WRL SERIES FUND INC, 485APOS, 2000-09-15

WRL SERIES FUND INC
485APOS, 2000-09-15

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As filed electronically with the Securities and Exchange Commission on
September 15, 2000

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Registration No. 33-507
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Pre-Effective Amendment No.
----
Post-Effective Amendment No. 41
---- and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 1940 Act File
No. 811-4419

Amendment No. 42
----

(Check appropriate box or boxes.)

WRL SERIES FUND, INC.
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(Exact Name of Registrant as Specified in Charter)

570 Carillon Parkway, St. Petersburg, Florida 33716
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(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (727) 299-1800

John K. Carter, Esq. 570 Carillon Parkway St. Petersburg, Florida 33716
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(Name and Address of Agent for Service)

Approximate date of proposed public offering:

It is proposed that this filing will become effective:

|_| immediately upon filing pursuant to paragraph (b)

|_| on (date) pursuant to paragraph (b)

|_| 60 days after filing pursuant to paragraph (a) (1)

|X| on December 1, 2000 pursuant to paragraph (a) (1)

|_| 75 days after filing pursuant to paragraph (a) (2)

|_| on (date) pursuant to paragraph (a) (2) of Rule 485.

If appropriate, check the following box:

|_| this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

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<PAGE>
WRL Series Fund, Inc.

AGGRESSIVE EQUITY PORTFOLIOS o WRL VKAM Emerging Growth o WRL T.
Rowe Price Small Cap o WRL Goldman Sachs Small Cap o WRL Pilgrim
Baxter Mid Cap Growth o WRL Alger Aggressive Growth o WRL Third
Avenue Value o WRL Value Line Aggressive Growth

WORLD EQUITY PORTFOLIOS o WRL GE International Equity o WRL Great
Companies -- Global2 o WRL Gabelli Global Growth o WRL Janus Global

GROWTH EQUITY PORTFOLIOS o WRL Great Companies -- TechnologySM o
WRL LKCM Capital Growth o WRL Janus Growth o WRL Goldman Sachs
Growth o WRL GE U.S. Equity o WRL Great Companies -- AmericaSM o
WRL Salomon All Cap o WRL C.A.S.E. Growth o WRL Dreyfus Mid Cap o
WRL NWQ Value Equity

BALANCED PORTFOLIOS
o WRL T. Rowe Price Dividend Growth
o WRL Dean Asset Allocation
o WRL LKCM Strategic Total Return
o WRL J.P. Morgan Real Estate Securities
o WRL Federated Growth & Income
o WRL AEGON Balanced

FIXED-INCOME PORTFOLIOS
o WRL AEGON Bond

CAPITAL PRESERVATION PORTFOLIOS
o WRL J.P. Morgan Money Market

Prospectus

The Securities and Exchange Commission
has not approved or disapproved these
securities or passed upon
the adequacy of this prospectus.
Any representation to the contrary is a criminal offense.

December 1, 2000

<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
INVESTOR INFORMATION ............................... 1
ALL ABOUT THE FUND
AGGRESSIVE EQUITY PORTFOLIOS
WRL VKAM Emerging Growth ........................ 2
WRL T. Rowe Price Small Cap ..................... 3
WRL Goldman Sachs Small Cap ..................... 4
WRL Pilgrim Baxter Mid Cap Growth ............... 4
WRL Alger Aggressive Growth ..................... 5
WRL Third Avenue Value ......................... 5
WRL Value Line Aggressive Growth ................ 6
WORLD EQUITY PORTFOLIOS
WRL GE International Equity ..................... 12
WRL Great Companies -- Global2 .................. 13
WRL Gabelli Global Growth ....................... 14
WRL Janus Global ................................ 14
GROWTH EQUITY PORTFOLIOS
WRL Great Companies -- TechnologySM ............. 20
WRL LKCM Capital Growth ......................... 20
WRL Janus Growth ................................ 21
WRL Goldman Sachs Growth ........................ 21
WRL GE U.S. Equity .............................. 22
WRL Great Companies -- AmericaSM ................ 22
WRL Salomon All Cap ............................. 23
WRL C.A.S.E. Growth ............................. 23
WRL Dreyfus Mid Cap ............................. 24
WRL NWQ Value Equity ............................ 24
BALANCED PORTFOLIOS
WRL T. Rowe Price Dividend Growth ............... 32
WRL Dean Asset Allocation ....................... 32
WRL LKCM Strategic Total Return ................. 33
WRL J.P. Morgan Real Estate Securities ......... 33
WRL Federated Growth & Income ................... 34
WRL AEGON Balanced .............................. 34
FIXED-INCOME PORTFOLIOS
WRL AEGON Bond .................................. 41
CAPITAL PRESERVATION PORTFOLIOS
WRL J.P. Morgan Money Market ................... 44
RISK/REWARD INFORMATION ............................ 47
EXPLANATION OF STRATEGIES AND RISKS ................ 48
HOW THE FUND IS MANAGED AND ORGANIZED .............. 54
PERFORMANCE INFORMATION ............................ 59
OTHER INFORMATION .................................. 62
FINANCIAL HIGHLIGHTS ............................... 64
</TABLE>

WRL Series Fund, Inc. (Fund) currently offers twenty-nine separate series
or investment portfolios. The Fund is an open-end management investment
company, more commonly known as a mutual fund.

Shares of these portfolios are currently only sold to separate accounts of
Western Reserve Life Assurance Co. of Ohio, PFL Life Insurance Company,
AUSA Life Insurance Company, Peoples Benefit Life Insurance Company and
Transamerica Occidental Life Insurance Company to fund the benefits under
certain individual flexible premium variable life insurance policies and
individual and group variable annuity contracts.

A particular portfolio of the Fund may not be available under the policy or
annuity contract you have chosen. The prospectus or disclosure document for
your policy or annuity contract shows the portfolios available to you.

Please read this prospectus carefully before selecting a portfolio. It
provides information to assist you in your decision. If you would like
additional information about a portfolio, please request a copy of the
Statement of Additional Information (SAI) (see back cover). The SAI is
incorporated by reference into this prospectus.

Prospectus
<PAGE>

INVESTOR INFORMATION

To help you understand . . .

In this prospectus, you will see the symbols below.

These are "icons" which serve as tools to direct you to the type of information
that is included in the accompanying paragraphs.

The icons are for your convenience and to assist you as you read this
prospectus.

[GRAPHIC OMITTED]

The target directs you to a portfolio's goal or objective.

[GRAPHIC OMITTED]

The chess piece indicates discussion about a portfolio's strategies.

[GRAPHIC OMITTED]

The warning sign indicates the risks of investing in a portfolio.

[GRAPHIC OMITTED]

The graph indicates investment performance.

[GRAPHIC OMITTED]

The question mark provides additional
information about the Fund or may direct you on how to obtain
further information.

Shares of a portfolio are not deposits or obligations of, or guaranteed by, any
bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government.

Prospectus 1
<PAGE>

AGGRESSIVE EQUITY PORTFOLIOS

WRL VKAM EMERGING GROWTH
WRL T. ROWE PRICE SMALL CAP
WRL GOLDMAN SACHS SMALL CAP
WRL PILGRIM BAXTER MID CAP GROWTH
WRL ALGER AGGRESSIVE GROWTH
WRL THIRD AVENUE VALUE
WRL VALUE LINE AGGRESSIVE GROWTH

This Risk/Return Summary briefly describes each Aggressive Equity Portfolio of
the Fund and the principal risks of investing in the portfolios. For further
information on these portfolios, please read the section entitled "Explanation
of Strategies and Risks," beginning on page 48, and the Fund's SAI.

[GRAPHIC OMITTED]

Objectives

WRL VKAM EMERGING GROWTH
This portfolio seeks capital appreciation by investing primarily in common
stocks of small and medium-sized companies.

WRL T. ROWE PRICE SMALL CAP
This portfolio seeks long-term growth of capital by investing primarily in
common stocks of small growth companies.

WRL GOLDMAN SACHS SMALL CAP
This portfolio seeks long-term growth of capital.

WRL PILGRIM BAXTER
MID CAP GROWTH
This portfolio seeks capital appreciation.

WRL ALGER AGGRESSIVE GROWTH
This portfolio seeks long-term capital appreciation.

WRL THIRD AVENUE VALUE
This portfolio seeks long-term capital appreciation.

WRL VALUE LINE AGGRESSIVE GROWTH This portfolio seeks to realize capital growth.
What is an Aggressive Equity Portfolio?
Aggressive Equity Portfolios are those that seek maximum capital appreciation
(a rise in the share price/value). Current income is not a significant
factor. Some portfolios that are included in this category may invest in
out-of-the main-stream stocks, such as those of fledging or struggling
companies, or those in new or currently out-of-favor industries. Some
portfolios in this category may also use specialized investment techniques
such as options or short-term investing. For these reasons, these portfolios
usually entail greater risk than the overall equity portfolio category.

[GRAPHIC OMITTED]

Policies and Strategies

WRL VKAM EMERGING GROWTH
The portfolio's sub-adviser, Van Kampen Asset Management Inc. (VKAM), seeks to
achieve the portfolio's objective by investing:

o At least 65% of the portfolio's total assets in common stocks of emerging
growth companies. Emerging growth companies are those companies in the
early stages of their life cycles that the portfolio's sub-adviser believes
have the potential to become major enterprises.

o Options

o Futures

Prospectus 2
<PAGE>

AGGRESSIVE EQUITY PORTFOLIOS (CONTINUED)

VKAM invests at least 65% of the portfolio's assets (under normal market
conditions) in common stocks of companies that are in the early stages of their
life cycle, and are believed by VKAM to have the potential to become major
enterprises. Some securities may have above average price volatility. VKAM
attempts to reduce overall exposure to risk from declines in the security prices
by spreading the portfolio's investments over many different companies in a
variety of industries.

VKAM will utilize options on securities, futures contracts and options thereon
in several different ways, depending upon the status of the portfolio's
investment portfolio and its expectations concerning the securities market. VKAM
will invest up to 20% of the portfolio's total assets in securities of foreign
issuers.

In times of stable or rising stock prices, the portfolio generally seeks to be
fully invested. Even when the portfolio is fully invested, VKAM believes that at
least a small portfolio of assets will be held as cash or cash equivalents to
honor redemption requests and for other short-term needs.

The amount of portfolio assets invested in cash equivalents does not fluctuate
with stock market prices, so that, in times of rising market prices, the
portfolio may underperform the market in proportion to the amount of cash
equivalents in its portfolio. By purchasing stock index futures contracts, stock
index call options, or call options on stock index futures contracts, however,
the portfolio can seek to "equalize" the cash portion of its assets and obtain
performance that is equivalent to investing 100% in equity securities.

The portfolio may take a temporary defensive position when the securities
trading markets or the economy are experiencing volatility or a prolonged
general decline, or other adverse conditions exist. This may be inconsistent
with the portfolio's principal investment strategies. Under these conditions,
the portfolio will be unable to achieve its investment objective.
What is a Top-Down Approach?

When using a "top-down" approach, the portfolio manager looks first at broad
market factors, and on the basis of those market factors, chooses certain
sectors, or industries within the overall market. The manager then looks at
individual companies within those sectors or industries.

WRL T. ROWE PRICE SMALL CAP

The portfolio's sub-adviser, T. Rowe Price Associates, Inc. (T. Rowe Price),
seeks to achieve the portfolio's objective by investing principally in:

o Common stocks of small-cap growth companies

This portfolio will invest at least 65% of the fund's total assets in small-cap
growth companies. These companies are defined as companies whose market
capitalization falls within the range of or smaller than the bottom 100
companies in the Standard & Poor's 500 Stock Index (S&P 500), which was
approximately $3.3 billion and below as of December 31, 1999, but the upper size
limit will vary with market fluctuations. The S&P 500 measures the performance
of the common stocks of 500 large U.S. companies in the manufacturing,
utilities, transportation, and financial industries. It also tracks the
performance of common stocks issued by foreign and smaller U.S. companies in
similar industries. (A company's market "cap" is found by multiplying its shares
outstanding by its stock price.) Companies whose capitalization increases above
this range after the portfolio's initial purchase continue to be considered
small companies for purposes of this policy.

To help manage cash flows efficiently, T. Rowe Price may also buy and sell stock
index futures. The portfolio intends to be invested in a large number of
holdings. T. Rowe Price believes this diversification should minimize the
effects of individual security selection on portfolio performance.

Quantitative models are furnished by a sub-adviser to assist the sub-adviser in
evaluating a potential security. Characteristics are included in the model that
the sub-adviser deems advantageous in a security. Based on these models, stocks
are selected in a "top-down" manner so that the portfolio's portfolio as a whole
reflects characteristics T. Rowe Price considers important, such as valuations
(price/earnings or price/ book value ratios, for example) and projected earnings
growth.

While the portfolio invests principally in common stocks, and, to a lesser
extent in stock index futures, it may also purchase other securities, in keeping
with its objective.

Prospectus 3
<PAGE>

AGGRESSIVE EQUITY PORTFOLIOS (CONTINUED)

The portfolio may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into more promising opportunities.

The portfolio may take a temporary defensive position when the securities
trading markets or the economy are experiencing excessive volatility or a
prolonged general decline, or other adverse conditions exist. This may be
inconsistent with the portfolio's principal investment strategies. Under these
circumstances, the portfolio may be unable to achieve its investment objective.

What is a Quantitative Model?
A quantitative model is fashioned by a portfolio's sub-adviser to assist the
sub-adviser in evaluating a potential security. The sub-adviser creates a
model that is designed using characteristics that the sub-adviser deems
advantageous in a security. The sub-adviser then compares a potential
security's characteristics against those of the model, and makes a
determination of whether or not to purchase the security based on the results
of that comparison.

WRL GOLDMAN SACHS SMALL CAP
The portfolio's sub-adviser, Goldman Sachs Asset Management (GSAM), seeks to
achieve the portfolio's objective by investing principally in:

o Equity securities of U.S. issuers, and certain foreign issuers that are
traded in the U.S.

The portfolio will invest at least 90% of its assets in equity securities of
companies with public stock market capitalizations within the range of the
market capitalization of companies constituting the Russell 2000 (a widely
recognized unmanaged index of market performance which measures the performance
of the 2000 smallest companies in the Russell 3000 Index) at the time of
investment (currently $3.1 million to $12.3 billion). The equity securities
include those of U.S. issuers, and certain foreign issuers traded in the U.S.
The portfolio's fixed-income securities are limited to securities that are
considered cash equivalents.

The portfolio may also purchase Standard & Poor's Depositary Receipts ("SPDRs").
SPDRs are American Stock Exchange-traded securities that represent ownership in
the SPDR Trust, a trust which has been established to accumulate and hold a
portfolio of common stocks that is intended to track the price performance and
dividend yield of the S&P 500. SPDRs are included in the portfolio's 10%
limitation on investments in investment companies.

GSAM uses the CORE investment process. CORE is an acronym for
"Computer-Optimized, Research-Enhanced." GSAM selects the portfolio's
investments using both a variety of quantitative techniques and fundamental
research while seeking to maximize the portfolio's expected return, while
maintaining risk, style, capitalization and industry characteristics similar to
the Russell 2000 Index.

GSAM may take a temporary defensive position when the securities trading markets
or the economy are experiencing excessive volatility or a prolonged general
decline, or other adverse conditions exist. This may be inconsistent with the
portfolio's principal investment strategies. Under these circumstances, the
portfolio may be unable to pursue its investment objective.

WRL PILGRIM BAXTER
MID CAP GROWTH

The portfolio's sub-adviser, Pilgrim Baxter & Associates, Ltd. (Pilgrim Baxter),
seeks to achieve the portfolio's objective by investing principally in:

o Common stocks

o Convertible securities

In seeking capital appreciation, Pilgrim Baxter normally invests at least 65% of
the portfolio's total assets in growth securities, such as common stocks, issued
by companies with market capitalizations or annual revenues between $500 million
and $10 billion. The portfolio invests primarily in companies that Pilgrim
Baxter believes have strong business momentum, earnings growth and
capital-appreciation potential. The portfolio may also invest in foreign
securities, warrants and rights.

Prospectus 4
<PAGE>

AGGRESSIVE EQUITY PORTFOLIOS (CONTINUED)

Pilgrim Baxter uses its own fundamental research, computer models and
proprietary measures of growth and business momentum in managing this portfolio.

Pilgrim Baxter's decision to sell a stock depends on many factors. Generally
speaking, Pilgrim Baxter considers selling a security when its anticipated
appreciation is no longer probable, alternate investments offer more superior
appreciation prospects, or the risk of a decline in its market price is too
great.

Pilgrim Baxter may take a temporary defensive position when the securities
trading markets or the economy are experiencing excessive volatility or a
prolonged general decline, or other adverse conditions exist. Under these
circumstances, the portfolio may be unable to achieve its investment objective.

While the fund invests principally in common stocks of medium-sized companies,
Pilgrim Baxter may, to a lesser extent, elect to invest in options and futures
contracts for hedging and risk management, or in other securities and investment
strategies in pursuit of its investment objective, which are explained beginning
on page 48 and in the SAI.

Please note: On June 29, 2000, United Asset Management Corporation (UAM), the
parent company of Pilgrim Baxter & Associates, Ltd., announced that it had
agreed to be acquired by Old Mutual plc (the "Transaction"). The Transaction is
expected to take place during the fourth quarter of 2000 and is subject to a
number of conditions, including regulatory approval and approval of shareholders
of UAM.

WRL ALGER AGGRESSIVE GROWTH
The portfolio's sub-adviser, Fred Alger Management, Inc. (Alger), seeks to
achieve the portfolio's objective by investing principally in:

o Equity securities such as common or preferred stocks

o Convertible securities (convertible securities are securities which can be
exchanged or converted into common stock of such companies)

To a lesser extent, the sub-adviser may invest portfolio assets in:

o U.S. dollar denominated securities of foreign issuers (American Depositary
Receipts (ADRs))

o Money market instruments

o Repurchase agreements

Under normal market conditions, the portfolio invests at least 85% of its assets
in common stocks, which may include stocks of developing companies, of older
companies that are entering a new stage of growth, and of companies whose
products or services have a high unit volume growth rate.

The portfolio may also use leveraging, a technique that involves borrowing money
to invest in an effort to enhance shareholder returns.

The portfolio's manager may take a temporary defensive position when the
securities trading markets or the economy are experiencing excessive volatility
or a prolonged general decline, or other adverse conditions exist. This may be
inconsistent with the portfolio's principal investment strategies. During this
time, the portfolio may invest up to 100% of its assets in money market
instruments and cash equivalents. Under these circumstances, the portfolio will
be unable to pursue its investment objective.

WRL THIRD AVENUE VALUE
The portfolio's sub-adviser, EQSF Advisers, Inc. (EQSF), seeks to achieve the
portfolio's investment objective by investing principally in:

o Common stocks

o Debt securities

o High-yield/high-risk fixed-income securities

o Foreign securities

The portfolio invests to a lesser extent, in trade claims and engages in foreign
currency transactions for hedging purposes. (Trade claims are interests in
amounts owed to suppliers or services and are purchased from creditors of
companies in financial difficulty.)

EQSF seeks to achieve the portfolio's objective by seeking to acquire common
stocks of well-financed companies at a substantial discount for what EQSF
believes is their value as a private business or as a take over candidate. It
also seeks to acquire senior securities,

Prospectus 5
<PAGE>

AGGRESSIVE EQUITY PORTFOLIOS (CONTINUED)

such as preferred stock and debt instruments, that have strong covenant
protections and above-average yields.

EQSF seeks portfolio securities whose prices are low enough at the time of
acquisition so both the risk is lowered and appreciation potential is enhanced.
EQSF believes that value is created more by past corporate prosperity than by
bear markets.

To choose such securities, EQSF uses a "bottom-up" approach. EQSF believes the
knowledge it obtains through extensive research of individual companies reduces
risk more than does diversification so the portfolio is non-diversified.

The portfolio's classification as "non-diversified" under the Investment Company
Act of 1940 (1940 Act) means that the portfolio has the ability to take larger
positions in a smaller number of issuers.

However, to meet federal tax requirements, at the close of each quarter the
portfolio may not have more than 25% of its total assets invested in any one
issuer and, with respect to 50% of its total assets, not more than 5% of its
total assets invested in any one issuer.

The portfolio may take a temporary defensive position when the securities
trading markets or the economy are experiencing excessive volatility or a
prolonged general decline, or other adverse conditions exist. This may be
inconsistent with the portfolio's principal investment strategies. Under these
conditions, the portfolio may be unable to achieve its investment objective.

WRL VALUE LINE AGGRESSIVE GROWTH

The portfolio's sub-adviser, Value Line, Inc. (Value Line), seeks to achieve
the portfolio's objective by investing principally in:

o Common stocks

o Securities convertible into common stock

Value Line seeks to invest substantially all of the portfolio's net assets in
common stock or securities convertible into common stock.

In selecting securities for purchase or sale, Value Line relies on the "Value
Line Timeliness Ranking System" and the "Value Line Performance Ranking System."
These Ranking Systems compare Value Line's estimate of the probable market
performance of each stock during the next six to twelve months relative to all
of the stocks under review. The portfolio will usually invest in common stocks
ranked 1 or 2 by either Ranking System, but it may also invest in common stocks
ranked as low as 3. Each Ranking System ranks stocks on a scale of 1 (highest)
to 5 (lowest). Although the portfolio may invest in companies of any size, it
generally invests in U.S. securities issued by larger, more established
companies.

Reliance upon the rankings, whenever feasible, is a fundamental policy of the
portfolio which may not be changed without policyholder approval. For a complete
discussion of these ranking systems, please see "Explanation of Strategies and
Risks" beginning on page 48.

The portfolio may also use leveraging, a technique that involves borrowing money
to invest in an effort to enhance shareholder or policyholder returns.

From time to time in response to adverse market, economic, political or other
conditions, the portfolio may invest a portion of its net assets in cash or cash
equivalents, debt securities, bonds or preferred stocks for temporary defensive
purposes. This could help the portfolio to avoid losses, but it may result in
lost opportunities. If this becomes necessary, the portfolio may not meet its
investment objective.

The portfolio may also engage in active and frequent trading of portfolio
securities in order to take advantage of better investment opportunities to
achieve its investment objective.

[GRAPHIC OMITTED]

Risks of Investing in
Aggressive Equity Portfolios

The principal risks of investing in Aggressive Equity Portfolios that may
adversely affect your investment are described below. (Not all of these risks
apply to each Aggressive Equity Portfolio. See the chart below for the principal
risks of your portfolio.) Please note that there are many other circumstances
which could adversely affect your investment and prevent a portfolio from
achieving its objective, which are not described here. Please refer to the
section entitled "Explanation of

Prospectus 6
<PAGE>

AGGRESSIVE EQUITY PORTFOLIOS (CONTINUED)

Strategies and Risks" beginning on page and the Fund's SAI for more information
about the risks of investing in the Aggressive Equity Portfolios.

PRINCIPAL RISKS
AGGRESSIVE EQUITY PORTFOLIOS

<TABLE>
<CAPTION>
PORTFOLIO
-------------------------------------------------
WRL WRL WRL
RISKS VKAM Emerging T. Rowe Price Goldman
--------------------- Growth Small Cap Sachs Small Cap
<S> <C> <C> <C>
Stocks X X X
Investing
Aggressively X X X
Small-Cap and
Growth Companies X X
Quantitative Models X X
Non-Diversification
Futures & Options X X
Foreign Securities X X
Depositary Receipts
Convertibles
Leveraging
Value Investing
Value Line Ranking
Systems

<CAPTION>
PORTFOLIO
---------------------------------------------------------------------
WRL WRL WRL WRL
RISKS Pilgrim Baxter Alger Aggressive Third Avenue Value Line
--------------------- Mid Cap Growth Growth Value Aggressive Growth
<S> <C> <C> <C> <C>
Stocks X X X X
Investing
Aggressively X X X X
Small-Cap and
Growth Companies X
Quantitative Models
Non-Diversification X
Futures & Options X
Foreign Securities X X
Depositary Receipts X X
Convertibles X X X
Leveraging X X
Value Investing X X
Value Line Ranking
Systems X
</TABLE>

o Stocks

While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the short term. These
price movements may result from factors affecting individual companies, certain
industries or the securities market as a whole.

Because the stocks a portfolio holds fluctuate in price, the value of your
investment in the portfolio will go up and down.

o Investing Aggressively

o The value of developing-company stocks may be very volatile, and can drop
significantly in a short period of time

o Rights, options and futures contracts may not be exercised and may
expire worthless

o Warrants and rights may be less liquid than stocks

o Use of futures and other derivatives may make the portfolio more
volatile

o Small-Cap and Growth Companies

Investing in small companies involves greater risk than is customarily
associated with more established companies. Stocks of small companies may be
subject to more abrupt or erratic price movements than larger company
securities. Small companies often have limited product lines, markets, or
financial resources, and their management may lack depth and experience.
Securities of such issuers may lack sufficient market liquidity to enable a
portfolio to effect sales at an advantageous time or without a substantial drop
in price.

Also, growth stocks can experience steep price declines if the company's
earnings disappoint investors. Since many of the Aggressive Equity Portfolios
will typically be fully invested in this market sector, investors are fully
exposed to its volatility.

o Quantitative Models

Stocks selected using quantitative models may not perform as well as these
models might otherwise suggest and may cause overall returns to be lower than if
other methods are used.

Prospectus 7
<PAGE>

AGGRESSIVE EQUITY PORTFOLIOS (CONTINUED)

o Non-Diversification

To the extent a portfolio invests a greater proportion of its assets in the
securities of a smaller number of issuers, it may be more susceptible to any
single economic, political or regulatory occurrence than a more widely
diversified portfolio and may be subject to greater risk of loss with respect to
its portfolio securities.

o Futures and Options

Futures and options involve additional investment risks and transactional costs,
and draw upon skills and experience which are different than those needed to
pick other securities. Special risks include:

o Inaccurate market predictions

o Imperfect correlation

o Illiquidity

o Tax considerations

The portfolios are not required to hedge their investments.

o Foreign Securities

Investments in foreign securities involve risks relating to political, social
and economic developments abroad as well as risks resulting from differences in
regulations to which U.S. and foreign issuers and markets are subject. To the
extent a portfolio invests in emerging markets, these risks would be greater.
These risks include:

o Changes in currency values

o Currency speculation

o Currency trading costs

o Different accounting and reporting practices

o Less information available to the public

o Less (or different) regulation of securities markets

o More complex business negotiations

o Less liquidity

o More fluctuations in market prices

o Delays in settling foreign securities transactions

o Higher transaction costs

o Higher costs for holding foreign securities (custodial fees)

o Vulnerability to seizure and taxes

o Political instability and small markets

o Different market trading days

o ADRs

Many securities of foreign issuers are represented by American Depositary
Receipts (ADRs). While ADRs principally are traded on domestic securities
exchanges, investing in ADRs involves many of the same risks associated with
foreign securities in general. These risks include:

o Changes in currency value

o Currency speculation

o Currency trading costs

o More fluctuations in market prices

o Less information available

o Convertibles

As with all debt securities, the market value of convertibles tends to decline
as interest rates increase and, conversely, to increase as interest rates
decline.

o Value Investing Risk

Undervalued stocks may not realize their perceived value for extended periods of
time. Value stocks may respond differently to market and other developments than
other types of stocks. Value oriented funds will typically underperform when
growth investing is in favor.

o Leveraging

Leveraging by a portfolio involves special risks:

o Leveraging practices may make a portfolio more volatile

o Leveraging may exaggerate the effect on net asset value of any increase
or decrease in the market value of the portfolio's securities

o Money borrowed for leveraging is subject to interest costs

o Minimum average balances may need to be maintained or a line of credit in
connection with borrowing may be necessary resulting in an increase in
the cost of borrowing over the stated interest rate.

Prospectus 8
<PAGE>

AGGRESSIVE EQUITY PORTFOLIOS (CONTINUED)

o Value Line Ranking Systems
(WRL Value Line Aggressive Growth)

The use of the Value Line Ranking Systems (the "Systems") involves the risks
that stocks selected using the Systems may not perform as well as their ranking
within the Systems might otherwise suggest. As a result, the overall returns of
WRL Value Line Aggressive Growth may be lower than if other selection methods
were used.

The portfolio's use of the Systems also involves the risk that over certain
periods of time the price of securities not covered by the Systems, or lowered
ranked securities, may appreciate to a greater extent than those securities in
the portfolio's portfolio.

You may lose money if you invest in any of the Aggressive Equity Portfolios.

[GRAPHIC OMITTED]

Investor Profiles

WRL VKAM EMERGING GROWTH

May be appropriate for the investor who seeks capital appreciation over the long
term; is willing to take on the increased risks of investing in smaller and
medium-sized, less established companies in exchange for potentially higher
capital appreciation; can withstand substantial volatility in the value of their
shares of the portfolio; and wish to add to their personal holdings a portfolio
that invests primarily in common stocks of emerging growth companies.

WRL T. ROWE PRICE SMALL CAP

For the investor who wants an aggressive, long-term approach to building capital
and who is comfortable with significant fluctuations inherent in small-cap stock
investing.

WRL GOLDMAN SACHS SMALL CAP

For the investor who seeks long-term growth of capital, who can tolerate the
fluctuations inherent in small-cap investing and is willing to accept the
special risks involved in quantitative stock selection techniques.

WRL PILGRIM BAXTER MID CAP GROWTH

For the investor who wants long-term growth of capital and who can tolerate the
fluctuations inherent in stock investing.

WRL ALGER AGGRESSIVE GROWTH

For the investor who seeks capital growth aggressively, and can tolerate wide
swings in the value of their investment.

WRL THIRD AVENUE VALUE

For the investor who is willing to hold shares through periods of market
fluctuations and the accompanying changes in share prices.

WRL VALUE LINE AGGRESSIVE GROWTH

For the investor who seeks capital growth and who can tolerate fluctuations
inherent in stock investing and is willing to accept the special risks
associated with the novel investment strategy of the portfolio.

Prospectus 9
<PAGE>

AGGRESSIVE EQUITY PORTFOLIOS (CONTINUED)

[GRAPHIC OMITTED]

Portfolio Performance

The bar charts and tables below give an indication of the portfolios' risks and
performance. The charts show changes in a portfolio's performance from year to
year. The performance calculations do not reflect charges or deductions under
the policies or the annuity contracts. These fees and expenses would lower
investment performance. The tables show how a portfolio's average annual returns
for the periods indicated compare to those of a broad measure of market
performance.

Because the WRL T. Rowe Price Small Cap, WRL Goldman Sachs Small Cap and WRL
Pilgrim Baxter Mid Cap Growth portfolios commenced operations in 1999, and the
WRL Value Line Aggressive Growth portfolio commenced operations in 2000, their
performance history is not included.

When you consider this information, please remember that a portfolio's
performance in past years is not necessarily an indication of how a portfolio
will do in the future.

WRL VKAM EMERGING GROWTH

[GRAPHIC OMITTED]

(1) As of September 30, 2000, the end of the most recent calendar quarter, the
portfolio's year-to-date return was %.

Prospectus 10
<PAGE>

AGGRESSIVE EQUITY PORTFOLIOS (CONTINUED)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Highest and Lowest Return
(Quarterly 1994-1999)
-------------------------------------------
Quarter Ended
<S> <C> <C>
Highest 62.73 % 12/31/99
Lowest (12.53)% 9/30/98
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Average Annual Total Returns
(through December 31, 1999)
-----------------------------------------------------------------
Since
Inception
1 Year 5 Years (March 1, 1993)
<S> <C> <C> <C>
WRL VKAM
Emerging Growth 105.16% 42.96% 32.64%
S&P 500 Index 21.04% 28.56% 21.70%
</TABLE>

--------------------------------------------------------------------------------

WRL ALGER AGGRESSIVE GROWTH

[GRAPHIC OMITTED]

(1) As of September 30, 2000, the end of the most recent calendar quarter, the
portfolio's year-to-date return was %.
--------------------------------------------------------------------

<TABLE>
<CAPTION>
Highest and Lowest Return
(Quarterly 1995-1999)
------------------------------------------
Quarter Ended
<S> <C> <C>
Highest 44.67 % 12/31/99
Lowest (9.72)% 9/30/98
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Average Annual Total Returns
(through December 31, 1999)
----------------------------------------------------------------
Since
Inception
1 Year 5 Years (March 1, 1994)
<S> <C> <C> <C>
WRL Alger
Aggressive Growth 69.02% 36.62% 30.35%
S&P 500 Index 21.04% 28.56% 24.15%
</TABLE>

--------------------------------------------------------------------------------

Prospectus 11
<PAGE>

AGGRESSIVE EQUITY PORTFOLIOS (CONTINUED)

WRL THIRD AVENUE VALUE

[GRAPHIC OMITTED]

(1) As of September 30, 2000, the end of the most recent calendar quarter, the
portfolio's year-to-date return was %.
--------------------------------------------------------------------

<TABLE>
<CAPTION>
Highest and Lowest Return
(Quarterly 1998 - 1999)
-------------------------------------------
Quarter Ended
<S> <C> <C>
Highest 17.85 % 12/31/98
Lowest (17.57)% 9/30/98
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Average Annual Total Returns
(through December 31, 1999)
-----------------------------------------------------------
Since
Inception
One Year (January 2, 1998)
<S> <C> <C>
WRL Third Avenue Value 15.72% 3.84%
S&P 500 Index 21.04% 24.75%
</TABLE>

--------------------------------------------------------------------------------

Prospectus 12
<PAGE>

WORLD EQUITY PORTFOLIOS

WRL GE INTERNATIONAL EQUITY (FORMERLY GE/SCOTTISH EQUITABLE INTERNATIONAL
EQUITY PORTFOLIO)
WRL GREAT COMPANIES -- GLOBAL2
WRL GABELLI GLOBAL GROWTH
WRL JANUS GLOBAL

This Risk/Return Summary briefly describes each World Equity Portfolio of the
Fund and the principal risks of investing in the portfolios. For further
information on these portfolios, please read the section entitled "Explanation
of Strategies and Risks," beginning on page 48, and the Fund's SAI.

[GRAPHIC OMITTED]

Objectives

WRL GE INTERNATIONAL EQUITY

This portfolio seeks long-term growth of capital.

WRL GREAT COMPANIES -- GLOBAL2

This portfolio seeks long-term growth of capital in a manner consistent with
preservation of capital.

WRL GABELLI GLOBAL GROWTH

This portfolio seeks to provide investors with appreciation of capital.

WRL JANUS GLOBAL

This portfolio seeks long-term growth of capital in a manner consistent with the
preservation of capital.
What is a World Equity Portfolio?
World Equity portfolios include both global and international portfolios.
These portfolios invest in equity securities of companies worldwide. Global
portfolios invest in securities traded worldwide, including issuers in the
U.S. International portfolios invest in securities of companies located
outside the U.S. (2/3 of the portfolio's assets must be so invested at all
times to qualify as an international portfolio.)

[GRAPHIC OMITTED]

Policies and Strategies

WRL GE INTERNATIONAL EQUITY
(FORMERLY WRL GE/SCOTTISH EQUITABLE INTERNATIONAL EQUITY)

The portfolio's sub-adviser, GE Asset Management Incorporated (GEAM) seeks to
achieve the portfolio's investment objective by investing principally in:

o Common stocks of companies located in developed and developing countries
other than the United States

GEAM focuses on companies that it expects will grow faster than relevant markets
and whose security price does not, in GEAM's view, fully reflect their potential
for growth. Under normal circumstances, the portfolio's assets are invested in
foreign securities of companies representing at least three different countries.

GEAM determines the country represented by an issuer by reference to the country
in which the issuer is organized; derives at least 50% of its revenues or
profits from goods produced or sold, investments made or services performed; has
at least 50% of its assets situated; or has the principal trading market for its
securities.

GEAM seeks to identify securities of growth companies with characteristics such
as:

o low prices relative to their long-term cash earnings potential

o potential for significant improvement in the company's business

o financial strength

o sufficient liquidity

Prospectus 13
<PAGE>

WORLD EQUITY PORTFOLIOS

The portfolio invests, not only in the larger markets of Europe and Japan, but
also may invest in the smaller markets of Asia, emerging Europe, Latin America,
and other emerging markets.

Overseas economies often do not move in the same direction and operate
differently. This creates situations the portfolio aims to take advantage of
through asset allocation among international markets.

The portfolio may, to a lesser extent, invest in equity securities other than
common stocks (including preferred securities, depositary receipts such as ADRs,
EDRs and GDRs, convertible securities, and rights and warrants), securities of
companies located in the United States, debt securities or other securities.

The portfolio also may use various investment techniques to adjust the
portfolio's investment exposure, but there is no guarantee that these techniques
will work.

Prior to May 1, 2000, Scottish Equitable Investment Management Limited served as
co-manager of this portfolio, and was responsible for managing a discrete
portion of its assets.

WRL GREAT COMPANIES -- GLOBAL2
The portfolio's sub-adviser, Great Companies, L.L.C. (Great Companies), seeks to
achieve the portfolio's investment objective by investing principally in:

o Common stocks of domestic and foreign issuers

Great Companies will select non-technology and technology stocks, both domestic
and international, for the portfolio from a group of companies that Great
Companies has identified as being "great companies." All stocks selected for the
portfolio will meet the common criteria listed below.

All companies selected for the domestic portion of the portfolio must be
incorporated in the United States. Domestic non-technology stocks selected for
the domestic portion of the portfolio will only be selected if they (and their
predecessors) have outperformed the S&P 500 over the ten-year period ended
December 31, 1998, are global companies (at least 40% of its revenues outside
the U.S.), and have been in business at least 50 years and survived the founder.

Domestic technology stocks will only be selected if they (and their
predecessors) have outperformed the S&P 500 Technology Index over the ten-year
period ended December 31, 1998, are global companies (at least 30% of its
revenues outside the U.S.), and have been in business at least 15 years.

The stocks selected for the international portion of the portfolio must be
incorporated outside of the United States. The non-technology portion of
international stocks must consist of stocks of companies that have at least 40%
of their revenues outside the country of origin, and the technology portion must
have at least 30% of their revenues outside the country of origin. In addition,
the international stocks will only be selected if they (and their predecessors)
have outperformed the Morgan Stanley Capital International World Index (MSCIW)
over the ten-year period ended June 30, 2000. The international stocks cannot
have government ownership in excess of 10% and, generally, must be ADR traded
securities.

The common criteria used to be considered a "great company" candidate by the
sub-adviser includes the following. Each company must:

o be highly regarded by management experts

o be publicly traded

o have a market cap in excess of $15 billion;

o be engaged in what the sub-adviser considers to be "terrific businesses"

o have a "protective barrier" such as superior brand franchises

o consider employees to be a company's most valuable asset

o have, in the sub-adviser's opinion, "world class management"

o and be an innovation-driven company that, in the sub-adviser's opinion,
can convert changes into opportunities.

Prospectus 14
<PAGE>

WORLD EQUITY PORTFOLIOS (CONTINUED)

The allocation of stocks within each portion of the portfolio will be driven by
three factors:

o Market price relative to intrinsic value;

o Intrinsic value momentum; and

o Sector diversification.

To determine which "great company" in which the fund should invest, Great
Companies uses Intrinsic Value investing. Intrinsic Value is the discounted
value of the estimated amount of cash that can be taken out of a business during
its remaining life. It is an estimate rather than a precise figure, and changes
when interest rates move or when forecasts of future cash flows are revised.
Please see page 7 for a complete description of Intrinsic Value investing.

The allocation of the portfolio between domestic and international companies
will be driven by three factors:

o Momentum/growth of U.S. equities and international equities

o Intrinsic Value momentum of the stocks in the domestic portfolio versus
the stocks in the international portfolio; and

o Market price of the stocks in the portfolios relative to their intrinsic
values.

WRL GABELLI GLOBAL GROWTH

The fund's sub-adviser, Gabelli Asset Management Company ("Gabelli"), seeks to
achieve this objective by investing principally in:

o Common stocks

Under normal market conditions, the fund will invest at least 65% of its total
assets in common stock of companies involved in global market place. The
portfolio invests primarily in common stocks of foreign and domestic small
capitalization, mid-capitalization and large capitalization issuers. The
portfolio may invest without limitation in securities of foreign issuers and
will invest in securities of issuers located in at least three countries.

To seek to achieve the fund's primary objective, Gabelli employs a disciplined
investment program focusing on the globalization and interactivity of the
world's market place. The fund invests in companies that, in Gabelli's opinion,
are at the forefront of accelerated growth.

Gabelli strives to find reasonably valued businesses exhibiting creativity to
adapt to the changing environment. Additionally, Gabelli looks for solid
franchises, ideally with unique copyrights that can add to overall value
creation. And lastly, Gabelli likes growth and, therefore, looks to businesses
involved in the ever-evolving communication revolution. Looking forward, Gabelli
continues to believe that the dominant companies of tomorrow will be conducting
a major portion of their business via the Internet within the next five years.

Currently in selecting investments, Gabelli seeks companies participating in
emerging advances in interactive services and products that are accessible to
individuals in their homes or offices through consumer electronics content based
devices such as telephones, televisions, radios and personal computers. The
portfolio will invest in companies which Gabelli believes are likely to have
rapid growth in revenues and earnings and potential for above average capital
appreciation or are undervalued. In addition, Gabelli also considers the market
price of the issuer's securities, its balance sheet characteristics and the
perceived strength of its management.

Gabelli sells the portfolio's securities when Gabelli considers the stock to be
overvalued, or when Gabelli feels the stock is no longer in what it considers to
be a favorable media.

In seeking to achieve the investment objective of this portfolio, Gabelli may
make investment decisions without giving consideration to the turnover rate of
the portfolio. As a result, the turnover rate of the portfolio may be higher
than other comparable portfolios. Consequently, the portfolio may incur higher
transaction related expenses than portfolios that do not engage in frequent
trading.

WRL JANUS GLOBAL

NOTE: Effective Setember 1, 2000, this portfolio is not available to new
policyholders.

The portfolio's sub-adviser, Janus Capital Corporation (Janus) seeks to achieve
the portfolio's investment objective by investing principally in:

o Common stocks of foreign and domestic issuers

o Depositary receipts including ADRs, GDRs and EDRs

Prospectus 15
<PAGE>

WORLD EQUITY PORTFOLIOS (CONTINUED)

The portfolio may also use forward foreign currency contracts for hedging.

Janus' main strategy is to use a "bottom up" approach to build the portfolio's
portfolio. They seek to identify individual companies with earnings growth
potential that may not be recognized by the market at large.

Foreign securities are generally selected on a stock-by-stock basis without
regard to defined allocation among countries or geographic regions.

When evaluating foreign investments, Janus (in addition to looking at individual
companies) considers such factors as:

o Expected levels of inflation in various countries

o Government policies that might affect business conditions

o The outlook for currency relationships

o Prospects for economic growth among countries, regions or geographic
areas
What is a "Bottom-Up" Approach?
When portfolio managers use a "bottom-up" approach, they look primarily at
individual companies against the context of broader market factors.

[GRAPHIC OMITTED]

Risks of Investing in World
Equity Portfolios

The principal risks of investing in Foreign Equity Portfolios that may adversely
affect your investment are described below. (Not all of these risks apply to
each Foreign Equity Portfolio. See the chart below for the principal risks of
your portfolio.) Please note that there are many other circumstances which could
adversely affect your investment and prevent a portfolio from achieving its
objective, which are not described here. Please refer to the section entitled
"Explanation of Strategies and Risks" beginning on page 45, and the Fund's SAI
for more information about the risks associated with investing in the Foreign
Equity Portfolios.

PRINCIPAL RISKS

WORLD EQUITY PORTFOLIOS

<TABLE>
<CAPTION>
PORTFOLIO
------------------------------
WRL WRL WRL
GE Great Gabelli WRL
RISKS International Companies -- Global Janus
---------------------- Equity Global2 Growth Global
<S> <C> <C> <C> <C>
Stocks X X X X
Foreign Securities X X X X
Emerging Markets
Risk X X X X
Forward Foreign
Currency Contracts X X
Established Company
Stocks X
Depositary Receipts X X X X
Warrants & Rights X
Proprietary Research X
Technology Stocks X
</TABLE>

o Stocks

While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies, certain
industries or the securities market as a whole.

Because the stocks the portfolio holds fluctuate in price, the value of your
investment in the portfolio will go up and down.

o Foreign Securities

o Currency speculation

o Currency trading costs

o Different accounting and reporting practices

o Less information available to the public

o Less (or different) regulation of securities markets

Prospectus 16
<PAGE>

WORLD EQUITY PORTFOLIOS (CONTINUED)

o Greater complex business negotiations

o Less liquidity

o More fluctuations in prices

o Delays in settling foreign securities transactions

o Higher costs for holding shares (custodial fees)

o Higher transaction costs

o Vulnerability to seizure and taxes o Political instability and small
markets o Different market trading days o Forward foreign currency
contracts for hedging

o Emerging Markets Risk

Investing in the securities of issuers located in or principally doing business
in emerging markets bear foreign risks as discussed above. In addition, the
risks associated with investing in emerging markets are often greater than
investing in developed foreign markets. Specifically, the economic structures in
emerging markets countries are less diverse and mature than those in developed
countries, and their political systems are less stable. Investments in emerging
markets countries may be affected by national policies that restrict foreign
investments. Emerging market countries may have less developed legal structures,
and the small size of their securities markets and low trading volumes can make
investments illiquid and more volatile than investments in developed countries.
As a result, a portfolio investing in emerging market countries may be required
to establish special custody or other arrangements before investing.

o Forward Foreign Currency Contracts

Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of portfolio securities decline.

Such hedging transactions preclude the opportunity for gain if the value of the
hedging currency should rise. Forward contracts may, from time to time, be
considered illiquid, in which case they would be subject to the portfolio's
limitation on investing in illiquid securities.

If the portfolio manager's judgment of markets proves incorrect or the strategy
does not correlate well with a portfolio's investment, the use of such hedging
transactions could result in a loss regardless of whether the intent was to
reduce risk or increase return and may increase a portfolio's volatility. In
addition, in the event that non-exchange traded forward currency contracts are
used, such transactions could result in a loss if the counterparty to the
transaction does not perform as promised.

o Convertibles

As with all debt securities, the market value of convertibles tends to decline
as interest rates increase and, conversely, to increase as the interest rates
decline.

o Warrants and Rights

Warrants and rights may be considered more speculative than certain other types
of investments because they do not entitle a holder to the dividends or voting
rights for the securities that may be purchased. They do not represent any
rights in the assets of the issuing company.

Also, the value of a warrant or right does not necessarily change with the value
of the underlying securities. A warrant or right ceases to have value if it is
not exercised prior to the expiration date.

o Depositary Receipts

Depositary receipts represent interests in an account at a bank or trust company
which holds equity securities. They are subject to some of the same risks as
direct investments in foreign securities, including currency risk. The
regulatory requirements with respect to depositary receipts that are issued in
sponsored and unsponsored programs are generally similar, but the issuers of
unsponsored depositary receipts are not obligated to disclose material
information in the U.S., and, therefore, such information may not be reflected
in the market value of the depositary receipts.

o Established Company Stocks (Great Companies -- Global2)

Because companies in which this portfolio invests must have been in existence
for at least 15 years, certain sector stocks, which would otherwise present
attractive investment opportunities, will not be selected for the portfolio.

Prospectus 17
<PAGE>

WORLD EQUITY PORTFOLIOS (CONTINUED)

o Proprietary Research

Proprietary forms of research may not be effective and may cause overall returns
to be lower than if other forms of research are used.

o Technology Stocks

Securities of technology companies are strongly affected by worldwide scientific
and technological developments and governmental policies, and, therefore, are
generally more volatile than securities of companies not dependent upon or
associated with technological issues. The entire value of the portfolio may
decrease if the technology industry suffers a loss.

o Growth Investing Risk

Securities with different characteristics tend to shift in and out of favor
depending upon market and economic conditions as well as investor sentiment. A
portfolio may underperform other portfolios that employ a different style.
Growth stocks may be more volatile than other stocks because they are more
sensitive to investor perceptions of the issuing company's growth potential.
Growth-oriented funds typically will underperform when value investing is in
favor.

You may lose money if you invest in either of the World Equity Portfolios.

[GRAPHIC OMITTED]

Investor Profiles

WRL GE INTERNATIONAL EQUITY

For the investor who seeks long-term capital growth through foreign investments,
and who is able to tolerate the significant risks in such investments.

WRL GABELLI GLOBAL GROWTH

For the investor who is a long-term investor and who seeks growth of capital in
a diversified portfolio of stocks of companies located inside and outside the
United States.

WRL GREAT COMPANIES -- GLOBAL2

For the investor who seeks capital growth without being limited to investments
in U.S. securities, and who can tolerate the risks associated with foreign
investing.

WRL JANUS GLOBAL

For the investor who seeks capital growth without being limited to investments
in U.S. securities, and who can tolerate the significant risks associated with
foreign investing.

Prospectus 18
<PAGE>

WORLD EQUITY PORTFOLIOS (CONTINUED)

[GRAPHIC OMITTED]

Portfolio Performance

When you consider this information, please remember that a portfolio's
performance in past years is not necessarily an indication of how a portfolio
will do in the future.

WRL GE INTERNATIONAL EQUITY

[GRAPHIC OMITTED]

(1) As of September 30, 2000, the end of the most recent calendar quarter, the
portfolio's year-to-date return was %.
--------------------------------------------------------------------

<TABLE>
<CAPTION>
Highest and Lowest Return
(Quarterly 1997-1999)
--------------------------------------------
Quarter Ended
<S> <C> <C>
Highest 22.87 % 12/31/99
Lowest (17.69)% 9/30/98
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Average Annual Total Returns
(through December 31, 1999)
-------------------------------------------------------------
Since
Inception
1 Year (January 2, 1997)
<S> <C> <C>
WRL GE International Equity 24.95% 14.90%
Morgan Stanley Capital
International-Europe,
Asia & Far East
(MSCI-EAFE) 28.24% 13.18%
</TABLE>

--------------------------------------------------------------------------------

WRL JANUS GLOBAL

[GRAPHIC OMITTED]

(1) As of September 30, 2000, the end of the most recent calendar quarter, the
portfolio's year-to-date return was %.
--------------------------------------------------------------------

<TABLE>
<CAPTION>
Highest and Lowest Return
(Quarterly 1993-1999)
--------------------------------------------
Quarter Ended
<S> <C> <C>
Highest 46.11 % 12/31/99
Lowest (16.52)% 9/30/98
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Average Annual Total Returns
(through December 31, 1999)
---------------------------------------------------------------
Since
Inception
1 Year 5 Years (December 3, 1992)
<S> <C> <C> <C>
WRL Janus Global 71.10% 32.94% 27.91%
Morgan Stanley
Capital
International
World Index 24.93% 20.08% 18.23%
</TABLE>

--------------------------------------------------------------------------------

Prospectus 19
<PAGE>

GROWTH EQUITY PORTFOLIOS

WRL GREAT COMPANIES - TECHNOLOGYSM
WRL JANUS GROWTH
WRL GOLDMAN SACHS GROWTH
WRL GE U.S. EQUITY
WRL GREAT COMPANIES - AMERICASM
WRL SALOMON ALL CAP
WRL C.A.S.E. GROWTH
WRL DREYFUS MID CAP
WRL NWQ VALUE EQUITY

This Risk/Return Summary briefly describes each Growth Equity Portfolio of the
Fund and the principal risks of investing in the portfolios. For further
information on these portfolios, please read the section entitled "Explanation
of Strategies and Risks," beginning on page 48, and the Fund's SAI.
[GRAPHIC OMITTED]

Objectives

WRL GREAT COMPANIES - TECHNOLOGYSM

This portfolio seeks long-term growth of capital.

WRL LKCM CAPITAL GROWTH

This portfolio seeks long-term growth of capital through a disciplined
investment approach focusing on companies with superior growth prospects.

WRL JANUS GROWTH

This portfolio seeks growth of capital.

WRL GOLDMAN SACHS GROWTH

This portfolio seeks long-term growth of capital.

WRL GE U.S. EQUITY

This portfolio seeks long-term growth of capital.

WRL GREAT COMPANIES - AMERICASM

This portfolio seeks long-term growth of capital.

WRL SALOMON ALL CAP

This portfolio seeks capital appreciation.

WRL C.A.S.E. GROWTH

This portfolio seeks annual growth of capital through investment in companies
whose management, financial resources and fundamentals appear attractive on a
scale measured against each company's present value.

WRL DREYFUS MID CAP

This portfolio seeks total investment returns (including capital appreciation
and income) which consistently outperform the S&P 400 Mid Cap Index.

WRL NWQ VALUE EQUITY

This portfolio seeks to achieve maximum, consistent total return with minimum
risk to principal.
What is a Growth Equity Portfolio?
Each growth equity portfolio invests in the common stock of companies that
offer potentially rising share prices. These portfolios primarily aim to
provide capital appreciation (a rise in share price) rather than steady
income.

Prospectus 20
<PAGE>

[GRAPHIC OMITTED]

Policies and Strategies

WRL GREAT COMPANIES - TECHNOLOGYSM
The portfolio's sub-adviser, Great Companies LLC. (Great Companies), seeks to
achieve the portfolio's objective by investing principally in:

o Common stocks of companies that offer technology- or
communications-related products and services

The portfolio seeks to invest in stocks of large, established, United
States-based companies that rely extensively on technology or communication
advances in their product development or operations, and have benefited from
technological or communications in their operating history. Stocks for this
portfolio are selected by Great Companies from a group of companies that it has
identified, in its opinion, as being a "great company". To be considered a
"great company" candidate by the sub-adviser, a company must: have a market cap
in excess of $15 billion; be highly regarded by management experts; be
headquartered in the U.S.; be publicly traded; have been in business 15 years or
more; be engaged in what the sub-adviser considers to be "terrific technology
businesses"; have superior business franchises; consider employees to be the
company's most valuable asset; have, in the sub-adviser's opinion, "world class
management"; deliver outstanding returns to shareholders; be a global company
(30% of revenues from non-U.S. operations); and, in the sub-adviser's opinion,
be able to convert changes into opportunities. Its common stock must have
outperformed both the S&P 500 and the Dow Jones Industrial Average over the ten
year period ending December 31, 1998.

To determine a company in which the portfolio should invest, Great Companies
also uses Intrinsic Value investing. Intrinsic Value is the discounted value of
the cash that can be taken out of a business during its remaining life. It is an
estimate rather than a precise figure, and changes when interest rates move or
when forecasts of future cash flows are revised.

Great Companies monitors changes in each company's Intrinsic Value over a twelve
to eighteen month period. It then determines a company's Intrinsic Value
Momentum (IVM), which is a measurement of the rate at which a company is
increasing or decreasing its Intrinsic Value. Great Companies looks at the
trading price of the stock and compares it to its Intrinsic Value calculation.
If a stock appears to be significantly overvalued in the market and its IVM is
flat or declining when compared to the Intrinsic Value calculation, Great
Companies does not invest in the stock or, if the portfolio has already invested
in the company, may reduce its position in the stock. When a company's stock
share price drops well below the Intrinsic Value calculation and its IVM is
rising, Great Companies will normally invest in the company or, if the portfolio
has already invested in the company, attempt to buy more shares.

The companies chosen by Great Companies will vary over time and Great Companies
will add and subtract from its list of "great companies" based on its evaluation
process. It is the opinion of Great Companies that, over the long-term, stocks
selected through its evaluation process will continue to outperform the various
benchmarks.

Because stock selections are limited to the companies identified as being a
"great company" by Great Companies, the portfolio is non-diversified.

WRL LKCM CAPITAL GROWTH

The Portfolio's sub-adviser, Luther King Capital Management (LKCM), seeks to
achieve the portfolio's objective by investing principally in:

o Common Stocks

The LKCM strategy is a "bottom-up" (please see page 15 for a definition of
bottom-up), fundamental approach to selecting securities, generally favoring
companies that demonstrate one or more of the following attributes:

o strong management with shareholder-oriented incentives

o high and improving returns on invested capital

o above average sales, cash flow and/or earnings growth

o proven ability to deliver consistent and predictable growth

o solid balance sheet, financial and accounting policies, and overall
financial strength

Prospectus 21
<PAGE>

o sustainable competitive advantages

o demonstrated pricing flexibility

LKCM's strategy is to invest in, what the sub-adviser considers to be good
businesses, in attractive industries, at fair prices.

LKCM may take a temporary defensive position when the securities trading markets
or the economy are experiencing excessive volatility or a prolonged general
decline, or other adverse conditions exist. This may be inconsistent with the
portfolio's principal investment strategies. Under these circumstances, the
portfolio may be unable to achieve its investment objective.

WRL JANUS GROWTH

The Portfolio's sub-adviser, Janus Capital Corporation (Janus), seeks to achieve
the portfolio's objective by investing principally in:

o Common stocks

The portfolio's strategy is to invest almost all of its assets in common stock
at times when Janus believes the market environment favors such investing.

Janus generally takes a "bottom-up" approach to building the stock portfolio. In
other words, Janus seeks to identify individual companies with earnings growth
potential that may not be recognized by the stock market at large.

Although themes may emerge in the portfolio, securities are generally selected
without regard to any defined industry sector or other similarly defined
selection procedure. Realization of income is not a significant investment
consideration for the portfolio and any income realized on the portfolio's
investments is incidental to its objective.

Janus may take a temporary defensive position when the securities trading
markets or the economy are experiencing excessive volatility or a prolonged
general decline, or other adverse market conditions exist. This may be
inconsistent with the portfolio's principal investment strategies. Under these
circumstances, the portfolio may be unable to achieve its investment objective.

WRL GOLDMAN SACHS GROWTH
The portfolio's sub-adviser, Goldman Sachs Asset Management (GSAM), seeks to
achieve the portfolio's objective by investing principally in:

o Equity securities

The portfolio will invest at least 90% of total assets in a diversified
portfolio of equity securities that are considered by GSAM to have long-term
capital appreciation potential. Although the portfolio will invest primarily in
publicly traded U.S. securities, it may invest up to 10% of its total assets in
foreign securities, including securities of issuers in emerging (developing)
countries and securities quoted in foreign currencies.

Equity securities for this portfolio are selected based on their prospects for
above-average growth. GSAM will select securities of growth companies trading,
in GSAM's opinion, at a reasonable price relative to other industries,
competitors and historical price/earnings multiples.

In order to determine whether a security has favorable growth prospects, GSAM
ordinarily looks for one or more of the following characteristics in relation to
the security's prevailing price:

o prospects for above average sales and earnings growth per share

o high return on invested capital

o free cash flow generation

o sound balance sheet, financial and accounting policies, and overall
financial strength

o strong competitive advantages

o effective research, product development, and marketing

o pricing flexibility

o strength of management

o general operating characteristics that will enable the company to
compete successfully in its marketplace

The portfolio generally will invest in companies whose earnings are believed to
be in a relatively strong growth trend, or, to a lesser extent, in companies in
which significant further growth is not anticipated, but whose market value per
share is thought to be undervalued.

Prospectus 22
<PAGE>

GROWTH EQUITY PORTFOLIOS (CONTINUED)

WRL GE U.S. EQUITY

The portfolio's sub-adviser, GE Asset Management Incorporated (GEAM), seeks to
meet the portfolio's investment objective by investing primarily in:

o Common stocks of U.S. companies

GEAM uses a Multi-Style(R) investment strategy that combines growth and value
investment management styles. As a result, the portfolio has characteristics
similar to the Standard & Poor's 500 Composite Stock Index, including capital
appreciation and income potential. Stock selection is key to the performance of
the portfolio.

Through fundamental company research, the portfolio managers seek to identify
securities of large companies with characteristics such as: attractive
valuations, financial strength and high quality management focused on generating
shareholder value.

The portfolio may, to a lesser extent, invest in equity securities other than
common stocks (including preferred securities, depositary receipts such as ADRs,
EDRs and GDRs, convertible securities, and rights and warrants) foreign
securities, debt securities or other securities, and use various investment
techniques and investment strategies in pursuit of its investment objective.

WRL GREAT COMPANIES - AMERICASM

The portfolio's sub-adviser, Great Companies LLC. (Great Companies), seeks to
achieve the portfolio's objective by investing principally in:

o Large-cap stocks

The portfolio seeks to invest in common stocks of large, established, United
States-based companies. Stocks for this portfolio are selected by Great
Companies from a group of companies that it has identified, in its opinion, as
being a "great company." To be considered a "great company" candidate by the
sub-adviser, a company must: have a market cap in excess of $15 billion; be
highly regarded by management experts; be headquartered in the U.S.; be publicly
traded; be engaged in what the sub-adviser considers to be "terrific
businesses"; have superior business franchises; consider employees to be the
company's most valuable asset; have, in the sub-adviser's opinion, "world class
management"; deliver outstanding returns to shareholders; be a global company
(40% of revenues from non-U.S. operations); and, in the sub-adviser's opinion,
be able to convert changes into opportunities. Each company's common stock must
have consistently outperformed both the S&P 500 and the Dow Jones Industrial
Average over the twenty-year period ending December 31, 1998.

To determine which "great companies" in which the portfolio should invest, Great
Companies also uses Intrinsic Value investing. Intrinsic Value is the discounted
value of the cash that can be taken out of a business during its remaining life.
It is an estimate rather than a precise figure, and changes when interest rates
move or when forecasts of future cash flows are revised.

Great Companies monitors changes in each "great company's" Intrinsic Value over
a twelve to eighteen month period. It then determines a company's Intrinsic
Value Momentum (IVM), which is a measurement of the rate at which a company is
increasing or decreasing its Intrinsic Value. Great Companies looks at the
trading price of the stock and compares it to its Intrinsic Value calculation.
If a stock appears to be significantly overvalued and its IVM is flat or
declining in the market when compared to the Intrinsic Value calculation, Great
Companies does not invest in the stock or, if the portfolio has already invested
in the company, may reduce its position in the stock. When a company's stock
share price drops well below the Intrinsic Value calculation and its IVM is
rising, Great Companies will normally invest in the company, or, if the
portfolio has already invested in the company, attempt to buy more shares.

Because stock selections are limited to the companies identified as being a
"great company" by Great Companies, the portfolio is non-diversified.

Prospectus 23
<PAGE>

GROWTH EQUITY PORTFOLIOS (CONTINUED)

WRL SALOMON ALL CAP
The portfolio's sub-adviser, Salomon Brothers Asset Management Inc (SBAM), seeks
to achieve the portfolio's investment objective by investing principally in:

o Common stocks

o Convertible securities

To a lesser extent, the portfolio may invest in:

o Cash and cash equivalents

This portfolio is non-diversified. The portfolio will primarily invest in common
stocks, or securities convertible into or exchangeable for common stocks, such
as convertible preferred stocks or convertible debentures.

The portfolio's classification as "non-diversified" under the 1940 Act means
that the portfolio has the ability to take larger positions in a smaller number
of issuers. However, to meet federal tax requirements, at the close of each
quarter the portfolio may not have more than 25% of its total assets invested in
any one issuer and, with respect to 50% of its total assets, not more than 5% of
its total assets invested in any one issuer.

In seeking capital appreciation, the portfolio may purchase securities of:
seasoned issuers; small companies; newer companies; and new issues. The
portfolio may be subject to wide fluctuations in market value. Portfolio
securities may have limited marketability or may be widely and publicly traded.

SBAM anticipates that the portfolio's investments generally will be in
securities of companies which it considers to reflect some or all of the
following characteristics:

o Undervalued share prices

o Special situations such as existing or possible changes in management or
management policies, corporate structure or control, capitalization,
regulatory environment, or other circumstances which could be expected to
favor earnings or market price of such company's shares

o Growth potential due to technological advances, new methods in marketing
or production, new or unique products or services, changes in demands for
products or services or other significant new developments

SBAM uses a "bottom-up," fundamental research process to select the portfolio's
securities. They seek to identify individual companies with earnings growth
potential that may not be recognized by the market.

SBAM may take a temporary defensive position when the securities trading markets
or the economy are experiencing excessive volatility or a prolonged general
decline, or other adverse conditions exist. This may be inconsistent with the
portfolio's principal investment strategies. Under these circumstances, the
portfolio may be unable to pursue its investment objective.

WRL C.A.S.E. GROWTH

The portfolio's sub-adviser, C.A.S.E. Management, Inc. (C.A.S.E.), seeks to
achieve the portfolio's investment objective by investing principally in:

o Common stocks

o Preferred stocks

o Convertible stocks

Using proprietary forms of research, C.A.S.E. selects companies after evaluating
the current economic cycle, and identifying potentially attractive sectors,
industries and company-specific circumstances.

C.A.S.E. invests in common, preferred and convertible stocks of companies that
it believes show below-market risk, supported by below-market multiples, along
with above-average fundamentals. These fundamentals include return on equity,
price-to-earnings ratio and other balance sheet factors that contribute to
long-term capital growth.

The portfolio's assets are invested in companies whose stocks are traded on
national exchanges or over-the-counter markets. C.A.S.E. focuses on companies
that are fundamentally strong compared to other companies in the same industry,
the same sector and the broad market.

C.A.S.E. applies its proprietary forms of research to companies that exhibit
superior products and above-average growth rates along with sound management
and financials.

Each company selected for the portfolio is monitored against more than two dozen
measures of financial strength, including:

Prospectus 24
<PAGE>

GROWTH EQUITY PORTFOLIOS (CONTINUED)

o insiders' activity

o market style leadership

o earnings surprise

o analysts' change in earnings projections

o return on equity

o 5-year earnings-per-share growth rate

o price-earnings ratio

o price-to-book ratio

o price-to-cash flow

o institutional activity and holdings

o relative strength price change

o price-to-200-day moving average

o price-to-historical rising inflation

o price-to-declining U.S. dollar

o earnings projected change

o quarterly earnings per-share growth rate

Stocks are sold when C.A.S.E. views them as overvalued, or when C.A.S.E. feels
the stocks have lost their strong fundamentals.

In seeking to achieve the investment objective of the portfolio, C.A.S.E. will
make investment decisions without giving consideration to the turnover rate of
the portfolio. As a result, the turnover rate of the portfolio may be higher
than other comparable portfolios. Consequently, the portfolio may incur higher
transaction related expenses than portfolios that do not engage in frequent
trading.

WRL DREYFUS MID CAP

The portfolio's sub-adviser, The Dreyfus Corporation (Dreyfus), seeks to achieve
the portfolio's investment objective by investing principally in:

o Common stocks of medium capitalization companies

To a lesser extent, Dreyfus may invest portfolio assets in:

o Common stocks of large and small capitalization companies, including
emerging (developing) and cyclical growth companies

Dreyfus seeks to have a diversified portfolio of the common stocks of
mid-capitalization companies which offer above-average potential for
appreciation based on its multi-factor evaluation approach. The multi-factor
evaluation approach centers around the ability to identify and dynamically weigh
the fundamental characteristics driving current market returns, and to construct
portfolios by actively selecting stocks possessing positive exposure to these
preferred characteristics.

Generally, the factors which drive the investment process can be classified into
three categories:

o Earnings momentum indicators

o Company financial attributes

o Relative value measures

WRL NWQ VALUE EQUITY

The portfolio's sub-adviser, NWQ Investment Management Company, Inc. (NWQ),
seeks to achieve its objective by investing principally in:

o Common stocks

To a lesser extent, NWQ may invest portfolio assets in:

o Money market and short-term instruments (Treasury Bills)

o ADRs and exchange listed foreign stocks

NWQ employs a value-oriented approach to investing, combining top-down and
bottom-up disciplines.

NWQ will use statistical measures to look for above-average stock valuations,
screening for below-average price-to-earnings and price-to-book ratios,
above-average dividend yields and strong financial stability.

NWQ also identifies those market sectors believed to benefit from long-term
positive fundamentals, and focuses on the companies within these sectors which
represent above-average statistical value and are undervalued when purchased.

Prospectus 25
<PAGE>

GROWTH EQUITY PORTFOLIOS (CONTINUED)

The portfolio consists primarily of mid-capitalization to large capitalization
companies. NWQ considers the following when making a security selection:

o below-average price-to-earnings ratios

o below-average price-to-book

o strong financial stability

o industries/sectors with strong long-term fundamentals

o leading/strong market positions

o uses earnings averaged over both strong and weak periods in evaluating
cyclical companies

Please note: On June 29, 2000, United Asset Management Corporation (UAM), the
parent company of NWQ Investment Management Company, Inc., announced that it had
agreed to be acquired by Old Mutual plc (the "Transaction"). The Transaction is
expected to take place during the fourth quarter of 2000 and is subject to a
number of conditions, including regulatory approval and approval of shareholders
of UAM.
[GRAPHIC OMITTED]

Risks

The principal risks of investing in Growth Equity Portfolios that may adversely
affect your investment are described below. (Not all of these risks apply to
each Growth Equity Portfolio. See the chart below for the principal risks of
your portfolio.) Please note that there are many other circumstances which could
adversely affect your investment and prevent a portfolio from achieving its
objective, which are not described here. Please refer to the section entitled
"Explanation of Strategies and Risks," beginning on page 48, and the Fund's SAI
for more information about the risks associated with investing in the Growth
Equity Portfolios.

PRINCIPAL RISKS
GROWTH EQUITY PORTFOLIOS

<TABLE>
<CAPTION>
PORTFOLIO
-------------------------------------------
WRL WRL WRL
Great LKCM WRL Goldman
RISKS Companies Capital Janus Sachs
------------------------ TechnologySM Growth Growth Growth
<S> <C> <C> <C> <C>
Non-Diversification X
Stocks X X X X
Medium Sized Companies X
Foreign Securities X X
Emerging Markets Risk X X
Convertibles X X X
Proprietary Research X
Style Risk X X X X
Futures and Options X
Depositary Receipts
Warrants & Rights X

<CAPTION>
PORTFOLIO
-------------------------------------------------------------
WRL WRL
WRL Great WRL WRL WRL NWQ
RISKS GE U.S. Companies Salomon C.A.S.E. Dreyfus Value
------------------------ Equity AmericaSM All Cap Growth Mid Cap Equity
<S> <C> <C> <C> <C> <C> <C>
Non-Diversification X X
Stocks X X X X X X
Medium Sized Companies X X
Foreign Securities X X X X
Emerging Markets Risk X
Convertibles X X
Proprietary Research X X
Style Risk X X X X X X
Futures and Options X X X
Depositary Receipts X X X
Warrants & Rights X X
</TABLE>

o Non-Diversification

o Stocks

Prospectus 26
<PAGE>

GROWTH EQUITY PORTFOLIOS (CONTINUED)

Because the stocks the portfolio holds fluctuate in price, the value of your
investment in the portfolio go up and down.

o Medium-Sized Companies

These companies present additional risks because their earnings may be less
predictable, their share price more volatile, and their securities less liquid
than larger more established companies.

o Foreign Securities

o Currency speculation

o Currency trading costs

o Different accounting and reporting practices

o Less information available to the public

o Less (or different) regulation of securities markets

o More complex business negotiations

o Less liquidity

o More fluctuations in market prices

o Delays in settling foreign securities transactions

o Higher costs for holding foreign securities (custodial fees)

o Higher transaction costs

o Vulnerability to seizure and taxes

o Political instability and small markets

o Different market trading days

o Emerging Markets Risk

o Convertibles

As with all debt securities, the market value of convertibles tends to decline
as interest rates increase and, conversely, increase as interest rates decline.
However, when the market price of the common stock underlying a convertible
security exceeds the conversion price of the convertible security, the
convertible security tends to reflect the market price of the underlying common
stock.

o Proprietary Research

Proprietary forms of research may not be effective and may cause overall returns
to be lower than if other forms of research are used.

o Style Risk

Securities with different characteristics tend to shift in and out of favor
depending upon market and economic conditions as well as investor sentiment. A
portfolio may underperform other portfolios that employ a different style. A
portfolio also may employ a combination of styles that impact its risk
characteristics. Examples of different styles include growth and value
investing, as well as those focusing on large, medium, or small company
securities.

o Growth Investing Risk
Growth stocks may be more volatile than other stocks because they are
more sensitive to investor perceptions of the issuing company's growth
potential. Growth oriented funds will typically underperform when value
investing is in favor.

o Futures and Options

o Inaccurate market predictions

o Imperfect correlation

Prospectus 27
<PAGE>

GROWTH EQUITY PORTFOLIOS (CONTINUED)

o Illiquidity

o Tax considerations

The portfolios are not required to hedge their investments.

o Warrants and Rights

o Depositary Receipts

You may lose money if you invest in any of the Growth Equity Portfolios.
[GRAPHIC OMITTED]

Investor Profiles

WRL GREAT COMPANIES -- TECHNOLOGYSM

For the investor who seeks long-term growth of capital and who can tolerate
fluctuations inherent in stock investing.

WRL LKCM CAPITAL GROWTH

For the investor who seeks capital growth in a diversified stock portfolio and
who is comfortable with fluctuations in value.

WRL JANUS GROWTH

For the investor who wants capital growth in a broadly diversified stock
portfolio, and who can tolerate significant fluctuations in value.

WRL GOLDMAN SACHS GROWTH

For the investor who seeks long-term growth of capital and who can tolerate
fluctuations inherent in stock investing.

WRL GE U.S. EQUITY

For the investor who seeks long-term growth from a diversified portfolio that
combines "value" and "growth" investment management styles. As a result, the
portfolio will have characteristics similar to the S&P 500. The investor should
be comfortable with the price fluctuations of a stock portfolio and be willing
to accept higher short-term risk for potential long-term returns.

WRL GREAT COMPANIES -- AMERICASM

For the investor who seeks long-term growth of capital and who can tolerate
fluctuations inherent in stock investing.

WRL SALOMON ALL CAP

For the investor who wants long-term growth of capital and who can tolerate the
risks of a non-diversified portfolio and fluctuations in their investment.

WRL C.A.S.E. GROWTH

For the investor who seeks growth on a quarterly basis, but wants a diversified
portfolio that seeks to have investments in companies that have below market
risk characteristics. The investor should be comfortable with the price
fluctuations of a stock portfolio.

WRL DREYFUS MID CAP

For the investor who seeks total returns exceeding the S&P 400 Mid Cap Index and
who can tolerate fluctuations inherent to mid-cap stock investing.

WRL NWQ VALUE EQUITY

For the investor who seeks both capital preservation and long-term capital
appreciation and who can tolerate fluctuations inherent in stock investing.

Prospectus 28
<PAGE>

[GRAPHIC OMITTED]

Portfolio Performance

Because the WRL Salomon All Cap, WRL Goldman Sachs Growth and WRL Dreyfus Mid
Cap portfolios commenced operations in 1999, WRL Great Companies -- AmericaSM
and WRL Great Companies -- TechnologySM commenced operations in May, 2000 and
WRL LKCM Capital Growth commenced operations in December, 2000, their
performance history is not included.

When you consider this information, please remember that a portfolio's
performance in past years is not necessarily an indication of how a portfolio
will do in the future.

WRL JANUS GROWTH

[GRAPHIC OMITTED]

(1) As of September 30, 2000, the end of the most recent calendar quarter, the
portfolio's year-to-date return was %.

----------------------------------------------------------------------------

<TABLE>
<CAPTION>
Highest and Lowest Return
(Quarterly 1990-1999)
-------------------------------------------
Quarter Ended
<S> <C> <C>
Highest 33.08 % 12/31/99
Lowest (16.60)% 9/30/90
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Average Annual Total Returns
(through December 31, 1999)
-----------------------------------------------------
1 Year 5 Years 10 Years
<S> <C> <C> <C>
WRL Janus Growth 59.67% 39.89% 23.62%
S&P 500 Index 21.04% 28.56% 18.21%
</TABLE>

--------------------------------------------------------------------------------

WRL GE U.S. EQUITY

[GRAPHIC OMITTED]

(1) As of September 30, 2000, the end of the most recent calendar quarter, the
portfolio's year-to-date return was %.
--------------------------------------------------------------------

<TABLE>
<CAPTION>
Highest and Lowest Return
(Quarterly 1997-1999)
-------------------------------------------
Quarter Ended
<S> <C> <C>
Highest 19.59 % 12/31/98
Lowest (10.14)% 9/30/98
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Average Annual Total Returns
(through December 31, 1999)
----------------------------------------------------
Since
Inception
1 Year (January 2, 1997)
<S> <C> <C>
WRL GE U.S. Equity 18.41% 22.76%
S&P 500 Index 21.04% 27.56%
</TABLE>

--------------------------------------------------------------------------------

Prospectus 29
<PAGE>

GROWTH EQUITY PORTFOLIOS (CONTINUED)

WRL C.A.S.E. GROWTH

[GRAPHIC OMITTED]

(1) As of September 30, 2000, the end of the most recent calendar quarter, the
portfolio's year-to-date return was %.
--------------------------------------------------------------------

<TABLE>
<CAPTION>
Highest and Lowest Return
(Quarterly 1996-1999)
-------------------------------------------
Quarter Ended
<S> <C> <C>
Highest 26.60 % 12/31/98
Lowest (22.50)% 9/30/98
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Average Annual Total Returns
(through December 31, 1999)
-------------------------------------------------
Since
Inception
1 Year (May 1, 1995)
<S> <C> <C>
WRL C.A.S.E. Growth 33.84% 18.80%
Wilshire 5000 Index 22.05% 24.06%
</TABLE>

--------------------------------------------------------------------------------

WRL NWQ VALUE EQUITY

[GRAPHIC OMITTED]

(1) As of September 30, 2000, the end of the most recent calendar quarter, the
portfolio's year-to-date return was %.
--------------------------------------------------------------------

<TABLE>
<CAPTION>
Highest and Lowest Return
(Quarterly 1997-1999)
-------------------------------------------
Quarter Ended
<S> <C> <C>
Highest 16.23% 6/30/99
Lowest (17.95)% 9/30/98
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Average Annual Total Returns
(through December 31, 1999)
---------------------------------------------
Since
Inception
1 Year (May 1, 1996)
<S> <C> <C>
WRL NWQ Value
Equity 7.95% 10.76%
S&P 500 Index 21.04% 26.74%
</TABLE>

--------------------------------------------------------------------------------

Prospectus 30
<PAGE>

BALANCED PORTFOLIOS

WRL T. ROWE PRICE DIVIDEND GROWTH
WRL DEAN ASSET ALLOCATION
WRL LKCM STRATEGIC TOTAL RETURN
WRL J.P. MORGAN REAL ESTATE SECURITIES
WRL FEDERATED GROWTH & INCOME
WRL AEGON BALANCED

This Risk/Return Summary briefly describes each Balanced Portfolio of the Fund
and the principal risks of investing in the portfolios. For further information
on these portfolios, please read the section entitled "Explanation of Strategies
and Risks," beginning on page 48, and the Fund's SAI.

[GRAPHIC OMITTED]

Objectives

WRL T. ROWE PRICE DIVIDEND
GROWTH

This portfolio seeks to provide an increasing level of dividend income,
long-term capital appreciation, and reasonable current income through
investments primarily in dividend paying stocks.

WRL DEAN ASSET ALLOCATION

The objective of this portfolio is to seek preservation of capital and
competitive investment returns.

WRL LKCM STRATEGIC
TOTAL RETURN
The objective of this portfolio is to provide current income, long-term growth
of income and capital appreciation.

WRL J.P. MORGAN REAL
ESTATE SECURITIES
This portfolio seeks long-term total return from investments primarily in equity
securities of real estate companies. Total return will consist of realized and
unrealized capital gains and losses plus income.

WRL FEDERATED GROWTH & INCOME

This portfolio seeks total return by investing in securities that have defensive
characteristics. (These are securities that appear to have a low probability of
significant price decline relative to the overall equity market. They also will,
in the sub-adviser's view, generally have a comparatively low volatility in
share price relative to the overall equity market.)

WRL AEGON BALANCED

This portfolio seeks preservation of capital, reduced volatility, and superior
long-term risk-adjusted returns.
What is a Balanced Portfolio?
A balanced portfolio generally tries to balance three different objectives:
moderate long-term growth of capital, moderate income, and moderate stability
in an investor's principal. To reach these goals, balanced portfolios invest
in a mixture of stocks, bonds and money market instruments.

Prospectus 31
<PAGE>

BALANCED PORTFOLIOS (CONTINUED)

[GRAPHIC OMITTED]

Policies and Strategies

WRL T. ROWE PRICE
DIVIDEND GROWTH

The portfolio's sub-adviser, T. Rowe Price Associates, Inc. (T. Rowe Price),
seeks to achieve the portfolio's objective by investing principally in:

o Dividend-paying common stocks with favorable prospects for increasing
dividends and long-term appreciation

To a lesser extent, T. Rowe Price may invest in:

o Foreign securities

o Futures

T. Rowe Price typically invests at least 65% of total assets in common stocks of
dividend-paying companies that it expects to increase their dividends over time
and also provide long-term appreciation.

T. Rowe Price believes that a track record of dividend increases is an excellent
indicator of financial health and growth prospects, and over the long-term,
income that can contribute significantly to total return. Dividends can also
help reduce the portfolio's volatility during periods of market turbulence and
help offset losses when stock prices are falling.

T. Rowe Price looks for stocks with sustainable, above-average growth in
earnings and dividends, and attempts to buy them when they are temporarily out
of favor or undervalued by the market. Holdings tend to be in large to
medium-sized companies. In selecting investments, T. Rowe Price favors companies
with one or more of the following:

o Either a track record of, or the potential for, above-average earnings
and dividend growth

o A competitive current dividend yield

o A sound balance sheet and solid cash flow to support future dividend
increases

o A sustainable competitive advantage and leading market position

o Attractive valuations such as a relatively high dividend yield

While the portfolio invests primarily in common stocks, T. Rowe Price may also
purchase other securities including foreign securities, convertible securities,
warrants, preferred stocks, and corporate and government debt when considered
consistent with the portfolio's objective. Futures and options may be used for
any number of reasons, including: managing the portfolio's exposure to
securities prices and foreign currencies; to enhance income; to manage cash
flows efficiently; or to protect the value of portfolio securities. If the
portfolio uses futures and options it is exposed to additional volatility and
potential losses.

The portfolio may sell securities for a variety of reasons such as to secure
gains, limit losses, or redeploy assets into more promising opportunities.

The portfolio may take a temporary defensive position when the securities
trading markets or the economy are experiencing excessive volatility or a
prolonged general decline, or other adverse conditions exist (which is
inconsistent with the portfolio's principal investment strategies). Under these
circumstances, the portfolio may be unable to achieve its investment objective.

WRL DEAN ASSET ALLOCATION
The portfolio's sub-adviser, Dean Investment Associates (Dean), seeks to achieve
the portfolio's investment objective by investing principally in:

o Income-producing common and preferred stocks

o Debt obligations of U.S. issuers, some of which will be convertible into
common stocks

o U.S. Treasury bonds, notes and bills

o Money market funds

In selecting stocks, Dean focuses on high-quality, liquid, large capitalization
stocks, using a bottom-up screening process to identify stocks that are
statistically undervalued. Dean's ultimate goal is to choose stocks whose price
has been driven down by a market that has over-reacted to perceived risks. With
this approach, the portfolio seeks to achieve a dividend income yield higher
than that of the Russell 1000 Index, a widely recognized unmanaged index of
market performance which measures the performance of the 1,000 largest companies
in the Russell 3000 Index, which represents approximately 89% of the total
market capitalization of the Russell 3000 Index. As of the latest
reconstitution,

Prospectus 32
<PAGE>

BALANCED PORTFOLIOS (CONTINUED)

the average market capitalization was approximately $9.9 billion; the median
market capitalization was approximately $3.7 billion. The smallest company in
the index had an approximate market capitalization of $1,404.7 million.

Dean employs an investment technique called "asset allocation," which shifts
assets from one class of investment to another (such as from equity to debt)
when it anticipates changes in market direction.

Dean will seek to enhance returns in rising stock markets by increasing its
allocation to equity, then protect itself in falling stock markets by reducing
equity exposure and shifting into fixed-income investments, as well as into
money market funds (up to 10% of total assets).

Dean has developed forecasting models to predict movements in the stock market
for both short (12 to 18-month) and long (3 to 5-year) time periods. These
models help compare the risks and rewards Dean anticipates in holding stocks
versus debt instruments and money market funds. Such techniques may result in
increased portfolio expenses such as brokerage fees.

Thus, the models determine when Dean is to "tactically" adjust the portfolio's
asset allocation among stocks, bonds, U.S. debt obligations and money market
funds.

WRL LKCM STRATEGIC
TOTAL RETURN

The portfolio's sub-adviser, Luther King Capital Management Corporation (LKCM),
seeks to achieve the portfolio's investment objective by investing primarily in:

o Common stocks

o Corporate bonds

o Convertible preferred stocks

o Corporate convertible bonds

o U.S. Treasury Notes

The portfolio seeks to invest in a blend of equity and fixed-income securities
to achieve a balance of capital appreciation and investment income while
limiting volatility. The portfolio will also invest in convertible securities,
which have both equity and fixed-income characteristics. In choosing such
securities, LKCM looks for companies with strong fundamental characteristics. It
considers factors such as:

o balance sheet quality

o cash flow generation

o earnings and dividend growth record and outlook

o profitability levels

In some cases, LKCM bases its selections on other factors. For example, some
securities may be bought at an apparent discount to their appropriate value,
with the anticipation that they'll increase in value over time.

The portfolio seeks to achieve an income yield greater than the average yield of
the stocks in the S&P 500.

The portfolio invests mainly in the stocks and bonds of companies with
established operating histories and strong fundamental characteristics. The
majority of the stocks the portfolio buys will be listed on a national exchange
or traded on NASDAQ or domestic over-the-counter markets.

LKCM closely analyzes a company's financial status and a security's valuation in
an effort to control risk at the individual level. In addition, the growth
elements of the portfolio's equity investments drive capital appreciation.

As part of its income-oriented strategy, LKCM expects to invest about 25% of the
portfolio's assets in fixed-income securities, some of which will be convertible
into common stocks, and no more than 20% of its assets in stocks that don't pay
a dividend.

WRL J.P. MORGAN REAL
ESTATE SECURITIES

This portfolio's sub-adviser, J.P. Morgan Investment Management Inc. (J.P.
Morgan), seeks to achieve the portfolio's objective by investing principally in
equity securities of real estate companies which include:

o Common stocks

o Convertible securities

Under normal conditions, J.P. Morgan invests at least 65% of portfolio assets
in real estate company securities. A company is considered to be a real estate

Prospectus 33
<PAGE>

BALANCED PORTFOLIOS (CONTINUED)

company if at least 50% of its revenues or at least 50% of the market value of
its assets is attributable to the ownership, construction, management or sale of
residential, commercial or industrial real estate.

Companies chosen are generally contained in the National Association of Real
Estate Investment Trusts (NAREIT) Equity without Healthcare Index. Based on
internal fundamental equity and real estate research, and using a dividend
discount model, J.P. Morgan ranks these companies within four broad sectors of
the real estate industry from undervalued to overvalued. From this target
universe, J.P. Morgan selects stocks for the portfolio based on a variety of
criteria including managerial strength, geographic diversification, prospects
for growth and the company's competitive position.

The portfolio may also invest in debt securities of real estate and non-real
estate companies, mortgage-backed securities such as pass through certificates,
real estate mortgage investment conduit (REMIC) certificates, and collateralized
mortgage obligations (CMOs), or short-term debt obligations. However, the
portfolio does not directly invest in real estate.

The portfolio is non-diversified under federal securities laws.

WRL FEDERATED GROWTH & INCOME

The portfolio's sub-adviser, Federated Investment Counseling (Federated), seeks
to achieve the portfolio's objective by investing principally in:

o Common stocks

o Convertible securities

o REITs

o Fixed income securities

o Foreign securities

Federated seeks total return by investing primarily in common stocks that
provide the opportunity for capital appreciation or high dividend income.
Federated seeks capital appreciation by investing primarily in undervalued,
overlooked common stocks. These securities are generally trading at low
historical valuations relative to the market and to industry peers. To achieve
high current income, Federated seeks to invest in securities that offer higher
dividends than the overall market. Convertible stocks and bonds, real estate
investment trusts and securities issued by utility companies are generally the
types of securities that Federated may emphasize in order to enhance the
portfolio's dividend income. Federated may also invest a portion of the
portfolio's assets in securities of companies based outside the U.S. to
diversify the portfolio's holdings and to gain exposure to the foreign market.

Federated attempts to invest in securities that have defensive characteristics,
i.e., securities that appear to have a low volatility in share price relative to
the overall equity market. Federated also may emphasize investments in equity
securities that provide high dividend income, which generally are less volatile
stocks. Federated also may allocate a portion of the portfolio's assets in cash
or government securities when the markets appear to be overpriced.

To identify companies for portfolio investment, Federated uses a model which
looks at a company's financial and earnings strength, management skill and
business prospects, and at the prospect of comparatively low volatility in share
price. In addition, Federated performs traditional fundamental and credit
analyses to select the most promising companies for the portfolio. Federated may
emphasize investments in certain industry sectors that offer securities that
have these attributes. To determine the timing of purchases and sales of
portfolio securities, Federated looks at recent stock price performance.

WRL AEGON BALANCED

This portfolio's sub-adviser, AEGON USA Investment Management, Inc. (AIMI),
seeks to achieve the portfolio's objective by investing principally in:

o Common stocks (primarily of domestic large cap companies)
o U.S. Treasuries

Prospectus 34
<PAGE>

BALANCED PORTFOLIOS (CONTINUED)

o Convertible securities

AIMI uses a top-down investment strategy to find stocks of medium to large
capitalization companies that fit a value criteria. The process for selecting
companies is based on fundamental analysis.

More specifically, AIMI looks at the industry structure, organizational
structure, financial structure, and business prospects of each portfolio
company. It then applies the analysis of these factors to financial forecasts
which, in turn, drives the valuation of a company's stock. AIMI uses a two stage
dividend discount model to value a company. Once AIMI initiates a position it
monitors and continually reassesses its prior analysis. When AIMI believes the
price fully reflects its independent valuation or there is a significant change
in the fundamentals of the company, the portfolio sells the security.

[GRAPHIC OMITTED]

Risks

The principal risks of investing in Balanced Portfolios that may adversely
affect your investment are described below. (Not all of these risks apply to
each Balanced Portfolio. See the chart below for the principal risks of your
portfolio.) Please note that there are many other circumstances that could
adversely affect your investment and prevent a portfolio from achieving its
objective, which are not described here. Please refer to the section entitled
"Explanation of Strategies and Risks," beginning on page 48 and the Fund's SAI
for more information about the risks associated with investing in Balanced
Portfolios.

PRINCIPAL RISKS
BALANCED PORTFOLIOS

<TABLE>
<CAPTION>
PORTFOLIO
---------------------------------------------------------------------------------------------------
WRL
T. Rowe
Price WRL WRL WRL WRL
RISKS Dividend Dean Asset LKCM Strategic J.P. Morgan Federated WRL
--------------------------- Growth Allocation Total Return Real Estate Securities Growth & Income AEGON Balanced
<S> <C> <C> <C> <C> <C> <C>
Stocks X X X X X X
Fixed-Income Securities X X X
Convertibles X X X X
Real Estate Securities X X
Style Risk X
Quantitative Models X
Futures and Options X
Non-Diversified X
Foreign Securities X X
Dividend-Paying Companies X
</TABLE>

o Stocks

Because the stocks a portfolio holds fluctuate in price, the value of your
investment in a portfolio will go up and down.

o Fixed-Income Securities

The value of these securities may change daily based on changes in the interest
rate, and other market conditions and factors. The risks include:

o Changes in interest rates

o Length of time to maturity

o Issuers defaulting on their obligations to pay interest or return
principal

Prospectus 35
<PAGE>

BALANCED PORTFOLIOS (CONTINUED)

o Foreign Securities

o Changes in currency values

o Currency speculation

o Currency trading costs

o Different accounting and reporting practices

o Less information available to the public

o Less (or different) regulation of securities markets

o More complex business negotiations

o Less liquidity

o More fluctuations in market prices

o Delays in settling foreign securities transactions

o Higher costs for holding foreign securities (custodial fees)

o Higher transaction costs

o Vulnerability to seizure and taxes

o Political instability and small markets

o Different market trading days

o High-Yield/High-Risk Fixed-Income Securities o Credit risk o Greater
sensitivity to interest rate movements o More speculative than higher rated
securities o Greater vulnerability to economic changes o Decline in market
value in event of default o Less liquidity

o Convertibles

As with all debt securities, the market value of convertibles tends to decline
as interest rates increase and, conversely, to increase as interest rates
decline.

o Real Estate Securities

Investments in the real estate industry are subject to risks associated with
direct investment in real estate. These risks may include:
o Declining real estate value
o Risks relating to general and local economic conditions

o Over-building
oIncreased competition for assets in local and regional markets o Increases
in property taxes o Increases in operating expenses or interest rates
oChange in neighborhood value or the appeal of properties to tenants o
Insufficient levels of occupancy o Inadequate rents to cover operating
expenses

The performance of securities issued by companies in the real estate industry
also may be affected by prudent management of insurance risks, adequacy of
financing available in capital markets, competent management, changes in
applicable laws and government regulations (including taxes) and social and
economic trends.

o Futures and Options

o Inaccurate market predictions

o Imperfect correlation

o Illiquidity

o Tax considerations

The portfolios are not required to hedge their investments.

o Quantitative Models

Securities selected using statistical models may result in incorrect asset
allocations causing overall returns to be lower than if other methods of
selection were used.

o Non-Diversified

Prospectus 36
<PAGE>

BALANCED PORTFOLIOS (CONTINUED)

o Style Risk -- Dividend-Paying Companies
(WRL T. Rowe Price Dividend Growth)

Securities with different characteristics tend to shift in and out of favor
depending upon market and economic conditions as well as investor sentiment. A
portfolio may underperform other portfolios that employ a different style. A
portfolio also may employ a combination of styles that impact its risk
characteristics. Examples of different styles include growth and value
investing, as well as those focusing on large, medium, or small company
securities.

T. Rowe Price's emphasis on dividend-paying companies could result in
significant investments in large-capitalization stocks. At times, stocks such as
these may lag shares of smaller, faster-growing companies. Also, a company may
reduce or eliminate its dividend. The portfolio's efforts to buy stocks that
appear temporarily out of favor also carries the risk that a stock or group of
stocks may remain out of favor for a long time and may continue to decline.

You may lose money if you invest in any of the Balanced Portfolios.

.
[GRAPHIC OMITTED]

Investor Profiles

WRL T. ROWE PRICE DIVIDEND GROWTH

For the investor who wants a reasonable level of current income from equity
investments that have the potential to rise faster than inflation, and who can
tolerate significant fluctuations in the value of their investments.

WRL DEAN ASSET ALLOCATION

For the investor who wants a combination of capital growth and income, and who
is comfortable with the risks associated with an actively traded portfolio which
shifts assets between equity and debt.

WRL LKCM STRATEGIC
TOTAL RETURN

For the investor who wants current income with the prospect of income growth,
plus the prospect of capital growth. The investor should be comfortable with the
price fluctuations of a portfolio that invests in both equity and fixed-income
securities.

WRL J.P. MORGAN REAL
ESTATE SECURITIES

For the investor who seeks long-term total return consisting of current income
and, potentially, capital appreciation. The investor should be comfortable with
the risk of a non-diversified portfolio invested primarily in securities of real
estate companies and their exposure to real estate markets.

WRL FEDERATED GROWTH & INCOME

For the investor who seeks high current income and moderate capital appreciation
and is willing to accept certain special risks associated with sector investing.
(A sector is a broad grouping of specific industries.)

WRL AEGON BALANCED

For the investor who wants capital growth and income from the same investment,
but who also wants an investment which has the prospect of sustaining its
interim principal value through maintaining a balance between equity and debt.
This portfolio is not designed for investors who desire a consistent level of
income.

Prospectus 37
<PAGE>

BALANCED PORTFOLIOS (CONTINUED)

[GRAPHIC OMITTED]

Portfolio Performance

Because the WRL T. Rowe Price Dividend Growth portfolio commenced operations in
1999, its performance history is not included.

When you consider this information, please remember that a portfolio's
performance in past years is not necessarily an indication of how a portfolio
will do in the future.

WRL DEAN ASSET ALLOCATION

[GRAPHIC OMITTED]

(1) As of September 30, 2000, the end of the most recent calendar quarter, the
portfolio's year-to-date return was %.
--------------------------------------------------------------------

<TABLE>
<CAPTION>
Highest and Lowest Return
(Quarterly 1995-1999)
------------------------------------------
Quarter Ended
<S> <C> <C>
Highest 9.03 % 6/30/97
Lowest (7.87)% 9/30/99
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Average Annual Total Returns
(through December 31, 1999)
----------------------------------------------------
Since
Inception
1 Year (January 3, 1995)
<S> <C> <C>
WRL Dean Asset
Allocation (5.64)% 10.38%
S&P 500 Index 21.04 % 28.54%
</TABLE>

--------------------------------------------------------------------------------

WRL LKCM STRATEGIC TOTAL RETURN

[GRAPHIC OMITTED]

(1) As of September 30, 2000, the end of the most recent calendar quarter, the
portfolio's year-to-date return was %.
--------------------------------------------------------------------

<TABLE>
<CAPTION>
Highest and Lowest Return
(Quarterly 1994-1999)
------------------------------------------
Quarter Ended
<S> <C> <C>
Highest 13.06 % 6/30/97
Lowest (8.05)% 9/30/98
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Average Annual Total Returns
(through December 31, 1999)
-------------------------------------------------------------
Since
Inception
1 Year 5 Years (March 1, 1993)
<S> <C> <C> <C>
WRL LKCM Strategic
Total Return 12.07% 16.50% 13.82%
S&P 500 Index 21.04% 28.56% 21.70%
</TABLE>

--------------------------------------------------------------------------------

Prospectus 38
<PAGE>

BALANCED PORTFOLIOS (CONTINUED)

WRL J.P. MORGAN REAL ESTATE SECURITIES

[GRAPHIC OMITTED]

(1) As of September 30, 2000, the end of the most recent calendar quarter, the
portfolio's year-to-date return was %.
--------------------------------------------------------------------

<TABLE>
<CAPTION>
Highest and Lowest Return
(Quarterly 1999)
-------------------------------------------
Quarter Ended
<S> <C> <C>
Highest 9.17 % 6/30/99
Lowest (8.49)% 9/30/99
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Average Annual Total Returns
(through December 31, 1999)
---------------------------------------------
Since
Inception
1 Year (May 1, 1998)
<S> <C> <C>
WRL J.P. Morgan
Real Estate
Securities (3.77)% (11.31)%
Morgan Stanley
REIT Index (4.55)% (10.67)%
</TABLE>

--------------------------------------------------------------------------------

WRL FEDERATED GROWTH & INCOME

[GRAPHIC OMITTED]

(1) As of September 30, 2000, the end of the most recent calendar quarter, the
portfolio's year-to-date return was %.
--------------------------------------------------------------------

<TABLE>
<CAPTION>
Highest and Lowest Return
(Quarterly 1995-1999)
------------------------------------------
Quarter Ended
<S> <C> <C>
Highest 12.15 % 6/30/99
Lowest (7.99)% 3/31/99
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Average Annual Total Returns
(through December 31, 1999)
----------------------------------------------------------
Since
Inception
1 Year 5 Year (March 1, 1994)
<S> <C> <C> <C>
WRL Federated
Growth &
Income (4.45)% 11.41% 8.82%
Russell Mid Cap
Value Index (0.11)% 18.01% 14.61%
</TABLE>

--------------------------------------------------------------------------------

Prospectus 39
<PAGE>

BALANCED PORTFOLIOS (CONTINUED)

WRL AEGON BALANCED

[GRAPHIC OMITTED]

(1) As of September 30, 2000, the end of the most recent calendar quarter, the
portfolio's year-to-date return was %.
--------------------------------------------------------------------

<TABLE>
<CAPTION>
Highest and Lowest Return
(Quarterly 1995-1999)
------------------------------------------
Quarter Ended
<S> <C> <C>
Highest 9.84 % 12/31/98
Lowest (7.86)% 9/30/99
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Average Annual Total Returns
(through December 31, 1999)
-----------------------------------------------------------
Since
Inception
1 Year 5 Years (March 1, 1994)
<S> <C> <C> <C>
WRL AEGON
Balanced 3.03% 11.34% 8.53%
S&P 500 Index 21.04% 28.56% 24.14%
</TABLE>

--------------------------------------------------------------------------------

Prospectus 40
<PAGE>

FIXED-INCOME PORTFOLIO(S)

WRL AEGON BOND

This Risk/Reward Summary briefly describes each Fixed-Income Portfolio of the
Fund and the principal risks of investing in the portfolio(s). For further
information on the portfolio(s), please read the section entitled "Explanation
of Strategies and Risks," beginning on page 48, and the Fund's SAI.

[GRAPHIC OMITTED]

Objectives

WRL AEGON BOND

This Portfolio seeks the highest possible current income within the confines of
the primary goal of ensuring the protection of capital.

What is a Fixed-Income Portfolio?
Fixed-income portfolios primarily invest in debt securities that pay
interest. When the debt security is purchased, the portfolio owns "debt" and
becomes an indirect creditor to the company or government that issued the
bond.

[GRAPHIC OMITTED]

Policies and Strategies

WRL AEGON BOND

The portfolio's sub-adviser, AEGON USA Investment Management, Inc. (AIMI) seeks
to achieve the portfolio's objective by investing principally in:

o U.S. government securities obligations, including Treasury and Agency
Securities

o Medium to high-quality corporate bonds

To a lesser extent AIMI may invest in:

o Mortgage-backed securities, including pass-through and Collateralized
Mortgage Obligations (CMOs)

o Asset-backed securities

o U.S. dollar-denominated foreign bonds

o Short-term securities, including agency discount notes and commercial paper

AIMI takes an approach in the daily management of the portfolio that it
considers to be conservative, striving to participate in the bond market's
advances while preserving capital on the downside.

AIMI uses its Core Fixed-Income Strategy through which it draws from all of its
organizational resources. AIMI utilizes a disciplined process to gather
information on key factors for evaluation of the market environment.

The Fixed-Income Strategy Committee then sets policy directives that reflect
AIMI's interest rate outlook and expectations for the relative performance of
the major bond market sectors.

AIMI then selects securities that are considered by it to be most appropriate
based on AIMI's findings.

[GRAPHIC OMITTED]

Risks

The principal risks of investing in the Fixed-Income Portfolio that may
adversely affect your investment are described below. Please note that there are
many other circumstances that could adversely affect your investment and prevent
a portfolio from achieving its objective, which are not described here. Please
refer to the section entitled "Explanation of Strategies and Risks" beginning on
page 48 and the Fund's SAI for more information about the risks associated with
investing in the Fixed-Income Portfolio.

o Fixed-Income Securities

The value of these securities may change daily based on changes in interest
rates, and other market conditions and factors. The risks include:

o Changes in interest rates

o Length of time to maturity

o Issuers defaulting on their obligations to pay interest or return
principal (Credit Risk)

Prospectus 41
<PAGE>

FIXED-INCOME PORTFOLIO(S) (CONTINUED)

o High-Yield/High-Risk Fixed-Income Securities

o Credit risk

o Greater sensitivity to interest rate movements than higher rated
securities

o More speculative than higher rated securities

o Greater vulnerability to economic changes

o Decline in market value in event of default

o Less liquidity

o Credit Risk

The price of a bond is affected by the issuer's or counterparty's credit
quality. Changes in financial condition and general economic conditions can
affect the ability to honor financial obligations and therefore credit quality.
Lower quality bonds are generally more sensitive to these changes than higher
quality bonds. Even within securities considered investment grade, differences
exist in credit quality and some investment grade debt securities may have
speculative characteristics. A security's price may be adversely affected by the
market's opinion of the security's credit quality level even if the issuer or
counterparty has suffered no degradation in ability to honor the obligation.

o Interest Rate Risk

Bond prices rise when interest rates decline and decline when interest rates
rise. The longer the duration of a bond, the more a change in interest rates
affects the bond's price. Short-term and long-term interest rates may not move
the same amount and may not move in the same direction, which may affect the
sub-adviser's ability to predict interest rate movements and select portfolio
investments.

o Mortgage- and other Asset-Backed Securities

o Repayment sooner than stated maturity dates resulting in greater price
and yield volatility than with traditional fixed-income securities

o Prepayments resulting in lower return

o Values may change based on creditworthiness of issuers

o Interest rate risks

o Proprietary Research

AIMI's proprietary forms of research may not be effective and may cause overall
returns to be lower than if other forms of research are used.

You may lose money if you invest in this portfolio.

[GRAPHIC OMITTED]

Investor Profile

WRL AEGON BOND

For the investor seeking current income with preservation of capital, and who
can tolerate the fluctuation in principal associated with changes in interest
rates.

Prospectus 42
<PAGE>

FIXED-INCOME PORTFOLIO(S) (CONTINUED)

[GRAPHIC OMITTED]

Portfolio Performance

The bar chart and table below gives an indication of the portfolio's risks and
performance. The chart shows changes in the portfolio's performance from year to
year. The performance calculations do not reflect charges or deductions under
the policies or the annuity contracts. These fees and expenses would lower
investment performance. The table shows how the portfolio's average annual
returns for the periods indicated compare to those of a broad measure of market
performance.

When you consider this information, please remember that a portfolio's
performance in past years is not necessarily an indication of how a portfolio
will do in the future.

WRL AEGON BOND

[GRAPHIC OMITTED]

(1) As of September 30, 2000, the end of the most recent calendar quarter, the
portfolio's year-to-date return was %.
--------------------------------------------------------------------

<TABLE>
<CAPTION>
Highest and Lowest Return
(Quarterly 1990-1999)
------------------------------------------
Quarter Ended
<S> <C> <C>
Highest 8.20 % 6/30/95
Lowest (4.90)% 3/31/94
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Average Annual Total Returns
(through December 31, 1999)
------------------------------------------------------------
1 Year 5 Years 10 Years
<S> <C> <C> <C>
WRL AEGON Bond (2.94)% 7.36% 7.33%
Lehman Brothers
Government/Corporate
Bond
(LBGC) Index (2.15)% 7.60% 7.65%
</TABLE>

--------------------------------------------------------------------------------

Prospectus 43
<PAGE>

CAPITAL PRESERVATION PORTFOLIO(S)

WRL J.P. MORGAN MONEY MARKET

This Risk/Return Summary briefly describes the Capital Preservation Portfolio(s)
and the principal risks of investing in the Portfolio. For further information
on the portfolio(s), please read the section entitled "Explanation of Strategies
and Risks," beginning on page 48, and the Fund's SAI.

[GRAPHIC OMITTED]

Objectives

WRL J.P. MORGAN MONEY MARKET

This portfolio seeks to obtain maximum current income consistent with
preservation of principal and maintenance of liquidity.

What is a money market portfolio?
A money market portfolio tries to maintain a share price of $1.00 while
paying income to its shareholders. A stable share price protects your
investment from loss ("preservation of principal"). If you need to sell your
shares at any time, you should receive your initial investment plus any
income that you have earned (thereby providing "liquidity"). However, a money
market portfolio does not guarantee that you will receive your money back.

A money market portfolio must follow SEC rules as to the investment quality,
maturity, diversification and other features of the securities it purchases
and the average remaining maturity of the securities cannot be greater than
90 days. The remaining maturity of a security is the period of time until the
principal amount must be repaid.

[GRAPHIC OMITTED]

Policies and Strategies

WRL J.P. MORGAN MONEY MARKET

The portfolio's sub-adviser, J.P. Morgan Investment Management Inc. (J.P.
Morgan) seeks to achieve the portfolio's objective by investing in:

o U.S. government obligations

o Domestic and certain foreign bank obligations including time deposits,
certificates of deposit, bankers' acceptances and other bank obligations

o Asset-backed securities

o Repurchase and reverse repurchase agreements

J.P. Morgan will limit its investments to securities that present minimum credit
risks, as determined by guidelines adopted by the Fund's Board. The portfolio
may invest up to 25% of its total assets in securities of a single issuer if the
securities will not be held for more than three business days.

The Fund's Board must approve or ratify any purchase of an unrated security or a
security rated by only one nationally recognized statistical rating organization
(NRSRO).

[GRAPHIC OMITTED]

Risks

The principal risks of investing in the WRL J.P. Morgan Money Market portfolio
that may adversely affect your investment are described below. Please note that
there are circumstances which could adversely affect your investment and prevent
the portfolio from achieving its objective, which are not described here. Please
refer to the section entitled "Explanation of Strategies and Risks," beginning
on page 48 and the Fund's SAI for more information about the risks associated
with investing in the Capital Preservation Portfolio(s).

o U.S. Government Obligations

The value of the U.S. government securities will fluctuate with changing
interest rates. A decrease in interest rates generally results in an increase in
the value of the securities and an increase in interest rates have the opposite
effect.

o Bank Obligations

Banks are subject to extensive governmental regulations that may affect an
investment. The profitability of this industry is dependent on the availability
and cost of capital funds for lending under prevailing money market conditions.

Prospectus 44
<PAGE>

CAPITAL PRESERVATION PORTFOLIO(S) (CONTINUED)

Economic conditions and credit losses also affect this type of investment.

o Asset-Backed Securities

o Repayment sooner than stated maturity dates resulting in greater price
and yield volatility than with traditional fixed-income securities

o Prepayments resulting in lower return

o Values may change based on creditworthiness of issuers

o Interest rate risks

o Repurchase and Reverse Repurchase Agreements

A repurchase agreement involves the purchase of a security by a portfolio and a
simultaneous agreement (generally from a bank or broker-dealer) to repurchase
that security back from the portfolio at a specified price and date upon demand.
Repurchase agreements not terminable within seven days are considered illiquid
securities.

Repurchase agreements involve the risk that the seller will fail to repurchase
the security, as agreed. In that case, the portfolio will bear the risk of
market value fluctuations until the security can be sold and may encounter
delays and incur costs in liquidating the security. In the event of bankruptcy
or insolvency of the seller, delays and costs are incurred.

A portfolio invests in a reverse repurchase agreement when it sells a portfolio
security to another party, such as a bank or broker-dealer, in return for cash,
and agrees to buy the security back at a future date and price. While a reverse
repurchase agreement is outstanding, a portfolio will segregate with its
custodian cash and other liquid assets to cover its obligation under the
agreement. Reverse repurchase agreements are considered a form of borrowing by
the portfolio for purposes of the 1940 Act.

Reverse repurchase agreements may expose a portfolio to greater fluctuations in
the value of its assets.

Portfolio shares are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency of the U.S.
government. Although the portfolio seeks to preserve the value of your
investment at $1.00 per share there is no guarantee that it will be able to do
so. You may lose money if you invest in this portfolio.

[GRAPHIC OMITTED]

Investor Profiles

WRL J.P. MORGAN MONEY MARKET

For the investor who seeks current income, preservation of capital and
maintenance of liquidity.

Prospectus 45
<PAGE>

CAPITAL PRESERVATION PORTFOLIO(S) (CONTINUED)

[GRAPHIC OMITTED]

Portfolio Performance

The bar chart and table below gives an indication of the portfolio's risks and
performance. The chart shows changes in the portfolio's performance from year to
year. The performance calculations do not reflect charges or deductions under
the policies or the annuity contracts. These fees and expenses would lower
investment performance. The table shows how the portfolio's average annual
return for the periods indicated compare to those of a broad measure of market
performance.

When you consider this information, please remember that a portfolio's
performance in past years is not necessarily an indication of how a portfolio
will do in the future.

WRL J.P. MORGAN MONEY MARKET

[GRAPHIC OMITTED]

(1) As of September 30, 2000, the end of the most recent calendar quarter, the
portfolio's year-to-date return was %.
--------------------------------------------------------------------

<TABLE>
<CAPTION>
Highest and Lowest Return
(Quarterly 1990-1999)
-------------------------------------
Quarter Ended
<S> <C> <C>
Highest 1.87% May 31, 1990
Lowest 0.56% April 30, 1993
</TABLE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Average Annual Total Returns
(through December 31, 1999)
-------------------------------------------------------------------------------------------------------------------
1 Year 5 Years 10 Years
<S> <C> <C> <C>
WRL J.P. Morgan
Money Market 4.63% 5.11% 4.67%
--------------------------------------------------------------------------------
7 Day Yield
--------------------------------------------------------------------------------
As of December 31, 1999 5.15%
</TABLE>

--------------------------------------------------------------------------------

Prospectus 46
<PAGE>

Before you choose an investment portfolio,
please consider . . .

RISK/REWARD INFORMATION

All of the investment portfolios involve risk, but there is also the potential
for reward. You can lose money -- and you can make money. The Fund portfolios
are structured so that each offers a slightly different degree of risk and
reward than others.

In this prospectus, we've arranged the portfolios in order of risk/ reward from
highest to lowest. Notice the scale at the right. It covers the full spectrum of
risk/reward of the portfolios described in this prospectus.

What risk/reward level is for you? Ask yourself the following:

(1) How well do I handle fluctuations in my account value? The higher a
portfolio is on the risk/reward spectrum, the more its price is likely to
move up and down on a day to day basis. If this makes you uncomfortable,
you may prefer an investment at the lower end of the scale that may not
fluctuate in price as much.

(2) Am I looking for a higher rate of return?
Generally, the higher the potential return, the higher the risk. If you
find the potential to make money is worth the possibility of losing more,
then a portfolio at the higher end of the spectrum may be right for you.

A final note: These portfolios are designed for long-term investment.

Each portfolio has an investment objective that it tries to achieve by following
certain investment strategies and techniques. The objective can be changed
without shareholder vote.

Please note: The World Equity category was previously named Foreign Equity.

WRL VKAM Emerging Growth
WRL T. Rowe Price Small Cap
WRL Goldman Sachs Small Cap
WRL Pilgrim Baxter Mid Cap Growth
WRL Alger Aggressive Growth
WRL Third Avenue Value
WRL Value Line Aggressive Growth

WRL GE International Equity
WRL Janus Global

WRL Great Companies -- TechnologySM
WRL LKCM Capital Growth
WRL Janus Growth
WRL Goldman Sachs Growth
WRL GE U.S. Equity
WRL Great Companies -- AmericaSM
WRL Salomon All Cap
WRL C.A.S.E. Growth
WRL Dreyfus Mid Cap
WRL NWQ Value Equity

WRL T. Rowe Price Dividend Growth
WRL Dean Asset Allocation
WRL LKCM Strategic Total Return
WRL J.P. Morgan Real
Estate Securities
WRL Federated Growth & Income
WRL AEGON Balanced

WRL AEGON Bond

WRL J.P. Morgan Money Market

Aggressive Equity World Equity Growth Equity
Balanced Fixed-IncomeCapital Preservation

Higher Risk/RewardLower - -
-------------------------- --------------------------

Prospectus 47
<PAGE>

EXPLANATION OF STRATEGIES AND RISKS

HOW TO USE THIS SECTION

In the discussions of the individual portfolios on pages 2 through 46, you found
descriptions of the strategies and risks associated with each. In those pages,
you were referred to this section for a more complete description of the risks.
For best understanding, first read the description of the portfolio you're
interested in. Then refer to this section and read about the risks particular to
that portfolio. For even more discussions of strategies and risks, see the SAI,
which is available upon request. See the back cover of this prospectus for
information on how to order the SAI.

[GRAPHIC OMITTED]

Diversification and Concentration. The 1940 Act classifies investment companies
as either diversified or non-diversified.

Diversification is the practice of spreading a portfolio's assets over a number
of investments, investment types, industries or countries to reduce risk. A
non-diversified portfolio has the ability to take larger positions in fewer
issuers. Because the appreciation or depreciation of a single security may have
a greater impact on the net asset value of a non-diversified portfolio, its
share price can be expected to fluctuate more than a comparable portfolio.

All of the portfolios (except WRL Salomon All Cap, WRL Third Avenue Value, WRL
Great Companies -- AmericaSM, WRL Great Companies -- TechnologySM, and WRL J.P.
Morgan Real Estate Securities) qualify as diversified funds under the 1940 Act.
The diversified portfolios are subject to the following diversification
requirements (which are set forth in full in the SAI):

o As a fundamental policy, with respect to 75% of the total assets of a
portfolio, the portfolio may not own more than 10% of the outstanding
voting shares of any issuer (other than U.S. government securities) as
defined in the 1940 Act and, with respect to some portfolios, in other
types of cash items.

o As a fundamental policy, with respect to 75% of the total assets of a
portfolio, the portfolio will not purchase a security of any issuer if such
would cause the portfolio's holdings of that issuer to amount to more than
5% of the portfolio's total assets.

o As a fundamental policy governing concentration, no portfolio will invest
more than 25% of its assets in any one particular industry, other than U.S.
government securities.

WRL Salomon All Cap, WRL Third Avenue Value, WRL Great Companies -- AmericaSM,
WRL Great Companies -- TechnologySM, and WRL J.P. Morgan Real Estate Securities
each reserves the right to become a diversified investment company (as defined
by the 1940 Act).

[GRAPHIC OMITTED]

Investing in common stocks. Many factors cause common stocks to go up and down
in price. A major one is the financial performance of the company that issues
the stock. Other factors include the overall economy, conditions in a particular
industry, and monetary factors like interest rates. When your portfolio holds
stocks, there's a risk that some or all of them may be down in price when you
choose to sell, causing you to lose money. This is called market risk.

[GRAPHIC OMITTED]

Investing in preferred stocks. Because these stocks come with a promise to pay a
stated dividend, their price depends more on the size of the dividend than on
the company's performance. But if a company fails to pay the dividend, its
preferred stock is likely to drop in price. Changes in interest rates can also
affect their price. (See "Investing in Bonds," below.)

[GRAPHIC OMITTED]

Investing in convertible securities, preferred stocks, and bonds. Since
preferred stocks and corporate bonds pay a stated return, their prices usually
don't depend on the price of the company's common stock. But some companies
issue preferred stocks and bonds that are convertible into their common stocks.
Linked to the common stock in this way, convertible securities go up and down in
price as the common stock does, adding to their market risk.

Prospectus 48
<PAGE>

EXPLANATION OF STRATEGIES AND RISKS

[GRAPHIC OMITTED]

Various Investment Techniques. Various investment techniques are utilized to
increase or decrease exposure to changing security prices, interest rates,
currency exchange rates, commodity prices or other factors that affect security
values. These techniques may involve derivative securities and transactions such
as buying and selling options and futures contracts, entering into currency
exchange contracts or swap agreements and purchasing indexed securities. These
techniques are designed to adjust the risk and return characteristics of the
portfolio of investment and are not used for leverage.

[GRAPHIC OMITTED]

T. Rowe Price Reserve Investment Fund. The WRL T. Rowe Price Small Cap and WRL
T. Rowe Price Dividend Growth portfolios may invest in money market instruments
directly or indirectly through investment in the Reserve Investment Fund
(Reserve Fund). The Reserve Fund is advised by T. Rowe Price and charges no
advisory fees to the Reserve Fund, but other fees may be incurred which may
result in a duplication of fees. Further information is included in the SAI.

[GRAPHIC OMITTED]

GEI Short-Term Investment Fund. The WRL GE International Equity and WRL GE U.S.
Equity portfolios may invest in money market instruments directly or indirectly
through investment in the GEI Short-Term Investment Fund (Investment Fund). The
Investment Fund is advised by GEAM; GEAM charges no advisory fee to the
Investment Fund, but other fees may be incurred which may result in a
duplication of fees. Further information is included in the SAI.

[GRAPHIC OMITTED]

Volatility. The more an investment goes up and down in price, the more volatile
it is. Volatility increases the market risk because even though your portfolio
may go up more than the market in good times, it may also go down more than the
market in bad times. If you decide to sell when a volatile portfolio is down,
you could lose more.

[GRAPHIC OMITTED]

Investing in bonds. Like common stocks, bonds fluctuate in value, though the
factors causing this fluctuation are different, including:

o Changes in interest rates. Bond prices tend to move the opposite of
interest rates. Why? Because when interest rates on new bond issues go up,
rates on existing bonds stay the same and they become less desirable. When
rates go down, the reverse happens. This is also true for most preferred
stocks and some convertible securities.

o Length of time to maturity. When a bond matures, the issuer must pay the
owner its face value. If the maturity date is a long way off, many things
can affect its value, so a bond is more volatile the farther it is from
maturity. As that date approaches, fluctuations usually become smaller and
the price gets closer to face value.

o Defaults. All bond issuers make at least two promises: (1) to pay
interest during the bond's term and (2) to return principal when it
matures. If an issuer fails to keep one or both of these promises,
the bond will probably drop in price dramatically, and may even
become worthless. Changes in financial condition and general
economic conditions can affect the ability to honor financial
obligations and therefore credit quality. A security's price may be
adversely affected by the market's opinion of the security's credit
quality level even if the issuer or counterparty has suffered no
degradation in ability to honor the obligation.

o Declines in ratings. At the time of issue, most bonds are rated by
professional rating services, such as Moody's Investors Service, Inc.
(Moody's) and Standard & Poor's Corporation (S&P). The stronger the
financial backing behind the bond, the higher the rating. If this backing
is weakened or lost, the rating service may downgrade the bond's rating.
This is virtually certain to cause the bond to drop in price. Bonds that
are rated below BBB by S&P, and below Ba by Moody's, are considered to be
below investment grade. Moody's rates bonds in nine categories, from Aaa to
C, with Aaa being the highest with least risk. S&P rates bonds in six
categories, from AAA to D, with AAA being the highest.

o Low Rating. High-yield/high-risk fixed-income securities (commonly known as
"junk bonds") have

Prospectus 49
<PAGE>

EXPLANATION OF STRATEGIES AND RISKS (CONTINUED)

greater credit risk, are more sensitive to interest rate movements, are
considered more speculative than higher rated bonds, have a greater
vulnerability to economic changes and are less liquid. The market for such
securities may be less active than for higher rated securities, which can
adversely affect the price at which these securities may be sold and may
diminish a portfolio's ability to obtain accurate market quotations when
valuing the portfolio securities and calculating the portfolio's net asset
value.

o Lack of rating. Some bonds are considered speculative, or for other reasons
are not rated. Such bonds must pay a higher interest rate in order to
attract investors. They're considered riskier because of the higher
possibility of default or loss of liquidity.

o Loss of liquidity. If a bond is downgraded, or for other reasons drops in
price, the market demand for it may "dry up". In that case, the bond may be
hard to sell or "liquidate" (convert to cash).

[GRAPHIC OMITTED]

Investing in foreign securities. These are investments offered by foreign
companies, governments and government agencies. They involve risks not usually
associated with U.S. securities, including:

o Changes in currency values. Foreign securities are sold in currencies other
than U.S. dollars. If a currency's value drops, the value of the securities
held by a portfolio could drop too, even if the securities are strong. In
turn, the value of the shares of the portfolio could also drop. Dividend
and interest payments may be lower. Factors affecting exchange rates are:
differing interest rates among countries; balances of trade; amount of a
country's overseas investments; and any currency manipulation by banks.

o Currency speculation. The foreign currency market is largely unregulated
and subject to speculation.

o ADRs/ADSs. Some portfolios also invest in American Depositary
Receipts (ADRs) and American Depositary Shares (ADSs). They
represent securities of foreign companies traded on U.S. exchanges,
and their values are expressed in U.S. dollars. Changes in the
value of the underlying foreign currency will change the value of
the ADR or ADS. A portfolio incurs costs when it converts other
currencies into dollars, and vice-versa.

o Euro Conversion. On January 1, 1999, certain participating countries in the
European Economic Monetary Union adopted the "Euro" as their official
currency. Other EU member countries may convert to the Euro at a later
date. As of January 1, 1999, governments in participating countries issued
new debt and redenominated existing debt in Euros; corporations chose to
issue stocks or bonds in Euros or national currency. The new European
Central Bank (the "ECB") will assume responsibility for a uniform monetary
policy in participating countries. Euro conversion risks that could affect
a portfolio's foreign investments include: (1) the readiness of Euro
payment, clearing, and other operational systems; (2) the legal treatment
of debt instruments and financial contracts in existing national currencies
rather than the Euro; (3) exchange-rate fluctuations between the Euro and
non-Euro currencies during the transition period of January 1, 1999 through
December 31, 2002 and beyond; (4) potential U.S. tax issues with respect to
portfolio securities; and (5) the ECB's abilities to manage monetary
policies among the participating countries; and (6) the ability of
financial institution systems to process Euro transactions.
o Different accounting and reporting practices. Foreign tax laws are
different, as are laws, practices and standards for accounting, auditing
and reporting data to investors.
o Less information available to the public. Foreign companies usually make
less information available to the public.
o Less regulation. Securities regulations in many foreign countries are more
lax than in the U.S.

o More complex negotiations. Because of differing business and legal
procedures, a portfolio may find it hard to enforce obligations or
negotiate favorable brokerage commission rates.
o Less Liquidity/more volatility. Some foreign securities are harder to
convert to cash than U.S. securities, and their prices may fluctuate more
dramatically.
o Settlement delays. "Settlement" is the process of completing a securities
transaction. In many countries, this process takes longer than it does in
the U.S.
o Higher custodial charges. Fees charged by the Fund's custodian for holding
shares are higher for foreign securities than that of domestic securities.

Prospectus 50
<PAGE>

EXPLANATION OF STRATEGIES AND RISKS (CONTINUED)

o Higher transaction costs. Fees charged by securities brokers are often
higher for transactions involving foreign securities than domestic
securities. Higher expenses, such as brokerage fees, may reduce the return
a portfolio might otherwise achieve.

o Vulnerability to seizure and taxes. Some governments can seize assets. They
may also limit movement of assets from the country. A portfolio's interest,
dividends and capital gains may be subject to foreign withholding taxes.

o Political instability and small emerging markets. Developing countries can
be politically unstable. Economies can be dominated by a few industries,
and markets may trade a small number of securities. Regulations of banks
and capital markets can be weak.

o Different market trading days. Foreign markets may not be open for trading
when U.S. markets are and asset values can change before your transaction
occurs.

o Hedging. A portfolio may, but will not necessarily, enter into
forward currency contracts to hedge against declines in the value of
securities denominated in, or whose value is tied to, a currency
other than the U.S. dollar or to reduce the impact of currency
fluctuation on purchases, and sales of such securities.

[GRAPHIC OMITTED]

Investing in futures, options and derivatives. Besides conventional securities,
your portfolio may seek to increase returns by investing in financial contracts
related to its primary investments. Such contracts involve additional risks and
costs. Risks include:

o Inaccurate market predictions. If the sub-adviser is wrong in its
expectation, for example, with respect to interest rates, securities prices
or currency markets, the contracts could produce losses instead of gains.

o Prices may not match. Movements in the price of the financial contracts may
be used to offset movements in the price of other securities you own. If
those prices don't correlate or match closely, the benefits of the
transaction might be diminished.

o Illiquid markets. If there's no market for the contracts, the portfolio may
not be able to control losses.

o Tax consequences. Sometimes the possibility of incurring high taxes on a
transaction may delay closing out a position and limit the gains it would
have produced.

[GRAPHIC OMITTED]

Investing in special situations. Each portfolio may invest in "special
situations" from time to time. Special situations arise when, in the opinion of
a portfolio manager, a company's securities may be undervalued, then increase
considerably in price, due to:

o a new product or process
o a management change
o a technological breakthrough
o an extraordinary corporate event
o a temporary imbalance in the supply of, and demand for, the securities of an
issuer

Investing in a special situation carries an additional risk of loss if the
expected development does not happen or does not attract the expected attention.
The impact of special situation investing to a portfolio will depend on the size
of a portfolio's investment in a situation.

[GRAPHIC OMITTED]

CASH POSITION
A portfolio may, at times, choose to hold some portion of its net assets in
cash, or to invest that cash in a variety of short-term debt securities that are
considered cash equivalents. This may be done as a temporary defensive measure
at times when desirable risk/reward characteristics are not available in stocks
or to earn income from otherwise uninvested cash. When a portfolio increases its
cash or debt investment position, its income may increase while its ability to
participate in stock market advances or declines decrease.

[GRAPHIC OMITTED]

PORTFOLIO TURNOVER
A portfolio turnover rate is, in general, the percentage calculated by taking
the lesser of purchases or sales of portfolio securities (excluding short-term
securities) for a year and dividing it by the monthly average of the market
value of such securities during the year.

Prospectus 51
<PAGE>

EXPLANATION OF STRATEGIES AND RISKS (CONTINUED)

Changes in security holdings are made by a portfolio's sub-adviser when it is
deemed necessary. Such changes may result from: liquidity needs; securities
having reached a price or yield objective; anticipated changes in interest rates
or the credit standing of an issuer; or unforeseen developments.

The rate of portfolio turnover will not be a limiting factor when short-term
investing is considered appropriate. Increased turnover rates result in higher
brokerage costs and other transaction based expenses for a portfolio. These
charges are ultimately borne by the policyholders.

[GRAPHIC OMITTED]

SHORT SALES

A portfolio may sell securities "short against the box." A short sale is the
sale of a security that the portfolio does not own. A short sale is "against the
box" if at all times when the short position is open, the portfolio owns an
equal amount of the securities convertible into, or exchangeable without further
consideration for, securities of the same issue as the securities sold short.

[GRAPHIC OMITTED]

VALUE LINE RANKING SYSTEMS (WRL VALUE LINE AGGRESSIVE GROWTH)

In selecting securities for purchase or sale for the portfolio, Value Line
relies on the Value Line Timeliness(TM) Ranking System and the Value Line
Performance(TM) Ranking System. The Value Line Timeliness Ranking System has
evolved after many years of research and has been used in substantially its
present form since 1965. It is based upon historical prices and reported
earnings, recent earnings and price momentum and the degree to which the last
reported earnings deviated from estimated earnings, among other factors. The
Timeliness Rankings are published weekly in the Standard Edition of The Value
Line Investment Survey for approximately 1,700 of the most actively traded
stocks in U.S. markets, including stocks with large, mid and small market
capitalizations. There are only a few stocks of foreign issuers that are
included and stocks that have traded for less than two years are not ranked. On
a scale of 1 (highest) to 5 (lowest), the rankings compare an estimate of the
probable market performance of each stock during the coming six to twelve months
relative to all 1,700 stocks under review. The Rankings are updated weekly to
reflect the most recent information.

The Value Line Performance Ranking System for common stocks was introduced in
1995. It is a variation of the Value Line Small-Capitalization Ranking System,
which has been employed by Value Line in managing private accounts assets since
1981, and in managing the Value Line Emerging Opportunities since 1993. The
Performance Ranking System evaluates the approximately 1,800 stocks in the
Expanded Edition of The Value Line Investment Survey which consists of stocks
with mostly smaller market capitalizations and only a few stocks of foreign
issuers. This stock ranking system relies on factors similar to those found in
the Value Line Timeliness Ranking System except that it does not utilize
earnings estimates. The Performance Ranking uses a scale of 1 (highest) to 5
(lowest) to compare the sub-adviser's estimate of the probable market
performance of each Expanded Edition stock during the coming six to twelve
months relative to all 1,800 stocks under review in the Expanded Edition.

Neither the Value Line Timeliness Ranking System nor the Value Line Performance
Ranking System eliminates market risk but the sub-adviser believes that they
provide objective standards for determining expected relative performance over
the next six to twelve months. The portfolio will usually invest in common
stocks ranked 1 or 2 but it may also invest in common stocks ranked as low as 3.
The utilization of these Rankings is no assurance that the portfolio will
perform more favorably than the market in general over any particular period.

[GRAPHIC OMITTED]

INTRINSIC VALUE
(GREAT COMPANIES PORTFOLIOS)

Prospectus 52
<PAGE>

EXPLANATION OF STRATEGIES AND RISKS (CONTINUED)

the rate at which a company is increasing or decreasing its Intrinsic Value.
Great Companies looks at the trading price of the stock and compares it to its
Intrinsic Value calculation. If a stock appears to be significantly overvalued
and its IVM is flat or declining in the market when compared to the Intrinsic
Value calculation, Great Companies does not invest in the stock or, if the fund
has already invested in the company, may reduce its position in the stock. When
the stock share price drops well below the Intrinsic Value calculation and its
IVM is rising, Great Companies will normally invest in the company, or, if the
fund has already invested in the company, attempt to buy more shares.

[GRAPHIC OMITTED]

Investment Strategies

A portfolio is permitted to use other securities and investment strategies in
pursuit of its investment objective, subject to limits established by the Fund's
Board of Directors. No portfolio is under any obligation to use any of the
techniques or strategies at any given time or under any particular economic
condition. Certain instruments and investment strategies may expose the
portfolios to other risks and considerations, which are discussed in the Fund's
SAI.

Prospectus 53
<PAGE>

HOW THE FUND IS MANAGED AND ORGANIZED

[GRAPHIC OMITTED]

HOW THE FUND IS MANAGED
AND ORGANIZED

The Fund's Board is responsible for managing the business affairs of the Fund.
It oversees the operation of the Fund by its officers. It also reviews the
management of the portfolios' assets by the investment adviser and sub-advisers.
Information about the Directors and executive officers of the Fund is contained
in the SAI.

WRL Investment Management, Inc. (WRL Management) located at 570 Carillon
Parkway, St. Petersburg, Florida 33716, has served as the Fund's investment
adviser since 1997. (Prior to this date, Western Reserve served as investment
adviser to the Fund). The investment adviser is a direct, wholly-owned
subsidiary of Western Reserve Life Assurance Co. of Ohio (Western Reserve),
which is wholly-owned by First AUSA Life Insurance Company, a stock life
insurance company, which is wholly-owned by AEGON USA, Inc. AEGON USA, Inc. is a
financial services holding company whose primary emphasis is on life and health
insurance and annuity and investment products. AEGON USA, Inc. is a wholly-owned
indirect subsidiary of AEGON N.V., a Netherlands corporation which is a publicly
traded international insurance group. The investment adviser had no prior
experience as an adviser.

Subject to the supervision of the Fund's Board, the investment adviser is
responsible for furnishing continuous advice and recommendations to the Fund as
to the acquisition, holding or disposition of any or all of the securities or
other assets which the portfolios may own or contemplate acquiring from time to
time; to cause its officers to attend meetings and furnish oral or written
reports, as the Fund may reasonably require, in order to keep the Fund's Board
and appropriate officers of the Fund fully informed as to the conditions of the
investment portfolio of each portfolio, the investment recommendations of the
investment adviser, and the investment considerations which have given rise to
those recommendations; to supervise the purchase and sale of securities of the
portfolios as directed by the appropriate officers of the Fund; and to maintain
all books and records required to be maintained by the investment adviser.

The Fund has received an order from the Securities and Exchange Commission that
will permit the Fund and the investment adviser, subject to certain conditions,
and without the approval of shareholders to: (1) employ a new unaffiliated
sub-adviser for a portfolio pursuant to the terms of a new investment
sub-advisory agreement, either as a replacement for an existing sub-adviser or
as an additional sub-adviser; (2) materially change the terms of any
sub-advisory agreement; and (3) continue the employment of an existing
sub-adviser on the same sub-advisory contract terms where a contract has been
assigned because of a change in control of the sub-adviser. In such
circumstances, shareholders would receive notice and information about the new
sub-adviser within ninety (90) days after the hiring of any new sub-adviser.

As compensation for its services to the portfolios, the investment adviser
receives monthly compensation at an annual rate of a percentage of the average
daily net assets of each portfolio. The advisory fees for each portfolio are:

Prospectus 54
<PAGE>

HOW THE FUND IS MANAGED AND ORGANIZED

<TABLE>
<CAPTION>
Advisory
Portfolio Fee
<S> <C>
WRL Janus Growth* 0.80%
WRL AEGON Bond 0.45%
WRL Janus Global** 0.80%
WRL J.P. Morgan Money Market 0.40%
WRL AEGON Balanced 0.80%
WRL GE International Equity 1.00%
WRL Third Avenue Value 0.80%
WRL VKAM Emerging Growth 0.80%
WRL LKCM Strategic
Total Return 0.80%
WRL Alger Aggressive Growth 0.80%
WRL Federated Growth
& Income 0.75%
WRL Dean Asset Allocation 0.80%
WRL C.A.S.E. Growth 0.80%
WRL NWQ Value Equity 0.80%
WRL GE U.S. Equity 0.80%
WRL J.P. Morgan Real
Estate Securities 0.80%
WRL Value Line Aggressive Growth 0.80%
WRL Great Companies -- AmericaSM 0.80%
WRL Great Companies -- TechnologySM 0.80%
</TABLE>

<TABLE>
<CAPTION>
Advisory
Portfolio Fee
<S> <C>
WRL Salomon All Cap 0.90% up to $100 million
0.80% over $100 million
WRL T. Rowe Price 0.90% up to $100 million
Dividend Growth 0.80% over $100 million
WRL T. Rowe Price 0.75%
Small Cap
WRL Dreyfus Mid Cap 0.85% up to $100 million
0.80% over $100 million
WRL Pilgrim Baxter 0.90% up to $100 million
Mid Cap Growth 0.80% over $100 million
WRL Goldman Sachs Small Cap 0.90%
WRL Goldman Sachs Growth 0.90% up to $100 million
0.80% over $100 million
WRL Gabelli Global Growth 1.00% of the first $500
million of the portfolio's
average daily net assets;
0.90% of assets over $500
million up to $1 billion;
and 0.80% of assets in
excess of $1 billion
WRL Great Companies -- Global2 0.80%
WRL LKCM Capital Growth 0.80%
</TABLE>

EXPENSE REIMBURSEMENT
WRL Management has entered into an expense limitation agreement with the Fund on
behalf of each applicable portfolio, pursuant to which WRL Management has agreed
to reimburse a portfolio for certain operating expenses so that the total annual
operating expenses of each applicable portfolio do not exceed the total
operating expenses specified for that portfolio (expense cap) in the portfolio's
then-current SAI. The Fund, on behalf of an applicable portfolio, will at a
later date reimburse WRL Management for operation expenses previously paid on
behalf of such portfolio during the previous 36 months, but only if, after such
reimbursement, the portfolio's expense ratio does not exceed the expense cap.
The agreement has an initial term through April 30, 2001, and will automatically
renew for one-year terms unless WRL Management provides written notice to the
Fund at least 30 days prior to the end of the then-current term. In addition,
the agreement will terminate upon termination of the Investment Advisory
Agreement, or may be terminated by the Fund, without payment of any penalty,
upon ninety (90) days' prior written notice to WRL Management.

Prospectus 55
<PAGE>

HOW THE FUND IS MANAGED AND ORGANIZED

SUB-ADVISERS

Here is a listing of the sub-advisers and the portfolios they manage:

<TABLE>
<CAPTION>
Sub-Adviser Portfolio
<S> <C>
Alger WRL Alger Aggressive Growth
GEAM WRL GE International Equity
WRL GE U.S. Equity
Janus WRL Janus Global
WRL Janus Growth
C.A.S.E. WRL C.A.S.E. Growth
NWQ WRL NWQ Value Equity
Dean WRL Dean Asset Allocation
AIMI WRL AEGON Bond
WRL AEGON Balanced
T. Rowe Price WRL T. Rowe Price
Dividend Growth
WRL T. Rowe Price Small Cap
SBAM WRL Salomon All Cap
GSAM WRL Goldman Sachs Growth
WRL Goldman Sachs Small
Cap
Pilgrim Baxter WRL Pilgrim Baxter
Mid Cap Growth
VKAM WRL VKAM Emerging
Growth
EQSF WRL Third Avenue Value
LKCM WRL LKCM Strategic
Total Return
LKCM Capital Growth
J.P. Morgan WRL J.P. Morgan Real
Estate Securities
WRL J.P. Morgan
Money Market
Federated WRL Federated Growth
& Income
Dreyfus WRL Dreyfus Mid Cap
Value Line WRL Value Line Aggressive
Growth
Great Companies, Inc. WRL Great Companies --
AmericaSM
WRL Great Companies --
TechnologySM
WRL Great Companies--
Global2
Gabelli Asset Management WRL Gabelli Global Growth
Company
</TABLE>

Prospectus 56
<PAGE>

HOW THE FUND IS MANAGED AND ORGANIZED (CONTINUED)

Day-to-day management of the investments in each portfolio is the responsibility
of the portfolio manager. The portfolio managers of the Fund are:

WRL VKAM EMERGING GROWTH

Gary M. Lewis leads an investment team and is primarily responsible for the day
to day management of this portfolio. Mr. Lewis has been senior vice president of
VKAM since October, 1995. Previously, he has served as vice president/portfolio
manager of VKAM from 1989 to October 1995.

WRL T. ROWE PRICE SMALL CAP

Richard T. Whitney, CFA has managed this portfolio since inception and heads the
Investment Team for this portfolio. He joined T. Rowe Price in 1985.

WRL GOLDMAN SACHS SMALL CAP

Robert C. Jones, Managing Director, has served as the head of an investment
team that has managed the portfolio since its inception. Mr. Jones joined GSAM
as a portfolio manager in 1989.

WRL PILGRIM BAXTER
MID CAP GROWTH

Jeffrey A. Wrona, CFA has managed this portfolio since inception. Prior to
joining Pilgrim Baxter, he was a senior portfolio manager at Munder Capital
Management.

WRL ALGER AGGRESSIVE GROWTH

David D. Alger has been employed by Alger since 1971 and has served as president
since 1995. He has managed this portfolio since inception.

Seilai Khoo has served as co-manager of this portfolio since June 2000. She has
been employed by Alger as a senior research analyst since 1989 and as a senior
vice president since 1995. Ms. Khoo also serves as a portfolio manager of other
Alger funds.

WRL THIRD AVENUE VALUE

Martin J. Whitman has served as portfolio manager of this portfolio since its
inception. He is Chairman, President and Chief Executive Officer of the
sub-adviser.

WRL GE INTERNATIONAL EQUITY

Ralph R. Layman has served as the head of a team of portfolio managers that has
managed a portion of the portfolio's assets since its inception. Prior to May 1,
2000, GEAM was sub-adviser for one half of the portfolio's assets. Mr. Layman
joined GEAM in 1991 as an executive vice president for international
investments.

WRL GABELLI GLOBAL GROWTH

The portfolio is managed by an investment team that is headed by Marc J.
Gabelli, Portfolio Manager. Mr. Gabelli, as Team Manager, is primarily
responsible for all the investment decisions for the portfolio. Mr. Gabelli has
been a portfolio manager and an analyst with Gabelli Funds, LLC since 1993.

WRL JANUS GLOBAL

Helen Young Hayes, CFA and Laurence Chang, CFA have served as co-portfolio
managers of this portfolio since January 2000. Ms. Hayes previously served as
manager of this portfolio since its inception. She has been employed by Janus
since 1987.

Mr. Chang has been employed by Janus since 1993. Before joining Janus, Mr.
Chang was a project director at the National Security Archive.

WRL SALOMON ALL CAP

Ross S. Margolies has managed this portfolio since inception. Mr. Margolies
joined Salomon in 1992.

Robert M. Donahue, Jr. assists in the day-to-day management of the portfolio.
Prior to joining SBAM in 1997, Mr. Donahue worked as an equity analyst at
Gabelli & Company.

WRL JANUS GROWTH

Edward Keely has served as manager of this portfolio since January 2000. He
previously served as co-portfolio manager of this portfolio since January 1999.
Prior to joining Janus in 1998, Mr. Keely was a senior vice president of
investments at Founders.

Prospectus 57
<PAGE>

HOW THE FUND IS MANAGED AND ORGANIZED (CONTINUED)

WRL GOLDMAN SACHS GROWTH

Herbert E. Ehlers has served as head of a thirteen person investment team that
has managed the portfolio since inception. Prior to joining GSAM in 1997, he was
chief investment officer at Liberty Investment Management, Inc. from 1994-1997.

WRL C.A.S.E GROWTH

This portfolio is managed by a team of professionals, called the Portfolio
Management Committee. William E. Lange is the head manager of this Committee.
He has been president of C.A.S.E. since 1984.

WRL GE U.S. EQUITY

Eugene K. Bolton leads a team of portfolio managers for this portfolio. He has
served in that capacity since the portfolio's inception. Mr. Bolton joined GEAM
in 1984 as Chief Financial Officer and has been a portfolio manager since 1986.

WRL DREYFUS MID CAP

John O'Toole has served as portfolio manager since inception and has been
employed by Dreyfus as portfolio manager since 1994. Mr. O'Toole is a senior
vice president and portfolio manager for Mellon Equity Associates. He has been
employed by Mellon Bank since 1979.

WRL NWQ VALUE EQUITY

Edward C. Friedel has been the senior manager of this portfolio since inception.
He has been a managing director and investment strategist with NWQ since 1983.

WRL T. ROWE PRICE
DIVIDEND GROWTH

Thomas Huber, CFA, has served as manager of this portfolio since March 2000.
Mr. Huber is a Vice President of T. Rowe Price Associates. Within the Equity
Division, he covers consumer products, leisure and gaming, apparel, drugstores
and supermarkets. Before joining the firm in 1994, he worked for NationsBank as
a Corporate Banking Officer.

WRL DEAN ASSET ALLOCATION

John C. Riazzi, CFA serves as portfolio manager of this portfolio.

Previously, Mr. Riazzi served as co-portfolio manager of the portfolio. He
joined Dean in 1989 and has served as a manager of the portfolio since its
inception.

WRL LKCM STRATEGIC
TOTAL RETURN

Luther King, Jr., CFA and Scot C. Hollmann, CFA have co-managed this portfolio
since inception.

Mr. King has been the president of Luther King since 1979.

Mr. Hollmann has been a vice president of Luther King since 1983.

WRL LKCM CAPITAL GROWTH

J. Luther King, Jr., CFA, and Brent W. Clum, CFA serve as co-portfolio
managers.

Mr. King founded Luther King Capital Management in 1979 and is President and
Chief Executive Officer.

Mr. Clum joined LKCM as Portfolio manager in 1999. Prior to that, he was a
Managing Director and Portfolio Manager at Invesco-NY. Mr. Clum began his
career as an analyst at T. Rowe Price.

WRL J.P. MORGAN REAL
ESTATE SECURITIES

Daniel P. O'Connor serves as portfolio manager of this portfolio.

Mr. O'Connor has served as the sole manager of this portfolio since its
inception. Prior to joining J.P. Morgan in 1996, Mr. O'Connor served two years
as Director of Real Estate Securities at INVESCO.

WRL FEDERATED GROWTH & INCOME

Steven J. Lehman, CFA and Linda A. Duessel, CFA serve as co-portfolio managers
of this portfolio.

Prospectus 58
<PAGE>

HOW THE FUND IS MANAGED AND ORGANIZED (CONTINUED)

Mr. Lehman has served as co-portfolio manager since 1997. He joined Federated
in 1997. From 1985 to 1997, he served as portfolio manager, vice president and
senior portfolio manager at First Chicago NBD.

Ms. Duessel, senior vice president, has been employed by Federated since 1991
and has been a portfolio manager of this portfolio since 1996.

WRL AEGON BALANCED

Michael Van Meter has served as the senior portfolio manager of this portfolio
since inception. Mr. Van Meter has been employed by VMF Capital, LLC (VMF) since
July, 1998. Prior to joining VMF, Mr. Van Meter was employed by AIMI.

WRL AEGON BOND

Clifford A. Sheets, CFA and David R. Halfpap, CFA have served as co-portfolio
managers of this portfolio since January 2000. Mr. Sheets previously served as
a co-portfolio manager of this portfolio since 1998, and prior to that date, as
manager since the portfolio's inception. Mr. Sheets joined AIMI in 1990.

Mr. Halfpap has been employed by AIMI since 1975 and is currently a senior vice
president.

WRL J.P. MORGAN MONEY MARKET

John T. Donohue and Mark Settles have served as co-portfolio managers of this
portfolio since January 2000. Mr. Donohue has been employed by J.P. Morgan
since 1997 and is a portfolio manager in the Fixed Income Group. He previously
served as senior money market trader. Mr. Donohue was a portfolio manager at
Goldman Sachs for 10 years prior to his employment at J.P. Morgan.

Mr. Settles is a product portfolio manager in the Short Term Fixed Income Group
at J.P. Morgan. Previously, he spent five years trading dollar and
euro-denominated fixed income products on J.P. Morgan's New York and London
trading desks.

WRL VALUE LINE AGGRESSIVE GROWTH

A committee of employees of Value Line, Inc. is jointly and primarily
responsible for the day-to-day management of the portfolio.

WRL GREAT COMPANIES - AMERICASM
WRL GREAT COMPANIES - TECHNOLOGYSM
WRL GREAT COMPANIES -- GLOBAL2

James H. Huguet and Gerald W. Bollman, CFA serve as co-portfolio managers of
these portfolios. Mr. Huguet serves as director, president and Co-CEO of Great
Companies, L.L.C. Mr. Huguet also serves as director and president of Great
Companies, Inc. From 1994-1998, Mr. Huguet was executive vice president of
Information Resources, Inc., Chicago, Il, a market research firm.

Mr. Bollman is executive vice president of Great Companies, L.L.C. and Great
Companies, Inc. From 1995-1999, Mr. Bollman was chairman and manager of
Intrinsic Value Associates, an investment advisory service for institutional
managers. He previously served as executive vice president and portfolio
manager for Continental Asset Management Corporation.

Prospectus 59
<PAGE>

PERFORMANCE INFORMATION

The Fund may include quotations of a portfolio's total return or yield in
connection with the total return for the appropriate separate account, in
advertisements, sales literature or reports to policyowners or to prospective
investors. Total return and yield quotations for a portfolio reflect only the
performance of a hypothetical investment in the portfolio during the particular
time period shown as calculated based on the historical performance of the
portfolio during that period. Such quotations do not in any way indicate or
project future performance. Quotations of total return and yield will not
reflect charges or deductions against the separate accounts or charges and
deductions against the policies or the annuity contracts. Where relevant, the
prospectuses for the policies and the annuity contracts contain performance
information which show total return and yield information for the separate
accounts, policies or annuity contracts.

YIELD

Yield quotations for the WRL AEGON Bond portfolio refer to the income generated
by a hypothetical investment in the portfolio over a specified thirty-day period
expressed as a percentage rate of return for that period. The yield is
calculated by dividing the net investment income per share for the period by the
price per share on the last day of that period.

TOTAL RETURN

Total return refers to the average annual percentage change in value of an
investment in a portfolio held for a stated period of time as of a stated ending
date. When a portfolio has been in operation for the stated period, the total
return for such period will be provided if performance information is quoted.
Total return quotations are expressed as average annual compound rates of return
for each of the periods quoted. They also reflect the deduction of a
proportionate share of a portfolio's investment advisory fees and direct
portfolio expenses, and assume that all dividends and capital gains
distributions during the period are reinvested in the portfolio when made.

SIMILAR SUB-ADVISER PERFORMANCE

A portfolio may disclose in advertisements, supplemental sales literature, and
reports to policyowners or to prospective investors total returns of an existing
SEC-registered fund that is managed by the portfolio's sub-adviser and that has
investment objectives, policies, and strategies substantially similar to those
of such portfolio (a "Similar Sub-Adviser Fund"). Although the Similar
Sub-Adviser Funds have substantially similar investment objectives, policies,
and strategies as the designated portfolio, and are managed by the same
sub-adviser as the designated portfolio, you should not assume that any
portfolio will have the same future performance as Similar Sub-Adviser Funds
whose total returns are shown. Each portfolio's future performance may be
greater or less than the historical performance of the corresponding Similar
Sub-Adviser Fund. There can be no assurance, and no representation is made, that
the investment results of any portfolio will be comparable to the results of any
of the Similar Sub-Adviser Funds or any other fund managed by WRL Management or
any sub-adviser.

The table below sets forth certain portfolios of the Fund and, for each
portfolio's respective Similar Sub-Adviser Fund, the fund's inception date,
asset size, and the average annual total returns for the one, five and ten year
periods (or life of the Similar Sub-Adviser Fund, if shorter) ended December 31,
1999. These figures are based on the actual investment performance of the
Similar Sub-Adviser Funds. Each Similar Sub-Adviser Fund has higher total
expenses than its corresponding portfolio of the Fund. The average annual total
returns for the Similar Sub-Adviser Funds are shown with and without the
deductions of any applicable sales load. You should note that the performance of
the Similar Sub-Adviser Funds does not reflect the historical performance of any
portfolios.

Prospectus 60
<PAGE>

PERFORMANCE INFORMATION (CONTINUED)

SIMILAR SUB-ADVISER FUND PERFORMANCE

<TABLE>
<CAPTION>
Average Annual Total Return
(with Sales Loads)
--------------------------------
Similar 10 Years
Sub-Adviser Inception Total or Since
WRL Portfolio Fund Date Assets 1 Year 5 Years Inception
--------------------------- ----------------------------------- ----------- -------------------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
WRL Janus Global Janus Worldwide(1) 5/15/91 $ 33,802.9M 64.37% 30.88% 25.10%
WRL Alger Aggressive The Alger Fund Class A $ 226.6M 65.74% N/A 40.59%
Growth Capital Appreciation Portfolio 12/31/96 (Net)
Class A Shares(2)
WRL VKAM Emerging Van Kampen Class A $113,175,800,000 92.01% 39.86% 27.16%
Growth Emerging Growth(3) 10/2/70
WRL Third Avenue Value Third Avenue 11/1/90 $ 1,372,960,198 12.82% 18.45% 19.26%
Value Fund(1)
WRL Dreyfus Mid Cap Dreyfus Premier Midcap Class A $ 28,320,316 4.30% 21.74% 17.43%
Stock Fund(7) 4/6/94
WRL Goldman Sachs Goldman Sachs Capital Class A $ 3,285,584,250 20.24% 27.15% 19.81%
Growth Growth Fund(4) 4/20/90
WRL Goldman Sachs Small Goldman Sachs CORE Class A $ 61,240,964 20.20% N/A 4.85%
Cap Small Cap Equity Fund(5) 8/15/97
WRL T. Rowe Price T. Rowe Price Dividend 12/30/92 $ 1,027,968,177 (2.09)% 20.32% 17.75%
Dividend Growth Growth Fund(1)
WRL T. Rowe Price Small T. Rowe Price Diversified 6/30/97 $ 74,803,935 29.27% N/A 16.36%
Cap Small-Cap Growth Fund(1)(8)
WRL Pilgrim Baxter PBHG Growth II Portfolio(1) 4/30/97 $ 178.6M 98.19% N/A 36.70%
Mid Cap Growth
WRL Salomon All Cap Salomon Brothers Class O $ 215,308,000 23.44% 28.36% 16.11%
Capital Fund(6) 8/23/76
WRL Value Line Aggressive Value Line Leveraged Growth(1) 2/14/72 $ 763,203,000 30.99% 30.57% 19.55%
Growth
WRL Gabelli Global Gabelli Global Growth (Class AAA) 2/07/94 $ 446M 116.06% 39.25% 32.94%
Growth (9)
</TABLE>

(1) The Janus Worldwide Fund, T. Rowe Price Dividend Growth, Third Avenue
Value, PBHG Growth II, T. Rowe Price Diversified Small Cap Growth and
Value Line Leveraged Growth Funds do not have sales loads.
(2) Total returns are for Class A shares of The Alger Fund Capital Appreciation
Portfolio and reflect a deduction of a 4.75% front-end sales load. The
Portfolio also offers Class B and Class C shares with different sales loads.
Calculating total return with those sales loads may have resulted in lower
total returns. The inception dates for Class A, B and C shares are 12/31/96,
10/29/93 and 8/1/97, respectively.
(3) Total returns are for Class A shares of the Van Kampen Emerging Growth Fund
and reflect a deduction of a 5.75% front end sales load and an annual 12b-1
fee of up to 0.25%. The fund also has Class B and Class C shares with
different sales loads and annual 12b-1 fees. Calculating total return with
those sales loads may have resulted in lower total returns. The Fund's
performance during the one-year period ended December 31, 1999 is largely
attributable to investments in the technology sector, which performed
favorably for the period. This performance was achieved during a rising
market, and there is no guarantee that this performance record or the
circumstances leading to it can be replicated in the future. As the Fund
expects to have a substantial portion of its assets invested in equity
securities of emerging growth companies, the Fund will be subject to more
volatility and erratic movements than the market in general.
(4) Total returns are for Class A shares of the Goldman Sachs Capital Growth
Fund and reflects a deduction of a 5.5% front-end sales load. The Fund also
offers Class B and Class C shares with different sales loads. Calculating
total return with those sales loads may have resulted in lower total
returns.
(5) Total returns are for Class A shares of the Goldman Sachs CORE Small Cap
Equity Fund and reflects a deduction of a 5.5% front-end sales load. The
fund also offers Class B and Class C shares with different sales loads.
Calculating total returns with those sales loads may have resulted in lower
total returns.
(6) Total returns are for Class O shares of the Salomon Brothers Capital Fund.
Class O shares are sold without any sales charge to the fund. The fund also
offers Class A, Class B and Class 2 shares. Since May 1, 1990, the Fund has
been managed by Salomon Brothers Asset Management Inc. Prior hereto, it was
managed by Lehman Management Co.
(7) Total returns are for Class A of the Dreyfus Premier Mid Cap Stock Fund and
reflect the deduction of a 5.75% front-end sales load. The Fund also offers
Class B, Class C and Class T shares with different sales loads. Calculating
total returns with those sales loads may have resulted in lower total
returns.
(8) Total returns for the T. Rowe Price Diversified Small-Cap Growth Fund
reflect past and present expense limitations, which increased the fund's
total return.
(9) Gabelli Global Growth does not have a sales load.

Prospectus 61
<PAGE>

PERFORMANCE INFORMATION (CONTINUED)

SIMILAR SUB-ADVISER FUND PERFORMANCE

<TABLE>
<CAPTION>
Similar
Sub-Adviser Inception
WRL Portfolio Fund Date
----------------------------- ----------------------------------- -----------
<S> <C> <C>
WRL Janus Global Janus Worldwide(3) 5/15/91
WRL Alger Aggressive Growth The Alger Fund(1) Class A
Capital Appreciation Portfolio 12/31/96
WRL VKAM Emerging Growth Van Kampen Class A
Emerging Growth(1)(2) 10/2/70
WRL Third Avenue Value Third Avenue 11/1/90
Value Fund(3)
WRL Dreyfus Mid Cap Dreyfus Premier Midcap Class R
Stock Fund(6) 11/12/93
WRL Goldman Sachs Growth Goldman Sachs Capital Class A
Growth Fund(1) 4/20/90
WRL Goldman Sachs Small Cap Goldman Sachs CORE Class A
Small Cap Equity Fund(1) 8/15/97
WRL T. Rowe Price Dividend T. Rowe Price Dividend 12/30/92
Growth Growth Fund(3)
WRL T. Rowe Price Small Cap T. Rowe Price Diversified 6/30/97
Small-Cap Growth Fund(3)(5)
WRL Pilgrim Baxter Mid Cap PBHG Growth II Portfolio(3) 4/30/97
Growth
WRL Salomon All Cap Salomon Brothers Class O
Capital Fund(4) 8/23/76
WRL Value Line Aggressive Value Line Leveraged Growth(3) 2/14/72
Growth
WRL Gabelli Global Gabelli Global Growth (Class AAA) 2/07/94
Growth (7)

<CAPTION>
Average Annual Total Return
(without Sales Loads)
--------------------------------
10 Years
Total or Since
WRL Portfolio Assets 1 Year 5 Years Inception
----------------------------- -------------------- ----------- --------- ----------
<S> <C> <C> <C> <C>
WRL Janus Global $ 33,802.9M 64.37% 30.88% 25.10%
WRL Alger Aggressive Growth $ 266.6M 74.01% N/A 42.89%
(Net)
WRL VKAM Emerging Growth $113,175,800,000 103.72% 41.53% 27.92%
WRL Third Avenue Value $ 1,372,960,198 12.82% 18.45% 19.26%
WRL Dreyfus Mid Cap $ 28,320,316 10.84% 23.50% 17.63%
WRL Goldman Sachs Growth $ 3,285,584,250 27.23% 28.58% 20.51%
WRL Goldman Sachs Small Cap $ 61,240,964 16.63% N/A 7.36%
WRL T. Rowe Price Dividend $ 1,027,968,177 (2.09)% 20.32% 17.75%
Growth
WRL T. Rowe Price Small Cap $ 74,803,935 29.27% N/A 16.36%
WRL Pilgrim Baxter Mid Cap $ 178.6M 98.19% N/A 36.70%
Growth
WRL Salomon All Cap $ 215,308,000 23.44% 28.36% 16.11%
WRL Value Line Aggressive $ 763,203,000 30.99% 30.57% 19.55%
Growth
WRL Gabelli Global $ 446M 116.06% 39.25% 32.94%
Growth (7)
</TABLE>

(1) The fund offers Class B and Class C shares as well. Returns for those
classes may differ from those of
Class A shares due to differing fee structures.
(2) The Fund's performance during the one-year period ended December 31, 1999 is
largely attributable to investments in the technology sector, which
performed favorably for the period. This performance was achieved during a
rising market, and there is no guarantee that this performance record or the
circumstances leading to it can be replicated in the future. As the Fund
expects to have a substantial portion of its assets invested in equity
securities of emerging growth companies, the Fund will be subject to more
volatility and erratic movements than the market in general.
(3) The T. Rowe Price Dividend Growth, Janus Worldwide, Third Avenue Value,
PBHG Growth II, T. Rowe Price Diversified Small-Cap Growth and Value Line
Leveraged Growth Funds do not have sales loads.
(4) The Salomon Brothers Capital Fund Class O shares does not have a sales load.
Since May 1, 1990, the Fund has been managed by Salomon Brothers Asset
Management Inc. Prior hereto, it was managed by Lehman Management Co.
(5) Total returns for the T. Rowe Price Diversified Small-Cap Growth Fund
reflect past and present expense limitations, which increased the fund's
total return.
(6) The fund offers Class B, Class C and Class T shares as well. Returns for
those classes may differ from those of Class A shares due to differing fee
structures.
(7) Gabelli Global Growth does not have a sales load.

The performance of Similar Sub-Adviser Funds does not reflect any of the
charges, fees, and expenses imposed under the policies or annuity contracts.
Such performance would in each case be lower if it reflected these charges, fees
and expenses. See the contract form or disclosure document for the policy or
annuity contract. (The Disclosure Documents for the policy or annuity contract
describe Similar Sub-Advisers Funds as "Similar Sub-Advised Funds.")

(See the SAI for more information about the portfolios' performance.)

Prospectus 62
<PAGE>

OTHER INFORMATION

[GRAPHIC OMITTED]

Purchase and Redemption

of Shares

As described earlier in the prospectus, shares of the portfolios are sold
exclusively to certain separate accounts of Western Reserve Life Assurance Co.
of Ohio, PFL Life Insurance Company, AUSA Life Insurance Company, Inc., Peoples
Benefit Life Insurance Company and Transamerica Occidental Life Insurance
Company are not offered to the public. Shares are sold and redeemed at their net
asset value without the imposition of any sales commission or redemption charge.
(However, certain sales or other charges may apply to the policies or annuity
contracts, as described in the product prospectus.)

[GRAPHIC OMITTED]

Valuation of Shares

Each portfolio's net asset value per share is ordinarily determined once daily,
as of the close of the regular session of business on the New York Stock
Exchange (NYSE) (usually 4:00 p.m., Eastern Time), on each day the exchange is
open.

Net asset value (NAV) of a portfolio share is computed by dividing the value of
the net assets of the portfolio by the total number of shares outstanding in the
portfolio. Share prices for any transaction are those next calculated after
receipt of an order.

What is Net Asset Value?
The net asset value of a portfolio share is computed by dividing the value of
the net assets of the portfolio by the total number of shares outstanding in
the portfolio.

Except for money market instruments maturing in 60 days or less, securities held
by portfolios (other than the WRL J.P. Morgan Money Market) are valued at market
value. If market values are not readily available, securities are valued at fair
value as determined by the Fund's Valuation Committee under the supervision of
the Fund's Board.

Money market instruments maturing in 60 days or less, and all securities held in
the WRL J.P. Morgan Money Market, are valued on the amortized cost basis. Under
this method, the NAV of the money market portfolio shares is expected to remain
at a constant $1.00 per share, although there can be no assurance that the
portfolio will be able to maintain a stable NAV. (See the SAI for details.)

[GRAPHIC OMITTED]

Dividends and Distributions

Each portfolio intends to distribute substantially all of its net investment
income, if any. Dividends from investment income of a portfolio normally are
declared daily and reinvested monthly in additional shares of the portfolio at
net asset value. Distributions of net realized capital gains from security
transactions normally are declared and paid in additional shares of the
portfolio at the end of the fiscal year.

[GRAPHIC OMITTED]

Taxes

Each portfolio has either qualified and expects to continue to qualify or will
qualify in its initial year as a regulated investment company under Subchapter M
of the Internal Revenue Code of 1986, as amended ("Code"). As qualified, a
portfolio is not subject to federal income tax on that part of its taxable
income that it distributes to you. Taxable income consists generally of net
investment income, and any capital gains. It is each portfolio's intention to
distribute all such income and gains.

Shares of each portfolio are offered only to the separate accounts of Western
Reserve and its affiliates. Separate accounts are insurance company separate
accounts that fund the policies and the annuity contracts. Under the Code, an
insurance company pays no tax with respect to income of a qualifying separate
account when the income is properly allocable to the value of eligible variable
annuity or variable life insurance contracts. For a discussion of the taxation
of life insurance companies and the separate accounts, as well as the tax
treatment of the policies and annuity contracts and the holders thereof, see
"Federal Income Tax Considerations" included in the respective prospectuses for
the policies and the annuity contracts.

Section 817(h) of the Code and the regulations thereunder impose
"diversification" requirements on each portfolio. Each portfolio intends to
comply with the diversification requirements. These requirements

Prospectus 63
<PAGE>

OTHER INFORMATION

are in addition to the diversification requirements imposed on each portfolio by
Subchapter M and the 1940 Act. The 817(h) requirements place certain limitations
on the assets of each separate account that may be invested in securities of a
single issuer. Specifically, the regulations provide that, except as permitted
by "safe harbor," rules described below, as of the end of each calendar quarter
or within 30 days thereafter, no more than 55% of the portfolio's total assets
may be represented by any one investment, no more than 70% by any two
investments, no more than 80% by any three investments, and no more than 90% by
any four investments.

Section 817(h) also provides, as a safe harbor, that a separate account will be
treated as being adequately diversified if the diversification requirements
under Subchapter M are satisfied and no more than 55% of the value of the
account's total assets are cash and cash items, government securities, and
securities of other regulated investment companies. For purposes of section
817(h), all securities of the same issuer, all interests in the same real
property, and all interests in the same commodity are treated as a single
investment. In addition, each U.S. government agency or instrumentality is
treated as a separate issuer, while the securities of a particular foreign
government and its agencies, instrumentalities, and political subdivisions all
will be considered securities issued by the same issuer. If a portfolio does not
satisfy the section 817(h) requirements, the separate accounts, the insurance
companies, the policies and the annuity contracts may be taxable. See the
prospectuses for the policies and annuity contracts.

The foregoing is only a summary of some of the important federal income tax
considerations generally affecting a portfolio and you; see the SAI for a more
detailed discussion. You are urged to consult your tax advisors.

[GRAPHIC OMITTED]

Report to Policyholders

The fiscal year of each portfolio ends on December 31 of each year. The Fund
will send to you, at least semi-annually, reports which show the portfolios'
composition and other information. An annual report, with audited financial
information, will be sent to you each year.

[GRAPHIC OMITTED]

Distribution and

Service Plans

The Fund has adopted a plan pursuant to Rule 12b-1 under the 1940 Act (the
"Plan") and pursuant to the Plan, entered into a Distribution Agreement with
AFSG Securities Corporation (AFSG) located at 4333 Edgewood Road NE, Cedar
Rapids, Iowa 52499. AFSG is an affiliate of the investment adviser, and serves
as principal underwriter for the Fund. The Plan permits the use of Fund assets
to help finance the distribution of the shares of the portfolios. Under the
Plan, the Fund, on behalf of the portfolios, is permitted to pay to various
service providers up to 0.15% of the average daily net assets of each portfolio
as payment for actual expenses incurred in connection with the distribution of
the shares of the portfolios. Because these fees are paid out of Fund assets on
an on-going basis, over time these costs will increase the cost of your
investment and may cost you more than other types of sales charges.

As of the date of this prospectus, the Fund has not paid any distribution fees
under the Plan and does not intend to do so before April 30, 2001. You will
receive written notice prior to the payment of any fees under the Plan.

Prospectus 64
<PAGE>

FINANCIAL HIGHLIGHTS*

The financial highlights table is intended to help you understand a portfolio's
financial performance for the past 5 years (or, if shorter, the period of the
portfolio's operations). Certain information reflects financial results for a
single portfolio share. The total returns in the table represent the rate an
investor would have earned (or lost) on an investment in each portfolio
(assuming reinvestment of all distributions). The information through December
31, 2000 has been derived from financial statements audited by
PricewaterhouseCoopers LLP, independent certified public accountants, whose
report, along with the Fund's financial statements, is included in the Fund's
Annual Report, which is available upon request by calling the Fund at
1-800-851-9777. (Information is not included for WRL Great Companies --
AmericaSM, WRL Great Companies -- TechnologySM or WRL Value Line Aggressive
Growth, as these portfolios commenced operations May 1, 2000, and for WRL
Gabelli Global Growth or WRL Great Companies -- Global2 as they commenced
operations September 1, 2000 and for WRL LKCM Capital Growth as it commenced
operation December 1, 2000.) The June 30, 2000 information is unaudited.

FOR THE YEAR ENDED

<TABLE>
<CAPTION>
WRL J.P. Morgan Money Market
=======================================
December 31,
June 30, -----------------------------
2000 1999 1998
--------- -------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of year .................................. $ 1.00 $ 1.00
Income from operations:
Net investment income (loss) ...................................... 0.05 0.05
Net realized and unrealized gain (loss) on investments ............ 0.00 0.00
-------- --------
Net income (loss) from operations ................................ 0.05 0.05
-------- --------
Distributions:
Dividends from net investment income .............................. (0.05) (0.05)
Dividends in excess of net investment income ...................... 0.00 0.00
Distributions from net realized gains on investments .............. 0.00 0.00
Distributions in excess of net realized gains on investments ...... 0.00 0.00
-------- --------
Total distributions .............................................. (0.05) (0.05)
-------- --------
Net asset value, end of year ........................................ $ 1.00 $ 1.00
======== ========
Total return ........................................................ 4.63 % 5.26 %
Ratios and supplemental data:
Net assets at end of year (in thousands) .......................... $ 429,811 $ 169,731
Ratio of expenses to average net assets ........................... 0.44 % 0.46 %
Ratio of net investment income (loss) to average net assets ....... 4.81 % 5.24 %
Portfolio turnover rate ........................................... n/a n/a

<CAPTION>
WRL J.P. Morgan Money Market
===========================================
December 31,
-------------------------------------------
1997 1996 1995
-------------- -------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of year .................................. $ 1.00 $ 1.00 $ 1.00
Income from operations:
Net investment income (loss) ...................................... 0.05 0.05 0.05
Net realized and unrealized gain (loss) on investments ............ 0.00 0.00 0.00
-------- -------- -------
Net income (loss) from operations ................................ 0.05 0.05 0.05
-------- -------- -------
Distributions:
Dividends from net investment income .............................. (0.05) (0.05) (0.05)
Dividends in excess of net investment income ...................... 0.00 0.00 0.00
Distributions from net realized gains on investments .............. 0.00 0.00 0.00
Distributions in excess of net realized gains on investments ...... 0.00 0.00 0.00
-------- -------- -------
Total distributions .............................................. (0.05) (0.05) (0.05)
-------- -------- -------
Net asset value, end of year ........................................ $ 1.00 $ 1.00 $ 1.00
======== ======== =======
Total return ........................................................ 5.24 % 5.03 % 5.40 %
Ratios and supplemental data:
Net assets at end of year (in thousands) .......................... $ 119,708 $ 122,114 $ 80,544
Ratio of expenses to average net assets ........................... 0.48 % 0.52 % 0.56 %
Ratio of net investment income (loss) to average net assets ....... 5.32 % 5.03 % 5.30 %
Portfolio turnover rate ........................................... n/a n/a n/a
</TABLE>

Prospectus 65
<PAGE>

FINANCIAL HIGHLIGHTS*

<TABLE>
<CAPTION>
WRL AEGON Bond
=======================================
December 31,
June 30, -----------------------------
2000 1999 1998
--------- -------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 11.59 $ 11.14
Income from operations:
Net investment income (loss) ..................................... 0.64 0.64
Net realized and unrealized gain (loss) on investments ........... (0.97) 0.40
-------- --------
Net income (loss) from operations ............................... (0.33) 1.04
-------- --------
Distributions:
Dividends from net investment income ............................. (0.65) (0.59)
Dividends in excess of net investment income ..................... 0.00 0.00
Distributions from net realized gains on investments ............. 0.00 0.00
Distributions in excess of net realized gains on investments ..... 0.00 0.00
-------- --------
Total distributions ............................................. (0.65) (0.59)
-------- --------
Net asset value, end of year ....................................... $ 10.61 $ 11.59
======== ========
Total return ....................................................... (2.94)% 9.32 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 153,885 $ 170,744
Ratio of expenses to average net assets .......................... 0.53 % 0.54 %
Ratio of net investment income (loss) to average net assets ...... 5.67 % 5.54 %
Portfolio turnover rate .......................................... 26.40 % 51.60 %

<CAPTION>
WRL AEGON Bond
==========================================
December 31,
------------------------------------------
1997 1996 1995
-------------- ------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 10.71 $ 11.35 $ 9.80
Income from operations:
Net investment income (loss) ..................................... 0.65 0.64 0.69
Net realized and unrealized gain (loss) on investments ........... 0.32 (0.64) 1.55
-------- -------- --------
Net income (loss) from operations ............................... 0.97 0.00 2.24
-------- -------- --------
Distributions:
Dividends from net investment income ............................. (0.54) (0.64) (0.69)
Dividends in excess of net investment income ..................... 0.00 0.00 0.00
Distributions from net realized gains on investments ............. 0.00 0.00 0.00
Distributions in excess of net realized gains on investments ..... 0.00 0.00 0.00
-------- -------- --------
Total distributions ............................................. (0.54) (0.64) (0.69)
-------- -------- --------
Net asset value, end of year ....................................... $ 11.14 $ 10.71 $ 11.35
======== ======== ========
Total return ....................................................... 9.16 % 0.14 % 22.99 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 129,654 $ 95,759 $ 96,972
Ratio of expenses to average net assets .......................... 0.64 % 0.64 % 0.61 %
Ratio of net investment income (loss) to average net assets ...... 5.90 % 5.96 % 6.45 %
Portfolio turnover rate .......................................... 213.03 % 187.72 % 120.54 %
</TABLE>

Prospectus 66
<PAGE>

FINANCIAL HIGHLIGHTS*

FOR THE YEAR ENDED

<TABLE>
<CAPTION>
WRL Janus Growth
===========================================
December 31,
June 30, ---------------------------------
2000 1999 1998
--------- ---------------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 59.94 $ 36.84
Income from operations:
Net investment income (loss) ..................................... (0.04) 0.12
Net realized and unrealized gain (loss) on investments ........... 34.02 23.49
---------- ----------
Net income (loss) from operations ............................... 33.98 23.61
---------- ----------
Distributions:
Dividends from net investment income ............................. 0.00 (0.09)
Dividends in excess of net investment income ..................... (1.17) 0.00
Distributions from net realized gains on investments ............. (14.75) (0.42)
Distributions in excess of net realized gains on investments ..... 0.00 0.00
---------- ----------
Total distributions ............................................. (15.92) (0.51)
---------- ----------
Net asset value, end of year ....................................... $ 78.00 $ 59.94
========== ==========
Total return ....................................................... 59.67 % 64.47 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 4,141,240 $ 3,086,057
Ratio of expenses to average net assets .......................... 0.82 % 0.83 %
Ratio of net investment income (loss) to average net assets ...... (0.05)% 0.25 %
Portfolio turnover rate .......................................... 70.95 % 35.29 %

<CAPTION>
WRL Janus Growth
==================================================
December 31,
--------------------------------------------------
1997 1996 1995
---------------- ---------------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 35.00 $ 31.66 $ 23.81
Income from operations:
Net investment income (loss) ..................................... 0.31 0.34 0.26
Net realized and unrealized gain (loss) on investments ........... 5.88 5.35 10.97
---------- ---------- ----------
Net income (loss) from operations ............................... 6.19 5.69 11.23
---------- ---------- ----------
Distributions:
Dividends from net investment income ............................. (0.26) (0.35) (0.24)
Dividends in excess of net investment income ..................... 0.00 (0.01) 0.00
Distributions from net realized gains on investments ............. (4.09) (1.99) (3.14)
Distributions in excess of net realized gains on investments ..... 0.00 0.00 0.00
---------- ---------- ----------
Total distributions ............................................. (4.35) (2.35) (3.38)
---------- ---------- ----------
Net asset value, end of year ....................................... $ 36.84 $ 35.00 $ 31.66
========== ========== ==========
Total return ....................................................... 17.54 % 17.96 % 47.12 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 1,839,453 $ 1,527,409 $ 1,195,174
Ratio of expenses to average net assets .......................... 0.87 % 0.88 % 0.86 %
Ratio of net investment income (loss) to average net assets ...... 0.80 % 0.98 % 0.90 %
Portfolio turnover rate .......................................... 85.88 % 45.21 % 130.48 %
</TABLE>

<TABLE>
<CAPTION>
WRL Janus Global
===========================================
December 31,
June 30, ---------------------------------
2000 1999 1998
--------- ---------------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 23.71 $ 19.04
Income from operations:
Net investment income (loss) ..................................... (0.04) 0.05
Net realized and unrealized gain (loss) on investments ........... 16.42 5.61
---------- ----------
Net income (loss) from operations ............................... 16.38 5.66
---------- ----------
Distributions:
Dividends from net investment income ............................. 0.00 (0.13)
Dividends in excess of net investment income ..................... 0.00 0.00
Distributions from net realized gains on investments ............. (2.63) (0.80)
Distributions in excess of net realized gains on investments ..... 0.00 (0.06)
---------- ----------
Total distributions ............................................. (2.63) (0.99)
---------- ----------
Net asset value, end of year ....................................... $ 37.46 $ 23.71
========== ==========
Total return ....................................................... 71.10 % 30.01 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 1,926,210 $ 1,069,765
Ratio of expenses to average net assets .......................... 0.92 % 0.95 %
Ratio of net investment income (loss) to average net assets ...... (0.14)% 0.23 %
Portfolio turnover rate .......................................... 68.10 % 87.36 %

<CAPTION>
WRL Janus Global
============================================
December 31,
--------------------------------------------
1997 1996 1995
-------------- -------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 18.12 $ 15.52 $ 13.12
Income from operations:
Net investment income (loss) ..................................... 0.08 0.08 0.10
Net realized and unrealized gain (loss) on investments ........... 3.32 4.20 2.91
-------- -------- --------
Net income (loss) from operations ............................... 3.40 4.28 3.01
-------- -------- --------
Distributions:
Dividends from net investment income ............................. (0.13) (0.04) 0.00
Dividends in excess of net investment income ..................... (1.01) (0.17) 0.00
Distributions from net realized gains on investments ............. (1.34) (1.47) (0.61)
Distributions in excess of net realized gains on investments ..... 0.00 0.00 0.00
-------- -------- --------
Total distributions ............................................. (2.48) (1.68) (0.61)
-------- -------- --------
Net asset value, end of year ....................................... $ 19.04 $ 18.12 $ 15.52
======== ======== ========
Total return ....................................................... 18.75 % 27.74 % 23.06 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 785,966 $ 534,820 $ 289,506
Ratio of expenses to average net assets .......................... 1.00 % 0.99 % 0.99 %
Ratio of net investment income (loss) to average net assets ...... 0.41 % 0.46 % 0.75 %
Portfolio turnover rate .......................................... 97.54 % 88.31 % 130.60 %
</TABLE>

Prospectus 67
<PAGE>

FINANCIAL HIGHLIGHTS*

FOR THE YEAR ENDED

<TABLE>
<CAPTION>
WRL LKCM Strategic Total Return
=======================================
December 31,
June 30, -----------------------------
2000 1999 1998
--------- -------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 16.40 $ 15.62
Income from operations:
Net investment income (loss) ..................................... 0.34 0.39
Net realized and unrealized gain (loss) on investments ........... 1.59 1.09
-------- --------
Net income (loss) from operations ............................... 1.93 1.48
-------- --------
Distributions:
Dividends from net investment income ............................. (0.35) (0.38)
Dividends in excess of net investment income ..................... 0.00 0.00
Distributions from net realized gains on investments ............. (1.13) (0.32)
Distributions in excess of net realized gains on investments ..... 0.00 0.00
-------- --------
Total distributions ............................................. (1.48) (0.70)
-------- --------
Net asset value, end of year ....................................... $ 16.85 $ 16.40
======== ========
Total return ....................................................... 12.07 % 9.64 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 624,416 $ 592,312
Ratio of expenses to average net assets .......................... 0.86 % 0.86 %
Ratio of net investment income (loss) to average net assets ...... 2.02 % 2.43 %
Portfolio turnover rate .......................................... 45.42 % 49.20 %

<CAPTION>
WRL LKCM Strategic Total Return
============================================
December 31,
--------------------------------------------
1997 1996 1995
-------------- -------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 13.97 $ 12.86 $ 10.90
Income from operations:
Net investment income (loss) ..................................... 0.37 0.37 0.37
Net realized and unrealized gain (loss) on investments ........... 2.68 1.56 2.33
-------- -------- --------
Net income (loss) from operations ............................... 3.05 1.93 2.70
-------- -------- --------
Distributions:
Dividends from net investment income ............................. (0.35) (0.32) (0.37)
Dividends in excess of net investment income ..................... (0.03) 0.00 0.00
Distributions from net realized gains on investments ............. (1.02) (0.50) (0.37)
Distributions in excess of net realized gains on investments ..... 0.00 0.00 0.00
-------- -------- --------
Total distributions ............................................. (1.40) (0.82) (0.74)
-------- -------- --------
Net asset value, end of year ....................................... $ 15.62 $ 13.97 $ 12.86
======== ======== ========
Total return ....................................................... 21.85 % 15.00 % 24.66 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 526,577 $ 390,141 $ 256,806
Ratio of expenses to average net assets .......................... 0.88 % 0.91 % 0.87 %
Ratio of net investment income (loss) to average net assets ...... 2.43 % 2.72 % 3.07 %
Portfolio turnover rate .......................................... 48.20 % 49.32 % 52.59 %
</TABLE>

<TABLE>
<CAPTION>
WRL VKAM Emerging Growth
=========================================
December 31,
June 30, -------------------------------
2000 1999 1998
--------- ---------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 26.92 $ 20.37
Income from operations:
Net investment income (loss) ..................................... (0.15) (0.08)
Net realized and unrealized gain (loss) on investments ........... 26.83 7.56
---------- --------
Net income (loss) from operations ............................... 26.68 7.48
---------- --------
Distributions:
Dividends from net investment income ............................. 0.00 0.00
Dividends in excess of net investment income ..................... (0.21) 0.00
Distributions from net realized gains on investments ............. (7.38) (0.93)
Distributions in excess of net realized gains on investments ..... 0.00 0.00
---------- --------
Total distributions ............................................. (7.59) (0.93)
---------- --------
Net asset value, end of year ....................................... $ 46.01 $ 26.92
========== ========
Total return ....................................................... 105.16 % 37.33 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 1,916,025 $ 853,440
Ratio of expenses to average net assets .......................... 0.87 % 0.89 %
Ratio of net investment income (loss) to average net assets ...... (0.44)% (0.36)%
Portfolio turnover rate .......................................... 117.72 % 99.50 %

<CAPTION>
WRL VKAM Emerging Growth
============================================
December 31,
--------------------------------------------
1997 1996 1995
-------------- -------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 18.46 $ 16.25 $ 11.55
Income from operations:
Net investment income (loss) ..................................... (0.05) (0.04) 0.01
Net realized and unrealized gain (loss) on investments ........... 4.03 3.10 5.42
-------- -------- --------
Net income (loss) from operations ............................... 3.98 3.06 5.43
-------- -------- --------
Distributions:
Dividends from net investment income ............................. 0.00 0.00 0.00
Dividends in excess of net investment income ..................... 0.00 0.00 0.00
Distributions from net realized gains on investments ............. (2.07) (0.85) (0.73)
Distributions in excess of net realized gains on investments ..... 0.00 0.00 0.00
-------- -------- --------
Total distributions ............................................. (2.07) (0.85) (0.73)
-------- -------- --------
Net asset value, end of year ....................................... $ 20.37 $ 18.46 $ 16.25
======== ======== ========
Total return ....................................................... 21.45 % 18.88 % 46.79 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 592,003 $ 431,454 $ 288,519
Ratio of expenses to average net assets .......................... 0.93 % 0.94 % 0.91 %
Ratio of net investment income (loss) to average net assets ...... (0.27)% (0.24)% 0.03 %
Portfolio turnover rate .......................................... 99.78 % 80.02 % 124.13 %
</TABLE>

Prospectus 68
<PAGE>

FINANCIAL HIGHLIGHTS*

FOR THE YEAR ENDED

<TABLE>
<CAPTION>
WRL Alger Aggressive Growth
=========================================
December 31,
June 30, -------------------------------
2000 1999 1998
--------- ---------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 22.44 $ 16.04
Income from operations:
Net investment income (loss) ..................................... (0.15) (0.04)
Net realized and unrealized gain (loss) on investments ........... 14.95 7.68
---------- --------
Net income (loss) from operations ............................... 14.80 7.64
---------- --------
Distributions:
Dividends from net investment income ............................. (0.16) 0.00
Dividends in excess of net investment income ..................... (1.38) (0.05)
Distributions from net realized gains on investments ............. (2.42) (1.19)
Distributions in excess of net realized gains on investments ..... 0.00 0.00
---------- --------
Total distributions ............................................. (3.96) (1.24)
---------- --------
Net asset value, end of year ....................................... $ 33.28 $ 22.44
========== ========
Total return ....................................................... 69.02 % 48.69 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 1,117,511 $ 574,164
Ratio of expenses to average net assets .......................... 0.89 % 0.91 %
Ratio of net investment income (loss) to average net assets ...... (0.56)% (0.21)%
Portfolio turnover rate .......................................... 101.71 % 117.44 %

<CAPTION>
WRL Alger Aggressive Growth
============================================
December 31,
--------------------------------------------
1997 1996 1995
-------------- -------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 14.18 $ 13.25 $ 9.86
Income from operations:
Net investment income (loss) ..................................... (0.01) (0.01) (0.06)
Net realized and unrealized gain (loss) on investments ........... 3.44 1.38 3.96
-------- -------- --------
Net income (loss) from operations ............................... 3.43 1.37 3.90
-------- -------- --------
Distributions:
Dividends from net investment income ............................. 0.00 0.00 0.00
Dividends in excess of net investment income ..................... (0.42) (0.19) 0.00
Distributions from net realized gains on investments ............. (1.15) (0.25) (0.51)
Distributions in excess of net realized gains on investments ..... 0.00 0.00 0.00
-------- -------- --------
Total distributions ............................................. (1.57) (0.44) (0.51)
-------- -------- --------
Net asset value, end of year ....................................... $ 16.04 $ 14.18 $ 13.25
======== ======== ========
Total return ....................................................... 24.25 % 10.45 % 38.02 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 336,166 $ 220,552 $ 158,534
Ratio of expenses to average net assets .......................... 0.96 % 0.98 % 1.07 %
Ratio of net investment income (loss) to average net assets ...... (0.06)% (0.10)% (0.48)%
Portfolio turnover rate .......................................... 136.18 % 101.28 % 108.04 %
</TABLE>

<TABLE>
<CAPTION>
WRL AEGON Balanced
======================================
December 31,
June 30, ----------------------------
2000 1999 1998
--------- -------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 12.54 $ 12.01
Income from operations:
Net investment income (loss) ..................................... 0.26 0.35
Net realized and unrealized gain (loss) on investments ........... 0.12 0.47
-------- -------
Net income (loss) from operations ............................... 0.38 0.82
-------- -------
Distributions:
Dividends from net investment income ............................. (0.26) (0.28)
Dividends in excess of net investment income ..................... 0.00 0.00
Distributions from net realized gains on investments ............. 0.00 0.00
Distributions in excess of net realized gains on investments ..... 0.00 (0.01)
-------- -------
Total distributions ............................................. (0.26) (0.29)
-------- -------
Net asset value, end of year ....................................... $ 12.66 $ 12.54
======== =======
Total return ....................................................... 3.03 % 6.93 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 108,473 $ 95,000
Ratio of expenses to average net assets .......................... 0.89 % 0.91 %
Ratio of net investment income (loss) to average net assets ...... 2.06 % 2.89 %
Portfolio turnover rate .......................................... 74.88 % 83.94 %

<CAPTION>
WRL AEGON Balanced
=========================================
December 31,
-----------------------------------------
1997 1996 1995
------------- ------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 11.39 $ 10.63 $ 9.24
Income from operations:
Net investment income (loss) ..................................... 0.38 0.34 0.44
Net realized and unrealized gain (loss) on investments ........... 1.56 0.80 1.38
------- ------- -------
Net income (loss) from operations ............................... 1.94 1.14 1.82
------- ------- -------
Distributions:
Dividends from net investment income ............................. (0.36) (0.28) (0.43)
Dividends in excess of net investment income ..................... (0.30) 0.00 0.00
Distributions from net realized gains on investments ............. (0.66) (0.10) 0.00
Distributions in excess of net realized gains on investments ..... 0.00 0.00 0.00
------- ------- -------
Total distributions ............................................. (1.32) (0.38) (0.43)
------- ------- -------
Net asset value, end of year ....................................... $ 12.01 $ 11.39 $ 10.63
======= ======= =======
Total return ....................................................... 17.10 % 10.72 % 19.80 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 73,451 $ 49,331 $ 31,114
Ratio of expenses to average net assets .......................... 0.94 % 0.97 % 0.97 %
Ratio of net investment income (loss) to average net assets ...... 3.13 % 3.14 % 4.38 %
Portfolio turnover rate .......................................... 77.06 % 76.90 % 98.55 %
</TABLE>

Prospectus 69
<PAGE>

FINANCIAL HIGHLIGHTS*

FOR THE YEAR ENDED

<TABLE>
<CAPTION>
WRL Federated Growth & Income
=====================================
December 31,
June 30, ---------------------------
2000 1999 1998
--------- ------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 12.28 $ 12.56
Income from operations:
Net investment income (loss) ..................................... 0.48 0.53
Net realized and unrealized gain (loss) on investments ........... (1.00) (0.16)
-------- -------
Net income (loss) from operations ............................... (0.52) 0.37
-------- -------
Distributions:
Dividends from net investment income ............................. (0.73) (0.55)
Dividends in excess of net investment income ..................... (0.02) 0.00
Distributions from net realized gains on investments ............. (0.10) (0.10)
Distributions in excess of net realized gains on investments ..... 0.00 0.00
-------- -------
Total distributions ............................................. (0.85) (0.65)
-------- -------
Net asset value, end of year ....................................... $ 10.91 $ 12.28
======== =======
Total return ....................................................... (4.45)% 3.05 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 76,280 $ 87,616
Ratio of expenses to average net assets .......................... 0.89 % 0.90 %
Ratio of net investment income (loss) to average net assets ...... 4.01 % 4.35 %
Portfolio turnover rate .......................................... 117.14 % 97.17 %

<CAPTION>
WRL Federated Growth & Income
=========================================
December 31,
-----------------------------------------
1997 1996 1995
------------- ------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 11.76 $ 11.12 $ 9.30
Income from operations:
Net investment income (loss) ..................................... 0.49 0.42 0.46
Net realized and unrealized gain (loss) on investments ........... 2.35 0.87 1.93
-------- ------- -------
Net income (loss) from operations ............................... 2.84 1.29 2.39
-------- ------- -------
Distributions:
Dividends from net investment income ............................. (0.43) (0.33) (0.46)
Dividends in excess of net investment income ..................... (0.59) 0.00 0.00
Distributions from net realized gains on investments ............. (1.02) (0.32) (0.11)
Distributions in excess of net realized gains on investments ..... 0.00 0.00 0.00
-------- ------- -------
Total distributions ............................................. (2.04) (0.65) (0.57)
-------- ------- -------
Net asset value, end of year ....................................... $ 12.56 $ 11.76 $ 11.12
======== ======= =======
Total return ....................................................... 24.65 % 11.64 % 25.25 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 60,492 $ 38,115 $ 24,607
Ratio of expenses to average net assets .......................... 0.96 % 1.00 % 1.00 %
Ratio of net investment income (loss) to average net assets ...... 3.84 % 3.73 % 4.56 %
Portfolio turnover rate .......................................... 155.77 % 68.53 % 78.34 %
</TABLE>

<TABLE>
<CAPTION>
WRL Dean Asset Allocation
=======================================
December 31,
June 30, -----------------------------
1999 1998
2000 -------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 13.35 $ 13.61
Income from operations:
Net investment income (loss) ..................................... 0.39 0.41
Net realized and unrealized gain (loss) on investments ........... (1.14) 0.71
-------- --------
Net income (loss) from operations ............................... (0.75) 1.12
-------- --------
Distributions:
Dividends from net investment income ............................. (0.41) (0.39)
Dividends in excess of net investment income ..................... 0.00 0.00
Distributions from net realized gains on investments ............. (0.04) (0.99)
Distributions in excess of net realized gains on investments ..... (0.02) 0.00
-------- --------
Total distributions ............................................. (0.47) (1.38)
-------- --------
Net asset value, end of year ....................................... $ 12.13 $ 13.35
======== ========
Total return ....................................................... (5.64)% 8.33 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 261,707 $ 365,738
Ratio of expenses to average net assets .......................... 0.87 % 0.86 %
Ratio of net investment income (loss) to average net assets ...... 2.99 % 2.93 %
Portfolio turnover rate .......................................... 88.78 % 76.62 %

<CAPTION>
WRL Dean Asset Allocation
============================================
December 31,
--------------------------------------------
1997 1996 1995(a)
-------------- -------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 12.61 $ 11.49 $ 10.00
Income from operations:
Net investment income (loss) ..................................... 0.36 0.33 0.41
Net realized and unrealized gain (loss) on investments ........... 1.72 1.33 1.93
-------- -------- --------
Net income (loss) from operations ............................... 2.08 1.66 2.34
-------- -------- --------
Distributions:
Dividends from net investment income ............................. (0.33) (0.30) (0.41)
Dividends in excess of net investment income ..................... (0.19) 0.00 0.00
Distributions from net realized gains on investments ............. (0.56) (0.24) (0.44)
Distributions in excess of net realized gains on investments ..... 0.00 0.00 0.00
-------- -------- --------
Total distributions ............................................. (1.08) (0.54) (0.85)
-------- -------- --------
Net asset value, end of year ....................................... $ 13.61 $ 12.61 $ 11.49
======== ======== ========
Total return ....................................................... 16.59 % 14.42 % 20.09 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 302,745 $ 206,172 $ 120,531
Ratio of expenses to average net assets .......................... 0.87 % 0.90 % 0.93 %
Ratio of net investment income (loss) to average net assets ...... 2.65 % 2.78 % 3.76 %
Portfolio turnover rate .......................................... 63.76 % 98.97 % 38.68 %
</TABLE>

Prospectus 70
<PAGE>

FINANCIAL HIGHLIGHTS*

FOR THE YEAR ENDED

<TABLE>
<CAPTION>
WRL C.A.S.E. Growth
=====================================
December 31,
June 30, ---------------------------
2000 1999 1998
--------- ------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 12.99 $ 14.01
Income from operations:
Net investment income (loss) ..................................... (0.05) 0.02
Net realized and unrealized gain (loss) on investments ........... 4.38 0.31
-------- --------
Net income (loss) from operations ............................... 4.33 0.33
-------- --------
Distributions:
Dividends from net investment income ............................. (0.66) (0.36)
Dividends in excess of net investment income ..................... (0.96) (0.90)
Distributions from net realized gains on investments ............. 0.00 (0.09)
Distributions in excess of net realized gains on investments ..... 0.00 0.00
-------- --------
Total distributions ............................................. (1.62) (1.35)
-------- --------
Net asset value, end of year ....................................... $ 15.70 $ 12.99
======== ========
Total return ....................................................... 33.84 % 2.47 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 93,608 $ 69,401
Ratio of expenses to average net assets .......................... 1.00 % 1.00 %
Ratio of net investment income (loss) to average net assets ...... (0.36)% 0.14 %
Portfolio turnover rate .......................................... 143.52 % 205.28 %

<CAPTION>
WRL C.A.S.E. Growth
========================================
December 31,
----------------------------------------
1997 1996 1995(b)
------------- ------------- ------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 13.42 $ 11.66 $ 10.00
Income from operations:
Net investment income (loss) ..................................... 0.04 0.12 0.12
Net realized and unrealized gain (loss) on investments ........... 1.95 1.92 2.49
-------- -------- ---------
Net income (loss) from operations ............................... 1.99 2.04 2.61
-------- -------- ---------
Distributions:
Dividends from net investment income ............................. (0.03) (0.05) (0.12)
Dividends in excess of net investment income ..................... (1.23) 0.00 0.00
Distributions from net realized gains on investments ............. (0.14) (0.23) (0.83)
Distributions in excess of net realized gains on investments ..... 0.00 0.00 0.00
-------- -------- ---------
Total distributions ............................................. (1.40) (0.28) (0.95)
-------- -------- ---------
Net asset value, end of year ....................................... $ 14.01 $ 13.42 $ 11.66
======== ======== =========
Total return ....................................................... 15.03 % 17.50 % 20.65 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 60,596 $ 26,559 $ 2,578
Ratio of expenses to average net assets .......................... 1.00 % 1.00 % 1.00 %
Ratio of net investment income (loss) to average net assets ...... 0.25 % 0.94 % 1.02 %
Portfolio turnover rate .......................................... 196.50 % 160.27 % 121.62 %
</TABLE>

<TABLE>
<CAPTION>
WRL NWQ Value Equity
========================
December 31,
June 30, --------------
2000 1999
--------- --------------
<S> <C> <C>
Net asset value, beginning of year ................................... $ 12.12
Income from operations:
Net investment income (loss) ....................................... 0.10
Net realized and unrealized gain (loss) on investments ............. 0.85
--------
Net income (loss) from operations ................................. 0.95
--------
Distributions:
Dividends from net investment income ............................... (0.10)
Dividends in excess of net investment income ....................... 0.00
Distributions from net realized gains on investments ............... 0.00
Distributions in excess of net realized gains on investments ....... (0.20)
--------
Total distributions ............................................... (0.30)
--------
Net asset value, end of year ......................................... $ 12.77
========
Total return ......................................................... 7.95 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ........................... $ 137,158
Ratio of expenses to average net assets ............................ 0.90 %
Ratio of net investment income (loss) to average net assets ........ 0.77 %
Portfolio turnover rate ............................................ 34.19 %

<CAPTION>
WRL NWQ Value Equity
==========================================
December 31,
------------------------------------------
1998 1997 1996(c)
-------------- -------------- ------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................... $ 13.90 $ 11.27 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 0.12 0.12 0.10
Net realized and unrealized gain (loss) on investments ............. (0.78) 2.69 1.23
-------- -------- -------
Net income (loss) from operations ................................. (0.66) 2.81 1.33
-------- -------- -------
Distributions:
Dividends from net investment income ............................... (0.13) (0.09) (0.04)
Dividends in excess of net investment income ....................... (0.12) (0.07) 0.00
Distributions from net realized gains on investments ............... (0.62) (0.02) (0.02)
Distributions in excess of net realized gains on investments ....... (0.25) 0.00 0.00
-------- -------- -------
Total distributions ............................................... (1.12) (0.18) (0.06)
-------- -------- -------
Net asset value, end of year ......................................... $ 12.12 $ 13.90 $ 11.27
======== ======== =======
Total return ......................................................... (4.78)% 25.04 % 13.19 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ........................... $ 157,157 $ 173,435 $ 49,394
Ratio of expenses to average net assets ............................ 0.89 % 0.89 % 1.00 %
Ratio of net investment income (loss) to average net assets ........ 0.89 % 0.90 % 0.89 %
Portfolio turnover rate ............................................ 43.60 % 17.28 % 7.93 %
</TABLE>

Prospectus 71
<PAGE>

FINANCIAL HIGHLIGHTS*

FOR THE YEAR ENDED

<TABLE>
<CAPTION>
WRL GE/Scottish
Equitable International Equity
==================================================
December 31,
June 30, ----------------------------------------
2000 1999 1998 1997(d)
--------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year ................................... $ 12.07 $ 10.70 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 0.04 0.03 0.02
Net realized and unrealized gain (loss) on investments ............. 2.90 1.35 0.73
------- ------- -------
Net income (loss) from operations ................................. 2.94 1.38 0.75
------- ------- -------
Distributions:
Dividends from net investment income ............................... (0.05) (0.01) (0.01)
Dividends in excess of net investment income ....................... 0.00 0.00 (0.04)
Distributions from net realized gains on investments ............... (0.68) 0.00 0.00
Distributions in excess of net realized gains on investments ....... 0.00 0.00 0.00
------- ------- -------
Total distributions ............................................... (0.73) (0.01) (0.05)
------- ------- -------
Net asset value, end of year ......................................... $ 14.28 $ 12.07 $ 10.70
======= ======= =======
Total return ......................................................... 24.95 % 12.85 % 7.50 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ........................... $ 33,579 $ 32,149 $ 19,795
Ratio of expenses to average net assets ............................ 1.50 % 1.50 % 1.50 %
Ratio of net investment income (loss) to average net assets ........ 0.31 % 0.30 % 0.18 %
Portfolio turnover rate ............................................ 99.77 % 71.74 % 54.33 %
</TABLE>

<TABLE>
<CAPTION>
WRL GE U.S. Equity
====================================================
December 31,
June 30, ------------------------------------------
2000 1999 1998 1997(d)
--------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year ................................... $ 14.42 $ 12.23 $ 10.00
Income from operations:
Net investment income (loss) ....................................... 0.07 0.09 0.09
Net realized and unrealized gain (loss) on investments ............. 2.55 2.69 2.60
-------- -------- -------
Net income (loss) from operations ................................. 2.62 2.78 2.69
-------- -------- -------
Distributions:
Dividends from net investment income ............................... (0.18) (0.15) (0.04)
Dividends in excess of net investment income ....................... (0.33) (0.33) (0.38)
Distributions from net realized gains on investments ............... (0.74) (0.11) (0.04)
Distributions in excess of net realized gains on investments ....... 0.00 0.00 0.00
-------- -------- -------
Total distributions ............................................... (1.25) (0.59) (0.46)
-------- -------- -------
Net asset value, end of year ......................................... $ 15.79 $ 14.42 $ 12.23
======== ======== =======
Total return ......................................................... 18.41 % 22.87 % 27.01 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ........................... $ 179,267 $ 110,803 $ 42,951
Ratio of expenses to average net assets ............................ 0.93 % 1.05 % 1.30 %
Ratio of net investment income (loss) to average net assets ........ 0.46 % 0.67 % 0.75 %
Portfolio turnover rate ............................................ 44.01 % 63.08 % 92.35 %
</TABLE>

Prospectus 72
<PAGE>

FINANCIAL HIGHLIGHTS*

FOR THE YEAR ENDED

<TABLE>
<CAPTION>
WRL Third Avenue
Value
======================================
December 31,
---------------------------
June 30,
2000 1999 1998(e)
---------- ------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 9.29 $ 10.00
Income from operations:
Net investment income (loss) ..................................... 0.16 0.06
Net realized and unrealized gain (loss) on investments ........... 1.28 (0.74)
------- -------
Net income (loss) from operations ............................... 1.44 (0.68)
------- -------
Distributions:
Dividends from net investment income ............................. (0.28) (0.03)
Dividends in excess of net investment income ..................... 0.00 0.00
Distributions from net realized gains on investments ............. 0.00 0.00
Distributions in excess of net realized gains on investments ..... 0.00 0.00
------- -------
Total distributions ............................................. (0.28) (0.03)
------- -------
Net asset value, end of year ....................................... $ 10.45 $ 9.29
======= =======
Total return ....................................................... 15.72 % (6.84)%
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 19,217 $ 18,206
Ratio of expenses to average net assets .......................... 1.00 % 1.00 %
Ratio of net investment income (loss) to average net assets ...... 1.76 % 0.63 %
Portfolio turnover rate .......................................... 9.56 % 4.35 %

<CAPTION>
WRL J.P. Morgan
Real Estate Securities
===================================
December 31,
June 30, -------------------------
2000 1999 1998(f)
--------- ------------ ------------
<S> <C> <C> <C>
Net asset value, beginning of year ................................. $ 8.51 $ 10.00
Income from operations:
Net investment income (loss) ..................................... 0.49 0.36
Net realized and unrealized gain (loss) on investments ........... (0.79) (1.85)
--------- ---------
Net income (loss) from operations ............................... (0.30) (1.49)
--------- ---------
Distributions:
Dividends from net investment income ............................. (0.15) 0.00
Dividends in excess of net investment income ..................... 0.00 0.00
Distributions from net realized gains on investments ............. 0.00 0.00
Distributions in excess of net realized gains on investments ..... 0.00 0.00
--------- ---------
Total distributions ............................................. (0.15) 0.00
--------- ---------
Net asset value, end of year ....................................... $ 8.06 $ 8.51
========= =========
Total return ....................................................... (3.77)% (14.93)%
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 3,199 $ 2,414
Ratio of expenses to average net assets .......................... 1.00 % 1.00 %
Ratio of net investment income (loss) to average net assets ...... 5.91 % 6.03 %
Portfolio turnover rate .......................................... 189.80 % 100.80 %
</TABLE>

<TABLE>
<CAPTION>
WRL WRL
Goldman Sachs Goldman Sachs
Growth Small Cap
========================= =========================
June 30, December 31, June 30, December 31,
---------- -------------- ---------- --------------
2000 1999(g) 2000 1999(g)
---------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year ................................. $ 10.00 $ 10.00
Income from operations:
Net investment income (loss) ..................................... 0.01 0.03
Net realized and unrealized gain (loss) on investments ........... 1.74 1.74
-------- ---------
Net income (loss) from operations ............................... 1.75 1.77
-------- ---------
Distributions:
Dividends from net investment income ............................. 0.00 (0.04)
Dividends in excess of net investment income ..................... 0.00 (0.48)
Distributions from net realized gains on investments ............. 0.00 0.00
Distributions in excess of net realized gains on investments ..... 0.00 0.00
-------- ---------
Total distributions ............................................. 0.00 (0.52)
-------- ---------
Net asset value, end of year ....................................... $ 11.75 $ 11.25
======== =========
Total return ....................................................... 17.50 % 17.82 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 8,204 $ 2,783
Ratio of expenses to average net assets .......................... 1.00 % 1.00 %
Ratio of net investment income (loss) to average net assets ...... 0.12 % 0.50 %
Portfolio turnover rate .......................................... 40.46 % 340.66 %

<CAPTION>
WRL
T. Rowe Price
Dividend Growth
========================
June 30, December 31,
---------- -------------
2000 1999(g)
---------- -------------
<S> <C> <C>
Net asset value, beginning of year ................................. $ 10.00
Income from operations:
Net investment income (loss) ..................................... 0.11
Net realized and unrealized gain (loss) on investments ........... (0.85)
-------
Net income (loss) from operations ............................... (0.74)
-------
Distributions:
Dividends from net investment income ............................. 0.00
Dividends in excess of net investment income ..................... 0.00
Distributions from net realized gains on investments ............. 0.00
Distributions in excess of net realized gains on investments ..... 0.00
-------
Total distributions ............................................. 0.00
-------
Net asset value, end of year ....................................... $ 9.26
=======
Total return ....................................................... (7.40)%
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 8,730
Ratio of expenses to average net assets .......................... 1.00 %
Ratio of net investment income (loss) to average net assets ...... 1.75 %
Portfolio turnover rate .......................................... 43.76 %
</TABLE>

Prospectus 73
<PAGE>

FINANCIAL HIGHLIGHTS*

FOR THE YEAR ENDED

<TABLE>
<CAPTION>
WRL WRL
T. Rowe Price Salomon
Small Cap All Cap
========================= ========================
June 30, December 31, June 30, December 31,
---------- -------------- ---------- -------------
2000 1999(g) 2000 1999(g)
---------- -------------- ---------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year ................................. $ 10.00 $ 10.00
Income from operations:
Net investment income (loss) ..................................... (0.03) 0.08
Net realized and unrealized gain (loss) on investments ........... 3.87 1.48
------- --------
Net income (loss) from operations ............................... 3.84 1.56
------- --------
Distributions:
Dividends from net investment income ............................. 0.00 (0.06)
Dividends in excess of net investment income ..................... (0.43) (0.32)
Distributions from net realized gains on investments ............. 0.00 0.00
Distributions in excess of net realized gains on investments ..... 0.00 0.00
------- --------
Total distributions ............................................. (0.43) (0.38)
------- --------
Net asset value, end of year ....................................... $ 13.41 $ 11.18
======= ========
Total return ....................................................... 38.49 % 15.57 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 9,824 $ 6,686
Ratio of expenses to average net assets .......................... 1.00 % 1.00 %
Ratio of net investment income (loss) to average net assets ...... (0.44)% 1.09%
Portfolio turnover rate .......................................... 159.02 % 216.29 %
</TABLE>

<TABLE>
<CAPTION>
WRL WRL
Pilgrim Baxter Dreyfus
Mid Cap Growth Mid Cap
------------------------- ------------------------
June 30, December 31, June 30, December 31,
---------- -------------- ---------- -------------
2000 1999(g) 2000 1999(g)
---------- -------------- ---------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year ................................. $ 10.00 $ 10.00
Income from operations:
Net investment income (loss) ..................................... (0.03) 0.04
Net realized and unrealized gain (loss) on investments ........... 7.83 0.68
-------- --------
Net income (loss) from operations ............................... 7.80 0.72
-------- --------
Distributions:
Dividends from net investment income ............................. 0.00 0.00
Dividends in excess of net investment income ..................... (0.05) 0.00
Distributions from net realized gains on investments ............. 0.00 0.00
Distributions in excess of net realized gains on investments ..... 0.00 0.00
-------- --------
Total distributions ............................................. (0.05) 0.00
-------- --------
Net asset value, end of year ....................................... $ 17.75 $ 10.72
======== ========
Total return ....................................................... 78.00 % 7.20 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ......................... $ 37,201 $ 3,384
Ratio of expenses to average net assets .......................... 1.00 % 1.00 %
Ratio of net investment income (loss) to average net assets ...... (0.30)% 0.58 %
Portfolio turnover rate .......................................... 155.71 % 94.19 %
</TABLE>

Prospectus 74
<PAGE>

FINANCIAL HIGHLIGHTS*

Notes to Financial Highlights

Per share information has been computed using average shares outstanding
throughout each period. Total return reflects all Portfolio expenses and
includes reinvestment of dividends and capital gains; it does not reflect the
charges and deductions under the policies or annuity contracts. Total return and
portfolio turnover rate are not annualized for periods of less than one year.
Ratio of expenses and ratio of net investment income (loss) to average net
assets are annualized for periods of less than one year. For the year ended
December 31, 1999, ratio of expenses to average net assets is net of the
advisory fee waiver. For the years prior to 1999, ratio of expenses to average
net assets is net of the advisory fee waiver and fees paid indirectly. Without
the advisory fee waived by WRL Management and the fees paid indirectly, ratio of
expenses to average net assets for each period presented would be as follows
(ratios are annualized for periods of less than one year):

<TABLE>
<CAPTION>
December 31,
----------------------------------------------------------------
Portfolio 1999 1998 1997 1996 1995
-------------------------------------------------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
WRL J.P. Morgan Money Market ........................... * * * * *
WRL AEGON Bond ......................................... * * * * *
WRL Janus Growth ....................................... 0.82 % * * * *
WRL Janus Global ....................................... * * * * *
WRL LKCM Strategic Total Return ........................ * * * * *
WRL VKAM Emerging Growth ............................... * * * * *
WRL Alger Aggressive Growth ............................ * * * * *
WRL AEGON Balanced ..................................... * * * * *
WRL Federated Growth & Income .......................... * * * * 1.08 %
WRL Dean Asset Allocation .............................. * * * * *
WRL C.A.S.E. Growth .................................... * * 1.14 % 1.70 % 4.17 %
WRL NWQ Value Equity ................................... * * * 1.10 % **
WRL GE/Scottish Equitable International Equity ......... 1.84 % 1.96 % 3.14 % ** **
WRL GE U.S. Equity ..................................... * * 1.54 % ** **
WRL Third Avenue Value ................................. 1.06 % 1.13 % ** ** **
WRL J.P. Morgan Real Estate Securities ................. 2.69 % 3.34 % ** ** **
WRL Goldman Sachs Growth ............................... 2.68 % ** ** ** **
WRL Goldman Sachs Small Cap ............................ 5.57 % ** ** ** **
WRL T. Rowe Price Dividend Growth ...................... 2.35 % ** ** ** **
WRL T. Rowe Price Small Cap ............................ 2.46 % ** ** ** **
WRL Salomon All Cap .................................... 2.87 % ** ** ** **
WRL Pilgrim Baxter Mid Cap Growth ...................... 1.40 % ** ** ** **
WRL Dreyfus Mid Cap .................................... 4.89 % ** ** ** **
</TABLE>

* Ratio difference less than 0.01%.
** Portfolio was not in existence during this period.
(a) The inception date of this portfolio was January 3, 1995.
(b) The inception date of this portfolio was May 1, 1995.
(c) The inception date of this portfolio was May 1, 1996.
(d) The inception date of this portfolio was January 2, 1997.
(e) The inception date of this portfolio was January 2, 1998.
(f) The inception date of this portfolio was May 1, 1998.
(g) The inception date of this portfolio was May 1, 1999.

Prospectus 75
<PAGE>

Additional information about these portfolios is contained in the
Fund's annual and semi-annual reports to shareholders and in the
Statement of Additional Information, dated December 1, 2000, which
is incorporated by reference into this prospectus. In the Fund's
annual report, you will find a discussion of the market conditions
and investment strategies that significantly affected the Fund's
performance during the last fiscal year.

You may also call 1-800-851-9777 to request this additional
information about the Fund without charge or to make shareholder
inquiries.

Other information about these portfolios has been filed with and is
available from the U.S. Securities and Exchange Commission.
Information about the Fund (including the SAI) can be reviewed and
copied at the Securities and Exchange Commission's Public Reference
Room in Washington, D.C. Information on the operation of the public
reference room may be obtained by calling the Commission at
202-942-8090. Information may be obtained, upon payment of a
duplicating fee by writing the Public Reference Section of the
Commission, Washington, D.C. 20549-6009.

Reports and other information about the Fund are also available on
the Commission's Internet site at http://www.sec.gov.
(WRL Series Fund File No. 811-4419.)

For more information about these portfolios, you may obtain a copy
of the SAI or the Annual or Semi-Annual Reports without charge, or
to make other inquiries about this Fund, call the number listed
above.

(WRL Series Fund File No. 811-4419.)
<PAGE>

WRL SERIES FUND, INC.
WRL VKAM EMERGING GROWTH
WRL T. ROWE PRICE SMALL CAP
WRL GOLDMAN SACHS SMALL CAP
WRL PILGRIM BAXTER MID CAP GROWTH
WRL ALGER AGGRESSIVE GROWTH
WRL THIRD AVENUE VALUE
WRL VALUE LINE AGGRESSIVE GROWTH
WRL GE INTERNATIONAL EQUITY
WRL JANUS GLOBAL
WRL GREAT COMPANIES -- GLOBAL2
WRL GABELLI GLOBAL GROWTH
WRL GREAT COMPANIES -- TECHNOLOGYSM
WRL JANUS GROWTH
WRL LKCM CAPITAL GROWTH
WRL GOLDMAN SACHS GROWTH
WRL GE U.S. EQUITY
WRL GREAT COMPANIES -- AMERICASM
WRL SALOMON ALL CAP
WRL C.A.S.E. GROWTH
WRL DREYFUS MID CAP
WRL NWQ VALUE EQUITY
WRL T. ROWE PRICE DIVIDEND GROWTH
WRL DEAN ASSET ALLOCATION
WRL LKCM STRATEGIC TOTAL RETURN
WRL J.P. MORGAN REAL ESTATE SECURITIES
WRL FEDERATED GROWTH & INCOME
WRL AEGON BALANCED
WRL AEGON BOND
WRL J.P. MORGAN MONEY MARKET

STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information is not a prospectus but supplements and
should be read in conjunction with the WRL Series Fund, Inc. (the "Fund")
Prospectus. A copy of the Prospectus may be obtained from the Fund by writing
the Fund at 570 Carillon Parkway, St. Petersburg, FL 33716 or by calling the
Fund at (800) 851-9777.

Investment Adviser:

WRL INVESTMENT MANAGEMENT, INC.

Sub-Advisers:

VAN KAMPEN ASSET MANAGEMENT INC.
T. ROWE PRICE ASSOCIATES, INC.
GOLDMAN SACHS ASSET MANAGEMENT INC.
PILGRIM BAXTER & ASSOCIATES, LTD.
FRED ALGER MANAGEMENT, INC.
EQSF ADVISERS, INC.
VALUE LINE, INC.
GE ASSET MANAGEMENT INCORPORATED
JANUS CAPITAL CORPORATION
GREAT COMPANIES, L.L.C.
GABELLI ASSET MANAGEMENT COMPANY
SALOMON BROTHERS ASSET MANAGEMENT INC.
C.A.S.E. MANAGEMENT, INC.
THE DREYFUS CORPORATION
NWQ INVESTMENT MANAGEMENT COMPANY, INC.
DEAN INVESTMENT ASSOCIATES
LUTHER KING CAPITAL MANAGEMENT CORPORATION
J.P. MORGAN INVESTMENT MANAGEMENT INC.
FEDERATED INVESTMENT COUNSELING
AEGON USA INVESTMENT MANAGEMENT, INC.

The date of the Prospectus to which this Statement of Additional Information
relates is May 1, 2000, as supplemented August 30, 2000 and the date of this
Statement of Additional Information is December 1, 2000.
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page in this Statement
of
Additional Information
-----------------------
<S> <C>
FUND HISTORY 1
INVESTMENT OBJECTIVES AND POLICIES 2
Investment Restrictions 2
WRL VKAM Emerging Growth 2
WRL T. Rowe Price Small Cap 3
WRL T. Rowe Price Dividend Growth 3
WRL Goldman Sachs Growth 4
WRL Goldman Sachs Small Cap 4
WRL Pilgrim Baxter Mid Cap Growth 5
WRL Alger Aggressive Growth 6
WRL Third Avenue Value 6
WRL Value Line Aggressive Growth 7
WRL GE International Equity 8
WRL Janus Global 9
WRL Gabelli Global Growth 10
WRL Great Companies -- Global2 11
WRL Great Companies -- AmericaSM 12
WRL Great Companies -- TechnologySM 12
WRL Janus Growth 12
WRL LKCM Capital Growth 13
WRL C.A.S.E. Growth 12
WRL AEGON Bond 12
WRL GE U.S. Equity 14
WRL Salomon All Cap 15
WRL Dreyfus Mid Cap 16
WRL NWQ Value Equity 16
WRL Dean Asset Allocation 17
WRL LKCM Strategic Total Return 18
WRL J.P. Morgan Real Estate Securities 19
WRL Federated Growth & Income 20
WRL AEGON Balanced 21
WRL J.P. Morgan Money Market 22
INVESTMENT POLICIES 23
Lending 23
Borrowing 23
Short Sales 24
Foreign Securities 24
Sovereign Debt Securities (WRL Gabelli Global Growth) 25
Foreign Bank Obligations 25
Forward Foreign Currency Contracts 25
When-Issued, Delayed Settlement and Forward Delivery Securities 25
Investment Funds (WRL GE International Equity) 26
Securities Subject to Reorganization (WRL Gabelli Global Growth) 26
Repurchase and Reverse Repurchase Agreements 26
Temporary Defensive Position 27
U.S. Government Securities 27
Non-Investment Grade Debt Securities 27
Convertible Securities 28
Investments in Futures, Options and Other Derivative Instruments 28
Zero Coupon, Pay-In-Kind and Step Coupon Securities 38
</TABLE>

i
<PAGE>

<TABLE>
<CAPTION>
Page in this Statement
of
Additional Information
-----------------------
<S> <C>
Warrants and Rights 39
Mortgage-Backed Securities 39
Asset-Backed Securities 39
Pass-Through Securities 39
Other Income Producing Securities 40
Illiquid and Restricted/144A Securities 40
Money Market Reserves
(WRL T. Rowe Price Small Cap and
WRL T. Rowe Price Dividend Growth) 41
Other Investment Companies 41
Quality and Diversification Requirements
(WRL J.P. Morgan Money Market) 41
Bank and Thrift Obligations 42
Investments in the Real Estate Industry and Real Estate Investment Trusts
("REITs") 42
Variable Rate Master Demand Notes 43
Debt Securities and Fixed-Income Investing 43
High Yield/High-Risk Securities 44
Trade Claims 44
MANAGEMENT OF THE FUND 45
Directors and Officers 45
The Investment Adviser 47
The Sub-Advisers 51
Joint Trading Accounts 58
Personal Securities Transactions 58
Administrative and Transfer Agency Services 59
PORTFOLIO TRANSACTIONS AND BROKERAGE 59
Portfolio Turnover 59
Placement of Portfolio Brokerage 60
PURCHASE AND REDEMPTION OF SHARES 63
Determination of Offering Price 63
Net Asset Valuation 63
CALCULATION OF PERFORMANCE
RELATED INFORMATION 63
Total Return 63
Yield Quotations 64
Yield Quotations - WRL J.P. Morgan Money Market 64
TAXES 65
CAPITAL STOCK OF THE FUND 66
REGISTRATION STATEMENT 66
FINANCIAL STATEMENTS 67
OTHER INFORMATION 67
Independent Certified Public Accountants 67
Custodian 67
Appendix A - Description of Portfolio Securities A-1
Appendix B - Brief Explanation of
Rating Categories B-1
</TABLE>

ii
<PAGE>

[GRAPHIC OMITTED]

FUND HISTORY

The Fund was incorporated under the laws of the State of Maryland on August 21,
1985 and is registered with the Securities and Exchange Commission ("SEC") as an
open-end management investment company.

The Fund offers its shares only for purchase by the separate accounts of life
companies to fund benefits under variable life insurance policies or variable
annuity contracts issued by AUSA Life Insurance Company, Inc. ("AUSA"), PFL Life
Insurance Company ("PFL"), Western Reserve Life Assurance Co. of Ohio ("WRL")
Peoples Benefit Life Insurance Company ("Peoples") and Transamerica Occidental
Life Insurance Company ("Transamerica"), (the "Life Companies"). Shares may be
offered to other life insurance companies in the future.

Because Fund shares are sold to separate accounts established to receive and
invest premiums received under variable life insurance policies and purchase
payments received under the variable annuity contracts, it is conceivable that,
in the future, it may become disadvantageous for variable life insurance
separate accounts and variable annuity separate accounts of the Life Companies
to invest in the Fund simultaneously. Neither the Life Companies nor the Fund
currently foresees any such disadvantages or conflicts, either to variable life
insurance policyholders or to variable annuity contract owners. Any Life Company
may notify the Fund's Board of a potential or existing conflict. The Fund's
Board will then determine if a material conflict exists and what action, if any,
should be taken in response. Such action could include the sale of Fund shares
by one or more of the separate accounts, which could have adverse consequences.
Material conflicts could result from, for example, (1) changes in state
insurance laws, (2) changes in Federal income tax laws, or (3) differences in
voting instructions between those given by variable life insurance policyholders
and those given by variable annuity contract owners. The Fund's Board might
conclude that separate funds should be established for variable life and
variable annuity separate accounts. If this happens, the affected Life Companies
will bear the attendant expenses of establishing separate funds. As a result,
variable life insurance policyholders and variable annuity contract owners would
no longer have the economies of scale typically resulting from a larger combined
fund.

The Fund offers a separate class of common stock for each portfolio. All shares
of a portfolio have equal voting rights, but only shares of a particular
portfolio are entitled to vote on matters concerning only that portfolio. Each
of the issued and outstanding shares of a portfolio is entitled to one vote and
to participate equally in dividends and distributions declared by the portfolio
and, upon liquidation or dissolution, to participate equally in the net assets
of the portfolio remaining after satisfaction of outstanding liabilities. The
shares of a portfolio, when issued, will be fully paid and nonassessable, have
no preference, preemptive, conversion, exchange or similar rights, and will be
freely transferable. Shares do not have cumulative voting rights. The holders of
more than 50% of the shares of the Fund voting for the election of directors can
elect all of the directors of the Fund if they so choose. In such event, holders
of the remaining shares would not be able to elect any directors.

Only the separate accounts of the Life Companies may hold shares of the Fund and
are entitled to exercise the rights directly as described above. To the extent
required by law, the Life Companies will vote the Fund's shares held in the
separate accounts, including Fund shares which are not attributable to
policyowners, at meetings of the Fund, in accordance with instructions received
from persons having voting interests in the corresponding sub-accounts of the
separate accounts. Except as required by the Investment Company Act of 1940, as
amended (the "1940 Act"), the Fund does not hold regular or special policyowner
meetings. If the 1940 Act or any regulation thereunder should be amended, or if
present interpretation thereof should change, and as a result it is determined
that the Life Companies are permitted to vote the Fund's shares in their own
right, they may elect to do so. The rights of policyowners are described in more
detail in the prospectuses or disclosure documents for the policies and the
annuity contracts, respectively.

1
<PAGE>

[GRAPHIC OMITTED]

The investment objectives of the WRL VKAM Emerging Growth, WRL T. Rowe Price
Small Cap, WRL Goldman Sachs Small Cap, WRL Alger Aggressive Growth, WRL Value
Line Aggressive Growth, WRL GE International Equity, WRL Janus Global, WRL Third
Avenue Value, WRL Dreyfus Mid Cap, WRL Salomon All Cap, WRL Pilgrim Baxter Mid
Cap Growth, WRL Janus Growth, WRL Goldman Sachs Growth, WRL C.A.S.E. Growth, WRL
GE U.S. Equity, WRL NWQ Value Equity, WRL T. Rowe Price Dividend Growth, WRL
Great Companies -- AmericaSM, WRL Great Companies -- TechnologySM, WRL Great
Companies -- Global2, WRL Gabelli Global, WRL LKCM Capital Growth, WRL Dean
Asset Allocation, WRL LKCM Strategic Total Return, WRL Federated Growth &
Income, WRL AEGON Balanced, WRL J.P. Morgan Real Estate Securities, WRL AEGON
Bond and WRL J.P. Morgan Money Market (a "portfolio" or collectively, the
"portfolios") of the Fund are described in the portfolios' Prospectus. Shares of
the portfolios are sold only to the separate accounts of WRL and to separate
accounts of certain of its affiliated life insurance companies (collectively,
the "separate accounts") to fund the benefits under certain variable life
insurance policies (the "policies") and variable annuity contracts (the "annuity
contracts").

As indicated in the prospectus, each portfolio's investment objective and,
unless otherwise noted, its investment policies and techniques may be changed by
the Board of Directors of the Fund without approval of shareholders or holders
of the policies or annuity contracts (collectively, "policyowners"). A change in
the investment objective or policies of a portfolio may result in the portfolio
having an investment objective or policies different from those which a
policyowner deemed appropriate at the time of investment.

As indicated in the prospectus, each portfolio is subject to certain fundamental
policies and restrictions which may not be changed without the approval of the
holders of a majority of the outstanding voting securities of the portfolio.
"Majority" for this purpose and under the 1940 Act means the lesser of (i) 67%
of the outstanding voting securities represented at a meeting at which more than
50% of the outstanding voting securities of a portfolio are represented or (ii)
more than 50% of the outstanding voting securities of a portfolio. A complete
statement of all such fundamental policies is set forth below. State insurance
laws and regulations may impose additional limitations on the Fund's
investments, including the Fund's ability to borrow, lend and use options,
futures and other derivative instruments. In addition, such laws and regulations
may require that a portfolio's investments meet additional diversification or
other requirements.

[GRAPHIC OMITTED]

WRL VKAM EMERGING GROWTH

The portfolio may not, as a matter of fundamental policy:

1. With respect to 75% of the portfolio's total assets purchase the
securities of any one issuer (other than Government securities as defined in the
1940 Act) if immediately after and as a result of such purchase (a) the value of
the holdings of the portfolio in the securities of such issuer exceeds 5% of the
value of the portfolio's total assets, or (b) the portfolio owns more than 10%
of the outstanding voting securities of any one class of securities of such
issuer.

2. Invest more than 25% of the portfolio's assets in the securities of
issuers primarily engaged in the same industry. Utilities will be divided
according to their services; for example, gas, gas transmission, electric and
telephone, and each will be considered a separate industry for purposes of this
restriction. In addition, there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, or of certificates of deposit and bankers' acceptances.

3. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
portfolio from investing in securities or other instruments backed by physical
commodities).

4. Purchase or sell real estate (but this shall not prevent the portfolio
from investing in securities or other instruments backed by real estate,
including mortgage-backed securities, or securities of companies engaged in the
real estate business).

5. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or repurchase
agreements).

6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities.

2
<PAGE>

7. Borrow money except for temporary or emergency purposes (not for
leveraging or investment) in an amount exceeding 25% of the value of the
portfolio's total assets (including the amount borrowed) less liabilities (other
than borrowings). Any borrowings that exceed 25% of the value of the portfolio's
total assets by reason of a decline in total assets will be reduced within three
business days to the extent necessary to comply with the 25% limitation. This
policy shall not prohibit reverse repurchase agreements.

8. Issue senior securities, except as permitted by the 1940 Act.

Furthermore, the portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) The portfolio may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, provided that margin payments and other deposits in connection with
transactions in options, futures contracts and options on futures contracts
shall not be deemed to constitute selling securities short.

(B) The portfolio may not purchase securities on margin, except that the
portfolio may obtain such short-term credits as are necessary for the clearance
of transactions and that margin payments and other deposits in connection with
transactions in options, futures contracts and options on futures contracts
shall not be deemed to constitute purchasing securities on margin.

(C) The portfolio may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of a consolidation, merger or other reorganization.

(D) The portfolio may not mortgage or pledge any securities owned or held
by the portfolio in amounts that exceed, in the aggregate, 15% of the
portfolio's net assets, provided that this limitation does not apply in the case
of assets deposited to provide margin or guarantee positions in options, futures
contracts and options on futures contracts or the segregation of assets in
connection with such contracts.

(E) The portfolio may not invest more than 15% of its net assets in
illiquid securities. This does not include securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933 or any other securities
as to which the Board of Directors has made a determination as to liquidity, as
permitted under the 1940 Act.

(F) The portfolio may not invest in companies for the purpose of
exercising control or management.

(G) The portfolio may not invest in securities of foreign issuers
denominated in foreign currency and not publicly traded in the United States if
at the time of acquisition more than 20% of the portfolio's total assets would
be invested in such securities.

[GRAPHIC OMITTED]

WRL T. ROWE PRICE SMALL CAP AND
WRL T. ROWE PRICE DIVIDEND GROWTH

The portfolio may not, as a matter of fundamental policy:

1. With respect to 75% of the portfolio's total assets, purchase the
securities of any one issuer (other than Government securities as defined in the
1940 Act) if immediately after and as a result of such purchase (a) the value of
the holdings of the portfolio in the securities of such issuer exceeds 5% of the
value of the portfolio's total assets, or (b) the portfolio owns more than 10%
of the outstanding voting securities of any one class of securities of such
issuer.

2. Borrow money except for temporary or emergency purposes (not for
leveraging or investment) in an amount exceeding 331/3% of the value of the
portfolio's total assets (including amount borrowed) less liabilities (other
than borrowings). Any borrowings that exceed 331/3% of the value of the
portfolio's total assets by reason of a decline in net assets will be reduced
within three business days to the extent necessary to comply with the 331/3%
limitation. This policy shall not prohibit reverse repurchase agreements or
deposits of assets to margin or guarantee positions in futures, options, swaps
or forward contracts, or the segregation of assets in connection with such
contracts.

3. Purchase or sell physical commodities (but this shall not prevent the
portfolio from entering into future contracts and options thereon).

4. Invest more than 25% of the portfolio's total assets in the securities
of issuers primarily engaged in the same industry. Utilities will be divided
according to their services; for example, gas, gas transmission, electric and
telephone, and each will be considered a separate industry for purposes of this
restriction, provided that there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, or of certificates of deposit and bankers' acceptance.

5. Lend any security although the portfolio may lend portfolio securities
provided that the aggregate of such loans do not exceed 331/3% of the value of
the portfolio's total assets. The portfolio may purchase money market
securities, enter into repurchase agreements and acquire publicly distributed or
privately placed debt securities, and purchase debt.

6. Purchase or sell real estate (but this shall not prevent the portfolio
from investing in securities or other instruments backed by real estate,
including mortgage-backed securities, or securities of companies engaged in the
real estate business).

3
<PAGE>

7. Issue senior securities, except as permitted by the 1940 Act.

8. Underwrite securities issued by other persons, except to the extent
that the portfolio may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in connection with the purchase and sale of its portfolio
securities in the ordinary course of pursuing its investment objective.

Furthermore, the portfolios have adopted the following non-fundamental
restrictions which may be changed by the Board of Directors of the Fund without
shareholder approval:

(A) A portfolio may not purchase additional securities when money borrowed
exceeds 5% of its total assets. This restriction shall not apply to temporary
borrowings until the portfolio's net assets exceed $40,000,000.

(B) A portfolio may not purchase a futures contract or an option thereon,
if, with respect to positions in futures or options on futures which do not
represent bona fide hedging, the aggregate initial margin and premiums on such
options would exceed 5% of the portfolio's net asset value.

(C) A portfolio may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933 or any other securities as to which a
determination as to liquidity has been made pursuant to guidelines adopted by
the Board of Directors, as permitted under the 1940 Act.

(D) A portfolio may not invest in companies for the purpose of exercising
control or management.

(E) A portfolio may not purchase securities of open-end or closed-end
investment companies except (i) in compliance with the 1940 Act; or (ii)
securities of the Reserve Investment or Government Reserve Investment Funds.

(F) A portfolio may not purchase securities on margin, except (i) for use
of short-term credit necessary for clearance of purchases of portfolio
securities; and (ii) it may make margin deposits in connection with futures
contracts or other permissible investments.

(G) A portfolio may not mortgage, pledge, hypothecate or, in any manner,
transfer any security owned by the portfolio as security for indebtedness except
as may be necessary in connection with permissible borrowings or investments and
then such mortgaging, pledging or hypothecating may not exceed 331/3% of the
portfolio's total assets at the time of borrowing or investment.

(H) A portfolio may not sell securities short, except short sales "against
the box."

[GRAPHIC OMITTED]

WRL GOLDMAN SACHS GROWTH AND
WRL GOLDMAN SACHS SMALL CAP

Each portfolio may not, as a matter of fundamental policy:

2. Borrow money except (a) the portfolio may borrow from banks (as defined
in the 1940 Act) or through reverse repurchase agreements in amounts up to
331/3% of its total assets (including the amount borrowed), (b) the portfolio
may, to the extent permitted by applicable law, borrow up to an additional 5% of
its total assets for temporary purposes, (c) the portfolio may obtain such
short-term credits as may be necessary for the clearance of purchases and sales
of portfolio securities, (d) the portfolio may purchase securities on margin to
the extent permitted by applicable law and (e) the portfolio may engage in
mortgage dollar rolls which are accounted for as financings.

3. Purchase or sell physical commodities (but this shall not prevent the
portfolio from investing in currency and financial instruments and contracts
that are commodities or commodity contracts).

4. Invest more than 25% of the portfolio's assets in the securities of
issuers primarily engaged in the same industry. Utilities will be divided
according to their services; for example, gas, gas transmission, electric and
telephone, and each will be considered a separate industry for purposes of this
restriction, provided that there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, or of certificates of deposit and bankers' acceptances.

7. Issue senior securities, except as permitted by the 1940 Act.

4
<PAGE>

Furthermore, the portfolios have adopted the following non-fundamental
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) A portfolio may not invest in companies for the purpose of exercising
control or management.

(B) A portfolio may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933 or any other securities as to which a
determination as to liquidity has been made pursuant to guidelines adopted by
the Board of Directors, as permitted under the 1940 Act.

(C) A portfolio may not purchase additional securities when money borrowed
exceeds 5% of its total assets. This restriction shall not apply to temporary
borrowings until the portfolio's net assets exceed $40,000,000.

(D) A portfolio may not make short sales of securities, except short sales
"against the box."

[GRAPHIC OMITTED]

WRL PILGRIM BAXTER MID CAP GROWTH

The portfolio may not, as a matter of fundamental policy:

2. Borrow money except for temporary or emergency purposes (not for
leveraging or investment) in an amount exceeding 10% of the value of the
portfolio's total assets. This borrowing provision is included solely to
facilitate the orderly sale of portfolio securities to accommodate substantial
redemption requests if they should occur and is not for investment purposes. All
borrowings in excess of 5% of the portfolio's total assets will be repaid before
making investments.

3. Make loans, except that the portfolio, in accordance with its
investment objectives and policies, may purchase or hold debt securities, and
enter into repurchase agreements as described in the portfolio's prospectus and
this Statement of Additional Information.

4. Purchase or sell real estate, real estate limited partnership
interests, futures contracts, commodities or commodity contracts, except that
this shall not prevent the portfolio from (i) investing in readily marketable
securities of issuers which can invest in real estate or commodities,
institutions that issue mortgages, or real estate investment trusts which deal
in real estate or interests therein, pursuant to the portfolio's investment
objective and policies, and (ii) entering into futures contracts and options
thereon that are listed on a national securities or commodities exchange where,
as a result thereof, no more than 5% of the portfolio's total assets (taken at
market value at the time of entering into the futures contracts) would be
committed to margin deposits on such futures contracts and premiums paid for
unexpired options on such futures contracts; provided that, in the case of an
option that is "in-the-money" at the time of purchase, the "in-the-money"
amount, as defined under the Commodities Futures Trading Commission regulations,
may be excluded in computing the 5% limit. The portfolio (as a matter of
operating policy) will utilize only listed futures contracts and options
thereon.

5. Act as an underwriter of securities of other issuers except as it may
be deemed an underwriter in selling a portfolio security.

6. Issue senior securities, except as permitted by the 1940 Act.

7. Invest more than 25% of the portfolio's assets in the securities of
issuers primarily engaged in the same industry. Utilities will be divided
according to their services, for example, gas, gas transmission, electric and
telephone, and each will be considered a separate industry for purposes of this
restriction. In addition, there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. government or its agencies or
instrumentalities, or of certificates of deposit and bankers' acceptances.

Furthermore, the portfolio has adopted the following non-fundamental
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) The portfolio may not invest in companies for the purpose of
exercising control.

(B) The portfolio may not pledge, mortgage or hypothecate assets, except
(i) to secure temporary borrowings as permitted by the portfolio's limitation on
permitted borrowings, or (ii) in connection with permitted transactions
regarding options and futures contracts.

(C) The portfolio may not invest more than 15% of its net assets in
illiquid securities. This does not include securities eligible for resale
pursuant to Rule 144A under the 1933 Act, or any successor to such Rule, Section
4(2) commercial paper or any other securities as to which the Board of Directors
has made a determination as to liquidity, as permitted under the 1940 Act.

(D) Purchase securities of other investment companies except as permitted
by the 1940 Act and the rules and regulations thereunder.

5
<PAGE>

With respect to restriction 7 above, the portfolio may use (with the
consent of the Investment Adviser) industry classifications reflected by
Bloomberg Sub-Groups for the comunications equipment, electronic components and
accessories, and the computer and other data processing service sectors, if
applicable at the time of determination.

[GRAPHIC OMITTED]

WRL ALGER AGGRESSIVE GROWTH

The portfolio may not, as a matter of fundamental policy:

2. Purchase any securities that would cause more than 25% of the value of
the portfolio's total assets to be invested in the securities of issuers
conducting their principal business activities in the same industry; provided
that there shall be no limit on the purchase of U.S. Government securities.

3. Invest in commodities except that the portfolio may purchase or sell
stock index futures contracts and related options thereon if thereafter no more
than 5% of its total assets are invested in aggregate initial margin and
premiums.

4. Purchase or sell real estate or real estate limited partnerships,
except that the portfolio may purchase and sell securities secured by real
estate, mortgages or interests therein and securities that are issued by
companies that invest or deal in real estate.

5. Make loans to others, except through purchasing qualified debt
obligations, lending portfolio securities or entering into repurchase
agreements.

6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities.

7. Borrow money, except that the portfolio may borrow from banks for
investment purposes as set forth in the Prospectus. Immediately after any
borrowing, including reverse repurchase agreements, the portfolio will maintain
asset coverage of not less than 300% with respect to all borrowings.

8. Issue senior securities, except that the portfolio may borrow from
banks for investment purposes so long as the portfolio maintains the required
coverage.

Furthermore, the portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) The portfolio may not sell securities short or purchase securities on
margin, except that the portfolio may obtain any short-term credit necessary for
the clearance of purchases and sales of securities. These restrictions shall not
apply to transactions involving selling securities "short against the box."

(B) The portfolio may not invest in securities of other investment
companies, except as it may be acquired as part of a merger, consolidation,
reorganization, acquisition of assets or offer of exchange.

(C) The portfolio may not pledge, hypothecate, mortgage or otherwise
encumber more than 10% of the value of the portfolio's total assets except as
noted in (E) below. These restrictions shall not apply to transactions involving
reverse repurchase agreements or the purchase of securities subject to firm
commitment agreements or on a when-issued basis.

(D) The portfolio may not invest more than 15% of its net assets in
illiquid securities. This does not include securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933 or any other securities
as to which the Board of Directors has made a determination as to liquidity, as
permitted under the 1940 Act.

(E) The portfolio may not invest in companies for the purpose of
exercising control or management.

[GRAPHIC OMITTED]

WRL THIRD AVENUE VALUE

The portfolio may not, as a matter of fundamental policy:

1. Act as underwriter of securities issued by other persons, except to the
extent that, in connection with the disposition of portfolio securities, it may
technically be deemed to be an underwriter under certain securities laws.

2. Invest 25% or more of the value of its total assets in the securities
of issuers (other than Government securities) which are determined to be engaged
in the same industry or similar trades or businesses or related trades or
businesses.

3. Invest in interests in oil, gas, or other mineral exploration or
development programs, although it may invest in the marketable securities of
companies which invest in or sponsor such programs.

4. Buy or sell commodities or commodity contracts or future contracts
(other than gold or foreign currencies unless acquired as a result of ownership
of securities).

5. Invest directly in real estate or interests in real estate, including
limited partnership interests; however, the portfolio may own debt or equity
securities issued by companies engaged in those businesses.

6. Borrow money or pledge, mortgage or hypothecate any of its assets
except that the portfolio may borrow on a secured or unsecured basis as a
temporary

6
<PAGE>

measure for extraordinary or emergency purposes. Such temporary borrowing may
not exceed 5% of the value of the portfolio's total assets when the borrowing is
made.

7. Issue any senior security except as permitted by the 1940 Act.

8. Lend any security or make any other loan if, as a result, more than
331/3% of its total assets would be lent to other parties (but this limitation
does not apply to purchases of commercial paper, debt securities or to
repurchase agreements).

Furthermore, the portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) The portfolio may not make short sales of securities or maintain a
short position. This restriction shall not apply to transactions involving
selling securities "short against the box."

(B) The portfolio may not participate on a "joint" or "joint and several"
basis in any trading account in securities.

(C) The portfolio may not invest in securities of other investment
companies if the portfolio, after such purchase or acquisition owns, in the
aggregate, (i) more than 3% of the total outstanding voting stock of the
acquired company; (ii) securities issued by the acquired company having an
aggregate value in excess of 5% of the value of the total assets of the
portfolio, or (iii) securities issued by the acquired company and all other
investment companies (other than treasury stock of the portfolio) having an
aggregate value in excess of 10% of the value of the total assets of the
portfolio.

[GRAPHIC OMITTED]

WRL VALUE LINE AGGRESSIVE GROWTH

The portfolio may not, as a matter of fundamental policy:

1. With respect to 75% of the portfolio's total assets, purchase the
securities of any one issuer (other than Government securities as defined in the
1940 Act) if immediately after and as a result of such purchase (a) the value of
the holdings of the portfolio in the securities of such issuer exceeds 5% of the
value of the portfolio's total assets, or (b) the portfolio owns more than 10%
of the outstanding securities of any one class of securities of such issuer.

3. Invest in commodities or commodity contracts except that the portfolio
may invest in stock index futures contracts and options on stock index futures
contracts.

5. Make loans, except through (a) the purchase of debt obligations in
accordance with the portfolio's investment objective and policies, (b)
repurchase agreements with banks, brokers, dealers and other financial
institutions, provided that repurchase agreements maturing in more than seven
days when taken together with other illiquid investments do not exceed 10% of
the portfolio's assets, and (c) loans of securities as permitted by applicable
law.

6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities.

7. Borrow money, except that the portfolio may borrow from banks for
investment purposes as set forth in the prospectus. Immediately after borrowing,
including reverse repurchase agreements, the portfolio will maintain asset
coverage of not less than 300% with respect to all borrowings.

8. Issue senior securities, except as permitted by the 1940 Act.

Furthermore, the portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) The portfolio may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short ("short against the box"), provided that margin payments and other
deposits in connection with transactions in options, futures contracts and
options on futures contracts shall not be deemed to constitute selling
securities short.

(C) The portfolio may not purchase securities of other investment
companies, except as it may be acquired as part of a merger, consolidation,
reorganization, acquisition of assets or offer of exchange.

(D) The portfolio may not invest more than 10% of its net assets in
illiquid securities. This does not include

7
<PAGE>

securities eligible for resale pursuant to Rule 144A under the Securities Act of
1933 or any securities for which the Board of Directors or sub-adviser has made
a determination of liquidity, as permitted under the 1940 Act.

(E) The portfolio may not invest in companies for the purpose of
exercising control or management.

(F) The portfolio may not purchase or sell any put or call options or any
combinations thereof, except that the portfolio may write and sell covered call
option contracts on securities owned by the portfolio. The portfolio may also
purchase call options for the purpose of terminating its outstanding obligations
with respect to securities upon which covered call option contracts have been
written (i.e., "closing purchase transaction"). The portfolio may also purchase
and sell put and call options on stock index futures contracts.

[GRAPHIC OMITTED]

WRL GE INTERNATIONAL EQUITY
(formerly WRL GE/Scottish Equitable
International Equity Portfolio)

The portfolio may not, as a matter of fundamental policy:

2. Invest more than 25% of the portfolio's assets in the securities of
issuers primarily engaged in the same industry. Utilities will be divided
according to their services; for example, gas, gas transmission, electric and
telephone, and each will be considered a separate industry for purposes of this
restriction, provided that there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, or of certificates of deposit and bankers' acceptances. For
purposes of this restriction, (a) the government of a country, other than the
United States, will be viewed as one industry; and (b) all supranational
organizations together will be viewed as one industry.

3. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this shall not
prevent the portfolio from purchasing or selling options, futures, swaps and
forward contracts or from investing in securities or other instruments backed by
physical commodities).

4. Invest directly in real estate or interests in real estate; however,
the portfolio may own securities or other instruments backed by real estate,
including mortgage-backed securities, or debt or equity securities issued by
companies engaged in those businesses.

5. Lend any security or make any other loan if, as a result, more than 30%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or to repurchase
agreements).

6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities.

7. Borrow money, except for temporary or emergency purposes (not for
leveraging or investment) in an amount exceeding 331/3% of the value of the
portfolio's total assets (including the amount borrowed) less liabilities (other
than borrowings). Any borrowings that exceed 331/3% of the value of the
portfolio's total assets by reason of a decline in net assets will be reduced
within three business days to the extent necessary to comply with the 331/3%
limitation. This policy shall not prohibit reverse repurchase agreements or
deposits of assets to margin or guarantee positions in futures, options, swaps
or forward contracts, or the segregation of assets in connection with such
contracts.

8. Issue senior securities, except as permitted by the 1940 Act.

Furthermore, the portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) The portfolio may not (i) enter into any futures contracts or options
on futures contracts for purposes other than bona fide hedging transactions
within the meaning of Commodity Futures Trading Commission regulations if the
aggregate initial margin deposits and premiums required to establish positions
in futures contracts and related options that do not fall within the definition
of bona fide hedging transactions would exceed 5% of the fair market value of
the portfolio's net assets, after taking into account unrealized profits and
losses on such contracts it has entered into and (ii) enter into any futures
contracts or options on futures contracts if the aggregate amount of the
portfolio's commitments under outstanding futures contracts positions and
options on futures contracts would exceed the market value of its total assets.

(B) The portfolio may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short and provided that transactions in options, swaps and forward futures
contracts are not deemed to constitute selling securities short.

8
<PAGE>

deposits in connection with transactions in options, futures, swaps and forward
contracts shall not be deemed to constitute purchasing securities on margin.

(D) The portfolio may not purchase securities of other investment
companies, other than a security acquired in connection with a merger,
consolidation, acquisition, reorganization or offer of exchange and except as
otherwise permitted under the 1940 Act. Investments by the portfolio in GEI
Short-Term Investment Fund, a private investment fund advised by GE Asset
Management Incorporated ("GEAM"), created specifically to serve as a vehicle for
the collective investment of cash balances of the portfolio and other accounts
advised by GEAM, are not subject to this restriction, pursuant to and in
accordance with necessary regulatory approvals.

(E) The portfolio may not mortgage or pledge any securities owned or held
by the portfolio in amounts that exceed, in the aggregate, 15% of the
portfolio's net assets, provided that this limitation does not apply to reverse
repurchase agreements or in the case of assets deposited to margin or guarantee
positions in futures, options, swaps or forward contracts or the segregation of
assets in connection with such contracts.

(F) The portfolio may not invest more than 15% of its net assets in
illiquid securities. This does not include securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933 or any other securities
as to which a determination as to liquidity has been made pursuant to guidelines
adopted by the Board of Directors, as permitted under the 1940 Act.

(G) The portfolio may not invest in companies for the purpose of
exercising control or management.

With respect to investment restriction 2. above, the portfolio may use the
industry classifications reflected by the S&P 500 Composite Stock Index, if
applicable at the time of determination. For all other portfolio holdings, the
portfolio may use the Directory of Companies Required to File Annual Reports
with the SEC and Bloomberg Inc. In addition, the portfolio may select its own
industry classifications, provided such classifications are reasonable.

[GRAPHIC OMITTED]

WRL JANUS GLOBAL

The portfolio may not, as a matter of fundamental policy:

1. (a) With respect to 75% of the portfolio's assets, invest in the
securities (other than Government securities as defined in the 1940 Act) of any
one issuer if immediately thereafter, more than 5% of the portfolio's total
assets would be invested in securities of that issuer; or (b) with respect to
100% of the portfolio's assets, own more than either (i) 10% in principal amount
of the outstanding debt securities of an issuer, or (ii) 10% of the outstanding
voting securities of an issuer, except that such restrictions shall not apply to
Government securities, bank money market instruments or bank repurchase
agreements.

2. Invest more than 25% of the portfolio's assets in the securities of
issuers primarily engaged in the same industry. Utilities will be divided
according to their services; for example, gas, gas transmission, electric and
telephone, and each will be considered a separate industry for purposes of this
restriction, provided that there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, or of certificates of deposit and bankers' acceptances.

4. Invest directly in real estate or interests in real estate; however,
the portfolio may own debt or equity securities issued by companies engaged in
those businesses.

6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities.

7. Borrow money, except for temporary or emergency purposes (not for
leveraging or investment) in an amount exceeding 25% of the value of the
portfolio's total assets (including the amount borrowed) less liabilities (other
than borrowings). Any borrowings that exceed 25% of the value of the portfolio's
total assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 25% limitation. This
policy shall not prohibit reverse repurchase agreements or deposits of assets to
margin or guarantee positions in futures, options, swaps or forward contracts,
or the segregation of assets in connection with such contracts.

8. Issue senior securities, except as permitted by the 1940 Act.

Furthermore, the portfolio has adopted the following non-fundamental
investment restrictions which may be changed by the Board of Directors of the
Fund without shareholder or policyowner approval:

9
<PAGE>

5% of the fair market value of the portfolio's net assets, after taking into
account unrealized profits and losses on such contracts it has entered into and
(ii) enter into any futures contracts or options on futures contracts if the
aggregate amount of the portfolio's commitments under outstanding futures
contracts positions and options on futures contracts would exceed the market
value of its total assets.

(C) The portfolio may not purchase securities on margin, except that the
portfolio may obtain such short-term credits as are necessary for the clearance
of transactions, provided that margin payments and other deposits in connection
with transactions in options, futures, swaps and forward contracts shall not be
deemed to constitute purchasing securities on margin.

(D) The portfolio may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies.

Limitations (i) and (ii) do not apply to money market funds or to securities
received as dividends, through offers of exchange, or as a result of a
consolidation, merger or other reorganization.

(F) The portfolio may not invest more than 15% of its net assets in
illiquid securities. This does not include securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933 or any other securities
as to which the Board of Directors has made a determination as to liquidity, as
permitted under the 1940 Act.

(G) The portfolio may not invest in companies for the purpose of
exercising control or management.

[GRAPHIC OMITTED]

WRL GABELLI GLOBAL GROWTH

The portfolio may not, as a matter of fundamental policy:

1. With respect to 75% of the portfolio's total assets, purchase the
securities of any one issuer (other than cash items and "Government Securities"
as defined in the 1940 Act) if immediately after and as a result of such
purchase (a) the value of the holdings of the portfolio in the securities of
such issuer exceeds 5% of the value of the portfolio's total assets, or (b) the
portfolio owns more than 10% of the outstanding voting securities of any one
class of securities of such issuer.

2. Issue senior securities, except to the extent that senior securities
may be deemed to arise from bank borrowings and purchases of government
securities on a "when-issued" or "delayed delivery" basis, as described in the
prospectus.

3. Borrow money except (a) the portfolio may borrow from banks (as defined
in the 1940 Act) or through reverse repurchase agreements, (b) the portfolio
may, to the extent permitted by applicable law, borrow up to an additional 5% of
its total assets for temporary purposes (not for leveraging or borrowing), (c)
or pledge its assets other than to secure such issuances or in connection with
hedging transactions, short-sales, when-issued and forward commitment
transactions and similar investment strategies.

4. Make loans except (i) by purchasing fixed-income securities or by
entering into repurchase agreements or (ii) by lending the portfolio securities
to banks, brokers, dealers and other financial institutions so long as such
loans are not inconsistent with the 1940 Act or the rules and regulations or
interpretations of the SEC thereunder.

5. Act as underwriter of securities issued by others, except to the extent
that it may be deemed an underwriter in connection with the disposition of its
portfolio securities.

6. Invest in companies for the purpose of exercising control or
management.

7. Invest directly in real estate or interests in real estate, including
limited partnership interests; however the portfolio may own debt or equity
securities issued by companies engaged in those businesses.

8. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments.

9. Invest 25% or more of the portfolio's assets in the securities of
issuers primarily engaged in the same industry. Utilities will be divided
according to their services; for example, gas, gas transmission, electric and
telephone, and each will be considered a separate industry for purposes of this
restriction, provided that there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, or of certificates of deposit and bankers' acceptances.

Furthermore, the portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) The fund may not invest more than 15% of its net assets in illiquid
securities. This does not include

10
<PAGE>

securities eligible for resale pursuant to Rule 144A under the 1933 or any other
securities as to which a determination as to liquidity has been made pursuant to
guidelines adopted by the Board of Trustees as permitted under the 1940 Act.

(B) The fund may not mortgage, pledge or hypothecate any of its assets,
provided that this shall not apply to the transfer of securities in connection
with any permissible borrowing or to collateral arrangements in connection with
permissible activities.

(C) The fund may not purchase securities on margin, provided that the fund
may obtain short-term credits necessary for the clearance of purchases and sales
of securities, and further provided that the fund may make margin deposits in
connection with its use of financial futures, forward contracts, or derivative
instruments.

[GRAPHIC OMITTED]

WRL GREAT COMPANIES -- GLOBAL2

The portfolio may not, as a matter of fundamental policy:

1. With respect to 75% of the portfolio's total assets, purchase the
securities of any one issuer (other than government securities as defined in the
1940 Act), if immediately after and as a result of such purchase (a) the value
of the holdings of the portfolio in the securities of such issuer exceeds 5% of
the value of the portfolio's total assets; or (b) the portfolio owns more than
10% of the outstanding voting securities of any one class of securities of such
issuer.

2. Invest 25% or more of the portfolio's assets in the securities of
issuers primarily engaged in the same industry. Utilities will be divided
according to their services; for example, gas, gas transmission, electric and
telephone, and each will be considered a separate industry for purposes of this
restriction, provided that there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, or of certificates of deposit and bankers' acceptances.

4. Invest directly in real estate or interests in real estate; however,
the portfolio may own debt or equity securities issued by companies engaged in
those businesses.

6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities.

8. Issue senior securities, except to the extent that senior securities
may be deemed to arise from bank borrowings and purchases of government
securities on a "when-issued" or "delayed delivery" basis, as described in the
prospectus.

Furthermore, the portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(D) The portfolio may not (i) purchase securities of other investment
companies, except in the open market

11
<PAGE>

where no commission except the ordinary broker's commission is paid, or (ii)
purchase or retain securities issued by other open-end investment companies.

Limitations (i) and (ii) do no apply to money market funds or to
securities received as dividends, through offers of exchange, or as a
result of a consolidation, merger or other reorganization.

(F) The portfolio may not invest more than 15% of its net assets in
illiquid securities. This does not include securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933 or any other securities
as to which the Board of Directors has made a determination as to liquidity, as
permitted under the 1940 Act.

(G) The portfolio may not invest in companies for the purpose of
exercising control or management.

[GRAPHIC OMITTED]

WRL GREAT COMPANIES -- AMERICASM
WRL GREAT COMPANIES -- TECHNOLOGYSM

Each portfolio may not, as a matter of fundamental policy:

2. Invest in interest in oil, gas, or other mineral exploration or
development progams, although it may invest in the marketable securities of
companies which invest in or sponsor such programs.

3. Buy or sell commodities or commodity contracts or future contracts
(other than gold or foreign currencies unless acquired as a result of ownership
of securities.)

4. Invest directly in real estate or interests in real estate, including
limited partnership interests; however, the portfolio may own debt or equity
securities issued by companies engaged in those businesses.

5. Borrow money or pledge, mortgage or hypothecate any of its assets
except that the portfolio may borrow on a secured or unsecured basis as a
temporary measure for extraordinary or emergency purposes. Such temporary
borrowing may not exceed 5% of the value of the portfolio's total assets when
the borrowing is made.

6. Issue any senior security except as permitted by the 1940 Act.

7. Lend any security or make any other loan if, as a result, more than
331/3% of its total assets would be lent to other parties (but this limitation
does not apply to purchases of commercial paper, debt securities or to
repurchase agreements).

Furthermore, each portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) Each portfolio may not make short sales of securities or maintain a
short position. This restriction shall not apply to transactions involving
selling securities "short against the box."

(B) Each portfolio may not participate on a "joint" or "joint and several"
basis in any trading account in securities.

(C) Each portfolio may not invest in securities of other investment
companies, except as it may be acquired as part of a merger, consolidation,
reorganization, acquisition of assets, or offer of exchange.

[GRAPHIC OMITTED]

WRL JANUS GROWTH, WRL C.A.S.E. GROWTH AND WRL AEGON BOND

A portfolio may not, as a matter of fundamental policy:

1. With respect to 75% of the portfolio's total assets, purchase the
securities of any one issuer (other than cash items and "Government securities"
as defined in the 1940 Act) if immediately after and as a result of such
purchase (a) the value of the holdings of the portfolio in the securities of
such issuer exceeds 5% of the value of the portfolio's total assets, or (b) the
portfolio owns more than 10% of the outstanding voting securities of any one
class of securities of such issuer.

2. Invest more than 25% (15% for C.A.S.E. Growth portfolio) of the value
of the portfolio's assets in any particular industry (other than Government
securities).

3. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this restriction
shall not prevent the portfolio from purchasing or selling options, futures
contracts, caps, floors and other derivative instruments, engaging in swap
transactions or investing in securities or other instruments backed by physical
commodities).

5. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of portfolio securities of the portfolio.

6. Lend any security or make any other loan if, as a result, more than
25% of its total assets would be lent to

12
<PAGE>

other parties (but this limitation does not apply to purchases of commercial
paper, debt securities or to repurchase agreements).

7. Borrow money, except for temporary or emergency purposes (not for
leveraging or investment) in an amount exceeding 25% of the value of the
portfolio's total assets (including the amount borrowed) less liabilities (other
than borrowings). Any borrowings that exceed 25% of the value of the portfolio's
total assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 25% restriction. This
policy shall not prohibit reverse repurchase agreements or deposits of assets to
provide margin or guarantee positions in connection with transactions in
options, future contracts, swaps, forward contracts, or other derivative
instruments or the segregation of assets in connection with such transactions.

8. Issue senior securities, except as permitted by the 1940 Act.

Furthermore, the portfolios have adopted the following non-fundamental
investment restrictions which may be changed by the Board of Directors of the
Fund without shareholder or policyowner approval:

(A) A portfolio may not, as a matter of non-fundamental policy: (i) enter
into any futures contracts or options on futures contracts for purposes other
than bona fide hedging transactions within the meaning of Commodity Futures
Trading Commission regulations if the aggregate initial margin deposits and
premiums required to establish positions in futures contracts and related
options that do not fall within the definition of bona fide hedging transactions
would exceed 5% of the fair market value of the portfolio's net assets, after
taking into account unrealized profits and losses on such contracts it has
entered into and (ii) enter into any futures contracts or options on futures
contracts if the aggregate amount of the portfolio's commitments under
outstanding futures contracts positions and options on futures contracts would
exceed the market value of its total assets.

(B) A portfolio may not mortgage or pledge any securities owned or held by
the portfolio in amounts that exceed, in the aggregate, 15% of the portfolio's
net assets, provided that this limitation does not apply to reverse repurchase
agreements or in the case of assets deposited to provide margin or guarantee
positions in options, futures contracts, swaps, forward contracts or other
derivative instruments or the segregation of assets in connection with such
transactions.

(C) A portfolio may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that transactions in options, futures contracts, swaps,
forward contracts and other derivative instruments are not deemed to constitute
selling securities short.

(D) A portfolio may not purchase securities on margin, except that a
portfolio may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments and other deposits made in
connection with transactions in options, futures contracts, swaps, forward
contracts, and other derivative instruments shall not be deemed to constitute
purchasing securities on margin.

(E) A portfolio may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933 or any securities for which the Board
of Directors or the Sub-Adviser has made a determination of liquidity, as
permitted under the 1940 Act.

(F) A portfolio may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Restrictions (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers to
exchange, or as a result of reorganization, consolidation, or merger. If the
portfolio invests in a money market fund, the Investment Adviser will reduce its
advisory fee by the amount of any investment advisory or administrative service
fees paid to the investment manager of the money market fund.

(G) A portfolio may not invest more than 25% of its net assets at the time
of purchase in the securities of foreign issuers and obligors.

(H) A portfolio may not invest in companies for the purpose of exercising
control or management.

[GRAPHIC OMITTED]

WRL LKCM CAPITAL GROWTH

The portfolio may not, as a matter of fundamental policy:

2 Act as underwriter of securities issued by other persons, except to the
extent that, in connection with the disposition of portfolio securities. It may
technically be deemed to be an underwriter under certain securities laws.

3. Invest 25% or more of the portfolio's assets in the securities of
issuers primarily engaged in the same industry. Utilities will be divided
according to their services, for example, gas, gas transmission, electric and
telephone, and each will be considered a separate industry for purposes of this
restriction. In addition, there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government or its

13
<PAGE>

agencies or instrumentalities, or of certificates of deposits and bankers'
acceptances.

4. Buy or sell commodities or commodity contracts or future contracts
(other than gold or foreign currencies unless acquired as a result of ownership
of securities).

6. Borrow money or pledge, mortgage or hypothecate any of its assets
except that the portfolio may borrow on a secured or unsecured basis as a
temporary measure for extraordinary or emergency purposes. Such temporary
borrowing may not exceed 5% of the value of the portfolio's total assets when
the borrowing is made.

7. Issue any senior security except as permitted by the 1940 Act.

8. Lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties (but this limitation
does not apply to purchases of commercial paper, debt securities or to
repurchase agreements).

Furthermore, the portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) The portfolio may not make short sales of securities or maintain a
short position. This restriction shall not apply to transactions involving
selling securities "short against the box."

(B) The portfolio may not participate on a "joint" or "joint and several"
basis in any trading account in securities.

(C) The portfolio may not invest in securities of other investment
companies, except as it may be acquired as part of a merger, consolidation,
reorganization, acquisition of assets, or offer of exchange.

[GRAPHIC OMITTED]

WRL GE U.S. EQUITY

The portfolio may not, as a matter of fundamental policy:

2. Purchase any security that would cause more than 25% of the value of
the portfolio's total assets to be invested in the securities of issuers
conducting their principal business activities in the same industry; provided
that there shall be no limit on the purchase of U.S. Government securities (as
defined in the 1940 Act). For purposes of this restriction, (a) the government
of a country, other than the United States, will be viewed as one industry; and
(b) all supranational organizations together will be viewed as one industry.

3. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
portfolio from purchasing or selling options, futures, swaps and forward
contracts or from investing in securities or other instruments backed by
physical commodities).

4. Purchase or sell real estate (but this shall not prevent the portfolio
from investing in securities or other instruments backed by real-estate,
including mortgage-backed securities, or securities of companies engaged in the
real estate business).

6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities.

7. Borrow money or issue senior securities (as defined in the 1940 Act),
except that the portfolio may borrow money from banks for temporary or emergency
purposes (not for leveraging or investment) in an aggregate amount not exceeding
331/3% of the value of its total assets (including the amount borrowed) less
liabilities (other than borrowings) at the time the borrowing is made. Whenever
borrowings, including reverse repurchase agreements, of 5% or more of the
portfolio's total assets are outstanding, the portfolio will not purchase
securities.

Furthermore, the portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) The portfolio may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount of the securities sold
short.

(B) The portfolio may not purchase securities on margin, except that the
portfolio may obtain such short-term credits as are necessary for clearance of
transactions. (For purposes of this restriction, the deposit or payment of
initial or variation margin in connection with futures contracts, financial
futures contracts or related options, and options on securities, options on
securities indexes and options on currencies will not be deemed to be a purchase
of securities on margin by the portfolio.)

14
<PAGE>

(C) The portfolio may not purchase securities of other investment
companies, other than a security acquired in connection with a merger,
consolidation, acquisition, reorganization or offer of exchange and except as
otherwise permitted under the 1940 Act. Investments by the portfolio in GEI
Short-Term Investment Fund, a private investment fund advised by GEAM, created
specifically to serve as a vehicle for the collective investment of cash
balances of the portfolio and other accounts advised by GEAM are not subject to
this restriction, pursuant to and in accordance with necessary regulatory
approvals.

(D) The portfolio may not invest more than 15% of its net assets in
illiquid securities. For purposes of this restriction, illiquid securities are
securities that cannot be disposed of by the portfolio within seven days in the
ordinary course of business at approximately the amount at which the portfolio
has valued the securities. This Restriction does not include securities eligible
for resale pursuant to Rule 144A under the Securities Act of 1933 or any other
securities as to which a determination as to liquidity has been made pursuant to
guidelines adopted by the Board of Directors, as permitted under the 1940 Act.

(E) The portfolio may not purchase restricted securities if more than 10%
of the total assets of the portfolio would be invested in restricted securities.
Restricted securities are securities that are subject to contractual or legal
restrictions on transfer, excluding for purposes of this restriction, restricted
securities that are eligible for resale pursuant the Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A Securities"), that have been
determined to be liquid under guidelines established by the Fund's Board of
Directors. In no event will the portfolio's investment in illiquid and
non-publicly traded securities, in the aggregate, exceed 15% of its net assets.

(F) The portfolio may not invest in companies for the purpose of
exercising control or management, except to the extent that exercise by the
portfolio of its rights under agreements related to portfolio securities would
be deemed to constitute such control.

(G) The portfolio may not purchase or sell put options, call options,
spreads or combinations of put options, call options and spreads, except that
the portfolio may purchase and sell covered put and call options on securities
and stock indexes, and futures contracts and options on futures contracts.

[GRAPHIC OMITTED]

WRL SALOMON ALL CAP

The portfolio may not, as a matter of fundamental policy:

1. Purchase or sell real estate, real estate mortgages, commodities or
commodity contracts; however, the portfolio may: (a) purchase interests in real
estate investment trusts or companies which invest in or own real estate if the
securities of such trusts or companies are registered under the Securities Act
of 1933 and are readily marketable or holding or selling real estate received in
connection with securities it holds; and (b) may enter into futures contracts,
including futures contracts on interest rates, stock indices and currencies, and
options thereon, and may engage in forward currency contracts and buy, sell and
write options on currencies and shall not be prohibited from reverse repurchase
agreements or deposits of assets to margin or guarantee positions in futures,
options, swaps or forward contracts, or the segregation of assets in connection
with such contracts.

3. Borrow money, except that the portfolio may borrow from banks for
investment purposes up to an aggregate of 15% of the value of its total assets
taken at the time of borrowing. The portfolio may borrow for temporary or
emergency purposes an aggregate amount not to exceed 5% of the value of its
total assets at the time of borrowing.

4. Issue senior securities, except as permitted by the 1940 Act.

5. Underwrite securities issued by other persons, except to the extent
that the portfolio may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in connection with the purchase and sale of its portfolio
securities in the ordinary course of pursuing its investment objective.

6. Make loans, except that the portfolio may purchase debt obligations in
which the portfolio may invest consistent with its investment objectives and
policies or enter into, and make loans of its portfolio securities, as permitted
under the 1940 Act.

Furthermore, the portfolio has adopted the following non-fundamental
restrictions that may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

15
<PAGE>

(A) The portfolio may not invest more than 15% of its net assets in
illiquid securities. This does not include securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933 or any other securities
as to which a determination as to liquidity has been made pursuant to guidelines
adopted by the Board of Directors, as permitted under the 1940 Act.

(B) The portfolio may not invest in companies for the purpose of
exercising control or management.

(C) The portfolio may not sell securities short. This restriction shall
not apply to transactions involving selling securities "short against the box."

[GRAPHIC OMITTED]

WRL DREYFUS MID CAP

The portfolio may not, as a matter of fundamental policy:

2. Purchase any securities which would cause more than 25% of the value of
the portfolio's total assets at the time of such purchase to be invested in the
securities of one or more issuers conducting their principal activities in the
same industry. (For purposes of this limitation, U.S. Government securities, and
state or municipal governments and their political subdivisions are not
considered members of any industry. In addition, this limitation does not apply
to investments in domestic banks, including U.S. branches of foreign banks and
foreign branches of U.S. banks.)

3. Borrow money or issue senior securities as defined in the 1940 Act
except that (a) the portfolio may borrow money in an amount not exceeding
one-third of the portfolio's total assets at the time of such borrowings, and
(b) the portfolio may issue multiple classes of shares. The purchase or sale of
futures contracts and related options shall not be considered to involve the
borrowing of money or issuance of senior securities.

4. Make loans or lend securities, if as a result thereof more than
one-third of the portfolio's total assets would be subject to all such loans.
For purposes of this limitation debt instruments and repurchase agreements shall
not be treated as loans.

5. Purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the portfolio
from investing in securities or other instruments backed by real estate,
including mortgage loans, or securities of companies that engage in real estate
business or invest or deal in real estate interests therein).

6. Underwrite securities issued by any other person, except to the extent
that the purchase of securities and later disposition of such securities in
accordance with the portfolio's investment program may be deemed an
underwriting.

7. Purchase or sell commodities except that the portfolio may enter into
futures contracts and related options, forward currency contracts and other
similar instruments.

Furthermore, the portfolio has adopted the following non-fundamental
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) The portfolio shall not sell securities short, unless it owns or has
the right to obtain securities equivalent in kind and amount to the securities
sold short, and provided that transactions in futures contracts and options are
not deemed to constitute selling short.

(B) The portfolio shall not purchase securities on margin, except that the
portfolio may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments in connection with futures
contracts and options on futures contracts shall not constitute purchasing
securities on margin.

(C) The portfolio will invest no more than 15% of the value of its net
assets in illiquid securities, including repurchase agreements with remaining
maturities in excess of seven days, time deposits with maturities in excess of
seven days and other securities which are not readily marketable. For purposes
of this limitations, illiquid securities shall not include Section 4(2) paper
and securities which may be resold under Rule 144A under the Securities Act of
1933, provided the Board of Directors, or its delegate, determines that such
securities are liquid based upon the trading market for the specific security.

(D) The portfolio may not invest in securities of other investment
companies, except as they may be acquired as part of a merger, consolidation or
acquisition of assets and except to the extent otherwise permitted by the 1940
Act.

(E) The portfolio shall not purchase any security while borrowings
representing more than 5% of the portfolio's total assets are outstanding. This
restriction shall not apply to temporary borrowings until the portfolio's net
assets exceed $40,000,000.

[GRAPHIC OMITTED]

WRL NWQ VALUE EQUITY

The portfolio may not, as a matter of fundamental policy:

16
<PAGE>

(a) the value of the holdings of the portfolio in the securities of such issuer
exceeds 5% of the value of the portfolio's total assets, or (b) the portfolio
owns more than 10% of the outstanding voting securities of such issuer.

3. Make loans except (i) by purchasing debt securities in accordance with
its investment objectives and policies or by entering into repurchase agreements
or (ii) by lending the portfolio securities to banks, brokers, dealers and other
financial institutions so long as such loans are not inconsistent with the 1940
Act or the rules and regulations or interpretations of the SEC thereunder.

4. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments.

5. Purchase or sell real estate or real estate limited partnerships (but
this shall not prevent the portfolio from investing in securities or other
instruments backed by real estate, including mortgage-backed securities, or
securities of companies engaged in the real estate business).

6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities.

7. Borrow money, except from banks for temporary or emergency purposes
(not for leveraging or investment) in an amount exceeding 10% of the value of
the portfolio's total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that exceed 10% of the value of the
portfolio's total assets by reason of a decline in net assets will be reduced
within three business days to the extent necessary to comply with the 10%
limitation. The portfolio may not purchase additional securities when borrowings
exceed 5% of total assets.

8. Issue senior securities, except as permitted by the 1940 Act.

Furthermore, the portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) The portfolio may not purchase on margin or sell short.

(B) The portfolio may not invest more than an aggregate of 15% of the net
assets of the portfolio, determined at the time of investment, in illiquid
securities, subject to legal or contractual restrictions on resale or securities
for which there are no readily available markets.

(D) The portfolio may not pledge, mortgage or hypothecate any of its
assets to an extent greater than 10% of its total assets at fair market value.

(E) The portfolio may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of a consolidation, merger or other reorganization.

[GRAPHIC OMITTED]

WRL DEAN ASSET ALLOCATION

The portfolio may not, as a matter of fundamental policy:

3. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments.

6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities.

17
<PAGE>

7. Borrow money, except for temporary or emergency purposes (not for
leveraging or investment) in excess of 25% of the value of the portfolio's total
assets (including the amount borrowed) less liabilities (other than borrowings).
Any borrowings that exceed 25% of the value of the portfolio's total assets by
reason of a decline in net assets will be reduced within three business days to
the extent necessary to comply with the 25% limitation.

8. Issue senior securities, except as permitted by the 1940 Act.

Furthermore, the portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) The portfolio may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short.

(B) The portfolio may not purchase securities on margin, except that the
portfolio may obtain such short-term credits as are necessary for the clearance
of transactions.

(D) The portfolio may not mortgage or pledge any securities owned or held
by the portfolio in amounts that exceed, in the aggregate, 15% of the
portfolio's net assets.

(E) The portfolio may not invest in companies for the purpose of
exercising control or management.

(F) The portfolio may not invest in securities of foreign issuers
denominated in foreign currency and not publicly traded in the United States if
at the time of acquisition more than 25% of the portfolio's total assets would
be invested in such securities. (See "Foreign Securities," p. 24.)

[GRAPHIC OMITTED]

WRL LKCM STRATEGIC TOTAL RETURN

The portfolio may not, as a matter of fundamental policy:

2. Invest more than 25% of the portfolio's assets in the securities of
issuers primarily engaged in the same industry. Utilities will be divided
according to their services, for example, gas, gas transmission, electric and
telephone, and each will be considered a separate industry for purposes of this
restriction. In addition, there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, or of certificates of deposit and bankers' acceptances.

6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities.

8. Issue senior securities, except as permitted by the 1940 Act.

Furthermore, the portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) The portfolio may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that margin payments and other deposits in connection with
transactions in options, swaps and forward futures contracts are not deemed to
constitute selling securities short.

18
<PAGE>

(B) The portfolio may not purchase securities on margin, except that the
portfolio may obtain such short-term credits as are necessary for the clearance
of transactions, and that margin payments and other deposits in connection with
transactions in options, futures, swaps and forward contracts shall not be
deemed to constitute purchasing securities on margin.

Limitations (i) and (ii) do not apply to money market funds or to securities
received as dividends, through offers of exchange, or as a result of a
consolidation, merger or other reorganization.

(D) The portfolio may not mortgage or pledge any securities owned or held
by the portfolio in amounts that exceed, in the aggregate, 15% of the
portfolio's net assets, provided that this limitation does not apply in the case
of assets deposited to margin or guarantee positions in options, futures
contracts and options on futures contracts or placed in a segregated account in
connection with such contracts.

(E) The portfolio may not invest more than 15% of its net assets in
illiquid securities. This does not include securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933 Act or any other
securities as to which the Board of Directors has made a determination as to
liquidity, as permitted under the 1940 Act.

(F) The portfolio may not invest in companies for the purpose of
exercising control or management.

(G) The portfolio may not invest in securities of foreign issuers
denominated in foreign currency and not publicly traded in the United States if
at the time of acquisition more than 10% of the portfolio's total assets would
be invested in such securities.

[GRAPHIC OMITTED]

WRL J.P. MORGAN REAL ESTATE SECURITIES

The portfolio may not, as a matter of fundamental policy:

1. Invest less than 25% of its assets in securities of issuers primarily
engaged in the real estate industry. The portfolio will not invest more than 25%
of its assets in the securities of issuers primarily engaged in any other single
industry, provided that there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. Government or its agencies or
instrumentalities.

2. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this shall not
prevent the portfolio from purchasing or selling options, futures, swaps and
forward contracts or from investing in securities or other instruments backed by
physical commodities).

3. Invest directly in real estate or interests in real estate; however,
the portfolio may own securities or other instruments backed by real estate,
including mortgage-backed securities, or debt or equity securities issued by
companies engaged in those businesses and the portfolio may hold and sell real
estate acquired by the portfolio as a result of the ownership of securities.

4. Make loans, except that the portfolio (i) may lend portfolio securities
with a value not exceeding one-third of the portfolio's total assets, (ii) enter
into repurchase agreements, and (iii) purchase all or a portion of an issue of
debt obligations (including privately issued debt obligations), loan
participation interests, bank certificates of deposit, bankers' acceptances,
debentures or other securities, whether or not the purchase is made upon the
original issuance of the securities.

5. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities.

6. Borrow money except for temporary or emergency purposes (not for
leveraging or investment) in an amount not exceeding 331/3% of the value of the
portfolio's total assets (including the amount borrowed) less liabilities (other
than borrowings). Any borrowings that exceed 331/3% of the value of the
portfolio's total assets by reason of the decline in net assets will be reduced
within three business days to the extent necessary to comply with the 331/3%
limitation. This policy shall not prohibit reverse repurchase agreements or
deposits of assets to margin or guarantee positions in futures, options, swaps
or forward contracts, or the segregation of assets in connection with such
contracts.

7. Issue senior securities, except as permitted by the 1940 Act.

Furthermore, the portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(B) The portfolio may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold

19
<PAGE>

short and provided that transactions in options, futures contracts, swaps,
forward contracts and other derivative instruments are not deemed to constitute
selling securities short.

(C) The portfolio may not purchase securities on margin, except that the
portfolio may obtain such short-term credits as are necessary for the clearance
of transactions, provided that margin payments and other deposits in connection
with transactions in options, futures contracts, swaps and forward contracts and
other derivative instruments shall not be deemed to constitute purchasing
securities on margin.

(E) The portfolio may not invest more than 15% of its net assets in
illiquid securities. This does not include securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933 or any other securities
as to which a determination as to liquidity has been made pursuant to guidelines
adopted by the Board of Directors, as permitted under the 1940 Act.

(F) The portfolio may not invest in companies for the purpose of
exercising control or management.

[GRAPHIC OMITTED]

WRL FEDERATED GROWTH & INCOME

The portfolio may not, as a matter of fundamental policy:

3. Purchase or sell commodities. However, the portfolio may purchase put
options on portfolio securities and on financial futures contracts. In addition,
the portfolio reserves the right to hedge the portfolio by entering into
financial futures contracts and to sell calls on financial futures contracts.

4. Purchase or sell real estate, although it may invest in the securities
of companies whose business involves the purchase or sale of real estate or in
securities which are secured by real estate or interests in real estate.

5. Lend any of its assets except portfolio securities up to one-third of
the value of its total assets. This shall not prevent the purchase or holding of
corporate bonds, debentures, notes, certificates of indebtedness or other debt
securities of an issuer, repurchase agreements, or other transactions which are
permitted by the portfolio's investment objective and policies.

6. Underwrite any issue of securities, except as it may be deemed to be an
underwriter under the 1933 Act in connection with the sale of restricted
securities which the portfolio may purchase pursuant to its investment objective
and policies.

7. Borrow money or engage in reverse repurchase agreements for investment
leverage, but rather as a temporary, extraordinary, or emergency measure to
facilitate management of the Portfolio by enabling the portfolio to meet
redemption requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The portfolio will not purchase any securities
while any borrowings are outstanding. However, during the period any reverse
repurchase agreements are outstanding, but only to the extent necessary to
assure completion of the reverse repurchase agreements, the portfolio will
restrict the purchase of portfolio instruments to money market instruments
maturing on or before the expiration date of the reverse repurchase agreements.

8. Issue senior securities, except that the portfolio may borrow money and
engage in reverse repurchase agreements in amounts up to one-third of the value
of its net assets, including the amounts borrowed.

Furthermore, the portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) The portfolio will not sell securities short unless: (i) during the
time the short position is open, it owns an equal amount of the securities sold
or securities readily and freely convertible into or exchangeable, without
payment of additional consideration, for securities of the same issue as, and
equal in amount to, the securities sold short; and (ii) not more than 10% of the
portfolio's net assets (taken at current value) is held as collateral for such
sales at any one time.

(B) The portfolio will not purchase securities on margin, other than in
connection with the purchase of put options on financial futures contracts, but
may obtain such short-term credits as may be necessary for the clearance of
transactions.

20
<PAGE>

securities eligible for resale pursuant to Rule 144A under the Securities Act of
1933 or any securities for which the Board of Directors or the Sub-Adviser has
made a determination of liquidity, as permitted under the 1940 Act.

(D) The portfolio will not purchase securities of a company for the
purpose of exercising control or management. However, the portfolio will acquire
no more than 10% of the voting securities of an issuer and may exercise its
voting power in the portfolio's best interest. From time to time, the portfolio,
together with other investment companies advised by affiliates or subsidiaries
of Federated Investors, may together buy and hold substantial amounts of a
company's voting stock. All such stock may be voted together. In some cases, the
portfolio and the other investment companies might collectively be considered to
be in control of the company in which they have invested.

(E) The portfolio will not purchase the securities of any issuer (other
than the U.S. Government, its agencies, or instrumentalities or instruments
secured by securities of such issuers, such as repurchase agreements or cash or
cash items) if, as a result, more than 5% of the value of its total assets would
be invested in the securities of such issuer, or acquire more than 10% of any
class of voting securities of any issuer. For these purposes the portfolio takes
all common stock and all preferred stock of an issuer each as a single class,
regardless of priorities, series, designations, or other differences.

(F) The portfolio will not write call options on securities unless the
securities are held in the portfolio's portfolio or unless the portfolio is
entitled to them in deliverable form without further payment or after
segregating cash in the amount of any further payment. The portfolio will not
purchase put options on securities unless the securities are held in the
portfolio's portfolio.

[GRAPHIC OMITTED]

WRL AEGON BALANCED

The portfolio may not, as a matter of fundamental policy:

5. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchase of commercial paper or debt securities).

6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities.

7. Borrow money, except for temporary or emergency purposes (not for
leveraging or investment) in excess of 25% of the value of the portfolio's total
assets (including the amount borrowed) less liabilities (other than borrowings).
Any borrowings that exceed 25% of the value of the portfolio's total assets by
reason of decline in net assets will be reduced within three business days to
the extent necessary to comply with the 25% limitation.

8. Issue senior securities, except as permitted by the 1940 Act.

Furthermore, the portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) The portfolio may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short.

(B) The portfolio may not purchase securities on margin, except that the
portfolio may obtain such short-term credits as are necessary for the clearance
of transactions.

21
<PAGE>

(D) The portfolio may not mortgage or pledge any securities owned or held
by the portfolio in amounts that exceed, in the aggregate, 15% of the
portfolio's net assets.

(F) The portfolio may not invest in companies for the purpose of
exercising control or management.

(G) The portfolio may not invest in securities of foreign issuers
denominated in foreign currency and not publicly traded in the United States if
at the time of acquisition more than 25% of the portfolio's total assets would
be invested in such securities. (See "Foreign Securities," p. 23.)

[GRAPHIC OMITTED]

WRL J.P. MORGAN MONEY MARKET

The portfolio may not, as a matter of fundamental policy:

2. Invest more than 25% of the value of the portfolio's assets in any
particular industry (other than Government securities or obligations of U.S.
branches of U.S. banks).

3. Purchase or sell physical commodities unless acquired as a result of
ownership of securities.

4. Purchase or sell puts, calls, straddles, spreads, or any combination
thereof, real estate (including real estate limited partnerships), commodities,
or commodity contracts or interest in oil, gas or mineral exploration or
development programs or leases. However, the portfolio may purchase debt
securities or commercial paper issued by companies which invest in real estate
or interest therein, including real estate investment trusts.

5. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of portfolio securities of the portfolio.

6. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or to repurchase
agreements).

7. Borrow money, except for temporary or emergency purposes (not for
leveraging or investment) in an amount exceeding 25% of the value of the
portfolio's total assets (including the amount borrowed) less liabilities (other
than borrowings). Any borrowings that exceed 25% of the value of the portfolio's
total assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 25% restriction. This
policy shall not prohibit reverse repurchase agreements or the segregation of
assets in connection with such transactions.

8. Issue senior securities, except as permitted by the 1940 Act.

Furthermore, the portfolio has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Directors of the Fund without
shareholder or policyowner approval:

(A) The portfolio may not mortgage or pledge any securities owned or held
by the portfolio in amounts that exceed, in the aggregate, 15% of the
portfolio's net assets, provided that this limitation does not apply to reverse
repurchase agreements or the segregation of assets in connection with such
transactions.

(B) The portfolio may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short.

(C) The portfolio may not purchase securities on margin, except that the
portfolio may obtain such short-term credits as are necessary for the clearance
of transactions.

(D) The portfolio may not invest more than 10% of its net assets in
illiquid securities. This does not include securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933 or any securities for
which the Board of Directors or the Sub-Adviser has made a determination of
liquidity, as permitted under the 1940 Act.

(E) The portfolio may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Restrictions (i) and (ii) do not apply to
securities received as dividends, through offers to exchange, or as a result of
reorganization, consolidation, or merger.

(F) The portfolio may not invest in companies for the purpose of
exercising control or management.

Except with respect to borrowing money, if a percentage limitation set forth
above in the investment restrictions for each portfolio is complied with at the
time of the investment, a subsequent change in the percentage resulting from any
change in value of a portfolio's net assets will not result in a violation of
such restriction. State laws and regulations may impose additional limitations
on borrowing, lending, and the use of options,

22
<PAGE>

futures, and other derivative instruments. In addition, such laws and
regulations may require a portfolio's investments in foreign securities to meet
additional diversification and other requirements.

[GRAPHIC OMITTED]

This section explains certain other portfolio policies, subject to each
portfolio's investment restrictions. Please carefully review the "Investment
Restrictions" for each portfolio listed above.

[GRAPHIC OMITTED]

LENDING

Each of the portfolios may lend its portfolio securities subject to the
restrictions stated in this Statement of Additional Information. Under
applicable regulatory requirements (which are subject to change), the following
conditions apply to securities loans: (a) the loan must be continuously secured
by liquid assets maintained on a current basis in an amount at least equal to
the market value of the securities loaned; (b) each portfolio must receive any
dividends or interest paid by the issuer on such securities; (c) each portfolio
must have the right to call the loan and obtain the securities loaned at any
time upon notice of not more than five business days, including the right to
call the loan to permit voting of the securities; and (d) each portfolio must
receive either interest from the investment of collateral or a fixed fee from
the borrower.

State laws and regulations may impose additional limitations on borrowings.

Securities loaned by a portfolio remain subject to fluctuations in market value.
A portfolio may pay reasonable finders, custodian and administrative fees in
connection with a loan. Securities lending, as with other extensions of credit,
involves the risk that the borrower may default. Although securities loans will
be fully collateralized at all times, a portfolio may experience delays in, or
be prevented from, recovering the collateral. During the period that the
portfolio seeks to enforce its rights against the borrower, the collateral and
the securities loaned remain subject to fluctuations in market value. The
portfolios do not have the right to vote securities on loan, but would terminate
the loan and regain the right to vote if it were considered important with
respect to the investment. A portfolio may also incur expenses in enforcing its
rights. If a portfolio has sold a loaned security, it may not be able to settle
the sale of the security and may incur potential liability to the buyer of the
security on loan for its costs to cover the purchase.

The WRL GE International Equity, WRL GE U.S. Equity, WRL VKAM Emerging Growth,
WRL LKCM Strategic Total Return, WRL T. Rowe Price Dividend Growth, WRL T. Rowe
Price Small Cap, WRL Salomon All Cap, WRL Goldman Sachs Growth, WRL Goldman
Sachs Small Cap, WRL Dreyfus Mid Cap and WRL Pilgrim Baxter Mid Cap Growth may
also lend (or borrow) money to other funds that are managed by their respective
Sub-Adviser, provided each portfolio seeks and obtains permission from the SEC.

[GRAPHIC OMITTED]

BORROWING

Subject to its investment restrictions, each portfolio may borrow money from
banks for temporary or emergency purposes. As a fundamental policy, the amount
borrowed shall not exceed 331/3% of total assets for the WRL GE International
Equity, WRL GE U.S. Equity, WRL T. Rowe Price Small Cap, WRL T. Rowe Price
Dividend Growth, WRL Dreyfus Mid Cap, WRL J. P. Morgan Real Estate Securities,
and WRL Goldman Sachs Small Cap, WRL Goldman Sachs Growth; 15% for WRL Salomon
All Cap; 10% of total assets for the WRL NWQ Value Equity and WRL Pilgrim Baxter
Mid Cap Growth; 5% of total assets for the WRL Third Avenue Value, WRL Great
Companies -- AmericaSM and WRL Great Companies -- TechnologySM; and 25% of total
assets for all other portfolios.

To secure borrowings, a portfolio may not mortgage or pledge its securities in
amounts that exceed 15% of its net assets (10% for the WRL NWQ Value Equity and
5% for the WRL Third Avenue Value).

The portfolios with a common Sub-Adviser may also borrow (or lend) money to
other portfolios or funds that permit such transactions and are also advised by
that Sub-Adviser, provided each portfolio or fund seeks and obtains permission
from the SEC. There is no assurance that such permission would be granted.

The WRL Alger Aggressive Growth and WRL Value
Line Aggressive Growth may borrow for investment
purposes - this is called "leveraging." The portfolio may borrow only from
banks, not from other investment companies. There are risks associated with
leveraging:

- If a portfolio's asset coverage drops below 300% of borrowings, the
portfolio may be required to sell securities within three days to reduce
its debt and restore the 300% coverage, even though it may be
disadvantageous to do so.

- Leveraging may exaggerate the effect on net asset value of any increase or
decease in the market value of a portfolio's securities.

- Money borrowed for leveraging will be subject to interest costs. In certain
cases, interest costs may exceed the return received on the securities
purchased.

- A portfolio may be required to maintain minimum average balances in
connection with borrowing or to pay a commitment or other fee to maintain a
line of credit. Either of these requirements would increase the cost of
borrowing over the stated interest rate.

23
<PAGE>

[GRAPHIC OMITTED]

SHORT SALES

Each portfolio other than WRL Goldman Sachs Small Cap, may sell securities
"short against the box." A short sale is the sale of a security that the
portfolio does not own. A short sale is "against the box" if at all times when
the short position is open, the portfolio owns an equal amount of the securities
sold short or securities convertible into, or exchangeable without further
consideration for, securities of the same issue as the securities sold short.

[GRAPHIC OMITTED]

FOREIGN SECURITIES

Subject to a portfolio's investment restricitions and policies, a portfolio may
purchase certain foreign securities. Investments in foreign securities,
particularly those of non-governmental issuers, involve considerations which are
not ordinarily associated with investing in domestic issuers. These
considerations include:

o Currency Trading Costs. A portfolio incurs costs in converting foreign
currencies into U.S. dollars, and vice versa.

o Different Accounting and Reporting Practices. Foreign companies are
generally subject to tax laws and to accounting, auditing and financial
reporting standards, practices and requirements different from those
that apply in the U.S.

o Less Information Available. There is generally less public information
available about foreign companies.

o More Difficult Business Negotiations. A portfolio may find it difficult
to enforce obligations in foreign countries or to negotiate favorable
brokerage commission rates.

o Reduced Liquidity/Increased Volatility. Some foreign securities are
less liquid and their prices more volatile, than securities of
comparable U.S. companies.

o Settlement Delays. Settling foreign securities may take longer than
settlements in the U.S.

o Higher Custody Charges. Custodianship of shares may cost more for
foreign securities than it does for U.S. securities.

o Asset Vulnerability. In some foreign countries, there is a risk of
direct seizure or appropriation through taxation of assets of a
portfolio. Certain countries may also impose limits on the removal of
securities or other assets of a portfolio. Interest, dividends and
capital gains on foreign securities held by a portfolio may be subject
to foreign withholding taxes.

o Political Instability. In some countries, political instability, war or
diplomatic developments could affect investments.

These risks may be greater in emerging countries or in countries with limited or
emerging markets, In particular, developing countries have relatively unstable
governments, economies based on only a few industries, and securities markets
that trade only a small number of securities. As a result, securities of issuers
located in developing countries may have limited marketability and may be
subject to abrupt or erratic price fluctuations.

At times, a portfolio's foreign securities may be listed on exchanges or traded
in markets which are open on days (such as Saturday) when the portfolio does not
compute a price or accept orders for purchase, sale or exchange of shares. As a
result, the net asset value of the portfolio may be significantly affected by
trading on days when policyholders cannot make transactions.

A portfolio may also purchase American Depositary Receipts ("ADRs"), which are
dollar-denominated receipts issued generally by domestic banks and represent the
deposit with the bank of a security of a foreign issuer. A portfolio may also
invest in American Depositary Shares ("ADSs"), European Depositary Receipts
("EDRs") or Global Depositary Receipts ("GDRs") and other types of receipts of
shares evidencing ownership of the underlying foreign security.

ADRs and ADSs are subject to some of the same risks as direct investments in
foreign securities, including the currency risk discussed above. The regulatory
requirements with respect to ADRs and ADSs that are issued in sponsored and
unsponsored programs are generally similar but the issuers of unsponsored ADRs
and ADSs are not obligated to disclose material information in the U.S., and,
therefore, such information may not be reflected in the market value of the ADRs
and ADS.

Foreign Exchange Transactions. To the extent a portfolio invests directly in
foreign securities, a portfolio will engage in foreign exchange transactions.
The foreign currency exchange market is subject to little government regulation,
and such transactions generally occur directly between parties rather than on an
exchange or in an organized market. This means that a portfolio is subject to
the full risk of default by a counterparty in such a transaction. Because such
transactions often take place between different time zones, a portfolio may be
required to complete a currency exchange transaction at a time outside of normal
business hours in the counterparty's location, making prompt settlement of such
transaction impossible. This exposes a portfolio to an increased risk that the
counterparty will be unable to settle the transaction. Although the counterparty
in such transactions is often a bank or other financial institution, currency
transactions are generally not covered by insurance otherwise applicable to such
institutions.

24
<PAGE>

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SOVEREIGN DEBT SECURITIES
(WRL GABELLI GLOBAL GROWTH)

The WRL Gabelli Global Growth portfolio may invest in securities issued or
guaranteed by any country and denominated in any currency. The portfolio expects
that it generally will invest in developed countries including Australia,
Canada, Finland, France, Germany, the Netherlands, Japan, Italy, New Zealand,
Norway, Spain, Sweden, the United Kingdom and the United States. The obligations
of governmental entities have various kinds of government support and include
obligations issued or guaranteed by governmental entities with taxing power.
These obligations may or may not be supported by the full faith and credit of a
government. Debt securities issued or guaranteed by foreign governmental
entities have credit characteristics similar to those of domestic debt
securities but include additional risks. These additional risks include those
resulting from devaluation of currencies, future adverse political and economic
developments and other foreign governmental laws.

The portfolio may also purchase securities issued by semi-governmental or
supranational agencies such as the Asian Developmental Bank, the International
Bank for Reconstruction and Development, the Export-Import Bank and the European
Investment Bank. The governmental members, or "stockholders," usually make
initial capital contributions to the supranational entity and in many cases are
committed to make additional capital contributions if the supranational entity
is unable to repay its borrowings. The portfolio will not invest more than 25%
of its assets in the securities of supranational entities.

[GRAPHIC OMITTED]

FOREIGN BANK OBLIGATIONS

A portfolio may invest in foreign bank obligations and obligations of foreign
branches of domestic banks. These investments present certain risks.

- Risk Factors

Risks include the impact of future political and economic developments, the
possible imposition of withholding taxes on interest income, the possible
seizure or nationalization of foreign deposits, the possible establishment of
exchange controls and/or the addition of other foreign governmental restrictions
that might adversely affect the payment of principal and interest on these
obligations.

In addition, there may be less publicly available and reliable information about
a foreign bank than about domestic banks owing to different accounting,
auditing, reporting and recordkeeping standards.

[GRAPHIC OMITTED]

FORWARD FOREIGN CURRENCY CONTRACTS

A forward foreign currency contract ("forward contract") is used to purchase or
sell foreign currencies at a future date as a hedge against fluctuations in
foreign exchange rates pending the settlement of transactions in foreign
securities or during the time a portfolio has exposure to foreign currencies. A
forward contract, which is also included in the types of instruments commonly
known as derivatives, is an agreement between contracting parties to exchange an
amount of currency at some future time at an agreed upon rate.

- Risk Factors

Investors should be aware that hedging against a decline in the value of a
currency in the foregoing manner does not eliminate fluctuations in the prices
of portfolio securities or prevent losses if the prices of portfolio securities
decline.

Furthermore, such hedging transactions preclude the opportunity for gain if the
value of the hedging currency should rise. Forward contracts may, from time to
time, be considered illiquid, in which case they would be subject to a
portfolio's limitation on investing in illiquid securities.

[GRAPHIC OMITTED]

WHEN-ISSUED, DELAYED SETTLEMENT AND FORWARD DELIVERY SECURITIES

Securities may be purchased and sold on a "when- issued," "delayed settlement,"
or "forward (delayed) delivery" basis.

"When-issued" or "forward delivery" refers to securities whose terms are
available, and for which a market exists, but which are not available for
immediate delivery. When-issued or forward delivery transactions may be expected
to occur a month or more before delivery is due.

A portfolio may engage in when-issued transactions to obtain what is considered
to be an advantageous price and yield at the time of the trasaction. When a
portfolio engages in when-issued or forward delivery transactions, it will do so
for the purpose of acquiring securities consistent with its investment objective
and policies and not for the purpose of investment leverage.

"Delayed settlement" is a term used to describe settlement of a securities
transaction in the secondary market which will occur sometime in the future. No
payment or delivery is made by a portfolio until it receives payment or delivery
from the other party to any of the above transactions.

The portfolio will segregate with its custodian cash, U.S. Government
securities or other liquid assets at least

25
<PAGE>

equal to the value or purchase commitments until payment is made. Such of the
segregated securities will either mature or, if necessary, be sold on or before
the settlement date. Typically, no income accrues on securities purchased on a
delayed delivery basis prior to the time delivery of the securities is made,
although a portfolio may earn income in securities it has segregated to
collateralize its delayed delivery purchases.

New issues of stocks and bonds, private placements and U.S. Government
securities may be sold in this manner.

- Risk Factors

At the time of settlement, the market value of the security may be more or less
than the purchase price. The portfolio bears the risk of such market value
fluctuations. These transactions also involve a risk to a portfolio if the other
party to the transaction defaults on its obligation to make payment or delivery,
and the portfolio is delayed or prevented from completing the transaction.

[GRAPHIC OMITTED]

INVESTMENT FUNDS
(WRL GE INTERNATIONAL EQUITY)

The WRL GE International Equity may invest in investment funds which have been
authorized by the governments of certain countries specifically to permit
foreign investment in securities of companies listed and traded on the stock
exchanges in these respective countries. If the portfolio invests in such
investment funds, the portfolio's shareholders will bear not only their
proportionate share of the expenses of the portfolio (including operating
expenses and the fees of the Investment Adviser), but also will bear indirectly
similar expenses of the underlying investment funds. In addition, the securities
of these investment funds may trade at a premium over their net asset value.

[GRAPHIC OMITTED]

SECURITIES SUBJECT TO REORGANIZATION (WRL GABELLI GLOBAL GROWTH)

The WRL Gabelli Global Growth portfolio may invest in securities for which a
tender or exchange offer has been made or announced and in securities of
companies for which a merger, consolidation, liquidation or reorganization
proposal has been announced if, in the judgment of Gabelli, there is a
reasonable prospect of high total return significantly greater than the
brokerage and other transaction expenses involved.

In general, securities which are the subject of such an offer or proposal sell
at a premium to their historic market price immediately prior to the
announcement of the offer or may also discount what the stated or appraised
value of the security would be if the contemplated transaction were approved or
consummated.

Such investments may be advantageous when the discount significantly overstates
the risk of the contingencies involved; significantly undervalues the
securities, assets or cash to be received by shareholders of the prospective
portfolio company as a result of the contemplated transaction; or fails
adequately to recognize the possibility that the offer or proposal may be
replaced or superseded by an offer or proposal of greater value. The evaluation
of such contingencies requires unusually broad knowledge and experience on the
part of the sub-adviser which must appraise not only the value of the issuer and
its component businesses as well as the assets or securities to be received as a
result of the contemplated transaction but also the financial resources and
business motivation of the offer and the dynamics and business climate when the
offer of the proposal is in process. Since such investments are ordinarily
short-term in nature, they will tend to increase the turnover ratio of the
portfolio thereby increasing its brokerage and other transaction expenses.
Gabelli intends to select investments of the type described which, in its view,
have a reasonable prospect of capital appreciation which is significant in
relation to both risk involved and the potential of available alternate
investments.

[GRAPHIC OMITTED]

REPURCHASE AND REVERSE
REPURCHASE AGREEMENTS

Subject to a portfolio's investment restrictions and policies, a portfolio may
enter into repurchase or reverse repurchase agreements.

In a repurchase agreement, a portfolio purchases a security and simultaneously
commits to resell that security to the seller at an agreed upon price on an
agreed upon date within a number of days (usually not more than seven) from the
date of purchase. The resale price reflects the purchase price plus an agreed
upon incremental amount that is unrelated to the coupon rate or maturity of the
purchased security. A repurchase agreement involves the obligation of the seller
to pay the agreed upon price, which obligation is in effect secured by the value
(at least equal to the amount of the agreed upon resale price and
marked-to-market daily) of the underlying security. A portfolio may engage in a
repurchase agreement with respect to any security in which it is authorized to
invest. While it does not presently appear possible to eliminate all risks from
these transactions (particularly the possibility of a decline in the market
value of the underlying securities, as well as delays and costs to a portfolio
in connection with bankruptcy proceedings), it is the policy of the portfolio to
limit repurchase agreements to those parties whose creditworthiness has been
reviewed and found satisfactory by a portfolio's Sub-Adviser.

In a reverse repurchase agreement, a portfolio sells a portfolio security to
another party, such as a bank or

26
<PAGE>

broker-dealer, in return for cash and agrees to repurchase the instrument at a
particular price and time. Reverse repurchase agreements may be used to provide
cash to satisfy unusually heavy redemption requests or for temporary or
emergency purposes without necessity of selling portfolio securities or to earn
additional income on portfolio securities such as U.S. Treasury bills and notes.
While a reverse repurchase agreement is outstanding, the portfolio will
segregate with its custodian cash and appropriate liquid assets to cover its
obligation under the agreement. Reverse repurchase agreements are considered a
form of borrowing by the portfolio for purposes of the 1940 Act. A portfolio
will enter into reverse repurchase agreements only with parties that the
portfolio's Sub-Adviser deems creditworthy, and that have been reviewed by the
Board of Directors of the Fund. The WRL Goldman Sachs Small Cap and WRL Goldman
Sachs Growth may, together with other registered investment companies managed by
GSAM or its affiliates, transfer uninvested cash balances into a single joint
account, the daily aggregate balance of which will be invested in one or more
repurchase agreements.

- Risk Factors

Repurchase agreements involve the risk that the seller will fail to repurchase
the security, as agreed. In that case, a portfolio will bear the risk of market
value fluctuations until the security can be sold and may encounter delays and
incur costs in liquidating the security. In the event of bankruptcy or
insolvency of the seller, delays and costs are incurred.

Reverse repurchase agreements may expose a portfolio to greater fluctuations in
the value of its assets.

[GRAPHIC OMITTED]

TEMPORARY DEFENSIVE POSITION

For temporary defensive purposes, a portfolio may, at times, choose to hold some
portion of its net assets in cash, or to invest that cash in a variety of debt
securities. This may be done as a defensive measure at times when desirable
risk/reward characteristics are not available in stocks or to earn income from
otherwise uninvested cash. When a portfolio increases its cash or debt
investment position, its income may increase while its ability to participate in
stock market advances or declines decrease. Furthermore, when a portfolio
assumes a temporary defensive position it may not be able to achieve its
investment objective.

[GRAPHIC OMITTED]

U.S. GOVERNMENT SECURITIES

Subject to a portfolio's investment restrictions or policies, a portfolio may
invest in U.S. Government obligations which generally include direct obligations
of the U.S. Treasury (such as U.S. Treasury bills, notes, and bonds) and
obligations issued or guaranteed by U.S. Government agencies or
instrumentalities. Examples of the types of U.S. Government securities that the
portfolio may hold include the Federal Housing Administration, Small Business
Administration, General Services Administration, Federal Farm Credit Banks,
Federal Intermediate Credit Banks, and Maritime Administration. U.S. Government
securities may be supported by the full faith and credit of the U.S. Government
(such as securities of the Small Business Administration); by the right of the
issuer to borrow from the U.S. Treasury (such as securities of the Federal Home
Loan Bank); by the discretionary authority of the U.S. Government to purchase
the agency's obligations (such as securities of the Federal National Mortgage
Association); or only by the credit of the issuing agency.

Examples of agencies and instrumentalities which may not always receive
financial support from the U.S. Government are: Federal Land Banks; Central Bank
for Cooperatives; Federal Intermediate Credit Banks; Federal Home Loan Banks;
Farmers Home Administration; and Federal National Mortgage Association ("FNMA").

[GRAPHIC OMITTED]

NON-INVESTMENT GRADE DEBT SECURITIES

Subject to limitations set forth in a portfolio's investment policies, a
portfolio may invest its assets in debt securities below the four highest grades
("lower grade debt securities" commonly referred to as "junk bonds"), as
determined by Moody's Investors Service, Inc. ("Moody's") (lower than Baa) or
Standard & Poor's Corporation ("S&P") (lower than BBB). Bonds and preferred
stock rated "B" or "b" by Moody's are not considered investment grade debt
securities. (See Appendix B for a description of debt securities ratings.)

Before investing in any lower-grade debt securities, a portfolio's Sub-Adviser
will determine that such investments meet the portfolio's investment objective.
Lower-grade debt securities usually have moderate to poor protection of
principal and interest payments, have certain speculative characteristics, and
involve greater risk of default or price declines due to changes in the issuer's
creditworthiness than investment-grade debt securities. Because the market for
lower-grade debt securities may be thinner and less active than for investment
grade debt securities, there may be market price volatility for these securities
and limited liquidity in the resale market. Market prices for lower-grade debt
securities may decline significantly in periods of general economic difficulty
or rising interest rates. Through portfolio diversification and credit analysis,
investment risk can be reduced, although there can be no assurance that losses
will not occur.

The quality limitation set forth in each portfolio's investment policies is
determined immediately after the portfolio's acquisition of a given security.
Accordingly, any later

27
<PAGE>

change in ratings will not be considered when determining whether an investment
complies with the portfolio's investment policies.

[GRAPHIC OMITTED]

CONVERTIBLE SECURITIES

Subject to any investment limitations set forth in a portfolio's policies or
investment restrictions, a portfolio may invest in convertible securities.
Convertible securities may include corporate notes or preferred stock, but
ordinarily are a long-term debt obligation of the issuer convertible at a stated
exchange rate into common stock of the issuer. As with all debt securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, to increase as interest rates decline. Convertible
securities generally offer lower interest or dividend yields than
non-convertible securities of similar quality. However, when the market price of
the common stock underlying a convertible security exceeds the conversion price,
the price of the convertible security tends to reflect the value of the
underlying common stock. As the market price of the underlying common stock
declines, the convertible security tends to trade increasingly on a yield basis,
and thus may not depreciate to the same extent as the underlying common stock.

DECS (Dividend Enhanced Convertible Stock, or Debt Exchangeable for Common Stock
when-issued as a debt security) offer a substantial dividend advantage with the
possibility of unlimited upside potential if the price of the underlying common
stock exceeds a certain level. DECS convert to common stock at maturity. The
amount received is dependent on the price of the common stock at the time of
maturity. DECS contain two call options at different strike prices. The DECS
participate with the common stock up to the first call price. They are
effectively capped at that point unless the common stock rises above a second
price point, at which time they participate with unlimited upside potential.

PERCS (Preferred Equity Redeemable Stock, converts into an equity issue that
pays a high cash dividend, has a cap price and mandatory conversion to common
stock at maturity) offer a substantial dividend advantage, but capital
appreciation potential is limited to a predetermined level. PERCS are less risky
and less volatile than the underlying common stock because their superior income
mitigates declines when the common falls, while the cap price limits gains when
the common rises.

Convertible securities generally rank senior to common stocks in an issuer's
capital structure and are consequently of higher quality and entail less risk of
declines in market value than the issuer's common stock. However, the extent to
which such risk is reduced depends in large measure upon the degree to which the
convertible security sells above its value as a fixed-income security. In
evaluating investment in a convertible security, primary emphasis will be given
to the attractiveness of the underlying common stock. The convertible debt
securities in which a portfolio may invest are subject to the same rating
criteria as the portfolio's investment in non-convertible debt securities.

[GRAPHIC OMITTED]

INVESTMENTS IN FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS

The following investments are subject to limitations as set forth in each
portfolio's investment restrictions and policies:

Futures Contracts. A portfolio may enter into contracts for the purchase or sale
for future delivery of equity or fixed-income securities, foreign currencies or
contracts based on financial indices, including interest rates or indices of
U.S. Government or foreign government securities or equity or fixed-income
securities ("futures contracts"). U.S. futures contracts are traded on exchanges
that have been designated "contract markets" by the Commodity Futures Trading
Commission ("CFTC") and must be executed through a futures commission merchant
("FCM"), or brokerage firm, which is a member of the relevant contract market.
Through their clearing corporations, the exchanges guarantee performance of the
contracts as between the clearing members of the exchange. Since all
transactions in the futures market are made through a member of, and are offset
or fulfilled through a clearinghouse associated with, the exchange on which the
contracts are traded, a portfolio will incur brokerage fees when it buys or
sells futures contracts.

When a portfolio buys or sells a futures contract, it incurs a contractual
obligation to receive or deliver the underlying instrument (or a cash payment
based on the difference between the underlying instrument's closing price and
the price at which the contract was entered into) at a specified price on a
specified date. Transactions in futures contracts generally would be made to
seek to hedge against potential changes in interest or currency exchange rates
or the prices of a security or a securities index which might correlate with or
otherwise adversely affect either the value of a portfolio's securities or the
prices of securities which the portfolio is considering buying at a later date.
Futures may also be used for managing a portfolio's exposure to change in
securities prices and foreign currencies; as an efficient means of adjusting its
overall exposure to certain markets, or in an effort to enhance income.

The buyer or seller of futures contracts is not required to deliver or pay for
the underlying instrument unless the contract is held until the delivery date.
However, both the buyer and seller are required to deposit "initial margin" for
the benefit of an FCM when the contract is entered into. Initial margin deposits
are equal to a percentage of the contract's value, as set by the exchange on
which the contract is traded, and may be maintained in cash or certain
high-grade liquid assets. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments with an

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<PAGE>

FCM to settle the change in value on a daily basis. The party that has a gain
may be entitled to receive all or a portion of this amount. Initial and
variation margin payments are similar to good faith deposits or performance
bonds, unlike margin extended by a securities broker, and initial and variation
margin payments do not constitute purchasing securities on margin for purposes
of the portfolio's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a portfolio, the portfolio may be entitled to
return of margin owed to the portfolio only in proportion to the amount received
by the FCM's other customers. The portfolio's Sub-Adviser will attempt to
minimize the risk by careful monitoring of the creditworthiness of the FCM with
which the portfolio does business and by depositing margin payments in a
segregated account with the custodian when practical or otherwise required by
law.

Although a portfolio would hold cash and liquid assets in a segregated account
with a value sufficient to cover the portfolio's open futures obligations, the
segregated assets would be available to the portfolio immediately upon closing
out the futures position, while settlement of securities transactions could take
several days. However, because the portfolio's cash that may otherwise be
invested would be held uninvested or invested in liquid assets so long as the
futures position remains open, the portfolio's return could be diminished due to
the opportunity cost of foregoing other potential investments.

The acquisition or sale of a futures contract may occur, for example, when a
portfolio holds or is considering purchasing equity securities and seeks to
protect itself from fluctuations in prices without buying or selling those
securities. For example, if prices were expected to decrease, a portfolio might
sell equity index futures contracts, thereby hoping to offset a potential
decline in the value of equity securities in the portfolio by a corresponding
increase in the value of the futures contract position held by the portfolio and
thereby preventing a portfolio's net asset value from declining as much as it
otherwise would have. A portfolio also could seek to protect against potential
price declines by selling portfolio securities and investing in money market
instruments. However, since the futures market is more liquid than the cash
market, the use of futures contracts as an investment technique allows a
portfolio to maintain a defensive position without having to sell portfolio
securities.

Similarly, when prices of equity securities are expected to increase, futures
contracts may be bought to attempt to hedge against the possibility of having to
buy equity securities at higher prices. This technique is sometimes known as an
anticipatory hedge. Since the fluctuations in the value of futures contracts
should be similar to those of equity securities, a portfolio could take
advantage of the potential rise in the value of equity securities without buying
them until the market has stabilized. At that time, the futures contracts could
be liquidated and the portfolio could buy equity securities on the cash market.
To the extent a portfolio enters into futures contracts for this purpose, the
assets in the segregated asset account maintained to cover the portfolio's
obligations with respect to futures contracts will consist of liquid assets from
its portfolio in an amount equal to the difference between the contract price
and the aggregate value of the initial and variation margin payments made by the
portfolio with respect to the futures contracts.

The ordinary spreads between prices in the cash and futures markets, due to
differences in the nature of those markets, are subject to distortions. First,
all participants in the futures market are subject to initial margin and
variation margin requirements. Rather than meeting additional variation margin
requirements, investors may close out futures contracts through offsetting
transactions which could distort the normal price relationship between the cash
and futures markets. Second, the liquidity of the futures market depends on
participants entering into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery, liquidity
in the futures market could be reduced and prices in the futures market
distorted. Third, from the point of view of speculators, the margin deposit
requirements in the futures market are less onerous than margin requirements in
the securities market. Therefore, increased participation by speculators in the
futures market may cause temporary price distortions. Due to the possibility of
the foregoing distortions, a correct forecast of general price trends by a
portfolio's Sub-Adviser still may not result in a successful use of futures
contracts.

Futures contracts entail risks. Although each portfolio's Sub-Adviser believes
that use of such contracts can benefit a portfolio, if the Sub-Adviser's
investment judgment is incorrect, a portfolio's overall performance could be
worse than if the portfolio had not entered into futures contracts. For example,
if a portfolio has attempted to hedge against the effects of a possible decrease
in prices of securities held by the portfolio and prices increase instead, the
portfolio may lose part or all of the benefit of the increased value of these
securities because of offsetting losses in the portfolio's futures positions. In
addition, if the portfolio has insufficient cash, it may have to sell securities
from its portfolio to meet daily variation margin requirements. Those sales may,
but will not necessarily, be at increased prices which reflect the rising market
and may occur at a time when the sales are disadvantageous to a portfolio.

The prices of futures contracts depend primarily on the value of their
underlying instruments. Because there are a limited number of types of futures
contracts, it is possible that the standardized futures contracts available to a
portfolio will not match exactly the portfolio's current or potential
investments. A portfolio may buy and sell futures contracts based on underlying
instruments with different characteristics from the securities in which it

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typically invests - for example, by hedging investments in portfolio securities
with a futures contract based on a broad index of securities - which involves a
risk that the futures position will not correlate precisely with the performance
of the portfolio's investments.

Futures prices can also diverge from the prices of their underlying instruments,
even if the underlying instruments correlate with a portfolio's investments.
Futures prices are affected by such factors as current and anticipated
short-term interest rates, changes in volatility of the underlying instruments,
and the time remaining until expiration of the contract. Those factors may
affect securities prices differently from futures prices. Imperfect correlations
between a portfolio's investments and its futures positions may also result from
differing levels of demand in the futures markets and the securities markets,
from structural differences in how futures and securities are traded, and from
imposition of daily price fluctuation limits for futures contracts. A portfolio
may buy or sell futures contracts with a greater or lesser value than the
securities it wishes to hedge or is considering purchasing in order to attempt
to compensate for differences in historical volatility between the futures
contract and the securities, although this may not be successful in all cases.
If price changes in a portfolio's futures positions are poorly correlated with
its other investments, its futures positions may fail to produce desired gains
or result in losses that are not offset by the gains in the portfolio's other
investments.

Because futures contracts are generally settled within a day from the date they
are closed out, compared with longer settlement periods for some types of
securities, the futures markets can provide superior liquidity to the securities
markets. Nevertheless, there is no assurance a liquid secondary market will
exist for any particular futures contract at any particular time. In addition,
futures exchanges may establish daily price fluctuation limits for futures
contracts and may halt trading if a contract's price moves upward or downward
more than the limit in a given day. On volatile trading days when the price
fluctuation limit is reached, it may be impossible for a portfolio to enter into
new positions or close out existing positions. If the secondary market for a
futures contract is not liquid because of price fluctuation limits or otherwise,
a portfolio may not be able to promptly liquidate unfavorable positions and
potentially be required to continue to hold a futures position until the
delivery date, regardless of changes in its value. As a result, the portfolio's
access to other assets held to cover its futures positions also could be
impaired.

Although futures contracts by their terms call for the delivery or acquisition
of the underlying commodities or a cash payment based on the value of the
underlying commodities, in most cases the contractual obligation is offset
before the delivery date of the contract by buying, in the case of a contractual
obligation to sell, or selling, in the case of a contractual obligation to buy,
an identical futures contract on a commodities exchange. Such a transaction
cancels the obligation to make or take delivery of the commodities.

Each portfolio intends to comply with guidelines of eligibility for exclusion
from the definition of the term "commodity pool operator" with the CFTC and the
National Futures Association, which regulate trading in the futures markets.
Such guidelines presently require that to the extent that a portfolio enters
into futures contracts or options on a futures position that are not for bona
fide hedging purposes (as defined by the CFTC), the aggregate initial margin and
premiums on these positions (excluding the amount by which options are
"in-the-money") may not exceed 5% of the portfolio's net assets.

Options on Futures Contracts. A portfolio may buy and write options on futures
contracts. An option on a futures contract gives the portfolio the right (but
not the obligation) to buy or sell a futures contract at a specified price on or
before a specified date. The purchase and writing of options on futures
contracts is similar in some respects to the purchase and writing of options on
individual securities. See "Options on Securities" on page 28. Transactions in
options on futures contracts will generally not be made other than to attempt to
hedge against potential changes in interest rates or currency exchange rates or
the price of a security or a securities index which might correlate with or
otherwise adversely affect either the value of the portfolio's securities or the
process of securities which the portfolio is considering buying at a later date.

The purchase of a call option on a futures contract may or may not be less risky
than ownership of the futures contract or the underlying instrument, depending
on the pricing of the option compared to either the price of the futures
contract upon which it is based or the price of the underlying instrument. As
with the purchase of futures contracts, when a portfolio is not fully invested
it may buy a call option on a futures contract to attempt to hedge against a
market advance.

The writing of a call option on a futures contract may constitute a partial
hedge against declining prices of the security or foreign currency which is
deliverable under, or of the index comprising, the futures contract. If the
futures price at the expiration of the option is below the exercise price, the
portfolio will retain the full amount of the option premium which provides a
partial hedge against any decline that may have occurred in the portfolio's
holdings. The writing of a put option on a futures contract may constitute a
partial hedge against increasing prices of the security or foreign currency
which is deliverable under, or of the index comprising, the futures contract. If
the futures price at expiration of the option is higher than the exercise price,
the portfolio will retain the full amount of the option premium which provides a
partial hedge against any increase in the price of securities which the
portfolio is considering buying. If a call or put

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option a portfolio has written is exercised, the portfolio will incur loss which
will be reduced by the amount of the premium it received. Depending on the
degree of correlation between change in the value of its portfolio securities
and changes in the value of the futures positions, a portfolio's losses from
existing options on futures may to some extent be reduced or increased by
changes in the value of portfolio securities.

The purchase of a put option on a futures contract is similar in some respect to
the purchase of protective put options on portfolio securities. For example, a
portfolio may buy a put option on a futures contract to attempt to hedge the
portfolio's securities against the risk of falling prices.

The amount of risk a portfolio assumes when it buys an option on a futures
contract is the premium paid for the option plus related transaction costs. In
addition to the correlation risks discussed above, the purchase of an option
also entails the risk that changes in the value of the underlying futures
contract will not be fully reflected in the value of the options bought.

Forward Contracts. A portfolio may enter into forward foreign currency exchange
contracts ("forward currency contracts") to attempt to minimize the risk to the
portfolio from adverse changes in the relationship between the U.S. dollar and
other currencies. A forward currency contract is an obligation to buy or sell an
amount of a specified currency for an agreed price (which may be in U.S. dollars
or a foreign currency) at a future date which is individually negotiated between
currency traders and their customers. A portfolio may invest in forward currency
contracts with stated contract values of up to the value of the portfolio's
assets.

A portfolio may exchange foreign currencies for U.S. dollars and for other
foreign currencies in the normal course of business and may buy and sell
currencies through forward currency contracts in order to fix a price for
securities it has agreed to buy or sell. A portfolio may enter into a forward
currency contract, for example, when it enters into a contract to buy or sell a
security denominated in or exposed to fluctuations in a foreign currency in
order to "lock in" the U.S. dollar price of the security ("transaction hedge").

Additionally, when a portfolio's Sub-Adviser believes that a foreign currency in
which portfolio securities are denominated may suffer a substantial decline
against the U.S. dollar, a portfolio may enter into a forward currency contract
to sell an amount of that foreign currency (or a proxy currency whose
performance is expected to replicate the performance of that currency) for U.S.
dollars approximating the value of some or all of the portfolio securities
denominated in that currency (not exceeding the value of the portfolio's assets
denominated in that currency) or by participating in options or futures
contracts with respect to the currency, or, when the portfolio's Sub-Adviser
believes that the U.S. dollar may suffer a substantial decline against a foreign
currency for a fixed U.S. dollar amount ("position hedge"). This type of hedge
seeks to minimize the effect of currency appreciation as well as depreciation,
but does not protect against a decline in the security's value relative to other
securities denominated in the foreign currency.

A portfolio also may enter into a forward currency contract with respect to a
currency where the portfolio is considering the purchase of investments
denominated in that currency but has not yet done so ("anticipatory hedge").

In any of the above circumstances a portfolio may, alternatively, enter into a
forward currency contract with respect to a different foreign currency when a
portfolio's Sub-Adviser believes that the U.S. dollar value of that currency
will correlate with the U.S. dollar value of the currency in which portfolio
securities of, or being considered for purchase by, the portfolio are
denominated ("cross-hedge"). For example, if a portfolio's Sub-Adviser believes
that a particular foreign currency may decline relative to the U.S. dollar, a
portfolio could enter into a contract to sell that currency or a proxy currency
(up to the value of the portfolio's assets denominated in that currency) in
exchange for another currency that the Sub-Adviser expects to remain stable or
to appreciate relative to the U.S. dollar. Shifting a portfolio's currency
exposure from one foreign 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 to the portfolio if the portfolio's
Sub-Adviser's projection of future exchange rates is inaccurate.

A portfolio also may enter into forward contracts to buy or sell at a later date
instruments in which a portfolio may invest directly or on financial indices
based on those instruments. The market for those types of forward contracts is
developing and it is not currently possible to identify instruments on which
forward contracts might be created in the future.

A portfolio will cover outstanding forward currency contracts by maintaining
liquid portfolio securities denominated in the currency underlying the forward
contract or the currency being hedged. To the extent that a portfolio is not
able to cover its forward currency positions with underlying portfolio
securities, the Fund's custodian will segregate cash or other liquid assets
having a value equal to the aggregate amount of the portfolio's commitments
under forward contracts entered into with respect to position hedges and
cross-hedges. If the value of the segregated securities declines, additional
cash or liquid assets will be segregated on a daily basis so that the value of
the account will be equal to the amount of the portfolio's commitments with
respect to such contracts. As an alternative to maintaining all or part of the
segregated assets, a portfolio may buy call options permitting the portfolio to
buy the amount of foreign currency

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subject to the hedging transaction by a forward sale contract or the portfolio
may buy put options permitting the portfolio to sell the amount of foreign
currency subject to a forward buy contract.

While forward contracts are not currently regulated by the CFTC, the CFTC may in
the future assert authority to regulate forward contracts. In such event a
portfolio's ability to utilize forward contracts in the manner set forth in the
Prospectus may be restricted. Forward contracts will reduce the potential gain
from a positive change in the relationship between the U.S. dollar and foreign
currencies. Unforeseen changes in currency prices may result in poorer overall
performance for a portfolio than if it had not entered into such contracts. The
use of foreign currency forward contracts will not eliminate fluctuations in the
underlying U.S. dollar equivalent value of the proceeds of or rates of return on
a portfolio's foreign currency denominated portfolio securities.

The matching of the increase in value of a forward contract and the decline in
the U.S. dollar equivalent value of the foreign currency denominated asset that
is the subject of the hedging transaction generally will not be precise. In
addition, a portfolio may not always be able to enter into forward contracts at
attractive prices and accordingly may be limited in its ability to use these
contracts in seeking to hedge the portfolio's assets.

Also, with regard to a portfolio's use of cross-hedging transactions, there can
be no assurance that historical correlations between the movement of certain
foreign currencies relative to the U.S. dollar will continue. Thus, at any time
poor correlation may exist between movements in the exchange rates of the
foreign currencies underlying a portfolio's cross-hedges and the movements in
the exchange rates of the foreign currencies in which the portfolio's assets
that are subject of the cross-hedging transactions are denominated.

Options on Foreign Currencies. A portfolio may buy put and call options and may
write covered put and call options on foreign currencies for hedging purposes in
a manner similar to that in which futures contracts or forward contracts on
foreign currencies may be utilized. For example, a decline in the U.S. dollar
value of a foreign currency in which portfolio securities are denominated will
reduce the U.S. dollar value of such securities, even if their value in the
foreign currency remains constant. In order to protect against such diminutions
in the value of portfolio securities, a portfolio may buy put options on the
foreign currency. If the value of the currency declines, the portfolio will have
the right to sell such currency for a fixed amount in U.S. dollars and will
thereby offset, in whole or in part, the adverse effect on its portfolio which
otherwise would have resulted.

Conversely, when a rise in the U.S. dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the
cost of such securities, a portfolio may buy call options thereon. The purchase
of such options could offset, at least partially, the effects of the adverse
movements in exchange rates. The purchase of an option on a foreign currency may
constitute an effective hedge against fluctuations in exchange rates, although,
in the event of exchange rate movements adverse to a portfolio's option
position, the portfolio could sustain losses on transactions in foreign currency
options which would require that the portfolio lose a portion or all of the
benefits of advantageous changes in those rates. In addition, in the case of
other types of options, the benefit to a portfolio from purchases of foreign
currency options will be reduced by the amount of the premium and related
transaction costs.

A portfolio may write options on foreign currencies for the same types of
hedging purposes. For example, in attempting to hedge against a potential
decline in the U.S. dollar value of foreign currency denominated securities due
to adverse fluctuations in exchange rates, a portfolio could, instead of
purchasing a put option, write a call option on the relevant currency. If the
expected decline occurs, the option will most likely not be exercised and the
diminution in value of portfolio securities will be offset by the amount of the
premium received.

Similarly, instead of purchasing a call option to attempt to hedge against a
potential increase in the U.S. dollar cost of securities to be acquired, a
portfolio could write a put option on the relevant currency which, if rates move
in the manner projected, will expire unexercised and allow the portfolio to
hedge the increased cost up to the amount of premium. As in the case of other
types of options, however, the writing of a foreign currency option will
constitute only a partial hedge up to the amount of the premium received, and
only if exchange rates move in the expected direction. If that does not occur,
the option may be exercised and the portfolio would be required to buy or sell
the underlying currency at a loss which may not be offset by the amount of the
premium. Through the writing of options on foreign currencies, a portfolio also
may lose all or a portion of the benefits which might otherwise have been
obtained from favorable movements in exchange rates.

A portfolio may write covered call options on foreign currencies. A call option
written on a foreign currency by a portfolio is "covered" if the portfolio owns
the underlying foreign currency covered by the call or has an absolute and
immediate right to acquire that foreign currency without additional cash
consideration (or for additional cash consideration held in a segregated account
by its custodian) upon conversion or exchange of other foreign currency held in
its portfolio. A call option is also covered if the portfolio has a call on the
same foreign currency and in the same principal amount as the call written if
the exercise price of the call held (i) is equal to or less than the exercise
price of the call written or (ii) is greater than the exercise price of the call
written, and if the

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difference is maintained by the portfolio in cash or high-grade liquid assets in
a segregated account with the Fund's custodian.

A portfolio may also write call options on foreign currencies for cross-hedging
purposes that may not be deemed to be covered. A call option on a foreign
currency is for cross-hedging purposes if it is not covered but is designed to
provide a hedge against a decline due to an adverse change in the exchange rate
in the U.S. dollar value of a security which the portfolio owns or has the right
to acquire and which is denominated in the currency underlying the option. In
such circumstances, the portfolio collateralizes the option by maintaining
segregated assets in an amount not less than the value of the underlying foreign
currency in U.S. dollars marked-to-market daily.

A portfolio may buy or write options in privately negotiated transactions on the
types of securities and indices based on the types of securities in which the
portfolio is permitted to invest directly. A portfolio will effect such
transactions only with investment dealers and other financial institutions (such
as commercial banks or savings and loan institutions) deemed creditworthy, and
only pursuant to procedures adopted by the portfolio's Sub-Adviser for
monitoring the creditworthiness of those entities. To the extent that an option
bought or written by a portfolio in a negotiated transaction is illiquid, the
value of an option bought or the amount of the portfolio's obligations under an
option written by the portfolio, as the case may be, will be subject to the
portfolio's limitation on illiquid investments. In the case of illiquid options,
it may not be possible for the portfolio to effect an offsetting transaction at
the time when the portfolio's Sub-Adviser believes it would be advantageous for
the portfolio to do so.

Options on Securities. In an effort to reduce fluctuations in net asset value, a
portfolio may write covered put and call options and may buy put and call
options and warrants on securities that are traded on United States and foreign
securities exchanges and over-the-counter ("OTC"). A portfolio also may write
call options that are not covered for cross-hedging purposes. A portfolio may
write and buy options on the same types of securities that the portfolio could
buy directly and may buy options on financial indices as described above with
respect to futures contracts. There are no specific limitations on a portfolio's
writing and buying options on securities.

A put option gives the holder the right, upon payment of a premium, to deliver a
specified amount of a security to the writer of the option on or before a fixed
date at a predetermined price. A call option gives the holder the right, upon
payment of a premium, to call upon the writer to deliver a specified amount of a
security on or before a fixed date at a predetermined price.

A put option written by a portfolio is "covered" if the portfolio (i) maintains
cash not available for investment or other liquid assets with a value equal to
the exercise price in a segregated account with its custodian or (ii) holds a
put on the same security and in the same principal amount as the put written and
the exercise price of the put held is equal to or greater than the exercise
price of the put written. The premium paid by the buyer of an option will
reflect, among other things, the relationship of the exercise price to the
market price and the volatility of the underlying security, the remaining term
of the option, supply and demand and interest rates. A call option written by a
portfolio is "covered" if the portfolio owns the underlying security covered by
the call or has an absolute and immediate right to acquire that security without
additional cash consideration (or has segregated additional cash consideration
with its custodian) upon conversion or exchange of other securities held in its
portfolio. A call option is also deemed to be covered if the portfolio holds a
call on the same security and in the same principal amount as the call written
and the exercise price of the call held (i) is equal to or less than the
exercise price of the call written or (ii) is greater than the exercise price of
the call written if the difference is maintained by the portfolio in cash and
high-grade liquid assets in a segregated account with its custodian.

A portfolio collateralizes its obligation under a written call option for
cross-hedging purposes by segregating with its custodian cash or other liquid
assets in an amount not less than the market value of the underlying security,
marked-to-market daily. A portfolio would write a call option for cross-hedging
purposes, instead of writing a covered call option, when the premium to be
received from the cross-hedge transaction would exceed that which would be
received from writing a covered call option and the portfolio's Sub-Adviser
believes that writing the option would achieve the desired hedge.

If a put or call option written by a portfolio was exercised, the portfolio
would be obligated to buy or sell the underlying security at the exercise price.
Writing a put option involves the risk of a decrease in the market value of the
underlying security, in which case the option could be exercised and the
underlying security would then be sold by the option holder to the portfolio at
a higher price than its current market value. Writing a call option involves the
risk of an increase in the market value of the underlying security, in which
case the option could be exercised and the underlying security would then be
sold by the portfolio to the option holder at a lower price than its current
market value. Those risks could be reduced by entering into an offsetting
transaction. The portfolio retains the premium received from writing a put or
call option whether or not the option is exercised.

The writer of an option may have no control when the underlying security must be
sold, in the case of a call

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option, or bought, in the case of a put option, since with regard to certain
options, the writer may be assigned an exercise notice at any time prior to the
termination of the obligation. Whether or not an option expires unexercised, the
writer retains the amount of the premium. This amount, of course, may, in the
case of a covered call option, be offset by a decline in the market value of the
underlying security during the option period. If a call option is exercised, the
writer experiences a profit or loss from the sale of the underlying security. If
a put option is exercised, the writer must fulfill the obligation to buy the
underlying security.

The writer of an option that wishes to terminate its obligation may effect a
"closing purchase transaction." This is accomplished by buying an option of the
same series as the option previously written. The effect of the purchase is that
the writer's position will be canceled by the clearing corporation. However, a
writer may not effect a closing purchase transaction after being notified of the
exercise of an option. Likewise, an investor who is the holder of an option may
liquidate its position by effecting a "closing sale transaction." This is
accomplished by selling an option of the same series as the option previously
bought. There is no guarantee that either a closing purchase or a closing sale
transaction can be effected.

Effecting a closing transaction in the case of a written call option will permit
a portfolio to write another call option on the underlying security with either
a different exercise price or expiration date or both or, in the case of a
written put option, will permit a portfolio to write another put option to the
extent that the exercise price thereof is secured by deposited high-grade liquid
assets. Also, effecting a closing transaction will permit the cash or proceeds
from the concurrent sale of any securities subject to the option to be used for
other portfolio investments. If a portfolio desires to sell a particular
security on which the portfolio has written a call option, the portfolio will
effect a closing transaction prior to or concurrent with the sale of the
security.

A portfolio may realize a profit from a closing transaction if the price of the
purchase transaction is less than the premium received from writing the option
or the price received from a sale transaction is more than the premium paid to
buy the option; a portfolio may realize a loss from a closing transaction if the
price of the purchase transaction is less than the premium paid to buy the
option. Because increases in the market of a call option will generally reflect
increases in the market price of the underlying security, any loss resulting
from the repurchase of a call option is likely to be offset in whole or in part
by appreciation of the underlying security owned by the portfolio.

An option position may be closed out only where there exists a secondary market
for an option of the same series. If a secondary market does not exist, it might
not be possible to effect closing transactions in particular options with the
result that a portfolio would have to exercise the options in order to realize
any profit. If a portfolio is unable to effect a closing purchase transaction in
a secondary market, it will not be able to sell the underlying security until
the option expires or the portfolio delivers the underlying security upon
exercise. Reasons for the absence of a liquid secondary market may include the
following: (i) there may be insufficient trading interest in certain options,
(ii) restrictions may be imposed by a national securities exchange on which the
option is traded ("Exchange") on opening or closing transactions or both, (iii)
trading halts, suspensions or other restrictions may be imposed with respect to
particular classes or series of options or underlying securities, (iv) unusual
or unforeseen circumstances may interrupt normal operations on an Exchange, (v)
the facilities of an Exchange or the Options Clearing Corporation ("OCC") may
not at all times be adequate to handle current trading volume, or (vi) one or
more Exchanges could, for economic or other reasons, decide or be compelled at
some future date to discontinue the trading of options (or a particular class or
series of options), in which event the secondary market on that Exchange (or in
that class or series of options) would cease to exist, although outstanding
options on that Exchange that had been issued by the OCC as a result of trades
on that Exchange would continue to be exercisable in accordance with their
terms.

A portfolio may write options in connection with buy-and-write transactions;
that is, a portfolio may buy a security and then write a call option against
that security. The exercise price of a call option may be below
("in-the-money"), equal to ("at-the-money") or above ("out-of-the-money") the
current value of the underlying security at the time the option is written.
Buy-and-write transactions using in-the-money call options may be used when it
is expected that the price of the underlying security will remain flat or
decline moderately during the option period. Buy-and-write transactions using
at-the-money call options may be used when it is expected that the price of the
underlying security will remain fixed or advance moderately during the option
period. Buy-and-write transactions using out-of-the-money call options may be
used when it is expected that the premiums received from writing the call option
plus the appreciation in the market price of the underlying security up to the
exercise price will be greater than the appreciation in the price of the
underlying security alone. If the call options are exercised in such
transactions, a portfolio's maximum gain will be the premium received by it for
writing the option, adjusted upwards or downwards by the difference between the
portfolio's purchase price of the security and the exercise price. If the
options are not exercised and the price of the underlying security declines, the
amount of such decline will be offset by the amount of premium received.

The writing of covered put options is similar in terms of risk and return
characteristics to buy-and-write transactions. If the market price of the
underlying security rises

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or otherwise is above the exercise price, the put option will expire worthless
and a portfolio's gain will be limited to the premium received. If the market
price of the underlying security declines or otherwise is below the exercise
price, the portfolio may elect to close the position or take delivery of the
security at the exercise price and a portfolio's return will be the premium
received from the put options minus the amount by which the market price of the
security is below the exercise price.

A portfolio may buy put options to attempt to hedge against a decline in the
value of its securities. By using put options in this way, a portfolio will
reduce any profit it might otherwise have realized in the underlying security by
the amount of the premium paid for the put option and by transaction costs.

A portfolio may buy call options to attempt to hedge against an increase in the
price of securities that the portfolio may buy in the future. The premium paid
for the call option plus any transaction costs will reduce the benefit, if any,
realized by a portfolio upon exercise of the option, and, unless the price of
the underlying security rises sufficiently, the option may expire worthless to
the portfolio.

In purchasing an option, a portfolio would be in a position to realize a gain
if, during the option period, the price of the underlying security increased (in
the case of a call) or decreased (in the case of a put) by an amount in excess
of the premium paid and would realize a loss if the price of the underlying
security did not increase (in the case of a call) or decrease (in the case of a
put) during the period by more than the amount of the premium. If a put or call
option brought by a portfolio were permitted to expire without being sold or
exercised, the portfolio would lose the amount of the premium.

Although they entitle the holder to buy equity securities, warrants on and
options to purchase equity securities do not entitle the holder to dividends or
voting rights with respect to the underlying securities, nor do they represent
any rights in the assets of the issuer of those securities.

Interest Rate Swaps and Swap-Related Products. In order to attempt to protect
the value of a portfolio's investments from interest rate or currency exchange
rate fluctuations, a portfolio may enter into interest rate swaps, and may buy
or sell interest rate caps and floors. A portfolio expects to enter into these
transactions primarily to attempt to preserve a return or spread on a particular
investment or portion of its portfolio. A portfolio also may enter into these
transactions to attempt to protect against any increase in the price of
securities the portfolio may consider buying at a later date. A portfolio does
not intend to use these transactions as a speculative investment. Interest rate
swaps involve the exchange by a portfolio with another party of their respective
commitments to pay or receive interest, e.g., an exchange of floating rate
payments for fixed rate payments. The exchange commitments can involve payments
to be made in the same currency or in different currencies. The purchase of an
interest rate cap entitles the purchaser, to the extent that a specified index
exceeds a predetermined interest rate, to receive payments of interest on a
contractually based principal amount from the party selling the interest rate
cap. The purchase of an interest rate floor entitles the purchaser, to the
extent that a specified index falls below a predetermined interest rate, to
receive payments of interest on a contractually based principal amount from the
party selling the interest rate floor.

Swap and swap-related products are specialized OTC instruments and their use
involves risks specific to the markets in which they are entered into. A
portfolio will usually enter into interest rate swaps on a net basis, i.e., the
two payment streams are netted out, with the portfolio receiving or paying, as
the case may be, only the net amount of the two payments. The net amount of the
excess, if any, of a portfolio's obligations over its entitlements with respect
to each interest rate swap will be calculated on a daily basis and an amount of
cash or other liquid assets having an aggregate net asset value of at least
equal to the accrued excess will be segregated with the Fund's custodian. If a
portfolio enters into an interest rate swap on other than a net basis, the
portfolio would segregate assets in the full amount accrued on a daily basis of
the portfolio's obligations with respect to the swap. A portfolio will not enter
into any interest rate swap, cap or floor transaction unless the unsecured
senior debt or the claims-paying ability of the other party thereto is rated in
one of the three highest rating categories of at least one nationally recognized
statistical rating organization at the time of entering into such transaction. A
portfolio's Sub-Adviser will monitor the creditworthiness of all counterparties
on an ongoing basis. If there is a default by the other party to such a
transaction, a portfolio will have contractual remedies pursuant to the
agreements related to the transaction.

The swap market has grown substantially in recent years with a large number of
banks and investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. The Sub-Advisers have determined
that, as a result, the swap market has become relatively liquid. Caps and floors
are more recent innovations for which standardized documentation has not yet
been developed and, accordingly, they are less liquid than swaps. To the extent
a portfolio sells (i.e., writes) caps and floors, it will segregate with the
custodian cash or other liquid assets having an aggregate net asset value at
least equal to the full amount, accrued on a daily basis, of the portfolio's
obligations with respect to any caps or floors.

Interest rate swap transactions are subject to limitations set forth in each
portfolio's policies. These transactions may in some instances involve the
delivery of securities or other underlying assets by a portfolio or its

35
<PAGE>

counterparty to collateralize obligations under the swap. Under the
documentation currently used in those markets, the risk of loss with respect to
interest rate swaps is limited to the net amount of the interest payments that a
portfolio is contractually obligated to make. If the other party to an interest
rate swap that is not collateralized defaults, a portfolio would risk the loss
of the net amount of the payments that the portfolio contractually is entitled
to receive. A portfolio may buy and sell (i.e., write) caps and floors without
limitation, subject to the segregated account requirement described above.

In addition to the instruments, strategies and risks described in this Statement
of Additional Information and in the Prospectus, there may be additional
opportunities in connection with options, futures contracts, forward currency
contracts, and other hedging techniques, that become available as each
portfolio's Sub-Adviser develops new techniques, as regulatory authorities
broaden the range of permitted transactions and as new instruments and
techniques are developed. A Sub-Adviser may use these opportunities to the
extent they are consistent with each portfolio's respective investment objective
and are permitted by each portfolio's respective investment limitations and
applicable regulatory requirements.

Supranational Agencies. A portfolio may invest up to 10% of its assets in debt
obligations of supranational agencies such as: the International Bank for
Reconstruction and Development (commonly referred to as the World Bank), which
was chartered to finance development projects in developing member countries;
the European Community, which is a twelve-nation organization engaged in
cooperative economic activities; the European Coal and Steel Community, which is
an economic union of various European nations' steel and coal industries; and
the Asian Development Bank, which is an international development bank
established to lend funds, promote investment and provide technical assistance
to member nations in the Asian and Pacific regions. Debt obligations of
supranational agencies are not considered Government Securities and are not
supported, directly or indirectly, by the U.S. Government.

Index Options. In seeking to hedge all or a portion of its investments, a
portfolio may purchase and write put and call options on securities indices
listed on U.S. or foreign securities exchanges or traded in the over-the-counter
market, which indices include securities held in the portfolios. The portfolios
with such option writing authority may write only covered options. A portfolio
may also use securities index options as a means of participating in a
securities market without making direct purchases of securities.

A securities index measures the movement of a certain group of securities by
assigning relative values to the securities included in the index. Options on
securities indexes are generally similar to options on specific securities.
Unlike options on securities, however, options on securities indices do not
involve the delivery of an underlying security; the option in the case of an
option on a securities index represents the holder's right to obtain from the
writer in cash a fixed multiple of the amount by which the exercise price
exceeds (in the case of a call) or is less than (in the case of a put) the
closing value of the underlying securities index on the exercise date. A
portfolio may purchase and write put and call options on securities indexes or
securities index futures contracts that are traded on a U.S. exchange or board
of trade or a foreign exchange, to the extent permitted under rules and
interpretations of the Commodity Futures Trading Commission ("CFTC"), as a hedge
against changes in market conditions and interest rates, and for duration
management, and may enter into closing transactions with respect to those
options to terminate existing positions. A securities index fluctuates with
changes in the market values of the securities included in the index. Securities
index options may be based on a broad or narrow market index or on an industry
or market segment.

The delivery requirements of options on securities indices differ from options
on securities. Unlike a securities option, which contemplates the right to take
or make delivery of securities at a specified price, an option on a securities
index gives the holder the right to receive a cash "exercise settlement amount"
equal to (i) the amount, if any, by which the fixed exercise price of the option
exceeds (in the case of a put) or is less than (in the case of a call) the
closing value of the underlying index on the date of exercise, multiplied by
(ii) a fixed "index multiplier." Receipt of this cash amount will depend upon
the closing level of the securities index upon which the option is based being
greater than, in the case of a call, or less than, in the case of a put, the
exercise price of the option. The amount of cash received will be equal to the
difference between the closing price of the index and the exercise price of the
option expressed in dollars times a specified multiple. The writer of the option
is obligated, in return for the premium received, to make delivery of this
amount. The writer may offset its position in securities index options prior to
expiration by entering into a closing transaction on an exchange or it may allow
the option to expire unexercised.

The effectiveness of purchasing or writing securities index options as a hedging
technique will depend upon the extent to which price movements in the portion of
a securities portfolio being hedged correlate with price movements of the
securities index selected. Because the value of an index option depends upon
movements in the level of the index rather than the price of a particular
security, whether a portfolio realizes a gain or loss from the purchase of
writing of options on an index depends upon movements in the level of prices in
the market generally or, in the case of certain indices, in an industry or
market segment, rather than movements in the price of a particular security. As
a result, successful

36
<PAGE>

use by a portfolio of options on securities indices is subject to the
sub-adviser's ability to predict correctly movements in the direction of the
market generally or of a particular industry. This ability contemplates
different skills and techniques from those used in predicting changes in the
price of individual securities.

Securities index options are subject to position and exercise limits and other
regulations imposed by the exchange on which they are traded. The ability of a
portfolio to engage in closing purchase transactions with respect to securities
index options depends on the existence of a liquid secondary market. Although a
portfolio will generally purchase or write securities index options only if a
liquid secondary market for the options purchased or sold appears to exist, no
such secondary market may exist, or the market may cease to exist at some future
date, for some options. No assurance can be given that a closing purchase
transaction can be effected when the sub-adviser desires that a portfolio engage
in such a transaction.

WEBS and Other Index-Related Securities. A portfolio may invest in shares in an
investment company whose shares are known as "World Equity Benchmark Shares" or
"WEBS." WEBS have been listed for trading on the American Stock Exchange, Inc.
The portfolios also may invest in the CountryBaskets Index Fund, Inc., or
another fund the shares of which are the substantial equivalent of WEBS. A
portfolio may invest in S&P Depositary Receipts, or "SPDRs." SPDRs are
securities that represent ownership in a long-term unit investment trust that
holds a portfolio of common stocks designed to track the performance of the S&P
500 Index. A portfolio investing in a SPDR would be entitled to the dividends
that accrue to the S&P 500 stocks in the underlying portfolio, less trust
expenses.

Special Investment Considerations and Risks. The successful use of the
investment practices described above with respect to futures contracts, options
on futures contracts, forward contracts, options on securities and on foreign
currencies, and swaps and swap-related products draws upon skills and experience
which are different from those needed to select the other instruments in which
the portfolios invest. Should interest or exchange rates or the prices of
securities or financial indices move in an unexpected manner, a portfolio may
not achieve the desired benefits of futures, options, swaps and forwards or may
realize losses and thus be in a worse position than if such strategies had not
been used. Unlike many exchange-traded futures contracts and options on futures
contracts, there are no daily price fluctuation limits with respect to options
on currencies, forward contracts and other negotiated or OTC instruments, and
adverse market movements could therefore continue to an unlimited extent over a
period of time. In addition, the correlation between movements in the price of
the securities and currencies hedged or used for cover will not be perfect and
could produce unanticipated losses.

A portfolio's ability to dispose of its positions in the foregoing instruments
will depend on the availability of liquid markets in the instruments. Markets in
a number of the instruments are relatively new and still developing, and it is
impossible to predict the amount of trading interest that may exist in those
instruments in the future. Particular risks exist with respect to the use of
each of the foregoing instruments and could result in such adverse consequences
to a portfolio as the possible loss of the entire premium paid for an option
bought by the portfolio, the inability of the portfolio, as the writer of a
covered call option, to benefit from the appreciation of the underlying
securities above the exercise price of the option and the possible need to defer
closing out positions in certain instruments to avoid adverse tax consequences.
As a result, no assurance can be given that a portfolio will be able to use
those instruments effectively for the purposes set forth above.

In connection with certain of its hedging transactions, assets must be
segregated with the Fund's custodian bank to ensure that the portfolio will be
able to meet its obligations under these instruments. Assets held in a
segregated account generally may not be disposed of for so long as the portfolio
maintains the positions giving rise to the segregation requirement. Segregation
of a large percentage of the portfolio's assets could impede implementation of
the portfolio's investment policies or the portfolio's ability to meet
redemption requests or other current obligations.

Additional Risks of Options on Foreign Currencies, Forward Contracts and Foreign
Instruments. Unlike transactions entered into by a portfolio in futures
contracts, options on foreign currencies and forward contracts are not traded on
contract markets regulated by the CFTC or (with the exception of certain foreign
currency options) by the SEC. To the contrary, such instruments are traded
through financial institutions acting as market-makers, although foreign
currency options are also traded OTC. In an OTC trading environment, many of the
protections afforded to exchange participants will not be available. For
example, there are no daily price fluctuation limits, and adverse market
movements could therefore continue to an unlimited extent over a period of time.
Although the buyer of an option cannot lose more than the amount of the premium
plus related transaction costs, this entire amount could be lost. Moreover, an
option writer and a buyer or seller of futures or forward contracts could lose
amounts substantially in excess of any premium received or initial margin or
collateral posted due to the potential additional margin and collateral
requirements associated with such positions.

37
<PAGE>

Options on foreign currencies traded on national securities exchanges are within
the jurisdiction of the SEC, as are other securities traded on such exchanges.
As a result, many of the protections provided to traders on organized exchanges
are available with respect to such transactions. In particular, all foreign
currency option positions entered into on a national securities exchange are
cleared and guaranteed by the OCC, thereby reducing the risk of counterparty
default. Further, a liquid secondary market in options traded on a national
securities exchange may be more readily available than in the OTC market,
potentially permitting a portfolio to liquidate open positions at a profit prior
to exercise or expiration, or to limit losses in the event of adverse market
movements.

The purchase and sale of exchange-traded foreign currency options, however, is
subject to the risks of the availability of a liquid secondary market described
above, as well as the risks regarding adverse market movements, margining of
options written, the nature of the foreign currency market, possible
intervention by governmental authorities and the effects of other political and
economic events. In addition, exchange-traded options on foreign currencies
involve certain risks not presented by the OTC market. For example, exercise and
settlement of such options must be made exclusively through the OCC, which has
established banking relationships in applicable foreign countries for this
purpose. As a result, the OCC may, if it determines that foreign government
restrictions or taxes would prevent the orderly settlement of foreign currency
option exercises, or would result in undue burdens on the OCC or its clearing
member, impose special procedures on exercise and settlement, such as technical
changes in the mechanics of delivery of currency, the fixing of dollar
settlement prices or prohibitions, on exercise.

In addition, options on U.S. Government securities, futures contracts, options
on futures contracts, forward contracts and options on foreign currencies may be
traded on foreign exchanges and OTC in foreign countries. Such transactions are
subject to the risk of governmental actions affecting trading in or the prices
of foreign currencies or securities. The value of such positions also could be
adversely affected by (i) other complex foreign political and economic factors,
(ii) lesser availability than in the United States of data on which to make
trading decisions, (iii) delays in a portfolio's ability to act upon economic
events occurring in foreign markets during nonbusiness hours in the United
States, (iv) the imposition of different exercise and settlement terms and
procedures and margin requirements than in the United States, and (v) low
trading volume.

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ZERO COUPON, PAY-IN-KIND AND
STEP COUPON SECURITIES

Subject to any limitations set forth in the policies and investment restrictions
for a portfolio, a portfolio may invest in zero coupon, pay-in-kind or step
coupon securities. Zero coupon and step coupon bonds are issued and traded at a
discount from their face amounts. They do not entitle the holder to any periodic
payment of interest prior to maturity or prior to a specified date when the
securities begin paying current interest. The discount from the face amount or
par value depends on the time remaining until cash payments begin, prevailing
interest rates, liquidity of the security and the perceived credit quality of
the issuer. Pay-in-kind securities may pay all or a portion of their interest or
dividends in the form of additional securities. Because they do not pay current
income, the price of pay-in-kind securities can be very volatile when interest
rates change.

Current Federal income tax law requires holders of zero coupon securities and
step coupon securities to report the portion of the original issue discount on
such securities that accrues that year as interest income, even though the
holders receive no cash payments of interest during the year. In order to
qualify as a "regulated investment company" under the Internal Revenue Code,
each portfolio must distribute its investment company taxable income, including
the original issue discount accrued on zero coupon or step coupon bonds. Because
a portfolio will not receive cash payments on a current basis in respect of
accrued original-issue discount on zero coupon bonds or step coupon bonds during
the period before interest payments begin, in some years a portfolio may have to
distribute cash obtained from other sources in order to satisfy the distribution
requirements under the Code. A portfolio might obtain such cash from selling
other portfolio holdings. These actions are likely to reduce the assets to which
a portfolio's expenses could be allocated and to reduce the rate of return for
the portfolio. In some circumstances, such sales might be necessary in order to
satisfy cash distribution requirements even though investment considerations
might otherwise make it undesirable for the portfolio to sell the securities at
the time.

Generally, the market prices of zero coupon, step coupon and pay-in-kind
securities are more volatile than the prices of securities that pay interest
periodically and in cash and are likely to respond to changes in interest rates
to a greater degree than other types of debt securities having similar
maturities and credit quality.

38
<PAGE>

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WARRANTS AND RIGHTS

Subject to its investment limitations, a portfolio may invest in warrants and
rights. Warrants are, in effect, longer-term call options. They give the holder
the right to purchase a given number of shares of a particular company at
specified prices, usually higher than the market price at the time of issuance,
for a period of years or to perpetuity. The purchaser of a warrant expects the
market price of the security will exceed the purchase price of the warrant plus
the exercise price of the warrant, thus giving him a profit. Of course, because
the market price may never exceed the exercise price before the expiration date
of the warrant, the purchaser of the warrant risks the loss of the entire
purchase price of the warrant. Warrants generally trade in the open market and
may be sold rather than exercised. Warrants are sometimes sold in unit form with
other securities of an issuer. Units of warrants and common stock may be
employed in financing young unseasoned companies. The purchase price of a
warrant varies with the exercise price of the warrant, the current market value
of the underlying security, the life of the warrant and various other investment
factors.

In contrast, rights, which also represent the right to buy common shares,
normally have a subscription price lower than the current market value of the
common stock and a life of two to four weeks.

Warrants and rights may be considered more speculative than certain other types
of investments in that they do not entitle a holder to dividends or voting
rights with respect to the securities which may be purchased, nor do they
represent any rights in the assets of the issuing company. Also, the value of a
warrant or right does not necessarily change with the value of the underlying
securities and a warrant or right ceases to have value if it is not exercised
prior to the expiration date.

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MORTGAGE-BACKED SECURITIES

Subject to a portfolio's investment restrictions and policies, a portfolio may
invest in mortgage-backed securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, or institutions such as banks,
insurance companies, and savings and loans. Some of these securities, such as
Government National Mortgage Association ("GNMA") certificates, are backed by
the full faith and credit of the U.S. Treasury while others, such as Federal
Home Loan Mortgage Corporation ("Freddie Mac") certificates, are not.

Mortgage-backed securities represent interests in a pool of mortgages. Principal
and interest payments made on the mortgages in the underlying mortgage pool are
passed through to the portfolio. These securities are often subject to more
rapid repayment than their stated maturity dates would indicate as a result of
principal prepayments on the underlying loans. This can result in significantly
greater price and yield volatility than with traditional fixed income
securities. During periods of declining interest rates, prepayments can be
expected to accelerate which will shorten these securities weighted average life
and may lower their return. Conversely, in a rising interst rate environment, a
declining prepayment rate will extend the weighted average life of these
securities which generally would cause their values to fluctuate more widely in
response to changes in interest rates.

The value of these securities also may change because of changes in the market's
perception of the creditworthiness of the federal agency or private institution
that issued them. In addition, the mortgage securities market in general may be
adversely affected by changes in governmental regulation or tax policies.

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ASSET-BACKED SECURITIES

Subject to a portfolio's investment restrictions and policies, asset-backed
securities represent interests in pools of consumer loans (generally unrelated
to mortgage loans) and most often are structured as pass-through securities.
Interest and principal payments ultimately depend on payment of the underlying
loans by individuals, although the securities may be supported by letters of
credit or other credit enhancements. The underlying assets (e.g., loans) are
subject to prepayments which shorten the securities' weighted average life and
may lower their returns. If the credit support or enhancement is exhausted,
losses or delays in payment may result if the required payments of principal and
interest are not made. The value of these securities also may change because of
changes in the market's perception of the creditworthiness of the servicing
agent for the pool, the originator of the pool, or the financial institution
providing the credit support or enhancement. A portfolio will invest its assets
in asset-backed securities subject to any limitations set forth in its
investment policies or restrictions.

[GRAPHIC OMITTED]

PASS-THROUGH SECURITIES

Subject to a portfolio's investment restrictions and policies, a portfolio may
invest its net assets in various types of pass-through securities, such as
mortgage-backed securities, asset-backed securities and participation interests.
A pass-through security is a share or certificate of interest in a pool of debt
obligations that have been repackaged by an intermediary, such as a bank or
broker-dealer. The purchaser receives an undivided interest in the underlying
pool of securities. The issuers of the underlying securities make interest and
principal payments to the intermediary which are passed through to purchasers,
such as the portfolio. The most common type of pass-through securities are
mortgage-backed securities. GNMA Certificates are mortgage-backed securities
that evidence an undivided interest in a pool of mortgage loans. GNMA
Certificates differ from traditional

39
<PAGE>

bonds in that principal is paid back monthly by the borrowers over the term of
the loan rather than returned in a lump sum at maturity. The portfolio will
generally purchase "modified pass-through" GNMA Certificates, which entitle the
holder to receive a share of all interest and principal payments paid and owned
on the mortgage pool, net of fees paid to the "issuer" and GNMA, regardless of
whether or not the mortgagor actually makes the payment. GNMA Certificates are
backed as to the timely payment of principal and interest by the full faith and
credit of the U.S. Government.

The Federal Home Loan Mortgage Corporation ("FHLMC") issues two types of
mortgage pass-through securities: mortgage participation certificates ("PCs")
and guaranteed mortgage certificates ("GMCs"). PCs resemble GNMA Certificates in
that each PC represents a pro rata share of all interest and principal payments
made and owned on the underlying pool. FHLMC guarantees timely payments of
interest on PCs and the full return of principal. GMCs also represent a pro rata
interest in a pool of mortgages. However, these instruments pay interest
semi-annually and return principal once a year in guaranteed minimum payments.
This type of security is guaranteed by FHLMC as to timely payment of principal
and interest, but is not backed by the full faith and credit of the U.S.
Government.

FNMA issues guaranteed mortgage pass-through certificates ("FNMA Certificates").
FNMA Certificates resemble GNMA Certificates in that each FNMA Certificate
represents a pro rata share of all interest and principal payments made and
owned on the underlying pool. This type of security is guaranteed by FNMA as to
timely payment of principal and interest, but it is not backed by the full faith
and credit of the U.S. Government.

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OTHER INCOME PRODUCING
SECURITIES

Subject to each portfolio's investment restrictions and policies, other types of
income producing securities that a portfolio may purchase include, but are not
limited to, the following types of securities:

Variable and floating rate obligations. These types of securities are
relatively long-term instruments that often carry demand features
permitting the holder to demand payment of principal at any time or at
specified intervals prior to maturity.

Standby Commitments. These instruments, which are similar to a put, give a
portfolio the option to obligate a broker, dealer or bank to repurchase a
security held by the portfolio at a specified price.

Tender option bonds. Tender option bonds are relatively long-term bonds
that are coupled with the agreement of a third party (such as a broker,
dealer or bank) to grant the holders of such securities the option to
tender the securities to the institution at periodic intervals.

Inverse floaters. Inverse floaters are instruments whose interest bears an
inverse relationship to the interest rate on another security. A portfolio
will not invest more than 5% of its assets in inverse floaters.

A portfolio will purchase instruments with demand features, standby commitments
and tender option bonds primarily for the purpose of increasing the liquidity of
its portfolio. (See Appendix A regarding income producing securities in which a
portfolio may invest.)

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ILLIQUID AND RESTRICTED/144A SECURITIES

A portfolio may invest up to 15% (the WRL J.P. Morgan Money Market may only
invest up to 10%) of its net assets in illiquid securities (i.e., securities
that are not readily marketable).

In recent years, a large institutional market has developed for certain
securities that are not registered under the Securities Act of 1933 ("1933
Act"). Institutional investors generally will not seek to sell these instruments
to the general public, but instead will often depend on an efficient
institutional market in which such unregistered securities can readily be resold
or on an issuer's ability to honor a demand for repayment. Therefore, the fact
that there are contractual or legal restrictions on resale to the general public
or certain institutions is not dispositive of the liquidity of such investments.

Rule 144A under the 1933 Act established a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities that might
develop as a result of Rule 144A could provide both readily ascertainable values
for restricted securities and the ability to liquidate an investment in order to
satisfy share redemption orders. An insufficient number of qualified
institutional buyers interested in purchasing a Rule 144A-eligible security held
by a portfolio could, however, adversely affect the marketability of such
portfolio security and the portfolio might be unable to dispose of such security
promptly or at reasonable prices.

The Fund's Board of Directors has authorized each portfolio's Sub-Adviser to
make liquidity determinations with respect to Rule 144A securities in accordance
with the guidelines established by the Board of Directors. Under the guidelines,
the portfolio's Sub-Adviser will consider the following factors in determining
whether a Rule 144A security is liquid: 1) the frequency of trades and quoted
prices for the security; 2) the number of dealers willing to purchase or sell
the security and the number of other potential purchasers; 3) the willingness of
dealers to undertake to make a market in the security; and 4) the nature of the
marketplace trades, including the time needed to dispose of the security, the
method of soliciting

40
<PAGE>

offers and the mechanics of the transfer. The sale of illiquid securities often
requires more time and results in higher brokerage charges or dealer discounts
and other selling expenses than does the sale of securities eligible for trading
on national securities exchanges or in the OTC markets. The portfolio may be
restricted in its ability to sell such securities at a time when a portfolio's
Sub-Adviser deems it advisable to do so. In addition, in order to meet
redemption requests, a portfolio may have to sell other assets, rather than such
illiquid securities, at a time which is not advantageous.

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MONEY MARKET RESERVES
(WRL T. ROWE PRICE SMALL CAP AND
WRL T. ROWE PRICE DIVIDEND GROWTH)

It is expected that WRL T. Rowe Price Dividend Growth and WRL T. Rowe Price
Small Cap portfolios will invest their cash reserves primarily in a money market
fund established for the exclusive use of the T. Rowe Price family of mutual
funds and other clients of T. Rowe Price and Price-Fleming. The Reserve
Investment Fund ("RIF") and Government Reserve Investment Fund ("GRIF") are
series of Reserve Investment Funds, Inc. Additional series may be created in the
future. These funds were created and operate under an Exemptive Order issued by
the Securities and Exchange Commission (Investment Company Act Release No.
IC-22770, July 29, 1997).

The funds must comply with the requirements of Rule 2a-7 under the 1940 Act
governing money market funds. The RIF invests at least 95% of its total assets
in prime money market instruments receiving the highest credit rating. The GRIF
invests primarily in a portfolio of U.S. Government-backed securites, primarily
U.S. Treasuries, and repurchase agreements thereon.

The RIF and GRIF provide very efficient means of managing the cash reserves of
the portfolios. While the funds do not pay an advisory fee to the Investment
Manager, they will incur other expenses. However, the RIF and GRIF are expected
by T. Rowe Price to operate at very low expense ratios. The portfolios will only
invest in RIF or GRIF to the extent it is consistent with their objectives and
programs.

The RIF and GRIF are not insured or guaranteed by the U.S. government, and there
is no assurance they will maintain a stable net asset value of $1.00 per share.

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OTHER INVESTMENT COMPANIES

In accordance with certain provisions of the 1940 Act, certain portfolios may
invest up to 10% of their total assets, calculated at the time of purchase, in
the securities of money market funds, which are investment companies. The 1940
Act also provides that a portfolio generally may not invest (i) more than 5% of
its total assets in the securities of any one investment company or (ii) in more
than 3% of the voting securities of any other investment company. A portfolio
will indirectly bear its proportionate share of any investment advisory fees and
expenses paid by the funds in which it invests, in addition to the investment
advisory fee and expenses paid by the portfolio. However, if the WRL Janus
Growth, or WRL Janus Global portfolio invests in a Janus money market fund,
Janus Capital will remit to such portfolio the fees it receives from the Janus
money market fund to the extent such fees are based on the portfolio's assets.

The WRL GE International Equity and WRL GE U.S. Equity portfolios may not
purchase securities of other investment companies, other than a security
acquired in connection with a merger, consolidation, acquisition, reorganization
or offer of exchange and except as otherwise permitted under the 1940 Act.
Investments by the WRL GE International Equity and WRL GE U.S. Equity portfolios
in the GEI Short-Term Investment Fund, an investment fund advised by GEAM,
created specifically to serve as a vehicle for the collective investment of cash
balances of these portfolios and other accounts advised by GEAM or GEIC, is not
considered an investment in another investment company for purposes of these
restrictions. The GEI Short-Term Investment Fund is not registered with the SEC
as an investment company.

WRL Goldman Sachs Growth and WRL Goldman Sachs Small Cap may also purchase
Standard & Poors Depositary Receipts ("SPDRs"). SPDRs are American Stock
Exchange-traded securities that represent ownerhsip in the SPDR Trust, a trust
which has been established to accumulate and hold a portfolio of common stocks
that is intended to track the price performance and dividend yield of the S&P
500.

[GRAPHIC OMITTED]

QUALITY AND DIVERSIFICATION
REQUIREMENTS
(WRL J.P. MORGAN MONEY MARKET)

For the purpose of maintaining a stable net asset value per share, the WRL J.P.
Morgan Money Market will (i) limit its investment in the securities (other than
U.S. Government securities and securities that benefit from certain types of
credit enhancement arrangements) of any one issuer to no more than 5% of its
total assets, measured at the time of purchase, except at any time for an
investment in a single issuer of up to 25% of the portfolio's total assets held
for not more than three business days; and (ii) limit investments to securities
that present minimal credit risks and securities (other than U.S. Government
securities) that are rated within the highest short-term rating category by at
least two nationally recognized statistical rating organizations ("NRSROs") or
by the only NRSRO that has rated the security. Securities which originally had a
maturity of over one year are subject to more complicated, but generally similar
rating requirements. A description of illustrative credit ratings is set forth
in Appendix B. The portfolio may

41
<PAGE>

also purchase unrated securities that are of comparable quality to the rated
securities described above as determined by the Board of Directors.
Additionally, if the issuer of a particular security has issued other securities
of comparable priority and security and which have been rated in accordance with
(ii) above, that security will be deemed to have the same rating as such other
rated securities.

In addition, the Board of Directors of the Fund has adopted procedures which (i)
require the Fund's Directors to approve or ratify purchases by the portfolio of
securities (other than U.S. Government securities) that are rated by only one
NRSRO or that are unrated; (ii) require the portfolio to maintain a
dollar-weighted average portfolio maturity of not more than 90 days and to
invest only in securities with a remaining maturity of not more than 13 months;
and (iii) require the portfolio, in the event of certain downgrading of or
defaults on portfolio holdings, to dispose of the holdings, subject in certain
circumstances to a finding by the Fund's Directors that disposing of the holding
would not be in the portfolio's best interest.

[GRAPHIC OMITTED]

BANK AND THRIFT OBLIGATIONS

Bank and thrift obligations in which a portfolio may invest are limited to
dollar-denominated certificates of deposit, time deposits and bankers'
acceptances issued by bank or thrift institutions. Certificates of deposit are
short-term, unsecured, negotiable obligations of commercial banks and thrift
institutions. Time deposits are non-negotiable deposits maintained in bank or
thrift institutions for specified periods of time at stated interest rates.
Bankers' acceptances are negotiable time drafts drawn on commercial banks
usually in connection with international transactions.

Bank and thrift obligations in which the portfolio invests may be, but are not
required to be, issued by institutions that are insured by the Federal Deposit
Insurance Corporation (the "FDIC"). Bank and thrift institutions organized under
Federal law are supervised and examined by Federal authorities and are required
to be insured by the FDIC. Institutions organized under state law are supervised
and examined by state banking authorities but are insured by the FDIC only if
they so elect. State institutions insured by the FDIC are subject to Federal
examination and to a substantial body of Federal law regulation. As a result of
Federal and state laws and regulations, Federally insured bank and thrift
institutions are, among other things, generally required to maintain specified
levels of reserves and are subject to other supervision and regulation designed
to promote financial soundness.

Obligations of foreign branches of domestic banks and of United Kingdom branches
of foreign banks may be general obligations of the parent bank in addition to
the issuing branch, or may be limited by the terms of a specific obligation and
governmental regulation. Such obligations are subject to different risks than
are those of domestic banks or domestic branches of foreign banks. These risks
include foreign economic and political developments, foreign governmental
restrictions that may adversely affect payment of principal and interest on the
obligations, foreign exchange controls and foreign withholding and other taxes
on interest income. Foreign branches of domestic banks and United Kingdom
branches of foreign banks are not necessarily subject to the same or similar
regulatory requirements that apply to domestic banks, such as mandatory reserve
requirements, loan limitations and accounting, auditing and financial
recordkeeping requirements. In addition, less information may be publicly
available about a foreign branch of a domestic bank or about a foreign bank than
about a domestic bank. Certificates of deposit issued by wholly-owned Canadian
subsidiaries of domestic banks are guaranteed as to repayment of principal and
interest (but not as to sovereign risk) by the domestic parent bank.

Obligations of domestic branches of foreign banks may be general obligations of
the parent bank in addition to the issuing branch, or may be limited by the
terms of a specific obligation and by governmental regulation as well as
governmental action in the country in which the foreign bank has its head
office. A domestic branch of a foreign bank with assets in excess of $1 billion
may or may not be subject to reserve requirements imposed by the Federal Reserve
System or by the state in which the branch is located if the branch is licensed
by that state. In addition, branches licensed by the Comptroller of the Currency
and branches licensed by certain states ("State Branches") may or may not be
required to: (i) pledge to the regulator, by depositing assets with a designated
bank within the state, an amount of its assets equal to 5% of its total
liabilities; and (ii) maintain assets within the state in an amount equal to a
specified percentage of the aggregate amount of liabilities of the foreign bank
payable at or through all of its agencies or branches within the state. The
deposits of State Branches may not necessarily be insured by the FDIC.

A portfolio may purchase obligations, or all or a portion of a package of
obligations, of smaller institutions that are Federally insured, provided the
obligation of any single institution does not exceed the Federal insurance
coverage of the obligation, presently $100,000.

[GRAPHIC OMITTED]

INVESTMENTS IN THE REAL ESTATE INDUSTRY AND REAL ESTATE INVESTMENT TRUSTS
("REITs")

REITs are pooled investment vehicles which invest primarily in income producing
real estate, or real estate related loans or interests. REITs are generally
classified as equity REITs, mortgage REITs, or hybrid REITs.

Equity REITs invest the majority of their assets directly in real property and
derive income primarily from the collection of rents. Equity REITs can also
realize capital gains by selling properties that have appreciated in

42
<PAGE>

value. Mortgage REITs invest the majority of their assets in real estate
mortgages and derive income from the collection of interest payments. Hybrid
REITs invest their assets in both real property and mortgages. REITs are not
taxed on income distributed to policyowners provided they comply with several
requirements of the Internal Revenue Code of 1986, as amended (the "Code").

- Risk Factors

Investments in the real estate industry are subject to risks associated with
direct investment in real estate. Such risks include, but are not limited to:
declining real estate values; risks related to general and local economic
conditions; over-building; increased competition for assets in local and
regional markets; changes in zoning laws; difficulties in completing
construction; changes in real estate value and property taxes; increases in
operating expenses or interest rates; changes in neighborhood values or the
appeal of properties to tenants; insufficient levels of occupancy; and
inadequate rents to cover operating expenses. The performance of securities
issued by companies in the real estate industry also may be affected by prudent
management of insurance risks, adequacy of financing available in capital
markets, competent management, changes in applicable laws and governmental
regulations (including taxes) and social and economic trends.

REITs also may subject a portfolio to certain risks associated with the direct
ownership of real estate. As described above, these risks include, among others:
possible declines in the value of real estate; possible lack of availability of
mortgage funds; extended vacancies of properties; risks related to general and
local economic conditions; overbuilding; increases in competition, property
taxes and operating expenses; changes in zoning laws; costs resulting from the
clean-up of, liability to third parties for damages resulting from,
environmental problems, casualty or condemnation losses; uninsured damages from
floods, earthquakes or other natural disasters; limitations on and variations in
rents; and changes in interest rates.

Investing in REITs involves certain unique risks, in addition to those risks
associated with investing in the real estate industry in general. Equity REITs
may be affected by changes in the value of the underlying property owned by the
REITs, while mortgage REITs may be affected by the quality of any credit
extended. REITs are dependent upon management skills, are not diversified, and
are subject to heavy cash flow dependency, default by borrowers,
self-liquidation and the possibilities of failing to qualify for the exemption
from tax for distributed income under the Code. REITs (especially mortgage
REITs) are also subject to interest rate risk. (See "Debt Securities and
Fixed-Income Investing" on page 43.)

[GRAPHIC OMITTED]

VARIABLE RATE MASTER DEMAND NOTES

Variable rate master demand notes are unsecured commercial paper instruments
that permit the indebtedness thereunder to vary and provide for periodic
adjustment in the interest rate. Because variable rate master demand notes are
direct lending arrangements between a portfolio and the issuer, they are not
normally traded.

Although no active secondary market may exist for these notes, a portfolio may
demand payment of principal and accrued interest at any time or may resell the
note to a third party.

While the notes are not typically rated by credit rating agencies, issuers of
variable rate master demand notes must satisfy a Sub-Adviser that the ratings
are within the two highest ratings of commercial paper.

In addition, when purchasing variable rate master demand notes, a Sub-Adviser
will consider the earning power, cash flows, and other liquidity ratios of the
issuers of the notes and will continuously monitor their financial status and
ability to meet payment on demand.

- Risk Factors

In the event an issuer of a variable rate master demand note defaulted on its
payment obligations, a portfolio might be unable to dispose of the note because
of the absence of a secondary market and could, for this or other reasons,
suffer a loss to the extent of the default.

[GRAPHIC OMITTED]

DEBT SECURITIES AND
FIXED-INCOME INVESTING

Debt securities include securities such as corporate bonds and debentures;
commercial paper; trust preferreds, debt securities issued by the U.S.
Government, its agencies and instrumentalities; or foreign governments;
asset-backed securities; CMOs; zero coupon bonds; floating rate, inverse
floating rate and index obligations; "strips"; pay-in-kind and step securities.

Fixed-income investing is the purchase of a debt security that maintains a level
of income that does not change. For instance, bonds paying interest at a
specified rate that does not change are fixed-income securities. When a debt
security is purchased, the portfolio owns "debt" and becomes a creditor to the
company or government.

Fixed-income securities generally include short- and long-term government,
corporate and municipal obligations that pay a specified rate of interest or
coupons for a specified period of time, or preferred stock, which pays fixed
dividends. Coupon and dividend rates may be fixed

43
<PAGE>

for the life of the issue or, in the case of adjustable and floating rate
securities, for a shorter period of time. A portfolio may vary the average
maturity of its portfolio of debt securities based on the Sub-Adviser's analysis
of interest rate trends and factors.

Bonds rated Baa by Moody's or BBB by S&P are considered medium grade obligations
i.e., they are neither highly protected nor poorly secured. Interest payment
prospects and principal security for such bonds appear adequate for the present,
but certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and, in fact, have speculative characteristics. (See Appendix B
for a description of debt securities ratings.)

- Risk Factors

Investments in debt securities are generally subject to both credit risk and
market risk. Credit risk relates to the ability of the issuer to meet interest
or principal payments, or both, as they come due. Market risk relates to the
fact that the market values of the debt securities in which the portfolio
invests generally will be affected by changes in the level of interest rates. An
increase in interest rates will tend to reduce the market value of debt
securities, whereas a decline in interest rates will tend to increase their
value.

Generally, shorter term securities are less sensitive to interest rate changes,
but longer term securities offer higher yields. The portfolio's share price and
yield will also depend, in part, on the quality of its investments in debt
securities.

Such securities may be affected by changes in the creditworthiness of the issuer
of the security. The extent that such changes are reflected in the portfolio's
share price will depend upon the extent of the portfolio's investment in such
securities.

[GRAPHIC OMITTED]

HIGH-YIELD/HIGH-RISK SECURITIES

High-yield/high-risk securities (or "junk bonds") are debt securities rated
below investment grade by the primary rating agencies (such as S&P and Moody's
). (See Appendix B for a description of debt securities rating.)

- Risk Factors

The value of lower quality securities generally is more dependent on the ability
of the issuer to meet interest and principal payments (i.e., credit risk) than
is the case for higher quality securities. Conversely, the value of higher
quality securities may be more sensitive to interest rate movements than lower
rated securities. Issuers of high-yield securities may not be as strong
financially as those issuing bonds with higher credit ratings. Investments in
such companies are considered to be more speculative than higher quality
investment.

Issuers of high-yield securities are more vulnerable to real or perceived
economic changes (for instance, an economic downturn or prolonged period of
rising interest rates), political changes or adverse developments specific to
the issuer. Adverse economic, political or other developments may impair the
issuer's ability to service principal and interest obligations, to meet
projected business goals and to obtain additional financing, particularly if the
issuer is highly leveraged.

In the event of a default, a portfolio would experience a reduction of its
income and could expect a decline in the market value of the defaulted
securities.

The market for lower quality securities is generally less liquid than the market
for higher quality bonds. Adverse publicity and investor perceptions, as well as
new or proposed laws, may also have a greater negative impact on the market for
lower quality securities. Unrated debt, while not necessarily of lower quality
than rated securities, may not have as broad a market as higher quality
securities.

[GRAPHIC OMITTED]

TRADE CLAIMS

Trade claims are interests in amounts owed to suppliers of goods or services and
are purchased from creditors of companies in financial difficulty. Trade claims
offer the potential for profits since they are often purchased at a significant
discount from face value and, consequently, may generate capital appreciation in
the event that the market value of the claim increases as the debtor's financial
position improves or the claim is paid.

- Risk Factors

An investment in trade claims is speculative and carries a high degree of risk.
Trade claims are illiquid securities which generally do not pay interest and
there can be no guarantee that the debtor will ever be able to satisfy the
obligation on the trade claim. The markets in trade claims are not regulated by
Federal securities laws or the SEC. Because trade claims are unsecured, holders
of trade claims may have a lower priority in terms of payment than certain other
creditors in a bankruptcy proceeding.

44
<PAGE>

[GRAPHIC OMITTED]

DIRECTORS AND OFFICERS

The Fund is governed by a Board of Directors. Subject to the supervision of the
Board of Directors, the assets of each portfolio are managed by an investment
adviser and sub-advisers, and by portfolio managers. The Board of Directors is
responsible for managing the business and affairs of the Fund and oversees the
operation of the Fund by its officers. It also reviews the management of the
portfolios' assets by the investment adviser and sub-adviser. Information about
the Directors and officers of the Fund is as follows:

<TABLE>
<CAPTION>
Name, Address and Age Position(s) held with Fund Principal Occupation(s) During the past 5 years
-------------------------------- ---------------------------- -------------------------------------------------------------
<S> <C> <C>
PETER R. BROWN Director Retired (January, 2000 - present); Chairman of the Board,
(DOB 5/10/28), Peter Brown Construction Company (construction contrac-
11180 6th Street East tors and engineers), Largo, Florida (1963 - 2000); Trustee
Treasure Island, Florida 33706 of IDEX Mutual Funds, Rear Admiral (Ret.) U.S. Navy
Reserve, Civil Engineer Corps.
CHARLES C. HARRIS Director Trustee of IDEX Mutual Funds, (March, 1994 - present)
(DOB 7/15/30), former Trustee of IDEX Fund, IDEX II Series Fund and
35 Winston Drive IDEX Fund 3.
Clearwater, Florida 34616
RUSSELL A. KIMBALL, Jr. Director General Manager, Sheraton Sand Key Resort (resort
(DOB 8/17/44), hotel), Clearwater, Florida (1975 - present)
1160 Gulf Boulevard
Clearwater Beach, Florida 34630
JOHN R. KENNEY(1,2) Chairman of the Board Chairman of the Board, Director and Co-CEO of Great
(DOB 2/8/38) of Directors Companies, L.L.C.; Chairman of the Board of Directors
(1982 - present),
Chief Executive
Officer (1982 -
present),
President (1978 -
1987 and December,
1992 - 1999),
Director (1978 -
present), Western
Reserve Life
Assurance Co. of
Ohio; Chairman of
the Board of
Directors
(September, 1996 -
present),
President
(September, 1997 -
present), WRL
Investment
Management, Inc.
(investment
adviser), St.
Petersburg,
Florida; Chairman
of the Board of
Directors
(September, 1996 -
present), WRL
Investment
Services, Inc.,
St. Petersburg,
Florida; Chairman
of the Board of
Directors
(February, 1997 -
present), AEGON
Asset Management
Services, Inc.,
St.Petersburg,
Florida; Director
(December, 1990 -
present); IDEX
Management, Inc.,
(investment
adviser), St.
Petersburg,
Florida; Trustee
and Chairman
(September, 1996 -
present) of IDEX
Mutual Funds
(investment
companies) St.
Petersburg,
Florida.
PAT BAIRD Director and President Director and Executive Vice President
(November, 1999 - (DOB 1/19/54) June, 2000); President and Trustee (November,
1999 - 433 Edgewood Road, NE, present), IDEX Mutual Funds; Executive Vice
President, Cedar Rapids, Iowa 52499 Chief Operating Officer (February, 1996 -
present) Execu-
tive Vice
President and CFO
(February, 1995 -
February, 1996),
Vice President,
Chief Financial
Officer (May, 1992
- February, 1995),
AEGON USA.
ALLAN HAMILTON(1,2) Treasurer, Principal Vice President and Controller (1987 - present), Treasurer
(DOB 11/26/56) Financial Officer (February, 1997 - present)
</TABLE>

45
<PAGE>

<TABLE>
<CAPTION>
Name, Address and Age Position(s) held with Fund Principal Occupation(s) During the past 5 years
------------------------ ---------------------------- -------------------------------------------------------------
<S> <C> <C>
William W. Shors, Jr. Director Trustee of IDEX Mutual Funds; President and sole
. (DOB 02/25/36), chareholder of Shorts, Inc. (men's retail apparel); Chair-
12420 73rd Court, man of Sourthern Apparel Corporation and S.A.C Apparel
Largo, Florida 33773 Corporation and S.A.C. Distributors (nationwide sholesale
apparel distributors), Largo, Florida; Member of Advisory
Board of Nations Banks of Pinellas County; Trustee of
Morton Plant Hospital Foundation; Former Chairman of
Advisory Board of First Florida Bank, Pinellas County,
Florida
Jerome C. Vahl Executive Vice Executive Vice President of IDEX Mutual Funds
Presidnet (September 200 - present); President (December, 1999 -
present); Vice President (1986 - present) of AEGON USA
(Cedar Rapids); Director (November, 1999 - pressent) of
Idex Investor Services, Inc., WRL Investment Manage-
ment, Inc., WRL Investment Management, Inc. and WrL
Investment Services, Inc.; Director (June, 1998 - present
Director (March, 2000 - present) of Great Companies,
LLC.
JOHN K. CARTER(1,2) Vice President, Vice President, Secretary and Counsel (December, 1999 -
(DOB 04/24/61) Secretary and Counsel present), IDEX Mutual Funds; Vice President and Counsel,
Western Reserve Life Assurance Co. of Ohio (June, 2000
- present); Vice President, Counsel and Assistant
Secretary (April, 2000 - present) of Idex Investor Services,
Inc., AEGON Asset Management Services, Inc. and WRL
Investment Services, Inc.; Vice President, Counsel,
Compliance Officer and Assistant Secretary (April, 2000 -
present) of Idex Management, Inc. and WRL Investment
Management, Inc.; Vice President and Counsel (March,
1997 - May 1999), Salomon Smith Barney; Assistant Vice
President, Associate Corporate Counsel and Trust Officer
(September, 1993 - March 1997), Franklin Templeton
Mutual Funds.
THOMAS E. PIERPAN(1,2) Assistant Secretary Vice President, Secretary and Counsel (December, 1997 -
and Vice President December, 1999); Assistant Secretary (March, 1995 -
(DOB 10/18/43)
December, 1997) of WRL
Series Funds, Inc.; Vice
President and Assistant
Secretary 1999 - present),
Vice President, Counsel
and Secretary (December,
1997 - 1999) of IDEX
Mutual Funds (mutual
fund); Assistant Vice
President, Counsel and
Assistant Secretary
(November, 1997 - present)
of Intersecurities, Inc.
(broker-dealer); Senior
Vice President, General
Counsel and Assistant
Secretary (April, 2000 -
present) of AEGON Equity
Group; Senior Vice
President and General
Counsel (1999 - present),
Vice President (November,
1993 - present), Associate
General Counsel (February,
1995 - 1997), Assistant
Secretary, (February, 1995
- present) of Western
Reserve Life Assurance of
Ohio.
ALAN M. YAEGER(1,2) Executive Vice Executive Vice President (June, 1993 - present), Chief
(DOB 10/21/46) President Financial Officer (December, 1995 - present), Actuary
(1972 - present), Western Reserve Life Assurance
Company of Ohio; Director (September, 1996 - present),
WRL Investment Management, Inc. (investment adviser)
St. Petersburg, Florida; Director (September, 1996 -
present), WRL Investment Services, Inc., St. Petersburg,
Florida.
</TABLE>

--------------
(1) The principal business address is Western Reserve Life Assurance Co. of
Ohio, P.O. Bos 5068, Clearwater, Florida 33758-5068.
(2) Interested person as defined in the 1940 Act and affiliated person of
Investment Adviser.

46
<PAGE>

The Fund pays no salaries or compensation to any of its officers, all of whom
are employees of WRL. The Fund pays an annual fee of $10,000 to each Director
who is not affiliated with the Investment Adviser or the Sub-Advisers
("disinterested Director"). Each disinterested Director also receives $1,500,
plus expenses, per each regular and special Board meeting attended. The table
below shows each portfolio's allocation of Directors' fees and expenses paid for
the year ended December 31, 1999. The compensation table provides compensation
amounts paid to disinterested Directors of the Fund for the fiscal year ended
December 31, 1999. (Information is not included for WRL Great Companies --
AmericaSM, WRL Great Companies -- TechnologySM WRL Value Line Aggressive Growth,
WRL Great Companies -- Global2, WRL Gabelli Global Growth and WRL LKCM Capital
Growth as they had not commenced operations as of December 31, 1999.)

47
<PAGE>

Director's Fees Paid - Year Ended December 31, 1999

<TABLE>
<CAPTION>
PORTFOLIO AMOUNT PAID
---------------------------------------- ------------
<S> <C>
WRL VKAM Emerging Growth $8,000
WRL T. Rowe Price Small Cap -0-
WRL Goldman Sachs Small Cap -0-
WRL Alger Aggressive Growth 6,000
WRL GE International Equity(1) -0-
WRL Janus Global 8,000
WRL Third Avenue Value -0-
WRL Dreyfus Mid Cap -0-
WRL Salomon All Cap -0-
WRL Pilgrim Baxter Mid Cap Growth -0-
WRL Janus Growth 11,000
WRL Goldman Sachs Growth -0-
WRL C.A.S.E. Growth 1,000
WRL GE U.S. Equity 1,000
WRL NWQ Value Equity 1,000
WRL T. Rowe Price Dividend Growth -0-
WRL Dean Asset Allocation 2,000
WRL LKCM Strategic Total Return 3,000
WRL Federated Growth & Income 1,000
WRL AEGON Balanced 1,000
WRL J.P. Morgan Real Estate Securities -0-
WRL AEGON Bond 1,000
WRL J.P. Morgan Money Market -0-
</TABLE>

------------------------------
(1) Prior to May 1, 2000, this portfolio was named WRL GE/Scottish Equitable
International Equity.

Compensation Table

<TABLE>
<CAPTION>
Pension Or
Retirement
Benefits Total Compensation
Aggregate Accrued As Estimated Paid to Directors From
Compensation From Part of Annual Benefits WRL Series Fund, Inc. and
Name of Person, Position WRL Series Fund, Inc. Fund Expenses* Upon Retirement IDEX Mutual Funds
----------------------------------- ----------------------- ---------------- ----------------- --------------------------
<S> <C> <C> <C> <C>
Peter R. Brown, Director $15,500 0 N/A $43,750
Charles C. Harris, Director 15,500 0 N/A 43,750
Russell A. Kimball, Jr., Director 15,500 0 N/A 15,500
</TABLE>

------------------------------
* The Plan became effective January 1, 1996.

Commencing on January 1, 1996, a non-qualified deferred compensation plan (the
"Plan") became available to directors who are not interested persons of the
Fund. Under the Plan, compensation may be deferred that would otherwise be
payable by the Fund, or IDEX Mutual Funds to a disinterested Director or Trustee
on a current basis for services rendered as director. Deferred compensation
amounts will accumulate based on the value of Class A shares of a portfolio of
IDEX Mutual Funds (without imposition of sales charge), as elected by the
Director. As of April 1, 1999, the Directors and officers of the Fund
beneficially owned in the aggregate less than 1% of the Fund's shares through
ownership of policies and annuity contracts indirectly invested in the Fund. The
Board of Directors has established an Audit Committee consisting of Messrs.
Brown, Harris and Kimball.

[GRAPHIC OMITTED]

THE INVESTMENT ADVISER

The information that follows supplements the information provided about the
Investment Adviser under the caption "Management of the Fund - Investment
Adviser" in the Prospectus.

WRL Investment Management, Inc. ("WRL Management") located at 570 Carillon
Parkway, St. Petersburg, FL 33716, serves as the investment adviser to each
portfolio of the Fund pursuant to an Investment Advisory Agreement dated January
1, 1997 with the Fund. The Investment Adviser is a direct, wholly-owned
subsidiary of WRL, which is wholly-owned by First AUSA Life Insurance Company
("First AUSA"), a stock life insurance company, which is wholly-owned by AEGON
USA, Inc.

48
<PAGE>

("AEGON USA"). AEGON USA is a financial services holding company whose primary
emphasis is on life and health insurance and annuity and investment products.
AEGON USA is a wholly-owned indirect subsidiary of AEGON N.V., a Netherlands
corporation, which is a publicly traded international insurance group.

The Investment Advisory Agreement was approved by the Fund's Board of Directors,
including a majority of the Directors who are not "interested persons" of the
Fund (as defined in the 1940 Act) on October 3, 1996 and by the shareholders of
each portfolio of the Fund on December 16, 1996 (portfolios that commenced
operations prior to that date). The Investment Advisory Agreement provides that
it will continue in effect from year to year thereafter, if approved annually
(a) by the Board of Directors of the Fund or by a majority of the outstanding
shares of each portfolio, and (b) by a majority of the Directors who are not
parties to such contract or "interested persons" of any such party. The
Investment Advisory Agreement may be terminated without penalty on 60 days'
written notice at the option of either party or by the vote of the shareholders
of each portfolio and terminates automatically in the event of its assignment
(within the meaning of the 1940 Act).

While the Investment Adviser is at all times subject to the direction of the
Board of Directors of the Fund, the Investment Advisory Agreement provides that
the Investment Adviser, subject to review by the Board of Directors, is
responsible for the actual management of the Fund and has responsibility for
making decisions to buy, sell or hold any particular security. The Investment
Adviser also is obligated to provide all the office space, facilities, equipment
and personnel necessary to perform its duties under the Investment Advisory
Agreement. For further information about the management of each portfolio of the
Fund, see "The Sub-Advisers", on p. 47.

Advisory Fee. The method of computing the investment advisory fee is fully
described in the Fund's prospectus. For the years ended December 31, 1999, 1998
and 1997, the Investment Adviser was paid fees for its services to each
portfolio in the following amounts (information is not included for WRL Value
Line Aggressive Growth, WRL Great Companies -- AmericaSM, WRL Great Companies --
TechnologySM, WRL Great Companies -- Global2, WRL Gabelli Global Growth and WRL
LKCM Capital Growth as these portfolios had not commenced operations as of
December 31, 1999):

Advisory Fees

<TABLE>
<CAPTION>
Year Ended December 31
-----------------------------------------------
Portfolio 1999 1998 1997
------------------------------------------- ------------- --------------- -------------
<S> <C> <C> <C>
WRL Alger Aggressive Growth $ 5,873,932 $ 3,361,604 $ 2,249,801
WRL VKAM Emerging Growth 8,946,705 5,408,098 4,075,498
WRL GE International Equity(2) 329,326 275,279 111,702
WRL Janus Global 10,293,952 7,537,671 5,591,818
WRL Janus Growth 25,489,599 18,111,607 13,716,824
WRL Third Avenue Value(3) 145,682 111,928 N/A
WRL C.A.S.E. Growth 669,877 515,902 334,892
WRL GE U.S. Equity (2) 1,177,975 555,341 140,280
WRL NWQ Value Equity(4) 1,214,963 1,458,166 900,818
WRL Dean Asset Allocation 2,623,575 2,710,626 2,079,540
WRL LKCM Strategic Total Return 4,766,336 4,485,018 3,703,670
WRL J.P. Morgan Real Estate Securities(3) 24,531 9,338 N/A
WRL Federated Growth & Income 615,256 578,162 338,267
WRL AEGON Balanced 842,458 680,543 491,901
WRL AEGON Bond(1) 731,366 663,484 479,685
WRL J.P. Morgan Money Market 1,078,993 644,611 514,968
WRL Goldman Sachs Small Cap(4) 11,839 N/A N/A
WRL Goldman Sachs Growth(4) 26,410 N/A N/A
WRL Dreyfus Mid Cap(4) 7,501 N/A N/A
WRL Salomon All Cap(4) 25,424 N/A N/A
WRL T. Rowe Price Dividend Growth(4) 30,980 N/A N/A
WRL T. Rowe Price Small Cap(4) 32,294 N/A N/A
WRL Pilgrim Baxter Mid Cap Growth(4) 76,560 N/A N/A
----------- ----------- -----------
TOTAL $65,035,534 $47,107,378 $34,729,664
=========== =========== ===========
</TABLE>

--------------
(1) Prior to January 1, 1998, Janus Capital Corporation served as Sub-Adviser to
the Bond portfolio and received monthly compensation from the Investment
Adviser at the annual rate of 0.25% of average daily net assets of the
portfolio. Effective January 1, 1998, AEGON USA Investment Management, Inc.
serves as the Sub-Adviser to the WRL AEGON Bond (formerly Bond portfolio)
and receives monthly compensation from the Investment Adviser at the rate of
0.20% of average daily net assets of the portfolio.

(2) Portfolio was previously named WRL GE/Scottish Equitable International
Equity.
(3) Portfolio commenced operations May 1, 1998.
(4) Portfolio commenced operations May 1, 1999.

49
<PAGE>

Payment of Expenses. Under the terms of the Investment Advisory Agreement, the
Investment Adviser is responsible for providing investment advisory services and
furnishing office space for officers and employees of the Investment Adviser
connected with investment management of the portfolios.

Each portfolio pays: all expenses incurred in connection with the formation and
organization of a portfolio, including the preparation (and filing, when
necessary) of the portfolio's contracts, plans, and documents, conducting
meetings of organizers, directors and shareholders; preparing and filing the
post-effective amendment to the Fund's registration statement effecting
registration of a portfolio and its shares under the 1940 Act and the 1933 Act
and all other matters relating to the information and organization of a
portfolio and the preparation for offering its shares; expenses in connection
with ongoing registration or qualification requirements under Federal and state
securities laws; investment advisory fees; pricing costs (including the daily
calculations of net asset value); brokerage commissions and all other expenses
in connection with execution of portfolio transactions, including interest; all
Federal, state and local taxes (including stamp, excise, income and franchise
taxes) and the preparation and filing of all returns and reports in connection
therewith; any compensation, fees, or reimbursements which the Fund pays to its
Directors who are not "interested persons," as that phrase is defined in the
1940 Act, of the Fund or WRL Management; compensation of the Fund's custodian,
administrative and transfer agent, registrar and dividend disbursing agent;
legal, accounting and printing expenses; other administrative, clerical,
recordkeeping and bookkeeping expenses; auditing fees; certain insurance
premiums; services for shareholders (including allocable telephone and personnel
expenses); costs of certificates and the expenses of delivering such
certificates to the purchaser of shares relating thereto; expenses of local
representation in Maryland; fees and/or expenses payable pursuant to any plan of
distribution adopted with respect to the Fund in accordance with Rule 12b-1
under the 1940 Act; expenses of shareholders' meetings and of preparing,
printing, and distributing notices, proxy statements and reports to
shareholders; expenses of preparing and filing reports with Federal and state
regulatory authorities; all costs and expenses, including fees and
disbursements, of counsel and auditors, filing and renewal fees and printing
costs in connection with the filing of any required amendments, supplements or
renewals of registration statement, qualifications or prospectuses under the
1933 Act and the securities laws of any states or territories, subsequent to the
effectiveness of the initial registration statement under the 1933 Act; all
costs involved in preparing and printing prospectuses of the Fund; extraordinary
expenses; and all other expenses properly payable by the Fund or the portfolios.

The Investment Adviser has voluntarily undertaken, until at least April 30,
2001, to pay expenses on behalf of the portfolios to the extent normal operating
expenses (including investment advisory fees but excluding interest, taxes,
brokerage fees, commissions and extraordinary charges) exceed, as a percentage
of each portfolio's average daily net assets, 1.00% (0.70% for the WRL AEGON
Bond and WRL J.P. Morgan Money Market, 1.20% for the WRL GE International Equity
and WRL Gabelli Global Growth). The following expenses were paid by the
investment adviser for the fiscal years ended December 31, 1999, 1998, and 1997
(WRL served as investment adviser for 1996) (there are no expenses included for
WRL Value Line Aggressive Growth, WRL Great Companies -- AmericaSM, WRL Great
Companies -- TechnologySM, WRL Great Companies -- Global2, WRL Gabelli Global
Growth and WRL LKCM Capital Growth because these portfolios had not yet
commenced operations as of December 31, 1999):

50
<PAGE>

Portfolio Expenses Paid by Investment Adviser

<TABLE>
<CAPTION>
Year Ended December 31
------------------------------------------------------------
Portfolio 1999 1998 1997
------------------------------------------- ---------- -------------------------- ------------------
<S> <C> <C> <C>
WRL Alger Aggressive Growth -0- -0- -0-
WRL VKAM Emerging Growth -0- -0- -0-
WRL GE International Equity 112,088 127,763 179,163
WRL Janus Global -0- -0- -0-
WRL Janus Growth -0- -0- -0-
WRL Third Avenue Value 10,734 14,229 N/A
WRL C.A.S.E. Growth -0- -0- 49,784
WRL GE U.S. Equity -0- -0- 29,464
WRL NWQ Value Equity -0- -0- -0-
WRL Dean Asset Allocation -0- -0- -0-
WRL LKCM Strategic Total Return -0- -0- -0-
WRL J.P. Morgan Real Estate Securities(2) 51,924 28,275 N/A
WRL Federated Growth & Income -0- -0- -0-
WRL AEGON Balanced -0- -0- -0-
WRL AEGON Bond(1) -0- -0- -0-
WRL J.P. Morgan Money Market -0- -0- -0-
WRL Goldman Sachs Small Cap(3) 60,555 N/A N/A
WRL Goldman Sachs Growth(3) 49,677 N/A N/A
WRL Dreyfus Mid Cap(3) 34,541 N/A N/A
WRL Salomon All Cap(3) 53,174 N/A N/A
WRL T. Rowe Price Dividend Growth(3) 46,989 N/A N/A
WRL T. Rowe Price Small Cap(3) 63,542 N/A N/A
WRL Pilgrim Baxter Mid Cap Growth(3) 34,986 N/A N/A
</TABLE>

------------------------------
(1) Prior to January 1, 1998, Janus Capital Corporation served as the
Sub-Adviser for the WRL AEGON Bond.

(2) Portfolio commenced operations on May 1, 1998.

(3) Portfolio commenced operations May 1, 1999.

Effective May 1, 2000, the Investment Adviser has entered into an agreement with
the Fund on behalf of, and pursuant to which, the Investment Adviser will be
reimbursed for operating expenses paid on behalf of a portfolio during the
previous 36 months, but only if, after such reimbursement, the portfolio's
expense ratio does not exceed the expense cap. The agreement has an initial term
through April 30, 2001, and will automatically renew for one-year terms unless
terminated by a 30 day written notice to the Fund.

Service Agreement. Effective January 1, 1997, the Fund entered into an
Administrative Services and Transfer Agency Agreement ("Services Agreement")
with WRL Investment Services, Inc. ("WRL Services"), an affiliate of WRL
Management and WRL, to furnish the Fund with administrative services to assist
the Fund in carrying out certain of its functions and operations. The Service
Agreement was approved by the Fund's Board of Directors, including a majority of
Directors who are not "interested persons" of the Fund (as defined in the 1940
Act) on October 3, 1996. Under this Agreement, WRL Services shall furnish to
each portfolio, subject to the overall supervision of the Fund's Board,
supervisory, administrative, and transfer agency services, including
recordkeeping and reporting. WRL Services is reimbursed by the Fund monthly on a
cost incurred basis. The following Administrative Services fees were paid by the
portfolios for the fiscal year ended December 31, 1999 (there are no fees
included for WRL Value Line Aggressive Growth, WRL Great Companies -- AmericaSM,
WRL Great Companies -- TechnologySM, WRL Great Companies -- Global2, WRL Gabelli
Global Growth or WRL LKCM Capital Growth because these

51
<PAGE>

portfolios had not commenced operations as of December 31, 1999):

Administrative Services Fees

<TABLE>
<CAPTION>
Portfolio 1999 1998 1997
------------------------------ ----------- --------------- -------------
<S> <C> <C> <C>
WRL Alger Aggressive Growth $178,687 $73,408 $122,776
WRL VKAM Emerging Growth 214,882 95,721 166,269
WRL GE International Equity 8,983 3,731 3,901
WRL Janus Global 223,428 99,277 165,294
WRL Janus Growth 306,127 143,999 260,374
WRL Third Avenue Value 2,871 1,139 N/A
WRL C.A.S.E. Growth 30,645 14,345 15,798
WRL GE U.S. Equity 27,038 6,364 3,218
WRL NWQ Value Equity 35,693 18,893 23,307
WRL Dean Asset Allocation 50,791 25,722 41,445
WRL LKCM Strategic Total
Return 89,085 47,197 87,766
WRL J.P. Morgan Real Estate
Securities 384 -0- N/A
WRL Federated Growth &
Income 27,663 12,140 16,773
WRL AEGON Balanced 23,945 10,827 18,333
WRL AEGON Bond 32,651 16,871 31,011
WRL J.P. Morgan Money
Market 13,674 6,378 12,092
WRL Goldman Sachs Small
Cap 175 N/A N/A
WRL Goldman Sachs Growth 279 N/A N/A
WRL Dreyfus Mid Cap 73 N/A N/A
WRL Salomon All Cap 283 N/A N/A
WRL T. Rowe Price Dividend
Growth 217 N/A N/A
WRL T. Rowe Price Small Cap 402 N/A N/A
WRL Pilgrim Baxter Mid Cap
Growth 527 N/A N/A
</TABLE>

Distribution Agreement. Effective January 1, 1997, the Fund adopted a
distribution plan ("Distribution Plan") pursuant to Rule 12b-1 under the 1940
Act, as amended. Pursuant to the Distribution Plan, the Fund entered into a
Distribution Agreement with AFSG Securities Corporation (AFSG) located at 4333
Edgewood Road NE, Cedar Rapids, Iowa 52494. The Distribution Plan and related
Agreement were approved by the Fund's Board of Directors, including a majority
of Directors who are not "interested persons" of the Fund (as defined in the
1940 Act) on October 3, 1996 as amended by the Board March 29, 1999, and the
Distribution Plan was approved by the shareholders of each portfolio of the Fund
on December 16, 1996 (by all portfolios that had commenced operations on that
date). AFSG is an affiliate of the Investment Adviser.

Under the Distribution Plan and Distribution Agreement, the Fund, on behalf of
the portfolios, will reimburse AFSG after each calendar month for certain Fund
distribution expenses incurred or paid by AFSG, provided that these expenses in
the aggregate do not exceed 0.15%, on an annual basis, of the average daily net
asset value of shares of each portfolio.

Distribution expenses for which AFSG may be reimbursed under the Distribution
Plan and Distribution Agreement include, but are not limited to, expenses of
printing and distributing the Fund's prospectus and statement of additional
information to potential investors; developing and preparing Fund
advertisements; sales literature and other promotional materials; holding
seminars and sales meetings designed to promote distribution of Fund shares; the
development of consumer-oriented sales materials describing and/or relating to
the Fund; and expenses attributable to "distribution-related services" provided
to the Fund, which include such things as salaries and benefits, office
expenses, equipment expenses, training costs, travel costs, printing costs,
supply expenses, computer programming time, and data center expenses, each as
they relate to the promotion of the sale of Fund shares.

AFSG submits to the Directors of the Fund for approval annual distribution
budgets and quarterly reports of distribution expenses with respect to each
portfolio. AFSG allocates to each portfolio distribution expenses specifically
attributable to the distribution of shares of such portfolio. Distribution
expenses not specifically attributable to the distribution of shares of a
particular portfolio are allocated among the portfolios, based upon the ratio of
net asset value of each portfolio to the net asset value of all portfolios, or
such other factors as AFSG deems fair and are approved by the Fund's Board of
Directors. AFSG has determined that it will not seek payment by the Fund of
distribution expenses incurred with respect to any portfolio before April 30,
2001. (ISI waived payment by the Fund for the fiscal year ended December 31,
1999.) Prior to AFSG seeking reimbursement of future expenses, Policyowners will
be notified in advance.

It is anticipated that benefits provided by the Distribution Plan may include
lower fixed costs as a percentage of assets as Fund assets increase through the
growth of the Fund due to enhanced marketing efforts.

[GRAPHIC OMITTED]

THE SUB-ADVISERS

Each Sub-Adviser serves, pursuant to each Sub-Advisory Agreement dated January
1, 1997 (January 1, 1998 with respect to the WRL Third Avenue Value and WRL
AEGON Bond; May 1, 1998 with respect to WRL J.P. Morgan Real Estate Securities,
May 1, 1999 with respect to the WRL T. Rowe Price Small Cap, WRL T. Rowe Price
Dividend Growth, WRL Pilgrim Baxter Mid Cap Growth, WRL Salomon All Cap, WRL
Goldman Sachs Growth, WRL Goldman Sachs Small Cap and WRL Dreyfus Mid Cap), May
1, 2000 with respect to WRL Value Line Agressive Growth, WRL Great Companies --
AmericaSM or WRL Great Companies -- TechnologySM, August 30, 2000 with respect
to WRL Great Companies -- Global2 and WRL Gabelli Global Growth and December 1,
2000 with respect to WRL LKCM Capital Growth) between WRL Management and the
respective Sub-Adviser, on behalf of each portfolio. The Sub-Advisory Agreements
were approved by the Board of Directors of the Fund, including a majority of the
Directors who are not "interested persons" of the Fund (as defined in the 1940

52
<PAGE>

Act) on October 3, 1996 and by the shareholders of each portfolio of the Fund on
December 16, 1996 (for portfolios that had commenced operations prior to that
date) (December 9, 1997 with respect to the WRL AEGON Bond). The Sub-Advisory
Agreements provide that they will continue in effect if approved annually (a) by
the Board of Directors of the Fund or by a majority of the outstanding shares of
each portfolio and (b) by a majority of the Directors who are not parties to
such Agreements or "interested persons" (as defined in the 1940 Act) of any such
party. WRL Goldman Sachs Growth, WRL Goldman Sachs Small Cap, WRL T. Rowe Price
Small Cap, WRL T. Rowe Price Dividend Growth, WRL Salomon All Cap, the WRL
Pilgrim Baxter Mid Cap Growth and WRL Dreyfus Mid Cap will continue in effect
for an initial term ending April 30, 2001; WRL Value Line Aggressive Growth, WRL
Great Companies -- AmericaSM, WRL Great Companies -- TechnologySM, WRL Great
Companies Global2, WRL Gabelli Global Growth and WRL LKCM Capital Growth will
continue for an initial term ending April 30, 2002; and from year to year
thereafter, if approved annually. The Sub-Advisory Agreements may be terminated
without penalty on 60 days' written notice at the option of either party or by
the vote of the shareholders of each portfolio and terminate automatically in
the event of their assignment (within the meaning of the 1940 Act) or
termination of the Investment Advisory Agreement. The agreements may also be
terminated under the term of an Exemptive Order granted by the SEC under section
6(c) of the 1940 Act from section 15(a) and rule 18f-2 under the 1940 Act
(Release #23379).

Pursuant to the Sub-Advisory Agreements, each Sub-Adviser provides investment
advisory assistance and portfolio management advice to the Investment Adviser
for their respective portfolio(s). Subject to review by the Investment Adviser
and the Board of Directors of the Fund, the Sub-Advisers are responsible for the
actual management of their respective portfolio(s) and for making decisions to
buy, sell or hold a particular security. Each Sub-Adviser bears all of its
expenses in connection with the performance of its services under their
Sub-Advisory Agreement such as compensating and furnishing office space for
their officers and employees connected with investment and economic research,
trading and investment management of the respective portfolio(s).

Each Sub-Adviser is a registered investment adviser under the Investment
Advisers Act of 1940, as amended. The Sub-Advisers for the portfolios of the
Fund are:

- - - - -

FRED ALGER MANAGEMENT, INC.

Fred Alger Management, Inc. ("Alger") serves as Sub-Adviser to the WRL Alger
Aggressive Growth.

Alger, located at One World Trade Center, Suite 9333, New York, New York 10048,
is a wholly-owned subsidiary of Fred Alger & Company, Incorporated, which, in
turn, is a wholly-owned subsidiary of Alger Associates, Inc., a financial
services holding company. Alger is generally engaged in the business of
rendering investment advisory services to institutions and, to a lesser extent,
individuals. Alger has been engaged in the business of rendering investment
advisory services since 1964 and, as of March 31, 2000, had approximately $21.8
billion under management.

- Portfolio Manager:

David D. Alger and Seilai Khoo are primarily responsible for the day-to-day
management of WRL Alger Aggressive Growth. Mr. Alger has been employed by Alger
Management as Executive Vice President and Director of Research Since 1971 and
as President since 1995. Mr. Alger has served as a portfolio manager of the WRL
Aggressive Growth portfolio since its inception and Ms. Khoo has served as
co-manager since June 2000. Ms. Khoo has been employed by Alger as a senior
research analyst since 1989 and as a senior vice president since 1995. Mr.
Alger has served as portfolio manager of WRL Alger Aggressive Growth since its
inception. Mr. Alger and Ms. Khoo also serve as portfolio managers for other
mutual funds and investment accounts managed by Alger Management.

- - - - -

VAN KAMPEN ASSET
MANAGEMENT INC. (`VKAM")

Van Kampen Asset Management Inc. ("VKAM") serves as Sub-Adviser to WRL VKAM
Emerging Growth.

VKAM, located at 1 Parkview Plaza, P.O. Box 5555 Oakbrook Terrace, Illinois
60181, is a wholly owned subsidiary of Van Kampen Investments Inc., which, in
turn, is an indirect wholly owned subsidiary of Morgan Stanley Dean Witter &
Co., a financial services company.

- Portfolio Manager:

Gary M. Lewis leads an investment team and is primarily responsible for the
day-to-day management of WRL VKAM Emerging Growth. Mr. Lewis has been Senior
Vice President of Van Kampen since October 1995. Previously, he served as Vice
President and portfolio manager of Van Kampen from 1989 to October 1995.

- - - - -

JANUS CAPITAL CORPORATION

Janus Capital Corporation ("Janus") serves as the Sub-Adviser to WRL Janus
Growth and WRL Janus Global.

Janus, located at 100 Fillmore Street, Denver, Colorado 80206, has been engaged
in the management of the Janus funds since 1969. Janus also serves as investment
adviser or sub-adviser to other mutual funds, and for individual, corporate,
charitable and retirement accounts. The aggregate market value of the assets
managed by Janus was over $261 billion as of February 1, 2000. Janus Capital is
owned in part by

53
<PAGE>

Stilwell Financial Inc. ("Stilwell"), which owns approximately 81.5% of the
outstanding voting stock of Janus Capital. Stilwell is a publicly traded holding
company with principal operations in financial asset management businesses.
Thomas H. Bailey, President and Chairman of the Board of Janus Capital, owns
approximately 12% of Janus Capital's voting stock and, by agreement with
Stilwell, selects at least a majority of Janus capital's Board subject to the
approval of Stilwell, which approval cannot be unreasonably withheld.

- Portfolio Managers:

Edward Keely has served as manager of the WRL Janus Growth portfolio since
January 2000. He previously served as co-portfolio manager of this portfolio
since January 1999. Prior to joining Janus in 1998, Mr. Keely was a senior vice
president of investments at Founders.

Helen Young Hayes, CFA and Laurence Chang, CFA have served as co-portfolio
managers of the WRL Janus Global portfolio since January 2000. Ms. Hayes
previously served as manager of this portfolio since its inception. She has been
employed by Janus since 1987.

Mr. Chang has been employed by Janus since 1993. Before joining Janus, Mr.
Chang was a project director at the National Security Archive.

- - - - -

EQSF ADVISERS, INC.

EQSF Advisers, Inc. ("EQSF") serves as Sub-Adviser to WRL Third Avenue Value.

EQSF, located at 767 Third Avenue, New York, New York 10017-2023.

- Portfolio Manager:

Martin J. Whitman has served as portfolio manager of WRL Third Avenue Value
since inception. Mr. Whitman is Chairman and Chief Executive Officer of the
sub-adviser. During the past five years, Mr. Whitman has also served in various
executive capacities with M.J. Whitman, Inc. and several other affiliated
companies of the sub-adviser engaged in various investment and financial
businesses. Mr. Whitman has over 42 years experience in the securities
industry, has served as a Distinguished Management Fellow at the Yale School of
Management and has been a director of various public and private companies,
currently including Danielson Holding Corporation, an insurance holding
company, Nabors Industries, Inc. an international oil drilling contractor and
Tejon Ranch Company, an agricultural and land development company.

- - - - -

C.A.S.E. MANAGEMENT, INC.

C.A.S.E. Management, Inc. ("C.A.S.E.") serves as sub-adviser to WRL C.A.S.E.
Growth.

C.A.S.E., located at 5355 Town Center Road, Suite 702, Boca Raton, Florida
33486, is a wholly-owned subsidiary of C.A.S.E., Inc. C.A.S.E. provides
investment management services to financial institutions, high net worth
individuals, and other professional money managers.

- Portfolio Managers:

Informally, C.A.S.E.'s Board members confer on a continuous basis, gathering
economic, sector, industry and stock specific information from C.A.S.E.'s
research and management resources. Each Board member is individually responsible
for the analytical coverage of one or two of the market's eight economic
sectors. C.A.S.E.'s "sector specialists" are encouraged to maintain contact with
counterpart sector specialists from leading outside research organizations. The
information gathered for consideration by the Board's sector specialists also
includes objective forms of research from various governmental agencies, stock
exchanges and financial capitols. Formally, the Board meets monthly to formulate
overall strategic investment positions. The Board then formally reviews its
current investment focus towards every stock, industry, and economic sector
owned in its overall stock population.

- - - - -

NWQ INVESTMENT MANAGEMENT COMPANY, INC.

NWQ Investment Management Company, Inc. ("NWQ") serves as sub-adviser to WRL
NWQ Value Equity.

NWQ, located at 2049 Century Park East, 4th Floor, Los Angeles, California
90067, is a wholly-owned subsidiary of United Asset Management Corporation and
provides investment management services to institutions and high net worth
individuals. NWQ had approximately $5.63 billion in assets under management as
of December 31, 1999.

- Portfolio Manager:

An investment policy committee is responsible for the day-to-day management of
WRL NWQ Vaue Equity investments. David A. Polak, CFA, Edward C. Friedel, CFA,
James H. Galbreath, CFA, Phyllis G. Thomas, CFA, Jon D. Bosse, CFA, and Justin
T. Clifford constitute the committee.

Edward C. Friedel, CFA serves as senior portfolio manager for WRL NWQ Value
Equity. Mr. Friedel has been a managing director and investment
strategist/portfolio manager of NWQ Investment since 1983. Mr. Friedel is a
graduate of the University of California at Berkeley (BS) and Stanford
University (MBA).

- - - - -

DEAN INVESTMENT ASSOCIATES

Dean Investment Associates ("Dean") serves as sub-adviser to WRL Dean Asset
Allocation.

54
<PAGE>

Dean, located at 2480 Kettering Tower, Dayton, Ohio 45423-2480, is wholly-owned
by C.H. Dean and Associates, Inc. Founded in 1972, Dean manages portfolios for
individuals and institutional clients worldwide. Dean provides a full range of
investment advisory services and currently has $2.5 billion of assets under
management.

- Portfolio Managers:

The WRL Dean Asset Allocation is managed by a team of 10 senior investment
professionals (Central Investment Committee), with over 137 years of total
investment experience.

John C. Riazzi, CFA, has served as the senior portfolio Manager of WRL Dean
Asset Allocation since its inception. Mr. Riazzi joined Dean in March of 1989.
Before being promoted to Vice President and Director of Consulting Services at
Dean, Mr. Riazzi was responsible for client servicing, portfolio execution and
trading operations. Mr. Riazzi has been a member of the Central Investment
Committee and a Senior Institutional portfolio Manager for the past five years.
He received a B.A. in Economics from Kenyon College in 1985 and was awarded the
Chartered Financial Analyst designation in 1993.

- - - - -

LUTHER KING CAPITAL
MANAGEMENT CORPORATION

Luther King Capital Management Corporation ("LKCM") serves as sub-adviser to WRL
LKCM Strategic Total Return and WRL LKCM Capital Growth.

LKCM is located at 301 Commerce Street, Suite 1600, Fort Worth, Texas 76102.
Ultimate control of Luther King is exercised by J. Luther King, Jr. Luther King
provides investment management services to accounts of individual investors,
mutual funds, and other institutional investors. Luther King has served as an
investment adviser for approximately 18 years; as of December 31, 1999, the
total assets managed by Luther King was approximately $6.5 billion.

- Portfolio Managers:

Luther King, Jr., CFA, and Scot Hollmann, CFA, have served as portfolio
Managers of the WRL LKCM Strategic Total Return since its inception. Mr. King
has been President of Luther King Capital since 1979. Mr. Hollmann has served
as Vice President of Luther King Capital since 1983.

Luther King, Jr. CFA and Frent W. Chun, CFA serve as co-partfolio managers of
WRL LKCM Capital Growth.

- - - - -

FEDERATED INVESTMENT COUNSELING

Federated Investment Counseling ("Federated") serves as the sub-adviser to WRL
Federated Growth & Income.

Federated, located at Federated Investors Tower, Pittsburgh, Pennsylvania
15222-3779, is a wholly-owned subsidiary of Federated Investors, Inc. All of
the voting securities of Federated Investors, Inc. are owned by a trust, the
trustees of which are John F. Donahue, his wife, Rhodora Donahue, and his son,
J. Christopher Donahue.

- Portfolio Managers:

Steven J. Lehman and Linda A. Duessel serve as Co-portfolio Managers of the WRL
Federated Growth & Income. Ms. Duessel has been a portfolio Manager of the WRL
Federated Growth & Income since July, 1996. Mr. Lehman has served as
co-portfolio manager since September, 1997. Mr. Lehman joined Federated in May,
1997 as a Vice President. From 1985 to May, 1997, Mr. Lehman served as a
portfolio manager, then Vice President/Senior portfolio manager, at First
Chicago NBD Investment Management Company. Mr. Lehman is a Chartered Financial
Analyst; he received his M.A. from the University of Chicago.

Ms. Duessel, Senior Vice President, is a Chartered Financial Analyst and also
serves as a co-portfolio manager for other funds managed by Federated. Ms.
Duessel received her B.S., Finance from the Wharton School of the University of
Pennsylvania and and her M.S.I.A. from Carnegie Mellon University. Ms. Duessel
has been a Vice President of an affiliate of Federated since 1995, and was an
Assistant Vice President from 1991 - 1995.

Federated's disciplined investment selection process is rooted in sound
methodologies backed by fundamental and technical research. At Federated,
success in investment management does not depend solely on the skill of a single
portfolio manager. It is a fusion of individual talents and state-of-the-art
industry tools and resources. Federated's investment process involves teams of
portfolio managers and analysts, and investment decisions are executed by
traders who are dedicated to specific market sectors and who handle trillions of
dollars in annual trading volume.

- - - - -

AEGON USA INVESTMENT MANAGEMENT, INC.

AEGON USA Investment Management, Inc. ("AIMI") serves as sub-adviser to the WRL
AEGON Bond and the WRL AEGON Balanced.

AIMI, located at 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499, is a
wholly-owned subsidiary of AEGON USA and thus is an affiliate of the Investment
Adviser. AIMI also serves as sub-adviser to the two bond portfolios of IDEX
Mutual Funds. AIMI also manages the general account investment portfolios of the
life insurance subsidiaries of AEGON USA and had in excess of $46 billion under
management as of December 31, 1999.

55
<PAGE>

- Portfolio Managers:

Clifford A. Sheets, CFA and David R. Halfpap, CFA have served as co-portfolio
managers of this portfolio since January 2000. Mr. Sheets previously served as
co-portfolio manager of this portfolio since 1998. Mr. Sheets joined AIMI in
1990.

Mr. Halfpap has been employed by AIMI since 1975 and is currently a senior vice
president.

Michael Van Meter has served as the senior portfolio Manager of the WRL AEGON
Balanced since its inception. Mr. Van Meter also serves as Chairman of the
Equity Investment Policy Committee of AIMI. Mr. Van Meter was President and
Managing Partner of Perpetual Investment Advisors from 1983 to 1989, when AEGON
USA acquired that firm.

- - - - -
J.P. MORGAN INVESTMENT MANAGEMENT INC.

J.P. Morgan Investment Management Inc. ("J.P. Morgan") serves as sub-adviser to
WRL J.P. Morgan Money Market and WRL J.P. Morgan Real Estate Securities.

J.P. Morgan, located at 522 Fifth Avenue, New York, New York 10036, is a
wholly-owned subsidiary of J.P. Morgan & Co. Incorporated. J.P. Morgan provides
investment management and related services for corporate, public, and union
employee benefit funds, foundations, endowments, insurance companies and
government agencies.

- Portfolio Managers:

John T. Donohue and Mark Settles have served as co-portfolio managers of the
WRL J.P. Morgan Money Market Portfolio since January 2000. Mr. Donohue has been
employed by J.P. Morgan since 1997 and is a portfolio manager in the Fixed
Income Group. He previously served as senior money market trader. Mr. Donohue
was a portfolio manager at Goldman Sachs for 10 years prior to his employment
at J.P. Morgan.

Mr. Settles is a product portfolio manager in the Short Term Fixed Income Group
at J.P. Morgan. Previously, he spent five years trading dollar and
euro-denominated fixed income products in J.P. Morgan's New York and London
trading desks.

Daniel P. O'Connor has served as the portfolio manager of the WRL J.P. Morgan
Real Estate Securities portfolio since its inception. He is the senior
portfolio manager for all real estate securities investment-related activity at
J.P. Morgan Investment. Prior to joining J.P. Morgan Investment in 1996, he
served for two years as Director of Real Estate Securities at INVESCO, an
investment management firm. In that position, Mr. O'Connor was responsible for
developing the firm's REIT investment management process. Mr. O'Connor received
a B.S. from Indiana University, an M.S. from Clemson University, and an M.B.A.
in Finance from the University of Chicago. He is a Chartered Financial Analyst
and is a member of AIMR and the New York Society of Securities Analysts. Mr.
O'Connor serves on the editorial board of the Institutional Real Estate
Securities Newsletter.

- - - - -
GE ASSET MANAGEMENT INCORPORATED

GE Asset Management Incorporated ("GEAM") serves as a sub-adviser to WRL GE
International Equity and WRL GE U.S. Equity. Prior to May 1, 2000, GEAM served
as co-sub-adviser to WRL GE/Scottish Equitable International Equity.

GEAM is located at 3003 Summer Street, P.O. Box 7900, Stamford, Connecticut
06904. GEAM is a wholly-owned subsidiary of General Electric Company and a
registered investment adviser. As of December 31, 1999, GEAM oversaw $115.8
billion and managed individual and institutional assets of $91.7 billion, of
which more than $18.2 billion was invested in mutual funds.

- Portfolio Managers:

Ralph R. Layman is a Director and Executive Vice President of GEAM. Mr. Layman
manages the overall International Equity Investments for GEAM. He leads a team
of portfolio managers for WRL GE International. Mr. Layman joined GEAM in 1991
as Executive Vice President for International Investments.

Eugene K. Bolton is Director and Executive Vice President of GEAM. He manages
U.S. Equity investments for GEAM. He leads a team of portfolio managers for the
overall the WRL GE U.S. Equity and has served in that capacity since its
inception. Mr. Bolton joined GEAM in 1984 as Chief Financial Officer and has
been portfolio manager since 1986. Mr. Bolton is currently a director and
executive vice president of GE Investments.

- - - - -
GOLDMAN SACHS ASSET MANAGEMENT

As of September 1, 1999, the Investment Management Division ("IMD") was
established as a new operating division of Goldman, Sachs & Co. and this newly
created entity includes Goldman Sachs Asset Management ("GSAM"). Goldman Sachs
& Co. registered as an investment adviser in 1981. GSAM serves as the
sub-adviser to the WRL Goldman Sachs Growth and WRL Goldman Sachs Small Cap.
GSAM is located at 32 Old Slip, New York, New York 10005. The Goldman Sachs
Group, L.P., which controlled GSAM, merged into the Goldman Sachs Group, Inc.
as a result of an initial public offering.

- Portfolio Manager:

Herbert E. Ehlers has served as head of a thirteen person investment team that
has managed the WRL Goldman Sachs Growth since inception. Prior to joining GSAM
in 1997, he was chief investment officer at Liberty Investment Management, Inc.
from 1994-1997.

Robert C. Jones, Managing Director, has served as head of an investment team
that has managed the WRL

56
<PAGE>

Goldman Sachs Small Cap since inception. Mr. Jones joined GSAM as a portfolio
manager in 1989.

- - - - -
SALOMON BROTHERS ASSET
MANAGEMENT INC

Salomon Brothers Asset Management Inc ("SBAM") serves as the sub-adviser to the
WRL Salomon All Cap.

SBAM, located at 7 World Trade Center, New York, NY 10048, is a wholly-owned
subsidiary of Salomon Brothers Holding Company, Inc., which is wholly-owned by
Salomon Smith Barney Holdings Inc., which is, in turn, wholly-owned by
Citigroup.

- Portfolio Managers:

Ross S. Margolies, has managed this portfolio since inception. Mr. Margolies
joined Salomon in 1992.

Robert M. Donahue, Jr. assists in the day-to-day management of the portfolio.
Prior to joining SBAM in 1997, Mr. Donahue worked as an equity analyst at
Gabelli & Company.

- - - - -
THE DREYFUS CORPORATION

The Dreyfus Corporation ("Dreyfus") serves as the sub-adviser to WRL Dreyfus Mid
Cap.

Dreyfus, located at 200 Park Avenue, New York, NY 10166, is a wholly-owned
subsidiary of Mellon Bank, which is a wholly-owned subsidiary of Mellon Bank
Corporation. Dreyfus manages assets in excess of $128 billion, as of December
31, 1999.

- Portfolio Manager:

John O'Toole has served as portfolio manager since its inception and has been
employed by Dreyfus as a portfolio manager since 1994. Mr. O'Toole is a senior
vice president and portfolio manager for Mellon Equity Assocates, LLP, a
wholly-owned subsidiary of Mellon Bank, N.A. He has been with Mellon Bank, N.A.
since 1979.

- - - - -
T. ROWE PRICE ASSOCIATES, INC.

T. Rowe Price Associates, Inc. ("T. Rowe Price") serves as sub-adviser to WRL
T. Rowe Price Small Cap and the WRL T. Rowe Price Dividend Growth.

T. Rowe Price is located at 100 E. Pratt Street, Baltimore, MD 21202.

- Portfolio Managers:

Tom Huber has managed the WRL T. Rowe Price Dividend Growth portfolio since
March, 2000 and heads an Investment Team for this portfolio. He joined T. Rowe
Price in 1994.

Richard T. Whitney, CFA, has managed the WRL T. Rowe Price Small Cap portfolio
since inception and heads the Investment Team for this portfolio. He joined T.
Rowe Price in 1985.

- - - - -

GABELLI ASSET MANAGEMENT COMPANY

Gabelli Asset Management Company ("Gabelli") serves as sub-adviser to WRL
Gabelli Global Growth.

Gabelli is located at One Corporate Center, Rye, New York 10580-1434.

- Portfolio Managers:

Marc J. Gabelli heads an investment team and is primarily responsible for all
the investment decisions for the portfolio. Mr. Gabelli has been a portfolio
manager and an analyst with Gabelli since 1993.

- - - - -

PILGRIM BAXTER AND ASSOCIATES, LTD.

Pilgrim Baxter and Associates, Ltd. ("Pilgrim Baxter") serves as sub-adviser to
the WRL Pilgrim Baxter Mid Cap Growth.

Pilgrim Baxter, located at 825 Duportail Road, Wayne PA 19087, is a professional
investment management firm which, along with its predecessors, has been in
business since 1982. Pilgrim Baxter is a wholly-owned subsidiary of United Asset
Management.

- Portfolio Manager:

Jeff A. Wrona, CFA, has managed this portfolio since inception. Prior to joining
Pilgrim Baxter, he was a senior portfolio manager at Munder Capital Management.

- - - - -

GREAT COMPANIES, INC.

Great Companies, L.L.C. ("Great Companies") serves as the sub-adviser to WRL
Great Companies -- AmericaSM, WRL Great Companies -- TechnologySM and WRL Great
Companies -- Global2.

Great Companies, located at 8550 Ulmerton Road, Largo, FL 33771, is a
professional investment management firm.

James H. Huguet, John R. Kenney (Chairman of the Board and President of the
Fund), and AEGON USA are each a controlling minority shareholder of Great
Companies. Great Companies may be deemed to be an affiliate of the Investment
Adviser.

- Portfolio Manager:

James H. Huguet and Gerald W. Bollman, CFA have served as co-managers of the
portfolios since inception.

- - - - -

VALUE LINE, INC.

Value Line, Inc. ("Value Line") serves as the sub-adviser to WRL Value Line
Aggressive Growth.

57
<PAGE>

Value Line, located at 220 East 42nd Street, New York, New York 10017-5891 also
acts as investment adviser to other mutual funds and furnishes investment
counseling services to private and institutional clients resulting in combined
assets under management of over $5 billion. Value Line was organized in 1982 and
is the successor to substantially all of the operations of Arnold Bernhard &
Co., Inc. which with its predecessor has been in business since 1931.

- Portfolio Manager:

A committee of employees of Value Line, Inc. is jointly and primarily
responsible for the day-to-day management of the portfolio.

SUB-ADVISERS' COMPENSATION

Each Sub-Adviser receives monthly compensation from the Investment Adviser at
the annual rate of a specified percentage of the average daily net assets of
each portfolio management by the Sub-Adviser. The table below lists those
percentages by portfolio.

<TABLE>
<CAPTION>
Portfolio Percentage of Average Daily Net Assets
---------------------------------------- ------------------------------------------------------------------
<S> <C>
WRL Janus Growth 0.40%
WRL AEGON Bond 0.20% (Prior to January 1, 1998, Janus Capital
Corporation, previous Sub-Adviser, received 0.25%)
WRL Janus Global 0.40%
WRL J.P. Morgan Money Market 0.15%
WRL AEGON Balanced 0.40%, less 50% of amount of excess expenses(1)
WRL VKAM Emerging Growth 0.40%, less 50% of amount of excess expenses(1)
WRL LKCM Strategic Total Return 0.40%
WRL Alger Aggressive Growth 0.40%
WRL Dean Asset Allocation 0.40%, less 50% of amount of excess expenses(1)
WRL C.A.S.E. Growth 0.40%
WRL Federated Growth & Income 0.50% of the first $30 million of
average daily net assets;
0.35% of the next $20 million of average daily net assets;
and 0.25% of average daily net assets
in excess of $50 million
WRL NWQ Value Equity 0.40%, less 50% of amount of excess expenses(1) WRL GE
International Equity 50% of the fees received by the investment adviser(3) WRL
GE U.S. Equity 0.40% WRL Third Avenue Value 0.40%, less 50% of amount of excess
expenses(1) WRL J.P. Morgan Real Estate Securities 0.40% WRL T. Rowe Price Small
Cap 0.35% WRL Pilgrim Baxter Mid Cap 0.50% of the first $100 million of
portfolio's average
daily net assets; 0.40% of assets in excess of
$100 million (from first dollar)(2)
WRL Salomon All Cap 0.30% of the
first $20 million of
portfolio's average daily net
assets; 0.50% of the next
$20-100 million of
average daily net assets; and 0.40% of average
daily net assets over $100 million(2)
WRL Goldman Sachs Growth 0.50% of the first
$50 million of portfolio's average
daily net assets; 0.45% of the next
$50-100 million in assets; and 0.40% of
assets in excess of $100 million after
the first year of the contract, the
minimum fees will be $150,000 (in
aggregate)(2)
WRL T. Rowe Price Dividend Growth 0.50% of first $100 million of average daily net assets
and 0.40% of assets over $100 million (from first dollar)(2)
WRL Goldman Sachs Small Cap 0.50% after the first year of the contract, minimum fees will
be $150,000
WRL Dreyfus Mid Cap 0.45% of the
first $100 million of the
portfolio's average daily net
assets; 0.40% of assets in
excess
of $100 million (from first dollar)
WRL Value Line Aggressive Growth 0.40%, less 50% of amount of excess expenses(1)
WRL Great Companies -- AmericaSM 0.40%, less 50% of amount of excess expenses(1)
WRL Great Companies -- TechnologySM 0.40%, less 50% of amount of excess expenses
WRL Great Companies -- Global2 0.40%, less 50% of amount of excess expenses(1)
WRL Gabelli Global Growth 0.50% of the first $500 million of the portfolio's
average daily
netassets; 0.40% of assets over $500
million up to $1 billion; and 0.30%
of assets in excess of $1 billion,
less 50% of any amount reimbursed
pursuant to its expense limitations
WRL LKCM Capital Growth 0.40%, less 50% of amount of excess expenses
</TABLE>

--------------
(1) Excess expenses are those expenses paid by the Investment Adviser on behalf
of a portfolio pursuant to any expense limitation.

58
<PAGE>

(2) The average daily net assets will be determined on a combined basis with the
same name fund managed by the sub-adviser for IDEX Mutual Funds.

(3) Prior to May 1, 2000, Scottish Equitable served as co-manager of this
portfolio and the portfolio was know as WRL GE/Scottish Equitable
International Equity.

59
<PAGE>

The method of computing each Sub-Adviser's fees is set forth above. For the
years ended December 31, 1999, 1998 and 1997 each Sub-Adviser was paid fees for
their services in the following amounts (Fees are not included for WRL Value
Line Aggressive Growth, WRL Great Companies - AmericaSM, WRL Great Companies -
TechnologySM, WRL Great Companies -- Global2, WRL Gabelli Global Growth or WRL
LKCM Capital Growth as these portfolios had not yet commenced operations as of
December 31, 1999.)

Sub-Advisory Fees

<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------------------------------------
Sub-adviser Portfolio 1999 1998 1997
---------------- ---------------------------------------- ------------------------- ------------------------ -------------------
<S> <C> <C> <C> <C>
Alger WRL Alger Aggressive Growth $2,936,966 $1,680,802 $1,124,900
VKAM WRL VKAM Emerging Growth 4,473,352 2,704,049 2,037,749
Janus WRL Janus Growth 12,744,800 9,055,804 6,858,412
WRL Janus Global 5,146,976 3,768,835 2,795,909
WRL J.P. Morgan Money Market N/A N/A N/A
WRL AEGON Bond(1) 325,052 N/A 239,843
EQSF WRL Third Avenue Value 72,841 55,964 N/A
C.A.S.E. WRL C.A.S.E. Growth 334,939 257,951 167,446
NWQ WRL NWQ Value Equity 607,482 729,083 450,409
Dean WRL Dean Asset Allocation 1,311,787 1,355,313 1,039,770
LKCM WRL LKCM Strategic Total Return 2,383,168 2,242,509 1,851,835
Federated WRL Federated Growth & Income 300,086 287,959 202,218
AIMI WRL AEGON Balanced 421,229 340,271 245,951
WRL AEGON Bond(1) 325,052 294,882 N/A
J.P. Morgan WRL J.P. Morgan Real Estate Securities 12,266 4,669 N/A
WRL J.P. Morgan Money Market 404,622 241,729 193,113
GEIM WRL GE U.S. Equity(2) 588,987 277,671 70,140
WRL GE International Equity(2)(3) 86,818 69,749 27,889
SEIM WRL GE International Equity(2)(3) 77,845 67,890 27,962
GSAM WRL Goldman Sachs Small Cap 6,577 N/A N/A
WRL Goldman Sachs Growth 14,672 N/A N/A
Dreyfus WRL Dreyfus Mid Cap 3,971 N/A N/A
Salomon WRL Salomon All Cap 8,475 N/A N/A
T. Rowe Price WRL T. Rowe Price Dividend Growth 17,211 N/A N/A
WRL T. Rowe Price Small Cap 15,071 N/A N/A
Pilgrim Baxter WRL Pilgrim Baxter Mid Cap Growth 42,533 N/A N/A
</TABLE>

------------------------------
(1) Prior to January 1, 1998, Janus served as sub-adviser to Bond and received
monthly compensation from the Investment Adviser at the annual rate of 0.25%
of average daily net assets of the portfolio. Effective January 1, 1998,
AIMI serves as Sub-Adviser to the WRL AEGON Bond (formerly Bond), and will
receive monthly compensation from the Investment Adviser at the annual rate
of 0.20% of average daily net assets of the portfolio.
(2) Prior to May 1, 2000 this portfolio was known as WRL GE/Scottish Equitable
International Equity.
(3) GEIM and SEIM served as Co-sub-advisers for the WRL GE International Equity
until May 1, 2000.

[GRAPHIC OMITTED]

JOINT TRADING ACCOUNTS

Subject to approval by the Fund's Board, the WRL Janus Growth and WRL Janus
Global may transfer uninvested cash balances on a daily basis into certain joint
trading accounts. Assets in the joint trading accounts are invested in money
market instruments. All other participants in the joint trading accounts will be
other clients, including registered mutual fund clients, of Janus Capital or its
affiliates. The WRL Janus Growth and WRL Janus Global will participate in the
joint trading accounts only to the extent that the investments of the joint
trading accounts are consistent with each portfolio's investment policies and
restrictions. Janus Capital anticipates that the investment made by a portfolio
through the joint trading accounts will be at least as advantageous to that
portfolio as if the portfolio had made such investment directly.

[GRAPHIC OMITTED]

PERSONAL SECURITIES TRANSACTIONS

The Fund permits "Access Persons" as defined by Rule 17j-1 under the 1940 Act to
engage in personal securities transactions, subject to the terms of the Code of
Ethics and Insider Trading Policy ("Ethics Policy") that has been adopted by the
Fund's Board. Access Persons are required to follow the guidelines established
by this Ethics Policy in connection with all personal securities transactions
and are subject to certain prohibitions on personal trading. The Fund's
Sub-Advisers, pursuant to Rule 17j-1 and other applicable laws, and pursuant to

60
<PAGE>

the terms of the Ethics Policy, must adopt and enforce their own Code of Ethics
and Insider Trading Policies appropriate to their operations. The Board is
required to review and approve the Code of Ethics for each Sub-Adviser. Each
Sub-Adviser is also required to report to the Fund's Board on a quarterly basis
with respect to the administration and enforcement of such Ethics Policy,
including any violations thereof which may potentially affect the Fund.

[GRAPHIC OMITTED]

ADMINISTRATIVE AND TRANSFER
AGENCY SERVICES

Effective January 1, 1997, the Fund entered into an Administrative Services and
Transfer Agency Agreement with WRL Services located at 570 Carillon Parkway, St.
Petersburg, Florida 33716, an affiliate of WRL Management and WRL, to furnish
the Fund with administrative services to assist the Fund in carrying out certain
of its functions and operations. Under this Agreement, WRL Services shall
furnish to each portfolio, subject to the overall supervision of the Fund's
Board, supervisory, administrative, and transfer agency services, including
recordkeeping and reporting. WRL Services is reimbursed by the Fund monthly on a
cost incurred basis. Prior to January 1, 1997, WRL performed these services in
connection with its serving as the Fund's investment adviser.

[GRAPHIC OMITTED]

PORTFOLIO TURNOVER

A portfolio turnover rate is, in general, the percentage calculated by taking
the lesser of purchases or sales of portfolio securities (excluding certain
short-term securities) for a year and dividing it by the monthly average of the
market value of such securities held during the year. The WRL Third Avenue Value
investment policies and objective, which emphasizes long-term holdings, should
tend to keep the number of portfolio transactions relatively low. Because of
this, the WRL Third Avenue Value does not expect its annual portfolio turnover
rate to exceed 50%. The WRL J.P. Morgan Real Estate Securities does not expect
its annual portfolio turnover rate to exceed 100%.

Changes in security holdings are made by a portfolio's Sub-Adviser when it is
deemed necessary. Such changes may result from: liquidity needs; securities
having reached a price or yield objective; anticipated changes in interest rates
or the credit standing of an issuer; or developments not foreseen at the time of
the investment decision.

A Sub-Adviser may engage in a significant number of short-term transactions if
such investing serves a portfolio's objective. The rate of portfolio turnover
will not be a limiting factor when such short-term investing is considered
appropriate. Increased turnover results in higher brokerage costs or mark-up
charges for a portfolio; these charges are ultimately borne by the policyowners.

In computing the portfolio turnover rate for a portfolio, securities whose
maturities or expiration dates at the time of acquisition are one year or less
are excluded. Subject to this exclusion, the turnover rate for a portfolio is
calculated by dividing (a) the lesser of purchases or sales of portfolio
securities for the fiscal year by (b) the monthly average of portfolio
securities owned by the portfolio during the fiscal year.

61
<PAGE>

The following table provides the portfolios' turnover rates for the fiscal years
ended December 31, 1999, 1998 and 1997 (Information is not included for WRL
Value Line Aggressive Growth, WRL Great Companies -- AmericaSM, WRL Great
Companies -- TechnologySM, WRL Great Companies -- Global2, WRL Gabelli Global
Growth and WRL LKCM Capital Growth as these portfolios had not yet commenced
operations as of December 31, 1999.)

Portfolio Turnover Rates

<TABLE>
<CAPTION>
Year Ended December 31
------------------------------------------------------------------
Portfolio 1999 1998 1997
--------------------------------------------------- -------------------- ----------------------- -----------------
<S> <C> <C> <C>
WRL Alger Aggressive Growth 101.71% 117.44% 136.18%
WRL VKAM Emerging Growth 117.72% 99.50% 99.78%
WRL GE/Scottish Equitable International Equity(2) 99.77% 71.74% 54.33%
WRL Janus Global 68.10% 87.36% 97.54%
WRL Janus Growth 70.95% 35.29% 85.88%
WRL Third Avenue Value 9.56% 4.35% N/A
WRL C.A.S.E. Growth 143.52% 205.28% 196.50%
WRL GE U.S. Equity 44.01% 63.08% 92.35%
WRL NWQ Value Equity 34.19% 43.60% 17.28%
WRL Dean Asset Allocation 88.78% 76.62% 63.76%
WRL LKCM Strategic Total Return 45.42% 49.20% 48.20%
WRL J.P. Morgan Real Estate Securities 189.80% 100.80% N/A
WRL Federated Growth & Income 117.14% 97.17% 155.77%
WRL AEGON Balanced 74.88% 83.94% 77.06%
WRL AEGON Bond 26.40% 51.60% 213.03%
WRL J.P. Morgan Money Market(1) N/A N/A N/A
WRL Goldman Sachs Small Cap 340.66% N/A N/A
WRL Goldman Sachs Growth 40.46% N/A N/A
WRL Dreyfus Mid Cap 94.19% N/A N/A
WRL Salomon All Cap 216.29% N/A N/A
WRL T. Rowe Price Dividend Growth 43.76% N/A N/A
WRL T. Rowe Price Small Cap 159.02% N/A N/A
WRL Pilgrim Baxter Mid Cap Growth 155.71% N/A N/A
</TABLE>

------------------------------
(1) WRL J.P. Morgan Money Market does not have a stated portfolio turnover rate,
as securities of the type in which it invests are excluded in the usual
calculation of that rate.

(2) This portfolio was previously known as WRL GE/Scottish Equitable
International Equity.

For the year ended December 31, 1997, the Bond portfolio's increase in turnover
rate was the result of portfolio management strategies in trying to maintain
benchmark treasury issues. There was also a significant increase in the turnover
rate for the WRL Federated Growth & Income for the year ended December 31, 1997
because the portfolio changed its investment objective from a utility based
portfolio to a defensive equity portfolio and the portfolio managers implemented
a proprietary defensive equity model in selecting new stocks.

The future annual turnover rates cannot be precisely predicted, although an
annual turnover rate in excess of 100% is not presently anticipated for the WRL
Alger Aggressive Growth, WRL Dean Asset Allocation, WRL Federated Growth &
Income and WRL AEGON Balanced; 50% for the WRL NWQ Value Equity and WRL Third
Avenue Value; 150% for the WRL Janus Growth; and 200% for the WRL Janus Global.

There are no fixed limitations regarding the portfolio turnover rates of the
portfolios. Portfolio turnover rates are expected to fluctuate under constantly
changing economic conditions and market circumstances. Higher turnover rates
tend to result in higher brokerage fees. Securities initially satisfying the
basic policies and objective of each portfolio may be disposed of when they are
no longer deemed suitable.

[GRAPHIC OMITTED]

PLACEMENT OF PORTFOLIO
BROKERAGE

Subject to policies established by the Board of Directors of the Fund, each
portfolio's Sub-Adviser is primarily responsible for placement of a portfolio's
securities transactions. In placing orders, it is the policy of a portfolio to
obtain the most favorable net results, taking into account various factors,
including price, dealer spread or commissions, if any, size of the transaction
and difficulty of execution. While each Sub-Adviser generally will seek
reasonably competitive spreads or commissions, a portfolio will not necessarily
be paying the lowest spread or

62
<PAGE>

commission available. A portfolio does not have any obligation to deal with any
broker, dealer or group of brokers or dealers in the execution of transactions
in portfolio securities.

Decisions as to the assignment of portfolio brokerage business for a portfolio
and negotiation of its commission rates are made by the Sub-Adviser, whose
policy is to obtain "best execution" (prompt and reliable execution at the most
favorable security price) of all portfolio transactions. In placing portfolio
transactions, the Sub-Adviser may give consideration to brokers who provide
supplemental investment research, in addition to such research obtained for a
flat fee, to the Sub-Adviser, and pay spreads or commissions to such brokers or
dealers furnishing such services which are in excess of spreads or commissions
which another broker or dealer may charge for the same transaction.

In selecting brokers and in negotiating commissions, the Sub-Adviser considers
such factors as: the broker's reliability; the quality of its execution services
on a continuing basis; the financial condition of the firm; and research
products and services provided, which include: (i) furnishing advice, either
directly or through publications or writings, as to the value of securities, the
advisability of purchasing or selling specific securities and the availability
of securities or purchasers or sellers of securities and (ii) furnishing
analyses and reports concerning issuers, industries, securities, economic
factors and trends and portfolio strategy and products and other services (such
as third party publications, reports and analyses, and computer and electronic
access, equipment, software, information and accessories) that assist each
Sub-Adviser in carrying out its responsibilities.

Supplemental research obtained through brokers or dealers will be in addition
to, and not in lieu of, the services required to be performed by a Sub-Adviser.
The expenses of a Sub-Adviser will not necessarily be reduced as a result of the
receipt of such supplemental information. A Sub-Adviser may use such research
products and services in servicing other accounts in addition to the respective
portfolio. If a Sub-Adviser determines that any research product or service has
a mixed use, such that it also serves functions that do not assist in the
investment decision-making process, the Sub-Adviser will allocate the costs of
such service or product accordingly. The portion of the product or service that
a Sub-Adviser determines will assist it in the investment decision-making
process may be paid for in brokerage commission dollars. Such allocation may
create a conflict of interest for the Sub-Adviser. Conversely, such supplemental
information obtained by the placement of business for a Sub-Adviser will be
considered by and may be useful to the Sub-Adviser in carrying out its
obligations to a portfolio.

When a portfolio purchases or sells a security in the OTC market, the
transaction takes place directly with a principal market-maker, without the use
of a broker, except in those circumstances where, in the opinion of the
Sub-Adviser, better prices and executions are likely to be achieved through the
use of a broker.

Securities held by a portfolio may also be held by other separate accounts,
mutual funds or other accounts for which the Investment Adviser or Sub-Adviser
serves as an adviser, or held by the Investment Adviser or Sub-Adviser for their
own accounts. Because of different investment objectives or other factors, a
particular security may be bought by the Investment Adviser or Sub-Adviser for
one or more clients when one or more clients are selling the same security. If
purchases or sales of securities for a portfolio or other entities for which
they act as investment adviser or for their advisory clients arise for
consideration at or about the same time, transactions in such securities will be
made, insofar as feasible, for the respective entities and clients in a manner
deemed equitable to all. To the extent that transactions on behalf of more than
one client of the Investment Adviser or Sub-Adviser during the same period may
increase the demand for securities being purchased or the supply of securities
being sold, there may be an adverse effect on price.

On occasions when the Investment Adviser or a Sub-Adviser deems the purchase or
sale of a security to be in the best interests of a portfolio as well as other
accounts or companies, it may to the extent permitted by applicable laws and
regulations, but will not be obligated to, aggregate the securities to be sold
or purchased for the portfolio with those to be sold or purchased for such other
accounts or companies in order to obtain favorable execution and lower brokerage
commissions. In that event, allocation of the securities purchased or sold, as
well as the expenses incurred in the transaction, will be made by the
Sub-Adviser in the manner it considers to be most equitable and consistent with
its fiduciary obligations to the portfolio and to such other accounts or
companies. In some cases this procedure may adversely affect the size of the
position obtainable for a portfolio.

The Board of Directors of the Fund periodically reviews the brokerage placement
practices of each Sub-Adviser on behalf of the portfolios, and reviews the
prices and commissions, if any, paid by the portfolios to determine if they were
reasonable.

The Board of Directors of the Fund has authorized the Sub-Advisers to consider
sales of the policies and annuity contracts by a broker-dealer as a factor in
the selection of broker-dealers to execute portfolio transactions. In addition,
the Sub-Advisers may occasionally place portfolio business with affiliated
brokers of the Investment Adviser or a Sub-Adviser, including: InterSecurities,
Inc., P.O. Box 5068, Clearwater, Florida 33758; Fred Alger & Company, Inc., One
World Trade Center, Suite 9333, New York, New York 10038; M. J. Whitman, Inc.;
M. J. Whitman Senior Debt Corp., 767 Third Avenue, New York, New

63
<PAGE>

York 10017-2023; Van Kampen Funds Inc., 1 Parkview Plaza, P.O. Box 5555,
Oakbrook Terrace, Illinois 60181, Dreyfus Brokerage Services, Inc., 401 North
Maile Drive, Beverly Hills, CA 90210, Dreyfus Investment Services Corp., Union
Trust Building, 501 Grant St., Pittsburg, PA 15219 and AEGON USA Securities,
Inc., P.O. Box 1449, Cedar Rapids, Iowa 52499. As stated above, any such
placement of portfolio business will be subject to the ability of the
broker-dealer to provide best execution and to the Conduct Rules of the
National Association of Securities Dealers, Inc.

Commissions Paid By The Portfolios

<TABLE>
<CAPTION>
Aggregate Commissions
Year Ended December 31
-------------------------------------------------
Portfolio 1999 1998 1997
-------------------------------- ------------- ----------------- -----------------
<S> <C> <C> <C>
WRL Alger Aggressive Growth(1) $ 907,331 $ 916,267 $ 754,459
WRL VKAM Emerging Growth(5) 1,305,965 920,884 627,400
WRL Janus Global 2,219,248 2,373,255 2,305,145
WRL Janus Growth 2,717,764 1,023,925 1,367,104
WRL C.A.S.E. Growth 326,987 323,967 335,147
WRL Third Avenue Value(4)(7) 7,817 20,572 N/A
WRL Dean Asset
Allocation 521,249 339,951 352,964
WRL LKCM Strategic
Total Return 513,667 469,460 348,083
WRL Federated Growth &
Income 281,782 262,012 175,035
WRL AEGON Balanced 179,262 153,672 105,731
WRL NWQ Value Equity 168,551 191,139 157,512
WRL GE International Equity(3) 136,293 121,485 102,616
WRL GE U.S. Equity(2)(6) 133,539 102,182 39,301
WRL J.P. Morgan Real
Estate Securities(7) 17,545 8,206 N/A
WRL Goldman Sachs Small
Cap(9)(10) 14,335 N/A N/A
WRL Goldman Sachs
Growth(9)(11) 10,724 N/A N/A
WRL Dreyfus Mid Cap(9) 3,922 N/A N/A
WRL Salomon All Cap(9) 32,734 N/A N/A
WRL T. Rowe Price Dividend
Growth(9) 9,115 N/A N/A
WRL T. Rowe Price Small Cap(9) 15,525 N/A N/A
WRL Pilgrim Baxter Mid Cap
Growth(9) 26,811 N/A N/A

<CAPTION>
Affiliated Brokerage Commissions
Year Ended December 31
----------------------------------------------------------------------------------
Portfolio 1999 % 1998 % 1997 %
-------------------------------- --------------- -------------- ---------------- -------------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
WRL Alger Aggressive Growth(1) $903,540 99.58% $912,105 99.55% $749,587 99.35%
WRL VKAM Emerging Growth(5) 9,346 <1% 1,308 < 1% N/A N/A
WRL Janus Global N/A N/A N/A N/A N/A N/A
WRL Janus Growth N/A N/A N/A N/A N/A N/A
WRL C.A.S.E. Growth N/A N/A N/A N/A N/A N/A
WRL Third Avenue Value(4)(7) 7,452 95.33% 20,568 99.98%
WRL Dean Asset
Allocation N/A N/A N/A N/A N/A N/A
WRL LKCM Strategic
Total Return N/A N/A N/A N/A N/A N/A
WRL Federated Growth &
Income N/A N/A N/A N/A N/A N/A
WRL AEGON Balanced N/A N/A N/A N/A N/A N/A
WRL NWQ Value Equity N/A N/A N/A N/A N/A N/A
WRL GE International Equity(3) N/A N/A N/A N/A N/A N/A
WRL GE U.S. Equity(2)(6) 241 <1% 325 <1% N/A N/A
WRL J.P. Morgan Real
Estate Securities(7) N/A N/A N/A N/A N/A N/A
WRL Goldman Sachs Small
Cap(9)(10) 158 1.10% N/A N/A N/A N/A
WRL Goldman Sachs
Growth(9)(11) 198 1.85% N/A N/A N/A N/A
WRL Dreyfus Mid Cap(9) N/A N/A N/A N/A N/A N/A
WRL Salomon All Cap(9) N/A N/A N/A N/A N/A N/A
WRL T. Rowe Price Dividend
Growth(9) N/A N/A N/A N/A N/A N/A
WRL T. Rowe Price Small Cap(9) N/A N/A N/A N/A N/A N/A
WRL Pilgrim Baxter Mid Cap
Growth(9) N/A N/A N/A N/A N/A N/A
</TABLE>

------------------------------
(1) The percentage of the portfolio's aggregate dollar amount of transactions
involving the payment of commissions effected through Fred Alger Company,
Incorporated for the fiscal year ended December 31, 1999, 1998 and 1997 was
98.90%, 99.27% and 98.37%, respectively.
(2) Portfolio commenced operations on January 2, 1997.

(3)Portfolio commenced operatoins January 2, 1997 and was known as WRL
GE/Scottish Equitable International Equity.

(4) The percentage of the portfolio's aggregate dollar amount of transactions
involving the payment of commissions effected through M.J. Whitman, Inc.
for the fiscal year ended December 31, 1999, 1998 and 1997 was 88.40%,
97.91%, and N/A, respectively.

(5) The percentage of the portfolio's aggregate dollar amount of transactions
involving the payment of commissions effected through Morgan Stanley & Co.,
Incorporated for the fiscal year ended December 31, 1999, 1998 and 1997 was
1.06%, < 1% and N/A, respectively.

(6) The percentage of the portfolio's aggregate dollar amount of transactions
involving the payment of commissions effected through Paine Webber, Inc.
for the fiscal year ended December 31, 1999, 1998 and 1997 was < 1%, < 1%
and N/A, respectively.
(7) Portfolio commenced operations May 1, 1998.

(8) Portfolio commenced operations January 2, 1998

(9) Portfolio commenced operations May 3, 1999.

(10) The percentage of the portfolio's aggregate dollar amount of transactions
involving the payment of commissions effected through Goldman Sachs & Co.
for the fiscal year ended December 31, 1999, 1998 and 1997 was 36.91%, N/A
and N/A, respectively.

(11) The percentage of the portfolio's aggregate dollar amount of transactions
involving the payment of commissions effected through Goldman Sachs & Co.
for the fiscal year ended December 31, 1999, 1998 and 1997 was 2.44%, N/A
and N/A, respectively.

WRL Alger Aggressive Growth paid all its affiliated brokerage commissions to
Fred Alger & Company, Incorporated; WRL Third Avenue Value portfolio paid all
affiliated brokerage to M.J. Whitman, Inc.; WRL VKAM Emerging Growth paid all
affiliated brokerage to Morgan Stanley & Co., Incorporated; and WRL GE U.S.
Equity paid all affiliated commissions to Paine Webber, Inc. WRL Goldman Sachs
Small Cap and WRL Goldman Sachs Growth paid all its affiliated commissions to
Goldman Sachs & Co.

64
<PAGE>

The WRL AEGON Bond and the WRL J.P. Morgan Money Market did not pay any
brokerage commissions for the years ended December 31, 1999, 1998, and 1997.

During the fiscal year ended December 31, 1999, WRL AEGON Balanced, WRL VKAM
Emerging Growth, WRL C.A.S.E. Growth, WRL Federated Growth & Income, WRL LKCM
Strategic Total Return, WRL NWQ Value Equity, WRL Dean Asset Allocation and WRL
Dreyfus Mid Cap had transactions in the amounts of $68,190,393, $17,302,500,
$237,551,656, $37,901,146, $71,811,819, $14,620,351, $11,192,679 and $112,572,
respectively, which resulted in brokerage commissions of $127,677, $2,036,975,
$204,538, $71,676, $115,848, $1,019,464, $21,725 and $190, respectively, that
were directed to brokers for brokerage and research services provided. WRL GE
International Equity, WRL GE U.S. Equity, WRL Janus Growth, WRL T. Rowe Price
Dividend Growth, WRL Goldman Sachs Growth, WRL Salomon All Cap and WRL Pilgrim
Baxter Mid Cap Growth had brokerage commissions in the amounts of $2,707,
$20,309, $56,193, $23,749, $190, $109, $7,714, $1,098 and $518,856,
respectively, that were directed to brokerage and research services provided.

[GRAPHIC OMITTED]

DETERMINATION OF OFFERING PRICE

Shares of the portfolios are currently sold only to the separate accounts to
fund the benefits under the Policies and the annuity contracts. The portfolios
may, in the future, offer their shares to other insurance company separate
accounts. The separate accounts invest in shares of a portfolio in accordance
with the allocation instructions received from holders of the policies and the
annuity contracts. Such allocation rights are further described in the
prospectuses and disclosure documents for the policies and the annuity
contracts. Shares of the portfolios are sold and redeemed at their respective
net asset values as described in the prospectus.

[GRAPHIC OMITTED]

NET ASSET VALUATION

As stated in the prospectus, the net asset value of the portfolios' shares is
ordinarily determined, once daily, as of the close of the regular session of
business on the New York Stock Exchange ("Exchange") (usually 4:00 p.m., Eastern
Time) on each day the Exchange is open. (Currently the Exchange is closed on New
Year's Day, Martin Luther King's Birthday, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.)
The per share net asset value of a portfolio is determined by dividing the total
value of the securities and other assets, less liabilities, by the total number
of shares outstanding. In determining net asset value, securities listed on the
national securities exchanges and traded on the NASDAQ National Market are
valued at the closing prices on such markets, or if such a price is lacking for
the trading period immediately preceding the time of determination, such
securities are valued at their current bid price. Foreign securities and
currencies are converted to U.S. dollars using the exchange rate in effect at
the close of the Exchange. Other securities for which quotations are not readily
available are valued at fair values as determined in good faith by a portfolio's
Investment Adviser under the supervision of the Fund's Board of Directors. Money
market instruments maturing in 60 days or less are valued on the amortized cost
basis. Values of gold bullion held by a portfolio are based upon daily quotes
provided by banks or brokers dealing in such commodities.

[GRAPHIC OMITTED]

The Prospectus contains a brief description of how performance is calculated.
The following sections describe how performance data is calculated in greater
detail.

[GRAPHIC OMITTED]

TOTAL RETURN

Total return quotations for each of the portfolios are computed by finding the
average annual compounded rates of return over the relevant periods that would
equate the initial amount invested to the ending redeemable value, according to
the following equation:

P (1+T)n = ERV

<TABLE>
<S> <C> <C>
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value (at the end of the applicable period
of a hypotheti- cal $1,000 payment made at the begin- ning of
the applicable period)
</TABLE>

65
<PAGE>

The total return quotation calculations for a portfolio reflect the deduction of
a proportionate share of the portfolio's investment advisory fee and portfolio
expenses and assume that all dividends and capital gains during the period are
reinvested in the portfolio when made. The calculations also assume a complete
redemption as of the end of the particular period.

Total return quotation calculations do not reflect charges or deductions against
the Series Life Account or the Series Annuity Account or charges and deductions
against the policies or the annuity contracts. Accordingly, these rates of
return do not illustrate how actual investment performance will affect benefits
under the policies or the annuity contracts. Where relevant, the prospectuses
for the policies and the annuity contracts contain performance information about
these products. Moreover, these rates of return are not an estimate, projection
or guarantee of future performance. Additional information regarding the
investment performance of the portfolios appears in the prospectus.

[GRAPHIC OMITTED]

YIELD QUOTATIONS

The yield quotations for a portfolio (for WRL J.P. Morgan Money Market yield,
see "Yield Quotations - WRL J.P. Morgan Money Market ", below) are based on a
specific thirty-day period and are computed by dividing the net investment
income per share earned during the period by the maximum offering price per
share on the last date of the period, according to the following formula:

<TABLE>
<S> <C> <C>
a-b
YIELD = 2 [ ( + 1)6 - 1]
cd
</TABLE>

<TABLE>
<S> <C> <C>
Where: a = dividends and interest earned dur-
ing the period by the portfolio
b = expenses accrued for the period
(net of reimbursement)
c = the average daily number of shares
outstanding during the period that
were entitled to receive dividends
d = the maximum offering price per
share on the last day of the period
</TABLE>

The yield of the WRL AEGON Bond as computed above for the thirty day period
ended December 31, 1998 was 5.26%.

[GRAPHIC OMITTED]

YIELD QUOTATIONS - WRL J.P. MORGAN
MONEY MARKET

From time to time the WRL J.P. Morgan Money Market portfolio may quote its yield
in reports or other communications to policyholders or in advertising material.
Yield quotations are expressed in annualized terms and reflect dividends of a
portfolio declared and reinvested daily based upon the net investment income
earned by a portfolio each day. The portfolio's yields fluctuate and the yield
on any day for any past period is not an indication as to future yields on any
investment in the portfolio's shares. Future yields are not guaranteed.

Yield is computed in accordance with a standardized method required by the SEC.
The yields for the WRL J.P. Morgan Money Market for the seven-day period ended
December 31, 1999, was 5.15% and was equivalent to a compound effective yield of
5.28%. The current yield for the WRL J.P. Morgan Money Market is an
annualization, without compounding, of the portfolio rate of return, and is
computed by determining the net change in the value of a hypothetical
pre-existing account in the portfolio having a balance of one share at the
beginning of a seven calendar day period for which yield is to be quoted,
dividing the net change by the value of the account at the beginning of the
period to obtain the base period return, and annualizing the results (i.e.,
multiplying the base period return by 365/7). The net change in the value of the
account reflects the value of additional shares purchased with dividends
declared on the original shares and any such additional shares, but does not
include realized gains and losses or unrealized appreciation and depreciation.
The WRL J.P. Morgan Money Market may also calculate the compound effective
annualized yields by adding 1 to the base period return (calculated as described
above), raising that sum to a power equal to 365/7, and subtracting 1. The yield
quotations for the WRL J.P. Morgan Money Market portfolio do not take into
consideration any deductions imposed by the Series Life Account or the Series
Annuity Account.

Yield information is useful in reviewing the WRL J.P. Morgan Money Market's
performance in seeking to meet its investment objective, but, because yields
fluctuate, such information cannot necessarily be used to compare an investment
in shares of the portfolio with bank deposits, savings accounts and similar
investment alternatives, which often provide an agreed or guaranteed fixed yield
for a stated period of time. Also, the portfolio's yields cannot always be
compared with yields determined by different methods used by other funds. It
should be emphasized that yield is a function of the kind and quality of the
instruments in the WRL J.P. Morgan Money Market, portfolio maturity and
operating expenses.

66
<PAGE>

[GRAPHIC OMITTED]

Shares of the portfolios are offered only to the Separate Accounts that fund the
policies and annuity contracts. See the respective prospectuses for the policies
and annuity contracts for a discussion of the special taxation of insurance
companies with respect to the Separate Accounts and of the policies, the annuity
contracts and the holders thereof.

Each portfolio has either qualified, and expects to continue to qualify, for
treatment as a regulated investment company ("RIC") under the Internal Revenue
Code of 1986, as amended (the "Code"). In order to qualify for that treatment, a
portfolio must distribute to its Policyowners for each taxable year at least 90%
of its investment company taxable income ("Distribution Requirement") and must
meet several additional requirements. These requirements include the following:
(1) the portfolio must derive at least 90% of its gross income each taxable year
from dividends, interest, payments with respect to securities loans, and gains
from the sale or other disposition of securities or foreign currencies, or other
income (including gains from options, futures or forward contracts) derived with
respect to its business of investing in securities or those currencies ("Income
Requirement"); (2) at the close of each quarter of the portfolio's taxable year,
at least 50% of the value of its total assets must be represented by cash and
cash items, U.S. Government securities, securities of other RICs, and other
securities that, with respect to any one issuer, do not exceed 5% of the value
of the portfolio's total assets and that do not represent more than 10% of the
outstanding voting securities of the issuer; and (3) at the close of each
quarter of the portfolio's taxable year, not more than 25% of the value of its
total assets may be invested in securities (other than U.S. Government
securities or the securities of other RICs) of any one issuer. If each portfolio
qualifies as a regulated investment company and distributes to its shareholders
substantially all of its net income and net capital gains, then each portfolio
should have little or no income taxable to it under the Code.

As noted in the Prospectus, each portfolio must, and intends to, comply with the
diversification requirements imposed by section 817(h) of the Code and the
regulations thereunder. These requirements, which are in addition to the
diversification requirements mentioned above, place certain limitations on the
proportion of each portfolio's assets that may be represented by any single
investment (which generally includes all securities of the same issuer). For
purposes of section 817(h), all securities of the same issuer, all interests in
the same real property project, and all interest in the same commodity are
treated as a single investment. In addition, each U.S. Government agency or
instrumentality is treated as a separate issuer, while the securities of a
particular foreign government and its agencies, instrumentalities and political
subdivisions all will be considered securities issued by the same issuer.

If a portfolio fails to qualify as a regulated investment company, the portfolio
will be subject to federal, and possibly state, corporate taxes on its taxable
income and gains (without any deduction for its distributions to its
shareholders) and distributions to its shareholders will constitute ordinary
income to the extent of such Fund's available earnings and profits. Owners of
variable life insurance and annuity contracts which have invested in such a
portfolio might be taxed currently on the investment earnings under their
contracts and thereby lose the benefit of tax deferral. In addition, if a
portfolio failed to comply with the diversification requirements of section
817(h) of the Code and the regulations thereunder, owners of variable life
insurance and annuity contracts which have invested in the portfolio could be
taxed on the investment earnings under their contracts and thereby lose the
benefit of tax deferral. For additional information concerning the consequences
of failure to meet the requirements of section 817(h), see the prospectuses for
the Policies or the Annuity Contracts.

A portfolio will not be subject to the 4% Federal excise tax imposed on RICs
that do not distribute substantially all their income and gains each calendar
year because that tax does not apply to a RIC whose only shareholders are
segregated asset accounts of life insurance companies held in connection with
variable annuity contracts and/or variable life insurance policies.

The use of hedging strategies, such as writing (selling) and purchasing options
and futures contracts and entering into forward contracts, involves complex
rules that will determine for income tax purposes the character and timing of
recognition of the income received in connection therewith by the portfolios.
Income from the disposition of foreign currencies, and income from transactions
in options, futures, and forward contracts derived by a portfolio with respect
to its business of investing in securities or foreign currencies, will qualify
as permissible income under the Income Requirement.

Foreign Investments - portfolios investing in foreign securities or currencies
(which may include [list portfolios so authorized] may be required to pay
withholding, income or other taxes to foreign governments or U.S. possession.
Foreign tax withholding from dividends and interest, if any, is generally at a
rate between 10% and 35%. The investment yield of any portfolio that invests in
foreign securities or currencies is reduced by these foreign taxes. Holders of
Policies and Annuity Contracts investing in such portfolios bear the cost of any
foreign taxes but will not be able to claim a foreign tax credit or deduction
for these foreign taxes. Tax conventions between certain countries and the
United States may reduce or eliminate these foreign taxes, however, and

67
<PAGE>

foreign countries generally do not impose taxes on capital gains in respect of
investments by foreign investors.

Dividends and interest received by each portfolio may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and foreign countries generally do not impose taxes on capital gains in
respect of investments by foreign investors.

Under certain circumstances, a portfolio will be subject to Federal income tax
on a portion of any "excess distribution" received on the stock of a PFIC or of
any gain on disposition of that stock (collectively "PFIC income"), plus
interest thereon, even if the portfolio distributes the PFIC income as a taxable
dividend to its shareholders. The balance of the PFIC income will be included in
a portfolio's investment company taxable income and, accordingly, will not be
taxable to the portfolio to the extent that income is distributed to its
shareholders. If a portfolio invests in a PFIC and elects to treat the PFIC as a
"qualified electing fund," then in lieu of the foregoing tax and interest
obligations, the portfolio will be required to include in income each year its
pro rata share of the qualified electing fund's annual net ordinary earnings and
net capital gain (the excess of net long-term capital gain over net short-term
capital loss), even if they are not distributed to the portfolio; those amounts
would be subject to the Distribution Requirement. In most instances it will be
very difficult, if not impossible, to make this election because of certain
requirements thereof. A portfolio, however, may qualify for, and may make, an
election permitted under Section 853 of the Code so that shareholders may be
eligible to claim a credit or deduction on their Federal income tax returns for,
and will be required to treat as part of the amounts distributed to them, their
pro rata portion of qualified taxes paid or incurred by the portfolio to foreign
countries (which taxes relate primarily to investment income). The portfolio may
make an election under Section 853 of the Code, provided that more than 50% of
the value of the portfolio's total assets at the close of the taxable year
consists of securities in foreign corporations, and the portfolio satisfies
applicable distribution provisions of the Code. The foreign tax credit available
to shareholders is subject to certain limitations imposed by the Code. In
addition, another election is available that would involve marking to market a
portfolio's PFIC stock at the end of each taxable year (and on certain other
dates prescribed in the Code), with the result that unrealized gains are treated
as though they were realized although any such gains recognized will be ordinary
income rather than capital gain. If this election were made, tax at the
portfolio level under the PFIC rules would be eliminated, but a portfolio could,
in limited circumstances, incur nondeductible interest charges. A portfolio's
intention to qualify annually as a regulated investment company may limit a
portfolio'selection with respect to PFIC stock.

The foregoing is only a general summary of some of the important Federal income
tax considerations generally affecting the portfolios and their shareholders. No
attempt is made to present a complete explanation of the Federal tax treatment
of the portfolios' activities, and this discussion and the discussion in the
prospectuses and/or statements of additional information for the Policies and
Annuity Contracts are not intended as a substitute for careful tax planning.
Accordingly, potential investors are urged to consult their own tax advisors for
more detailed information and for information regarding any state, local, or
foreign taxes applicable to the policies, annuity contracts and the holders
thereof.

[GRAPHIC OMITTED]

As described in the Prospectus, the Fund offers a separate class of common stock
for each portfolio. The Fund is currently comprised of the following portfolios:
WRL VKAM Emerging Growth, WRL T. Rowe Price Small Cap, WRL Goldman Sachs Small
Cap, WRL Alger Aggressive Growth, WRL Value Line Aggressive Growth, WRL GE
International Equity, WRL Janus Global, WRL Dreyfus Mid Cap, WRL Salomon All
Cap, WRL Pilgrim Baxter Mid Cap Growth, WRL Janus Growth, WRL Goldman Sachs
Growth, WRL C.A.S.E. Growth, WRL GE U.S. Equity, WRL NWQ Value Equity, WRL Great
Companies -- AmericaSM, WRL Great Companies -- Technology SM, WRL Great
Companies -- Global2, WRL Gabelli Global Growth, WRL T. Rowe Price Dividend
Growth, WRL Dean Asset Allocation, WRL LKCM Strategic Total Return, WRL
Federated Growth & Income, WRL AEGON Balanced, WRL J.P. Morgan Real Estate
Securities, WRL AEGON Bond, WRL J.P. Morgan Money Market and WRL LKCM Capital
Growth.

[GRAPHIC OMITTED]

There has been filed with the Securities and Exchange Commission, Washington,
D.C. a Registration Statement under the Securities Act of 1933, as amended, with
respect to the securities to which this Statement of

Additional Information relates. If further information is desired with respect
to the portfolios or such securities, reference is made to the Registration
Statement and the exhibits filed as part thereof.

68
<PAGE>

[GRAPHIC OMITTED]

The audited financial statements for each portfolio (except WRL Value Line
Aggressive Growth, WRL Great Companies -- AmericaSM and WRL Great Companies --
TechnologySM, which commenced operations on May 1, 2000, WRL Great Companies --
Global2, WRL Gabelli Global Growth and WRL LKCM Capital Growth, which commenced
operations on September 1, 2000) of the Fund for the year ended December 31,
1999 and the report of the Fund's independent certified public accountants are
included in the 1999 Annual Report, and are incorporated herein by reference to
such report.

[GRAPHIC OMITTED]

INDEPENDENT CERTIFIED PUBLIC

ACCOUNTANTS

PricewaterhouseCoopers LLP, located at 400 North Ashley Street, Suite 2800,
Tampa, Florida 33602, serves as the Fund's independent certified public
accountants. The Fund has engaged PricewaterhouseCoopers LLP to examine, in
accordance with auditing standards generally accepted in the United States, the
financial statements of each of the Fund's portfolios.

[GRAPHIC OMITTED]

CUSTODIAN

Investors Bank & Trust Company ("IBT"), located at 200 Clarendon Street, 16th
Floor, Boston, Massachusetts 02116, serves as the Fund's Custodian and Dividend
Disbursing Agent. IBT provides comprehensive asset administrative services to
the Fund and other members of the financial industry which include:
multi-currency accounting; institutional transfer agency services; domestic and
global custody; performance measures; foreign exchange; and securities lending
and mutual fund administrative services.

69
<PAGE>

APPENDIX A

DESCRIPTION OF PORTFOLIO SECURITIES

The following is intended only as a supplement to the information contained
in the Prospectus and should be read only in conjunction with the Prospectus.
Terms defined in the Prospectus and not defined herein have the same meanings as
those in the Prospectus.

1. Certificate of Deposit.* A certificate of deposit generally is a
short-term, interest bearing negotiable certificate issued by a commercial bank
or savings and loan association against funds deposited in the issuing
institution.

2. Eurodollar Certificate of Deposit.* A Eurodollar certificate of
deposit is a short-term obligation of a foreign subsidiary of a U.S. bank
payable in U.S. dollars.

3. Floating Rate Note.* A floating rate note is debt issued by a
corporation or commercial bank that is typically several years in term but
whose interest rate is reset every one to six months.

4. Inverse Floating Rate Securities.* Inverse floating rate securities are
similar to floating rate securities except that their coupon payments vary
inversely with an underlying index by use of a formula. Inverse floating rate
securities tend to exhibit greater price volatility than other floating rate
securities.

5. Floating Rate Obligations.* Floating rate obligations generally
exhibit a low price volatility for a given stated maturity or average life
because their coupons adjust with changes in interest rates.

6. Time Deposit.* A time deposit is a deposit in a commercial bank for a
specified period of time at a fixed interest rate for which a negotiable
certificate is not received.

7. Bankers' Acceptance.* A bankers' acceptance is a time draft drawn on a
commercial bank by a borrower, usually in connection with international
commercial transactions (to finance the import, export, transfer or storage of
goods). The borrower is liable for payment as well as the bank, which
unconditionally guarantees to pay the draft at its face amount on the maturity
date. Most acceptances have maturities of six months or less and are traded in
secondary markets prior to maturity.

8. Variable Amount Master Demand Note.* A variable amount master demand
note is a note which fixes a minimum and maximum amount of credit and provides
for lending and repayment within those limits at the discretion of the lender.
Before investing in any variable amount master demand notes, a portfolio will
consider the liquidity of the issuer through periodic credit analysis based upon
publicly available information.

9. Preferred Stocks. Preferred stocks are securities which represent an
ownership interest in a corporation and which give the owner a prior claim over
common stock on the corporation's earnings and assets. Preferred stock generally
pays quarterly dividends. Preferred stocks may differ in many of their
provisions. Among the features that differentiate preferred stock from one
another are the dividend rights, which may be cumulative or non-cumulative and
participating or non-participating, redemption provisions, and voting rights.
Such features will establish the income return and may affect the prospects for
capital appreciation or risks of capital loss.

10. Convertible Securities. A portfolio may invest in debt securities
convertible into or exchangeable for equity securities, or debt securities that
carry with them the right to acquire equity securities, as evidenced by warrants
attached to such securities or acquired as part of units of the securities. Such
securities normally pay less current income than securities into which they are
convertible, and the concomitant risk of loss from declines in those values.

11. Commercial Paper.* Commercial paper is a short-term promissory note
issued by a corporation primarily to finance short-term credit needs.

12. Repurchase Agreement.* A repurchase agreement is an instrument under
which a portfolio acquires ownership of a debt security and the seller agrees to
repurchase the obligation at a mutually agreed upon time and price. The total
amount received on repurchase is calculated to exceed the price paid by the
portfolio, reflecting an agreed upon market rate of interest for the period from
the time of a portfolio's purchase of the security to the settlement date (i.e.,
the time of repurchase), and would not necessarily relate to the interest rate
on the underlying securities. A portfolio will only enter into repurchase
agreements with underlying securities consisting of U.S. Government or
government agency securities,

--------------
* Short-term Securities.

A-1
<PAGE>

certificates of deposit, commercial paper or bankers' acceptances, and will be
entered only with primary dealers. While a portfolio may invest in repurchase
agreements for periods up to 30 days, it is expected that typically such periods
will be for a week or less. The staff of the SEC has taken the position that
repurchase agreements of greater than seven days together with other illiquid
investments should be limited to an amount not in excess of 15% of a portfolio's
net assets.

Although repurchase transactions usually do not impose market risks on the
purchaser, a portfolio would be subject to the risk of loss if the seller fails
to repurchase the securities for any reason and the value of the securities is
less than the agreed upon repurchase price. In addition, if the seller defaults,
a portfolio may incur disposition costs in connection with liquidating the
securities. Moreover, if the seller is insolvent and bankruptcy proceedings are
commenced, under current law, a portfolio could be ordered by a court not to
liquidate the securities for an indeterminate period of time and the amount
realized by a portfolio upon liquidation of the securities may be limited.

13. Reverse Repurchase Agreement. A reverse repurchase agreement involves
the sale of securities held by a portfolio, with an agreement to repurchase the
securities at an agreed upon price, date and interest payment. A portfolio will
use the proceeds of the reverse repurchase agreements to purchase other money
market securities maturing, or under an agreement to resell, at a date
simultaneous with or prior to the expiration of the reverse repurchase
agreement. A portfolio will utilize reverse repurchase agreements when the
interest income to be earned from the investment of the proceeds from the
transaction is greater than the interest expense of the reverse repurchase
transactions.

14. Asset-Backed Securities. A portfolio may invest in securities backed by
automobile receivables and credit card receivables and other securities backed
by other types of receivables or other assets. Credit support for asset-backed
securities may be based on the underlying assets and/or provided through credit
enhancements by a third party. Credit enhancement techniques include letters of
credit, insurance bonds, limited guarantees (which are generally provided by the
issuer), senior-subordinated structures and over-collateralization. A portfolio
will only purchase an asset-backed security if it is rated at least "A" by S&P
or Moody's.

15. Mortgage-Backed Securities. A portfolio may purchase mortgage-backed
securities issued by government and non-government entities such as banks,
mortgage lenders, or other financial institutions. Mortgage-backed securities
include mortgage pass-through securities, mortgage-backed bonds, and mortgage
pay-through securities. A mortgage pass-through security is a pro-rata interest
in a pool of mortgages where the cash flow generated from the mortgage
collateral is passed through to the security holder. Mortgage-backed bonds are
general obligations of their issuers, payable out of the issuers' general funds
and additionally secured by a first lien on a pool of mortgages. Mortgage
pay-through securities exhibit characteristics of both pass-through and
mortgage-backed bonds. Mortgage-backed securities also include other debt
obligations secured by mortgages on commercial real estate or residential
properties. Other types of mortgage-backed securities will likely be developed
in the future, and a portfolio may invest in them if it is determined they are
consistent with the portfolio's investment objective and policies.

16. Collateralized Mortgage Obligations. (CMOs) are pay-through
securities collateralized by mortgages or mortgage-backed securities. CMOs are
issued in classes and series that have different maturities and interest rates.

17. Stripped Mortgage-Backed Securities. Stripped mortgage-backed
securities are created when the principal and interest payments of a
mortgage-backed security are separated by a U.S. Government agency or a
financial institution. The holder of the "principal-only" security receives the
principal payments made by the underlying mortgage-backed security, while the
holder of the "interest-only" security receives interest payments from the same
underlying security.

The value of mortgage-backed securities may change due to changes in the
market's perception of issuers. In addition, the mortgage securities market in
general may be adversely affected by regulatory or tax changes. Non-governmental
mortgage-backed securities may offer a higher yield than those issued by
government entities but also may be subject to greater price change than
government securities.

Like most mortgage securities, mortgage-backed securities are subject to
prepayment risk. When prepayment occurs, unscheduled or early payments are made
on the underlying mortgages, which may shorten the effective maturities of those
securities and may lower their total return. Furthermore, the prices of stripped
mortgage-backed securities can be significantly affected by changes in interest
rates as well. As interest rates fall, prepayment rates tend to increase, which
in turn tends to reduce prices of "interest-only" securities and increase prices
of "principal-only" securities. Rising interest rates can have the opposite
effect.

18. Financing Corporation Securities. (FICOs) are debt obligations issued
by the Financing Corporation. The Financing Corporation was originally created
to recapitalize the Federal Savings and Loan Insurance Corporation (FSLIC) and
now functions as a financing vehicle for the FSLIC Resolution Fund, which
received substantially all of FSLIC's assets and liabilities.

A-2
<PAGE>

19. U.S. Government Securities. U.S. Government securities are securities
issued by or guaranteed by the U.S. Government or its agencies or
instrumentalities. U.S. Government securities have varying degrees of
government backing. They may be backed by the credit of the U.S. Government as
a whole or only by the issuing agency or instrumentality. For example,
securities issued by the Financing Corporation are supported only by the credit
of the Financing Corporation, and not by the U.S. Government. Securities issued
by the Federal Home Loan Banks and the Federal National Mortgage Association
(FNMA) are supported by the agency's right to borrow money from the U.S.
Treasury under certain circumstances. U.S. Treasury bonds, notes, and bills,
and some agency securities, such as those issued by the Government National
Mortgage Association (GNMA), are backed by the full faith and credit of the
U.S. Government as to payment of principal and interest and are the highest
quality U.S. Government securities. Each portfolio, and its share price and
yield, are not guaranteed by the U.S. Government.

20. Zero Coupon Bonds. Zero coupon bonds are created three ways:

1) U.S. Treasury STRIPS (Separate Trading of Registered Interest and
Principal of Securities) are created when the coupon payments and the
principal payment are stripped from an outstanding Treasury bond by the
Federal Reserve Bank. Bonds issued by the Resolution Funding Corporation
(REFCORP) and the Financial Corporation (FICO) also can be stripped in
this fashion.

2) STRIPS are created when a dealer deposits a Treasury Security or a
Federal agency security with a custodian for safe keeping and then sells
the coupon payments and principal payment that will be generated by this
security separately. Proprietary receipts, such as Certificates of
Accrual on Treasury Securities (CATS), Treasury Investment Growth
Receipts (TIGRS), and generic Treasury Receipts (TRs), are stripped U.S.
Treasury securities separated into their component parts through
custodial arrangements established by their broker sponsors. FICO bonds
have been stripped in this fashion. The portfolios have been advised that
the staff of the Division of Investment Management of the SEC does not
consider such privately stripped obligations to be U.S. Government
securities, as defined by the 1940 Act. Therefore, the portfolios will
not treat such obligations as U.S. Government securities for purposes of
the 65% portfolio composition ratio.

3) Zero coupon bonds can be issued directly by Federal agencies and
instrumentalities, or by corporations. Such issues of zero coupon bonds
are originated in the form of a zero coupon bond and are not created by
stripping an outstanding bond.

Zero coupon bonds do not make regular interest payments. Instead they are
sold at a deep discount from their face value. Because a zero coupon bond does
not pay current income, its price can be very volatile when interest rates
change. In calculating its dividends, the Fund takes into account as income a
portion of the difference between zero coupon bond's purchase price and its face
value.

21. Bond Warrants. A warrant is a type of security that entitles the holder
to buy a proportionate amount of a bond at a specified price, usually higher
than the market price at the time of issuance, for a period of years or to
perpetuity. Warrants generally trade in the open market and may be sold rather
than exercised.

22. Obligations of Supranational Entities. Obligations of supranational
entities include those of international organizations designated or supported by
governmental entities to promote economic reconstruction or development and of
international banking institutions and related government agencies. Examples
include the International Bank for Reconstruction and Development (the World
Bank), the European Coal and Steel Community, the Asian Development Bank and the
Inter-American Development Bank. The governmental members, or "stockholders,"
usually make initial capital contributions to the supranational entity and in
many cases are committed to make additional capital contributions if the
supranational entity is unable to repay its borrowings. Each supranational
entity's lending activities are limited to a percentage of its total capital
(including "callable capital" contributed by members at the entity's call),
reserves and net income. There is no assurance that foreign governments will be
able or willing to honor their commitments.

23. Equipment Lease and Trust Certificates. A portfolio may invest in
equipment lease and trust certificates, which are debt securities that are
secured by direct or indirect interest in specified equipment or equipment
leases (including, but not limited to, railroad rolling stock, planes, trucking
or shipping fleets, or other personal property).

24. Trade Claims. Trade claims are interests in amounts owed to suppliers
of goods or services and are purchased from creditors of companies in financial
difficulty.

A-3
<PAGE>

APPENDIX B

BRIEF EXPLANATION OF RATING CATEGORIES

<TABLE>
<CAPTION>
Bond Rating Explanation
------------- -------------------------------------------------------------------------
<S> <C> <C>
Standard & Poor's Corporation AAA Highest rating; extremely strong capacity to pay principal and interest.
AA High quality; very strong capacity to pay principal and interest.
A Strong capacity to pay principal and interest; somewhat more
susceptible to the adverse effects of changing circumstances and
economic conditions.
BBB Adequate capacity to pay principal
and interest; normally exhibit
adequate protection parameters,
but adverse economic conditions or
changing circumstances more likely
to lead to a weakened capac- ity
to pay principal and interest then
for higher rated bonds.
BB, B, and Predominantly speculative with
respect to the issuer's capacity to CC, CC, C
meet required interest and principal payments.
BB - lowest degree of
speculation; C- the highest degree
of speculation. Quality and
protective characteristics
outweighed by large uncertainties
or major risk exposure to adverse
conditions.
D In default.
</TABLE>

Plus (+) or Minus (-) - The ratings from "AA" to "BBB" may be modified by the
addition of a plus or minus to show relative standing within the major rating
categories.

Unrated - Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.

<TABLE>
<S> <C> <C>
Moody's Investors Service, Inc. Aaa Highest qualty, smallest degree of investment risk.
Aa High quality; together with Aaa bonds, they compose the high-grade
bond group.
A Upper-medium grade obligations; many
favorable investment attributes.
Baa Medum-grade obligations; neither highly
protected nor poorly secured. Interest
and principal appear adequate for the
present but certain protective elements
may be lacking or may be unreliable over
any great length of time.
Ba More unceratin, with speculative
elements. Protection of interest and
principal payments not well safeguarded
during good and bad times.
B Lack characteristics of desirable
investment; potentially low assur- ance
of timely interest and principal
payments or maintenance of other
contract terms over time.
Caa Poor standing, may be in default;
elements of danger with respect to
principal or interest payments.
Ca Speculative in a high degree; could be
in default or have other marked
short-comings.
C Lowest-rated; extremely poor prospects
of ever attaining investment standing.
</TABLE>

Unrated - Where no rating has been assigned or where a rating has been suspended
or withdrawn, it may be for reasons unrelated to the quality of the issue.

Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies that
are not rated as a matter of policy.
3. There is lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.

Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.

B-1
<PAGE>

PART C
OTHER INFORMATION

Item 23. Exhibits

List all exhibits filed as part of the Registration Statement.

(a) 1. (A) Articles of Incorporation of WRL Series Fund, Inc. (2)
(B) Articles Supplementary to Articles of Incorporation of
WRL Series Fund, Inc. (2)
(C) Articles Supplementary to Articles of Incorporation of
WRL Series Fund, Inc. (2)
(D) Articles Supplementary to Articles of Incorporation of
WRL Series Fund, Inc. (2)
(E) Articles Supplementary to Articles of Incorporation of
WRL Series Fund, Inc. (2)
(F) Articles Supplementary to Articles of Incorporation of
WRL Series Fund, Inc. (2)
(G) Articles Supplementary to Articles of Incorporation of
WRL Series Fund, Inc. (2)
(H) Articles Supplementary to Articles of Incorporation of
WRL Series Fund, Inc. (3)
(I) Articles Supplementary to Articles of Incorporation of
WRL Series Fund, Inc. (3)
(J) Articles Supplementary to Articles of Incorporation of
WRL Series Fund, Inc. (4)
(K) Articles Supplementary to Articles of Incorporation of
WRL Series Fund, Inc. (6)
(L) Articles Supplementary to Articles of Incorporation of
WRL Series Fund, Inc. (7)
(M) Articles Supplementary to Articles of Incorporation of
WRL Series Fund, Inc. (8)
(N) Articles Supplementary to Articles of Incorporation of
WRL Series Fund, Inc. (11)
(O) Articles Supplementary to Articles of Incorporation of
WRL Series Fund, Inc. (12)

(P) Articles Supplementary to Articles of Incorporation of
WRL Series Fund, Inc.

(b) Bylaws of WRL Series Fund, Inc. (2)

(d) Investment Advisory Agreements

(1) Investment Advisory Agreement on behalf of the Portfolios of
the WRL Series Fund, Inc. with WRL Investment Management, Inc.
(8)
(2) Sub-Advisory Agreement on behalf of WRL Janus Growth and WRL
Janus Global of the Fund. (6)
(3) Sub-Advisory Agreement on behalf of WRL J.P. Morgan Money
Market of the Fund. (8)
(4) Sub-Advisory Agreement on behalf of WRL VKAM Emerging Growth of
the Fund. (8)
(5) Sub-Advisory Agreement on behalf of WRL LKCM Strategic Total
Return of the Fund. (8)
(6) Sub-Advisory Agreement on behalf of WRL Federated Growth &
Income of the Fund. (8)
(7) Sub-Advisory Agreement on behalf of WRL Alger Aggressive Growth
of the Fund. (8)
(8) Sub-Advisory Agreement on behalf of WRL Dean Asset Allocation
of the Fund. (8)
(9) Sub-Advisory Agreement on behalf of WRL C.A.S.E. Growth of the
Fund. (8)
(10) Co-Sub-Advisory Agreements on behalf of WRL GE International
Equity of the Fund. (10)

1
<PAGE>

(11) Sub-Advisory Agreement on behalf of WRL NWQ Value Equity of the
Fund. (8)
(12) Sub-Advisory Agreement on behalf of WRL GE U.S. Equity of the
Fund. (8)
(13) Sub-Advisory Agreement on behalf of WRL Third Avenue Value of
the Fund.(8)
(14) Sub-Advisory Agreement on behalf of WRL AEGON Balanced of the
Fund. (8)
(15) Sub-Advisory Agreement on behalf of WRL AEGON Bond of the Fund.
(8)
(16) Sub-Advisory Agreement on behalf of WRL J. P. Morgan Real
Estate Securities of the Fund. (8)
(17) Form of Sub-Advisory Agreement on behalf of WRL T. Rowe Price
Small Cap and WRL T. Rowe Price Dividend Growth of the Fund.(8)
(18) Form of Sub-Advisory Agreement on behalf of WRL Goldman Sachs
Small Cap and WRL Goldman Sachs Growth of the Fund. (8)
(19) Form of Sub-Advisory Agreement on behalf of WRL Salomon All Cap
of the Fund. (8)
(20) Form of Sub-Advisory Agreement on behalf of WRL Dreyfus Mid Cap
of the Fund. (8)
(21) Form of Sub-Advisory Agreement on behalf of WRL Pilgrim Baxter
Growth of the Fund. (8)
(22) Form of Sub-Advisory Agreement on behalf of WRL Great Companies
- Americasm and WRL Great Companies - Technology.sm(10)
(23) Form of Sub-Advisory Agreement on behalf of WRL Value Line
Aggressive Growth.(10)
(24) Form of Sub-Advisory Agreement on behalf of WRL Great Companies
Global2. (12)
(25) Form of Sub-Advisory Agreement on behalf of WRL Gabelli Global
Growth. (12)

(26) Form of Sub-Advisory Agreement on behalf of WRL LKCM Capital
Growth.

(e) Distribution Agreement. (8)

(f) Director's Deferred Compensation Plan. (1)

(g) Form of Custodian Agreement. (3)

(h) Administrative Services and Transfer Agency Agreement. (3)

(i) Opinion and consent of John K. Carter, Esq. as to legality of the
securities being registered. (9)

(j) Consent of PricewaterhouseCoopers LLP. (9)

(k) Not applicable.

(l) Not applicable.

(m) Plan of Distribution. (5)

(n) Not applicable

(o) Reserved

(p) Code of Ethics

(1) WRL Series Fund, Inc. (10)
SUB-ADVISERS
(2) AEGON USA Investment Management, Inc. (10)
(3) Fred Alger Management, Inc. (10)
(4) C.A.S.E. Management, Inc. (10)
(5) Dean Investment Associates (10)
(6) Federated Investment Management Company (10)
(7) GE Asset Management Incorporated (10)
(8) Goldman Sachs Asset Management Inc. (10)
(9) Janus Capital Corporation (10)
(10) Luther King Capital Management Corporation (10)
(11) NWQ Investment Management Company, Inc. (10)
(12) Pilgrim Baxter & Associates, Ltd. (10)
(13) Salomon Brothers Asset Management Inc (10)
(14) Transamerica Investment Management, LLC (10)

2
<PAGE>
(15) T. Rowe Price Associates, Inc. (10)

(16) Great Companies, L.L.C. (13)
(17) Van Kampen Asset Management, Inc. (11)
(18) EQSF Advisers, Inc. (11)
(19) The Dreyfus Corporation (11)
(20) Gabelli Funds, L.L.C. (13)

---------------------
(1) Previously filed with Post-Effective Amendment No. 23 to Form N-1A dated
April 19, 1996 and incorporated herein by reference.
(2) Previously filed with Post-Effective Amendment No. 25 to Form N-1A dated
October 17, 1996, and incorporated herein by reference.
(3) Previously filed with Post-Effective Amendment No. 26 to Form N-1A dated
December 26, 1996 and incorporated herein by reference.
(4) Previously filed with Post-Effective Amendment No. 28 to Form N-1A dated
April 24, 1997, and incorporated herein by reference.
(5) Previously filed with Post-Effective Amendment No. 29 to Form N-1A dated
June 30, 1997, and incorporated herein by reference.
(6) Previously filed with Post-Effective Amendment No. 31 to Form N-1A dated
October 16, 1997, and incorporated herein by reference.
(7) Previously filed with Post-Effective Amendment No. 34 to Form N-1A dated
April 22, 1998, and incorporated herein by reference.
(8) Previously filed with Post-Effective Amendment No. 36 to Form N-1A dated
April 27, 1999, and incorporated herein by reference.
(9) To be filed by amendment.
(10) Previously filed with Post-Effective Amendment No. 35 to Form N-1A dated
February 28, 2000 (File No. 33-2659), and incorporated herein by
reference.
(11) Previously filed with Post-Effective Amendment No. 38 to Form N-1A dated
April 28, 2000, and incorporated herein by reference.
(12) Previously filed with Post-Effective Amendment No. 39 to Form N-1A dated
June 16, 2000, and incorporated herein by reference.

(13) Previously filed with Post-Effective Amendment No. 40 to Form N-1A dated
September 1, 2000, and incorporated herein by reference.

Item 24. Persons Controlled by or under Common Control with Registrant.
--------------------------------------------------------------

Shares of the Registrant are sold and owned by the WRL Series Life
Account and WRL Series Annuity Account established by Western Reserve Life
Assurance Co. of Ohio ("Western Reserve") to fund benefits under certain
flexible premium variable life insurance policies and variable annuity contracts
issued by it. In addition, shares of theWRL Janus Growth Portfolio Common Stock
of the Registrant are also sold to the PFL Endeavor Variable Annuity Account and
the Mutual Fund Account, established by PFL Life Insurance Company, and AUSA
Endeavor Variable Annuity Account, established by AUSA Life Insurance Company,
Inc., both affiliates of Western Reserve. Shares of the WRL VKAM Emerging Growth
and WRL Janus Global Portfolios Common Stock are also sold to the Mutual Fund
Account, established by PFL Life Insurance Company. Shares of the WRL Janus
Growth, WRL AEGON Bond, WRL J.P. Morgan Money Market, WRL Janus Global, WRL LKCM
Strategic Total Return, WRL AEGON Balanced, WRL Alger Aggressive Growth, WRL
VKAM Emerging Growth, WRL Federated Growth & Income, WRL GE International
Equity, WRL Third Avenue Value, WRL NWQ Value Equity, WRL GE U.S. Equity , WRL
Dean Asset Allocation, WRL Pilgrim Baxter Mid Cap Growth, WRL Dreyfus Mid Cap,
WRL T. Rowe Price Dividend Growth, WRL T. Rowe Price Small Cap, WRL Salomon All
Cap, WRL Goldman Sachs Growth, WRL Goldman Sachs Small Cap Portfolio, WRL Great
Companies - America(SM), WRL Great Companies - Technology(SM), WRL Great
Companies - Global(2), WRL Gabelli Global Growth and WRL LKCM Capital Growth
Common Stock are sold to Pooled Account No. 27 established by AUSA Life
Insurance Company, Inc. Shares of the WRL Alger Aggressive Growth, WRL Janus
Global, WRL Janus Growth, WRL LKCM Strategic Total Return and WRL J.P. Morgan
Real Estate Securities are sold to Peoples Benefit Life Insurance Company.
Shares of Fund portfolios are also sold to Transamerica Occidental Life
Insurance Company, an affiliate of Western Reserve.

3
<PAGE>
Item 25. Indemnification.
----------------
Article VI of the By-Laws of WRL Series Fund, Inc. provides in its entirety as
follows:

Each director, officer, or employee (and his heirs, executors and
administrators) shall be indemnified by the Corporation against all
liability and expense incurred by reason of the fact that he is or was a
director, officer or employee of the corporation, to the full extent and
in any manner permitted by Maryland law, as in effect at any time,
provided that nothing herein shall be construed to protect any director,
officer or employee against any liability to the corporation or to its
security holders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office ("disabling
conduct"). No indemnification of a director, officer or employee shall
be made pursuant to the preceding sentence unless there has been (a) a
final decision on the merits by a court or other body before whom the
proceeding was brought that the person to be indemnified ("indemnity")
was not liable by reason of disabling conduct or (b) in the absence of
such a decision, a reasonable determination, based upon a review of the
facts, that the indemnity was not liable by reason of disabling conduct
by (i) the vote of a majority of a quorum of directors who are neither
"interested persons" of the corporation, as defined in Section 2(a)(19)
of the Investment Company Act of 1940, nor parties to the proceeding
("non-interested, non-party directors"), or (ii) an independent legal
counsel in a written opinion. Reasonable expenses incurred by each such
director, officer or employee may be paid by the corporation in advance
of the final disposition of any proceeding to which such person is a
party, to the full extent and under the circumstances permitted by
Maryland law, provided that such person undertakes to repay the advance
unless it is ultimately determined that he is entitled to
indemnification and either (i) he provides security for his undertaking,
(ii) the corporation is insured against losses by reason of any lawful
advances or (iii) a majority of a quorum of the non-interested,
non-party directors, or an independent legal counsel in a written
opinion, determines, based on a review of readily available facts, and
there is reason to believe that such person ultimately will be found
entitled to indemnification. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer or
employee of the corporation against any liability asserted against and
incurred by such person in any such capacity or arising out of such
person's position, whether or not the corporation would have the power
to indemnify against such liability under the provisions of this Article
VI.

RULE 484 UNDERTAKING
--------------------

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

Item 26. Business and Other Connections of Investment Adviser.
-----------------------------------------------------

A. WRL Investment Management, Inc.
-------------------------------

WRL Investment Management, Inc. ("WRL Management") is principally
engaged in offering investment advisory services.

The only businesses, professions, vocations or employments of a
substantial nature of Messrs. Kenney, Hurley and Yaeger, directors of
WRL Management, are described in the Statement of Additional
Information under the section entitled "Management of the Fund."
Additionally, the following describes the principal occupations of
other persons who serve as executive officers of WRL Management: Kim D.

4
<PAGE>

Day, Vice President and Treasurer, is Vice President, Fund Operations
and Principal Accounting Officer of the WRL Series Fund, Inc.,
Assistant Vice President and Assistant Treasurer of Western Reserve
Life Assurance Co. of Ohio ("Western Reserve") and Vice President and
Treasurer of WRL Investment Services, Inc.; William H. Geiger, Esq.,
Secretary, is Assistant Secretary of the WRL Series Fund, Inc., Senior
Vice President, Secretary, General Counsel and Group Vice President -
Compliance of Western Reserve, and Secretary of WRL Investment
Services, Inc.; and Thomas E. Pierpan, Esq., Vice President, Assistant
Secretary and General Counsel, is Vice President, Secretary and
Associate General Counsel of the WRL Series Fund, Inc. and Vice
President, Associate General Counsel and Assistant Secretary of Western
Reserve, and Vice President, Assistant Secretary and General Counsel of
WRL Investment Services, Inc.

B. WRL Janus Growth and WRL Janus Global: Sub-Adviser - Janus Capital
------------------------------------------------------------------
Corporation
------------

Janus Capital Corporation, the sub-adviser to WRL Janus Growth and WRL
Janus Global of the WRL Series Fund, Inc. is majority-owned by Kansas
City Southern Industries, Inc.

Janus Capital Corporation also serves as sub-adviser to certain of the
mutual funds within the IDEX Group and as investment adviser or
sub-adviser to other mutual funds, and for private and retirement
accounts. Thomas H. Bailey, Trustee, Chairman and President of Janus
Investment Fund and Janus Aspen Series; Chairman, CEO, Director and
President of the sub-adviser; Director of Janus Distributors, Inc.; and
Chairman and Director of Idex Management, Inc., has no business,
profession, vocation or employment of a substantial nature other than
his positions with Idex Management, Inc. and Janus Capital Corporation.
James P. Craig, Executive Vice President and Trustee of Janus
Investment Fund and Janus Aspen Series; and Director, Vice Chairman,
and Chief Investment Officer of Janus Capital Corporation, has no
substantial business, profession, vocation or employment other than his
positions with Janus Capital Corporation. Michael N. Stolper, a
Director of Janus Capital Corporation, is President of Stolper &
Company, 525 "B" Street, Suite 1080, San Diego, CA 92101, an investment
performance consultant. Michael E. Herman, a Director of Janus Capital
Corporation, is Chairman of the Finance Committee of Ewing Marion
Kauffman Foundation, 4900 Oak, Kansas City, MO 64112. Thomas A.
McDonnell, a Director of Janus Capital Corporation, is President,
Director and CEO of DST Systems, Inc., 333 West 11th Street, 5th Floor,
Kansas City, MO 64105, a provider of data processing and recordkeeping
services for various mutual funds. Landon H. Rowland is a Director of
Janus Capital, and President and Chief Executive Officer of Kansas City
Southern Industries, Inc. Steven R. Goodbarn is Vice President and
Chief Financial Officer of Janus Investment Fund and Janus Aspen
Series; Vice President of Finance, Treasurer and Chief Financial
Officer of Janus Capital Corporation, Janus Service Corporation and
Janus Distributors, Inc.; Director of Janus Distributors, Inc., Janus
Service Corporation, and Idex Management, Inc.; and Vice President of
Finance of Janus Capital International Ltd. Margie G. Hurd is Vice
President and Chief Operations Officer of Janus Capital, and Director
and President of Janus Service Corporation. Mark B. Whiston is Vice
President and Chief Marketing Officer of Janus Capital, and Director
and President of Janus Capital International, Ltd. Sandy R. Rufenacht
is Executive Vice President of Janus Investment Fund and Aspen Series,
and Assistant Vice President of Janus Capital. Helen Young Hayes, Scott
W. Schoelzel, and Ronald V. Speaker are each a Vice President of Janus
Capital Corporation, and an Executive Vice President of Janus
Investment Fund and Janus Aspen Series.

C. WRL J. P. Morgan Money Market and WRL J. P. Morgan Real Estate
--------------------------------------------------------------
Securities: Sub-Adviser - J.P. Morgan Investment Management, Inc.
-----------------------------------------------------------------

J.P. Morgan Investment Management Inc., the sub-adviser to WRL J. P.
Morgan Money Market and WRL J. P. Morgan Real Estate Securities, is a
wholly-owned subsidiary of J.P. Morgan & Co., Inc. J.P. Morgan
Investment Management Inc. provides investment management and related
services for corporate, public and union employee benefit funds,
foundations, endowments, insurance companies and government agencies.

5
<PAGE>

The directors and principal officers of J.P. Morgan Investment
Management Inc. are listed below. Unless otherwise indicated, each
director and officer has a principal business address of 522 Fifth
Avenue, New York, NY 10036: Kenneth W. Anderson, Director and Managing
Director; Keith M. Schappert, President, Chairman, Director and
Managing Director; Jeff M. Garrity, Director and Managing Director;
Isabel H. Sloane, Director and Managing Director; Gilbert Van Hassel,
Director and Managing Director (J.P. Morgan Investment Management Inc.,
Akasaka Park Building, 2-20, Akasaka 5-chome, Minatoku, Tokyo, Japan);
Hendrik Van Riel, Director and Managing Director (J.P. Morgan
Investment Management Inc., 28 King Street, London, England SW1Y 6XA);
John W. Schmidlin, Director (J.P. Morgan Investment Management Inc.,
345 Park Avenue, New York, New York 10154).

D. WRL AEGON Bond and WRL AEGON Balanced: Sub-Adviser - AEGON USA
--------------------------------------------------------------
Investment Management, Inc.
---------------------------

AEGON USA Investment Management, Inc. ("AIMI"), the Sub-Adviser to the
WRL AEGON Bond and WRL AEGON Balanced Portfolios, is an Iowa
corporation which was incorporated on April 12, 1989. AIMI became a
registered investment adviser on March 16, 1992. AIMI is a wholly-owned
subsidiary of First AUSA Holding Company, which is a wholly-owned
subsidiary of AEGON USA, Inc.

AIMI also serves as sub-adviser to IDEX Mutual Fund's Income Plus.
Douglas C. Kolsrud is Director, Chairman of the Board and President of
AIMI; Director, Senior Vice President, Chief Investment Officer and
Corporate Actuary of Life Investors Insurance Company of America
("LIICA"), Bankers United Life Assurance Company ("Bankers United"),
PFL Life Insurance Company ("PFL Life"), First AUSA Life Insurance
Company ("First AUSA") and Monumental Life Insurance Company
("Monumental Life"); Director, Chief Investment Officer and Vice
President of Monumental General Casualty Company ("Monumental General")
and Commonwealth General Corporation; Senior Vice President, Chief
Investment Officer and Corporate Actuary of Western Reserve Life
Assurance Co. of Ohio ("Western Reserve"); Executive Vice President of
AEGON USA, Inc.; Chief Investment Officer of Diversified Financial
Products Inc.; Director of United Financial Services, Inc., Realty
Information Systems, Inc., AEGON USA Realty Advisors Inc., Southlife,
Inc. and Quantra Corporation. The remaining officers are Brenda K.
Clancy, Director, Treasurer, Vice President and Chief Financial Officer
of LIICA and Monumental Life; Treasurer, Vice President and Chief
Financial Officer of Bankers United and PFL Life; Director, Treasurer
and Vice President of First AUSA and Investors Warranty of America,
Inc.; Director, Treasurer and Cashier of Massachusetts Fidelity Trust
Company; Director and Vice President of Peoples Benefit Life Insurance
Company, Academy Life Insurance Company and Pension Life Insurance
Company of America; Director and Vice President of Veterans Life
Insurance Company; Treasurer and Vice President of Money Services, Inc.
and Commonwealth General Corporation; Director and Treasurer of Zahorik
Company, Inc.; Vice President of Western Reserve, Commonwealth General
Assignment Corporation, Monumental Agency Group, Inc. and AEGON
Assignment Corporation of Kentucky; Director of AEGON USA Investment
Management, Inc. and AEGON USA Realty Advisors Inc.; Treasurer of AUSA
Life and AUSA Holding Company; Assistant Secretary of Benefit Plans,
Inc.; Senior Vice President and Treasurer of AEGON USA, Inc.; Assistant
Treasurer of Diversified Financial Products, Inc., Independence
Automobile Association, Inc. and Independence Automobile Club, Inc.;
and Senior Vice President, Treasurer and Controller of Cadet Holding
Corp.; Craig D. Vermie, Director of AIMI; Director, Secretary, Vice
President and General Counsel of LIICA, Bankers United, PFL Life, and
First AUSA; Director, Vice President, General Counsel and Assistant
Secretary of Monumental Life; Vice President, Corporate Counsel and
Assistant Secretary of Western Reserve; Director, Vice President and
Assistant Secretary of Monumental General Casualty Company and Zahorik
Company, Inc.; Director, Secretary and Vice President of Investors
Warranty of America, Inc.; Secretary, Vice President and General
Counsel of AEGON USA, Inc.; Director, Counsel, Assistant Secretary of
Commonwealth General Corporation; Director and Vice President of The
Whitestone Corporation; Director and Secretary of Peoples Benefit Life
Assurance Company, Veterans Life Insurance Company, Massachusetts
Fidelity Trust Company, AUSA Holding Company, Cadet Holding Corp.,
AEGON Management Company and AEGON USA Charitable Foundation, Inc.;
Director and Assistant Secretary of Academy Life Insurance Company,
Providian Auto & Home Insurance Company, Providian Life Insurance
Company, Providian

6
<PAGE>

Property & Casualty Insurance Company, Monumental Agency Group, Inc.,
Creditor Resources, Inc., Great American Insurance Agency, Inc. and
Monumental General Mass Marketing, Inc.; Director, Pension Life
Insurance Company of America, Monumental General Insurance Group, Inc.,
United Financial Services, Inc., AEGON Financial Services Group, Inc.,
AIMI, Southlife, Inc., Durco Agency, Inc., Executive Management &
Consultant Services, Inc., Monumental General Administrators, Inc.,
AUSA Financial Markets, Inc., Short Hills Management Company, Corpa
Reinsurance Company, AEGON Special Markets Group and Monumental General
Mass Marketing, Inc.; Secretary, AUSA Life Insurance Company, Inc.,
Money Services, Inc., Supplemental Insurance Division, Inc.; Assistant
Secretary, Bankers Financial Life Insurance Company, ZCI, Inc.;
Clifford A. Sheets, Executive Vice President, Director of Securities of
AIMI; Vice President of Life Investors Insurance Company of America,
Bankers United Life Assurance Company, PFL Life Insurance Company,
First AUSA Life Insurance Company, Western Reserve Life Assurance Co.
of Ohio, AUSA Life Insurance Company, Inc., Monumental General Casualty
Company and Monumental Life Insurance Company; Second Vice President of
Peoples Benefit Life Insurance Company, Academy Life Insurance Company,
Veterans Life Insurance Company, Providian Auto & Home Insurance
Company, Providian Fire Insurance Company, Providian Property &
Casualty Insurance Company; Eric B. Goodman, Executive Vice President -
Portfolio Management of AIMI, Vice President of Life Investors
Insurance Company of America, Bankers United Life Assurance Company,
PFL Life Insurance Company, Western Reserve Life Assurance Co. of Ohio,
AUSA Life Insurance Company, Inc. and Monumental Life Insurance
Company; Second Vice President of Peoples Benefit Life Insurance
Company, Academy Life Insurance Company, Pension Life Insurance Company
of America, Veterans Life Insurance Company, Providian Auto & Home
Insurance Company, Providian Fire Insurance Company and Providian
Property & Casualty Insurance Company; William S. Cook, Executive Vice
President - Capital Market Strategies of AIMI; Vice President of Life
Investors Insurance Company of America, Bankers United Life Assurance
Company, PFL Life Insurance Company, Western Reserve Life Assurance Co.
of Ohio, AUSA Life Insurance Company, Inc. and Monumental Life
Insurance Company; Second Vice President of Peoples Benefit Life
Insurance Company, Academy Life Insurance Company, Pension Life
Insurance Company of America, Veterans Life Insurance Company,
Providian Auto & Home Insurance Company, Providian Fire Insurance
Company and Providian Property & Casualty Insurance Company; David R.
Ludke, Executive Vice President - Risk Management of AIMI; Chief
Actuary and Vice President of Diversified Financial Products Inc.;
Second Vice President of Academy Life Insurance Company, Pension Life
Insurance Company of America, Veterans Life Insurance Company,
Providian Auto & Home Insurance Company, Providian Fire Insurance
Company and Providian Property & Casualty insurance Company; David M.
Carney, Senior Vice President and Chief Financial Officer of AIMI; Vice
President of Life Investors Insurance Company of America, Peoples
Benefit Life Insurance Company, Bankers United Life Assurance Company,
Academy Life Insurance Company, Pension Life Insurance Company of
America, PFL Life Insurance Company, Western Reserve Life Insurance Co.
of Ohio, AUSA Life Insurance Company, Inc., Veterans Life Insurance
Company, Monumental General Insurance Group, Inc., Monumental General
Casualty Company, Monumental Life Insurance Company, Commonwealth
General Corporation and Investors Warranty of America, Inc.; Ralph M.
O'Brien, Senior Vice President of AIMI;

7
<PAGE>

Vice President of Life Investors Insurance Company of America, Bankers
United Life Assurance Company, PFL Life Insurance Company, First AUSA
Life Insurance Company, Western Reserve Life Assurance Co. of Ohio,
AUSA Life Insurance Company, Inc., Monumental General Casualty Company,
Monumental Life Insurance Company, Inc.; Second Vice President of
Peoples Benefit Life Insurance Company, Academy Life Insurance Company,
Pension Life Insurance Company of America, Veterans Life Insurance
Company, Providian Auto & Home Insurance Company, Providian Fire
Insurance Company and Providian Property & Casualty Insurance Company;
Trust Officer of Massachusetts Fidelity Trust Company; David R.
Halfpap, Senior Vice President of AIMI; Vice President of Life
Investors Insurance Company of America, Bankers United Life Assurance
Company, PFL Life Insurance Company, First AUSA Life Insurance Company,
Western Reserve Life Assurance Co. of Ohio, AUSA Life Insurance
Company, Inc., Monumental General Casualty Company and Monumental Life
Insurance Company; Second Vice President of Peoples Benefit Life
Insurance Company, Academy Life Insurance Company, Pension Life
Insurance Company of America, Veterans Life Insurance Company,
Providian Auto & Home Insurance Company, Providian Fire Insurance
Company and Providian Property & Casualty Insurance Company; Steven P.
Opp, Senior Vice President of AIMI; Kirk W. Buese, Senior Vice
President of AIMI; Vice President of Life Investors Insurance Company
of America, Bankers United Life Assurance Company, PFL Life Insurance
Company, Western Reserve Life Assurance Co. of Ohio, AUSA Life
Insurance Company, Inc., Monumental Life Insurance Company, PB
Investment Advisors, Inc.; Second Vice President of Peoples Benefit
Life Insurance Company, Academy Life Insurance Company of America,
Veterans Life Insurance Company, Providian Auto & Home Insurance
Company, Providian Fire Insurance Company, Providian Property &
Casualty Insurance Company; Gregory W. Theobald, Vice President and
Assistant Secretary of AIMI, Life Investors Insurance Company of
America, Bankers United Life Assurance Company, PFL Life Insurance
Company, First AUSA Insurance Company, Western Reserve Life Assurance
Co. of Ohio, AUSA Life Insurance Company, Inc., Monumental General
Casualty Company, Monumental Life Insurance Company; and Vice President
of Money Services, Inc.; Jon D. Kettering, Vice President of AIMI, Life
Investors Insurance Company of America, Bankers United Life Assurance
Company, PFL Life Insurance Company, First AUSA Life Insurance Company,
Western Reserve Life Assurance Co. of Ohio, AUSA Life Insurance
Company, Inc., Monumental General Casualty Company, Monumental Life
Insurance Company; Second Vice President of Peoples Benefit Life
Insurance Company, Academy Life Insurance Company, Pension Life
Insurance Company of America, Veterans Life Insurance Company,
Providian Auto & Home Insurance Company, Providian Fire Insurance
Company and Providian Property & Casualty Insurance Company; Robert L.
Hansen, Vice President of AIMI, Life Investors Insurance Company of
America, Bankers United Life Assurance Company, PFL Life Insurance
Company, First AUSA Life Insurance Company, Western Reserve Life
Assurance Co. of Ohio, AUSA Life Insurance Company, Inc., Monumental
General Casualty Company, Monumental Life Insurance Company; Second
Vice President of Peoples Benefit Life Insurance Company, Academy Life
Insurance Company, Pension Life Insurance Company of America, Veterans
Life Insurance Company, Providian Auto & Home Insurance Company,
Providian Fire Insurance Company and Providian Property & Casualty
Insurance Company; Bradley J. Beman, Vice President of AIMI; Michael B.
Simpson, Senior Vice President of AIMI, Life Investors Insurance
Company of America, Bankers United Life Assurance Company, PFL Life
Insurance Company, Western Reserve Life Assurance Co. of Ohio, AUSA
Life Insurance Company, Inc., Monumental Life Insurance Company; Second
Vice President of Peoples Benefit Life Insurance Company, Academy Life
Insurance Company, Pension Life Insurance Company of America, Veterans
Life Insurance Company, Providian Auto & Home Insurance Company,
Providian Fire Insurance Company and Providian Property & Casualty
Insurance Company; Douglas A. Dean, Vice President of AIMI; Stephanie
M. Phelps, Vice President of AIMI; Jon L. Skaags, Vice President of
AIMI, Life Investors Insurance Company of America, Bankers United Life
Assurance Company, PFL Life Insurance Company, First AUSA Life
Insurance Company, Monumental Life Insurance Company; Second Vice
President of Peoples Benefit Life Insurance Company, Academy Life
Insurance Company, Pension Life Insurance Company of America, Veterans
Life Insurance Company, Providian Auto & Home Insurance Company,
Providian Fire Insurance Company, Providian Property & Casualty
Insurance Company; Daniel P. Fox, Vice President of AIMI; Robert A.
Smedley, Vice President of AIMI; Ashok K. Chawla, Vice President of
AIMI; Sarvjeev S. Sidhu, Vice President of AIMI; Mark J. Zinkula, Vice
President of AIMI; James R. Landis, Vice President of AIMI; Craig M.
Enright, Vice President of AIMI; Robert S. Jett III, Secretary of AIMI;
Assistant Secretary of AUSA Life Insurance Company, Money Services,
Inc. and AUSA Financial Markets, Inc.; and Counsel and Vice President
of Investors Warranty of America, Inc.; Michael N. Meese, Assistant
Vice President of AIMI; Mary T. Pech, Assistant Vice President of AIMI;
Mark E. Dunn, Assistant Vice President of AIMI; Donna L. Heitzman,
Assistant Vice President of AIMI; Karen H. Fleming, Assistant Vice
President of AIMI; David Hopewell, Assistant Vice President of AIMI; M.
Christina Galligan, Assistant Vice President of AIMI; and Brian E.
Rolland, Treasurer of AIMI.

E. WRL VKAM Emerging Growth: Sub-Adviser: - Van Kampen Asset Management Inc.
-------------------------------------------------------------------------

Van Kampen Asset Management Inc. (the "sub-adviser") serves as
investment adviser to a number of investment companies. The executive
officers of the sub-adviser are Richard F. Powers III, Chairman, Chief
Executive Officer and Director of the sub-adviser, Van Kampen
Investment Advisory Corp. ("VK Adviser") and Van Kampen; A. Thomas
Smith III, Executive Vice President, General Counsel and a

8
<PAGE>
Director of the sub-adviser, the VK Adviser and Van Kampen; Michael H.
Santo, Executive Vice President, Chief Administrative Officer and
Director of the sub-adviser and the VK Adviser and Executive Vice
President of Van Kampen; Stephen L. Boyd, Executive Vice President and
Chief Investment Officer of the sub-adviser and the VK Adviser; and
Peter W. Hegel, Executive Vice President and Chief Investment Officer -
Fixed Income Investments of the sub-adviser and the VK Adviser. All of
these executive officers have no substantial business, profession,
vocation or employment other than their positions with the sub-adviser,
its subsidiaries and affiliates. The business address of each of the
executive officers of the sub-adviser is 1 Parkview Plaza, P.O. Box
5555, Oakbrook Terrace, Illinois 60181 - 5555.

F. WRL LKCM Strategic Total Return: Sub-Adviser - Luther King Capital
------------------------------------------------------------------
Management Corporation
-----------------------

Luther King Capital Management Corporation, the Sub-Adviser to the WRL
LKCM Strategic Total Return, is a registered investment adviser
providing investment management services.

Luther King Capital Management Corporation also provides investment
management services to individual and institutional investors on a
private basis. J. Luther King, Jr., President of the sub-adviser; Paul
W. Greenwell; Robert M. Holt, Jr.; Scot C. Hollmann; David L. Dowler;
Joan M. Maynard; Vincent G. Melashenko; Brent W. Clum; James B. Orser;
William M. Uhlemeyer; J. Bryan King; Gary G. Walsh; Steven R. Purvis;
Michael J. Simon; Timothy E. Harris; James J. Kerrigan; Alan D.
Marshall; and Barbara S. Garcia, officers of Luther King Capital
Management Corporation, have no substantial business, profession,
vocation or employment other than their positions with Luther King
Capital Management Corporation.

G. WRL Federated Growth & Income: Sub-Adviser - Federated Investment
-----------------------------------------------------------------
Counseling
----------

Federated Investment Counseling, the sub-adviser to WRL Federated
Growth & Income, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated
Investors, Inc.

The sub-adviser serves as investment adviser to a number of investment
companies and private accounts. Total assets under management or
administered by the sub-adviser and other subsidiaries of Federated
Investors are approximately $170 billion. The Trustees of the
sub-adviser, their position with the sub-adviser, and, in parenthesis,
their principal occupations are as follows: J. Christopher Donahue,
Trustee (President, Chief Executive Officer and Trustee, Federated
Investors, Inc.; President, Chief Executive Officer, Chief Operating
Officer and Trustee, Federated Investment Management Company;
President, Chief Executive Officer, Chief Operating Officer and
Director, Federated Global Investment Management Corp; President, Chief
Executive Officer and Chief Operating Officer, Passport Research, Ltd;
Trustee, Federated Fonds - Service GmbH (Germany), Federated
International Holdings BV (The Netherlands), Federated International
Management Limited (Ireland) and Federated Shareholder Services
Company; Director, Federated Services Company); John B. Fisher, Trustee
(President, Federated Investment Counseling and Federated Securities
Corp.; Vice President, Federated Investors, Inc.); James F. Getz,
Trustee (President, Federated Investors Trust Company and Federated
Securities Corp., and Vice President, Federated Investors, Inc.);
Thomas R. Donahue, Trustee (Trustee, Vice President, Chief Financial
Officer and Treasurer, Federated Investors, Inc.; Trustee and
Treasurer, Federated Investment Counseling, Federated Administrative
Services, Inc., Federated Global Investment Management Corp., Federated
Investment Management Company, Federated Investors Trust Company,
Federated Securities Corp., Federated Services Company and Federated
Shareholder Services Company; President, FII Holding, Inc.; Treasurer,
Federated Administrative Services and Passport Research, Ltd.); Mark D.
Olson, Trustee (Trustee, Federated Investment Management Company,
Federated Shareholder Services Company; Partner, Wilson, Halbrook &
Bayard, 107 W. Market Street, Georgetown, DE 19947). The business
address of the Trustees, with the exception of Mark D. Olson, is
Federated Investors Tower, Pittsburgh, PA 15222-3779.

The remaining officers of the sub-adviser are John B. Fisher,
President; William D. Dawson III, Henry

9
<PAGE>

A. Frantzen and J. Thomas Madden, Executive Vice Presidents; Joseph M.
Balestrino, David A. Briggs, Jonathan C. Conley, Deborah A. Cunningham,
Michael P. Donnelly, Linda A. Duessel, Mark E. Durbiano, James E.
Grefenstette, Jeffrey A. Kozemachak, Sandra L. McInerney, Susan M.
Nason, Mary Jo Ochson, Robert J. Ostrowski, Bernard J. Picchi, Peter
Vutz, Senior Vice Presidents; Todd A. Abraham, J. Scott Albrecht,
Arthur J. Barry, Randall S. Bauer, G. Andrew Bonnewell, Michael W.
Casey, Robert E. Cauley, Alexandre de Bethmann, B. Anthony Delserone,
Jr., Donald T. Ellenberger, Eamonn G. Folan, Kathleen M. Foody-Malus,
Thomas M. Franks, Marc Halperin, John W. Harris, Patricia L. Heagy,
Susan R. Hill, William R. Jamison, Constantine J. Kartsonas, Robert M.
Kowit, Richard J. Lazarchic, Steve Lehman, Marian R. Marinack,
Christopher Matyszewski, William May, Jeffrey A. Petro, Keith Sabol,
Frank Semack, Aash M. Shah, Michael W. Sirianni, Jr., Christopher
Smith, Edward J. Tiedge, Leonardo A. Vila, Paige M. Wilhelm, Lori Wolf,
George Wright, Vice Presidents; Catherine A. Arendas, Arminda Aviles,
Nancy J. Beltz, James R. Crea. Jr., Karol M. Crummic, James H. Davis
II, Paul S. Drotch, Salvatore A. Esposito, Donna M. Fabiano, Gary E.
Falwell, John T. Gentry, Nikola A. Ivanov, Nathan H. Kehm, John C.
Kerber, J. Andrew Kirschler, Ted T. Lietz, Sr., Grant K. McKay, Natalie
F. Metz, Thomas Mitchell, Joseph M. Natoli, Bob Nolte, Mary Kay Pavuk,
John Quartarolo, Rae Ann Rice, Roberto Sanchez-Dahl, Sr., Sarah
Sathkumara, James W. Schaub, John Sidawi, Diane R. Startari, Diane
Tolby, Tim Trebilcock, Michael R. Tucker, Steven J. Wagner, Richard
Winkowski, Jr., Assistant Vice Presidents; G. Andrew Bonnewell,
Secretary, and Thomas R. Donahue, Treasurer. The business address of
each of the officers of the sub-adviser is Federated Investors Tower,
Pittsburgh, PA 15222-3779. These individuals are also officers of some
of the investment advisers to other mutual funds.

H. WRL Alger Aggressive Growth: Sub-Adviser - Fred Alger Management, Inc.
----------------------------------------------------------------------

Fred Alger Management, Inc. ("Alger Management"), the sub-adviser to
WRL Alger Aggressive Growth, is a wholly-owned subsidiary of Fred Alger
& Company, Incorporated ("Alger, Inc.") which in turn is a wholly-owned
subsidiary of Alger Associates, Inc., a financial services holding
company. Alger Management is generally engaged in rendering investment
advisory services to mutual funds, institutions and, to a lesser
extent, individuals.

Fred M. Alger III, serves as Chairman of the Board, David D. Alger
serves as President and Director and Gregory S. Duch serves as
Treasurer of the following companies: Alger Associates, Inc.; Alger
Management; Alger, Inc.; Alger Properties, Inc., Alger Shareholder
Services, Inc.; Alger Life Insurance Agency, Inc.; and Castle
Convertible Fund, Inc. Fred M. Alger also serves as Chairman of the
Board of Analysts Resources, Inc. ("ARI") and Chairman of the Board and
Trustee of The Alger Fund, The Alger American Fund, Spectra Fund and
The Alger Retirement Fund. David D. Alger also serves as Executive Vice
President and Director of ARI and as President and Trustee of The Alger
Fund, The Alger American Fund, Spectra Fund and The Alger Retirement
Fund. Gregory S. Duch also serves as Treasurer of ARI, The Alger Fund,
The Alger American Fund, Spectra Fund and The Alger Retirement Fund.
The principal business address of each of the companies listed above,
other than Alger, Inc., is 1 World Trade Center, Suite 9333, New York,
NY 10048. The principal business address of Alger, Inc. is 30
Montgomery Street, Jersey City, NJ 07302.

I. WRL Dean Asset Allocation: Sub-Adviser - Dean Investment Associates
--------------------------------------------------------------------

Dean Investment Associates ("Dean"), the sub-adviser to WRL Dean Asset
Allocation, is a division of C.H. Dean and Associates, Inc. Dean is the
money management division of C.H. Dean and Associates, Inc. Dean became
a registered investment adviser in October, 1972 and will assume all of
the investment advisory functions. C.H. Dean and Associates is a Nevada
corporation (6/30/95) which was an Ohio corporation originally
incorporated on March 28, 1975.

Chauncey H. Dean is the Chairman and Chief Executive Officer; John C.
Riazzi is President; Stephen M. Miller is Executive Vice President and
Chief Financial Officer; Arvind K. Sachdeva is Vice President and
Director of Research; Victor S. Curtis is Vice President and Director
of Consulting Services; and Richard M. Luthman is Senior Vice
President. The business address of each of the officers of the
sub-adviser is 2480 Kettering Tower, Dayton, Ohio 45423-2480.

10
<PAGE>

J. WRL C.A.S.E. Growth: Sub-Adviser - C.A.S.E. Management, Inc.
-------------------------------------------------------------

C.A.S.E. Management, Inc. ("C.A.S.E."), the sub-adviser to WRL C.A.S.E.
Growth, is a registered investment advisory firm and a wholly-owned
subsidiary of C.A.S.E. Inc. C.A.S.E. Inc. is indirectly controlled by
William Edward Lange, President and Chief Executive Officer of C.A.S.E.
C.A.S.E. provides investment management services to financial
institutions, high net worth individuals, and other professional money
managers.

William E. Lange is the President, Chief Executive Officer and Founder.
The remaining officers are Robert G. Errigo, Investment Committee Board
Member; John Gordon, Investment Committee Board Member; Douglas Gordon,
Senior Vice President; Jeffrey C. Brewer, Senior Vice President;
William Fagin, Senior Vice President, Marketing; and Dexter Pierce,
Vice President, Marketing. The business addresses for each of the
officers are 5355 Town Center Road, Suite 702, Boca Raton, FL 33486; 16
Par La Vielle Road, Hamilton, Bermuda HM11; and 24 Juer Street, London,
SW11 4RF.

K. WRL GE International Equity: & WRL GE U.S. Equity - Sub-Adviser - GE
--------------------------------------------------------------------
Asset Management, Inc.
----------------------

GE Asset Management Incorporated ("GEAM") serves as sub-adviser for WRL
GE International Equity and WRL GE U.S. Equity Portfolios. GEAM is a
wholly-owned subsidiary of General Electric Company ("GE"). The
directors and executive officers of GEAM are John H. Myers, President
and Director; Michael J. Cosgrove, Executive Vice President and
Director; Alan M. Lewis, Executive Vice President, General Counsel, and
Director; Robert A. MacDougall, Executive Vice President; Eugene K.
Bolton, Executive Vice President and Director; Donald W. Torey,
Executive Vice President and Director; Ralph R. Layman, Executive Vice
President and Director; John J. Walker, Executive Vice President, Chief
Financial Officer and Director; and Geoffrey R. Norman, Executive Vice
President and Director. All of these officers and/or directors have no
substantial business, profession, vocation or employment other than
their positions with GEAM and its affiliates.

L. WRL NWQ Value Equity: Sub-Adviser - NWQ Investment Management Company,
----------------------------------------------------------------------
Inc.
----

NWQ Investment Management Company, Inc. ("NWQ") serves as sub-adviser
for WRL NWQ Value Equity. NWQ is a Massachusetts corporation and is a
wholly-owned subsidiary of United Asset Management Corporation. NWQ
provides investment advice to individuals, pension funds, profit
sharing funds, charitable institutions, educational institutions, trust
accounts, corporations, insurance companies, municipalities and
governmental agencies.

The directors and officers of NWQ are listed below. Unless otherwise
indicated, each director and officer has held the positions listed for
at least the past two years and is located at NWQ's principal business
address of 2049 Century Park East, 4th Floor, Los Angeles, CA 90067:
David A. Polak, Chairman, Chief Investment Officer; Michael C. Mendez
(Dec. 1999, Scottsdale, AZ), President; E. C. "Ted" Friedel, Jr.,
Managing Director; Kevin P. O' Brien (Boston), Director; Jon D. Bosse,
Managing Director and Director Equity Research; James H. Galbreath
(Denver), Managing Director; Mary-Gene Slaven, Secretary/Treasurer &
Managing Director; Phyllis G. Thomas, Managing Director; Louis T.
Chambers (Atlanta), Vice President; Justin T. Clifford, Managing
Director; Jeffrey M. Cohen, Vice President; Ronald R. Halverson
(Minneapolis, MN), Vice President; Thomas J. Laird, Managing Director;
Martin Pollack, Vice President; Ronald R. Sternal (Minneapolis, MN),
Vice President; John Severson (Albuquerque, NM), Vice President; and
Darcy Gratz, Vice President.

M. WRL Third Avenue Value: Sub-Adviser - EQSF Advisers, Inc.
----------------------------------------------------------

EQSF Advisers, Inc. ("EQSF") serves as sub-adviser for WRL Third Avenue
Value. EQSF is a New York corporation and is controlled by Martin J.
Whitman.

11
<PAGE>

The directors and officers of EQSF are listed below. Unless otherwise
indicated, each director and officer has held the positions listed for
at least the past two years and is located at EQSF's business address
of 767 Third Avenue, New York, New York, 10017-2023. Martin J. Whitman,
Chairman, Chief Executive Officer and President, is Chairman, Chief
Executive Officer and President of Third Avenue Trust; Chairman, Chief
Investment Officer and Chief Executive Officer of M.J. Whitman
Advisers, Inc.; Chairman and Chief Executive Officer of M.J. Whitman,
Inc. and Danielson Holding Corporation; Director of Nabors Industries,
Inc.; and President and Chief Executive Officer of Martin J. Whitman &
Co., Inc. David M. Barse, Director and Executive Vice President, is
Executive Vice President of Third Avenue Trust; Director, President and
Chief Operating Officer of M.J. Whitman Holding Corp., M.J. Whitman,
Inc., M.J. Whitman Advisers, Inc. and Danielson Holding Corporation.
Michael Carney, Treasurer and Chief Financial Officer, is Director,
Treasurer and Chief Financial Officer of M.J. Whitman, Inc., M.J.
Whitman Holding Corp. and M.J. Whitman Advisers, Inc.; and Chief
Financial Officer of Danielson Holding Corporation and Third Avenue
Trust. Kerri Weltz, Controller, is Assistant Treasurer and Controller
of Third Avenue Trust; Controller of Danielson Holding Corp., Whitman
Heffernan & Rhein Workout Fund II, L.P., Whitman Heffernan & Rhein
Workout Fund II-A and WHR Management Corporation. Ian M. Kirschner,
General Counsel and Secretary, is General Counsel and Secretary of
Third Avenue Trust, Danielson Holding Corporation, M.J. Whitman Holding
Corp., M.J. Whitman, Inc. and M.J. Whitman Advisers, Inc. Barbara
Whitman, Director, is a Director of Third Avenue Trust and a Registered
Representative of M.J. Whitman, Inc.

N. WRL Goldman Sachs Small Cap and WRL Goldman Sach Growth: Sub-Adviser -
----------------------------------------------------------------------
Goldman Sachs Asset Management
------------------------------

Goldman Sachs Asset Management ("GSAM"), located at 32 Old Slip, New
York, NY 10005, serves as sub-adviser to the WRL Goldman Sachs Small
Cap and WRL Goldman Sachs Growth. David B. Ford serves as Co-Head of
GSAM and as Managing Director of Goldman Sachs, & Co.; John P. McNulty
serves as Co-Head of GSAM and Managing Director of Goldman, Sachs & Co.

O. WRL Salomon All Cap: Sub-Adviser - Salomon Brothers Asset Management
--------------------------------------------------------------------
Inc.
----

Salomon Brothers Asset Management Inc ("SBAM"), 7 World Trade Center,
New York, NY, 10048, serves as sub-adviser to WRL Salomon All Cap. The
officers are Virgil H. Cumming, Director, also serving as Managing
Director and Chief Investment Officer of Salomon Smith Barney, Inc.,
New York, NY; Ross S. Margolies, Heath B. McLendon and Peter J. Wilby,
Managing Directors; Wendy Murdock, Executive Vice President of Solomon
Smith Barney, Inc., New York, NY; Jeffrey S. Scott, Chief Compliance
Officer; Peter Carman, Global Chief Investment Officer of Salomon Smith
Barney Citi Asset Management; and Michael F. Rosenbaum, Chief Legal
Officer, also serving as Chief Legal Officer of Salomon Brothers Asset
Management Limited, London, England, and Chief Legal officer of Salomon
Brothers Asset Management Asia Pacific Limited, Hong Kong; Corporate
Secretary of The Travelers Investment Management Company, New York, NY;
and General Counsel to Asset Management, Travelers Group Inc., New
York, NY and its predecessors.

P. WRL T. Rowe Price Small Cap and WRL T. Rowe Price Dividend Growth:
------------------------------------------------------------------
Sub-Adviser - T. Rowe Price Associates, Inc.
--------------------------------------------

T. Rowe Price Associates, Inc., ("T. Rowe") 100 E. Pratt Street,
Baltimore, MD 21202, serves as sub-adviser to WRL T. Rowe Price
Dividend Growth and WRL T. Rowe Price Small Cap. James E. Halbkat, Jr.,
Director of T. Rowe, is President of U.S. Monitor Corporation, a
provider of public response systems. Mr. Halbkat's address is P.O. Box
23109, Hilton Head Island, SC 29925. Donald B. Hebb, Jr., Director of
T. Rowe, is the Managing General Partner of ABS Capital Partners. Mr.
Hebb's address is 0ne South Street, 25th Floor, Baltimore, MD 21202.
Richard L. Menschel, Director of T. Rowe, is a limited partner of The
Goldman Sachs Group, L.P., an investment banking firm. Mr. Menschel's
address is 85 Broad Street, 2nd Floor, New NY 1000 home supplies, as of
January 31, 1998, and continues to serve as a

12
<PAGE>

Director. He is a Director of Hannaford Bros., Co., a food retailer.
Mr. Stickland's address is 2000 W. First Street, Suite 604,
Winston-Salem, NC 27104. Philip C. Walsh, Director of T. Rowe, is a
retired mining industry executive. Mr. Walsh's address is Pleasant
Valley, Peapack, NJ 07977. Anne Marie Whittemore, Director of T. Rowe,
is a partner of the law firm of McGuire, Woods, Battle & Boothe L.L.P.
and a Director of Owens & Minor, Inc., Fort James Corporation, and
Albemarle Corporation. Mrs. Whittemore's address is One James Center,
Richmond, VA 23219. The remaining Officers are Edward C. Bernard,
Director and Managing Director of T. Rowe; Director and President of T.
Rowe Price Insurance Agency, Inc. and T. Rowe Price Investment
Services; Director of T. Rowe Price Services, Inc. and Vice President
of TRP Distribution, Inc.; Henry H. Hopkins, Director and Managing
Director of T. Rowe; Director of T. Rowe Price Insurance Agency, Inc.;
Vice President and Director of T. Rowe Price (Canada), Inc., T. Rowe
Price Investment Services, Inc., T. Rowe Price Services, Inc., T. Rowe
Price Threshold Fund Associates, Inc., T. Rowe Price Trust Company, TRP
Distribution, Inc., and TRPH Corporation; Vice President of
Price-International, T. Rowe Price Real Estate Group, Inc., T. Rowe
Price Retirement Plan Services, Inc., T. Rowe Price Stable Asset
Management, Inc., and T. Rowe Price Strategic Partners Associates,
Inc.; James A.C. Kennedy III, Director and Managing Director of T.
Rowe, President and Director of T. Rowe Price Strategic Partners
Associates, Inc.; Director and Vice President of T. Rowe Price
Threshold Fund Associates, Inc.; John H. Laporte, Jr., Director and
Managing Director of T. Rowe; William T. Reynolds, Director and
Managing Director of T. Rowe; Chairman of the Board of T. Rowe Price
Stable Asset Management, Inc.; Director of TRP Finance, Inc.; James S.
Riepe, Vice-Chairman of the Board, Director, and Managing Director of
T. Rowe; Chairman of the Board and President of T. Rowe Price Trust
Company; Chairman of the Board of T. Rowe Price (Canada), Inc., T. Rowe
Price Investment Services, Inc., T. Rowe Price Investment Technologies,
Inc., T. Rowe Price Retirement Plan Services, Inc., and T. Rowe Price
Services, Inc.; Director of Price-International, T. Rowe Price
Insurance Agency, Inc., and TRPH Corporation; Director and President of
TRP Distribution, Inc., TRP Suburban Second, Inc., and TRP Suburban,
Inc.; and Director and Vice President of T. Rowe Price Stable Asset
Management, Inc.; George A. Roche, Chairman of the Board, President and
Managing Director of T. Rowe; Chairman of the Board of TRP Finance,
Inc.; Director of Price-International, T. Rowe Price Retirement Plan
Services, Inc., and T. Rowe Price Strategic Partners, Inc.; and
Director and Vice President of T. Rowe Price Threshold Fund Associates,
Inc., TRP Suburban Second, Inc., and TRP Suburban, Inc.; Brian C.
Rogers, Director and Managing Director of T. Rowe and Vice President of
T. Rowe Price Trust Company; M. David Testa, Vice-Chairman of the
Board, Director, Chief Investment Officer, and Managing Director of T.
Rowe; Chairman of the Board of Price-International; President and
Director of T. Rowe Price (Canada), Inc.; Director and Vice President
of T. Rowe Price Trust Company; and Director of TRPH Corporation;
Martin G. Wade, Director and Managing Director of T. Rowe and Director,
Managing Director and Non-Executive Chairman of Price International;
Michael A. Goff, Managing Director of T. Rowe; Director and the
President of T. Rowe Price Investment Technologies, Inc.; Charles E.
Vieth, Managing Director of T. Rowe; Director and President of T. Rowe
Price Retirement Plan Services, Inc.; Director and Vice President of T.
Rowe Price Investment Services, Inc. and T. Rowe Price Services, Inc.;
Vice President of T. Rowe Price (Canada), Inc., T. Rowe Price Trust
Company, and TRP Distribution, Inc.; Christopher D. Alderson, Managing
Director of T. Rowe and Vice President of Price International; Preston
G. Athey, Managing Director of T. Rowe; Brian W. H. Berghuis, Managing
Director of T. Rowe; Stephen W. Boesel, Managing Director of T. Rowe
and Vice President of T. Rowe Price Trust Company; John H. Cammack,
Managing Director of T. Rowe; Vice President of T. Rowe Price
Investment Services, Inc. and Vice President of T. Rowe Price Trust
Company; Gregory A. McCrickard, Managing Director of T. Rowe; Vice
President of T. Rowe Price Trust Company; John R. Ford, Managing
Director of T. Rowe and Chief Investment Officer and Executive Vice
President of Price International; Mary J. Miller, Managing Director of
T. Rowe; Charles A. Morris, Managing Director of T. Rowe; Nancy M.
Morris, Managing Director of T. Rowe; Vice President of Price
International; Vice President of T. Rowe Price Investment Services,
Inc; Vice President of T. Rowe Price Stable Asset Management, Inc. and
Director and Vice President of T. Rowe Price Trust Co.; George A.
Murnaghan, Managing Director of T. Rowe; Executive Vice President of
Price-International; Vice President of T. Rowe Price Investment
Services, Inc., and T. Rowe Price Trust Company; Maria Nalywayko,
Managing Director of T. Rowe; Edmund M. Notzon III, Managing Director
of T. Rowe; Vice President of T. Rowe Price Trust Company; Wayne D.
O'Melia, Managing Director of T. Rowe;

13
<PAGE>

Director and President of T. Rowe Price Services, Inc.; Vice President
of T. Rowe Price Trust Company; Larry J. Puglia, Managing Director of
T. Rowe; Vice President of T. Rowe Price (Canada), Inc.; John R.
Rockwell, Managing Director of T. Rowe; Director and Senior Vice
President of T. Rowe Price Retirement Plan Services, Inc.; Director and
Vice President of T. Rowe Price Stable Asset Management, Inc. and T.
Rowe Price Trust Company; Vice President of T. Rowe Price Investment
Services, Inc.; R. Todd Ruppert, Managing Director of T. Rowe;
President and Director of TRPH Corporation; Vice President of T. Rowe
Price Retirement Plan Services, Inc., and T. Rowe Price Trust Company;
Robert W. Smith, Managing Director of T. Rowe; Vice President of
Price-International; William J. Stromberg, Managing Director of T.
Rowe; Mark J. Vaselkiv, Managing Director of T. Rowe; Vice President of
T. Rowe Price Recovery Fund Associates, Inc. and Vice President of T.
Rowe Price Recovery Fund II Associates, L.L.C.; and David J. L. Warren,
Managing Director of T. Rowe and Chief Executive Officer and President
of Price International; Richard T. Whitney, Managing Director of T.
Rowe; Vice President of Price-International and T. Rowe Price Trust
Company.

Q. WRL Pilgrim Baxter Mid Cap Growth: Sub-Adviser - Pilgrim Baxter &
-----------------------------------------------------------------
Associates, Ltd.
----------------

Pilgrim Baxter & Associates, Ltd., ("Pilgrim") 825 Duportail Road,
Wayne, PA 19087, serves as sub-adviser to WRL Pilgrim Baxter Mid Cap
Growth. Harold J. Baxter, Chairman, Chief Executive Officer and
Director, also serves as Trustee to PBHG Fund Distributors; Director,
Chairman and Chief Executive Officer of Pilgrim Baxter Value Investors,
Inc.; Director and Chairman of PBHG Insurance Series Fund, Inc.;
Trustee of PBHG Fund Services; and Chairman and Director of The PBGH
Funds, Inc. The remaining officers are Gary L. Pilgrim, Chief
Investment Officer, President and Director; Director and President of
Pilgrim Baxter Value Investors, Inc.; Trustee of PBHG Fund Services;
and President of PBHG Insurance Series Fund Inc. and The PBHG Funds,
Inc.; Eric C. Schnieder, Chief Financial Officer and Treasurer of
Pilgrim and Pilgrim Baxter Value Investors, Inc.; Chief Financial
Officer of PBHG Fund Services; and Trustee and Chief Financial Officer
of PBHG Fund Distributors; Amy S. Yuter, Chief Compliance Officer of
Pilgrim, PBHG Fund Distributors, and Pilgrim Baxter Value Investors,
Inc.; and Director of NSCP, an industry association; and John M. Zerr,
General Counsel and Secretary of Pilgrim, Pilgrim Baxter Value
Investors, Inc., PBHG Fund Distributors, and PBHG Fund Services; and
Vice President and Secretary of PBHG Advisor Funds, Inc., The PBHG
Funds, Inc. and PBHG Insurance.

Each person and entity may be reached c/o Pilgrim Baxter & Associates,
Ltd., at the above address.

R. WRL Dreyfus Mid Cap: Sub-Adviser - The Dreyfus Corporation
----------------------------------------------------------

The Dreyfus Corporation ("Dreyfus"), 200 Park Avenue, New York, New
York 10166, serves as sub-adviser to WRL Dreyfus Mid Cap. The officers
are Burton Cook Borgelt, Director, also serving as Director of DeVlieg
Bullard, Inc., Mellon Bank Corporation, Pittsburgh, PA, Mellon Bank,
N.A., Pittsburgh, PA and Dentsply International, Inc., York, PA; Frank
V. Cahouet, Director, also serving as Director, Chairman and CEO of
Mellon Bank Corporation and Mellon Bank N.A., One Mellon Bank Center,
Pittsburgh, PA; Stephen E. Canter, Director, Vice Chairman and Chief
Investment Officer, also serving as Chairman, Director and President of
Dreyfus Investment Advisors, Inc., and as Director of The Dreyfus Trust
Company; Christopher M. Condron, Chief Executive Officer, Chief
Operations Officer, President and Director; Mark N. Jacobs, Vice
President and General Counsel; Lawrence S. Kash, Director and Vice
Chairman, Distribution, also serving as Director of Dreyfus Investment
Advisors, Inc.; Chairman and Chief Executive Officer of Dreyfus
Brokerage Services, Inc.; Director and President of Dreyfus Service
Corporation and Dreyfus Precious Metals, Inc.; and Director of Dreyfus
Service Organization, Inc.; William T. Sandalls, Jr., Senior Vice
President and Chief Financial Officer, also serving as Director and
Chairman of Dreyfus Transfer, Inc., One American Express Plaza,
Providence, RI 02903; Executive Vice President and Chief Financial
Officer of Dreyfus Service Corporation; and Director and Treasurer of
Dreyfus Investment Advisors, Inc. and Seven Six Seven Agency; William
K. Smith, Chairman and Director, also serving as President and Director
of The Bridgewater Land Co., Inc.

14
<PAGE>

and Mellon Preferred Capital Corporation, Boston, MA; and Director,
Chairman, President and CEO of Shearson Summit Euromanagement, Inc. and
Shearson Summit EuroPartners Inc., Pittsburgh, PA; Richard F. Syron,
Director, also serving as Chairman and Chief Executive Officer of the
American Stock Exchange, 86 Trinity Place, New York, NY; and Mandell L.
Berman, Director, self-employed as a Real Estate Consultant,
Residential Builder and Private Investor, Southfield, MI.

S. WRL Great Companies - America(sm), WRL Great Companies - Technology(sm)
-----------------------------------------------------------------------
and WRL Great Companies - Global(2): Sub-Adviser - Great Companies,
-----------------------------------------------------------------------
L.L.C.:
-------

Great Companies, L.L.C., 8550 Ulmerton Road, Largo, Florida 33771
serves as sub-adviser to WRL Great Companies - America(sm), WRL Great
Companies - Technology(sm), and WRL Great Companies - Global(2). John
R. Kenney, Director, Chairman and Co-CEO, also serves as Director,
Chairman and President of WRL Investment Management, Inc., WRL
Investment Services, Inc., and WRL Series Fund, Inc.; Chairman, Trustee
and Chief Executive Officer of IDEX Mutual Funds; Director of Idex
Management, Inc.; Chairman and Chief Executive Officer of Western
Reserve Life Assurance Co.(all of St. Petersburg, FL); Senior Vice
President of AEGON USA, Inc. (Cedar Rapids, IA); Chairman of Idex
Investor Services, Inc. (St. Petersburg, FL); James Hare Huguet,
Director, President and Co-CEO, also serves as Director and President
of Great Companies, Inc., 300 Everett Road, Easton, CT; Alan F.
Warrick, Director, also serves as Managing Director of AEGON USA (Cedar
Rapids, IA) and Western Reserve Life Assurance Co. of Ohio (St.
Petersburg, FL); Thomas R. Moriarty, Director, also serves as President
and Chief Executive Officer of Idex Investor Services, Inc.; Director,
President and Chief Executive Officer of Idex Management, Inc.; Senior
Vice President, Principal Financial Officer and Treasurer of IDEX
Mutual Funds; Chairman, Director, President and CEO of InterSecurities,
Inc.; Vice President of AFSG Securities, Inc.; and Vice President of
Western Reserve Life Assurance Co. of Ohio (all of St. Petersburg, FL);
Jerome C. Vahl, Director, also serves as Director and President of
Western Reserve Life Assurance Co. of Ohio; Director of Idex Investor
Services, Inc., Idex Management, Inc., WRL Investment Management, Inc.
and WRL Investment Services, Inc. (all of St. Petersburg, FL); and
Gerald William Bollman, Executive Vice President, also serves as
Executive Vice President of Great Companies, Inc., 300 Everett Road,
Easton, CT.

T. WRL Value Line Aggressive Growth: Sub-Adviser - Value Line, Inc.
----------------------------------------------------------------

Value Line, Inc., 220 East 42nd Street, New York, NY, serves as
sub-adviser to WRL Value Line Aggressive Growth. The officers are David
T. Henigson, Director, Vice President, Treasurer, Internal Auditor and
Compliance Officer, also serving as Director and Vice President of
Value Line Securities, Inc.; Jean Bernard Buttner, Chairman, CEO and
President, also serving as Chairman, Director and CEO of Arnold
Bernhard & Co.; Chairman, CEO and Director of Value Line Publishing,
Inc.; and Chairman and Director of Value Line Securities, Inc.; Samuel
Eisenstadt, Director, Chairman of Research and Sr. Vice President;
Harold Bernard, Jr., Director; William S. Thomas, Esq., Director, also
serving as an attorney at Brobeck, Phleger & Harrison, San Francisco,
CA; and Howard A. Brecher, Secretary, Director and Vice President, also
serving as Secretary and Director of Arnold Bernhard & Co., Inc.

U. WRL Gabelli Global Growth: Sub-Adviser - Gabelli Funds, L.L.C.
--------------------------------------------------------------

Gabelli Funds, L.L.C., One Corporate Center, Rye, New York, serves as
sub-adviser to the IDEX Gabelli Global Growth fund. Mario J. Gabelli,
Chairman and Director/Trustee, also serves as Chairman, CEO, CIO and
Director of Gabelli Asset Management Inc. and Gabelli Group Capital
Partners, Inc.; CEO and CIO of GAMCO Investors, Inc.; Chairman and
Director of Lynch Corp.; and Chairman and CEO of Lynch Interactive
Corp., 401 Theodore Fremd, Rye, New York 10580; CIO of Gabelli
Securities, Inc.; Director of Spinnaker Industries, Inc., 600 North
Pearl Street, Dallas, TX 75201; Director and CIO of Gabelli
International II Ltd., West Bay Road, Grand Cayman, BWI; President of
MJG Associates, Inc.; Chairman, Director and CIO of Gabelli
International Limited; and President and CIO of Gabelli Associates
Limited, P.O. Box 20063, Cayside Galleries, Harbour Drive, Grand
Cayman, BWI; and CIO of Gabelli Multimedia Partners, L.P. Caesar M. P.
Bryan, Managing Director and Portfolio Manager, also serves as
Portfolio Manager of other funds; President and Portfolio Manager of
Gabelli Gold Fund, Inc.; and Senior Vice President of GAMCO Investors,
Inc. Marc J. Gabelli, Managing Director and Portfolio Manager, also
serves as Vice President and Portfolio Manger of GAMCO Investors, Inc.;
Vice President Research of Gabelli & Company, Inc.; Director of Gabelli
Group Capital Partners, Inc.; President of Gemini Capital Management
Ltd., Hamilton, Bermuda; Portfolio Manager of the Gabelli Global Growth
Fund; and CIO of Gabelli Global Partners, L.P. and Gabelli Global
Partners, Ltd., Cayman Islands. Barbara G. Marcin, Senior Vice
President and Portfolio Manager, also

15
<PAGE>
serves as Senior Vice President and Portfolio Manager of GAMCO
Investors, Inc., and as Portfolio Manager of Gabelli Blue Chip Value
Fund. A. Hartswell Woodson III, Managing Director and Portfolio
Manager, also serves as Vice President and Portfolio Manager of the
Gabelli Global Convertible Securities Fund. James E. McKee, Secretary,
also serves as Vice President, General Counsel and Secretary of Gabelli
Asset Management, Inc., GAMCO Investors, Inc., and Gabelli Group
Capital Partners, Inc.; and as Secretary of Gabelli Company, Inc.,
Gabelli Securities, Inc. and Gabelli Advisers, Inc. Henry G. Van der
Eb, Jr., Senior Vice President and Portfolio Manager, also serves as
Senior Vice President and Portfolio Manager of GAMCO Investors, Inc.
and President, CEO and Portfolio Manager of the Gabelli Mathers Fund.
Robert J. Reynolds, Vice President and Portfolio Manager, also serves
as Vice President and Portfolio Manager of GAMCO Investors, Inc. Anne
E. Morrissy, Vice President and Portfolio Manager, also serves as Vice
President and Portfolio Manager of GAMCO Investors, Inc. and as
Executive Vice President of the Gabelli Mathers Funds.

Item 27. Principal Underwriter
---------------------

(a) AFSG Securities Corporation ("AFSG") is the principal
underwriter for the Contracts. AFSG currently serves as
principal underwriter for the PFL Endeavor VA Separate
Account, the PFL Retirement Builder Variable Annuity
Account, the PFL Life Variable Annuity Account A, the PFL
Wright Variable Annuity Account, the AUSA Endeavor
Variable Annuity Account, Separate Account C of First
Providian Life and Health Insurance Company, and the
Separate Account I, Separate Account II, and Separate
Account V of Providian Life and Health Insurance Company,
WRL Series Life Account, WRL Series Annuity Account B and
AUSA Series Life Account.

(b) Directors and Officers of AFSG:

(1) (2) (3)
Name and Principal Position and Offices Position and Offices
Business Address with Underwriter with Registrant
---------------- -------------------- --------------------
<S> <C> <C>
Larry N. Norman (1) Director and President N/A

Harvey E. Willis (1) Vice President and Secretary N/A

Lisa Wachendorf (1) Compliance Officer N/A

Debra C. Cubero (1) Vice President N/A

Gregory J. Garvin (1) Vice President N/A

Michael F. Lane (1) Vice President N/A

Sara J. Stange (1) Director and Vice President N/A

Brenda K. Clancy (1) Vice President N/A

Michael G. Ayers (1) Treasurer/Controller N/A

Colleen S. Lyons (1) Assistant Secretary N/A
</TABLE>

16
<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C>
John F. Reesor (1) Assistant Secretary N/A

Anne Spaes (1) Vice President N/A

Priscilla I. Hechler (2) Assistant Vice President and Assistant Vice President
Assistant Secretary and Assistant Secretary

Thomas E. Pierpan (2) Assistant Secretary Secretary, Vice President
And Associate General Counsel

Richard C. Hicks (2) Assistant Vice President N/A
and Assistant Secretary

Gina A. Babka (2) Assistant Secretary N/A
</TABLE>
--------------------------------------
(1) 4333 Edgewood Road, N.E., Cedar Rapids, IA 52499-0001
(2) 570 Carillon Parkway, St. Petersburg, FL 33716-1202

Item 28. Location of Accounts and Records.
---------------------------------

The accounts, books and other documents required to be maintained
by Registrant pursuant to Section 31(a) of the Investment Company
Act of 1940, as amended, and rules promulgated thereunder are in
the possession of WRL Investment Management, Inc. and WRL
Investment Services, Inc. at their offices at 570 Carillon
Parkway, St. Petersburg. Florida 33716, or at the offices of the
Fund's custodian, Investors Bank & Trust Company, 200 Clarendon
Street, 16th Floor, Boston, MA 02111.

Item 29. Management Services.
--------------------

Not applicable

Item 30. Undertakings.
-------------

Not applicable

17
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, WRL Series Fund, Inc., has duly
caused this Post-Effective Amendment No. 41 to its Registration Statement to be
signed on its behalf by the undersigned, thereunder duly authorized, in the City
of St. Petersburg, State of Florida, on the 15th day of September 2000.

By: /s/ John R. Kenney
------------------------------------------
John R. Kenney
Chairman of the Board and President

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 41 to its Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated:

Signature and Title Date
------------------- ----
<S> <C>
/s/ John R. Kenney September 15, 2000
-----------------------------------------
Chairman of the Board and President
John R. Kenney

/s/ Patrick S. Baird September 15, 2000
-----------------------------------------
Executive Vice President and Director
Patrick S. Baird

/s/ Peter R. Brown September 15, 2000
-----------------------------------------
Director - Peter R. Brown *

/s/ Charles C. Harris September 15, 2000
-----------------------------------------
Director - Charles C. Harris*

/s/ Russell A. Kimball, Jr. September 15, 2000
-----------------------------------------
Director - Russell A. Kimball, Jr. *

/s/ William W. Short, Jr. September 15, 2000
-----------------------------------------
William W. Short, Jr.

/s/ Allan J. Hamilton September 15, 2000
-----------------------------------------
Treasurer and Principal Financial Officer
Allan J. Hamilton

/s/ Kim D. Day September 15, 2000
-----------------------------------------
Vice President and
Principal Accounting Officer
Kim D. Day

/s/ John K. Carter
-----------------------------------------
* Signed by John K. Carter
as Attorney-in-fact

</TABLE>
<PAGE>

WASHINGTON, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION

Exhibits Filed With
Post-Effective Amendment No. 41 to
Registration Statement on
Form N-1A

WRL Series Fund, Inc.
Registration No. 33-507

<PAGE>

Exhibit Index

Exhibit Description
No. of Exhibit
--- ----------
<S> <C>

23(a)1.(p) Articles Supplementary to Articles of Incorporation of
WRL Series Fund, Inc.
23(d)(26) Form of Sub-Advisory Agreement on behalf of
WRL LKCM Capital Growth

</TABLE>