges of the custodian
and transfer agent, if any, cost of auditing services, non-interested
directors' fees, legal expenses, state franchise taxes, certain other
taxes, investment advisory fees, certain insurance premiums, costs of
maintenance of corporate existence, investor services (including allocable
personnel and telephone expenses), costs of printing and mailing updated
Fund prospectuses to shareholders, proxy statements and shareholder
reports, the cost of paying dividends and capital gains distribution,
capital stock certificates, costs of Board and shareholder meetings, and
any extraordinary expenses, including litigation costs in legal actions
involving the Fund, or costs relating to indemnification of directors,
officers and employees of the Fund.

The Board shall determine the manner in which expenses are allocated
to the Portfolio and among the Portfolios of the Fund, and the
determination of the Board shall be final and binding.

C. Reimbursement of Excess Operating Expenses. If the operating
expenses allocable to the Portfolio for any fiscal year should exceed the
amounts indicated below the Adviser shall reimburse the Fund for the
excess:

1.75% of the first $30,000,000 of the average daily net
assets of the Portfolio and 1% of the amount by which the average daily net
assets of the Portfolio exceeds $30,000,000.

For purposes of this Section, "operating expenses" do not include
attorneys' fees, court judgments, decrees or awards, or any other
litigation costs in legal actions involving the Fund, or costs relating to
indemnification of directors, officers or employees of the Fund where such
costs are not covered by director and officer liability insurance.

Expenses that are reimbursable pursuant to this Section, if any, shall
be calculated daily and credited to the Fund on a monthly basis.

ARTICLE III

Portfolio Transactions and Brokerage

The Adviser agrees to determine, or if applicable have a Sub-Adviser
determine, the securities to be purchased or sold by the Portfolio, subject
to the provisions of Article I, and to place orders pursuant to such
determinations, either directly with the issuer, with any broker-dealer or
underwriter that specializes in the securities for which the order is made,
or with any other broker or dealer selected by the Adviser or the Sub-
Adviser subject to the following limitations:

The Adviser or Sub-Adviser is authorized to select the brokers or
dealers that will execute the purchases and sales of the Portfolio and will
use best efforts to obtain the most favorable net results and execution of
the Fund's orders, taking into account all appropriate factors, including
price, dealer spread or commission, if any, size of the transaction and
difficulty of the transaction.

If, in the judgment of the Adviser or Sub-Adviser, the Fund
would benefit from supplemental investment research, the Adviser or Sub-
Adviser is authorized to pay spreads or commissions to brokers or dealers
furnishing such services in excess of spreads or commissions which another
broker or dealer may charge for the same transaction. The expenses of the
Adviser may not necessarily be reduced as a result of receipt of such
supplemental information.

Subject to the above requirements, nothing shall prohibit the Adviser
or Sub-Adviser from selecting brokers or dealers with which it or the Fund
are affiliated and from selecting brokers or dealers by virtue of sales of
insurance policies of The Life Insurance Company of Virginia or of its life
insurance company affiliates by such broker-dealers or their affiliates.

ARTICLE IV

Activities of the Adviser

The services of the Adviser to the Fund under this Investment Advisory
Agreement are not to be deemed exclusive and the Adviser will be free to
render similar services to others as long as its services under this
Investment Advisory Agreement are not impaired. Directors, officers,
employees and shareholders of the Fund are or may become interested persons
of the Adviser, as directors, officers, employees or shareholders or
otherwise, and directors, officers, employees or shareholders of the
Adviser are or may become interested persons of the Fund.

It is agreed that the Adviser or any Sub-Adviser may use any
supplemental investment research obtained for the benefit of
the Portfolio or the Fund in providing investment advice to its other
investment advisory accounts. The Adviser or its subsidiaries or Sub-
Adviser may use such information in managing their own accounts.
Conversely, such supplemental information obtained by the placement of
business for the Adviser or other entities advised by the Adviser will be
considered by and may be useful to the Adviser or any Sub-Adviser in
carrying out its obligations to the Fund.

Securities held by the Portfolio may also be held by separate
investment accounts or other mutual funds for which the Adviser or Sub-
Adviser may act as an adviser or sub-adviser or by the Adviser, Sub-Adviser
or their affiliates. Because of different investment objectives or other
factors, a particular security may be bought by the Adviser, Sub-Adviser or
their affiliates or for one or more clients when one or more clients are
selling the same security. If purchases or sales of securities for the
Portfolio or other entities for which the Adviser, Sub-Adviser or their
affiliates act as investment adviser or sub-adviser or for their advisory
clients arise for consideration at about the same time, the Fund agrees
that the Adviser or Sub-Adviser may make transactions in such securities,
insofar as feasible, for the respective entities and clients in a manner
deemed equitable to all. To the extent that transactions on behalf of more
than one client of the Adviser or Sub-Adviser during the same period may
increase the demand for securities being purchased or the supply of
securities being sold, the Fund recognizes that there may be an adverse
effect on the price of that security.

It is agreed that, on occasions when the Adviser or Sub-Adviser deems
the purchase or sale of a security to be in the best interests of the Fund
as well as other accounts or companies, it may, to the extent permitted by
applicable laws or regulations, but will not be obligated to, aggregate the
securities to be so sold or purchased for the Portfolio with those to be
sold or purchased for other accounts or companies in order to obtain
favorable execution and lower brokerage commissions. In that event,
allocation of the securities purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Adviser or Sub-Adviser
in the manner it considers to be most equitable and consistent with its
fiduciary obligations to the Fund and to such other accounts or companies.
The Fund recognizes that in some cases this procedure may adversely affect
the size of the position obtainable for the Portfolio.

ARTICLE V

Effectiveness of the Agreement

This Investment Advisory Agreement shall become effective on the date
that it is approved for by the Fund's Board of Directors, including a
majority of directors who are not parties to this Agreement or interested
persons of any such party, or on the date this Agreement is approved by a
majority of the Portfolio's shareholders acting in accordance with the
requirements of the Act and the rules and regulations promulgated
thereunder, whichever is later.

ARTICLE VI

Term of the Agreement

This Investment Advisory Agreement shall remain in effect from
year-to-year after its initial effective date so long as such continuance
is specifically approved at least annually (a) by the vote of the majority
of the Board, or by vote of a majority of the outstanding voting shares of
the class representing interests in the Portfolio, and (b) by the vote of a
majority of the members of the Board who are not parties to this Agreement
or interested persons of any such party, cast in person at a meeting called
for the purpose of voting on such approval.

In connection with all such approvals, the Board shall request and
evaluate, and the Adviser shall furnish, such information as may reasonably
necessary to evaluate the terms of this Agreement. This Agreement:

(a) shall be subject to termination by the Adviser, without
the payment of any penalty, on sixty days' written notice to the Fund;

(b) shall be subject to termination, without the payment of
any penalty, by the Board or by vote of a majority of the outstanding
voting securities of the class representing interests in the Portfolio, on
sixty days' written notice to the Adviser;

(c) shall not be amended without specific approval of such
amendment by (i) the vote of a majority of the class representing interests
in the Portfolio, and (ii) a majority of those directors who are not
parties to this Agreement or interested persons of such a party, cast in
person at a meeting called for the purpose of voting on such approval; and

(d) shall automatically terminate upon assignment by either
party.

ARTICLE VII

Record keeping

The Adviser agrees to preserve for the period prescribed by the rules
and regulations of the Securities and Exchange Commission all records the
Adviser maintains for the Fund as are required to be maintained pursuant to
such rules. The Adviser agrees that all such records shall be the property
of the Fund and shall be made available, within five (5) business days of
the request, to the Fund's accountants or auditors during regular business
hours at the Adviser's offices upon such prior written notice. In the event
of termination for any reason, all such records shall be returned promptly
to the Fund, free from any claim or retention of rights by the Adviser. In
addition, the Adviser will provide any materials, reasonably related to the
investment advisory services provided hereunder, as may be reasonably
requested in writing by the directors or officers of the Fund or as may be
required by any governmental agency having jurisdiction.

The Adviser further agrees that it will not disclose or use any
records or information obtained pursuant to this Agreement in any manner
whatsoever except as authorized in this Agreement and that it will keep
confidential any information obtained pursuant to this Agreement and
disclose such information only if The Life Insurance Company of Virginia or
the Fund has authorized such disclosure, or if such disclosure is required
by Federal or state regulatory authorities.

ARTICLE VIII

Liability of the Adviser

In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties on the part of the Adviser (or
its officers, directors, agents, employees, controlling persons,
shareholders, and any other person or entity affiliated with the Adviser or
retained by it to perform or assist in the performance of its obligations
under this Agreement), neither the Adviser nor any of its officers,
directors, employees or agents shall be subject to liability of the Fund or
to any shareholder or to any other person with a beneficial interest in the
Fund for any act or omission in the course of, or connected with, rendering
services hereunder, including without limitation any error of judgment or
mistake of law or for any loss suffered by the Fund or any shareholder or
other person in connection with the matters to which this Agreement
relates, except to the extent specified in Section 36(b) of the Investment
Company Act concerning loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services.

ARTICLE IX

Governing Law

While this Agreement is intended by the parties to be governed by
Virginia law as to matters of State law, this Investment Advisory Agreement
is also subject to the provisions of the Act and the rules and regulations
of the Securities and Exchange Commission thereunder, including such
exemptions therefrom as the Securities and Exchange Commission may grant.
Words and-phrases used herein shall be interpreted in accordance with the
Act and those rules and regulations. As used with respect to the Fund and
the holders of voting shares of any class of the Fund's Capital Stock, the
term "majority of the outstanding voting shares" means the lesser of (i)
67% or more of the voting shares represented at a meeting at which the
holders of more than 50% of the outstanding voting shares are represented
or (ii) more than 50% of the outstanding voting shares.

IN WITNESS WHEREOF, the parties have caused this Investment Advisory
Agreement to be signed by their respective officials duly authorized, as of
the day and year first above written.

AON ADVISORS, INC.

BY: ____________________________________

TITLE: _________________________________

DATE: __________________________________

LIFE OF VIRGINIA SERIES FUND, INC.

BY: ____________________________________

TITLE: _________________________________

DATE: __________________________________

INVESTMENT ADVISORY AGREEMENT

INVESTMENT ADVISORY AGREEMENT made this 27 day of
April, 1995, by and between LIFE OF VIRGINIA SERIES FUND,INC., (the
"Fund") a Virginia corporation and AON ADVISORS, INC., (the "Adviser") a
corporation, which is registered as an investment adviser under the
Investment Advisers Act of 1940, whereby the Adviser will act as
investment adviser to the Fund as follows:

ARTICLE I

Duties of the Adviser

The Fund hereby employs the Adviser to act as the investment adviser
to and manager of the Fund, and, subject to the supervision of the Board of
Directors of the Fund (the "Board"), to manage the investment and
reinvestment of the assets of the Fund's Real Estate Securities Portfolio
(the "Portfolio") for the period and on the terms and conditions set forth
in this Agreement. The Adviser hereby accepts such employment and agrees
during such period, at its own expense, to render the services and to
assume the obligations herein set forth for the compensation provided for
herein. The Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly
provided or authorized herein, have no authority to act for or
represent the Fund in any way or otherwise be deemed an agent of
the Fund. The Adviser shall, for purposes of this agreement,
have and exercise full investment discretion and authority to act
as agent for the Fund in buying, selling or otherwise disposing
of or managing the Fund's investments, subject to the supervision of the
Board.

(b) consult with the Board and furnish to the Board
recommendations with respect to an overall investment strategy of the
Portfolio for approval, modification, or rejection the Board;

(c) seek out and implement specific investment
opportunities, consistent with any investment strategies approved by the
Board;

(g) assist the Fund officers in determining each business
day the net asset value of the shares of the Portfolio in
accordance with applicable law; and,

Nothing contained herein will be construed to restrict the Fund's
right to hire its own employees or to contract for services to be performed
by third parties.

ARTICLE II

Compensation of the Adviser

Real Estate Securities Portfolio: .85% of the first
$100,000,000; .80% of the next $100,000,000; and .75% of the amounts in
excess of $200,000,000.

The Board shall determine the manner in which expenses are allocated
to the Portfolio and among the Portfolios of the Fund, and the
determination of the Board shall be final and binding.

1.50% of the first $30,000,000 of the average daily net
assets of the Portfolio and 1% of the amount by which the average daily net
assets of the Portfolio exceeds $30,000,000.

Expenses that are reimbursable pursuant to this Section, if any, shall
be calculated daily and credited to the Fund on a monthly basis.

ARTICLE III

Portfolio Transactions and Brokerage

ARTICLE IV

Activities of the Adviser

ARTICLE V

Effectiveness of the Agreement

ARTICLE VI

Term of the Agreement

(a) shall be subject to termination by the Adviser, without
the payment of any penalty, on sixty days' written notice to the Fund;

(d) shall automatically terminate upon assignment by either
party.

ARTICLE VII

Record keeping

ARTICLE VIII

Liability of the Adviser

ARTICLE IX

Governing Law

IN WITNESS WHEREOF, the parties have caused this Investment Advisory
Agreement to be signed by their respective officials duly authorized, as of
the day and year first above written.

AON ADVISORS, INC.

BY: ____________________________________

TITLE: _________________________________

DATE: __________________________________

LIFE OF VIRGINIA SERIES FUND, INC.

BY: ____________________________________

TITLE: _________________________________

DATE: __________________________________

INVESTMENT SUB-ADVISORY AGREEMENT

THIS INVESTMENT SUB-ADVISORY AGREEMENT ("Agreement") made this ___ day
of ___________ 1995 by and Between Aon Advisors, Inc., a Virginia
corporation, (the "Adviser") and Perpetual Portfolio Management, Limited, a
corporation organized under the laws of England (the "Sub-Adviser").

Adviser and Sub-Adviser Agree as follows:

1. Adviser hereby engages the services of Sub-Adviser in connection with
Adviser's management of the International Portfolio (the "Portfolio") of
Life of Virginia Series Fund, Inc. (the "Fund"). Pursuant to this
Agreement and subject to the oversight and supervision by Adviser and the
officers and the board of directors of the Fund, Sub-Adviser shall manage
the investment and reinvestment of the assets of the Portfolio.

2. Sub-Adviser hereby accepts employment by Adviser in the foregoing
capacity and agrees, at its own expense, to render the services set forth
herein and to provide the office space, furnishings, equipment and
personnel required by it to perform such services on the terms and for the
compensation provided in this Agreement.

3. In particular, Sub-Adviser shall furnish continuously an investment
program for the Portfolio and shall determine from time to time in its
discretion the securities and other investments to be purchased or sold or
exchanged and what portions of the Portfolio shall be held in various
securities, cash or other investments. In this connection, Sub-Adviser
shall provide Adviser and the officers and directors of the Fund with such
reports and documentation as the latter shall reasonably request regarding
Sub-Adviser's management of the Portfolio's assets.

4. Sub-Adviser shall carry out its responsibilities under this Agreement
in compliance with: (a) the Portfolio's investment objective, policies and
restrictions as set forth in the Fund's current registration statement, (b)
such policies or directives as the Fund's directors may from time to time
establish or issue, and (c) applicable law and related regulations. In
particular, Sub-Adviser shall make every effort to ensure that the
Portfolio complies with Section 817(h) of the Internal Revenue Code of 1986
(the "Code") and regulations issued thereunder relating to the
diversification requirements for variable annuity, endowment, and life
insurance contracts and to ensure that the Portfolio continuously qualifies
as a regulated investment company under sub-chapter M of the Code. Adviser
shall promptly notify Sub-Adviser of changes to (a) or (b) above and shall
notify Sub-Adviser of changes to (c) above promptly after it becomes aware
of such changes.

5. Sub-Adviser shall take all actions which it considers necessary to
implement the investment policies of the Portfolio, and in particular, to
place all orders for the purchase or sale of securities or other
investments for the Portfolio with brokers or dealers selected by it, and
to that end, Sub-Adviser is authorized as the agent of the Fund to give
instructions to the Fund's custodian as to deliveries of securities or
other investments and payments of cash for the account of the Portfolio.
In connection with the selection of brokers or dealers and the placing of
purchase and sale orders with respect to investments of the Portfolio, Sub-
Adviser is directed at all times to seek to obtain best execution and price
within the policy guidelines determined by the Fund's board of directors
and set forth in the Fund's current registration statement.

In addition to seeking the best price and execution, Sub-Adviser may
also take into consideration research and statistical information and wire
and other quotation services provided by brokers and dealers to Sub-
Adviser. Sub-Adviser is also authorized to effect individual securities
transactions at commission rates in excess of the minimum commission rates
available, if it determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that
particular transaction or Sub-Adviser's overall responsibilities with
respect to the Portfolio. The policies with respect to brokerage
allocation, determined from time to time by the Fund's board of directors
are those disclosed in the Fund's currently effective registration
statement. Sub-Adviser will periodically evaluate the statistical data,
research and other investment services provided to it by brokers and
dealers. Such services may be used by Sub-Adviser in connection with the
performance of its obligations under this Agreement or in connection with
other advisory or investment operations including using such information in
managing its own accounts.

6. Sub-Adviser's services under this Agreement are not exclusive. Sub-
Adviser may provide the same or similar services to other clients provided
that the Adviser is not treated less favorably than other clients of Sub-
Adviser. Sub-Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Adviser, the Fund
or the Portfolio or otherwise be deemed agents of the Adviser, the Fund or
the Portfolio.

7. Sub-Adviser is registered with the U.S. Securities and Exchange
Commission under the Investment Advisers Act of 1940, as amended, and is a
member of the Investment Regulatory Organization Limited ("IMRO") of the
United Kingdom and is thereby regulated by IMRO in the conduct of its
investment business. The Sub-Adviser shall remain so registered throughout
the term of this Agreement and shall notify Adviser immediately if Sub-
Adviser ceases to be so registered as an investment adviser. IMRO may
require certain disclosures and representations to be made from time to
time to clients that are not included in this Agreement. Any such
additional information will be provided in a separate writing to this
Agreement.

8. Subject to: (a) the requirement that Sub-Adviser seek to obtain best
execution and price within the policy guidelines determined by the Fund's
board of directors and set forth in the Fund's current registration
statement, (b) the provisions of the Investment Advisers Act of 1940 (the
"Act"), (c) the provisions of the Securities Exchange Act of 1934, and (d)
other applicable provisions of law; Sub-Adviser or an affiliated person of
Sub-Adviser may act as broker for the Portfolio in connection with the
purchase or sale of securities or other investments for the Portfolio.
Such brokerage services are not within the scope of the duties of Sub-
Adviser under this Agreement. Subject to the requirements of applicable
law and any procedures adopted by Fund's board of directors, Sub-Adviser or
its affiliated persons may receive brokerage commissions, fees or other
remuneration from the Portfolio or the Fund for such services in addition
to Sub-Adviser's fees for services under this Agreement.

9. For the services rendered, the facilities furnished and the expenses
assumed by Sub-Adviser, Adviser shall pay Sub-Adviser at the end of each
calendar month a fee based on the average daily net assets of the Portfolio
at the following annual rates:

.50% of the first $100,000,000; .475% of the next $100,000,000; and
.45% of amounts in excess of $200,000,000.

Sub-Adviser's fee shall be accrued daily at 1/365th of the applicable
annual rate set forth above. For the purpose of accruing compensation, the
net assets of the Portfolio shall be determined in the manner and on the
dates set forth in the current prospectus of the Fund, and, on days on
which the net assets are not so determined, the net asset value computation
to be used shall be as determined on the next day on which the net assets
shall have been determined. In the event of termination of this Agreement,
all compensation due through the date of termination will be calculated on
a pro-rated basis through the date of termination and paid within thirty
business days of the date of termination.

During any period when the determination of net asset value is
suspended, the net asset value of the Portfolio as of the last business day
prior to such suspension shall for this purpose be deemed to be the net
asset value at the close of each succeeding business day until it is again
determined.

10. Sub-Adviser hereby undertakes and agrees to maintain, in the form and
for the period required by Rule 31a-2 under the Investment Company Act of
1940, all records relating to the Portfolio's investments that are required
to be maintained by the Fund pursuant to the requirements of Rule 31a-1 of
that Act.

Sub-Adviser agrees that all books and records which it maintains for
the Portfolio or the Fund are the property of the Fund and further agrees
to surrender promptly to the Adviser or the Fund any such books, records or
information upon the Adviser's or the Fund's request. All such books and
records shall be made available, within five business days of a written
request, to the Fund's accountants or auditors during regular business
hours at Sub-Adviser's offices. Adviser and the Fund or either of their
authorized representative shall have the right to copy any records in the
possession of Sub-Adviser which pertain to the Portfolio or the Fund. Such
books, records, information or reports shall be made available to properly
authorized government representatives consistent with state and federal law
and/or regulations. In the event of the termination of this Agreement, all
such books, records or other information shall be returned to Adviser or
the Fund free from any claim or assertion of rights by Sub-Adviser.

11. Sub-Adviser agrees that it will not disclose or use any records or
information obtained pursuant to this Agreement in any manner whatsoever
except as authorized in this Agreement and that it will keep confidential
any information obtained pursuant to this Agreement and disclose such
information only if Adviser or the Fund has authorized such disclosure, or
if such disclosure is required by federal or state regulatory authorities.

12. In the absence of willful misfeasance, bad faith or gross negligence
on the part of Sub-Adviser or its officers, directors or employees, or
reckless disregard by Sub-Adviser of its duties under this Agreement, Sub-
Adviser shall not be liable to Adviser, the Portfolio, the Fund or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security, except to the
extent specified in Section 36(b) of the Investment Company Act of 1940
concerning loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services.

13. This Agreement shall not become effective unless and until it is
approved by the board of directors of the Fund, including a majority of
directors who are not parties to this Agreement or interested persons of
any such party to this Agreement. This Agreement shall come into full
force and effect on the date which it is so approved. This Agreement shall
continue in effect for two years and shall thereafter continue in effect
from year to year so long as such continuance is specifically approved at
least annually by (i) the board of directors of the Fund, or by the vote of
a majority of the outstanding shares of the class of stock representing an
interest in the Portfolio; and (ii) a majority of those directors who are
not parties to this Agreement or interested persons of any such party cast
in person at a meeting called for the purpose of voting on such approval.

14. This Agreement may be terminated at any time without the payment of
any penalty, by the Fund's board of directors, or by vote of a majority of
the outstanding shares of the class of stock representing an interest in
the Portfolio on sixty days written notice to the Adviser and Sub-Adviser,
or by the Adviser, or by the Sub-Adviser, on sixty days written notice to
the other. This Agreement shall automatically terminate in the event of its
assignment or in the event of the termination of the investment advisory
agreement between the Adviser and the Fund regarding the Adviser's
management of the Portfolio.

15. This Agreement may be amended by either party only if such amendment
is specifically approved by (i) the vote of a majority of outstanding
shares of the class representing an interest in the Portfolio, and (ii) a
majority of those directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for
the purpose of voting on such approval.

16. The terms "assignment", "affiliated person" and "interested person",
when used in this Agreement, shall have the respective meanings specified
in the Investment Company Act of 1940. The term "majority of the
outstanding shares of the class" means the lesser of (a) 67% or more of the
shares of such class present at a meeting if more than 50% of such shares
are present or represented by proxy or (b) more than 50% of the shares of
such class.

17. This Agreement shall be construed in accordance with laws of the
Commonwealth of Virginia, and applicable provisions of the Act and the
Investment Company Act of 1940.

18. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.

IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.

AON ADVISORS, INC.

By: ______________________________

Its: ______________________________

ATTEST:

__________________________

PERPETUAL PORTFOLIO MANAGEMENT, LIMITED

By: ______________________________

Its: ______________________________

ATTEST:

__________________________

Exhibit 5 (e)

Form of Investment Sub-Advisory Agreement Covering Real Estate
Securities Portfolio

SUB-INVESTMENT ADVISORY AGREEMENT

THIS SUB-INVESTMENT ADVISORY AGREEMENT ("Agreement") made this
day of 1995 by and Between Aon Advisors, Inc., a Virginia
corporation, (the "Adviser") and Genesis Realty Capital Management, a
partnership organized under the laws of Delaware (the "Sub-Adviser").

Adviser and Sub-Adviser Agree as follows:

1. Adviser hereby engages the services of Sub-Adviser in connection
with Adviser's management of the Real Estate Securities Portfolio (the
"Portfolio") of Life of Virginia Series Fund, Inc. (the "Fund").
Pursuant to this Agreement and subject to the oversight and
supervision by Adviser and the officers and the board of directors of
the Fund, Sub-Adviser shall manage the investment and reinvestment of
the assets of the Portfolio.

2. Sub-Adviser hereby accepts employment by Adviser in the
foregoing capacity and agrees, at its own expense, to render the
services set forth herein and to provide the office space,
furnishings, equipment and personnel required by it to perform such
services on the terms and for the compensation provided in this
Agreement.

3. In particular, Sub-Adviser shall furnish continuously an
investment program for the Portfolio and shall determine from time to
time in its discretion the securities and other investments to be
purchased or sold or exchanged and what portions of the Portfolio
shall be held in various securities, cash or other investments. In this
connection, Sub-Adviser shall provide Adviser and the officers and
directors of the Fund with such reports and documentation as the latter
shall reasonably request regarding Sub-Adviser's management of the
Portfolio's assets.

4. Sub-Adviser shall carry out its responsibilities under this
Agreement in compliance with: (a) the Portfolio's investment
objective, policies and restrictions as set forth in the Fund's current
registration statement, (b) such policies or directives as the Fund's
directors may from time to time establish or issue, and (c) applicable
law and related regulations. In particular, Sub-Adviser shall make
every effort to ensure that the Portfolio complies with (1) Section
817(h) of the Internal Revenue Code of 1986 (the "Code") and regulations
issued thereunder relating to the diversification requirements for
variable annuity, endowment, and life insurance contracts and to ensure
that the Portfolio continuously qualifies as a regulated investment
company under sub-chapter M of the Code and (2) the California
Insurance Department's Borrowing Guideline Limits Applicable to a
Portfolio of a Separate Account and its Diversification Guidelines for
Foreign Country Investments by a Portfolio of a Separate Account.

5. Sub-Adviser shall take all actions which it considers necessary
to implement the investment policies of the Portfolio, and in
particular, to place all orders for the purchase or sale of securities
or other investments for the Portfolio with brokers or dealers selected
by it, and to that end, Sub-Adviser is authorized as the agent of
the Fund to give instructions to the Fund's custodian as to
deliveries of securities or other investments and payments of cash
for the account of the Portfolio. In connection with the selection of
brokers or dealers and the placing of purchase and sale orders with
respect to investments of the Portfolio, Sub-Adviser is directed at all
times to seek to obtain best execution and price within the policy
guidelines determined by the Fund's board of directors and set forth in
the Fund's current registration statement.

In addition to seeking the best price and execution, Sub Adviser
may also take into consideration research and statistical information
and wire and other quotation services provided by brokers and dealers to
Sub-Adviser. Sub-Adviser is also authorized to effect individual
securities transactions at commission rates in excess of the minimum
commission rates available, if it determines in good faith that such
amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction or Sub-Adviser's
overall responsibilities with respect to the Portfolio. The policies
with respect to brokerage allocation, determined from time to time by
the Fund's board of directors are those disclosed in the Fund's
currently effective registration statement. Sub-Adviser will
periodically evaluate the statistical data, research and other
investment services provided to it by brokers and dealers. Such services
may be used by Sub-Adviser in connection with the performance of its
obligations under this Agreement or in connection with other advisory or
investment operations including using such information in managing its
own accounts.

6. Sub-Adviser's services under this Agreement are not
exclusive. Sub-Adviser may provide the same or similar services to other
clients provided that Sub-Adviser's services to Adviser are not impaired
thereby. Sub-Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Adviser, the
Fund or the Portfolio or otherwise be deemed agents of the Adviser, the
Fund or the Portfolio.

7. Sub-Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and shall remain so
registered throughout the term of this Agreement. Sub-Adviser shall
notify Adviser immediately if Sub-Adviser ceases to be so
registered as an investment adviser.

8. Subject to: (a) the requirement that Sub-Adviser seek to obtain
best execution and price within the policy guidelines determined by the
Fund's board of directors and set forth in the Fund's current
registration statement, (b) the provisions of the Investment Advisers
Act of 1940 (the "Act"), (c) the provisions of the Securities Exchange
Act of 1934, and (d) other applicable provisions of law; Sub-Adviser
or an affiliated person of Sub Adviser may act as broker for the
Portfolio in connection with the purchase or sale of securities or
other investments for the Portfolio. Such brokerage services are not
within the scope of the duties of Sub-Adviser under this Agreement.
Subject to the requirements of applicable law and any procedures
adopted by Fund's board of directors, Sub-Adviser or its affiliated
persons may receive brokerage commissions, fees or other remuneration
from the Portfolio or the Fund for such services in addition to
Sub-Adviser's fees for services under this Agreement.

9. For the services rendered, the facilities furnished and the
expenses assumed by Sub-Adviser, Adviser shall pay Sub-Adviser at the
end of each calendar month a fee based on the average daily net assets
of the Portfolio at the following annual rates:

.425% of the first $100,000,000; .40% of the next
$100,000,000; and .375% of amounts in excess of $200,000,000

Sub-Adviser's fee shall be accrued daily at 1/365th of the
applicable annual rate set forth above. For the purpose of accruing
compensation, the net assets of the Portfolio shall be determined in the
manner and on the dates set forth in the current prospectus of the Fund,
and on days on which the net assets are not so determined, the net asset
value computation to be used shall be as determined on the next day on
which the net assets shall have been determined. In the event of
termination of this Agreement, all compensation due through the date of
termination will be calculated on a pro-rated basis through the date of
termination and paid within thirty business days of the date of
termination.

During any period when the determination of net value is
suspended, the net asset value of the Portfolio of the last business
day prior to such suspension shall for this purpose be deemed to be the
net asset value at the close of- each succeeding business day until it
is again determined.

10. Sub-Adviser hereby undertakes and agrees to maintain, in the form
and for the period required by Rule 31a-2 under the Investment Company
Act of 1940, all records relating to the Portfolio's investments that
are required to be maintained by the Fund pursuant to the requirements
of Rule 3la-1 of that Act.

Sub-Adviser agrees that all books and records which it maintains
for the Portfolio or the Fund are the property of the Fund and further
agrees to surrender promptly to the Adviser or the Fund any such books,
records or information upon the Adviser's or the Fund's request. All
such books and records shall be made available, within five business
days of a written request, to the Fund's accountants or auditors during
regular business hours at Sub-Adviser's offices. Adviser and the Fund or
their authorized representative shall have the right to copy any records
in the possession of Sub-Adviser which pertain to the Portfolio or the
Fund. Such books, records, information or reports shall be made
available to properly authorized government representatives
consistent with state and federal law and/or regulations. In the event
of the termination of this Agreement, all such books, records or other
information shall be returned to Adviser or the Fund free from any claim
or assertion of rights by Sub-Adviser.

11. Sub-Adviser agrees that it will not disclose or use any records
or information obtained pursuant to this Agreement in any manner
whatsoever except as authorized in this Agreement and that it will keep
confidential any information obtained pursuant to this Agreement and
disclose such information only if Adviser or the Fund has authorized
such disclosure, or if such disclosure is required by federal or state
regulatory authorities.

12. Sub-Adviser hereby indemnifies, defends and protects Adviser and
holds Adviser harmless, from and against any losses arising out of
Sub-Adviser's willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of
Sub-Adviser, its officers, directors, agents, partners, employees,
controlling persons, shareholders or affiliated persons.

Adviser hereby indemnifies, defends and protects Sub-Adviser and
holds Sub-Adviser harmless, from and against any losses arising out of
Adviser's willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of Adviser,
its officers, directors, agents, partners, employees, controlling
persons, shareholders or affiliated persons.

13. This Agreement shall not become effective unless and until it is
approved by the board of directors of the Fund, including a majority of
directors who are not parties to this Agreement or interested persons of
any such party to this Agreement. This Agreement shall come into full
force and effect on the date which it is so approved. This Agreement
shall continue in effect for two years and shall thereafter continue in
effect from year to year so long as such continuance is specifically
approved at least annually by (i) the board of directors of the Fund, or
by the vote of a majority of the outstanding shares of the class
of stock representing an interest in the Portfolio; and (ii) a majority
of those directors who are not parties to this Agreement or interested
persons of any such party cast in person at a meeting called for the
purpose of voting on such approval.

14. This Agreement may be terminated at any time without the payment
of any penalty, by the Fund's board of directors, or by vote of a
majority of the outstanding shares of the class of stock representing an
interest in the Portfolio on sixty days written notice to the Adviser
and Sub-Adviser, or by the Adviser, or by the Sub-Adviser, on sixty
days written notice to the other. This Agreement shall automatically
terminate in the event of its assignment or in the event of the
termination of the investment advisory agreement between the Adviser and
the Fund regarding the Adviser's management of the Portfolio.

15. This Agreement may be amended by either party only if such
amendment is specifically approved by (i) the vote of a majority of
outstanding shares of the class representing an interest in the
Portfolio, and (ii) a majority of those directors who are not parties
to this Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval.

16. The terms "assignmentn, "affiliated person" and "interested
person", when used in this Agreement, shall have the respective meanings
specified in the Investment Company Act of 1940. The term "majority of
the outstanding shares of the class" means the lesser of (a) 67% or more
of the shares of such class present at a meeting if more than 50% of
such shares are present or represented by proxy or (b) more than 50% of
the shares of such class.

17. This Agreement shall be construed in accordance with laws of the
Commonwealth of Virginia, and applicable provisions of the Act and the
Investment Company Act of 1940.

18. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.

IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written. AON
ADVISORS, INC.

ATTEST:

By:

Its:

GENESIS REALTY CAPITAL MANAGEMENT

ATTEST:

By:

Its:

EXHIBIT 6

UNDERWRITING AGREEMENT

DISTRIBUTION AGREEMENT

AGREEMENT (the "Agreement") made this 30th day of June, 1994, by
and between LIFE OF VIRGINIA SERIES FUND, INC., a Virginia corporation
(the "Fund"), and FORTH FINANCIAL SECURITIES CORPORATION, a Virginia
corporation (the "Distributor").

1. Furnishing of Documents and Information.

1.1 The Fund has furnished the Distributor with copies of each of the
following:

(a) Articles of Incorporation of the Fund;

(b) By-laws of the Fund as in effect on the date hereof;

(c) The most recent post-effective amendment to the Fund's
registration statement on Form N-1A, as filed with the Securities and
Exchange Commission ("SEC");

(d) The most recent prospectus of the Fund.

1.2 The Fund will furnish the Distributor from time to time with
copies of all amendments of or supplements to the items referred to in
Section 1.1 hereof, and any other information for use in connection with
the Distributor's duties hereunder that the Distributor reasonably requests
regarding the Fund or shares of the Fund's common stock ("Shares"),
including the Fund's Prospectus and Statement of Additional Information.
The Fund shall not, however, pay the cost of reproducing its Prospectus and
Statement of Additional Information for use by the Distributor as sales
material. The Distributor shall pay the costs of any other Fund documents
(such as semiannual reports) used as sales material.

1.3 The Fund represents to the Distributor that the Prospectus and
Statement of Additional Information relating to the Fund contained in its
Registration Statement on Form N-1A, or any amendments thereto, as of their
respective effective dates, contain all statements and information which
are required to be stated therein by the Securities Act of 1933 (the "1933
Act") and in all respects conform to the requirements thereof, and neither
the Fund Prospectus nor the Statement of Additional Information include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein, or necessary to make the statements therein
not misleading; provided, however, that the foregoing representations shall
not apply to information contained in or omitted from the Fund Prospectus
and Statement of Information in reliance upon, and in conformity with,
written information furnished by the Distributor specifically for use in
the preparation thereof.

1.4 The Fund shall advise the Distributor promptly of (a) any action
of the SEC or any authorities of any State or Territory, of which it may be
advised, affecting registration or qualification of the Fund or the Shares,
or the right to offer the Shares for sale, and (b) the happening of any
event which makes untrue any statement in the Registration Statement or
Prospectus or which requires the making of any change in the Registration
Statement or Prospectus in order to make the statements therein not
misleading.

1.5 The Distributor shall furnish to the Fund reports as to the sales
made pursuant to this Agreement. These reports may be combined with any
similar report prepared for the Fund by the Distributor or any affiliate of
the Distributor.

2. Distribution Services. The Fund and Distributor hereby agree
that the Distributor will act as the principal underwriter of the Shares in
accordance with the Fund's Registration Statement and Prospectus. In
connection therewith, it is specifically agreed that:

(a) the Distributor will use its best efforts in soliciting
such orders and accompanying funds for the purchase of Shares and
will promptly remit same to the Fund. However, the Distributor
shall not be obligated to solicit any minimum number of orders in
connection with its duties hereunder;

(b) the Distributor will have authority to receive orders for the
purchase of Shares and to receive funds on the Fund's behalf; however,
no order for the purchase of Shares will be binding upon the Fund
until accepted by the Fund;

(c) the Distributor may undertake such advertising and
promotion as it deems reasonable in connection with its duties
hereunder;

(d) the Distributor is not authorized to give any information or
make any representations regarding the Fund or its Shares (other than
those contained in the Fund's Registration Statement or its
Prospectus, as in effect from time to time) other than such sales
literature, information or representations as the Fund may authorize
in writing;

(e) the Fund reserves the right to decline to accept any orders
for, or make any sales of, the Shares until such time as the officers
of the Fund deem it advisable to accept such orders and to make such
sales. The Fund will promptly advise the Distributor of any such
determination; and

(f) no orders for the purchase of Shares will be solicited by
the Distributor or by the Fund, if and so long as the effectiveness of
the Fund's Registration Statement or any necessary amendments thereto
shall be suspended under any of the provisions of the 1993 Act, or if
and so long as a current prospectus, as required by Section 5(b)
of such Act, is not on file with the SEC, or redemption rights of
shareholders have been suspended under any of the circumstances
specified in Section 22(e) of the 1940 Act, provided nothing in this
Section 2(f) will affect the Fund's obligation to redeem its Shares
from any shareholder in accordance with the provisions of the Fund's
Articles of Incorporation, By-Laws or Prospectus, and provided further
that the Distributor may continue to act under this Agreement until it
has been notified in writing (which may include written notice
transmitted by facsimile) of the occurrence of any of the foregoing
events.

3. Compliance. The Distributor represents that it is duly
registered as a broker-dealer under the Securities Exchange Act of 1934
(the "1934 Act") and is a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD") and, to the extent
necessary to distribute the Shares, shall be duly registered or otherwise
qualified under the securities laws of any state or other jurisdiction.
The Distributor shall be responsible for the fulfillment of its obligations
under this Agreement, by itself and by its agents, in continued compliance
with the NASD Rules of Fair Practice, and all rules and regulations made or
adopted pursuant to the 1933 Act or the 1940 Act by the SEC.

In addition, the Distributor agrees to maintain all required books of
account and related financial records, and make all required reports, in
connection with the distribution of the Shares. All such books of account,
records, and reports shall be maintained, preserved, and submitted to the
SEC (and any other required supervisory authority, including the NASD)
pursuant to the 1934 Act, and rules and regulations thereunder, including
(but not limited to) Rules 17a-3, 17a-4, and 17a-5. In addition, the
Distributor will maintain records of sales commissions, if any, paid to
agents of the Distributor in connection with sales of Shares of the Fund.
All such books, records, and reports shall be the property of the
Distributor, and shall at all times be subject to reasonable periodic,
special or other examination by the Fund, and by the SEC and all other
supervisory authorities, including the NASD, having jurisdiction. The
Distributor agrees to send to purchasers of Shares all required
confirmations on customer transactions.

4. Registration, Qualification and Expenses.

4.1 The Fund agrees at its own expense to execute such papers and to
do such acts and things as shall from time to time be reasonably requested
by the Distributor for the purpose of qualifying and maintaining
qualification of the Shares for sale under the Blue Sky Laws of any state,
if such qualification is required, or for maintaining the registration of
the Fund and of the Shares under the 1933 Act and the 1940 Act; the Fund
will pay all registration, filing and other fees in connection therewith
and for qualifying itself under applicable Blue Sky Laws and any costs of
printing and mailing registration statements.

4.2 The Distributor will pay or cause to be paid all expenses
relating to its qualification as a broker-dealer in any state in which it
qualifies in connection with the distribution of Shares and all of its
expenses relating to the sale and distribution of the Shares.

5. Similar Activities For Others. The services of the
Distributor under this Agreement are not to be deemed exclusive and the
Distributor will be free to render similar services to others so long as
its services under this Agreement are not impaired. Likewise, the Fund may
accept orders for purchases of its Shares that it receives directly from
prospective purchasers.

6. Liability of the Distributor. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties on the part of the Distributor (or its officers,
directors, agents, employees, controlling persons, shareholders, and any
other person or entity affiliated with the Distributor or retained by it to
perform or assist in the performance of its obligations under this
Agreement), neither the Distributor nor any of its officers, directors,
employees or agents shall be subject to liability to the Fund or to any
shareholder or to any other person with a beneficial interest in the Fund
for any act or omission in the course of, or connected with, rendering
services hereunder, including without limitation any error of judgment or
mistake of law or for any loss suffered by the Fund or any shareholder or
other person in connection with the matters to which this Agreement
relates, except to the extent specified in Section 36(b) of the 1940 Act
concerning loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services.

7. Dual Interests. It is understood by the parties to this
Agreement that any of the shareholders, directors, officers, employees and
agents of the Fund may be a director, officer, employee or agent of, or be
otherwise interested in the Distributor, any affiliated person of the
Distributor, any organization in which the Distributor may have an
interest, or any organization which may have an interest in the
Distributor; and that the Distributor, and any such affiliated person or
any such organization may have an interest in the Fund; and that the
existence of any such dual interest shall not affect the validity hereof,
or of any transactions hereunder, except as otherwise provided in the
Articles of Incorporation of the Fund and of the Distributor, respectively,
or by specific provisions of applicable law including the 1940 Act.

8. Duration, Termination and Amendment of this Agreement. This
Agreement shall not become effective (and the Distributor shall not serve
or act as the Fund's principal underwriter) unless and until this Agreement
is approved by the Fund's Board of Directors, including a majority of
directors who are not parties to this Agreement or interested persons of
any such party to this Agreement, and will remain in force from year to
year thereafter so long as such continuance is specifically approved at
least annually either (i) by the Board of Directors of the Fund or (ii) by
a vote of a majority of the outstanding voting securities of the Fund,
provided that in either event such continuance will also be approved by the
vote of a majority of the directors who are not parties to this Agreement
or interested persons of the Fund or of the Distributor, cast in person at
a meeting called for the purpose of voting on such approval.

This Agreement may, on sixty days' written notice, be terminated at
any time, without the payment of any penalty, by the Board of Directors
of the Fund, by a vote of a majority of the Fund's outstanding voting
securities, or by the Distributor. This Agreement shall automatically
terminate in the event of its assignment. In interpreting the
provisions of this Section 8, the definitions contained in Section 2(a)
of the Investment Company Act of 1940 (particularly the definitions of
"interested person" and "assignment", and the majority of outstanding
"voting securities") shall be applied.

This Agreement shall not be amended without specific approval of such
amendment by (i) the vote of a majority of the outstanding voting
securities of the Fund, or (ii) the vote of a majority of the Fund's
directors, including a majority of directors who are not parties to this
Agreement and who are not interested persons of the Fund or of the
Distributor, cast in person at a meeting called for the purpose of voting
on such approval.

9. Miscellaneous.

9.1 The Distributor may from time to time employ or associate with
any person or persons it may believe to be particularly fitted to assist
it in the performance of this Agreement. The compensation of any such
persons will be the responsibility of the Distributor, and no obligation
with respect to providing compensation, or otherwise, will be incurred
by, or on behalf of, the Fund with respect to such persons. In
addition, the Fund understands that the persons employed by the
Distributor to assist in the performance of its duties hereunder may not
devote their full time to those duties and that nothing contained herein
will be deemed to limit or restrict the Distributor's right or the right
of any of the Distributor's affiliates to engage in and devote time and
attention to other businesses or to render other services of whatever
kind or nature.

9.2 The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof
or otherwise affect their construction or effect. This Agreement may be
executed simultaneously in two or more counterparts, each of which will be
deemed an original, but all of which together will constitute one and the
same instrument.

9.3 It is intended by the parties that this Agreement be governed by
the law of the Commonwealth of Virginia; however, this Agreement is also
governed by, and subject to, the 1940 Act, and rules thereunder, including
such exemptions therefrom as the SEC may grant.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized.

Attest: Life of Virginia Series Fund, Inc.

M. O. Doherty SIGNATURE UNREADABLE
Assistant Secretary President

Attest: Forth Financial Securities
Corporation

M. O. Doherty SIGNATURE UNREADABLE
Assistant Secretary President

CUSTODIAN AGREEMENT

THIS AGREEMENT (the "Agreement") is made as of __________ ___,
1995, by and between LIFE OF VIRGINIA SERIES FUND, INC., a Virginia
corporation (hereinafter called the "Fund"), and FIRSTAR TRUST COMPANY, a
corporation organized under the laws of the State of Wisconsin (hereinafter
called the "Custodian").

W I T N E S E T H :

WHEREAS, the Fund is organized as an open-end management
investment company currently consisting of six separate investment
portfolios, one of which is the International Equity Portfolio (the
"Portfolio");

WHEREAS, the Fund desires that the securities and cash of the
Portfolio be hereafter held and administered by the Custodian pursuant to
the terms of this Agreement; and

WHEREAS, the Custodian is a bank qualified to act as a Custodian
under the Investment Company Act of 1940, as amended (the "1940 Act") and
the rules and regulations promulgated pursuant thereto (the "Rules");

NOW, THEREFORE, in consideration of the mutual agreements herein
made, the Fund and the Custodian agree as follows:

1. Appointment and Acceptance

1.1 The Fund agrees to and does appoint the Custodian as
custodian for the Portfolio, subject to the provisions of this Agreement,
and further agrees to deliver to the Custodian a copy of the resolution of
the Board of Directors of the Fund appointing the Custodian to act in the
capacities covered by this Agreement and authorizing the signing of this
Agreement. The Fund agrees to deliver to the Custodian all securities and
cash of the Portfolio owned by it, and all payments of the income, payments
of principal and capital distributions of the Portfolio received by it,
with respect to all securities of the Portfolio owned by the Fund from time
to time, and the cash consideration for those classes of shares of the Fund
as may be issued from time to time in connection with the Portfolio. The
Custodian shall not be responsible for any property of the Fund held or
received by the Fund and not delivered to the Custodian.

1.2 The Custodian hereby accepts appointment as the custodian of
the Portfolio and agrees to perform the duties thereof as hereinafter set
forth.

2. Definitions

2.1 The word "securities" as used herein includes stocks,
shares, bonds, debentures, notes, mortgages or other obligations, and any
certificates, receipts, warrants or other instruments representing rights
to receive, purchase or subscribe for the same, or evidencing or
representing any other rights or interests therein, or in any property or
assets, and any other instrument authorized for investment by the
Portfolio.

2.2 The phrase "officers' certificate" shall mean a request or
direction or certification in writing signed in the name of the Fund by any
two of the President, a Vice President, the Secretary, and the Treasurer of
the Fund, or any other persons duly authorized to sign by the Board of
Directors.

2.3 The word "Board" shall mean Board of Directors of the Fund.

2.4 The phrase "proper instructions" shall mean instructions
given as specified in this Agreement and, if the form for a particular
instruction is not otherwise specified herein, an officers' certificate.

3. Names, Titles, and Signatures of the Fund's Officers

An officer of the Fund will certify to the Custodian the names
and signatures of those persons authorized to sign the officers'
certificates described in Section 2.2 hereof, and the names of the members
of the Board of Directors, together with any changes which may occur from
time to time.

4. Receipt and Safekeeping of Securities

4.1 Except as provided below, the Custodian shall keep safely
the securities of the Portfolio, and, on behalf of the Fund, shall from
time to time receive delivery of securities for safekeeping. The Custodian
shall keep all securities of the Portfolio physically segregated at all
times from those of any other person. The Custodian shall maintain records
of all receipts, deliveries and locations of such securities, together with
a current inventory thereof. With respect to securities held by any
subcustodian appointed pursuant to Sections 12 or 13 hereof, the Custodian
may rely upon certificates from such subcustodian as to the holdings of
such subcustodian, it being understood that such reliance no way relieves
the Custodian of its responsibilities under this Agreement.

4.2 Notwithstanding any other provision of this Agreement, it is
expressly understood and agreed that the Custodian is authorized in the
performance of its duties hereunder to deposit and/or maintain securities
owned by the Fund in a clearing agency registered with the Securities and
Exchange Commission under Section 17A of the Securities Exchange Act of
1934, which acts as a securities depository, or in the book-entry system
authorized by the U.S. Department of the Treasury and certain federal
agencies as described in Rule 17f-4 (collectively, "Securities Systems"),
provided that (i) the Custodian and such Securities System meet all
applicable federal and state laws and regulations, including rules of the
Federal Reserve Board, and the 1940 Act and the Rules and (ii) the Board of
Directors of the Fund approves by resolution the use of such Securities
System.

4.3 Upon receipt of proper instructions, the Custodian shall
establish and maintain a segregated account(s) for and on behalf of the
Portfolio into which account(s) may be transferred cash and/or securities.

5. Receipt and Disbursement of Money

5.1 The Custodian shall open and maintain a separate account or
accounts in the name of the Portfolio, subject only to draft or order by
the Custodian acting pursuant to the terms of this Agreement. The
Custodian shall hold in such account or accounts, subject to the provisions
hereof, all monies received by it from or for the account of the Portfolio.
Cash received by the Custodian from or for the account of the Portfolio and
maintained by the Fund in a bank account established and used in accordance
with Rule 17f-3 shall not be subject to the terms of this Agreement. The
Custodian shall make payments of cash to, or for the account of, the
Portfolio from such cash only:

(a) for the purchase of securities for the Portfolio upon delivery of
such securities to the Custodian, or, in the case of securities
not customarily delivered to the purchaser, to the agent of the
Custodian, registered in the name of the Portfolio or of the
nominee of the Custodian referred to in Section 8 or in proper
form for transfer, or in the case of repurchase agreements
entered into between the Fund on behalf of the Portfolio and any
bank or other party, upon delivery of the receipt evidencing
purchase by the Portfolio of securities owned by such bank or
other party, along with written evidence of the agreement by such
bank or other party to repurchase such securities from the Fund;

(b) for the purchase or redemption of shares of the capital stock of
the Portfolio upon delivery thereof to the Custodian, or upon
proper instructions from the Fund;

(c) for the payment of interest, dividends, taxes, investment
advisor's fees or operating expenses (including, without
limitation thereto, fees for legal, accounting, auditing and
custodian services and expenses for printing and postage);

(d) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed for by the Portfolio
held by or to be delivered to the Custodian;

(e) the payment to any bank of interest on, or any portion of the
principal of, any loan made by such bank to the Portfolio;

(f) the payment to any person, firm, corporation, or trust which has
borrowed the Portfolio's securities of the amount deposited with
the Custodian as collateral for the borrowing upon delivery of
such securities to the Custodian, registered (if registerable) in
the name of the Portfolio or the name of the nominee of the
Custodian, or in proper form for transfer; or

(g) for other proper corporate purposes certified by resolution of
the Board of Directors of the Fund.

5.2 Before making any such payment, the Custodian shall receive
(and may rely upon) an officers' certificate requesting such payment and
stating that it is for a purpose permitted under the terms of items (a),
(b), (c), (d), (e), (f) or (g) of Section 5.1. Such officers' certificate
shall include information regarding the name of the issuer and description
of the security; the number of units of delivery; net purchase price, or
the principal amount purchased and any accrued interest due; the trade
date; the settlement date; the purchase price per unit, and the brokerage
commission, taxes and other expenses payable in connection with the
purchase, as applicable; the total amount payable upon such purchase; and
the name of the person from whom, or the broker or dealer through whom, the
purchase was made.

5.3 With respect to (a) above, in the case of repurchase
agreements entered into with a bank which is a member of the Federal
Reserve System, the Custodian may transfer funds to the account of such
bank prior to receipt of the safekeeping receipt and repurchase agreement,
provided that such documents are received prior to the close of business on
the same day. With respect to (f) above, the Custodian shall make payment
to the borrower of securities loaned by the Portfolio of part of the
collateral deposited with the Custodian only upon: (i) receiving
appropriate oral or facsimile instructions stating that the market value of
the securities named has declined and specifying the amount to be paid by
the Custodian without receipt or return of any of the securities loaned by
the Portfolio and (ii) an appropriate officers' certificate is received by
the Custodian within two business days thereafter.

5.4 Also, in respect of item (g), the officers' certificate
shall specify the amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such payment is
to be made. Notwithstanding the foregoing, an officers' certificate need
not precede the disbursement of cash for the purpose of purchasing a money
market instrument, or any other security with same or next-day settlement,
if the President, a Vice President, the Secretary or the Treasurer of the
Fund issues appropriate oral or facsimile instructions to the Custodian and
an appropriate officers' certificate is received by the Custodian within
two business days thereafter.

5.5 The Custodian is hereby authorized to endorse and collect
all checks, drafts or other orders for the payment of money received by the
Custodian for the account of the Portfolio.

5.6 The Custodian shall, upon receipt of proper instructions,
make federal funds available to the Portfolio as of specified times agreed
upon from time to time by the Fund and the Custodian in the amount of
checks received in payment for shares of the Portfolio which are deposited
into the Portfolio's account.

6. Transfer, Exchange, Redelivery of Securities

6.1 The Custodian shall have sole power to release or deliver
any securities of the Portfolio held by the Custodian pursuant to this
Agreement. The Custodian agrees to transfer, exchange or deliver
securities held by it hereunder only:

(a) for sales of such securities for the account of a Portfolio upon
receipt by the Custodian of payment therefor;

(b) when such securities mature or are called, redeemed, retired or
otherwise become payable;

(d) in exchange for, or upon conversion into, other securities alone
or other securities and cash whether pursuant to any plan of
merger, consolidation, reorganization, recapitalization or
readjustment, or otherwise;

(e) upon conversion of such securities pursuant to their terms into
other securities;

(f) upon exercise of subscription, purchase or other similar rights
represented by such securities;

(g) for the purpose of exchanging interim receipts or temporary
securities for definitive securities;

(h) for the purpose of effecting a loan of a Portfolio's securities
to any person, firm, corporation or trust upon receipt by the
Custodian of cash or cash equivalent collateral at least equal to
the market value of the securities loaned;

(i) to any bank for the purpose of collateralizing the obligation of
the Portfolio to repay any monies borrowed by the Fund from the
bank; provided, however, that the Custodian may, at the option of
such lending bank, keep such collateral in its possession,
subject to the rights of such bank given it by virtue of any
promissory note or agreement executed and delivered by the Fund
to such bank;

(j) for the purpose of redeeming in kind shares of capital stock of
the Fund upon delivery thereof to the Custodian; or

(k) for other proper corporate purposes.

6.2 As to any deliveries made by the Custodian pursuant to items
(a), (b), (d) (e), (f), (g), (h) and (j) of Section 6.1, securities or cash
receivable in exchange therefor shall be deliverable to the Custodian.

6.3 Before making any such transfer, exchange or delivery, the
Custodian shall receive (and may rely upon) an officer's certificate
requesting such transfer, exchange or delivery, and stating that it is for
a purpose permitted under the terms of items (a), (b), (c), (d), (e), (f),
(g), (h), (i) or (j) of Section 6.1, in each case specifying the name of
the issuer and the description of the security; the number of units or
principal amount sold and any accrued interest due; the date when the
securities sold were purchased by the Portfolio or other information
identifying the securities sold and to be delivered; the trade date; the
settlement date; the sales price per unit, and any brokerage commission,
taxes or other expenses payable in connection with such sale; the total
amount to be received by the Portfolio upon such sale; and the name of the
broker or dealer through whom, or person to whom, sale was made.

6.4 Also, with respect to item (k), upon receipt of an officer's
certificate specifying the securities to be delivered, setting forth the
purpose for which such delivery is to be made, declaring such purpose to be
a proper corporate purpose, and naming the person or persons to whom
delivery of such securities shall be made, provided, however, that an
officer's certificate need not precede any such transfer, exchange or
delivery of a money market instrument, or any other security with same or
next-day settlement, if the President, a Vice President, the Secretary or
the Treasurer of the Fund issues appropriate oral or facsimile instructions
to the Custodian and an appropriate officers' certificate is received by
the Custodian within two business days thereafter.

6.5 With respect to (h) above, the officers' certificate shall
state the market value of the securities to be loaned and the corresponding
amount of collateral to be deposited with the Custodian; thereafter, the
Custodian shall require the borrower of securities loaned by the Portfolio
to deposit additional collateral with the Custodian only upon: (i)
receiving appropriate oral or facsimile instructions from the Fund stating
that the market value of the securities loaned has increased and specifying
the amount of the increase and (ii) an appropriate officers' certificate is
received by the Custodian within two business days thereafter.

7. Custodian's Acts Without Instructions

Unless and until the Custodian receives an officers' certificate
to the contrary, the Custodian shall: (a) present for payment all coupons
and other income items held by it for the account of the Portfolio, which
call for payment upon presentation and hold the cash received by it upon
such payment for the account of the Portfolio; (b) present for payment all
securities which may mature or be called, redeemed, retired or otherwise
become payable on the date such securities become payable; (c) collect
interest and cash dividends received, with notice to the Fund, for the
account of the Portfolio; (d) hold for the account of the Portfolio, all
stock dividends, rights and similar securities issued with respect to any
securities held by it hereunder; and (e) execute, as agent on behalf of the
Portfolio, all necessary ownership certificates required by the Internal
Revenue Code or the income tax regulations of the United States Treasury
Department or under the laws of any state or other jurisdiction now or
hereafter in effect, inserting the Portfolio's name on such certificates as
the owner of the securities covered thereby, to the extent it may lawfully
do so.

8. Registration of Securities

8.1 Except as otherwise directed by an officers' certificate,
the Custodian shall register all securities, except such as are in bearer
form, in the name of a registered nominee of the Custodian as defined in
the Internal Revenue Code, and any regulations of the Treasury Department
issued thereunder or in any provision of any subsequent federal tax law or
applicable foreign tax law exempting such transaction from liability for
stock transfer taxes, and shall execute and deliver all such certificates
in connection therewith as may be required by such laws or regulations or
under the laws of any state or other jurisdiction. The Custodian shall use
its best efforts to the end that the specific securities held by it
hereunder shall be at all times identifiable in its records.

8.2 The Fund shall from time to time furnish to the Custodian
appropriate instruments to enable the Custodian to hold or deliver in
proper form for transfer, or to register in the name of its registered
nominee, any securities which it may hold for the account of the Portfolio
and which may from time to time be registered in the name of the Portfolio.

9. Voting and Other Action

Neither the Custodian nor any nominee of the Custodian shall vote
any of the securities held hereunder by or for the account of the
Portfolio, except in accordance with the instructions contained in an
officers' certificate. The Custodian shall deliver, or cause to be
executed and delivered, to the Portfolio all notices, proxies and proxy
soliciting materials with relation to such securities, such proxies to be
executed by the registered holder of such securities (if registered
otherwise than in the name of the Portfolio), but without indicating the
manner in which such proxies are to be voted.

10. Transfer Tax and Other Disbursements

10.1 The Fund shall pay, or reimburse the Custodian from time to
time for any transfer taxes payable upon transfers of securities made
hereunder, and for all other necessary and proper disbursements and
expenses made or incurred by the Custodian in the performance of this
Agreement.

10.2 The Custodian shall execute and deliver such certificates in
connection with securities delivered to it or by it under this Agreement as
may be required under the provisions of the Internal Revenue Code and any
rule or regulation of the Treasury Department issued thereunder, or under
the laws of any state or any other jurisdiction, to exempt from taxation
any exemptible transfers and/or deliveries of any such securities.

11. Concerning the Custodian

11.1 The Custodian shall be paid as compensation for its services
pursuant to this Agreement such compensation as may from time to time be
agreed upon in writing between the two parties. Until modified in writing,
such compensation shall be as set forth in Schedule 1 attached hereto.

11.2 The Custodian shall not be liable for any reasonable action
taken in good faith upon any certificate herein described or certified copy
of any resolution of the Board, and may rely on the genuineness of any such
document which it in good faith believes to have been validly executed.

11.3 The Fund agrees to indemnify and hold harmless the Custodian
and its nominee (each, an "Indemnitee") from all taxes, charges, expenses,
assessments, claims and liabilities (including reasonable counsel fees)
incurred by or assessed against it or its nominee in connection with the
performance of this Agreement, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful
misconduct, provided, however, that the indemnification provided for in
this Section 11.3 shall not apply to any action, suit or proceeding in
which the Fund is the adverse party or one of the adverse parties to an
Indemnitee. The Custodian is authorized to charge any account of the Fund
for such items upon reasonable prior notice to the Fund. In the event of
any advance of cash for any purpose made by the Custodian resulting from
orders or instructions of the Fund, or in the event that the Custodian or
its nominee shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance of
this agreement, except such as may arise from the Indemnitee's own
negligent action, negligent failure to act or willful misconduct, any
property at any time held for the account of the Fund shall be security
therefor.

11.4 In the event that an Indemnitee is or becomes a party to any
action or proceeding in respect of which indemnification may be sought
hereunder, the Indemnitee shall promptly notify the Fund in writing
thereof. Following such notice, the Fund shall be entitled to participate
therein and to assume the defense thereof, except as prohibited by law or
other applicable regulations, with counsel reasonably acceptable to the
Indemnitee. The Fund will notify the Indemnitee of its election of whether
or not to assume such defense within ten business days after the Fund's
receipt of notice of such action or proceeding. After notice from the Fund
to the Indemnitee of an election so to assume the defense thereof, the Fund
will not be liable to the Indemnitee hereunder for any legal or other
expenses subsequently incurred by the Indemnitee in connection with the
defense thereof other than reasonable costs of investigation.

11.5 If in any action or proceeding for which indemnification may
be sought, claims are asserted or threatened to be asserted for some of
which claims an Indemnitee is or may be entitled to indemnification and for
some of which claims the Indemnitee is not or may not be entitled to
indemnification, the Fund may cause the action or proceeding to be defended
as follows. The Fund and Indemnitee, each at its own expense, shall
cooperate and use their best efforts (which shall not require an appeal
from a trial court decision or similar finding or award) to have the claims
for which the Fund asserts that the Indemnitee is or may be entitled to
indemnification severed from those claims for which the Fund asserts that
the Indemnitee is not entitled to indemnification by the Fund. If such
severance is not granted, then the Fund may have counsel selected by it and
reasonably acceptable to the Indemnitee control the defense of such action
or proceeding, and such counsel shall reasonably cooperate with counsel for
the Indemnitee, if any, in the defense of the claims not subject to
indemnification, at the cost of the Indemnitee. If at any time the only
claims remaining as part of such action or proceeding are those for which
the Fund asserts that the Indemnitee is not entitled to indemnification by
the Fund, the counsel appointed by the Fund may withdraw from its
representation. In any case, the Indemnitee will reimburse all fees and
expenses incurred by counsel appointed by the Fund which are attributable
to claims for which the Indemnitee is not entitled to indemnification.

11.6 An Indemnitee shall not settle any action or claim against
an Indemnitee without the prior written consent of the Fund except at such
Indemnitee's sole cost and expense.

12. U.S. Subcustodians

12.1 The Custodian is hereby authorized to engage another bank or
trust company as a subcustodian for all or any part of the Portfolio's
assets, so long as any such bank or trust company is a bank or trust
company organized under the laws of any state of the United States, having
an aggregate capital, surplus and undivided profit, as shown by its last
published report, of not less than two million U.S. dollars (US
$2,000,000), and satisfies the qualifications for custodians in the 1940
Act and the Rules.

12.2 If the Custodian utilizes the services of a subcustodian,
the Custodian shall remain fully liable and responsible for any losses
caused to the Portfolio by the subcustodian as fully as if the Custodian
was directly responsible for any such losses under the terms of this
Agreement.

12.3 Nothwithstanding anything else contained herein, if the Fund
requires the Custodian to engage specific subcustodians for the safekeeping
and/or the clearing of assets, the Fund agrees to indemnify and hold
harmless the Custodian from all claims, expenses and liabities incurred or
assessed against it in connection with the use of such subcustodian in
regard to the Fund's assets, except as may arise from its own negligent
action, negligent failure to act, or willful misconduct.

12.4 The subcustodians may utilize the Securities Systems, in
accordance with the provisions of this agreement.

13. Foreign Subcustodians

13.1 Appointment of Foreign Subcustodians. The Fund hereby
authorizes and instructs the Custodian to employ as subcustodians for the
Portfolio's securities and other assets maintained outside the United
States the banking institutions and foreign securities depositories
("foreign subcustodians") that are part of the global custody network of
Chase Manhattan Bank, N.A. ("Chase"). The Fund recognizes that the
Custodian intends to enter into an agreement with the Chase in the form
attached hereto as Exhibit A, thereby appointing Chase a subcustodian.
Pursuant to such agreement, the Custodian will delegate to Chase authority
to engage, subject to the approval of the Fund, foreign subcustodians with
respect to the Portfolio. Notwithstanding the Fund's acceptance of such
agreement between the Custodian and Chase, the selection appointment,
activities and continuation of all foreign subcustodians with respect to
the Portfolio shall be subject to the terms of this Agreement, and any
foreign subcustodian engaged with respect to the Portfolio by Chase, as
well as Chase itself, shall be deemed to be employed by the Custodian
pursuant to this Agreement. Upon receipt of proper instructions, the Fund
may instruct the Custodian to cease the employment of any one or more such
subcustodians for maintaining custody of the Portfolio's assets.

13.2 Assets to be Held. The Custodian shall limit the securities
and other assets maintained in the custody of the foreign subcustodians to:
(a) "foreign securities", as defined in paragraph (c)(1) of Rule 17f-5, and
(b) cash and cash equivalents in such amounts as the Custodian or the Fund
may determine to be reasonably necessary to effect the Fund's foreign
securities transactions. The Custodian shall identify on its books (and
ensure that Chase identifies on Chase's books) as belonging to the Fund and
the Portfolio the foreign securities of the Portfolio held by each foreign
subcustodian.

13.3 Foreign Subcustodians and Securities Depositories. Except
as may otherwise be agreed upon in writing by the Custodian and the Fund,
assets of the Fund shall be maintained in foreign securities depositories
only through arrangements implemented by the foreign banking institutions
serving as subcustodians pursuant to the terms hereof and the terms of
Exhibit A. Where possible, such arrangements shall include entry into
agreements containing the provisions set forth in Section 13.4. In any
event, the Fund's foreign securities shall only be in the care of "eligible
foreign custodians" as defined by Rule 17f-5(c)(2).

13.4 Agreements with Foreign Banking Institutions. The Custodian
shall ensure that each agreement between Chase and a foreign banking
institution shall provide that: (a) the Fund's assets will not be subject
to any right, charge, security interest, lien or claim of any kind in favor
of the foreign banking institution or its creditors or agents, except a
claim of payment for safe custody or administration of the Fund's assets;
(b) beneficial ownership of the Fund's assets will be freely transferable
without the payment of money or value other than for custody or
administration; (c) adequate records will be maintained identifying the
assets as belonging to the Fund; (d) officers of or auditors employed by,
or other representatives of the Custodian or Chase, including, to the
extent permitted under applicable law, the independent public accountants
for the Fund, will be given access to the books and records of the foreign
banking institution relating to its actions under its agreement with Chase;
(e) assets of the Fund held by the foreign subcustodian will be subject
only to the instructions of the Chase or its agents; and (f) reports will
be made by the foreign banking institution to the Custodian or to Chase
sufficient to permit the Custodian to fulfill its obligations under Section
13.6 of this Agreement.

13.5 Access of Independent Accountants of the Fund. Upon request
of the Fund, the Custodian will use its best efforts (or ensure that Chase
uses its best efforts) to arrange for the independent accountants of the
Fund to be afforded access to the books and records of any foreign banking
institution employed as a foreign subcustodian insofar as such books and
records relate to the performance of such foreign banking institution under
its agreement with Chase.

13.6 Reports by Custodian. In addition to the Custodian's
obligations under Section 14 of this Agreement, the Custodian will supply
to the Fund from time to time, as mutually agreed upon, statements in
respect of the securities and other assets of the Portfolio held by foreign
subcustodians, including but not limited to an identification of entities
having possession of the Portfolio's securities and other assets and
advises or notifications of any transfers of securities to or from each
custodial account maintained by a foreign banking institution for Chase or
the Custodian on behalf of the Fund indicating, as to securities acquired
for the Fund, the identity of the entity having physical possession of such
securities.

13.7 Transactions in Foreign Custody Account.

(a) Except as otherwise provided in paragraph (b) of this Section
13.7, the provisions of Sections 6, 7 and 8 of this Agreement shall apply,
mutatis mutandis to the foreign securities of the Fund held outside the
United States by foreign subcustodians.

(b) Notwithstanding any provision of this Agreement to the contrary,
settlement and payment for securities received for the account of the Fund
or the Portfolio and delivery of securities maintained for the account of
the Fund or the Portfolio may be effected in accordance with the customary
established securities trading or securities processing practices and
procedures in the jurisdiction or market in which the transaction occurs,
including, without limitation, delivering securities to the purchaser
thereof or to a dealer therefor (or an agent for such purchaser or dealer)
against a receipt with the expectation of receiving later payment for such
securities from such purchaser or dealer.

(c) Securities maintained in the custody of a foreign subcustodian
may be maintained in the name of such entity's nominee to the same extent
as set forth in Section 8 of this Agreement, and the Fund agrees to hold
any such nominee harmless from any tax or similar liability as a holder of
record of such securities.

13.8 Liability of Custodian. The Custodian shall be liable for
the acts or omissions of Chase or a foreign banking institution to the same
extent as set forth with respect to subcustodians generally in this
Agreement, provided, however that regardless of whether assets are
maintained in the custody of Chase or of a foreign banking institution or a
foreign securities depository, the Custodian shall not be liable for any
loss, damage, cost, expense, liability or claim resulting from
nationalization, expropriation, currency restrictions, or acts of war or
terrorism or any similar event where Chase or the foreign subcustodian has
otherwise exercised reasonable care. Notwithstanding the foregoing
provisions of this Section 13.9, in delegating custody duties to Chase, the
Custodian shall not be relieved of any responsibility to the Fund for any
loss due to such delegation, except such loss as may result from (a)
political risk (including, but not limited to, exchange control
restrictions, confiscation, expropriation, nationalization, insurrection,
civil strife or armed hostilities) or (b) other losses (excluding a
bankruptcy or insolvency of Chase or any of its affiliates not caused by
political risk) due to Acts of God, nuclear incident or other losses under
circumstances when the Custodian has exercised reasonable care.

13.9 Reimbursement for Advances. If the Fund requires the
Custodian to advance cash or securities for any purpose including the
purchase or sale of foreign exchange or of contracts for foreign exchange,
or in the event that the Custodian or its nominee shall incur or be
assessed any taxes in connection with the performance of this Agreement,
any property at any time held for the account of the Fund shall be security
therefor and should the Fund fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of the
Fund assets to the extent necessary to obtain reimbursement.

13.10 Monitoring Responsibilities. The Custodian shall
furnish annually to the Fund or have Chase furnish annually to the Fund,
information concerning the foreign subcustodians employed by the Chase.
Such information shall be similar in kind and scope to that furnished to
the Fund in connection with the initial approval of this Agreement. In
addition, the Custodian will promptly inform the Fund in the event that the
Custodian learns of a material adverse change in the financial condition of
a foreign subcustodian or any material loss of the assets of the Fund or in
the case of any foreign subcustodian not the subject of an exemptive order
form the Securities and Exchange Commission is notified by such foreign
subcustodian that there appears to be a substantial likelihood that its
shareholders' equity will decline below US$200 million (or the equivalent
thereof) or that its shareholders' equity has declined below US$200 million
(or the equivalent thereof), in each case computed in accordance with
generally accepted U.S. accounting principles.

14. Reports by Custodian

The Custodian shall monthly (or more frequently, upon request of
the Fund) furnish the Fund with a statement summarizing all transactions
and entries for the account of the Portfolio. The Custodian shall furnish
to the Fund, at the end of every month, a list of the securities of the
Portfolio showing the adjusted average cost value of each issue. The
Custodian shall furnish to the Fund, at the close of each quarter of the
Fund's fiscal year, a list showing cost values of the securities held by it
for the Portfolio, certified by a duly authorized officer of the Custodian.
The books and records of the Custodian pertaining to its actions under this
Agreement shall be open to inspection and audit at reasonable times by
officers of, and auditors employed by, the Fund.

15. Termination or Assignment

15.1 This Agreement may be terminated by the Fund, or by the
Custodian, on ninety (90) days notice. Upon any termination of this
Agreement, the Custodian shall deliver all assets of the Portfolio then
held by it as directed in an officers' certificate accompanied by a copy of
a resolution of the Board of Directors or of the Portfolio's shareholders,
signed by an officer of the Fund and certified by its secretary,
designating a successor to the Custodian or otherwise directing the
disposition of its assets in a manner permitted by the 1940 Act and the
Rules; provided, however, that if the Custodian is not reasonably satisfied
that such disposition is permitted by the 1940 Act and the Rules, or
pending appointment of a successor to the Custodian or a vote of the
shareholders of the Portfolio to dissolve or to function without a
custodian of its cash, securities and other property, the Custodian shall
not deliver cash, securities or other property of the Portfolio to the
Fund, but may deliver them to a U.S. bank or trust company of its own
selection, that has an aggregate capital, surplus and undivided profits, as
shown by its last published report of not less than two million U.S.
dollars (US$2,000,000) and is qualified under the 1940 Act and the Rules to
serve as custodian of the Portfolio's assets, to serve as the Custodian for
the Portfolio. The assets of the Fund shall be held by such bank under
terms similar to those of this Agreement. The Custodian shall not be
required to make any such delivery or payment to a successor until full
payment shall have been made by the Fund of all liabilities constituting a
charge on or against the properties then held by the Custodian or on or
against the Custodian, and until full payment shall have been made to the
Custodian of all its fees, compensation, costs, and expenses, subject to
the provisions of Section 11 of this Agreement.

15.2 This Agreement shall not be assigned (as defined by the 1940
Act) by the Custodian without the consent of the Fund, duly authorized and
approved by a resolution of the Board of Directors.

16. Records

The Custodian will create, maintain and retain all records
relating to its activities and obligations under this Agreement in such
manner as will meet the obligations of the Fund under the 1940 Act, and
particularly Section 31 thereof and Rules 31a-1 and 31a-2. The Custodian
agrees that all such records are the property of the Fund and further
agrees to make any such records available to the Fund upon request and to
preserve such records for the periods prescribed in Rule 31a-2. In the
event of termination of this Agreement, records maintained by the Custodian
in connection with the performance of its duties under this Agreement will
be delivered to the Fund.

17. Confidentiality

The Custodian agrees on behalf of itself, its agents and its
employees to treat confidentially all records and other information
relative to the Fund and its shareholders. Such records and information
shall not be disclosed to any other party, except after prior notification
to and approval in writing by the Fund, which approval shall not be
unreasonably withheld and may not be withheld where the Custodian may be
exposed to civil or criminal contempt proceedings for failure to comply
after being requested to divulge such information by authorities operating
within the scope of their authority.

18. Miscellaneous

18.1 Governing Law. This Agreement is executed and delivered in
the State of Wisconsin and shall be governed and construed in accordance
with the laws of the State of Wisconsin, without regard to the rules as to
conflict of laws thereof.

18.2 Notices. Any notice given hereunder shall be in writing and
may be served by being sent (and instructions, when written, shall be sent)
by facsimile or other electronic transmission or sent by prepaid and
registered first class mail or by prepaid courier to the address set forth
below for the party for which it is intended. A notice served by mail
shall be deemed to have been served seven days after mailing and the case
of facsimile or other electronic transmission twelve hours after dispatch
thereof. Addresses for notice (and instructions) may be changed by like
notice.

If to the Fund:

Life of Virginia Series Fund, Inc.
6610 West Broad Street
Richmond, Virginia 23230
Fax: ( ) ___-____
Attn: ______________

If to the Custodian:
Firstar Trust Company
P.O. Box 2054
Milwaukee, Wisconsin 53201
Fax: ( ) ___-____
Attn: ______________

18.3 Not for Benefit of Creditors. The provisions of this
Agreement are intended only for the regulation of relations between the
Fund and the Custodian. This Agreement is not intended for the benefit of
creditors of the Fund or the Custodian and no rights are granted to such
creditors under this Agreement.

18.4 Binding Effect. All the terms and provisions of this
Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the respective successors and permitted assigns of the
parties hereto.

18.5 Independent Contractor. For all purposes of this Agreement,
the Custodian shall be an independent contractor and not an employee or
dependent agent of the Fund; nor shall anything herein be construed as
making the Fund a partner or co-venturer with the Custodian or any of its
affiliates or other customers. Except as provided in this Agreement, the
Custodian shall have no authority to bind, obligate or represent the Fund.

18.6 Entire Agreement; Amendments. This Agreement sets forth the
entire agreement between the Fund and the Custodian with respect to the
subject matter hereof, and no provision of this Agreement may be amended or
modified in any manner except by a written agreement properly authorized
and executed by both parties.

18.7 Captions. The captions in this Agreement are included for
convenience of reference only, and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.

18.8 Gender and Number. Whenever the context requires, the
gender of all words used in this Agreement include the masculine, feminine
and neuter, and the number of all words includes the singular and plural.

18.9 Applicable Provisions of Law. This Agreement shall be
subject to all applicable provisions of law, including, without limitation,
the applicable provisions of the 1940 Act and the Rules, and to the extent
that any provisions herein contained conflict with any such applicable
provisions of law, the latter shall control.

18.10 Severability. If any part, term or provision of this
Agreement is held to be illegal, in conflict with any law, unenforceable or
otherwise invalid, the remaining portion or portions shall be considered
severable and not be affected, and the rights and obligations of the
parties shall be construed and enforced as if the Agreement did not contain
the particular part, term or provision held to be illegal, unenforceable or
invalid.

18.11 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same
instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and their respective corporate seals to be affixed hereto as
of the date first above written by their respective officers thereunto duly
authorized.

Attest: FIRSTAR TRUST COMPANY

___________________________ By: ___________________________
Name: Name:
Title: Title:

Attest: LIFE OF VIRGINIA SERIES FUND, INC.

___________________________ By: ___________________________
Name: Name:
Title: Title:

Exhibit 8 (c)

Form of Sub-Custody Agreement

GLOBAL CUSTODY TRI-PARTY AGREEMENT

This AGREEMENT, effective , 19 , shall be by and among THE
CHASE MANHATTAN BANK, N A. (the "Bank"), ___________________ (the "Customer")
___________________ and ____________________ (the "Fund").

1. CUSTOMER ACCOUNTS.

The Bank agrees to establish and maintain the following accounts
("Accounts"):

(a) A custody account in the name of the Fund ("Custody Account") for
any and all stocks. shares, bonds, debentures, notes, mortgages or other
obligations for the payment of money, bullion, coin and any certificates,
receipts, warrants or other instruments representing rights to receive,
purchase or subscribe for the same or evidencing or representing any
other rights or interests therein and other similar property whether
certificated or uncertificated as may be received by the Bank or its
Subcustodian (as defined in Section 3) for the account of the Fund
("Securities"); and

(b) A deposit account in the name of the Fund ("Deposit Account")
for any and all cash in any currency received by the Bank or its
Subcustodian for the account of the Fund, which cash shall not be
subject to withdrawal by draft or check.

The Customer and the Fund warrant their authority to: 1) deposit
the cash and Securities ("Assets") received in the Account and 2) give
Instructions (as defined in Section 11) concerning the Accounts. The
Bank may deliver securities of the same class in place of those
deposited in the Custody Account.

Upon written agreement by and among the Bank, the Customer and the
Fund, additional Accounts may be established and separately accounted for
as additional Accounts under the terms of this Agreement.

2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN LOCATIONS.

Unless Instructions specifically require another location acceptable to
the Bank:

(a) Securities will be held in the country or other jurisdiction in
which the principal trading market for such Securities is located, where such
Securities are to be presented for payment or where such Securities are
acquired: and

(b) Cash will be credited to an account in a country or other
jurisdiction in which such cash may be legally deposited or is the legal
currency for the payment of public or private debts.

Cash may be held pursuant to Instructions in neither interest or non-
interest bearing accounts as may be available for the particular currency. To
the extent Instructions are issued and the Bank can comply with such
Instructions, the Bank is authorized to maintain cash balances on deposit for
the Fund with itself or one of its affiliates at such reasonable rates of
interest as may from time to time be paid on such accounts, or in non-interest
bearing accounts as the Fund may direct, if acceptable to the Bank.

If the Fund wishes to have any of the Assets held in the custody
of an institution other than the established Subcustodian as defined in
Section 3 (or their securities depositories), such arrangement must be
authorized by a written agreement, signed by the Bank and the Fund.

3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.

The Bank may act under this Agreement through the subcustodians
listed in Schedule A of this Agreement with which the Bank has entered
into subcustodial agreements ("Subcustodians"). The Customer and the
Fund authorize the Bank to hold Assets in the accounts
which the Bank has established with one or more of its branches or
Subcustodians. The Bank and Subcustodians are authorized to hold any of
the Securities in their account with any securities depository in which
they participate.

The Bank reserves the right to add new, replace or remove
Subcustodians. The Customer and the fund will be given notice by the
Bank of any amendment to Schedule A. Upon request by the Customer or the
Fund, the Bank will identify the name, address and principal place of
business of any Subcustodian of the Fund's Assets and the name and
address of the governmental agency or other regulatory authority that
supervises or regulates such Subcustodian.

4. USE OF SUBCUSTODIAN.

With respect to Assets credited to the Accounts in the custody of a
Subcustodian:

(a) The Bank will identify such Assets on its books as belonging to
the Fund.

(b) A Subcustodian will hold such Assets together with assets
belonging to other similar funds or other customers of the Bank in accounts
identified on such Subcustodian's books as special custody accounts for the
exclusive benefit of customers of the Bank.

(c) Any assets in the Accounts held by a Subcustodian will
be subject only to the instructions of the Bank or its agent. Any
Securities held in a securities depository for the account of a
Subcustodian will be subject only to the instructions of such
Subcustodian.

(d) Any agreement the Bank enters into with a Subcustodian
for holding its customer's assets shall provide that such assets will
not be subject to any right, charge, security interest, lien or claim of
any kind in favor of such Subcustodian except for safe custody or
administration, and that the beneficial ownership of such assets will be
freely transferable without the payment of money or value other than for
safe custody or administration. The foregoing shall not apply to the
extent of any special agreement or arrangement made by the Fund with any
particular Subcustodian.

5. DEPOSIT ACCOUNT TRANSACTIONS.

(a) the Bank or its Subcustodians will make payments from the
Deposit Account upon receipt of Instructions which include all information
required by the Bank.

(b) In the event that any payment to be made under this Section 5
exceeds the funds available in the Deposit Account, the Bank, in its discretion,
may advance the Fund such excess amount which shall be deemed a loan payable on
demand, bearing interest at the rate customarily charged by the Bank on similar
loans.

(c) If the Bank credits the Deposit Account on a payable
date, or at any time prior to actual collection and reconciliation to
the Deposit Account, with interest, dividends, redemptions or any other
amount due, the Customer or the Fund will promptly return any such
amount upon oral or written notification: (i) that such amount has not
been received in the ordinary course of business or (ii) that such
amount was incorrectly credited. If the Customer or the Fund does not
promptly return any amount upon such notification, the Bank shall be
entitled, upon oral or written notification to the Customer and the
fund, to reverse such credit by debiting the Deposit Account for the
amount previously credited. The Bank or its Subcustodian shall have no
duty or obligation to institute legal proceedings, file a claim or a
proof of claim in any insolvency proceeding or take any other action
with respect to the collection of such amount, but may act for the Fund
upon Instructions after consultation with the Fund.

6. CUSTODY ACCOUNT TRANSACTIONS.

(a) Securities will be transferred, exchanged or delivered
by the Bank or its Subcustodian ... of Instructions which include all
information required by the Bank. Settlement and payment for Securities
received for, and delivery of Securities out of, the Custody Account may
be made in accordance with customary or established securities trading
or securities processing practices and procedures in the jurisdiction or
market in which the transaction occurs, including, without limitation,
delivery of Securities to a purchaser, dealer or their agents against a
receipt with the expectation of receiving later payment and free
delivery. Delivery of Securities out of the Custody Account may also be
made in any manner specifically required by Instructions acceptable to
the Bank.

(b) The Bank, in its discretion, may credit or debit the
Accounts on a contractual settlement date with cash or Securities with
respect to any sale, exchange or purchase of Securities. Otherwise, such
transactions will be credited or debited to the Accounts on the date
cash or Securities are actually received by the Bank and reconciled to
the Account.

(i) The Bank may reverse credits or debits made to the
Accounts in its discretion, of the related ... after the contractual
settlement date for the related transaction.

(ii) If any Securities delivered pursuant to this Section 6 are
returned by the recipient thereof, the Bank may reverse the credits and
debits of the particular transaction at any time.

7. ACTIONS OF THE BANK.

The Bank shall follow Instructions received regarding assets
held in the Accounts. However, until it receives Instructions to the
contrary, the Bank will:

(a) Present for payment any Securities which are called,
redeemed or retired or otherwise become payable and all coupons and
other income items which call for payment upon presentation, to the
extent that the Bank or Subcustodian is actually aware of such
opportunities.

(b) Execute in the name of the Fund such ownership and other
certificates as may be required to obtain payments in respect of
Securities.

(d) Appoint brokers and agents for any transaction involving the
Securities, including, without limitations, affiliates of the Bank or
any Subcustodian.

(e) Issue statements to the Customer and the Fund, at times
mutually agreed upon, identifying the Assets in the Accounts.

The Bank will send the Customer and the Fund an advice or
notification of any transfers of Assets to or from the Accounts. Such
statements, advices or notifications shall indicate the identity of the
entity having custody of the Assets. Unless the Customer or the Fund
send the Bank a written exception or objection to any Bank statement
within sixty (60) days of receipt, the Customer and/or the Fund shall be
deemed to have approved such statement. In such event, or where the
Customer and the Fund have otherwise approved any such statement, the
Bank shall, to the extent permitted by law, be released, relieved and
discharged with respect to all matters set forth in such statement or
reasonably implied therefrom as though it had been settled by the decree
of a court of competent jurisdiction in an action where the Customer and
the Fund and all persons having or claiming an interest in the Accounts
were parties.

All collections of funds or other property paid or distributed
in respect of Securities in the Custody Account shall be made at the
risk of the Customer and the Fund. The Bank shall have no liability for
any loss occasioned by delay in the actual receipt of notice by the Bank
or by its Subcustodians of any payment, redemption or other transaction
regarding Securities in the Custody Account in respect of which the Bank
has agreed to take any action under this Agreement.

8. CORPORATE ACTIONS; PROXIES.

Whenever the Bank receives information concerning the Securities
which requires discretionary action by the beneficial owner of the
Securities (other than a proxy), such as subscription rights, bonus
issues, stock repurchase plans and right offerings, or legal notices or
other material intended to be transmitted to securities holders
("Corporate Actions"), the Bank will give the Fund notice of such
Corporate Actions to the extent that the Bank's central corporate
actions department has actual knowledge of a Corporate Action in time to
notify its customers.

When a rights entitlement or a fractional interest resulting
from a rights issue, stock dividend, stock split or similar Corporate
Action is received which bears an expiration date, the Bank will
endeavor to obtain Instructions from the Fund or its Authorized Person,
but if Instructions are not received in time for the Bank to take timely
action, or actual notice of such Corporate Action was received too late
to seek Instructions, the Bank is authorized to sell such rights
entitlement or fractional interest and to credit the Deposit Account
with the proceeds or take any other action it deems, in good faith, to
be appropriate in which case it shall be held harmless for any such
action.

The Bank will deliver proxies to the Fund or its designated
agent pursuant to special arrangements which may have been agreed to in
writing. Such proxies shall be executed in the appropriate nominee name
relating to Securities in the Custody Account registered in the name of
such nominee but without indicating the manner in which such proxies are
to be voted; and where bearer Securities are involved, proxies will be
delivered in accordance with Instructions.

9. NOMINEES.

Securities which are ordinarily held in registered form may be
registered in a nominee name of the Bank, Subcustodian or securities
depository, as the case may be. The Bank may, without notice to the
Customer or the Fund, cause any such Securities to cease to be
registered in the name of any such nominee and to be registered in the
name of the Customer or the Fund. In the event that any Securities
registered in a nominee name are called for partial redemption by the
issuer, the Bank may allot the called portion to the respective
beneficial holders of such class of security in any manner the Bank
deems to be fair and equitable. The Customer and the Fund jointly and
severally agree to hold the Bank, Subcustodians, and their respective
nominees harmless from any liability arising directly or indirectly from
their status as a mere record holder of Securities in the Custody
Account.

10. AUTHORIZED PERSONS.

As used in this Agreement, the term "Authorized Person" means
employees or agents including investment managers as have been
designated by written notice from the Customer and the Fund or their
designated agent to act on behalf of the Customer and the Fund under
this Agreement. Such persons shall continue to be Authorized Persons
until such time as the Bank receives Instructions from the Customer and
the Fund, or their designated agent, that any such employee or agent is
no longer an Authorized Person.

11. INSTRUCTIONS.

The term "Instructions" means instructions of any Authorized
Person received by the Bank, via telephone, telex, TWX, facsimile
transmission, bank wire or other teleprocess or electronic instruction
or trade information system acceptable to the Bank which the Bank
believes in good faith to have been given by Authorized Persons or which
are transmitted with proper testing or authentication pursuant to terms
and conditions which the Bank may specify. Unless otherwise expressly
provided, all Instructions shall continue in full force and effect until
canceled or superseded.

Any Instructions delivered to the Bank by telephone shall
promptly thereafter be confirmed in writing by an Authorized Person
(which confirmation may bear the facsimile signature of such Person),
but the party designating the Authorized Person will hold the Bank
harmless for the failure of an Authorized Person to send such
confirmation in writing, the failure of such confirmation to conform to
the telephone instructions received or the Bank's failure to produce
such confirmation at any subsequent time. The Bank may electronically
record any Instructions given by telephone, and any other telephone
discussions with respect to the Custody Account. The party designating
the Authorized Person shall be responsible for safeguarding any
testkeys, identification codes or other security devices which the Bank
shall make available to the Customer, the Fund or their Authorized
Persons.

12. STANDARD OF CARE; LIABILITIES.

(a) The Bank shall be responsible for the performance of only
such duties as are set forth in this Agreement or expressly contained in
Instructions which are consistent with the provisions of this Agreement
as follows:

(i) The Bank will use reasonable care with respect to its
obligations under this Agreement and the safekeeping of Assets. The Bank
shall be liable to the Customer or the Fund for any loss which shall
occur as the result of the failure of a Subcustodian to exercise
reasonable care with respect to the safekeeping of such Assets to the
same extent that the Bank would be liable to the Customer or the Fund if
the Bank were holding such Assets in New York. In the event of any loss
to the Customer or the Fund by reason of the failure of the Bank or its
Subcustodian to utilize reasonable care, the Bank shall be liable to the
Customer or the fund only to the extent of the Customer or the Fund's
direct damages, to be determined based on the market value of the
property which is the subject of the loss at the date of discovery of
such loss and without reference to any special conditions or
circumstances.

(ii) The Bank will not be responsible for any act, omission,
default or for the solvency of any broker or agent which it or a
Subcustodian appoints unless such appointment was made negligently or in
bad faith.

(iii) The Bank shall be indemnified by, and without liability to
the Customer or the Fund for any action taken or omitted by the Bank
whether pursuant to Instructions or otherwise within the scope of this
Agreement if such act or omission was in good faith, without negligence.
In performing its obligations under this Agreement, the Bank may rely on
the genuineness of any document which it believes in good faith to have
been validly executed.

(iv) The Customer and/or the Fund agree to pay for and hold the
Bank harmless from any liability or loss resulting from the imposition
or assessment of any taxes or other governmental charges, and any
related expenses with respect to income from or Assets in the Accounts.

(v) The Bank shall be entitled to rely, and may act, upon the
advice of counsel (who may be counsel for the Customer or the Fund) on
all matters and shall be without liability for any action reasonably
taken or omitted pursuant to such advice.

(vi) The Bank need not maintain any insurance for the benefit of
the Customer or the Fund.

(vii) Without limiting the foregoing, the Bank shall not be
liable for any loss which results from: 1) the general risk of
investing, or 2) investing or holding Assets in a particular country
including, but not limited to, losses resulting from nationalization,
expropriation or other governmental actions; regulation of the banking
or securities industry; currency restrictions, devaluations or
fluctuations; and market conditions which prevent the orderly execution
of securities transactions or affect the value of Assets.

(viii) No party shall be liable to any other party for any loss
due to forces beyond its control including, but not limited to strikes
or work stoppages, acts of war or terrorism, insurrection, revolution,
nuclear fusion, fission or radiation, or acts of God.

(b) Consistent with and without limiting the first paragraph of
this Section 12, it is specifically acknowledged that the Bank shall
have no duty or responsibility to:

(i) question Instructions or make any suggestions to the
Customer, the Fund or an Authorized Person regarding such Instructions;

(ii) supervise or make recommendations with respect to
investments or the retention of Securities;

(iii) advise the Customer or the Fund or an Authorized Person
regarding any default in the payment of principal or income of any
security other than as provided in Section 5(c) of this Agreement;

(iv) evaluate or report to the Customer, the Fund or an
Authorized Person regarding the financial condition of any broker, agent
or other party to which Securities are delivered or payments are made
pursuant to this Agreement;

(v) review or reconcile trade confirmations received from
brokers. The Customer, the Fund or its Authorized Persons (as defined in
Section 10) issuing Instructions shall bear any responsibility to review
such confirmations against Instructions issued to and statements issued
by the Bank.

(c) The Customer and the Fund authorize the Bank to act under
this Agreement notwithstanding that the Bank or any of its divisions or
affiliates may have a material interest in a transaction, or
circumstances are such that the Bank may have a potential conflict of
duty or interest including the fact that the Bank or any of its
affiliates may provide brokerage services to other customers, act as
financial advisor to the issuer of Securities, act as a lender to the
issuer of Securities, act in the same transaction as agent for more than
one customer, have a material interest in the issue of Securities, or
earn profits from any of the activities listed herein.

13. FEES AND EXPENSES.

The Fund and the Customer agrees to pay the Bank for its
services under this Agreement such amount as may be agreed upon in
writing, together with the Bank's reasonable out-of-pocket or incidental
expenses, including, but not limited to, legal fees. The Bank shall have
a lien on and is authorized to charge any Accounts of the Fund for any
amount owing to the Bank under any provision of this Agreement.

14. MISCELLANEOUS.

(a) Foreign Exchange Transactions. To facilitate the
administration of the Fund's trading and investment activity, the Bank
is authorized to enter into spot or forward foreign exchange contracts
with the Customer, the Fund or an Authorized Person of the Customer or
the Fund and may also provide foreign exchange through its subsidiaries,
affiliates or Subcustodians. Instructions, including standing
instructions, may be issued with respect to such contracts but the Bank
may establish rules or limitations concerning any foreign exchange
facility made available. In all cases where the Bank, its subsidiaries,
affiliates or Subcustodians enter into a foreign exchange contract
related to Accounts, the terms and conditions of the then current
foreign exchange contract of the Bank, its subsidiary, affiliate or
Subcustodian and, to the extent not inconsistent, this Agreement shall
apply to such transaction.

(b) Certification of Residency, etc. The Fund certifies that it
is a corporation and agrees to notify the Bank of any change in such
status. The Bank may rely upon this certification or the certification
of such other facts as may be required to administer the Bank's
obligations under this Agreement. The Fund will indemnify the Bank
against all losses, liability, claims or demands arising directly or
indirectly from any such certifications.

(c) Access to Records. The Bank shall allow the Customer or the
Fund's independent public accountant reasonable access to the records of
the Bank relating to the Assets as is required in connection with their
examination of books and records pertaining to the Customer or the
Fund's affairs. Subject to restrictions under applicable law, the Bank
shall also obtain an undertaking to permit the Customer or the Fund's
independent public accountants reasonable access to the records of any
Subcustodian which has physical possession of any Assets as may be
required in connection with the examination of the Customer or the
Fund's books and records.

(d) Governing Law; Successors and Assigns. This Agreement shall
be governed by the laws of the State of New York and shall not be
assignable by any party, but shall bind the successors in interest of
the parties.

(e) Entire Agreement; Applicable Riders. Customer and the Fund
represent that the Assets deposited in the Accounts are (Check one):

--Employee Benefit Plan or other assets subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA");

--Mutual Fund assets subject to certain Securities and Exchange
Commission ("SEC") rules and regulations;

--Neither of the above.

This Agreement consists exclusively of this document together
with Schedule A, Exhibits I-______ and the following Rider(s) [Check
applicable rider(s)]:

--ERISA

--MUTUAL FUND

--SPECIAL TERMS AND CONDITIONS

There are no other provisions of this Agreement and this
Agreement supersedes any other agreements, whether written or oral,
between the parties. Any amendment to this Agreement must be in writing,
executed by both parties.

(f) Severability. In the event that one or more provisions of
this Agreement are held invalid, illegal or enforceable in any respect
on the basis of any particular circumstances or in any jurisdiction, the
validity, legality and enforceability of such provision or provisions
under other circumstances or in other jurisdictions and of the remaining
provisions will not in any way be affected or impaired.

(g) Waiver. Except as otherwise provided in this Agreement, no
failure or delay on the part of either party in exercising any power or
right under this Agreement operates as a waiver, nor does any single or
partial exercise of any power or right preclude any other or further
exercise, or the exercise of any other power or right. No waiver by a
party of any provision of this Agreement, or waiver of any breach or
default, is effective unless in writing and signed by the party against
whom the waiver is to be enforced.

(h) Notices. All notices under this Agreement shall be
effective when actually received. Any notices or other communications
which may be required under this Agreement are to be sent to the parties
at the following addresses or such other addresses as may subsequently
be given to the other party in writing:

Bank: The Chase Manhattan Bank, N.A.
1211 Avenue of the Americas 39th Fl.
New York, NY 10036
Attention: Global Custody Division

or telex: __________________________

Customer: ____________________________________

____________________________________

or telex: __________________________

Fund: ____________________________________

____________________________________

or telex: __________________________

FUND ACCOUNTING SERVICES AGREEMENT

This Fund Accounting Services Agreement ("Agreement") between Life of
Virginia Series Fund, Inc., a Virginia corporation, hereinafter called the
"Fund", and Firstar Trust Company, a Wisconsin corporation, hereinafter
called "FTC", is entered into on this day of April, 1995.

WITNESSETH:

WHEREAS, the Fund is an open-end, diversified management investment
company registered as such under the Investment Company Act of 1940 (the
"1940 Act"); currently consisting of six separate investment portfolios
(the "Portfolios" or each a "Portfolio"), one of which is the International
Equity Portfolio;

WHEREAS, FTC is in the business of providing, among other things,
mutual fund accounting services to investment companies;

WHEREAS, the Fund desires to appoint FTC as its accounting services
agent to maintain and keep current certain books, records, journals, or
other records of original entry relating to the International Equity
Portfolio's business (the "accounts and records"), and to perform certain
daily functions in connection with such accounts and records; and

WHEREAS, FTC is willing to perform such functions upon the terms and
conditions set forth below;

NOW, THEREFORE, the Fund and FTC do mutually promise and agree as
follows:

1. Furnishing Documents

The Fund has furnished or will furnish FTC with copies of each of the
following:

(a) Articles of Incorporation of the Fund;

(b) Bylaws of the Fund as in effect on the date hereof;

(c) The Fund's effective registration statement on Form N-1A, as
filed with the Securities and Exchange Commission ("SEC"); and

(d) The most recent prospectuses of the Fund.

The Fund will furnish FTC from time to time with copies of all
amendments of or supplements to the foregoing, if any. FTC will be
entitled to rely on all such furnishings.

2. Services

FTC agrees to provide the following mutual fund accounting services to
the International Equity Portfolio (the "Portfolio") in conformity
with the disclosure provided in the Fund's current registration
statement and prospectus, as amended, or supplemented from time to
time.

A. Portfolio Accounting Services:

(1) Maintain portfolio records on a trade date basis using security
trade information communicated from the investment manager on a
timely basis.

(2) For each valuation time, obtain prices from a pricing source
approved by the Board of Directors and apply those prices to the
Portfolio's positions. For those securities where market
quotations are not readily available, the Fund's Board of
Directors or the Board's Interim Valuation Committee shall
approve, in good faith, the method for determining the fair value
for such securities.

(3) Identify interest and dividend accrual balances as of each
valuation time and calculate gross earnings on investments for
the accounting period.

(4) Determine gain/loss on security sales and identify them as to
short-short, short- or long-term status; account for periodic
distributions of gains or losses to shareholders and maintain
undistributed gain or loss balances as of each valuation time.

B. Expense Accrual and Payment Services:

(1) For each valuation time, calculate the expense accrual amounts as
directed by the Fund as to methodology, rate or dollar amount.

(2) Record payments for Portfolio expenses upon receipt of written
authorization from the Fund.

(3) Account for Portfolio expenditures and maintain expense accrual
balances at the level of accounting detail agreed upon by FTC and
the Fund.

(4) Provide expense accrual and payment reporting.

C. Portfolio Valuation and Financial Reporting Services:

(1) Account for Fund share purchases, sales, exchanges, transfers,
dividend reinvestments, and other share activity as reported by
the transfer agent on a timely basis.

(2) Determine net investment income (earnings) for the Portfolio as
of each valuation period defined as the period from one valuation
time to the next valuation time. Account for periodic
distributions of earnings to shareholders and maintain
undistributed net investment income balances as of each valuation
period.

(3) Maintain a general ledger for the Portfolio in the form agreed
upon by FTC and the Fund.

(4) For each valuation time, determine the net asset value and the
net asset value per share of the Portfolio according to the
accounting policies and procedures established by the Fund and
communicated to FTC from time to time.

(6) Communicate the Portfolio's net asset value and net asset value
per share for each valuation period to the Fund and its transfer
agent as soon as is practicable after the valuation time, but in
no event later than 24 hours thereafter.

(7) Prepare monthly reports which document the adequacy of accounting
detail to support month-end ledger balances.

D. Tax Accounting Services:

(1) Maintain tax accounting records for the Portfolio to support the
tax reporting required for IRS-defined regulated investment
companies.

(2) Maintain tax lot detail for the Portfolio.

(3) Provide the necessary financial information to support the
taxable components of income and capital gains distributions to
the transfer agent to support tax reporting to the shareholders.

E. Compliance Control Services:

(1) The accounts and records shall be maintained for the periods of
time prescribed in applicable regulations under the 1940 Act.
FTC shall assist the Fund's independent auditors, or upon
approval of the Fund, or upon demand, any regulatory body, in any
requested review of the Fund's accounts and records. Upon
receipt from the Fund of the necessary information, FTC shall
supply the necessary data for the Fund's or the Fund's
accountants to complete any tax returns, questionnaires, periodic
reports to shareholders, and such other reports and information
requests as the Fund and FTC shall from time to time agree upon.

(2) Maintain accounting records according to the Investment Company
Act of 1940 and regulations thereunder. Without limiting the
generality of the foregoing, FTC shall also maintain and keep
current, in accordance with Rule 31a-1 under the 1940 Act, the
following accounts and records of each Portfolio, in such form as
may be mutually agreed upon between the Fund and FTC:

a. Dividends paid record.

b. Portfolio securities purchase and sales journals.

c. Security ledgers.

d. Dealer ledger.

e. General ledger.

f. Daily expense accruals.

g. Daily interest accruals.

3. Changes in Accounting Procedures

Any resolution passed by the Board of Directors that effects
accounting practices and procedures under this Agreement shall be
effective upon written receipt and acceptance by FTC.

4. Changes in Equipment, Systems, Service, Etc.

FTC reserves the right to make changes from time to time, as it deems
advisable, relating to its services, systems, programs, rules, operating
schedules and equipment, so long as such changes do not adversely affect
the service provided to the Portfolio under this Agreement.

5. Compensation

FTC shall be compensated for providing the service set forth in this
Agreement in accordance with the Fee Schedule attached hereto as Exhibit A
and as mutually agreed upon and amended from time to time.

The Fund agrees to pay all fees and reimbursable expenses within ten
(10) business days following the mailing of the billing notice.

6. Performance of Service

FTC shall exercise reasonable care in the performance of its duties
under the Agreement. The Fund agrees to reimburse and make FTC whole for
any loss or damage (including reasonable fees and expenses of legal
counsel) arising out of or in connection with its actions under this
Agreement so long as FTC acts in good faith and is not negligent or guilty
of any willful misconduct.

FTC shall not be liable or responsible for delays or errors occurring
by reason of circumstances beyond its control, including acts of civil or
military authority, natural or state emergencies, fire, mechanical
breakdown, flood or catastrophe, acts of God, insurrection, war, riots, or
failure of transportation, communication or power supply.

In the event of a mechanical breakdown beyond its control, FTC shall
take all reasonable steps to minimize service interruptions for any period
that such interruption continues. FTC will make every reasonable effort to
restore any lost or damaged data and the correcting of any errors resulting
from such a breakdown will be at the expense of FTC. FTC agrees that it
shall at all times have reasonable contingency plans with appropriate
parties, making reasonable provision for emergency use of electrical data
processing equipment to the extent appropriate equipment is available.
Representatives of the Fund shall be entitled to inspect FTC's premises and
operating capabilities at any time during regular business hours of FTC,
upon reasonable notice to FTC.

This indemnification includes any act, omission to act, or delay by
FTC in reliance upon, or in accordance with, any written or oral
instruction it receives from any duly authorized officer of the Fund.

Regardless of the above, FTC reserves the right to reprocess and
correct administrative errors at its own expense.

7. No Agency Relationship

Nothing herein contained shall be deemed to authorize or empower FTC
or the Fund, respectively, to act as agent for the other party to this
Agreement, or to conduct business in the name of, or for the account of,
any other party to this Agreement.

8. Ownership of Records

All accounts and records prepared or maintained by FTC on behalf of
the Fund remain the property of the Fund and will be surrendered promptly
on the written request of an authorized officer of the Fund.

9. Confidentiality

FTC shall handle in confidence all information relating to the Fund's
business, which is received by FTC during the course of rendering any
service hereunder.

10. Data Necessary to Perform Services

The Fund or its agent shall furnish to FTC the data necessary to
perform the services described herein at all times and in such form as mutually
agreed upon.

11. Notification of Error

The Fund will notify FTC of any balancing or control error caused by
FTC within three (3) business days after receipt of any reports rendered by
FTC to the Fund, or within three (3) business days after discovery of any
error or omission not covered in the balancing or control procedure, or
within three (3) business days of receiving notice from any shareholder.

12. Term of Agreement

This Agreement may be terminated by either party upon giving ninety
(90) days prior written notice to the other party or such shorter period as
is mutually agreed upon by the parties. However, this Agreement may be
replaced or modified by a subsequent agreement between the parties.

13. Duties in the Event of Termination

In the event that in connection with termination, a successor to any
of FTC's duties or responsibilities hereunder is designated by the Fund by
written notice to FTC, FTC will promptly, upon such termination and at the
expense of the Fund, transfer to such Successor all relevant books,
records, correspondence and other data established or maintained by FTC
under this Agreement in a form reasonably acceptable to the Fund (if such
form differs from the form in which FTC has maintained the same, the Fund
shall pay any expenses associated with transferring the same to such form),
and will cooperate in the transfer of such duties and responsibilities,
including provision for assistance from FTC's personnel in the
establishment of books, records and other data by such successor.

14. Choice of Law

This Agreement shall be construed in accordance with the laws of the
State of Wisconsin.

IN WITNESS WHEREOF, the due execution hereof on the data first above
written.

ATTEST: Firstar Trust Company:

____________________ By _______________________

ATTEST: Life of Virginia Series Fund, Inc.

_____________________ By _______________________
Assistant Secretary

Exhibit 11(a)
Consent of Messrs. Sutherland, Asbill & Brennan

Sutherland, Asbill & Brennan
1275 PENNSYLVANIA AVENUE, N. W.
WASHINGTON, D.C. 20004-2404
TEL: (202) 383-0100
FAX: (202) 637-3593

April 27, 1995

Board of Directors
Life of Virginia Series Fund, Inc.
6610 West Broad Street
Richmond, Virginia 23230

Re: Life of Virginia Series Fund, Inc.
File No. 2-91369

Gentlemen:

We hereby consent to the reference to our name under
the caption "Legal Matters" in the Prospectus and Statement of
Additional Information filed as part of the Post-Effective
Amendment No. l5 to Form N-lA for Life of Virginia Series Fund
(File No. 2-91369). In giving this consent, we do not admit that
we are in the category of persons whose consent is required under
Section 7 of the Securities Act of 1933.

Very truly yours,

SUTHERLAND, ASBILL & BRENNAN

By: Stephen E. Roth
Stephen E. Roth

Exhibit 11(b)
Consent of Ernst & Young

Consent of Ernst & Young LLP, Independent Auditors

We consent to the reference to our firm under the captions "Independent
Auditors" and "Audited Financial Statements" and to the use of our report
dated February 9, 1995, in the Registration Statement (Form N-1A) of
Life of Virginia Series Fund, Inc. filed with the Securities and
Exchange Commission in this Post Effective Amendment No. 15 to the
Registration Statement under the Securities Act of 1933 (Registration
No. 2-91369) and in this Amendment No. 16 to the Registration Statement
under the Investment Company Act of 1940 ( Registration No. 811-4041).

ERNST & YOUNG LLP

Richmond, Virginia
April 28, 1995

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<ARTICLE> 6
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<MULTIPLIER> 1

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<MULTIPLIER> 1

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