CHUBB AMERICA FUND INC, 497, 1995-08-29

CHUBB AMERICA FUND INC
497, 1995-08-29

Previous: CHUBB AMERICA FUND INC, NSAR-A, 1995-08-29

Next: FIRST INVESTORS U S GOVERNMENT PLUS FUND, NSAR-A, 1995-08-29

<PAGE>

SUPPLEMENT DATED AUGUST 29, 1995
TO THE PROSPECTUS OF
THE CHUBB AMERICA FUND, INC.
DATED MAY 1, 1995

The Chubb America Fund, Inc. prospectus is amended to reflect that, effective
August 16, 1995, Melanie Reichl assumed primary responsibility for the day to
day management of the Balanced Portfolio. Ms. Reichl joined Phoenix in 1994 as
an Associate Portfolio Manager. Previously she was an Assistant Vice President
Personal Trust Portfolio Manager at the Bank of Boston.
<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FINANCIAL HIGHLIGHTS....................................................... 2
PERFORMANCE AND YIELD INFORMATION.......................................... 15
PORTFOLIOS................................................................. 15
INVESTMENT OBJECTIVES AND POLICIES......................................... 15
World Growth Stock Portfolio............................................. 16
Investment Objectives.................................................. 16
Investment Policies.................................................... 16
Risk Factors........................................................... 17
Money Market Portfolio................................................... 17
Investment Objectives.................................................. 17
Investment Policies.................................................... 17
Risk Factors........................................................... 17
Gold Stock Portfolio..................................................... 17
Investment Objectives.................................................. 17
Investment Policies.................................................... 18
Risk Factors........................................................... 18
Bond Portfolio........................................................... 18
Investment Objectives.................................................. 18
Investment Policies.................................................... 18
Risk Factors........................................................... 19
Domestic Growth Stock Portfolio.......................................... 19
Investment Objectives.................................................. 19
Investment Policies.................................................... 19
Risk Factors........................................................... 20
Growth and Income Portfolio.............................................. 20
Investment Objectives.................................................. 20
Investment Policies.................................................... 20
Risk Factors........................................................... 21
Capital Growth Portfolio................................................. 21
Investment Objectives.................................................. 21
Investment Policies.................................................... 21
Risk Factors........................................................... 22
Balanced Portfolio....................................................... 22
Investment Objectives.................................................. 22
Investment Policies.................................................... 22
Risk Factors........................................................... 22
Emerging Growth Portfolio................................................ 22
Investment Objective................................................... 22
Investment Policies.................................................... 22
Risk Factors........................................................... 23
Additional Risk Factors.................................................. 24
Foreign Securities....................................................... 25
American Depository Receipts............................................. 26
Forward Foreign Currency Exchange Contracts.............................. 26
Repurchase Agreements.................................................... 26
Zero Coupon Bonds........................................................ 27
Securities and Index Options............................................. 27
Purchasing Put and Call Options.......................................... 27
Futures Contracts........................................................ 27
Lending of Securities.................................................... 28
When Issued Securities................................................... 28
Corporate Asset-Backed Securities........................................ 28
Loan Participated and Other Direct Indebtedness.......................... 28
Investment Restrictions.................................................. 29
Portfolio Turnover....................................................... 29
MANAGEMENT OF THE FUND..................................................... 29
CAPITAL STOCK.............................................................. 32
TAXES AND DIVIDENDS........................................................ 33
OFFERING AND REDEMPTION OF SHARES.......................................... 33
OTHER INFORMATION.......................................................... 34
</TABLE>

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, IN THE STATEMENT OF ADDITIONAL INFORMATION, AND IN THE
ATTACHED PROSPECTUS FOR THE POLICY.
<PAGE>

FINANCIAL HIGHLIGHTS

The following tables include selected data for a share of capital stock
outstanding for each fund throughout the periods indicated and other performance
information derived from the financial statements. The related financial
statements and report of Ernst & Young LLP, independent auditors, are contained
in the Statement of Additional Information. In addition, further information
about the funds' performance is contained in the Fund's annual report to
shareholders, which may be obtained without charge.
or a share outstanding throughout the year:

<TABLE>
<CAPTION>
WORLD GROWTH STOCK PORTFOLIO
------------------------------------------------------------

YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1992 1991
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, begin ning of year.................. $ 20.89 $ 16.73 $ 16.45 $ 13.70
INCOME FROM INVESTMENT OPERATIONS
Net investment income.............................. 0.25 0.24 0.35 0.34
Net realized and unrealized gains (losses) on
securities........................................ (0.89) 5.40 0.65 2.75
----------- ----------- ----------- -----------
Total from investment operations................... (0.64) 5.64 1.00 3.09
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income............... (0.25) (0.24) (0.35) (0.34)
Dividends in excess of net investment income.......
Distributions from capital gains................... (0.81) (1.24) (0.37)
Distributions in excess of capital gains........... (0.19)
Returns of capital.................................
----------- ----------- ----------- -----------
Total distributions................................ (1.25) (1.48) (0.72) (0.34)
Net asset value, end of year......................... $ 19.00 $ 20.89 $ 16.73 $ 16.45
=========== =========== =========== ===========
Total Return (B)..................................... (3.05%) 33.73% 6.10% 22.53%
Ratios to Average Net Assets:
Expenses........................................... 1.00% 1.04% 1.17% 1.14%
Net investment income.............................. 1.56% 1.64% 2.19% 2.40%
Portfolio Turnover Rate.............................. 18.74% 34.90% 32.27% 50.06%
Net Assets, At End of Year........................... $52,903,768 $42,031,141 $25,416,357 $22,659,930
</TABLE>
- -------
(A) Per share data calculated from initial offering date, August 1, 1985, for
sale to Chubb Separate Account A. Ratios to average net assets calculated
on an annualized basis.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost.
(C) Not annualized.

2
<PAGE>

<TABLE>
<CAPTION>
WORLD GROWTH STOCK PORTFOLIO
----------------------------------------------------------------------------------
FOR THE
PERIOD
FROM
YEAR YEAR YEAR YEAR YEAR AUGUST 1,
ENDED ENDED ENDED ENDED ENDED 1985 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1990 1989 1988 1987 1986 1985(A)
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
$ 16.07 $ 12.77 $ 11.48 $ 13.75 $ 10.81 $ 10.27
0.36 0.32 0.18 0.06 0.31 0.05

(2.00) 3.34 1.32 (0.91) 2.69 0.49
----------- ----------- ---------- ---------- ---------- ----------
(1.64) 3.66 1.50 (0.85) 3.00 0.54
(0.37) (0.36) (0.18) (0.34) (0.06)
(0.36) (0.03) (1.08)

----------- ----------- ---------- ---------- ---------- ----------
(0.73) (0.36) (0.21) (1.42) (0.06)
$ 13.70 $ 16.07 $ 12.77 $ 11.48 $ 13.75 $ 10.81
=========== =========== ========== ========== ========== ==========
(10.38%) 28.62% 13.10% (7.74%) (27.77%) 5.26%(C)
1.22% 1.42% 1.60% 1.81% 1.62% 0.74%
2.65% 2.46% 1.80% 1.14% 3.02% 0.53%
25.79% 5.73% 14.75% 8.88% 67.53% N/A
$16,052,089 $14,467,050 $8,781,827 $5,253,616 $2,105,193 $1,084,864
</TABLE>

3
<PAGE>

FINANCIAL HIGHLIGHTS--(CONTINUED)

For a share outstanding throughout the year (A):

<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
---------------------------------------------------

YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1992 1991
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year.................... $ 10.26 $ 10.22 $ 10.22 $ 10.21
INCOME FROM INVESTMENT OPERATIONS
Net investment income............................... 0.35 0.20 0.29 0.52
Net realized and unrealized gains (losses) on
securities......................................... (0.01) 0.04 0.01
---------- ---------- ---------- ----------
Total from investment operations.................... 0.34 0.24 0.29 0.53
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income................ (0.35) (0.20) (0.29) (0.52)
Dividends in excess of net investment income........
Distributions from capital gains....................
Distributions in excess of capital gains............
Returns of capital..................................
---------- ---------- ---------- ----------
Total distributions................................. (0.35) (0.20) (0.29) (0.52)
Net asset value, end of year.......................... $ 10.25 $ 10.26 $ 10.22 $ 10.22
========== ========== ========== ==========
Total Return (C)...................................... 3.28% 2.32% 2.83% 5.18%
Ratios to Average Net Assets:
Expenses............................................ 0.65% 0.74% 0.85% 0.85%
Net investment income............................... 3.31% 2.32% 2.81% 4.95%
Portfolio Turnover Rate (D)........................... N/A N/A N/A N/A
Net Assets, At End of Year............................ $7,680,485 $5,061,181 $3,956,152 $3,672,941
</TABLE>
- -------
(A) The per share amounts which are shown have been computed based on the
average number of shares outstanding during each year.
(B) Per share data calculated from initial offering date, August 1, 1985 for
sale to Chubb Separate Account A. Ratios to average net assets calculated
on an annual basis.
(C) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost.
(D) There were no purchases and/or sales of securities other than short-term
obligations during the year. Therefore, the portfolio turnover rate has not
been calculated.
(E) Not annualized.

4
<PAGE>

<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
-----------------------------------------------------------------------------
FOR THE
PERIOD
FROM
YEAR YEAR YEAR YEAR YEAR AUGUST 1,
ENDED ENDED ENDED ENDED ENDED 1985 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1990 1989 1988 1987 1986 1985(B)
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
$ 10.18 $10.16 $ 10.09 $ 10.56 $ 10.33 $ 10.06
0.73 0.78 0.63 0.49 0.56 0.27

---------- ---------- ---------- ---------- ---------- ----------
0.73 0.78 0.63 0.49 0.56 0.27
(0.70) (0.76) (0.56) (0.96) (0.33)

---------- ---------- ---------- ---------- ---------- ----------
(0.70) (0.76) (0.56) (0.96) (0.33)
$ 10.21 $ 10.18 $ 10.16 $ 10.09 $ 10.56 $ 10.33
========== ========== ========== ========== ========== ==========
7.15% 7.63% 6.33% 4.85% 5.36% 2.72%(E)
1.09% 1.37% 1.79% 1.81% 1.45% 0.65%
6.90% 7.35% 6.16% 4.75% 5.23% 2.62%
N/A N/A N/A N/A N/A N/A
$2,910,677 $2,496,140 $2,228,190 $1,539,184 $1,249,363 $1,032,539
</TABLE>

5
<PAGE>

FINANCIAL HIGHLIGHTS--(CONTINUED)

For a share outstanding throughout the year:

<TABLE>
<CAPTION>
GOLD STOCK PORTFOLIO
-----------------------------------------------------

YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1992 1991
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, begin ning of year.................... $ 19.00 $ 11.57 $ 11.99 $ 12.76
INCOME FROM INVESTMENT OPERATIONS
Net investment income................................ 0.03 0.02 0.03 0.07
Net realized and unrealized gains (losses) on
securities.......................................... (2.65) 7.43 (0.42) (0.77)
---------- ---------- ---------- ----------
Total from investment operations..................... (2.62) 7.45 (0.39) (0.70)
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income................. (0.03) (0.02) (0.03) (0.07)
Dividends in excess of net investment income.........
Distributions from capital gains.....................
Distributions in excess of capital gains............. (0.10)
Returns of capital...................................
---------- ---------- ---------- ----------
Total distributions... (0.13) (0.02) (0.03) (0.07)
Net asset value, end of year........................... $ 16.25 $ 19.00 $ 11.57 $ 11.99
========== ========== ========== ==========
Total Return (B)....................................... (13.77%) 63.90% (3.29%) (5.48%)
Ratios to Average Net Assets:
Expenses............................................. 0.99% 1.01% 1.13% 1.16%
Net investment income................................ 0.18% 0.14% 0.24% 0.57%
Portfolio Turnover Rate................................ 17.43% 7.32% 7.78% 14.23%
Net Assets, At End of Year............................. $7,351,625 $7,863,581 $4,338,297 $4,646,951
</TABLE>
- -------
(A) Per share data calculated from initial offering date, August 1, 1985 for
sale to Chubb Separate Account A. Ratios to average net assets calculated
on an annual basis.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost.
(C) Not annualized.

6
<PAGE>

<TABLE>
<CAPTION>
GOLD STOCK PORTFOLIO
---------------------------------------------------------------------------------
FOR THE
PERIOD
FROM
YEAR YEAR YEAR YEAR YEAR AUGUST 1,
ENDED ENDED ENDED ENDED ENDED 1985 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1990 1989 1988 1987 1986 1985(A)
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
$ 16.95 $14.37 $ 18.24 $ 13.59 $ 10.00 $ 10.04
0.07 0.06 (0.03) (0.03) (0.07) 0.05

(4.19) 2.70 (3.84) 4.69 3.74 (0.09)
---------- ---------- ---------- ---------- ---------- --------
(4.12) 2.76 (3.87) 4.66 3.67 (0.04)
(0.70) (0.05) (0.08)
(0.12) (0.01)
(0.01)
---------- ---------- ---------- ---------- ---------- --------
(0.70) (0.18) (0.01) (0.08)
$ 12.76 $ 16.95 $ 14.37 $ 18.24 $ 13.59 $ 10.00
========== ========== ========== ========== ========== ========
(24.28%) 19.24% (21.24%) 34.29% 37.00% (0.40%)(C)
1.36% 1.39% 1.62% 1.92% 1.48% 0.65%
0.59% 0.39% (0.38%) (0.24%) (0.63%) 0.43%
17.61% 3.05% 9.92% 7.02% 7.43% N/A
$5,390,279 $5,969,256 $4,258,297 $3,821,605 $1,458,593 $999,946
</TABLE>

7
<PAGE>

FINANCIAL HIGHLIGHTS--(CONTINUED)

For a share outstanding throughout the year:

<TABLE>
<CAPTION>
DOMESTIC GROWTH STOCK PORTFOLIO
------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1992 1991
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year................... $ 16.14 $ 15.16 $ 12.96 $ 10.15
INCOME FROM INVESTMENT OPERATIONS
Net investment income............................... 0.09 0.12 0.14 0.24
Net realized and unrealized gains (losses) on
securities......................................... 1.12 2.29 3.27 3.13
----------- ----------- ----------- -----------
Total from investment operations.................... 1.21 2.41 3.41 3.37
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income................ (0.09) (0.12) (0.14) (0.24)
Dividends in excess of net investment income........
Distributions from capital gains.................... (1.32) (1.31) (1.07) (0.32)
Distributions in excess of capital gains............
Returns of capital..................................
----------- ----------- ----------- -----------
Total distributions................................. (1.41) (1.43) (1.21) (0.56)
Net asset value, end of year.......................... $ 15.94 $ 16.14 $ 15.16 $ 12.96
=========== =========== =========== ===========
Total Return (B)...................................... 7.66% 15.89% 26.50% 33.18%
Ratios to Average Net Assets:
Expenses............................................ 0.89% 0.97% 1.07% 1.13%
Net investment income............................... 0.63% 0.76% 1.07% 2.02%
Portfolio Turnover Rate............................... 46.65% 49.47% 41.36% 40.93%
Net Assets, At End of Year............................ $31,458,666 $25,072,289 $19,985,838 $15,583,806
</TABLE>
- -------
(A) Per share data calculated from initial offering date, April 18, 1986 for
sale to Chubb Separate Account A. Ratios to average net assets calculated
on an annual basis.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost.
(C) Not annualized.

8
<PAGE>

<TABLE>
<CAPTION>
DOMESTIC GROWTH STOCK PORTFOLIO
------------------------------------------------------------------
FOR THE
PERIOD
FROM
APRIL 18,
YEAR YEAR YEAR YEAR 1986 TO
ENDED ENDED ENDED ENDED DECEMBER
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 31,
1990 1989 1988 1987 1986(A)
------------ ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C>
$ 13.25 $ 11.71 $ 9.54 $ 10.57 $ 10.00
0.26 0.18 0.11 0.04 0.10

(2.71) 2.06 2.40 (0.11) 0.47
----------- ----------- ---------- ---------- ----------
(2.45) 2.24 2.51 (0.07) 0.57
(0.26) (0.21) (0.10) (0.12)
(0.39) (0.49) (0.24) (0.84)

----------- ----------- ---------- ---------- ----------
(0.65) (0.70) (0.34) (0.96)
$ 10.15 $ 13.25 $ 11.71 $ 9.54 $ 10.57
=========== =========== ========== ========== ==========
(18.55%) 19.36% 26.31% (1.61%) 5.65%(C)
1.25% 1.45% 1.70% 1.75% 1.64%
2.38% 1.59% 1.26% 0.71% 1.32%
15.17% 10.32% 22.69% 13.53% 31.53%
$10,517,783 $11,320,279 $6,893,776 $3,448,383 $1,139,554
</TABLE>

9
<PAGE>

FINANCIAL HIGHLIGHTS--(CONTINUED)

For a share outstanding throughout the year:

<TABLE>
<CAPTION>
BOND PORTFOLIO
-----------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1992 1991
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year................... $ 10.28 $ 10.21 $ 10.61 $ 9.83
INCOME FROM INVESTMENT OPERATIONS
Net investment income.............................. 0.35 0.74 0.66 0.72
Net realized and unrealized gains (losses) on
securities........................................ (0.58) 0.13 0.13 0.79
----------- ---------- ---------- ----------
Total from investment operations................... (0.23) 0.87 0.79 1.51
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income............... (0.35) (0.74) (0.66) (0.73)
Dividends in excess of net investment income.......
Distributions from capital gains................... (0.06) (0.53)
Distributions in excess of capital gains...........
Returns of capital.................................
----------- ---------- ---------- ----------
Total distributions................................ (0.35) (0.80) (1.19) (0.73)
Net asset value, end of year......................... $ 9.70 $ 10.28 $ 10.21 $ 10.61
=========== ========== ========== ==========
Total Return (B)..................................... (2.28%) 8.68% 7.46% 15.34%
Ratios to Average Net Assets:
Expenses........................................... 0.68% 0.74% 0.88% 1.03%
Net investment income.............................. 6.07% 7.59% 6.83% 7.12%
Portfolio Turnover Rate.............................. 140.30% 112.66% 81.23% 23.73%
Net Assets, At End of Year........................... $13,066,445 $5,461,879 $4,042,506 $3,516,314
</TABLE>
- -------
(A) Per share data calculated from initial offering date, April 18, 1986 for
sale to Chubb Separate Account A. Ratios to average net assets calculated
on an annual basis.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost.
(C) Not annualized.

10
<PAGE>

<TABLE>
<CAPTION>
BOND PORTFOLIO
---------------------------------------------------------------
FOR THE
PERIOD
FROM
APRIL 18,
YEAR YEAR YEAR YEAR 1986 TO
ENDED ENDED ENDED ENDED DECEMBER
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 31,
1990 1989 1988 1987 1986(A)
------------ ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
$ 9.76 $9.29 $ 9.38 $ 10.47 $ 10.02
0.75 0.73 0.62 0.55 0.37

0.06 0.47 (0.09) (0.65) 0.08
---------- ---------- ---------- ---------- ----------
0.81 1.20 0.53 (0.10) 0.45
(0.74) (0.73) (0.62) (0.94)
(0.05)

---------- ---------- ---------- ---------- ----------
(0.74) (0.73) (0.62) (0.99)
$ 9.83 $ 9.76 $ 9.29 $ 9.38 $ 10.47
========== ========== ========== ========== ==========
8.44% 12.92% 5.62% (1.04%) 4.47%(C)
1.21% 1.60% 1.80% 1.96% 1.18%
7.97% 7.62% 6.85% 6.43% 5.08%
29.25% 7.64% 13.80% 53.17% 97.37%
$2,905,564 $2,289,788 $1,730,229 $1,302,390 $1,069,355
</TABLE>

11
<PAGE>

FINANCIAL HIGHLIGHTS--(CONTINUED)

For a share outstanding throughout the year:

<TABLE>
<CAPTION>
GROWTH AND INCOME PORTFOLIO
-----------------------------------------
YEAR YEAR PERIOD FROM
ENDED ENDED MAY 1, 1992 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1992 (A)
------------ ------------ --------------
<S> <C> <C> <C>
Net asset value, beginning of year. $ 12.35 $ 11.10 $ 10.27
INCOME FROM INVESTMENT OPERATIONS
Net investment income............ 0.13 0.12 0.02
Net realized and unrealized gains
(losses) on securities.......... (0.65) 1.53 0.83
---------- ---------- ----------
Total from investment operations. (0.52) 1.65 0.85
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment in-
come............................ (0.13) (0.12) (0.02)
Dividends in excess of net in-
vestment income.................
Distributions from capital gains. (0.48) (0.28)
Distributions in excess of capi-
tal gains.......................
Returns of capital...............
---------- ---------- ----------
Total distributions.............. (0.61) (0.40) (0.02)
Net asset value, end of year....... $ 11.22 $ 12.35 $ 11.10
========== ========== ==========
Total Return (B)................... (4.24%) 14.94% 12.48%
Ratios to Average Net Assets:
Expenses......................... 1.10% 1.35% 2.09%(C)
Net investment income............ 1.52% 1.38% 0.36%(C)
Portfolio Turnover Rate............ 38.17% 77.68% 54.11%
Net Assets, At End of Year......... $5,610,472 $2,831,442 $1,489,179
</TABLE>
- -------
(A) Per share data calculated from the initial offering date, May 1, 1992, for
sale to Chubb Separate Account A. For the period from the start of business
April 1, 1992 to April 30, 1992, net investment income per share aggregated
$0 for the Growth and Income Portfolio.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost. Total return for periods of less than
one year have been annualized.
(C) Per share data and ratios calculated on an annualized basis.

12
<PAGE>

FINANCIAL HIGHLIGHTS--(CONTINUED)

For a share outstanding throughout the year:

<TABLE>
<CAPTION>
CAPITAL GROWTH PORTFOLIO
--------------------------------------------
YEAR YEAR PERIOD FROM
ENDED ENDED MAY 1, 1992 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1992 (A)
------------ ------------ --------------
<S> <C> <C> <C>
Net asset value, beginning of year............................. $ 14.26 $ 12.42 $ 9.95
INCOME FROM INVESTMENT OPERATIONS
Net investment income........................................ 0.03 (0.01)
Net realized and unrealized gains (losses) on
securities.................................................. (0.49) 3.03 2.69
----------- ----------- ----------
Total from investment operations............................. (0.46) 3.03 2.68
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income......................... (0.03)
Dividends in excess of net investment income.................
Distributions from capital gains............................. (0.33) (1.19) (0.21)
Distributions in excess of capital gains..................... (0.06)
Returns of capital...........................................
----------- ----------- ----------
Total distributions.......................................... (0.42) (1.19) (0.21)
Net asset value, end of year................................... $ 13.38 $ 14.26 $ 12.42
=========== =========== ==========
Total Return (B)............................................... (3.26%) 24.73% 40.40%
Ratios to Average Net Assets:
Expenses..................................................... 1.22% 1.33% 1.96% (C)
Net investment income........................................ 0.25% (0.11%) (0.37%)(C)
Portfolio Turnover Rate........................................ 202.04% 162.79% 104.76%
Net Assets, At End of Year..................................... $27,564,086 $15,373,489 $5,343,734
</TABLE>
- -------
(A) Per share data calculated from the initial offering date, May 1, 1992, for
sale to Chubb Separate Account A. For the period from the start of business
April 1, 1992 to April 30, 1992, net investment income per share aggregated
$0 for the Capital Growth Portfolio.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost. Total return for periods of less than
one year have been annualized.
(C) Per share data and ratios calculated on an annualized basis.

13
<PAGE>

FINANCIAL HIGHLIGHTS--(CONTINUED)

For a share outstanding throughout the year:

<TABLE>
<CAPTION>
BALANCED PORTFOLIO
-------------------------------------------
YEAR YEAR PERIOD FROM
ENDED ENDED MAY 1, 1992 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1992 (A)
------------ ------------ --------------
<S> <C> <C> <C>
Net asset value, beginning of year. $ 11.22 $ 10.77 $ 10.10
INCOME FROM INVESTMENT OPERATIONS
Net investment income............ 0.32 0.25 0.16
Net realized and unrealized gains
(losses) on securities.......... (0.47) 0.74 0.67
----------- ----------- ----------
Total from investment operations. (0.15) 0.99 0.83
LESS DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment in-
come............................ (0.32) (0.25) (0.16)
Dividends in excess of net in-
vestment income.................
Distributions from capital gains. (0.13) (0.25)
Distributions in excess of capi-
tal gains....................... (0.04)
Returns of capital...............
----------- ----------- ----------
Total distributions.............. (0.45) (0.54) (0.16)
Net asset value, end of year....... $ 10.62 $ 11.22 $ 10.77
=========== =========== ==========
Total Return (B)................... (1.33%) 9.27% 12.33%
Ratios to Average Net Assets:
Expenses......................... 1.01% 1.07% 1.43%(C)
Net investment income............ 3.34% 2.79% 2.80%(C)
Portfolio Turnover Rate............ 103.68% 65.49% 77.33%
Net Assets, At End of Year......... $14,764,853 $11,703,898 $6,944,437
</TABLE>
- -------
(A) Per share data calculated from the initial offering date, May 1, 1992, for
sale to Chubb Separate Account A. For the period from the start of business
April 1, 1992 to April 30, 1992, net investment income per share aggregated
$.03 for the Balanced Portfolio.
(B) Total return assumes reinvestment of all dividends during the year and does
not reflect deduction of account fees and charges that apply to the
separate account or related insurance policies. Investment returns and
principal values will fluctuate and shares, when redeemed, may be worth
more or less than the original cost. Total return for periods of less than
one year have been annualized.
(C) Per share data and ratios calculated on an annualized basis.

14
<PAGE>

PERFORMANCE AND YIELD INFORMATION

From time to time the Fund may advertise the yield and/or the average annual
total return of some or all of its nine investment portfolios. These figures
are based on historical earnings and are not intended to indicate future
performance. Shares of the portfolios are presently offered only to
corresponding divisions of separate accounts established by Chubb Life
Insurance Company of America ("Chubb Life"), or its affiliated insurance
companies, to fund flexible premium life insurance policies. None of these
performance figures reflect fees and charges imposed under such flexible
premium life insurance policies, which fees and charges will reduce the yield
and total return to policyowners; therefore, these performance figures may be
of limited use for comparative purposes.

The Money Market Portfolio's yield quotations represent the Portfolio's
investment income, less expenses, expressed as a percentage of assets on an
annualized basis for a seven-day period. The yield is expressed as both a
simple annualized yield and a compounded effective yield. The yield for the
non-money market portfolios is calculated by dividing the portfolio's net
investment income per share during a recent 30-day period by the maximum
offering price per share of that Portfolio (which is the net asset value of
that Portfolio) on the last day of the period.

The average annual total return quotations of the non-money market portfolios
are determined by computing the average annual percentage change in value of a
$1,000 investment, made at the maximum public offering price (which is net
asset value) for certain specified periods. This computation assumes
reinvestment of all dividends and distributions.

PORTFOLIOS

The Fund currently consists of nine investment portfolios, namely the World
Growth Stock Portfolio, the Money Market Portfolio, the Gold Stock Portfolio,
the Bond Portfolio, the Domestic Growth Stock Portfolio, the Growth and Income
Portfolio, the Capital Growth Portfolio, the Balanced Portfolio and the
Emerging Growth Portfolio (the "Portfolios").

The separate accounts established by Chubb Life or its affiliated insurance
companies are used for the purpose of funding Flexible Premium Variable Life
Insurance Policies (the "Policies") issued by Chubb Life, its affiliated
insurance companies and their successors or assigns. The owner of a Policy may
allocate among the Portfolios the amounts available for investment under the
Policy. Chubb Life is a wholly-owned subsidiary of The Chubb Corporation, a New
Jersey corporation.

In the future, the Fund may sell its shares to other separate accounts,
funding variable annuities and variable life insurance policies, established by
Chubb Life, its successors or assigns, or by other insurance companies with
which Chubb Life is affiliated, and may add or delete Portfolios.

Shares of each Portfolio are both offered and redeemed at their net asset
value without the addition of any sales load or redemption charge. See
"OFFERING AND REDEMPTION OF SHARES" in the Prospectus.

The investment manager to the Fund is Chubb Investment Advisory Corporation
("Chubb Investment Advisory"), a wholly-owned subsidiary of Chubb Life. Chubb
Investment Advisory and the Fund have contracted with six unaffiliated
companies, Templeton, Galbraith & Hansberger Ltd. ("Templeton"), Van Eck
Associates Corporation ("Van Eck Associates"), Pioneering Management
Corporation ("Pioneer"), Janus Capital Corporation ("Janus"), Phoenix
Investment Counsel, Inc. ("Phoenix"), and Massachusetts Financial Services
Company ("MFS") to act as sub-investment advisers or managers to the World
Growth Stock, Gold Stock, Domestic Growth Stock, Capital Growth, Balanced and
Emerging Growth Portfolios, respectively, and one affiliated company, Chubb
Asset Managers, Inc. ("Chubb Asset") to act as sub-investment adviser or
manager to the Money Market, Bond and Growth and Income Portfolios.
(Collectively the "Sub-Investment Managers"). The fees of the Sub-Investment
Managers are paid directly by Chubb Investment Advisory.

INVESTMENT OBJECTIVES AND POLICIES

The investment objectives and policies of each Portfolio are described below.
The investment objectives of a Portfolio, and certain investment restrictions
discussed in the Statement of Additional Information, may be changed only with
the approval of the stockholders of each Portfolio that are affected by such
change. The investment policies of a Portfolio, used to achieve the Portfolio's
objectives, may be changed by the Fund's Board of Directors without the
approval of the Portfolio's stockholders.

15
<PAGE>

Because investment involves both opportunities for gain and risks of loss, no
assurance can be given that the Portfolios will achieve their objectives. The
difference in objectives and policies among the various Portfolios can be
expected to affect each Portfolio's investment return as well as the degree of
market and financial risks to which each Portfolio is subject. Prospective
purchasers of Policies should carefully review the objectives and policies of
the Portfolios and consider their ability to assume the risks involved before
purchasing Policies and allocating amounts thereunder to particular Portfolios.

World Growth Stock Portfolio

Investment Objectives. The investment objective of the World Growth Stock
Portfolio is long-term capital growth, which it seeks to achieve through a
flexible policy of investing primarily in stocks of companies organized in the
United States or in any foreign nation. A portion of the Portfolio may also be
invested in debt obligations of companies and governments of any nation. Any
income realized will be incidental.

The Portfolio invests primarily in securities of companies of any size that
are (i) believed to be well-managed and possessing good growth potential or
(ii) are considered by the Sub-Investment Manager to be undervalued. See
"Foreign Securities," in the Prospectus.

Investment Policies. The Portfolio believes that in a world where investment
opportunities change rapidly, not only from company to company and from
industry to industry but also from one national economy to another, its
objective is more likely to be achieved through an investment policy that is
flexible and mobile. Accordingly, the Portfolio seeks investment opportunities
in all types of securities issued by companies or governments of any nation.
Investments are usually made in common stocks, but may also include preferred
stocks and certain debt securities, rated or unrated, such as convertible bonds
and bonds selling at a discount; all of these debt securities will have credit
ratings in the four highest rating categories of Standard & Poor's Rating
Service Corporation ("Standard & Poor's") or Moody's Investors Service, Inc.
("Moody's") or other nationally recognized statistical rating organizations
("NRSROs") or, if not rated, will be of comparable quality to obligations so
rated in the judgment of the Sub-Investment Manager. Securities rated BBB or
Baa by Standard & Poor's or Moody's are considered investment-grade obligations
and are regarded as having adequate capacity to pay interest and repay
principal, although adverse economic conditions or changing circumstances are
more likely to lead to a weakening of such capacity than for higher grade
bonds. Such securities may be considered to have speculative characteristics.
See "DESCRIPTION OF CERTAIN INVESTMENTS" in the Statement of Additional
Information for a more complete description of investment ratings. In the event
that the ratings of securities held by the Portfolio fall below investment
grade, the Portfolio will not be obligated to dispose of such securities and
may continue to hold such securities if, in the opinion of the Sub-Investment
Manager, such investment is considered appropriate under the circumstances.

Notwithstanding the investment objective of long-term capital growth, the
Portfolio may on occasion, for defensive purposes and without limitation as to
amount, invest in debt obligations of the U.S. Government, its agencies or
instrumentalities for the purpose of earning income; hold cash and time
deposits with banks in the U.S. or Canadian currencies or currencies of other
nations; acquire repurchase agreements with respect to U.S. or Canadian
government obligations; or invest in high-grade commercial paper. For a more
complete description of obligations of the U.S. Government, its agencies or
instrumentalities, see the description in the "Investment Policies" section of
the description of the Bond Portfolio. The Portfolio may also invest in
warrants, which are rights to buy certain securities at set prices during
specified time periods. See "DESCRIPTION OF CERTAIN INVESTMENTS" in the
Statement of Additional Information for more information concerning repurchase
agreements, warrants, and commercial paper. See also "Repurchase Agreements" in
the Prospectus.

The Portfolio may enter into agreements with banks or broker-dealers to
purchase some securities on a "forward commitment," "when issued" or on a
"delayed delivery" basis. Such agreements involve a commitment to purchase
securities at a price, which is fixed at the time of commitment, for delivery
at a future date, which may be up to three months in the future. The Portfolio
will not pay for the securities or begin earning interest on them until the
securities are paid for and received. The securities so purchased are subject
to market fluctuations so that at the time of delivery, the value of such
securities may be more or less than the purchase price.

The Portfolio will generally be composed of investments from among many
different industries. Although management may invest up to 25% of the
Portfolio's assets in a single industry, it has no present intention of doing
so. As a general matter, the Portfolio will be invested in a minimum of five
different foreign countries at all times. However,

16
<PAGE>

this minimum is reduced to four when foreign country investments comprise less
than 80% of the Portfolio's net asset value; to three when less than 60% of
such value; to two when less than 40%; and to one when less than 20%.

Risk Factors. All or a significant portion of this Portfolio may be invested
in foreign securities, including American Depository Receipts ("ADRs"), and
investors should understand the special considerations and risks related to
such an investment emphasis. See "Foreign Securities" and "American Depository
Receipts" in the Prospectus.

Money Market Portfolio

Investment Objectives. The primary objective of the Money Market Portfolio is
to seek as high a level of current income as is consistent with preservation of
capital and liquidity.

Investment Policies. The Portfolio invests exclusively in (1) obligations
whose timely payment of principal and interest is backed by the full faith and
credit of the U.S. Government or that of its agencies or instrumentalities
("U.S. Government Obligations") or which are secured or collateralized by such
obligations, (2) short-term obligations of U.S. banks which are members of the
Federal Deposit Insurance Corporation ("FDIC"), (3) U.S. dollar obligations of
foreign branches of U.S. banks, or (4) instruments fully secured or
collateralized by such bank obligations. Some of the obligations which the
Portfolio buys are insured by the FDIC up to $100,000. The Portfolio may also
invest in commercial paper, and may buy corporate or other notes if such notes
are guaranteed as to the payment of principal and interest by U.S. banks'
letters of credit or collateralized by U.S. Government Obligations. For a more
complete description of U.S. Government Obligations see the description in the
"Investment Policies" section of the description of the Bond Portfolio.

The Portfolio will invest only in securities which present minimal credit
risk and (1) which have been rated or whose issuer has received a rating at the
time of acquisition in one of the two highest rating categories for short-term
debt obligations by any two NRSROs, or by one NRSRO if it is the only NRSRO to
have issued a rating, ("Requisite NRSROs") or (2) which are unrated securities
of comparable quality. The Portfolio will invest no more than 5% of the value
of its total assets, at time of acquisition, in the securities of any one
issuer, other than U.S. Government Obligations, except that the Portfolio may
invest more than 5% of its total assets in securities of a single issuer rated
in the highest rating category by the Requisite NRSROs for up to three business
days after purchase. The Portfolio will also invest no more than 5% of its
total assets, at time of acquisition, in securities rated in the second highest
rating category by the Requisite NRSROs, with investment in any one issuer
limited to no more than the greater of 1% of the Portfolio's total assets or
$1,000,000.

The Sub-Investment Manager, under the supervision of Chubb Investment
Advisory, will use its best judgment in selecting investments, taking into
consideration rates, terms, and marketability of obligations as well as the
capitalization, earnings, liquidity, and other indicators of the financial
condition of their issuers. Because the market value of debt obligations
fluctuates as an inverse function of changing interest rates, the Portfolio
seeks to minimize the effect of such fluctuations by investing in instruments
with a remaining maturity of 397 calendar days or less at the time of
investment, except for U.S. government obligations which may have a remaining
maturity of 762 calendar days or less. The Portfolio will maintain a dollar-
weighted average portfolio maturity of 90 days or less.

The Portfolio may enter into repurchase agreements whereby it purchases
securities, subject to agreement by the other party to repurchase the
obligations at a specified price and date. Repurchase agreements may involve
certain additional risks. See "Repurchase Agreements" in the Prospectus and
"RISK CONSIDERATIONS" in the Statement of Additional Information for a
discussion of these risks. See "DESCRIPTION OF CERTAIN INVESTMENTS" in the
Statement of Additional Information for a more complete description of
repurchase agreements.

Risk Factors. The principal risk factors associated with investment in the
Money Market Portfolio are the risk of fluctuations in short-term interest
rates and the risk of default among one or more issuers of securities which
comprise the Portfolio's assets. Compared with the other available Portfolios,
the Money Market Portfolio could be considered the least risky of all the
Fund's Portfolios. See "RISK CONSIDERATIONS" in the Statement of Additional
Information for a description of the risks associated with investment in U.S.
dollar obligations of foreign branches of U.S. banks.

Gold Stock Portfolio

Investment Objectives. The primary investment objective of the Gold Stock
Portfolio is long-term capital appreciation while retaining, however, freedom
of action to take current income into consideration in selecting its
investments.

17
<PAGE>

Investment Policies. The present policy is to concentrate investments in
common stocks of gold mining companies. Up to 100% of the value of the
Portfolio's assets may be invested in this industry. The Fund does not
currently plan to concentrate investments of the Gold Stock Portfolio in any
industry other than the gold mining industry. Under unusual economic, political
or financial conditions, it may temporarily place a substantial portion (no
more than 75%) of its investments in debt or equity securities issued by
foreign companies, debt obligations of one or more foreign governments and/or
U.S. Government Obligations. All such debt securities in which the Portfolio
invests will have credit ratings in the four highest rating categories of
Standard & Poor's or Moody's or other NRSROs or, if not rated, will be of
comparable quality to obligations so rated in the judgment of the Sub-
Investment Manager. Securities rated BBB or Baa by Standard & Poor's or Moody's
are considered investment-grade obligations and are regarded as having adequate
capacity to pay interest and repay principal, although adverse economic
conditions or changing circumstances are more likely to lead to a weakening of
such capacity than for higher grade bonds. Such securities may be considered to
have speculative characteristics. See "DESCRIPTION OF CERTAIN INVESTMENTS" in
the Statement of Additional Information for a more complete description of
investment ratings. In the event that the ratings of securities held by the
Portfolio fall below investment grade, the Portfolio will not be obligated to
dispose of such securities and may continue to hold such securities if, in the
opinion of the Sub-Investment Manager, such investment is considered
appropriate under the circumstances.

The Gold Stock Portfolio may invest in securities of U.S. companies and also
in the following types of securities: securities of companies, wherever
organized, whose properties, products or services are international in scope or
substantially in countries outside of the U.S.; securities of foreign
governments; and U.S. Government Obligations. The Portfolio may also invest in
ADRs. See "American Depository Receipts" in the Prospectus and "DESCRIPTION OF
CERTAIN INVESTMENTS" in the Statement of Additional Information for a
description of ADRs.

The Portfolio may also enter into repurchase agreements and invest in
warrants, which are rights to buy certain securities at set prices during
specified time periods. See "Repurchase Agreements" in the Prospectus and
"DESCRIPTION OF CERTAIN INVESTMENTS" in the Statement of Additional Information
for a description of repurchase agreements and warrants.

Risk Factors. All or a significant portion of this Portfolio may be invested
in foreign securities, including ADRs, and investors should understand the
special considerations and risks related to such an investment emphasis. See
"Foreign Securities" below. In addition, given the Portfolio's concentration in
stocks of gold mining companies, investors should be aware that gold mining
shares are at times volatile; there may be sharp fluctuations in prices even
during periods of general inflation and political conditions in gold mining
countries may affect the Fund's investment decisions relating to gold mining
shares. The price of gold may affect the value of investments in the Gold Stock
Portfolio. Gold has been subject to substantial price fluctuations over short
periods of time and may be affected by the actions of certain governments and
changes in existing governments, by unpredictable international monetary and
political policies such as currency devaluations or revaluations, by economic
and social conditions within a country, trade imbalances or trade or currency
restrictions between countries or political unrest. See "RISK CONSIDERATIONS--
Gold Mining Shares" in the Statement of Additional Information.

Bond Portfolio

Investment Objectives. The investment objective of the Bond Portfolio is to
provide a stable level of income, consistent with limiting risk to principal,
by investing primarily in high quality corporate debt securities and U.S.
Government debt obligations.

Investment Policies. At least 85% of the assets of the Bond Portfolio are
invested in (a) U.S. Government Obligations, (b) debt securities, including
convertible securities, which are rated "AA" or higher by Standard & Poor's or
Moody's or other NRSROs or, if unrated, are considered by the Portfolio's Sub-
Investment Manager to be of comparable quality and (c) cash and cash
equivalents (such as bankers' acceptances, commercial paper and certificates of
deposit no greater than $100,000 per issuing bank, having ratings of A-1 or
Prime-1 by Standard & Poor's or Moody's or other NRSROs or, if unrated, are
considered by the Portfolio's Sub-Investment Manager to be of comparable
quality.)

U.S. Government Obligations consist of marketable securities issued or
guaranteed as to the timely payment of both principal and interest by the U.S.
Government, its agencies or instrumentalities. Federal agency securities are
debt obligations issued by agencies of the U.S. Government established under
authority granted by Congress. Such obligations include, but are not limited
to, those issued by the Federal Housing Authority, Maritime Administration,
Government

18
<PAGE>

National Mortgage Association, the Tennessee Valley Authority, and the General
Services Administration. Instrumentalities include, for example, each of the
Federal Home Loan Banks, the National Bank for Cooperatives, the Federal Home
Loan Mortgage Corporation, the Farm Credit Banks, the Federal National Mortgage
Association, and the U.S. Postal Service. These U.S. Government Obligations are
either: (i) backed by the full faith and credit of the U.S. Government (e.g.,
U.S. Treasury Bills); (ii) guaranteed by the U.S. Treasury (e.g., Government
National Mortgage Association mortgage-backed securities); (iii) supported by
the issuing agency's or instrumentality's right to borrow from the U.S.
Treasury (e.g., Federal National Mortgage Association Discount Notes); or (iv)
supported only by the issuing agency's or instrumentality's own credit (e.g.,
each of the Federal Home Loan Banks).

The Portfolio may also invest up to 15% of its total assets in corporate debt
securities which are rated A or BBB by Standard & Poor's or A and Baa by
Moody's or other NRSROs or, if not rated, are of comparable quality to
obligations so rated in the judgment of the Sub-Investment Manager. Securities
rated BBB or Baa by Standard & Poor's or Moody's are considered investment-
grade obligations and are regarded as having adequate capacity to pay interest
and repay principal, although adverse economic conditions or changing
circumstances are more likely to lead to a weakening of such capacity than for
higher grade bonds. Such securities may be considered to have speculative
characteristics. See "DESCRIPTION OF CERTAIN INVESTMENTS" in the Statement of
Additional Information for a more complete description of investment ratings.
In the event that the ratings of securities held by the Portfolio fall below
investment grade, the Portfolio will not be obligated to dispose of such
securities and may continue to hold such securities if, in the opinion of the
Sub-Investment Manager, such investment is considered appropriate under the
circumstances.

The Portfolio will not purchase preferred or common stocks but may acquire
and retain up to 10% of its total assets in preferred or common stocks either
by conversion of fixed income securities or by the exercise of related
warrants.

It is the policy of the Bond Portfolio not to engage in trading for short-
term profits. The Portfolio will engage in trading if it believes a transaction
net of costs (including custodian's fees) will contribute to the achievement of
its investment objective.

It is anticipated that the Portfolio's average portfolio maturity will not
exceed 15 years, with the precise term to maturity dependent upon general
market and economic conditions.

Risk Factors. If the Bond Portfolio disposes of an obligation prior to
maturity, it may realize a loss or a gain. An increase in interest rates will
generally reduce the value of portfolio investments, and a decline in interest
rates will generally increase the value of portfolio investments. As a result,
the level of income under such circumstances may vary. In addition, portfolio
investments (other than U.S. Government Obligations) are dependent upon the
ability of the issuer to make scheduled payments of principal and income.

Domestic Growth Stock Portfolio

Investment Objectives. The investment objective of the Domestic Growth Stock
Portfolio is to achieve reasonable income and growth of capital by investing
primarily in a diversified portfolio of equity securities issued by companies
organized in the U.S. and considered by the Sub-Investment Manager to be
undervalued in light of the company's earning power and growth potential.

Investment Policies. The mix of assets of the Portfolio will vary with
prevailing economic and market conditions. Generally, at least 80% of the
Portfolio's assets are invested in common stocks and other equity related
securities such as preferred stocks and securities convertible into common
stock. The Portfolio may also invest up to 20% of its assets in both U.S.
Government Obligations and corporate debt securities, which will be rated
within the top four rating categories of Standard & Poor's or Moody's or other
NRSROs or, if unrated, are considered by the Portfolio's Sub-Investment Manager
to be of comparable quality and cash equivalent investments, such as
certificates of deposit, bankers'

19
<PAGE>

acceptances, and commercial paper, having ratings of A-1 or Prime-1 by Standard
& Poor's or Moody's or other NRSROs or, if unrated, are considered by the
Portfolio's Sub-Investment Manager to be of comparable quality. Securities
rated BBB or Baa by Standard & Poor's or Moody's are considered investment-
grade obligations and are regarded as having adequate capacity to pay interest
and repay principal, although adverse economic conditions or changing
circumstances are more likely to lead to a weakening of such capacity than for
higher grade bonds. Such securities may be considered to have speculative
characteristics. In the event that the ratings of securities held by the
Portfolio fall below investment grade, the Portfolio will not be obligated to
dispose of such securities and may continue to hold such securities if, in the
opinion of the Sub-Investment Manager, such investment is considered
appropriate under the circumstances. Generally, at least 60% of the Portfolio's
assets will be invested in securities which have paid dividends or interest
within the preceding 12 months, but non-income producing securities will be
held for anticipated increases in value. The Portfolio may also invest in
warrants, which are rights to buy certain securities at set prices during
specified time periods. See "DESCRIPTION OF CERTAIN INVESTMENTS--Warrants" in
the Statement of Additional Information.

This Portfolio invests primarily in stocks listed on the New York Stock
Exchange and on other national securities exchanges and, to a lesser extent, in
stocks that are traded over-the-counter. Securities are selected principally
for their potential appreciation and anticipated income. Assets of the
Portfolio will be substantially fully invested at all times.

Risk Factors. The prices of the types of securities usually purchased for the
Domestic Growth Stock Portfolio will tend to fluctuate more than the prices of
the securities usually purchased for the Bond Portfolio or the Money Market
Portfolio. As a result, the net asset value of the Domestic Growth Stock
Portfolio may experience greater short-term and long-term variations than
Portfolios that invest primarily in fixed income securities.

Growth and Income Portfolio

Investment Objectives. The objective of the Growth and Income Portfolio is to
seek long-term growth of capital by investing primarily in a wide range of
equity issues that may offer capital appreciation and, secondarily, to seek a
reasonable level of current income.

Investment Policies. The Growth and Income Portfolio invests at least 80% of
its assets in common stocks and other equity securities such as preferred
stocks and securities convertible into common stock that are either listed on
the New York Stock Exchange, traded over-the-counter or, to a lesser extent,
listed on other national securities exchanges. Securities are selected
principally for potential capital appreciation, based upon such criteria as
relatively low price to earnings ratio and relatively low price to book value
ratio, as compared to such ratios for the market in general and, secondarily,
for current income and increasing future dividends. While the Growth and Income
Portfolio intends to invest at least 60% of its assets in securities which have
paid dividends or interest within the preceding 12 months, the Portfolio may
invest in securities not currently paying dividends where the Sub-Investment
Manager anticipates that they will increase in value.

The Growth and Income Portfolio may also invest for temporary or defensive
purposes in high-grade debt securities and money market securities, including
U.S. Government Obligations, commercial paper and bank obligations, and
repurchase agreements.

The Growth and Income Portfolio will invest primarily in U.S. companies, but
may, when deemed appropriate by the Sub-Investment Manager, invest in and hold
up to 20% of the Portfolio's total assets in foreign securities which are
traded in the U.S. or in ADRs. The Growth and Income Portfolio may also
purchase the securities of foreign issuers directly in foreign markets. The
Portfolio's investments in foreign securities will primarily be in equity
securities of companies organized outside the U.S., but may also include debt
obligations of foreign companies and governments. See "Foreign Securities" and
"American Depository Receipts" in the Prospectus and "DESCRIPTION OF CERTAIN
INVESTMENTS--American Depository Receipts" in the Statement of Additional
Information.

The Growth and Income Portfolio may write covered call options or purchase
put and call options with respect to certain of its portfolio securities or
purchase stock index options for hedging purposes or to enhance income. The
Growth and Income Portfolio may also purchase or write futures contracts,
including stock index futures contracts. The Portfolio may also enter into
closing transactions with respect to such options and futures contracts. See
"Securities and Index Options" and "Futures Contracts" in this Prospectus.

20
<PAGE>

Risk Factors. The prices of the securities purchased for the Growth and
Income Portfolio will tend to fluctuate more than the prices of securities
purchased for the Bond Portfolio or the Money Market Portfolio. As a result,
the net asset value of the Growth and Income Portfolio may experience greater
short-term and long-term variations than Portfolios that invest primarily in
fixed income securities.

Capital Growth Portfolio

Investment Objectives. The investment objective of the Capital Growth
Portfolio is to seek capital growth. Realization of income is not a significant
investment consideration and any income realized will be incidental.

Investment Policies. The Capital Growth Portfolio will invest primarily in
common stocks when the Sub-Investment Manager believes that the market
environment favors investment in those securities. Common stock investments are
selected in industries and companies that the Sub-Investment Manager believes
are experiencing favorable demand for their products and services and that
operate in a favorable environment from a competitive and regulatory
standpoint.

It is the policy of the Capital Growth Portfolio to purchase and hold
securities for capital growth. If the Sub-Investment Manager is satisfied with
the performance of a security and anticipates continued appreciation, the
Portfolio will generally retain such security. However, changes in the
Portfolio will generally be made whenever the Sub-Investment Manager believes
they are advisable, either as a result of securities having reached a price
objective, or by reason of developments not foreseen at the time of the
investment decision. Since investment changes usually will be made without
reference to the length of time a security has been held, a significant number
of short-term transactions may result. To a limited extent, the Portfolio may
also purchase individual securities in anticipation of relatively short-term
price gains, and the rate of portfolio turnover will not be a determining
factor in the sale of such securities. However, certain tax rules may restrict
the Portfolio's ability to sell securities held for less than 90 days.

Although the Portfolio expects that under normal conditions its assets will
be primarily invested in common stocks, to the extent that it is not so
invested, the Capital Growth Portfolio may also invest in other securities,
including: U.S. Government Obligations, corporate bonds and debentures, high
grade commercial paper, preferred stocks, convertible securities, warrants or
other securities of U.S. issuers when the Sub-Investment Manager perceives an
opportunity for capital growth from such securities or so that the Portfolio
may receive a return on its idle cash. The Portfolio's cash position may
increase when the Sub-Investment Manager is unable to locate investment
opportunities that it believes have desirable risk/reward characteristics.
Investments in debt securities will be limited to securities of U.S. companies,
the U.S. Government and foreign governments and foreign governmental entities.
Foreign governmental entities include supranational organizations, such as the
European Economic Community and the World Bank, that are chartered to promote
economic development and are supported by various governments and governmental
entities. All debt securities in which the Portfolio invests, except as noted
below, will have credit ratings in the four highest rating categories of
Standard & Poor's or Moody's or other NRSROs or, if not rated, will be of
comparable quality to obligations so rated in the judgment of the Sub-
Investment Manager. The Capital Growth Portfolio may invest up to 5% of its
assets in high-yield/high-risk bonds. Such securities include debt securities
that are below investment grade (securities rated Ba or lower by Moody's or BB
or lower by Standard & Poor's) and unrated securities of comparable quality as
determined by the Sub-Investment Manager.

Investments may also be made in foreign equity securities and in ADRs. The
Portfolio will not invest more than 25% of its assets in foreign securities
denominated in foreign currencies and not publicly traded in the U.S. See
"Foreign Securities" and "American Depository Receipts" in the Prospectus.
Additionally, in order to manage exchange rate risks, the Portfolio may enter
into foreign currency exchange contracts (agreements to exchange one currency
for another at a future date). See "Forward Foreign Currency Exchange
Contracts" in the Prospectus.

The Portfolio may purchase and sell futures contracts as more fully described
under "Futures Contracts" in this Prospectus and may write covered call options
and purchase call and put options as described under "Securities and Index
Options" in this Prospectus.

The Portfolio may invest in "special situations" from time to time. A special
situation arises when, in the Sub-Investment Manager's opinion, the securities
of a particular company will be recognized and appreciate in value due to a
specific development, such as a technological breakthrough or a new product, at
that company.

The Portfolio expects that its securities will primarily be traded on U.S.
and foreign securities exchanges and established over-the-counter markets.

21
<PAGE>

Risk Factors. The foreign securities and ADRs in which the Portfolio may
invest involve special considerations and risks. See "Foreign Securities" and
"American Depository Receipts" in this Prospectus. Investing in foreign
currency exchange contracts involves certain risks since shifting the
Portfolio's currency exposure from one currency to another removes the
Portfolio's opportunity to profit from increases in the value of the original
currency and involves a risk of increased losses if the Sub-Investment
Manager's projection of future exchange rates is inaccurate. Investment in
special situations may carry an additional risk of loss in the event that the
anticipated development does not occur or does not attract the expected
attention. The price of the securities purchased by the Capital Growth
Portfolio will tend to fluctuate more than the prices of securities purchased
by the Bond Portfolio and the Money Market Portfolio.

Balanced Portfolio

Investment Objectives. The investment objective of the Balanced Portfolio is
to seek reasonable current income and long-term capital growth, consistent with
conservation of capital, by investing primarily in common stocks and fixed
income securities.

Investment Policies. The Balanced Portfolio intends to invest based on
combined considerations of risk, income, capital enhancement and protection of
capital value. The Balanced Portfolio may invest in any type or class of
security. Normally, the Balanced Portfolio will invest in common stocks and
fixed income securities; however, it may also invest in warrants and in
securities convertible into common stocks. At least 25% of the value of its
assets will be invested in high-grade fixed income senior securities which are
rated in the three highest rating categories by any NRSRO or, if unrated, are
considered by the Portfolio's Sub-Investment Manager to be of comparable
quality. The Portfolio may purchase and sell futures contracts as more fully
described under "Futures Contracts" in this Prospectus and may write covered
call options and purchase call and put options as described under "Securities
and Index Options" in this Prospectus. The Portfolio may also invest in zero
coupon debt obligations. In order to provide additional diversification the
Portfolio may invest in equity and debt securities of foreign issuers limited
to 15% of the Portfolio's total assets and in ADRs. See "Foreign Securities"
and "American Depository Receipts" in this Prospectus.

In implementing the investment objectives of the Balanced Portfolio, the Sub-
Investment Manager will select securities believed to have potential for the
production of current income, with emphasis on securities that also have
potential for capital enhancement. In an effort to protect its assets against
major market declines, or for other temporary defensive purposes, the Balanced
Portfolio may actively pursue a policy of retaining cash or investing part or
all of its assets in cash equivalents, such as U.S. Government Obligations,
high grade commercial paper and U.S. dollar obligations of foreign branches of
U.S. banks.

Risk Factors. The prices of equity securities in which the Balanced Portfolio
invests will fluctuate day to day and, as a result, the value of an investment
in the Balanced Portfolio will vary based upon such market conditions. The
value of the Balanced Portfolio's investment in fixed income securities will
vary depending on various factors including prevailing interest rates. Fixed
income securities are also subject to the ability of the issuer to make
payments of principal and interest when due. Although the Balanced Portfolio
seeks to reduce both financial and market risks associated with any one
investment medium, performance of the Balanced Portfolio will depend on such
additional factors as timing the mix of investments and the ability of the Sub-
Investment Manager to predict and react to changing market conditions.
Investment in foreign securities and ADRs involve special considerations and
risks. See "Foreign Securities" and "American Depository Receipts" in this
Prospectus.

Emerging Growth Portfolio

Investment Objective. The Emerging Growth Portfolio seeks to provide long-
term growth of capital. Dividend and interest income from portfolio securities,
if any, is incidental to the Portfolio's investment objective of long term
growth of capital.

Investment Policies. The Portfolio's policy is to invest primarily (i.e., at
least 80% of its assets under normal circumstances) in common stocks of small
and medium-sized companies that are early in their life cycle but which have
the potential to become major enterprises (emerging growth companies). Such
companies generally would be expected to show earnings growth over time that is
well above the growth rate of the overall economy and the rate of inflation,
and would have the products, management and market opportunities which are
usually necessary to become more widely recognized as growth companies.

22
<PAGE>

However, the Portfolio may also invest in more established companies of any
capitalization whose earnings growth are expected to accelerate because of
special factors, such as rejuvenated management, new products, changes in
consumer demand, or basic changes in the economic environment.

While the Portfolio will invest primarily in common stocks, the Portfolio
may, to a limited extent, seek appreciation in other types of securities such
as foreign or convertible securities and warrants when relative values make
such purchases appear attractive either as individual issues or as types of
securities in certain economic environments (see "Risk Factors" and "Foreign
Securities" below). The Portfolio may also enter into forward foreign currency
exchange contracts for the purchase or sale of foreign currency for hedging
purposes and non-hedging purposes, including transactions entered into for the
purpose of profiting from anticipated changes in foreign currency exchange
rates, as well as options on foreign currencies. The Portfolio may also hold
foreign currency (see "Risk Factors" below). The Portfolio may invest up to 25%
of its total assets in foreign securities (not including American Depository
Receipts ("ADRs") (see "American Depository Receipts" below)), which may be
traded on foreign exchanges. The Portfolio may hold cash equivalents or other
forms of debt securities as a reserve for future purchases of common stock or
to meet liquidity needs.

The Portfolio may invest in corporate asset-backed securities (see "Corporate
Asset-Backed Securities" below). The Portfolio may write covered call and put
options and purchase call and put options on securities and stock indices in an
effort to increase current income and for hedging purposes. The Portfolio may
also purchase and sell stock index futures contracts and may write and purchase
options thereon for hedging purposes and for non-hedging purposes, subject to
applicable law (see "Futures Contracts" below and the Statement of Additional
Information). In addition, the Portfolio may purchase portfolio securities on a
"when-issued" or on a "forward delivery" basis (See "When-Issued Securities"
below). The Portfolio may also invest a portion of its assets in "loan
participations" (see "Loan Participations and Other Direct Indebtedness" below
and in the Statement of Additional Information).

While it is not generally the Portfolio's policy to invest or trade for
short-term profits, the Portfolio may dispose of a portfolio security whenever
the Sub-Investment Manager is of the opinion that such security no longer has
an appropriate appreciation potential or when another security appears to offer
relatively greater appreciation potential. Subject to tax requirements,
portfolio changes are made without regard to the length of time a security has
been held, or whether a sale would result in a profit or loss.

During periods of unusual market conditions when the Sub-Investment Manager
believes that investing for defensive purposes is appropriate, or in order to
meet anticipated redemption requests, a large portion or all of the assets of
the Portfolio may be invested in cash or cash equivalents including, but not
limited to, obligations of banks (including certificates of deposit, bankers'
acceptances and repurchases agreements) with assets of $1 billion or more,
commercial paper, short-term notes, obligations issued or guaranteed by the
U.S. Government or any of its agencies, authorities or instrumentalities and
related repurchase agreements. U.S. Government securities also include
interests in trust or other entities representing interests in obligations that
are issued or guaranteed by the U.S. Government, its agencies, authorities or
instrumentalities.

Risk Factors. The nature of investing in emerging growth companies involves
greater risk than is customarily associated with investments in more
established companies. Emerging growth companies often have limited product
lines, markets or financial resources, and they may be dependent on one-person
management. The securities of emerging growth companies may have limited
marketability and may be subject to more abrupt or erratic market movements
than securities of larger, more established growth companies or the market
averages in general. Shares of the Portfolio, therefore, are subject to greater
fluctuation in value than shares of a conservative equity Portfolio or of a
growth Portfolio which invests entirely in proven growth stocks.

The Portfolio may invest to a limited extent in lower rated fixed income
securities or comparable unrated securities. Investments in lower rated income
securities, while offering high current income and generally providing greater
income and opportunity for gain than investments in higher rated securities,
usually entail greater risk of principal and income (including the possibility
of default or bankruptcy of the issuers of such securities), and involve
greater volatility of price (especially during periods of economic uncertainty
or change) than investments in higher rated securities and because yields may
vary over time, no specified level of income can ever be assured. In
particular, securities rated lower than Baa by Moody's Investors Service, Inc.
("Moody's") or BBB by Standard & Poor's Rating Group or comparable unrated
securities (commonly known as "junk bonds") are considered speculative. These
lower rated high yielding fixed income securities generally tend to reflect
economic changes (and the outlook for economic growth), short-term corporate
and

23
<PAGE>

industry developments and the market's perception of their credit quality
(especially during times of adverse publicity) to a greater extent than higher
rated securities which react primarily to fluctuations in the general level of
interest rates (although these lower rated fixed income securities are also
affected by changes in interest rates). In the past, economic downturns or an
increase in interest rates have under certain circumstances caused a higher
incidence of default by the issuers of these securities and may do so in the
future, especially in the case of highly leveraged issuers. During certain
periods, the higher yields on the Portfolio's lower rated high yielding fixed
income securities are paid primarily because of the increased risk of loss of
principal and income, arising from such factors as the heightened possibility
of default or bankruptcy of the issuers of such securities. Due to the fixed
income payments of these securities, the Portfolio may continue to earn the
same level of interest income while its net asset value declines due to
portfolio losses, which could result in an increase in the Portfolio's yield
despite the actual loss of principal. The prices for these securities may be
affected by legislative and regulatory developments. For example, federal rules
require that savings and loan associations gradually reduce their holdings of
high-yield securities. An effect of such rules may be to depress the prices of
outstanding lower rated high yielding fixed income securities. Changes in the
value of securities subsequent to their acquisition will not affect cash income
or yield to maturity to the Portfolio but will be reflected in the net asset
value of shares of the Portfolio. The market for these lower rated fixed income
securities may be less liquid than the market for investment grade fixed income
securities. Furthermore, the liquidity of these lower rated securities may be
affected by the market's perception of their credit quality. Therefore, the
Sub-Investment Manager's judgment may at times play a greater role in valuing
these securities than in the case of investment grade fixed income securities,
and it also may be more difficult during times of certain adverse market
conditions to sell these lower rated securities at their fair value to meet
redemption requests or to respond to changes in the market. No minimum rating
standard is required by the Portfolio. To the extent the Portfolio invests in
these lower rated fixed income securities, the achievement of its investment
objective may be more dependant on the Sub-Investment Manager's own credit
analysis than in the case of a Portfolio investing in higher quality bonds.
While the Sub-Investment Manager may refer to ratings issued by established
credit rating agencies, it is not a policy of the Portfolio to rely exclusively
on ratings issued by these agencies, but rather to supplement such ratings with
the Sub-Investment Manager's own independent and ongoing review of credit
quality.

The Portfolio may also invest in fixed income securities rated Baa by Moody's
or BBB by S&P and comparable unrated securities. These securities, while
normally exhibiting adequate protection parameters, may have speculative
characteristics and changes in economic conditions and other circumstances are
more likely to lead to a weakened capacity to make principal and interest
payments than in the case of higher rated securities.

Additional Risk Factors

The net asset value of the shares of an open-end investment company which may
invest to a limited extent in fixed income securities changes as the general
levels of interest rates fluctuate. When interest rates decline, the value of a
fixed income portfolio can be expected to rise. Conversely, when interest rates
rise, the value of a fixed income portfolio can be expected to decline.

Although changes in the value of securities subsequent to their acquisition
are reflected in the net asset value of shares of the Portfolio, such changes
will not affect the income received by the Portfolios from such securities.
However, the dividends paid by the Portfolios, if any, will increase or
decrease in relation to the income received by the Portfolio from its
investments, which would in any case be reduced by the Portfolio's expenses
before it is distributed to shareholders.

In addition, the use of options, futures contracts, options on futures
contracts, forward contracts and options on foreign currencies may result in
the loss of principal, particularly where such instruments are traded for other
than hedging purposes (e.g., to enhance current yield).

The Emerging Growth Portfolio is aggressively managed and, therefore, the
value of its shares is subject to greater fluctuation and investments in its
shares involve the assumption of a higher degree of risk than would be the case
with an investment in a conservative equity portfolio or a growth portfolio
investing entirely in proven growth equities.

See the Statement of Additional Information for further discussion of foreign
securities and the holding of foreign currency as well as the associated risks.

Given the above average investment risk inherent to the Emerging Growth
Portfolio, investment in shares of the Emerging Growth Portfolio should not be
considered a complete investment program and may not be appropriate for all
investors.

24
<PAGE>

Foreign Securities

The World Growth Stock Portfolio, the Gold Stock Portfolio and the Emerging
Growth Portfolio intend to purchase securities that are listed on stock
exchanges in foreign countries. They may also, to a limited extent, purchase
unlisted foreign securities. The Growth and Income Portfolio, the Capital
Growth Portfolio and the Balanced Portfolio may also invest in listed and
unlisted foreign securities. Foreign investments may involve greater risks than
are present in domestic investments. Compared to domestic companies, there is
generally less publicly available information about foreign companies, less
comprehensive accounting, reporting and disclosure requirements, and there may
be less governmental regulation and supervision of foreign stock exchanges,
brokers and listed companies. Investments in foreign securities also involve
the risk of expropriation or confiscatory taxation that could affect
investments, currency blockages which would prevent cash from being brought
back into the United States, generally higher brokerage and custodial costs
than those of domestic securities and settlement of transactions with respect
to such securities may sometimes be delayed beyond periods customary in the
United States. The Sub-Investment Managers, under the supervision of Chubb
Investment Advisory, consider possible political and financial instability
abroad, as well as the liquidity and volatility of foreign investments.

Investing in foreign securities or on foreign exchanges may present a greater
degree of risk than investing in domestic issuers. These risks include changes
in currency rates, exchange control regulations, governmental administration,
economic or monetary policy (in this country or abroad), war or expropriation.
In particular, the dollar value of portfolio securities of non-U.S. issuers
fluctuates with changes in market and economic conditions abroad and with
changes in relative currency values (when the value of the dollar increases as
compared to a foreign currency, the dollar value of a foreign-denominated
security decreases, and vice versa). Costs may be incurred in connection with
conversions between various currencies. Special considerations may also include
more limited information about foreign issuers, higher brokerage costs,
different accounting standards and thinner trading markets. Foreign securities
markets may also be less liquid, more volatile and less subject to government
supervision than in the United States. Investments in foreign countries could
be affected by other factors including confiscatory taxation and potential
difficulties in enforcing contractual obligations and could be subject to
extended settlement periods. Therefore, an investment in shares of a Portfolio
may be subject to a greater degree of risk than investments in other investment
companies which invest exclusively in domestic securities.

As a result of its investments in foreign securities, the Portfolios may
receive interest or dividend payments, or the proceeds of the sale or
redemption of such securities, in the foreign currencies in which such
securities are denominated. In that event, a Portfolio may promptly convert
such currencies into dollars at the then current exchange rate. Under certain
circumstances, however, such as where the Sub-Investment Manager believes that
the applicable exchange rate is unfavorable at the time the currencies are
received or the Sub-Investment Manager anticipates, for any other reason, that
the exchange rate will improve, a Portfolio may hold such currencies for an
indefinite period of time.

In addition, a Portfolio may be required to receive delivery of the foreign
currency underlying forward currency contracts it has entered into. This could
occur, for example, if an option written by the Portfolio is exercised or is
unable to close out a forward contract it has entered into. A Portfolio may
also hold foreign currency in anticipation of purchasing foreign securities. A
Portfolio may also elect to take delivery of the currencies underlying options
or forward contracts if, in the judgment of the Sub-Investment Manager, it is
in the best interest of the Portfolio to do so. In such instances as well, a
Portfolio may promptly convert the foreign currencies to dollars at the then
current exchange rate, or may hold such currencies for an indefinite period of
time.

While the holding of currencies will permit a Portfolio to take advantage of
favorable movements in the applicable exchange rate, it also exposes a
Portfolio to risk of loss if such rates move in a direction adverse to the
Portfolio's position. Such losses could reduce any profits or increase any
losses sustained by the Portfolio from the sale or redemption of securities,
and could reduce the dollar value of interest or dividend payments received. In
addition, the holding of currencies could adversely affect the Portfolio's
profit or loss on currency options or forward contracts, as well as its hedging
strategies.

Prior to investing in foreign securities, a Portfolio may hold funds
temporarily in foreign currencies. The value of the assets of that Portfolio
may be affected favorably or unfavorably by changes in foreign currency
exchange rates and exchange control regulations. The Portfolio may also incur
costs in connection with conversions between various currencies. The Portfolios
will, therefore, consider foreign exchange rates in making investment
decisions, but, other

25
<PAGE>

than the Capital Growth Portfolio and the Emerging Growth Portfolio, will not
actively hedge foreign currency fluctuations by entering into contracts to
purchase or sell foreign currencies at a future date or options or futures
contracts on foreign currencies. See "RISK CONSIDERATIONS--Foreign Securities"
in the Statement of Additional Information.

American Depository Receipts

The World Growth Stock Portfolio, the Gold Stock Portfolio, the Growth and
Income Portfolio, the Capital Growth Portfolio, the Balanced Portfolio and the
Emerging Growth Portfolio may invest in ADRs. These are certificates issued by
a United States bank representing the right to receive securities of a foreign
issuer deposited in that bank or a correspondent bank. There are no fees
imposed on the purchase or sale of ADRs when purchased from the issuing bank in
the initial underwriting, although the issuing bank may impose charges for the
collection of dividends and the conversion of ADRs into the underlying ordinary
shares. Brokerage commissions will be incurred if ADRs are purchased through
brokers on U.S. stock exchanges. Investments in ADRs often have advantages over
direct investments in the underlying foreign securities, including the
following: they are more liquid investments, they can be sold for U.S. dollars,
they may be transferred easily, market quotations are readily available in the
U.S. and more uniform financial information is available for the issuers of
such securities.

Forward Foreign Currency Exchange Contracts

The Capital Growth Portfolio and the Emerging Growth Portfolio may utilize
forward foreign currency exchange contracts ("forward currency contracts"). A
forward currency 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 forward currency contract agreed upon by the parties, at a price set at
the time of the contract. These forward currency contracts are principally
traded in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. The Portfolios will enter
into forward currency contracts only under two circumstances. First, when a
Portfolio has entered into a contract to purchase or sell a security
denominated in a foreign currency, the Portfolio may be able to protect itself
against a possible loss, between trade date and settlement date for such
security, resulting from an adverse change in the relationship between the U.S.
dollar and the foreign currency in which such security is denominated, by
entering into a forward currency contract in U.S. dollars for the purchase or
sale of the amount of the foreign currency involved in the underlying security
transaction. However, this tends to limit potential gains which might result
from a positive change in such currency relationships. Second, when management
of a Portfolio believes that the currency of a particular foreign country may
suffer or enjoy a substantial movement against the U.S. dollar (or another
currency), the Portfolio may enter into a forward currency contract to sell or
buy an amount of foreign currency approximating the value of some or all of the
Portfolio's securities denominated in such foreign currency, limited to no more
than 10% of the Portfolio's total assets. The forecasting of short-term
currency market movement is extremely difficult and whether such a short-term
hedging strategy will be successful is highly uncertain.

Repurchase Agreements

All of the Portfolios except the Bond Portfolio and the Domestic Growth Stock
Portfolio may enter into repurchase agreements, whereby the Portfolio purchases
securities (referred to as "underlying securities") from well-established
securities dealers or banks, subject to agreement by the seller to repurchase
the securities at a stated price on a specified date. Repurchase agreements
involve certain risks not associated with direct investment in securities,
including the risk that the original seller will default on its obligations to
repurchase, as a result of bankruptcy or otherwise. To minimize this risk, a
Portfolio will enter into repurchase agreements only if the repurchase
agreement is structured in a manner reasonably designed to collateralize fully
the value of a Portfolio's investment during the entire term of the agreement
and in accordance with guidelines regarding the creditworthiness of the seller
determined by the Board of Directors of the Fund. As a general matter, if the
seller of the repurchase agreement is a bank it must have assets of at least
$1,000,000,000; if the seller is a broker-dealer it must have a net worth of at
least $25,000,000. The underlying securities, held as collateral, will be
marked to market on a daily basis, and must be high-quality short-term
securities. In addition, the underlying securities of repurchase agreements
acquired by the Money Market Portfolio must be either U.S. Government
Obligations or securities that, at the time the repurchase agreement is entered
into, are rated in the highest rating category by the Requisite NRSROs.
Nevertheless, in the event that the other party to the agreement fails to
repurchase the securities subject to the agreement, a Portfolio could suffer a
loss to the extent proceeds from the sale of the underlying securities held as
collateral were less than the price specified in the repurchase agreement.

26
<PAGE>

Zero Coupon Bonds

The Balanced Portfolio, Capital Growth Portfolio and the Emerging Growth
Portfolio may invest in zero coupon bonds which are debt obligations that do
not make any interest payments for a specified period of time prior to maturity
or until maturity. The value of these obligations fluctuates more in response
to interest rate changes than does the value of debt obligations that make
current interest payments.

Securities and Index Options

The Growth and Income Portfolio, the Capital Growth Portfolio, the Balanced
Portfolio and the Emerging Growth Portfolio may write covered call options and
purchase call and put options on securities and stock indices. The Capital
Growth Portfolio and the Emerging Growth Portfolio may also utilize options on
foreign currencies. See the Statement of Additional Information for a more
detailed description of these options.

Writing (Selling) Call Options. In order to earn additional income or to
protect partially against declines in the value of its securities, the
Portfolios noted above may write (sell) covered call options. A Portfolio may
also purchase call options to the extent necessary to close out call option
positions previously written by the Portfolio. A call option gives the holder
(purchaser) the right to buy and obligates the writer (seller) to sell, in
return for a premium paid to the writer, the underlying security at the
exercise price at any time during the option period. A call option on a
securities index is similar to a call option on an individual security, except
that the value of the option depends on the weighted value of the group of
securities comprising the index and all settlements are made in cash rather
than by delivery of a particular security. The Portfolios will write only
covered call options which are listed on exchanges, and will not write a
covered call option if, as a result, the aggregate market value of all
portfolio securities covering all call options or subject to call options
written exceeds 25% of the value of the Portfolio's total assets.

The writing of call options on securities and securities indices involves the
following risks: (1) during the option period the writer of a call option gives
up the opportunity for capital appreciation above the exercise price should the
market price of the underlying security increase, but retains the risk of loss
should the price of the underlying security or index decline and (ii) the
inability to close out options previously written, which would require the
Portfolio to retain the option and the securities covering the option until its
exercise or expiration.

Purchasing Put and Call Options

In order to hedge against changes in the market value of their portfolio
securities, the Growth and Income Portfolio, the Capital Growth Portfolio, the
Balanced Portfolio and the Emerging Growth Portfolio may also purchase put and
call options with respect to equity securities, bonds, and stock and bond
indices which correlate with their portfolio securities, provided that the
premiums paid for such options are limited in each case to no more than 5% of
the Portfolio's total assets. A put option on a security gives the purchaser of
the option, in return for the premium paid to the writer (seller), the right to
sell the underlying security at the exercise price at any time during the
option period. Upon exercise by the purchaser, the writer of a put option has
the obligation to purchase the underlying security at the exercise price. A put
option on a securities index is similar to a put option on an individual
security, except that the value of the option depends on the weighted value of
the group of securities comprising the index and all settlements are made in
cash, rather than by delivery of a particular security.

Purchasing a put or call option on securities and securities indices involves
the risk that the Portfolio may lose the premium it paid plus transaction
costs.

Futures Contracts

The Growth and Income Portfolio, the Capital Growth Portfolio, the Balanced
Portfolio and the Emerging Growth Portfolio may purchase and sell futures
contracts on debt securities and indexes of debt securities (i.e., interest
rate futures contracts) as a hedge against or to minimize adverse principal
fluctuations resulting from anticipated interest rate changes. They may also,
where appropriate, enter into stock index futures contracts to provide a hedge
for a portion of a Portfolio's equity holdings. Stock index futures contracts
may be used as a way to implement either an increase or decrease in portfolio
exposure to the equity markets in response to changing market conditions. The
Capital Growth Portfolio and the Emerging Growth Portfolio may also enter into
currency futures contracts to hedge the currency fluctuations of its foreign
securities. A Portfolio may also write covered call options and purchase put or
call options on futures contracts of the type which that Portfolio is permitted
to purchase. The Portfolios will not enter into futures contracts for
speculation and will only enter into futures contracts that are traded on
national futures exchanges. No Portfolio will enter into futures contracts or
options thereon if immediately thereafter the sum of the amounts of initial

27
<PAGE>

margin deposits on the Portfolio's existing futures contracts and premiums paid
for options on unexpired futures contracts would exceed 5% of the value of the
Portfolio's total assets.

The use of futures contracts by the Growth and Income Portfolio, the Capital
Growth Portfolio, the Balanced Portfolio and the Emerging Growth Portfolio
entails certain risks, including but not limited to the following: no assurance
that futures contracts transactions can be offset in closing transactions at
favorable prices or at all unless a liquid secondary market exists; possible
reduction of the 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 fluctuation; imperfect
correlation between the contract and the securities being hedged; and potential
losses well in excess of the amount invested in futures contracts themselves.
If a Sub-Investment Manager's forecasts regarding movements in securities
prices or interest rates are incorrect, the Portfolio's investment results may
have been better without the hedge. Futures contracts and their associated
risks are described in more detail in the Statement of Additional Information.

Lending of Securities

The Emerging Growth Portfolio may make loans of its portfolio securities.
Such loans will usually be made only to member banks of the Federal Reserve
System and member firms (and subsidiaries thereof) of the New York Stock
Exchange and would be required to be secured continuously by collateral in
cash, cash equivalents or U.S. Government securities maintained on a current
basis at an amount at least equal to the market value of the securities loaned.
The Portfolio would continue to collect the equivalent of the interest on the
securities loaned and would receive either interest (through investment of cash
collateral) or a fee (if the collateral is U.S. Government securities).

When-Issued Securities

In order to help ensure the availability of suitable securities for its
portfolio, the Bond and the Emerging Growth Portfolios may purchase securities
on a "when-issued" or on a "forward delivery" basis, which means that the
obligations will be delivered to the Portfolios at a future date usually beyond
customary settlement time. It is expected that, under normal circumstances, the
Portfolios will take delivery of such securities. In general, the Portfolios do
not pay for the securities until received and does not start earning interest
on the obligations until the contractual settlement date. While awaiting
delivery of the obligations purchased on such bases, the Portfolios will
establish a segregated account consisting of cash, short-term money market
instruments or high quality debt securities equal to the amount of the
commitments to purchase "when-issued" securities. See the Statement of
Additional Information.

Corporate Asset-Backed Securities

The Bond and the Emerging Growth Portfolios may invest in corporate asset-
backed securities. These securities, issued by trusts and special purpose
corporations, are backed by a pool of assets, such as credit card or automobile
loan receivables, representing the obligations of a number of different
parties. Corporate asset-backed securities present certain risks. For instance,
in the case of credit card receivables, these securities may not have the
benefit of any security interest in the related collateral. See the Statement
of Additional Information for further information on these securities.

Loan Participations and Other Direct Indebtedness

The Bond and the Emerging Growth Portfolios may invest a portion of their
assets in "Loan Participations" and other direct indebtedness. By purchasing a
loan participation, the Portfolios acquire some or all of the interest of a
bank or other lending institution in a loan to a corporate borrower. Many such
loans are secured, and impose restrictive covenants which must be met by the
borrower. These loans are made generally to finance internal growth, mergers,
acquisitions, stock repurchases, leveraged buy-outs and other corporate
activities. Such loans may be in default at the time of purchase. The
Portfolios may also purchase other direct indebtedness such as trade or other
claims against companies, which generally represent money owed by the company
to a supplier of goods and services. These claims may also be purchased at a
time when the company is in default. Certain of the loan participations and
other direct indebtedness acquired by the Portfolios may involve revolving
credit facilities or other standby financing commitments which obligate the
Portfolios to pay additional cash on a certain date or on demand.

The highly leveraged nature of many such loans and other direct indebtedness
may make such loans especially vulnerable to adverse changes in economic or
market conditions. Loan participations and other direct indebtedness may not be
in the form of securities or may be subject to restrictions on transfer, and
only limited opportunities may exist to

28
<PAGE>

resell such instruments. As a result, the Portfolios may be unable to sell such
investments at an opportune time or may have to resell them at less than fair
market value. For a further discussion of loan participations, other direct
indebtedness and the risks related to transactions therein, see the Statement
of Additional Information.

INVESTMENT RESTRICTIONS

Investments of the Portfolios are further restricted by certain policies that
may not be changed without a vote of stockholders. See "INVESTMENT
RESTRICTIONS" in the Statement of Additional Information.

Portfolio Turnover

Portfolio turnover may vary and from year to year or within a year depending
upon economic, market and business conditions. The annual portfolio turnover
rates for the Portfolios in 1994 and 1993 were as follows: 19% and 35% for the
World Growth Stock Portfolio; 17% and 7% for the Gold Stock Portfolio; 47% and
49% for the Domestic Growth Stock Portfolio; and 140% and 113% for the Bond
Portfolio. The portfolio turnover rates for the years ended December 31, 1994
and the year ended December 31, 1993 were 38% and 78%, respectively, for the
Growth and Income Portfolio, 202% and 163%, respectively, for the Capital
Growth Portfolio and 104% and 65%, respectively, for the Balanced Portfolio. In
addition, the portfolio turnover rate for the Balanced Portfolio for such
periods can be broken down into rates of 152% and 72%, respectively, for the
common stock portion of the Portfolio and 36% and 57%, respectively, for the
fixed income portion. It is expected that the Emerging Growth Portfolio will
have a turnover that will approximate 100%. Portfolios having annual portfolio
turnover rates of over 100% may realize larger amounts of gains and losses than
they would with a lower portfolio turnover rate and will generally incur
correspondingly greater brokerage commissions. Excessive short-term trading may
result in excessive "short-short income under the Internal Revenue Code ("IRC")
which, in turn, could cause the Portfolio to also violate IRC Section 817(h)
affecting the status of such Portfolios as regulated investment companies and
the tax status of the contracts invested in the Portfolio. See "TAXES AND
DIVIDENDS" in this Prospectus and "PORTFOLIO TRANSACTIONS AND BROKERAGE
ALLOCATIONS" in the Statement of Additional Information.

MANAGEMENT OF THE FUND

The Board of Directors of the Fund is responsible for the administration of
the affairs of the Fund.

The Fund's investment manager is Chubb Investment Advisory, a registered
investment adviser, which is a wholly-owned subsidiary of Chubb Life. Its
address is One Granite Place, Concord, NH 03301. It provides supervisory
investment advice, acts as transfer and dividend disbursing agent for the Fund
and provides certain administrative services for all of the Fund's Portfolios.
Its investment advisory responsibilities include, among other things,
recommending and overseeing the activities of the Sub-Investment Managers and
reviewing the practices of broker-dealers selected by the Sub-Investment
Managers. Chubb Investment Advisory also provides office space and related
utilities, including telephones, necessary for the Fund's operations;
recommends auditors, counsel and custodians; maintains records not otherwise
maintained by other parties; and provides personnel, data processing services,
and supplies to the Fund. The cost of such facilities, supplies and services is
included in the investment management fee described below. Chubb Investment
Advisory also acts as investment administrator to Chubb Investment Funds, Inc.,
and UST Master Variable Series, Inc., both open-end management investment
companies organized in 1987 and 1994 respectively, and as investment manager
for Chubb Series Trust, an open-end management investment company established
in 1994.

Investment management fees are paid to Chubb Investment Advisory monthly at
an annual rate based on a percentage of the average daily net asset value of
each Portfolio as shown below:

<TABLE>
<CAPTION>
WORLD GROWTH STOCK,
GOLD STOCK,
DOMESTIC GROWTH STOCK,
AVERAGE DAILY NET ASSET MONEY MARKET GROWTH AND INCOME, CAPITAL EMERGING
VALUE AND BOND AND BALANCED GROWTH GROWTH
- ----------------------- ------------ ---------------------- ------- --------
<S> <C> <C> <C> <C>
First $200 Million....... .50% .75% 1.00% .80%
Next $1.1 Billion........ .45% .70% .95% .75%
Over $1.3 Billion........ .40% .65% .90% .70%
</TABLE>

29
<PAGE>

The Sub-Investment Managers for the Portfolios are Templeton, Galbraith &
Hansberger Ltd., Lyford Cay, Nassau, Bahamas for the World Growth Stock
Portfolio; Chubb Asset Managers, Inc., 15 Mountain View Road, Warren, New
Jersey 07061 for the Money Market, Bond, and Growth and Income Portfolios; Van
Eck Associates Corporation, 99 Park Avenue, New York, New York 10016 for the
Gold Stock Portfolio; Pioneering Management Corporation, 60 State Street,
Boston, Massachusetts 02109 for the Domestic Growth Stock Portfolio; Janus
Capital Corporation, 100 Fillmore Street, Suite 300, Denver, Colorado 80206 for
the Capital Growth Portfolio; Phoenix Investment Counsel, Inc., One American
Row, Hartford, Connecticut 06115 for the Balanced Portfolio; Massachusetts
Financial Services Company, 500 Boylston Street, Boston, Massachusetts 02116
for the Emerging Growth Portfolio.

Templeton, a registered investment adviser, is organized under the laws of
the Bahamas. Templeton is an indirect wholly owned subsidiary of Franklin
Resources, Inc. ("Franklin"), a Delaware corporation. Franklin is a publicly
traded company whose ordinary shares of common stock are listed on the New York
Stock Exchange. Templeton serves as an investment adviser or sub-adviser to
various investment companies registered under the Investment Company Act of
1940, subject to the supervision and direction of each company's Board of
Directors and, where appropriate, the company's investment adviser, as well as
to investment companies registered in foreign jurisdictions. In this capacity,
Templeton is responsible on a daily basis for managing the companies'
investments, making investment decisions on behalf of the companies and
supplying research services. Templeton may also provide investment research and
advice to certain common trust vehicles. Templeton is also an adviser or sub-
adviser to several private accounts. Templeton and its affiliates currently
serve as investment manager to twenty-five U.S. registered investment
companies. Dr. Jane Siebels-Kilnes has been primarily responsible for the day-
to-day management of the World Growth Stock Portfolio since 1991. She has been
employed by Templeton since September 1990 and was previously Vice President
for Union Bank of Switzerland, Zurich, Switzerland from March 1990 to September
1990 and Portfolio Manager for Storebrand International, Oslo, Norway from July
1985 to March 1990.

Chubb Asset, a registered investment adviser, is a Delaware corporation and a
wholly-owned subsidiary of The Chubb Corporation. Since 1987, Chubb Asset has
been the investment manager for Chubb Investment Funds, Inc., which currently
consists of the Chubb Money Market Fund, the Chubb Government Securities Fund,
the Chubb Tax-Exempt Fund, the Chubb Total Return Fund and the Chubb Growth and
Income Fund. Persons employed by Chubb Asset, who are also investment personnel
of Chubb & Son, Inc., a wholly-owned subsidiary of The Chubb Corporation,
currently provide investment advice to and supervise and monitor investment
portfolios for The Chubb Corporation and its affiliates, including general
accounts of insurance affiliates of The Chubb Corporation. In addition, certain
investment personnel employed by Chubb Asset currently provide advice to other
investment portfolios of entities not affiliated with The Chubb Corporation or
its affiliates in their capacity as officers or directors of certain registered
investment advisers not related to Chubb Asset. Ned Gerstman and Paul Geyer
have been primarily responsible for the day-to-day management of the Bond
Portfolio since 1988 and 1991, respectively. Mr. Gerstman is Senior Vice
President of Chubb Asset and Vice President and Portfolio Manager of The Chubb
Corporation. He has been employed by Chubb Asset since 1988 and has been
Portfolio Manager for The Chubb Corporation since 1987. Mr. Geyer, Assistant
Vice President and Assistant Portfolio Manager of Chubb Asset, has been
affiliated with Chubb Asset since 1991 and with The Chubb Corporation since
1990. He was previously affiliated with Merrill Lynch in New York. David
Schafer and Robert Witkoff have been primarily responsible for the day-to-day
management of the Growth and Income Portfolio since 1993 and 1992,
respectively. Mr. Schafer, Senior Vice President of Chubb Asset, has been
affiliated with Chubb Asset since 1993. Mr. Schafer is also President of Chubb
Equity Managers, Director and President of Schafer Value Fund, Inc., Director,
President and Treasurer of Schafer Capital Management, Inc., Chairman of the
Board of Schafer Cullen Capital Management, Inc. and sole proprietor of Schafer
Capital Management Co. Mr. Witkoff joined Chubb Asset in 1988 and is currently
Vice President of Chubb Asset and Portfolio Manager for The Chubb Corporation.

Van Eck Associates, a registered investment adviser, is a Delaware
corporation. It acts as an adviser to three other registered investment
companies, Van Eck Funds, Van Eck Investment Trust and International Growth
Trust and as a sub-adviser to two other registered investment companies,
Thomson Fund Group--Thomson Precious Metals and Natural Resources Fund and GCG
Trust--Natural Resources Fund, and manages or advises managers of portfolios of
pension plans and other accounts. Mr. John C. van Eck owns 25.6% of the
outstanding voting securities of Van Eck Associates and his wife and two sons,
Jan and Derek van Eck, 270 River Road, Briarcliff Manor, New York, are each the
beneficial owners of 24.8% of such securities. Mr. John C. van Eck has retained
the right to direct the voting and disposition of the shares of Van Eck
Associates held by his wife. Lucille Palermo has been primarily responsible for
the day-to-day management of the Gold Stock Portfolio since October of 1991.
She has been affiliated with Van Eck

30
<PAGE>

Associates and related companies since 1989 and is currently Executive Vice
President of Van Eck Funds and President and Portfolio Manager for the
Gold/Resources Fund.

Pioneer, a registered investment adviser, is a Delaware corporation. It is a
wholly-owned subsidiary of The Pioneer Group, Inc., a Delaware corporation.
Pioneer currently acts as a manager and investment adviser of twenty-five other
registered investment companies. Robert Benson, Senior Vice President of
Pioneer, has been primarily responsible for the day-to-day management of the
Domestic Growth Stock Portfolio since 1986. Mr. Benson has been employed by
Pioneer since 1974.

Janus, a registered investment adviser, is a Colorado corporation. It serves
as investment adviser or subadviser to Janus Growth and Income Fund, Janus
Worldwide Fund, Janus Fund, Janus Twenty Fund, Janus Venture Fund, Janus
Flexible Income Fund and Janus Intermediate Government Securities Fund, as well
as several other mutual funds and individual, corporate and pension and profit-
sharing accounts. Kansas City Southern Industries, Inc. ("KCSI") owns
approximately 81% of the outstanding voting stock of Janus, most of which it
acquired in 1984. KCSI is a publicly-traded holding company whose primary
subsidiaries are engaged in transportation, financial services and real estate.
Helen Young Hayes has been primarily responsible for the day-to-day management
of the Capital Growth Portfolio since its inception in 1992. Ms. Hayes, who is
currently Executive Vice President of Janus Investment Fund and Janus Aspen
Series, as well as Portfolio Manager of the Janus Worldwide Fund and separate
equity accounts, has been affiliated with Janus since 1987.

Phoenix, a registered investment adviser, is a Massachusetts corporation. It
was originally organized in 1932 as John P. Chase, Inc. and has been engaged in
the management of the Phoenix Series Fund since 1958. It also serves as
investment adviser or sub-investment adviser to Phoenix Multi-Portfolio Fund,
Phoenix Total Return Fund, Inc., The Phoenix Edge Series Fund, Cambridge Series
Trust, SunAmerica Series Trust, JNL Series Trust and American Skandia Trust.
All of the outstanding stock of Phoenix is owned by Phoenix Equity Planning
Corporation, an indirect subsidiary of Phoenix Home Life Mutual Insurance
Company. Phoenix Home Life Mutual Insurance Company is in the business of
writing ordinary and group life and health insurance and annuities, including
variable life insurance and variable annuities. Michael R. Matty has been
primarily responsible for the day-to-day management of the Balanced Portfolio
since its inception in 1992. Mr. Matty is also the Portfolio Manager, Common
Stock, Phoenix Home Life, and has served as Vice President of Phoenix Series
Fund and National Securities and Research since 1993 and 1992, respectively.
Mr. Matty has been affiliated with Phoenix Home Life Mutual Insurance Company
since 1986.

Massachusetts Financial Services Company ("MFS") is America's oldest mutual
fund organization. MFS and its predecessor organizations have a history of
money management dating from 1924 and the founding of the first mutual fund in
the United States, Massachusetts Investors Trust. Net assets under the
management of the MFS organization were approximately $34.5 billion on behalf
of approximately 1.6 million investor accounts as of February 28, 1995. As of
such date, the MFS organization manages approximately $11.5 billion of assets
invested in equity securities and approximately $19.5 billion of assets
invested in fixed income securities. Approximately $3.1 billion of the assets
managed by MFS are invested in securities of foreign issuers and non-U.S.
dollar denominated securities of U.S. issuers. MFS is a subsidiary of Sun Life
Assurance Company of Canada (U.S.), which in turn is a subsidiary of Sun Life
Assurance Company of Canada.

MFS also serves as investment adviser to each of the other funds in the MFS
Family of Funds (the "MFS Funds") and to MFS (R) Municipal Income Trust, MFS
Multimarket Income Trust, MFS Government Markets Income Trust, MFS Intermediate
Income Trust, MFS Charter Income Trust, MFS Special Value Trust, MFS Variable
Insurance Trust, MFS Institutional Trust, MFS Union Standard Trust, MFS/Sun
Life Series Trust, Sun Growth Variable Annuity Fund, Inc. and seven variable
accounts, each of which is a registered investment company established by Sun
Life Assurance Company of Canada (U.S.) in connection with the sale of Compass-
2 and Compass-3 combination fixed/variable annuity contracts. MFS and its
wholly-owned subsidiary, MFS Asset Management, Inc., provides investment advice
to substantial private clients. John W. Ballen, a Senior Vice President of MFS,
will be the Portfolio's portfolio manager. Mr. Ballen has been employed by MFS
since 1984.

31
<PAGE>

The compensation of the Sub-Investment Managers is paid directly from the
investment management fees of Chubb Investment Advisory and is set forth in the
table below as an annual percentage of the average daily net asset value of the
Portfolio managed:

<TABLE>
<CAPTION>
SUB-INVESTMENT MANAGER
-----------------------------------------------------------------------------
CHUBB ASSET
CHUBB ASSET FOR THE
FOR THE BOND AND
GROWTH AND MONEY MARKET VAN ECK
AVERAGE DAILY NET ASSET VALUE INCOME PORTFOLIO JANUS PHOENIX TEMPLETON PORTFOLIOS ASSOCIATES PIONEER MFS
- ----------------------------- ---------------- ----- ------- --------- ------------ ---------- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
First $200 Million...... .50% .75% .50% .50% .35% .50% .50% .50%
Next $1.1 Billion....... .45% .70% .45% .45% .30% .45% .45% .45%
Over $1.3 Billion....... .40% .65% .40% .40% .25% .40% .40% .40%
</TABLE>

As noted above, Chubb Investment Advisory acts as transfer agent and dividend
paying agent for the Fund and assumes a number of administrative functions in
addition to its investment management services. For example, Chubb Investment
Advisory prepares and distributes proxy statements, prospectuses, Statements of
Additional Information, reports and other communications with stockholders;
schedules, plans the agenda for, and conducts the meetings of the Fund's
directors and stockholders; and prepares and files tax returns and reports
which federal, state, local or foreign laws may require. The cost of preparing,
printing and distributing all materials and holding such meetings is borne by
the Fund. The Fund also pays certain other expenses which are described under
the heading "INVESTMENT ADVISORY AND OTHER SERVICES--Payment of Expenses" in
the Statement of Additional Information.

For the year ended December 31, 1994, all investment management fees paid to
Chubb Investment Advisory totalled .75%, .50%, .75%, .75%, .50%, .75%, 1.00%,
and .75%, respectively, of the average net assets of the World Growth Stock
Portfolio, Money Market Portfolio, Gold Stock Portfolio, Domestic Growth Stock
Portfolio, Bond Portfolio, Growth and Income Portfolio, Capital Growth
Portfolio and Balanced Portfolio. For the year ended December 31, 1994 the
ratio of operating expenses to average net assets was 1.00%, .65%, .99%, .89%,
.68%, 1.10%, 1.22% and 1.01% respectively, for the World Growth Stock
Portfolio, the Money Market Portfolio, the Gold Stock Portfolio, the Domestic
Growth Stock Portfolio, the Bond Portfolio, the Growth and Income Portfolio,
the Capital Growth Portfolio and the Balanced Portfolio.

CAPITAL STOCK

The Fund issues a separate series of capital stock for each Portfolio. Each
share of capital stock issued with respect to a Portfolio has a pro rata
interest in the assets of that Portfolio. Each share of capital stock is
entitled to one vote on all matters submitted to a vote of all stockholders of
the Fund, and fractional shares are entitled to a corresponding fractional
vote. Shares of a Portfolio will be voted separately from shares of other
Portfolios on matters affecting only that Portfolio, including approval of the
investment management agreement, a sub-investment management agreement, and
changes in fundamental investment policies of that Portfolio. The assets of
each Portfolio are charged with the liabilities of that Portfolio and a
proportionate share of the general liabilities of the Fund. All shares may be
redeemed at any time.

As a Maryland corporate entity, the Fund is not required to hold regular
annual shareholder meetings and, in the normal course, does not expect to hold
such meetings. The Fund is, however, required to hold shareholder meetings for
such purposes as, for example: (i) approving certain agreements as required by
the 1940 Act; (ii) changing fundamental investment objectives and restrictions
of the Portfolios; and (iii) filling vacancies on the Board of Directors in the
event that less than a majority of the directors were elected by shareholders.
The Fund expects that there will be no meetings of shareholders for the purpose
of electing directors unless and until such time as less than a majority of the
directors holding office have been elected by shareholders. At such time, the
directors then in office will call a shareholder meeting for the election of
directors. In addition, holders of record of not less than two-thirds of the
outstanding shares of the Fund may remove a director from office by a vote cast
in person or by proxy at a shareholder meeting called for that purpose at the
request of holders of 10% or more of the outstanding shares of the Fund. The
Fund has the obligation to assist in such shareholder communications. Except as
set forth above, directors will continue in office and may appoint successor
directors.

32
<PAGE>

Chubb Life initially purchased 100,000 shares of the capital stock of each
Portfolio, other than the Balanced Portfolio and the Emerging Growth Portfolio,
for its general account. Chubb Life initially purchased 500,000 shares of the
capital stock of the Balanced Portfolio and will purchase 300,000 shares of
capital stock of the Emerging Growth Portfolio for its general account. The
purchase price of each share was $10.00. All other shares are offered only to
corresponding divisions of separate accounts established by Chubb Life or its
affiliated insurance companies. As of March 31, 1995, Chubb Life owned greater
than 25% of the shares of capital stock of the Bond Portfolio, the Growth and
Income Portfolio and the Balanced Portfolio. Chubb Life's ownership of greater
than 25% of these Portfolios may result in Chubb Life being deemed to be a
controlling entity of them. The shares held in a separate account which are
attributable to Policies will be voted by Chubb Life or its affiliated
insurance companies in accordance with instructions received from the owners of
Policies. The shares held by Chubb Life or its affiliated insurance companies,
including shares for which no voting instructions have been received, shares
held in the separate account representing charges imposed by Chubb Life or its
affiliated insurance companies against the separate account and shares held by
Chubb Life or its affiliated insurance companies that are not otherwise
attributable to Policies, will also be voted by Chubb Life or its affiliated
insurance companies in proportion to instructions received from the owners of
Policies. Chubb Life and its affiliated insurance companies reserve the right
to vote any or all such shares at their discretion to the extent consistent
with then current interpretations of the Investment Company Act of 1940 and
rules thereunder.

TAXES AND DIVIDENDS

Each Portfolio intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code ("Code"). It is the Fund's policy to
comply with the provisions of the Code regarding distribution of investment
income. Under those provisions, a Portfolio will not be subject to federal
income tax on that portion of its ordinary income and net capital gains
distributed to shareholders.

The Fund expects that each Portfolio will declare and distribute by the end
of each calendar year all or substantially all ordinary income and net capital
gains. Failure to distribute substantially all ordinary and net capital gains,
as described, may subject the Fund to an excise tax.

Dividends from ordinary income will be declared and distributed with respect
to each Portfolio at least once each year. Ordinary income of each Portfolio is
the investment company taxable income as defined in Section 852(b) of the Code.
All dividends and distributions will be automatically reinvested in additional
shares of the Portfolio with respect to which dividends have been declared, at
net asset value, as of the ex-dividend date of such dividends.

Section 817(h) of the Code and regulations thereunder set standards for
diversification of the investments underlying variable life insurance policies
in order for such policies to be treated as life insurance. These requirements,
which are in addition to diversification requirements applicable to the
Portfolios under Subchapter M and the Investment Company Act of 1940, may
affect the composition of a Portfolio's investments. Since the shares of the
Fund are currently sold to segregated asset accounts underlying such variable
life insurance policies, the Fund intends to comply with the diversification
requirements as set forth in the regulations.

The Secretary of the Treasury may in the future issue additional regulations
or revenue rulings that will prescribe the circumstances in which a
policyowner's control of the investments of a separate account may cause the
policyowner, rather than the insurance company, to be treated as the owner of
the assets of the separate account. Failure to comply with Section 817(h) of
the Code or any regulations thereunder, or with any regulations or revenue
rulings on policyowner control, if promulgated, would cause earnings on a
policyowner's interest in the separate account to be includible in the
policyowner's gross income in the year earned.

OFFERING AND REDEMPTION OF SHARES

Shares of capital stock of each Portfolio of the Fund are offered only to the
corresponding division of a separate account to which premiums have been
allocated by the owner of a Policy. Shares are sold and redeemed at their net
asset value as next determined following receipt by the separate account of
premium payments, surrender requests under Policies, loan payments, transfer
requests, and similar or related transactions through the separate account. The
Fund's principal underwriter and distributor is Chubb Securities Corporation,
One Granite Place, Concord, New Hampshire 03301. Chubb Securities Corporation
is an affiliate of Chubb Investment Advisory and a wholly-owned subsidiary of
Chubb Life. No selling commission or redemption charge is made with respect to
the purchase or sale of Fund shares.

33
<PAGE>

Net asset value is normally determined as of the close of regular trading on
the New York Stock Exchange (presently 4:00 p.m. New York Time) on each day
during which the New York Stock Exchange is open for trading.

An equity security listed on a stock exchange is valued at the closing sale
price on the exchange on which such security is principally traded. If no sale
took place, the mean of the bid and asked prices at the close of trading is
used. A security not listed on a stock exchange is valued at the closing sale
price as reported on a readily available market quotation system, or, if no
sales took place, the mean of the bid and asked prices at the close of trading
in the over-the-counter market. Quotations of foreign securities in foreign
currencies are converted to United States dollar equivalents using
appropriately translated foreign market closing prices.

Trading in securities on exchanges in European and Far Eastern countries, and
in over-the-counter markets in such other nations, is normally completed well
before the close of trading on the New York Stock Exchange. Trading of European
and Far Eastern securities, either generally or in a particular country or
countries, may not take place on every day on which the New York Stock Exchange
is open. Furthermore, trading takes place in Japanese markets on certain
Saturdays, and in various foreign markets on days which are not business days
in New York and on which the Fund's net asset value is not normally calculated.
The calculation of the net asset value of those Portfolios which do such
trading, therefore, may not take place contemporaneously with the determination
of the prices of many of the securities of each such Portfolio which are used
in making the calculation of net asset value. Occasionally, events affecting
the values of such securities may occur between the times at which they are
determined and the close of the New York Stock Exchange, which events may not
be reflected in the computation of a Portfolio's net asset value. If, during
such periods, events occur which materially affect the value of the securities
of a Portfolio, and during such periods either shares are tendered for
redemption or a purchase or sale order is received by the Fund, such securities
will be valued at fair value as determined in good faith by the Board of
Directors of the Fund.

Debt securities having remaining maturities of 60 days or less are valued on
an amortized cost basis unless the Board determines that such method does not
represent fair value. This procedure values a purchased instrument at cost on
the date of purchase. It thereafter assumes a constant rate of amortization of
any discount or premium and of accrual of interest income, regardless of any
intervening change in general interest rates or the market value of the
instrument.

Options and convertible preferred stocks listed on a national securities
exchange are valued as of their last sale price or, if there is no sale, at the
current bid price. Futures Contracts are valued as of their last sale price or,
if there is no sale, at the latest available bid price.

All other securities and assets are valued at their fair value as determined
in good faith by the Board of Directors of the Fund.

With the approval of the Board, the Fund may utilize a pricing service, a
bank, or a broker-dealer experienced in such matters to perform any of the
above-described valuation functions.

Further discussion of asset valuation methods is included in the Statement of
Additional Information under the heading "DETERMINATION OF NET ASSET VALUE."

OTHER INFORMATION

Shares of the Portfolios are presently offered only to corresponding
divisions of separate accounts established by Chubb Life or its affiliated
insurance companies in order to fund the Policies. In the future, however, the
shares of the Portfolios may also be offered to separate accounts of Chubb Life
or affiliates of Chubb Life in order to fund additional variable life insurance
policies or variable annuity contracts offered by Chubb Life or its affiliates.

A potential for certain conflicts of interest exists between the interests of
variable life insurance policyowners and variable annuity contract owners. In
the event that shares of the Portfolios are offered to separate accounts
funding variable annuity contracts, the Board of Directors of the Fund intends
to monitor events for the existence of any material conflict between the
interests of variable life insurance policyowners and variable annuity contract
owners and to determine what action, if any, should be taken in response
thereto.