FORTIS SERIES FUND INC, 485BPOS, 1995-05-02

FORTIS SERIES FUND INC
485BPOS, 1995-05-02

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<PAGE>
THIS CONFIRMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 902(g)
OF REGULATION S-T.
File No. 33-3920
FISCAL YEAR END - December 31

Registrant proposes that
this amendment will become
effective:
60 days after filing ____
As of the filing date X
---------------------
Pursuant to Rule 485:
paragraph (a)
----
paragraph (b) X
----

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 X
-----

Post-Effective Amendment Number 16

and

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 X
-----

FORTIS SERIES FUND, INC.
-------------------------

(Exact Name of Registrant as Specified in Charter)

500 Bielenberg Drive, Woodbury, Minnesota 55125
------------------------------------------------
(Address of Principal Executive Offices)

Registrant's Telephone Number: (612) 738-4000

Gregory S. Swenson, Esq., Asst. Secretary (Same address as above)
-----------------------------------------------------------------
(Name and Address of Agent for Service)

Copy to:

Michael J. Radmer, Esq.
Dorsey & Whitney
2200 First Bank Place East
Minneapolis, MN 55402

Pursuant to Section 270.24f-2 of the Investment Company Act of 1940, the
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933. The Rule 24f-2 Notice for the Registrant's most recent
fiscal year was filed on February 23, 1995.
<PAGE>
FORTIS SERIES FUND, INC.
Registration Statement on Form N-1A

_______________________________________________________________________________

CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
_______________________________________________________________________________

Item No. Prospectus Heading

1. Cover Page . . . . . . . . . . . . . . . . . Cover Page (no caption)

2. Synopsis (optional). . . . . . . . . . . . . . . (not included)

3. Condensed Financial Information. . . . . . . . . Condensed Financial
Information
4. General Description of
Registrant . . . . . . . . . . . . . . . . . . Organization and
Classification; The
Separate Accounts and
the Contracts;
Investment Objectives
and Policies

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

6. Capital Stock and
Other Securities . . . . . . . . . . . . . . . Capital Stock; Dividends
and Capital Gains
Distributions; Taxation

7. Purchase of Securities
Being Offered. . . . . . . . . . . . . . . . . Purchase and Redemption
of Fortis Series Shares

8. Redemption or Repurchase . . . . . . . . . . . . Purchase and Redemption
of Fortis Series Shares

9. Pending Legal Proceedings. . . . . . . . . . . . Not Applicable

Statement of Additional
-----------------------
Information Heading
-------------------

10. Cover Page . . . . . . . . . . . . . . . . . Cover Page (no caption)

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

12. General Information
and History . . . . . . . . . . . . . . . . . Not Applicable

13. Investment Objectives
and Policies . . . . . . . . . . . . . . . . . Investment Objectives
and Policies

14. Management of the Fund . . . . . . . . . . . . . Directors and Executive
Officers

15. Control Persons & Principal
Holders of Securities. . . . . . . . . . . . . Capital Stock
<PAGE>
16. Investment Advisory and
Other Services . . . . . . . . . . . . . . . . Investment Advisory and
Other Services

17. Brokerage Allocation and
Other Practices. . . . . . . . . . . . . . . . Portfolio Transactions
and Allocation of
Brokerage
18. Capital Stock and
Other Securities . . . . . . . . . . . . . . . Capital Stock

19. Purchase, Redemption & Pricing
of Securities Being Offered. . . . . . . . . . Computation of Net Asset
Value and Pricing;
Redemption

20. Tax Status . . . . . . . . . . . . . . . . . Taxation

21. Underwriters . . . . . . . . . . . . . . . . . Underwriter

22. Calculations of Performance Data . . . . . . . . Performance

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

<PAGE>

PART A

PROSPECTUS

<PAGE>

<TABLE>
<S> <C> <C>
PROSPECTUS DATED
UVW-Registered Trademark- FORTIS SERIES FUND, INC. May 1, 1995
MAILING ADDRESS: (A series fund with STREET ADDRESS:
P.O. BOX 64582 twelve separate series, 500 BIELENBERG DRIVE
ST. PAUL each with different goals WOODBURY
MINNESOTA 55164 and investment policies) MINNESOTA 55125
</TABLE>

Fortis Series Fund, Inc. ("Fortis Series") is an open-end management investment
company (commonly known as a "mutual fund") that is intended to provide a range
of investment alternatives through its twelve separate series (the "Series"),
each of which is, for investment purposes, in effect a separate fund with its
own separate goals and investment policies. All of the Series are diversified
series of Fortis Series.

Shares of Fortis Series are currently sold to separate accounts (the "Separate
Accounts") of Fortis Benefits Insurance Company ("Fortis Benefits") and First
Fortis Life Insurance Company ("First Fortis"), which are the funding vehicles
for benefits under variable life insurance policies (the "Policies") and
variable annuity contracts (the "Annuities") (collectively, the "Contracts")
issued by Fortis Benefits and First Fortis. The Separate Accounts invest in
shares of Fortis Series through subaccounts that correspond to the different
Series. The Separate Accounts will redeem shares of Fortis Series to the extent
necessary to provide benefits under the Contracts or for such other purposes as
may be consistent with the Contracts.

The investment objectives of the Series, which can be changed at any time
without the approval of Contract owners, are as follows:

- - The objectives of the "Money Market Series" are high levels of capital
stability and liquidity and, to the extent consistent with these primary
objectives, a high level of current income. Money Market Series will invest in
a diversified portfolio of investment grade bonds and other debt securities.
AN INVESTMENT IN MONEY MARKET SERIES IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT.

- - The objective of the "U.S. Government Securities Series" is a high level of
current income through investment primarily in debt securities of varying
maturities which have been issued, guaranteed, insured or collateralized by
the United States Government or its agencies or instrumentalities.

- - The objective of the "Diversified Income Series" is a high level of current
income by investing primarily in a diversified portfolio of government
securities and investment grade corporate bonds. However, up to 30% of
Diversified Income Series' total assets may be invested in non-investment
grade corporate bonds and other securities.

- - The objective of the "Global Bond Series" is total return from current income
and capital appreciation. The Series invests in a global portfolio principally
consisting of high quality fixed-income securities of governmental and
corporate issuers and supranational organizations, which securities have
varying maturities and are denominated in various currencies.

- - The objective of the "High Yield Series" is maximum total return through
current income and capital appreciation by investing primarily in high-yield,
high-risk fixed-income securities, which may not be suitable for all
investors.

- - The objective of the "Asset Allocation Series" is maximum total return on
invested capital, to be derived primarily from capital appreciation,
dividends, and interest, by following a flexible asset allocation strategy
that contemplates increased ownership of equity securities during periods when
stock market conditions appear favorable, and increased ownership of short and
long term debt instruments during periods when stock market conditions are
less favorable.

- - The objective of the "Global Asset Allocation Series" is maximum total return,
to be derived primarily from capital appreciation, dividends and interest, by
following a flexible asset allocation strategy. This strategy contemplates
increased ownership of global equity securities during periods when stock
market conditions appear favorable, and increased ownership of global
fixed-income securities during periods when stock market conditions are less
favorable.

- - The objectives of the "Growth & Income Series" are capital appreciation and
current income, which such Series seeks by investing primarily in equity
securities that provide an income component and the potential for growth.

- - The primary objective of the "Growth Stock Series" is short and long-term
capital appreciation. Current income through the receipt of interest and
dividends will merely be incidental to the efforts of Growth Stock Series in
pursuing its primary objective. Growth Stock Series will seek to meet these
objectives by investing primarily in common stocks and securities convertible
into common stocks.

- - The primary objective of the "Global Growth Series" is long-term capital
appreciation, which it seeks primarily by investing in a global portfolio of
equity securities, allocated among diverse international markets. Current
income through the receipt of income such as interest or dividends from
investments is a secondary objective.

- - The objective of the "International Stock Series" is capital appreciation by
investing primarily in the equity securities of non-United States companies.

- - The objective of the "Aggressive Growth Series" is maximum long-term capital
appreciation by investing primarily in equity securities of small and medium
sized companies that are early in their life cycles but which have the
potential to become major enterprises and of more established companies that
have the potential for above-average capital growth.

This Prospectus concisely sets forth the information a prospective investor
should know about Fortis Series before investing. Investors should retain this
Prospectus for future reference. Fortis Series has filed a Statement of
Additional Information (also dated May 1, 1995) with the Securities and Exchange
Commission. The Statement of Additional Information is available free of charge
from Fortis Series at the above mailing address, and is incorporated by
reference into this Prospectus in accordance with the Commission's rules. SHARES
IN THE FORTIS SERIES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK; ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY; AND
INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.

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

No broker-dealer, sales representative, or other person has been authorized to
give any information or to make any representations other than those contained
in this Prospectus, and if given or made, such information or representations
must not be relied upon as having been authorized by Fortis Benefits, First
Fortis, Fortis Series, or Fortis Investors, Inc. ("Investors"). This Prospectus
does not constitute an offer or solicitation by anyone in any state in which
such offer or solicitation is not authorized, or in which the person making such
offer or solicitation is not qualified to do so, or to any person to whom it is
unlawful to make such offer or solicitation.
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Financial Highlights........................................ 2
Organization and Classification............................. 5
The Separate Accounts and the Contracts..................... 5
Investment Objectives and Policies.......................... 6
- Money Market Series................................... 6
- U.S. Government Securities Series..................... 6
- Diversified Income Series............................. 7
- Global Bond Series.................................... 8
- High Yield Series..................................... 8
- Asset Allocation Series............................... 9
- Global Asset Allocation Series........................ 10
- Growth & Income Series................................ 10
- Growth Stock Series................................... 10
- Global Growth Series.................................. 11
- International Stock Series............................ 12
- Aggressive Growth Series.............................. 12
- Investment Policies and Restrictions Applicable to the
Global Bond Series, Global Asset Allocation Series,
and International Stock Series...................... 13
- Investment Policies and Restrictions Applicable to
More Than One Series................................ 14

<CAPTION>
PAGE
<S> <C>
Management.................................................. 18
- Board of Directors.................................... 18
- The Investment Adviser/Transfer Agent/Dividend Agent.. 18
- The Sub-Advisers...................................... 18
- Expenses and Allocations Among Series................. 19
- Brokerage Allocation.................................. 19
- Periodic Reports...................................... 19
Capital Stock............................................... 19
- Voting Privileges..................................... 19
Dividends and Capital Gains Distributions................... 19
Taxation.................................................... 19
Purchase and Redemption of Fortis Series Shares............. 19
- Generally............................................. 19
- Offering Price........................................ 20
- Transfers Among Subaccounts........................... 20
- The Underwriter....................................... 20
- Redemption............................................ 20
Appendix.................................................... 20
</TABLE>

FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)

The information below has been derived from audited financial statements, and
should be read in conjunction with the financial statements of Fortis Series
found in its 1994 Annual Report to Shareholders. The selected per share
historical data for each of the Series is presented based upon average shares
outstanding. Total return figures do not reflect charges pursuant to the terms
of the variable life insurance policies and variable annuity contracts funded by
separate accounts that invest in the Series shares and including those charges
would reduce the total return figures for all Series shown. The Global Bond
Series, Global Asset Allocation Series and International Stock Series, did not
commence operations until January 3, 1995, and therefore no data is presented.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31,
MONEY MARKET SERIES 1994 1993 1992 1991 1990 1989 1988 1987 1986***
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period............................ $10.23 $10.21 $10.15 $10.19 $9.92 $9.65 $9.98 $10.09 $10.00
- -------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income -- net......... .41 .28 .36 .62 .78 .77 .76 .70 .09
Net realized and unrealized gains
(losses) on investments......... (.01) .02 .06 (.02) .28 .27 (.29) (.07) --
- -------------------------------------------------------------------------------------------------------------------------
Total from operations.............. .40 .30 .42 .60 1.06 1.04 .47 .63 .09
- -------------------------------------------------------------------------------------------------------------------------
Distribution to shareholders:
From investment income -- net.... -- (.28) (.36) (.64) (.79) (.77) (.80) (.74) --
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period..... $10.63 $10.23 $10.21 $10.15 $10.19 $9.92 $9.65 $9.98 $10.09
- -------------------------------------------------------------------------------------------------------------------------
Total Return(@).................... 3.92% 2.77% 3.36% 5.91% 7.87% 9.42% 6.78% 5.80% .90%
Net assets end of period (000s
omitted).......................... $44,833 $28,682 $27,528 $10,737 $8,897 $2,868 $1,939 $2,832 $2,119
Ratio of expenses to average daily
net assets........................ .40% .44% .46% .55% .60% .60% .60% .60% .60%**
Ratio of net investment income to
average daily net assets.......... 3.96% 2.74% 3.51% 5.74% 7.75% 8.03% 7.71% 6.92% 4.98%**
Portfolio turnover rate............ N/A* N/A* N/A* N/A* 58% 19% 79% 72% --
- -------------------------------------------------------------------------------------------------------------------------
<FN>

*Pursuant to Rule 2a-7 under the Investment Company Act of 1940, under which
the Money Market Series qualified on May 1, 1991, the portfolio turnover rate
is not applicable.
**Annualized
***Period from October 27, 1986 to December 31, 1986.
@These are the Series total returns during the period, including reinvestment
of all dividend and capital gains distributions.
</TABLE>

2
<PAGE>

<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES YEAR ENDED DECEMBER 31,
SERIES 1994 1993 1992 1991 1990 1989 1988 1987 1986*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period....................... $10.94 $10.73 $10.77 $9.80 $9.48 $9.04 $ 9.46 $10.14 $10.00
- ---------------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income -- net.... .71 .74 .78 .77 .76 .76 .85 .73 .11
Net realized and unrealized
gains (losses) on
investments................ (1.54) .46 .15 .98 .31 .45 (.42) (.57) .03
- ---------------------------------------------------------------------------------------------------------------------------------
Total from operations......... (.83) 1.20 .93 1.75 1.07 1.21 .43 .16 .14
- ---------------------------------------------------------------------------------------------------------------------------------
Distribution to shareholders:
From investment income --
net........................ (.71) (.74) (.78) (.78) (.75) (.77) (.85) (.84) --
From net realized gains..... -- (.24) (.19) -- -- -- -- -- --
Excess distributions of net
realized gains............. -- (.01) -- -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions to
shareholders................. (.71) (.99) (.97) (.78) (.75) (.77) (.85) (.84) --
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period....................... $9.40 $10.94 $10.73 $10.77 $9.80 $9.48 $9.04 $9.46 $10.14
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return(@)............... (6.44)% 9.45% 6.14% 14.36% 7.93% 13.14% 6.36% 1.60% 1.40%
Net assets end of period (000s
omitted)..................... $172,656 $235,588 $132,683 $49,751 $10,750 $2,520 $1,959 $2,462 $2,128
Ratio of expenses to average
daily net assets............. .53% .52% .57% .64% .76% .75% .75% .75% .75%**
Ratio of net investment income
to average daily net
assets....................... 6.87% 6.49% 7.10% 7.57% 7.90% 8.55% 8.68% 8.16% 5.90%**
Portfolio turnover rate....... 187% 141% 135% 77% 17% 23% 83% 179% 1%
- ---------------------------------------------------------------------------------------------------------------------------------
<FN>
*Period from October 27, 1986 to December 31, 1986.
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
DIVERSIFIED INCOME SERIES 1994 1993 1992 1991 1990 1989 1988*
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $11.93 $11.34 $11.22 $10.40 $10.26 $9.85 $10.02
- --------------------------------------------------------------------------------------------------------------------
Operations:
Investment income -- net.............. .87 .87 .82 .81 .88 .87 .58
Net realized and unrealized gains
(losses) on investments.............. (1.53) 1.03 .33 .87 .13 .40 (.17)
- --------------------------------------------------------------------------------------------------------------------
Total from operations................... (.66) 1.90 1.15 1.68 1.01 1.27 .41
- --------------------------------------------------------------------------------------------------------------------
Distribution to shareholders:
From investment income -- net......... (.87) (.87) + (.81) (.86) (.87) (.86) (.58)
Excess distributions of net realized
gains................................ -- (.01) (.01) -- -- -- --
From net realized gains............... -- (.43) (.21) -- -- -- --
- --------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders..... (.87) (1.31) (1.03) (.86) (.87) (.86) (.58)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period.......... $ 10.40 $11.93 $11.34 $11.22 $10.40 $10.26 $9.85
- --------------------------------------------------------------------------------------------------------------------
Total Return(@)......................... (5.22)% 12.76% 7.08% 14.68% 8.87% 12.30% 3.90%
Net assets end of period (000s
omitted)............................... $98,314 $92,589 $28,490 $8,503 $4,945 $3,528 $2,579
Ratio of expenses to average daily net
assets................................. .55% .57% .67% .75% .75% .75% .75%**
Ratio of net investment income to
average daily net assets............... 7.59% 7.15% 7.08% 7.42% 8.27% 8.65% 8.50%**
Portfolio turnover rate................. 142% 125% 83% 25% 35% 46% 45%
- --------------------------------------------------------------------------------------------------------------------
<FN>
*Period from May 2, 1988 to December 31, 1988.
</TABLE>

<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31,
HIGH YIELD SERIES 1994*
<S> <C>
- -------------------------------------------------------------------
Net asset value, beginning of period.............. $10.00
- -------------------------------------------------------------------
Operations:
Investment income -- net........................ .71
Net realized and unrealized gains (losses) on
investments.................................... (.53)
- -------------------------------------------------------------------
Total from operations............................. .18
- -------------------------------------------------------------------
Distribution to shareholders:
From investment income -- net................... (.71)
- -------------------------------------------------------------------
Net asset value, end of period.................... $ 9.47
- -------------------------------------------------------------------
Total Return(@)................................... (.75)%
Net assets end of period (000s omitted)........... $ 13,706
Ratio of expenses to average daily net assets..... .75%**
Ratio of net investment income to average daily
net assets....................................... 10.44%**
Portfolio turnover rate........................... 20%
- -------------------------------------------------------------------
<FN>
*For the Period May 2, 1994 (commencement of operations) to December 31, 1994.
The Series' inception was April 26, 1994, when it was initially capitalized.
However, the Series' shares did not become effectively registered under the
Securities Act of 1933 until May 2, 1994. Supplementary information is not
presented for the period from April 26, 1994, through May 2, 1994, as the
Series' shares were not registered during that period.
- --------------------------
**Annualized
@These are the Series total returns during the period, including reinvestment
of all dividend and capital gains distributions.
</TABLE>

3
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
ASSET ALLOCATION SERIES 1994 1993 1992 1991 1990 1989 1988 1987*
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period....................... $ 14.14 $13.28 $12.81 $10.37 $10.59 $8.86 $ 9.11 $10.00
- -----------------------------------------------------------------------------------------------------------------------
Operations:
Investment income -- net.... .56 .52 .62 .59 .57 .49 .52 .32
Net realized and unrealized
gains (losses) on
investments................ (.58) .92 .47 2.43 (.20) 1.73 (.24) (.89)
- -----------------------------------------------------------------------------------------------------------------------
Total from operations......... (.02) 1.44 1.09 3.02 .37 2.22 .28 (.57)
- -----------------------------------------------------------------------------------------------------------------------
Distribution to shareholders:
From investment income --
net........................ (.56) (.52) (.62) (.58) (.59) (.49) (.53) (.32)
From net realized gains..... -- (.06) -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Total distributions to
shareholders................. (.56) (.58) (.62) (.58) (.59) (.49) (.53) (.32)
- -----------------------------------------------------------------------------------------------------------------------
Net asset of value, end of
period....................... $ 13.56 $14.14 $13.28 $12.81 $10.37 $10.59 $ 8.86 $9.11
- -----------------------------------------------------------------------------------------------------------------------
Total Return(@)............... (.31)% 9.79% 6.95% 27.65% 2.01% 23.75% 3.71% (6.12)%
Net assets end of period (000s
omitted)..................... $260,593 $204,603 $89,076 $31,821 $13,153 $5,531 $2,485 $2,475
Ratio of expenses to average
daily net assets............. .56% .56% .60% .70% .85% .75% .75% .75%**
Ratio of net investment income
to average daily net
assets....................... 4.05% 3.72% 4.78% 5.04% 5.40% 5.35% 5.82% 4.50%**
Portfolio turnover rate....... 73% 74% 54% 42% 75% 47% 79% 96%
- -----------------------------------------------------------------------------------------------------------------------
<FN>
*Period from April 1, 1987 to December 31, 1987.
</TABLE>

<TABLE>
<CAPTION>
PERIOD ENDED
GROWTH & INCOME SERIES DECEMBER 31, 1994*
<S> <C>
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.............................................................. $10.00
- --------------------------------------------------------------------------------------------------------------------
Operations:
Investment income -- net........................................................................ .21
Net realized and unrealized gains (losses) on investments....................................... .07
- --------------------------------------------------------------------------------------------------------------------
Total from operations............................................................................. .28
- --------------------------------------------------------------------------------------------------------------------
Distribution to shareholders:
From investment income -- net................................................................... (.21)
- --------------------------------------------------------------------------------------------------------------------
Net asset of value, end of period................................................................. $ 10.07
- --------------------------------------------------------------------------------------------------------------------
Total Return(@)................................................................................... 1.74%
Net assets end of period (000s omitted)........................................................... $16,276
Ratio of expenses to average daily net assets..................................................... .86%**
Ratio of net investment income to average daily net assets........................................ 3.12%**
Portfolio turnover rate........................................................................... 2%
- --------------------------------------------------------------------------------------------------------------------
<FN>
*For the Period May 2, 1994 (commencement of operations) to December 31, 1994.
The Series' inception was April 26, 1994, when it was initially capitalized.
However, the Series' shares did not become effectively registered under the
Securities Act of 1933 until May 2, 1994. Supplementary information is not
presented for the period from April 26, 1994, through May 2, 1994, as the
Series' shares were not registered during that period.
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
GROWTH STOCK SERIES 1994 1993 1992 1991 1990 1989 1988 1987 1986*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period....................... $ 22.92 $21.15 $20.68 $13.57 $14.26 $10.59 $10.42 $9.53 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income -- net.... .18 .09 .18 .22 .38 .26 .29 .20 .02
Net realized and unrealized
gains (losses) on
investments................ (.81) 1.77 .47 7.11 (.69) 3.67 .16 .92 (.49)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from operations......... (.63) 1.86 .65 7.33 (.31) 3.93 .45 1.12 (.47)
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution to shareholders:
From investment income --
net........................ (.18) (.09) (.18) (.22) (.38) (.26) (.28) (.21) --
From net realized gains..... -- -- -- -- -- -- -- (.02) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to
shareholders................. (.18) (.09) (.18) (.22) (.38) (.26) (.28) (.23) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period....................... $ 22.11 $22.92 $21.15 $20.68 $13.57 $14.26 $10.59 $10.42 $9.53
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return(@)............... (2.82)% 8.78% 2.94% 53.50% (3.10)% 36.46% 4.49% 11.31% (4.70)%
Net assets end of period (000s
omitted)..................... $377,483 $304,293 $188,172 $100,690 $25,623 $8,632 $3,023 $2,914 $1,716
Ratio of expenses to average
daily net assets............. .68% .69% .76% .81% 1.01% 1.00% 1.00% 1.00% 1.00%**
Ratio of net investment income
to average daily net
assets....................... .81% .46% .92% 1.28% 2.72% 2.03% 2.76% 1.79% 1.44%**
Portfolio turnover rate....... 19% 26% 24% 31% 50% 40% 85% 64% 4%
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*Period from October 27, 1986 to December 31, 1986.
- --------------------------
**Annualized.
@These are the Series total returns during the period, including reinvestment
of all dividend and capital gains distributions.
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
GLOBAL GROWTH SERIES 1994 1993 1992*
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period............................................ $12.77 $10.86 $9.82
- --------------------------------------------------------------------------------------------------------------------
Operations:
Investment income -- net...................................................... .10 .06 .05
Net realized and unrealized gains (losses) on investments..................... (.46) 1.91 1.04
- --------------------------------------------------------------------------------------------------------------------
Total from operations....................................................... (.36) 1.97 1.09
- --------------------------------------------------------------------------------------------------------------------
Distribution to shareholders:
From investment income -- net................................................. (.10) (.06) (.05)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period.................................................. $ 12.31 $12.77 $10.86
- --------------------------------------------------------------------------------------------------------------------
Total Return(@)................................................................. (2.98)% 17.92% 10.88%
Net assets end of period (000s omitted)......................................... $144,647 $75,882 $11,091
Ratio of expenses to average daily net assets................................... .81% 1.02% 1.22%**
Ratio of net investment income to average daily net assets...................... .82% .53% .73%**
Portfolio turnover rate......................................................... 20% 19% 21%
- --------------------------------------------------------------------------------------------------------------------
<FN>
*For the Period May 1, 1992 (commencement of operations) to December 31, 1992.
The Series' inception was April 13, 1992, when it was initially capitalized.
However, the Series' shares did not become effectively registered under the
Securities Act of 1933 until May 1, 1992. Supplementary information is not
presented for the period from April 13, 1992, through May 1, 1992, as the
Series' shares were not registered during that period.
</TABLE>

<TABLE>
<CAPTION>
PERIOD ENDED
AGGRESSIVE GROWTH SERIES DECEMBER 31, 1994*
<S> <C>
- ----------------------------------------------------------------------------------------------------
Net asset value, beginning of period............................................ $ 10.03
- ----------------------------------------------------------------------------------------------------
Operations:
Investment income -- net...................................................... .08
Net realized and unrealized gains (losses) on investments..................... (.23)
- ----------------------------------------------------------------------------------------------------
Total from operations....................................................... (.15)
- ----------------------------------------------------------------------------------------------------
Distribution to shareholders:
From investment income -- net................................................. (.08)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period.................................................. $ 9.80
- ----------------------------------------------------------------------------------------------------
Total Return(@)................................................................. (1.89)%
Net assets end of period (000s omitted)......................................... $ 13,526
Ratio of expenses to average daily net assets................................... .88%**
Ratio of net investment income to average daily net assets...................... 1.24%**
Portfolio turnover rate......................................................... 5%
- ----------------------------------------------------------------------------------------------------
<FN>
* For the Period May 2, 1994 (commencement of operations) to December 31, 1994.
The Series' inception was April 26, 1994, when it was initially capitalized.
However, the Series' shares did not become effectively registered under the
Securities Act of 1933 until May 2, 1994. Supplementary information is not
presented for the period from April 26, 1994, thorugh May 2, 1994, as the
Series' shares were not registered during that period.
- --------------------------
**Annualized.
@These are the Series total returns during the period, including reinvestment
of all dividend and capital gains distributions.
</TABLE>

The Series may advertise their "cumulative total return" and "average annual
total return" and may compare such figures to recognized indices. U.S.
Government Securities Series, Diversified Income Series, Global Bond Series,
High Yield Series, Asset Allocation Series, and Global Asset Allocation Series
may advertise their "yield." When they advertise yield, they will also advertise
"average annual total return" for the most recent one, five, and ten year
periods. Money Market Series may advertise its "yield" and "effective yield."
Any advertisement of Series performance will be accompanied by performance of
the Separate Account being advertised. Fortis Series may advertise its relative
performance as compiled by outside organizations such as Lipper Analytical or
Wiesenberger, or refer to publications which have mentioned Fortis Series,
Fortis Advisers, Inc. ("Advisers"), or their personnel, and also may advertise
other performance items as set forth in the Statement of Additional Information.
The performance discussion required by the Securities and Exchange Commission is
found in Fortis Series' Annual Report to Shareholders and will be made available
without charge upon request.

ORGANIZATION AND CLASSIFICATION

Fortis Series was incorporated under Minnesota law in 1986, and is registered
with the Securities and Exchange Commission under the Investment Company Act of
1940 (the "1940 Act") as an "open-end diversified management investment
company". Fortis Series is currently made up of twelve separate Series: Money
Market Series, U.S. Government Securities Series, Diversified Income Series,
Global Bond Series, High Yield Series, Asset Allocation Series, Global Asset
Allocation Series, Growth & Income Series, Growth Stock Series, Global Growth
Series, International Stock Series, and Aggressive Growth Series. Each Series
is, for investment purposes, in effect a separate investment fund. A separate
series of capital stock is issued for each Series. Each share of capital stock
issued with respect to a Series has a pro-rata interest in the assets of that
Series and has no interest in the assets of any other Series. Each Series bears
its own liabilities and also its proportionate share of the general liabilities
of Fortis Series. In other respects, Fortis Series is treated as one entity.

THE SEPARATE ACCOUNTS AND THE CONTRACTS

Shares in Fortis Series are currently sold to separate accounts of Fortis
Benefits and First Fortis which fund benefits under variable life insurance
policies and variable annuity contracts issued by Fortis Benefits and First
Fortis. Each Contract owner allocates Contract value among the subaccounts of
the Separate Accounts, which in turn invest in the corresponding Series of
Fortis Series. The rights of the Separate Accounts as shareholders should be
distinguished from the rights of a Contract owner, which are described in the
Contract. The term "shareholder" or "shareholders" in this Prospectus refers to
Fortis Benefits, First Fortis, any of their affiliates, or any other insurance
company that owns Fortis Series shares. "Contract owner" means the owner,
annuitant, or beneficiary that is entitled to exercise the rights and privileges
under a Contract.

5
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES

Each Series has different investment objectives which it pursues through
different investment policies as described below. The investment objectives of
the Series and, except as otherwise noted, the policies by which the Series seek
to achieve their investment objectives, may be changed without the approval of
shareholders. While no such change is contemplated, such a change could result
in a Series' objectives differing from those deemed appropriate by an investor
at the time of investment.

Through careful selection, broad diversification and constant supervision,
Fortis Series' management aims to limit and counteract various types of risk
that are inherent in all securities, and advance the value of the Series'
assets. There is risk in all investments, and fulfillment of the Series'
objectives cannot be assured.

MONEY MARKET SERIES

The objectives of Money Market Series are high levels of capital stability and
liquidity and, to the extent consistent with these primary objectives, a high
level of current income. Money Market Series intends to achieve these objectives
through investment in a diversified portfolio of investment grade bonds and
other debt securities which management considers to be of similar quality.

Money Market Series is somewhat different from a "traditional" money market
mutual fund in that it does not attempt to maintain its net asset value at any
set price. It has a nonfundamental investment policy requiring that all of its
assets be invested in debt securities maturing in 13 months or less, except
United States "Government Securities" as defined in the 1940 Act, whose
portfolio maturities cannot be more than 25 months from the date of acquisition.
Money Market Series will maintain a dollar weighted average portfolio maturity
of 90 days or less.

Pursuant to Rule 2a-7 under the 1940 Act, Money Market Series will not invest
more than 5% of its total assets in: (1) securities of any one issuer (other
than cash or United States "Government Securities" as defined in the 1940 Act),
except that the Series may at any one time make a single investment of more than
5% of its assets in securities of an issuer in the highest rating category for
up to three business days (subject to the diversification requirements of the
1940 Act, as set forth under "Investment Policies, Restrictions, and Risks
Applicable to More Than One Series"); or (2) securities rated in the second
highest rating category--with investments in the second highest category further
limited with respect to any particular issuer to the greater of 1% of total
assets or $1,000,000. Certain of the provisions of Rule 2a-7 are more
restrictive than Money Market Series' investment policies and restrictions
described below; Money Market Series' investments will be limited to the more
restrictive provisions of Rule 2a-7.

Money Market Series pursues its objectives by investing exclusively in the
following:

1. Obligations of other domestic issuers (which include, for example,
commercial paper and other debt obligations) which meet the quality and other
standards of Rule 2a-7 (or successors thereto) under the 1940 Act.

2. Securities of, or guaranteed by, the United States Government, its
agencies or instrumentalities. For a discussion of this type of security and the
federal income tax diversification requirements applicable to investments in
this type of security, see "U.S. Government Securities Series," below.

3. Securities (payable in U.S. dollars) of, or guaranteed by, the government
of Canada or a province of Canada or any instrumentality or political
subdivision thereof, such securities not to exceed 25% of Money Market Series'
total assets, and securities of foreign companies (which do not include domestic
branches of foreign banks and foreign branches of domestic banks), such
securities not to exceed 15% of Money Market Series' total assets. See
"Investment Policies, Restrictions, and Risks Applicable to More Than One
Series--Investment in Foreign Securities" for a discussion of certain risks
connected with investing in foreign securities.

4. Obligations of: (a) domestic or foreign banks having total assets in
excess of one billion dollars or of any branches of such banks, whether domestic
or foreign; or (b) in other foreign issuers; provided, that no more than 49% of
Money Market Series' total assets may be so invested in all such securities.
Such obligations of domestic and foreign banks may include, but are not limited
to, certificates of deposit, letters of credit, and bankers' acceptances. For
this purpose, "bank" includes commercial banks, savings banks and savings and
loan associations.

Overall, with respect to investments set forth in this paragraph and in
paragraph 3, above, Money Market Series may not invest more than 49% of the
value of its total assets collectively in: (i) securities of, or guaranteed by,
the government of Canada, a province of Canada, or any instrumentality or
political subdivision thereof; (ii) securities of foreign companies; and (iii)
securities of domestic branches of foreign banks and foreign branches of
domestic banks.

There are risks associated with investments in obligations of foreign branches
of domestic banks and domestic branches of foreign banks that do not accompany
investments in obligations of domestic banks generally. Domestic banks are
required to maintain specified levels of reserves, are limited in the amounts
they can loan to a single borrower, and are subject to other regulations
designed to promote financial soundness. Not all of such laws and regulations
apply to foreign branches of domestic banks. Money Market Series may also be
subject to additional investment risks from investing in the obligations of
foreign branches of domestic banks. Such risks include future political and
economic developments, the possible imposition of foreign withholding taxes on
interest income payable on securities, the possible seizure or nationalization
of foreign deposits, the possible establishment of exchange controls, or the
adoption of other foreign governmental restrictions which might adversely affect
the payment of principal and interest on such obligations. The obligations of
domestic branches of foreign banks may also be subject to other risks, including
political and economic developments in the country in which the foreign bank has
its main office. There may be less publicly available information about a
domestic branch of a foreign bank than about a domestic bank. In addition,
obligations of foreign branches of domestic banks and domestic branches of
foreign banks are not insured by the Federal Deposit Insurance Corporation.

5. Extendible notes that provide for an optional maturity date, at Money
Market Series' option, of 13 months or less from the date of acquisition.
Extendible notes issued with maturity dates in excess of 13 months from the date
of issuance that provide for optional maturity dates, at the holder's option, of
13 months or less shall be deemed by Money Market Series to have been issued
with the shorter optional maturity dates. Such extendible notes must meet the
quality and other standards of Rule 2a-7 (or successors thereto) and may not
account for greater than 25% of the total assets of Money Market Series.

6. Repurchase agreements in connection with obligations which are suitable
for investment under the categories set forth above.

7. Money Market Series may purchase obligations other than those listed
above if the obligation is accompanied by a guarantee of principal and interest,
provided that the guarantee is that of a bank or corporation whose certificates
of deposit or commercial paper may otherwise be purchased by Money Market
Series.

U.S. GOVERNMENT SECURITIES SERIES

The investment objective of U.S. Government Securities Series is to provide
shareholders with a high level of current income.

In pursuing its objective, U.S. Government Securities Series' assets will be
invested in the following manner:

A. At least 65% of the Series' assets will be invested in securities issued,
guaranteed, insured, or collateralized by the United States government, its
agencies, or instrumentalities (whether or not backed by the "full

6
<PAGE>
faith and credit" pledge of the United States government), and in repurchase
agreements pertaining to such securities. Securities issued or guaranteed as to
principal and interest by the United States government include a variety of
securities, which differ in their interest rates, maturities, and dates of
issuance.

In addition to Treasury obligations, U.S. Government Securities Series may
invest in the following: (1) obligations of United States government agencies
and instrumentalities which are secured by the full faith and credit of the
United States Treasury, such as Government National Mortgage Association
pass-through certificates; (2) obligations which are secured by the right of the
issuer to borrow from the Treasury, such as securities issued by the Federal
Financing Bank or the United States Postal Service; and (3) obligations which
are supported by the credit of the government agency or instrumentality itself,
such as securities of the Federal Home Loan Bank or the Federal National
Mortgage Association. U.S. Government Securities Series will invest in
securities which are not backed by the full faith and credit of the United
States Treasury only when the credit risk with respect to the instrumentality or
agency issuing such securities does not make the securities, in the judgment of
Advisers, unsuitable investments for the Series.

Types of mortgage-backed securities include "pass-through" securities, modified
pass-through securities, participation certificates, and collateralized mortgage
obligations.

There is no percentage limitation on U.S. Government Securities Series' purchase
of mortgage-backed securities issued, guaranteed, insured, or collateralized by
the United States government, its agencies, or instrumentalities, except for
limitations that may be imposed from time to time by the Internal Revenue Code.
U.S. Government Securities Series may also invest in mortgage-backed securities
issued and insured by private organizations if such securities fall within the
investment restrictions for marketable straight debt securities set forth below.

B. Up to 35% of U.S. Government Securities Series' total assets may consist
of:

(1) Marketable non-convertible debt securities which are rated at the time of
purchase within the three highest grades assigned by Moody's Investors Service
("Moody's") (Aaa, Aa or A) or Standard & Poor's Corporation ("S&P") (AAA, AA or
A), or comparably rated by another nationally recognized rating agency; see the
Appendix to this Prospectus for a discussion of S&P and Moody's ratings;

(2) Marketable securities (payable in U.S. dollars) of, or guaranteed by, the
government of Canada or a province of Canada or any instrumentality or political
subdivision thereof (such securities not to exceed 25% of the U.S. Government
Securities Series' total assets);

(3) Obligations of, or guaranteed by, U.S. banks, which obligations, although
not rated as a matter of policy by either Moody's or S&P, are considered by
Advisers to have investment quality comparable to securities which may be
purchased under item (1) above (such securities not to exceed 25% of the U.S.
Government Securities Series' total assets); and
(4) Commercial paper obligations rated Prime-1 by Moody's or A-1 by S&P, or
comparably rated by another nationally recognized rating agency. See the
Appendix to this Prospectus for a discussion of S&P and Moody's ratings.
(5) Cash, commercial paper, other non-securities assets such as accrued
interest, receivables from investment securities sold, prepaid expenses, as well
as other high quality short term interest bearing debt securities not discussed
above.
The foregoing percentage limitations will apply at the time of the purchase of
the securities.

U.S. Government Securities Series may invest in repurchase agreements.

Market prices of the securities in which U.S. Government Securities Series
invests will fluctuate and will tend to vary inversely with changes in
prevailing interest rates. If interest rates increase from the time a security
is purchased, such security, if sold, might be sold at a price less than its
purchase cost. Conversely, if interest rates decline from the time a security is
purchased, such security, if sold, might be sold at a price greater than its
purchase cost.

DIVERSIFIED INCOME SERIES

The objective of the Diversified Income Series is a high level of current income
by investing primarily in a diversified portfolio of government securities and
investment grade corporate bonds. The Diversified Income Series will pursue its
objective by investing, under normal circumstances, at least 70% of its total
assets in (a) investment grade corporate fixed income securities, which are
generally considered to be those fixed income securities rated within one of the
four highest grades assigned by Moody's (Aaa, Aa, A and Baa) or by S&P (AAA, AA,
A and BBB), or comparably rated by another nationally recognized rating agency;
(b) securities issued, guaranteed or insured by the United States Government or
its agencies or instrumentalities; (c) mortgage related securities in which the
U.S. Government Securities Series may invest; (d) repurchase agreements
pertaining to such securities; (e) commercial paper of companies having, at the
time of purchase, an issue of outstanding debt securities rated Baa or above by
Moody's or BBB or above by S&P, or comparably rated by another nationally
recognized rating agency, or commercial paper rated P-1 or P-2 by Moody's or A-1
or A-2 by S&P, or comparably rated by another nationally recognized rating
agency; and (f) cash and income producing cash equivalents.

Additionally, under normal circumstances, up to 30% of the Diversified Income
Series' total assets may be invested in any combination of (a) common and
preferred stocks and convertible securities; (b) dollar denominated foreign
securities (provided that such investments in foreign securities will be limited
to 10% of the total assets of the Diversified Income Series); and (c)
non-investment grade bonds (sometimes referred to as "junk bonds") and non-rated
corporate bonds. The lowest eligible rating category in which the Diversified
Income Series will invest are Caa as determined by Moody's and CCC as determined
by S&P, or comparably rated by another nationally recognized rating agency,
except that up to 10% of the assets of the Diversified Income Series may be
invested in nonperforming securities rated lower than these categories or which
are unrated. See "High Yield Series--Risks of Transactions in High-Yielding
Securities." The Diversified Income Series may retain a portfolio security whose
rating has changed if the security otherwise meets the Diversified Income
Series' investment objectives and investment criteria.

The table below shows the weighted average percentages of the Diversified Income
Series' long-term bond investments during the fiscal year ended December 31,
1994, represented by (1) bonds rated by a nationally recognized statistical
rating organization, separated into each rating category, and (2) all unrated
bonds as a group.

<TABLE>
<CAPTION>
STANDARD & POOR'S RATING PERCENT OF TOTAL
(OR EQUIVALENT) INVESTMENTS
- -------------------------------------------------- ------------------
<S> <C>
AAA............................................... 62.7%
AA................................................ 3.8%
A................................................. 6.9%
BBB............................................... 5.1%
BB................................................ 4.3%
B................................................. 15.0%
CCC............................................... 1.6%
CC................................................ 0%
C................................................. 0%
D................................................. 0%
All unrated bonds as a group...................... .6%
-----
100.0%
-----
-----
</TABLE>

For an explanation of investment quality ratings assigned by Moody's and S&P,
see the Appendix.

7
<PAGE>

GLOBAL BOND SERIES

The investment objective of the Global Bond Series is total return from current
income and capital appreciation. The Global Bond Series invests its assets in a
global portfolio principally consisting of high quality fixed-income securities
of governmental and corporate issuers and supranational organizations, which
securities have varying maturities and are denominated in various currencies,
including the U.S. dollar. The Series may invest in any region of the world,
including the United States. As discussed below under "Investment Policies,
Restrictions, and Risks Applicable to the Global Bond Series, Global Asset
Allocation Series, and International Stock Series--Foreign Currency Forward
Exchange Contracts," the Global Bond Series may engage in hedging/cross-hedging
transactions; typically however the Global Bond Series will be invested in the
same number of currencies as countries in which it is invested.

It is the present intention of the Series' sub-adviser, Warburg Investment
Management International Ltd. ("Warburg"), to invest the Global Bond Series'
assets principally in fixed-income securities of companies within, or
governments of, the United States, Continental Europe, the United Kingdom,
Canada, the Pacific Basin and in such other areas and countries as Warburg may
determine from time to time, including countries that are considered emerging
market countries at the time of investment. At all times at least 80% of the
Series' assets will be invested in developed countries. Developed countries
include Canada, the United Kingdom, France, Germany, Australia, New Zealand,
Austria, Belgium, Denmark, Finland, Ireland, Italy, Japan, Luxembourg, the
Netherlands, Norway, Spain, Sweden, Switzerland and the United States. For a
description of the risks associated with investing in foreign securities, see
"Investment Policies, Restrictions, and Risks Applicable to More Than One
Series--Investment in Foreign Securities."

In pursuing its investment objective, the Global Bond Series invests in a broad
range of fixed-income securities. Under normal market conditions, Warburg
anticipates that the Series will be invested primarily in fixed-income
securities issued or guaranteed by (a) governments and their agencies and
instrumentalities, (b) government-related issuers, and (c) supranational
organizations (such as the World Bank, The European Economic Community, The
Asian Development Bank and The European Coal and Steel Community). The Series
also invests in corporate fixed-income securities issued by foreign or U.S.
companies; certificates of deposit and bankers' acceptances issued or guaranteed
by, or time deposits maintained at, banks (including foreign branches of U.S.
banks or U.S. or foreign branches of foreign banks); and commercial paper issued
by foreign or U.S. companies. Under normal conditions, at least 90% of the
Global Bond Series' assets will be invested in high quality securities, I.E.,
securities that are rated AA or better by S&P or Aa or better by Moody's or
comparably rated by another nationally recognized rating agency, or, if unrated,
are determined by Warburg to be of comparable quality. At no time will the
Series invest in securities that are rated below "A" or, if unrated, are
determined by Warburg to be of comparable quality. See the Appendix attached
hereto for a description of the ratings of fixed-income securities and
commercial paper.

When, in Warburg's judgment, business or financial conditions warrant, the
Global Bond Series may assume a temporary defensive position and invest without
limit in high quality short-term debt securities or hold its assets in cash. See
"Investment Policies, Restrictions, and Risks Applicable to More Than One
Series--Short-Term Money Market Instruments." During those intervals when the
Series has assumed a temporary defensive position, the Series will not be
pursuing its investment objective.

The maturities of investments held by the Global Bond Series are not subject to
any prescribed limits. A longer average maturity is generally associated with a
higher level of volatility in the market value of a fixed-income security. The
maturity of a security measures only the time until final payment is due; it
takes no account of the pattern of the security's cash flows over time,
including how cash flow is affected by prepayments and by changes in interest
rates. The average "duration" of the Global Bond Series will vary depending on
anticipated market conditions. The Series' average "duration" is a measure of
the price sensitivity of its investment portfolio, including expected cash flow,
redemptions and mortgage prepayments under a wide range of interest rate
conditions. In computing the duration of the Series' investment portfolio,
Warburg will estimate the duration of obligations that are subject to prepayment
or redemption by the issuer taking into account the influence of interest rates.
The Series' average duration generally will be shorter than the Series' average
maturity. Under normal market conditions, Warburg anticipates that the average
weighted duration of the Series will be in the range of two to eight years.

HIGH YIELD SERIES

The investment objective of High Yield Series is maximum total return through
current income and capital appreciation by investing primarily in a diversified
portfolio of high-yielding, fixed-income securities (sometimes referred to as
"junk bonds"). Under normal economic circumstances, High Yield Series will
invest at least 65% of its total assets in lower grade (as explained below) debt
securities, convertible securities, options on debt securities, interest rate
futures contracts and options thereon, common and preferred stocks, and other
equity securities when these types of instruments are consistent with High Yield
Series' investment objective. High Yield Series' remaining assets may be held in
cash or cash equivalents or invested in investment grade debt instruments.

The higher yields that High Yield Series seeks are usually available from
lower-rated securities--those rated Baa or lower by Moody's or BBB or lower by
S&P, or comparably rated by another nationally recognized rating agency, and
unrated securities of similar quality. This is an aggressive approach to income
investing and is subject to greater risk than investing in higher quality
securities. The High Yield Series may invest without limitation in any
"eligible" rating category. The lowest eligible rating categories in which High
Yield Series will invest are Caa as determined by Moody's and CCC as determined
by S&P, or comparably rated by another nationally recognized rating agency,
except that up to 10% of the Series' assets (at the time of investment) may be
invested in "non-performing" securities rated lower than these categories.
Securities in the Caa/CCC rating categories are considered to be of poor
standing and are predominantly speculative. Lower ratings may reflect a greater
possibility that the financial condition of the issuer, or adverse changes in
general economic conditions, or both, may impair the ability of the issuer to
make payments of interest and principal. Additionally, investments in securities
rated Caa or CCC involve significant risk exposure to adverse conditions. Such
securities may be in default, or there may be present elements of danger with
respect to the payment of principal or interest. "Non- performing" securities
are highly speculative. For a discussion of Moody's and S&P ratings, see the
Appendix.

The prices and yields of lower rated securities generally fluctuate more than
higher quality securities, and such prices may decline significantly in periods
of general economic difficulty or rising interest rates. Advisers reserves the
right to adopt a defensive approach by temporarily investing up to 100% of High
Yield Series' assets in investment grade debt securities and commercial paper,
and/or in obligations of banks or the United States government.

In considering investments for High Yield Series, Advisers will attempt to
identify high-yielding securities of issuer companies whose financial condition
has improved or is expected to improve in the future. Advisers will not rely
exclusively on ratings assigned by Moody's and S&P in this process, but, in
appropriate circumstances, may perform its own credit analysis as well.
Advisers' analysis focuses on relative values, based on such factors as interest
or dividend coverage, asset coverage, earnings prospects, and the experience and
managerial strength of the issuer companies.

Because High Yield Series invests primarily in securities in the lower rating
categories, investors should carefully consider their ability to assume the
risks involved before making an investment in the High Yield Series.

For a discussion of payment-in-kind debentures ("PIKs"), in which High Yield
Series may invest, see "Investment Policies, Restrictions, and Risks Applicable
to More Than One Series."

8
<PAGE>

The table below shows the weighted average percentages of the High Yield Series'
long-term bond investments during the fiscal year ended December 31, 1994,
represented by (1) bonds rated by a nationally recognized statistical rating
organization, separated into each rating category, and (2) all unrated bonds as
a group.

<TABLE>
<CAPTION>
STANDARD & POOR'S RATING PERCENT OF TOTAL
(OR EQUIVALENT) INVESTMENTS
- -------------------------------------------------- ------------------
<S> <C>
AAA............................................... 0%
AA................................................ 0%
A................................................. 0%
BBB............................................... 0%
BB................................................ 5.3%
B................................................. 71.2%
CCC............................................... 14.8%
CC................................................ 0%
C................................................. 0%
D................................................. 1.1%
All unrated bonds as a group...................... 7.6%
-----
100.0%
-----
-----
</TABLE>

RISKS OF TRANSACTIONS IN HIGH-YIELDING SECURITIES. Participation in high-
yielding securities transactions generally involves greater returns in the form
of higher average yields. However, participation in such transactions involves
greater risks, often related to sensitivity to interest rates, economic changes,
solvency, and relative liquidity in the secondary trading market.

The high yielding securities market is still relatively new and its recent
growth paralleled a long period of economic expansion and an increase in merger,
acquisition, and leveraged buyout activity. High yielding securities are
especially subject to adverse changes in general economic conditions, to changes
in the financial condition of their issuers, and to price fluctuation in
response to changes in interest rates. During periods of economic downturn or
rising interest rates, issuers of high yielding securities may experience
financial stress that could adversely affect their ability to make payments of
principal and interest and increase the possibility of default.

Yields on high yield securities will fluctuate over time. The prices of high-
yielding securities have been found to be less sensitive to interest rate
changes than higher-rated investments, but more sensitive to adverse economic
changes or individual corporate developments. Also, during an economic downturn
or substantial period of rising interest rates highly leveraged issuers may
experience financial stress which would adversely affect their ability to
service their principal and interest payment obligations, to meet projected
business goals, and to obtain additional financing. If the issuer of a security
held by High Yield Series defaulted, High Yield Series may incur additional
expenses to seek recovery. In addition, periods of economic uncertainty and
changes can be expected to result in increased volatility of market prices of
high-yielding securities and the High Yield Series' asset value. Furthermore, in
the case of high-yielding securities structured as zero coupon or PIKs, their
market prices are affected to a greater extent by interest rate changes and
thereby tend to be more volatile than securities which pay interest periodically
and in cash.

High-yielding securities present risks based on payment expectations. For
example, high-yielding securities may contain redemption or call provisions. If
an issuer exercises these provisions in a declining interest rate market, the
High Yield Series would have to replace the security with a lower-yielding
security, resulting in a decreased return for investors. Conversely, a
high-yielding security's value will decrease in a rising interest rate market,
as will the value of such Series' assets. If High Yield Series experiences
unexpected net redemptions, this may force it to sell its high-yielding
securities, without regard to their investment merits, thereby decreasing the
asset base upon which such Series' expenses can be spread and possibly reducing
the rate of return.

To the extent that there is no established secondary market, there may be thin
trading of high-yielding securities. This may adversely affect the ability of
Fortis Series' Board of Directors to accurately value high-yielding securities
and the High Yield Series' assets and the Series' ability to dispose of the
securities. Securities valuation becomes more difficult and judgment plays a
greater role in valuation because there is less reliable, objective data
available. Adverse publicity and investor perceptions, whether or not based on
fundamental analysis, may decrease the values and liquidity of high-yielding
securities, especially in a thinly traded market. Illiquid or restricted
high-yielding securities purchased by High Yield Series may involve special
registration responsibilities, liabilities and costs, and liquidity and
valuation difficulties.

Certain risks are associated with applying credit ratings as a method for
evaluating high-yielding securities. For example, credit ratings evaluate the
safety of principal and interest payments, not market value risk of high-
yielding securities. Since credit rating agencies may fail to timely change the
credit ratings to reflect subsequent events, Advisers continuously monitors the
issuers of high-yielding securities held by High Yield Series to determine if
the issuers will have sufficient cash flow and profits to meet required
principal and interest payments, and to assure the securities' liquidity so High
Yield Series can meet redemption requests. The achievement of the investment
objective of High Yield Series may be more dependent upon Advisers' own credit
analysis than is the case for higher quality bonds. Also, High Yield Series may
retain a portfolio security whose rating has been changed if the security
otherwise meets the Series' investment objectives and investment criteria.

ASSET ALLOCATION SERIES

The objective of the Asset Allocation Series is maximum total return on invested
capital, to be derived primarily from capital appreciation, dividends, and
interest, by following a flexible asset allocation strategy that contemplates
increased ownership of equity securities during periods when stock market
conditions appear favorable, and increased ownership of short and long-term debt
instruments during periods when stock market conditions are less favorable. To
achieve this goal, the composition of the Asset Allocation Series will vary with
prevailing economic conditions and may consist of any of the types of
investments in which the Money Market Series, U.S. Government Securities Series,
Diversified Income Series, and Growth Stock Series are permitted to invest.

Depending upon prevailing economic and market conditions, the Asset Allocation
Series may at any given time be primarily comprised of equity securities
(including debt securities convertible into equity securities), short-term money
market securities, investment grade bonds and other debt securities, or of any
combination thereof.

As noted above, the Asset Allocation Series may invest in investment grade bonds
or other debt securities. Debt securities in which the Asset Allocation Series
may invest include the investment grade and lower-rated bonds (sometimes
referred to as "junk bonds") in which the Diversified Income Series and High
Yield Series may invest. For risks connected with such investments, see "High
Yield Series--Risks of Transactions in High-Yielding Securities."

Asset Allocation Series may invest up to 20% of its total assets (at the time of
investment) in foreign securities (provided that no more than 15% of its total
assets may be invested in foreign securities that are not traded on national
foreign securities exchanges or traded in the United States). Investing in
foreign securities may result in greater risk than that incurred in investing in
domestic securities. For a discussion of certain considerations of investing in
foreign securities, see "Investment Policies, Restrictions, and Risks Applicable
to More Than One Series--Investment in Foreign Securities."

Unlike shareholders of the other Series, a shareholder of the Asset Allocation
Series confers substantially more investment discretion on Advisers, enabling
Advisers to invest in a wider variety of investment securities.

The table below shows the weighted average percentages of the Asset Allocation
Series' long-term bond investments during the fiscal year ended December 31,
1994, represented by (1) bonds rated by a nationally recognized statistical
rating organization, separated into each rating category, and (2) all unrated
bonds as a group.

9
<PAGE>

<TABLE>
<CAPTION>
STANDARD & POOR'S RATING PERCENT OF TOTAL
(OR EQUIVALENT) INVESTMENTS
- -------------------------------------------------- ------------------
<S> <C>
AAA............................................... 65.4%
AA................................................ 5.3%
A................................................. 4.4%
BBB............................................... 3.9%
BB................................................ 4.2%
B................................................. 14.8%
CCC............................................... 1.6%
CC................................................ 0%
C................................................. 0%
D................................................. 0%
All unrated bonds as a group...................... .4%
-----
100.0%
-----
-----
</TABLE>

For an explanation of investment quality ratings assigned by Moody's and S&P,
see the Appendix.

GLOBAL ASSET ALLOCATION SERIES

The objective of the Global Asset Allocation Series is maximum total return on
invested capital, to be derived primarily from capital appreciation, dividends
and interest, by following a flexible asset allocation strategy that
contemplates increased ownership of equity securities during periods when stock
market conditions appear favorable, and increased ownership of short and
long-term fixed-income securities during periods when stock market conditions
are less favorable. To achieve this goal, the composition of the Global Asset
Allocation Series will vary with prevailing economic conditions. The Series'
neutral allocation is approximately 60% in equity securities (including debt
securities convertible into equity securities) and approximately 40% in
fixed-income securities (including money market securities). Under normal
conditions, either allocation may increase to 75% or decrease to 25%, although
the Series is permitted to be invested 100% in either equity or fixed-income
securities.

EQUITY INVESTMENTS. The Series' sub-adviser, Morgan Stanley Asset Management
Limited ("Morgan Stanley")'s approach in selecting investments for the Global
Asset Allocation Series is oriented to individual stock selection, and is value
driven. In selecting stocks for the Series, Morgan Stanley initially identifies
those stocks that it believes to be undervalued in relation to the issuer's
assets, cash flow, earnings and revenues, and then evaluates the future value of
such stocks by applying a dividend discount model to the information obtained
from its in-depth study of the issuer. Morgan Stanley utilizes the research of a
number of sources, including its affiliate in Geneva, Switzerland, Morgan
Stanley Capital International, and applies a number of proprietary screening
criteria to identify those securities that it believes to be undervalued. The
holdings are regularly reviewed and subjected to fundamental analysis to
determine whether they continue to conform to Morgan Stanley's value criteria.
Securities that no longer conform to such value criteria are sold.

Morgan Stanley intends to invest in the common stocks of issuers located
throughout the world, including issuers based in the United States as well as
emerging markets. Common stocks for this purpose include securities convertible
into common stocks and securities having common stock characteristics, such as
rights and warrants to purchase common stocks. The Series may also invest in
American Depositary Receipts, European Depositary Receipts or other types of
depositary receipts. See "Investment Policies, Restrictions, and Risks
Applicable to More Than One Series-- Depositary Receipts." Securities in
emerging markets may not be as liquid as those in developed markets and may pose
greater risks. For a description of the risks associated with investing in
foreign securities see "Investment Policies, Restrictions, and Risks Applicable
to More Than One Series-- Investment in Foreign Securities." Although Morgan
Stanley intends to invest primarily in securities listed on stock exchanges, it
will also invest in securities traded in over-the-counter markets.

FIXED-INCOME INVESTMENTS. Fixed-income investments include United States
government securities, foreign government securities, securities of
supranational entities, Eurobonds and corporate bonds with varying maturities
denominated in various currencies and money market instruments. See "Investment
Policies, Restrictions, and Risks Applicable to More Than One Series--Short Term
Money Market Instruments." In evaluating fixed-income securities, Morgan Stanley
evaluates the currency, market and individual features of the securities being
considered for investment. The Series seeks to minimize investment risk by
investing in fixed-income securities rated A or better by S&P or Moody's or
comparably rated by another nationally recognized rating agency, or, if unrated,
are determined to be of comparable quality by Morgan Stanley.

Investment in foreign government securities will be limited to those of
developed nations that Morgan Stanley believes pose limited credit risk. These
countries currently include Australia, Austria, Belgium, Canada, Denmark,
Finland, France, Germany, Ireland, Italy, Japan, Luxembourg, the Netherlands,
New Zealand, Norway, Spain, Sweden, Switzerland and the United Kingdom.

GROWTH & INCOME SERIES

The investment objectives of Growth & Income Series are capital appreciation and
current income, which it seeks by investing primarily in equity securities that
provide an income component and the potential for growth. Growth & Income Series
will pursue its investment objectives by investing in a broadly diversified
portfolio of securities, with an emphasis on securities of companies that have a
history of dividend payments. Companies will be selected on the basis of their
prospects for long-term growth and continued dividend payments.

In seeking to attain its investment objective, Growth & Income Series will
invest primarily in common stocks or securities convertible into common stocks.
Occasionally, however, limited amounts may be invested in other types of
securities (such as nonconvertible preferred and debt securities). In periods
when a more defensive position is deemed warranted, Growth & Income Series may
invest in high grade preferred stocks, bonds, and other fixed income securities
(whether or not convertible into or carrying rights to purchase common stock) or
retain cash, all without limitation. Growth & Income Series may invest in
repurchase agreements and in both listed and unlisted securities.

Growth & Income Series may also invest up to 10% of its total assets (at the
time of investment) in foreign securities. Investing in foreign securities may
result in greater risk than that incurred in investing in domestic securities.
For a discussion of certain considerations of investing in foreign securities
see "Investment Policies, Restrictions, and Risks Applicable to More Than One
Series--Investment in Foreign Securities."

Growth & Income Series may invest in equity or debt real estate investment
trusts ("REITs"), real estate development and real estate operating companies,
and other real estate related businesses. Growth & Income Series intends to
invest the REIT portion of its portfolio primarily in equity REITs, which are
trusts that sell shares to investors and use the proceeds to invest in real
estate or interest in real estate. A REIT may focus on particular projects, such
as apartment complexes or shopping centers, or geographic regions, such as the
Southeastern United States, or both. Debt REITs invest in obligations secured by
mortgages on real property or interests in real property. Growth & Income
Series' investments in REITs may be subject to certain of the same risks
associated with the direct ownership of real estate. These risks include:
declines in the value of real estate; risks related to general and local
economic conditions, overbuilding and competition; increases in property taxes
and operating expenses; and variations in rental income. In addition, REITs may
not be diversified. REITs are subject to the possibility of failing to qualify
for tax-free pass-through of income under the Internal Revenue Code and failing
to maintain exemption from the 1940 Act. Also, equity REITs may be dependent
upon management skill and may be subject to the risks of obtaining adequate
financing for projects on favorable terms.

GROWTH STOCK SERIES

The primary investment objective of Growth Stock Series is short and long-term
capital appreciation. Current income through the receipt of interest

10
<PAGE>
or dividends from investments will merely be incidental to the efforts of Growth
Stock Series in pursuing its primary objective. Growth Stock Series will
generally invest in companies representing a diversified cross section of
American industry. The Growth Stock Series will invest in both large and small
companies and both new and established companies.
In seeking to attain its investment objective, Growth Stock Series will invest
primarily in common stocks or securities convertible into common stocks.
Occasionally, however, limited amounts may be invested in other types of
securities (such as nonconvertible preferred and debt securities). In periods
when a more defensive position is deemed warranted, Growth Stock Series may
invest in high grade preferred stocks, bonds and other fixed income securities
(whether or not convertible into or carrying rights to purchase common stock) or
retain cash, all without limitation. Growth Stock Series may invest in
repurchase agreements and in both listed and unlisted securities.

Growth Stock Series may also invest up to 10% of its total assets (at the time
of investment) in foreign securities. Investing in foreign securities may result
in greater risk than that incurred in investing in domestic securities. For a
discussion of certain considerations of investing in foreign securities see
"Investment Policies, Restrictions, and Risks Applicable to More Than One
Series--Investment in Foreign Securities."

GLOBAL GROWTH SERIES

The primary investment objective of the Global Growth Series is long-term
capital appreciation. Current income through the receipt of income such as
interest or dividends from investments is a secondary objective. The Global
Growth Series seeks its objectives primarily by investing in a global portfolio
of equity securities, allocated among diverse international markets. The Global
Growth Series is designed for investors who wish to accept the risks entailed in
such investments, which are different from those associated with a portfolio
consisting entirely of U.S. securities. See "Investment Policies, Restrictions,
and Risks Applicable to More Than One Series-- Investment in Foreign
Securities."

Although the Global Growth Series is not required to maintain any particular
proportion of stocks, bonds, or other securities in its portfolio, the Global
Growth Series, in view of its investment objectives, currently expects to invest
its assets primarily in common stocks of U.S. and non-U.S. issuers. The Global
Growth Series invests at least 65% of its equity securities in established
growth companies which have achieved a record of operating earnings over the
past five-year period. Such companies would usually be located in the United
States, Canada, the United Kingdom, Japan, Australia, and other Western European
nations. These companies will also have paid or have the ability to pay a
dividend. Established growth companies typically have less sensitivity to
general economic trends, tend to generate above average returns on invested
capital, and have stronger leadership positions in their respective industries.
When selecting securities of non-U.S. issuers, Advisers considers additional
factors related to the country of the non-U.S. issuer, including foreign
currency exchange, the political stability of the country of such non-U.S.
issuer, foreign regulations, and settlement practices. See "Investment Policies,
Restrictions, and Risks Applicable to More Than One Series--Investment in
Foreign Securities."

In addition, the Global Growth Series may invest up to 35% of its equity
securities in U.S. and non-U.S. emerging growth companies and in global emerging
markets. For a discussion of emerging growth companies, see "Aggressive Growth
Series." The Global Growth Series has no minimum size requirements for the
emerging growth companies in which it will invest. As used in this Prospectus,
global emerging markets are countries categorized as emerging markets by the
International Finance Corporation, the World Bank's private sector division.
Such countries may include but are not limited to Singapore, Indonesia, China,
India and certain Latin American countries such as Mexico, Argentina, Chile and
Brazil. Such markets tend to be in the less economically developed regions of
the world. General characteristics of emerging market countries also include
lower degrees of political stability, a high demand for capital investment, a
high dependence on export markets for their major industries, a need to develop
basic economic infrasctructure, and rapid economic growth. Advisers believes
that investments in equity securities in emerging growth companies and in global
emerging markets offer the opportunity for significant long-term investment
returns. The Global Growth Series may invest in any kind of equity security
including common stocks, preferred stocks, and warrants. The above investments
involve certain risks. See "Investment Policies, Restrictions, and Risks
Applicable to More Than One Series-- Investment in Foreign Securities."

For investment purposes, an issuer is typically considered as domiciled in a
particular country if it is incorporated under the laws of that country, at
least 50% of the value of its assets are located in that country, and it derives
at least 50% of its income from operations or sales in that country. For issuers
which do not meet this criteria, Advisers will consider where an issuer has its
principal activities and interests, taking into account such factors as the
location of the issuer's assets, personnel, sales, and earnings in determining
the country of an issuer.

The Global Growth Series may, however, invest substantially or primarily in
investment grade debt securities of U.S. and non-U.S. issuers when the total
return available from investments in such securities may equal or exceed the
total return available from investments in equity securities. The Global Growth
Series may invest up to substantially all of its assets in high quality debt
securities of U.S. and non-U.S. issuers when the Global Growth Series is
temporarily in a defensive position. "High quality" debt securities are
securities rated within one of the two highest ratings categories of Moody's
(Aaa and Aa) or of S&P (AAA and AA), or comparably rated by another nationally
recognized rating agency, or, if unrated, determined to be of comparable quality
by Advisers. To enable the Global Growth Series to respond to general economic
changes and market conditions around the world, the Global Growth Series is
authorized to invest up to 100% of its assets in either equity securities or in
debt securities.

The debt obligations in which the Global Growth Series may invest include a
variety of government bonds and corporate debt obligations. Government bonds the
Global Growth Series may purchase include debt obligations issued or guaranteed
by the United States or foreign governments (including foreign states,
provinces, or municipalities) or their agencies, authorities, or
instrumentalities and also may include debt obligations issued by supranational
entities, which entities are organized or supported by several national
governments, such as the World Bank and the Asian Development Bank. Other debt
obligations held by the Global Growth Series may include corporate bonds of U.S.
and non-U.S. issuers and debt obligations convertible into equity securities or
having attached warrants or rights to purchase equity securities.

The Global Growth Series expects that a large portion of its debt investments
will be "high quality" (as defined above) government or corporate bonds. The
Global Growth Series may retain a portfolio security whose rating has changed if
the security otherwise meets the Series' investment objectives and investment
criteria, provided that no more than 5% of the Global Growth Series' net assets
may be invested in a debt security rated lower than Baa or BBB. A description of
the Moody's and S&P ratings is included in the Appendix.

The Global Growth Series may hold cash (U.S. dollars, foreign currencies, or
multinational currency units) and/or invest any portion or all of its assets in
high quality money market instruments as temporary defensive strategies, pending
investment of proceeds from new sales of Global Growth Series shares or to meet
ordinary daily cash needs.

For temporary defensive reasons, such as during times of international political
or economic uncertainty, most or all of the Global Growth Series' investments
may be made in the United States and denominated in U.S. dollars.

The Global Growth Series' use of forward currency contracts and options and
futures strategies would involve certain investment risks and transaction costs.
These risks include: dependence on Advisers' ability to predict movements in the
prices of individual securities, fluctuations in the general securities markets
and movements in interest rates and currency markets; imperfect correlation
between movements in the price of currency, options, futures contracts, or
options thereon and movements in the price of the currency or security hedged or
used for cover; the fact that skills and

11
<PAGE>

techniques needed to trade options, futures contracts and options thereon or to
use forward currency contracts are different from those needed to select the
securities in which the Global Growth Series invests; lack of assurance that a
liquid secondary market will exist for any particular option, futures contract
or option thereon at any particular time; and the possible need to defer closing
out certain options, futures contracts and options thereon in order to continue
to qualify for the beneficial tax treatment afforded "regulated investment
companies" under the Internal Revenue Code. See "Taxation." For additional
information on the risks of such investments, see "Investment Policies,
Restrictions, and Risks Applicable to the Global Bond Series, Global Asset
Allocation Series, and International Stock Series."

INTERNATIONAL STOCK SERIES

The investment objective of the International Stock Series is to seek capital
appreciation by investing primarily in the equity securities of non-United
States companies (I.E., incorporated or organized outside the United States).
The International Stock Series expects to invest its assets principally in
common stocks of non-United States companies, although it may have substantial
investments in American Depositary Receipts (see "Investment Policies,
Restrictions, and Risks Applicable to More Than One Series--Depositary
Receipts") and in convertible bonds and other convertible securities. There is
no requirement, however, that the International Stock Series invest exclusively
in common stocks or other equity securities, and it may invest up to 20% of the
value of its total assets in fixed-income securities and short-term money market
instruments. See "Investment Policies, Restrictions, and Risks Applicable to
More Than One Series-- Short-Term Money Market Instruments." The International
Stock Series' fixed-income investments will be limited to those rated A or
better by Standard & Poor's Corporation ("S&P") or Moody's Investors Service,
Inc. ("Moody's") or comparably rated by another nationally recognized rating
agency, or, if unrated, determined by the Series' sub-adviser, Lazard Freres
Asset Management ("Lazard Freres"), to be of comparable quality. See the
Appendix attached hereto for a description of the ratings of fixed-income
securities.

It is the present intention of Lazard Freres to invest the International Stock
Series' assets in companies based in Continental Europe, the United Kingdom, the
Pacific Basin and in such other areas and countries as Lazard Freres may
determine from time to time. Under normal market conditions, the Series will
invest at least 65% of its total assets in equity securities. The percentage of
the International Stock Series' assets invested in particular geographic sectors
may shift from time to time in accordance with the judgment of Lazard Freres.
For a description of the risks associated with investing in foreign securities
see "Investment Policies, Restrictions, and Risks Applicable to More Than One
Series--Investment in Foreign Securities."

In selecting investments for the International Stock Series, Lazard Freres
attempts to ascertain inexpensive securities world-wide through traditional
measures of value, including low price to earnings ratio, high yield,
unrecognized assets, potential for management change and/or the potential to
improve profitability. In addition, Lazard Freres seeks to identify companies
that it believes are financially productive and undervalued in those markets.
Lazard Freres focuses on individual stock selection (a "bottom-up" approach)
rather than on forecasting stock market trends (a "top-down" approach).

Lazard Freres recognizes that some of the best opportunities are in securities
not generally followed by investment professionals. Thus, Lazard Freres relies
on its research capability and also maintains a dialogue with foreign brokers
and with the management of foreign companies in an effort to gather the type of
"local knowledge" that it believes is critical to successful investment abroad.
To this end, Lazard Freres communicates with Lazard Freres & Cie. in Paris,
Lazard Brothers & Co. Ltd. in London and Lazard Freres K.K. in Japan
(independent but affiliated entities) for information concerning current
business trends, as well as for a better understanding of the management of
local businesses. The information supplied by these affiliates of Lazard Freres
will be limited to statistical and factual information, advice regarding
economic factors and trends or advice as to occasional transactions in specific
securities.

When, in the judgment of Lazard Freres, business or financial conditions
warrant, the International Stock Series may assume a temporary defensive
position and invest without limit in the equity securities of U.S. companies or
short-term money market instruments or hold its assets in cash. See "Investment
Policies, Restrictions, and Risks Applicable to More Than One Series--Short-Term
Money Market Instruments." During those intervals when the International Stock
Series has assumed a temporary defensive position, the Series will not be
pursuing its investment objective.

AGGRESSIVE GROWTH SERIES

The investment objective of Aggressive Growth Series is maximum long-term
capital appreciation by investing primarily in equity securities of small and
medium sized companies that are early in their life cycles, but which have the
potential to become major enterprises ("emerging growth companies"), and of more
established companies that have the potential for above-average capital growth.
Dividend and interest income from securities, if any, is incidental to the
Aggressive Growth Series' investment objective.

Aggressive Growth Series' policy is to invest, under normal circumstances, at
least 65% of its total assets in: (a) common stocks of emerging growth companies
and (b) equity securities of some more established companies whose rates of
earnings growth are expected to accelerate because of special factors such as
new products, changes in consumer demand, basic changes in the economic
environment, or rejuvenated management. Emerging growth companies generally have
annual gross revenues ranging from $10 million to $1 billion, would be expected
to show earnings growth over time that is well above the growth rate of the
overall economy and the rate of inflation, and would have products, management,
and market opportunities which are usually necessary to become more widely
recognized as growth companies.

While Aggressive Growth Series will invest primarily in common stocks, it may,
to a limited extent, seek appreciation in other types of securities such as
convertible securities and warrants when relative values make such purchases
appear attractive either as individual issues or as types of securities in
certain economic environments. The Aggressive Growth Series may also write
covered call and secured put options and purchase call and put options on
securities and stock indexes in an effort to increase total return and for
hedging purposes, and may purchase and sell stock index futures contracts and
options thereon for hedging purposes. (See "Investment Policies, Restrictions,
and Risks Applicable to More Than One Series--Options, Futures, and Currency
Strategies.")

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

Aggressive Growth Series may also invest up to 10% of its total assets (at the
time of investment) in foreign securities. Investing in foreign securities may
result in greater risk than that incurred in investing in domestic securities.
For a discussion of certain considerations of investing in foreign securities,
see "Investment Policies, Restrictions, and Risks Applicable to More Than One
Series--Investment in Foreign Securities."

As set forth above, Aggressive Growth Series, under normal economic conditions,
will be principally invested in equity securities. However, when Advisers
considers a more defensive posture appropriate, the Aggressive

12
<PAGE>

Growth Series temporarily can be 100% invested in commercial paper, obligations
of banks or the United States Government, and other high quality, short-term
debt instruments.

INVESTMENT POLICIES, RESTRICTIONS, AND RISKS APPLICABLE TO THE GLOBAL BOND
SERIES, GLOBAL ASSET ALLOCATION SERIES, AND INTERNATIONAL STOCK SERIES

Except as otherwise noted below, the following description of additional
permitted investment activities, restrictions, and risks is applicable to all of
these three Series.

EMERGING MARKETS. Subject to the restrictions set forth above, each Series may
invest without limitation in emerging market countries. Many emerging market
countries have experienced substantial or, in some periods, extremely high rates
of inflation for many years. Inflation and rapid fluctuations in inflation rates
have had and may continue to have adverse effects on the economies and
securities markets of certain of these countries. In an attempt to control
inflation, wage and price controls have been imposed in certain countries. In
many cases, emerging market countries are among the world's largest debtors to
commercial banks, foreign governments, international financial organizations and
other financial institutions. In recent years, the governments of some of these
countries have encountered difficulties in servicing their external debt
obligations, which led to defaults on certain obligations and the restructuring
of certain indebtedness.

As used in this Prospectus, emerging markets are countries categorized as
emerging markets by the International Financial Corporation, the World Bank's
private sector division. Such countries may include but are not limited to
Singapore, Indonesia, China, India and certain Latin American countries such as
Mexico, Argentina, Chile and Brazil. Such markets tend to be in the less
economically developed regions of the world. General characteristics of emerging
market countries also include lower degrees of political stability, a high
demand for capital investment, a high dependence on export markets for their
major industries, a need to develop basic economic infrastructures, and rapid
economic growth.

FOREIGN CURRENCY FORWARD EXCHANGE CONTRACTS. Each Series may purchase or sell
foreign currency forward exchange contracts ("forward contracts") to attempt to
minimize the risk from adverse changes in the relationship between the various
currencies in which each Series invests. A forward contract is an obligation to
purchase or sell a specific currency for an agreed price at a future date, which
contract is individually negotiated and privately traded by currency traders and
their customers. Each Series may enter into a forward contract, for example,
when it enters into a contract for the purchase or sale of a security
denominated in a foreign currency in order to "lock in" the price of the
security ("transaction hedge") in a particular currency. Additionally, when a
Series believes that a foreign currency (for example, the British pound) may
suffer a decline against any other currency or currencies in the Series (for
example, the U.S. dollar), it may enter into a forward sale contract to sell an
amount of the foreign currency expected to decline (the British pound) that
approximates the value of some or all of the Series' investment securities
denominated in such foreign currency (the British pound) (a "position hedge").
Similarly, the Series may enter into a forward contract to sell a different
foreign currency for a fixed amount in another currency where the Series
believes that the value of the currency to be sold pursuant to the forward
contract will fall whenever there is a decline in the value of the currency in
which certain portfolio securities of the Series are denominated (a "cross-
hedge").

Under certain conditions, Securities and Exchange Commission (the "Commission")
guidelines require investment companies to set aside cash, U.S. Government
securities or other liquid high quality debt securities in a segregated
custodial account to cover forward contracts. As required by Commission
guidelines, each Series will segregate assets to cover forward contracts, if
any, whose purpose is essentially speculative. The Series will not segregate
assets to cover forward contracts entered into for hedging purposes.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. Each Series may enter into
contracts for the purchase or sale for future delivery of fixed-income
securities or contracts based on financial indices including any index of U.S.
government securities or corporate debt securities ("futures contracts") and may
purchase and write "covered" put and call options to buy or sell futures
contracts ("options on futures contracts"). Each Series may also enter into
contracts for the purchase or sale for future delivery of foreign currencies. A
"sale" of a futures contract means the acquisition of a contractual obligation
to deliver the securities or foreign currencies called for by the contract at a
specified price on a specified date. A "purchase" of a futures contract means
the acquisition of a contractual obligation to deliver the securities or foreign
currencies called for by the contract at a specified price on a specified date.
The purchaser of a futures contract on an index agrees to take or make delivery
of an amount of cash equal to the difference between a specified dollar multiple
of the value of the index on the expiration date of the contract ("current
contract value") and the price at which the contract was originally struck. No
physical delivery of the fixed-income securities underlying the index is made.
At the time a futures contract is purchased or sold, a Series must allocate cash
or securities as a deposit payment based on a percentage of a contract's face
value. The futures contract is valued daily thereafter and the Series may be
required to contribute additional cash or securities that reflects any decline
in the contract's value. These investment techniques will be used for a variety
of purposes, including hedging against anticipated future changes in interest
rates that otherwise might either adversely affect the value of the portfolio
securities of a Series or adversely affect the prices of securities or foreign
currencies that a Series intends to purchase at a later date.

Although each of the Series may enter into transactions in futures contracts,
options on futures contracts, currency contracts and certain options for hedging
purposes, their use does involve certain risks. For example, a lack of
correlation between the index or instrument underlying an option or futures
contract and the assets being hedged, or unexpected adverse price movements,
could render such Series' hedging strategy unsuccessful and could result in
losses. Each Series also may enter into transactions in options on securities
and indexes of securities for other than hedging purposes, which involves
greater risk. In addition, there can be no assurance that a liquid secondary
market will exist for any contract purchased or sold, and such Series may be
required to maintain a position until exercise or expiration, which could result
in losses.

OPTIONS ON FOREIGN CURRENCIES. Each Series may purchase and write put and call
options on foreign currencies for the purpose of protecting against declines in
the value of foreign currency denominated portfolio securities and against
increases in the cost of such securities to be acquired. As in the case of other
kinds of options, however, the writing of an option on a foreign currency
constitutes only a partial hedge, up to the amount of the premium received, and
a Series could be required to purchase or sell foreign currencies at
disadvantageous exchange rates, thereby incurring losses. The purchase of an
option on a foreign currency may constitute an effective hedge against
fluctuations in exchange rates although, in the event of rate movements adverse
to a Series' position, it may forfeit the entire amount of the premium plus
related transaction costs. Options on foreign currencies to be written or
purchased by a Series are traded on U.S. and foreign exchanges or
over-the-counter.

Although there is no specific percentage limitation on a Series' investments in
options on foreign currencies, a Series will not enter into any options, futures
or forward contract transactions if immediately thereafter the amount of
premiums paid for all options, initial margin deposits on all futures contracts
and/or options on futures contracts, and collateral deposited with respect to
forward contracts held by or entered into by such Series would exceed 5% of the
value of the total assets of such Series. This restriction does not apply to
securities purchased on a when-issued, delayed delivery or forward commitment
basis as described under "Investment Policies, Restrictions, and Risks
Applicable to More Than One Series--Delayed Delivery Transactions."

FLOATING AND VARIABLE RATE INSTRUMENTS. Certain of the obligations that the
Series may purchase have a floating or variable rate of interest. Such

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obligations bear interest at rates that are not fixed, but vary with changes in
specified market rates or indices, such as the prime rate, and at specified
intervals. Certain of these obligations may carry a demand feature that would
permit the holder to tender them back to the issuer at par value prior to
maturity. Each Series limits its purchases of floating and variable rate
obligations to those of the same quality as it otherwise is allowed to purchase.
The sub-adviser monitors on an ongoing basis the ability of an issuer of a
demand instrument to pay principal and interest on demand. A Series' right to
obtain payment at par on a demand instrument can be affected by events occurring
between the date such Series elects to demand payment and the date payment is
due that may affect the ability of the issuer of the instrument to make payment
when due, except when such demand instruments permit same-day settlement. To
facilitate settlement, these same-day demand instruments may be held in book
entry form at a bank other than the Series' custodian, subject to a subcustodian
agreement approved by the Series between the bank and the Series' custodian.

The floating and variable rate obligations that the Series may purchase include
certificates of participation in obligations purchased from banks. A certificate
of participation gives the Series an undivided interest in the underlying
obligations in the proportion that such Series' interest bears to the total
principal amount of such obligations. Certain of such certificates of
participation may carry a demand feature that would permit the holder to tender
them back to the issuer prior to maturity.

To the extent that floating and variable rate instruments without demand
features are not readily marketable, they will be subject to the investment
restriction that no Series may invest an amount equal to 15% or more of the
current value of its net assets in illiquid securities. See "Illiquid
Securities" below.

LETTERS OF CREDIT. Commercial paper and other short-term obligations may be
backed by irrevocable letters of credit issued by banks that assume the
obligation for payment of principal and interest in the event of default by an
issuer. Only banks the securities of which, in the opinion of a Series' sub-
adviser, are of investment quality comparable to other permitted investments of
such Series may be used for letter of credit-backed investments.

INVESTMENT POLICIES, RESTRICTIONS, AND RISKS APPLICABLE TO MORE THAN ONE SERIES

Each of the Global Bond Series, Global Asset Allocation Series, Global Growth
Series and International Stock Series invests its net assets in issues of not
less than five different countries (four if less than 80% invested in foreign
securities; three if less than 60%; two if less than 40%; and one if less than
20%). Issues of any one country other than the United States will represent no
more than 20% of net assets, provided that an additional 15% of net assets may
be invested in issuers located in any one of the following countries: Australia,
Canada, France, Japan, the United Kingdom, or Germany.

REPURCHASE AGREEMENTS. Each of the Series may invest in repurchase agreements.

RESTRICTED OR ILLIQUID SECURITIES. A policy of Money Market Series, U.S.
Government Securities Series, Diversified Income Series, Asset Allocation
Series, and Growth Stock Series which may not be changed without the approval of
the shareholders, is that each such Series may invest up to 5% of the value of
its total assets (at the time of investment) in securities which it might not be
free to sell to the public without registration of such securities under the
Securities Act of 1933 (excluding Rule 144A securities). However, this policy is
further restricted by a policy--which could be changed without shareholder
approval--which prohibits more than an aggregate of 10% of each such Series'
assets from being invested in: (a) restricted securities (both debt and equity)
or in equity securities of any issuer which are not readily marketable; and (b)
companies which have been in business for less than three years.

Global Growth Series may invest up to 10% of the value of its total assets (at
the time of investment) in securities which are not registered under the
applicable securities laws of the country in which such securities are traded
and for which no alternative market is readily available (excluding Rule 144A
securities). This policy is restricted by a further policy which could be
changed without shareholder approval--that prohibits more than an aggregate of
10% of Global Growth Series' assets from being invested in (a) restricted
securities (both debt and equity) or in equity securities of any issuer which
are not readily marketable, (b) repurchase agreements with a maturity of more
than seven days, and (c) over-the-counter option and futures contracts.

A policy of each of the Global Bond Series, High Yield Series, Global Asset
Allocation Series, Growth & Income Series, International Stock Series, and
Aggressive Growth Series is that each Series may invest up to 15% of its net
assets (at the time of investment) in all forms of illiquid investments, as
determined pursuant to applicable Securities and Exchange Commission rules and
regulations.

BORROWINGS. Each Series may borrow money from banks as a temporary measure to
facilitate redemptions.

As a policy which may not be changed without shareholder approval, however,
borrowings by Money Market Series, U.S. Government Securities Series,
Diversified Income Series, Asset Allocation Series, and Growth Stock Series may
not exceed 10% of the value of the total assets of each such Series.

Borrowings by Global Bond Series, High Yield Series, Global Asset Allocation
Series, Growth & Income Series, Global Growth Series, International Stock
Series, and Aggressive Growth Series through banks and "roll" transactions will
not exceed 33 1/3% of the total assets of each such Series; however, an
investment policy changeable without shareholder approval further restricts each
such Series' borrowings to 10% of its total assets. No additional investment
securities may be purchased by a Series whose outstanding borrowings, (including
"roll" transactions in the case of the Series in this paragraph) exceed 5% of
the value of such Series' total assets. If market fluctuations in the value of
the portfolio holdings of the Series in this paragraph or other factors cause
the ratio of such Series' total assets to outstanding borrowings to fall below
300%, within three days (excluding Sundays and holidays) of such event such
Series may be required to sell portfolio securities to restore the 300% asset
coverage, even though from an investment standpoint such sales might be
disadvantageous. Interest paid on borrowings will not be available for
investment.

ZERO COUPON OBLIGATIONS. The U.S. Government Securities Series, Diversified
Income Series, Global Bond Series, High Yield Series, Asset Allocation Series,
Global Asset Allocation Series, Global Growth Series, and International Stock
Series may invest in zero coupon obligations of the government and corporate
issuers, including rights to "stripped" coupon and principal payments. Certain
obligations are "stripped" of their coupons, and the rights to receive each
coupon payment and the principal payment are sold as separate securities. Once
separated, each coupon as well as the principal amount represents a different
single-payment claim due from the issuer of the security. Each single-payment
claim (coupon or principal) is equivalent to a zero coupon bond. A zero coupon
security pays no interest to its holder during its life, and its value consists
of the difference between its face value at maturity (the coupon or principal
amount), if held to maturity, or its market price on the date of sale, if sold
prior to maturity, and its acquisition price (the discounted "present value" of
the payment to be received).

Certain zero coupon obligations represent direct obligations of the issuer of
the "stripped" coupon and principal payments. Other zero coupon obligations are
securities issued by financial institutions which constitute a proportionate
ownership of an underlying pool of stripped coupon or principal payments. These
Series may invest in either type of zero coupon obligation. The investment
policies and restrictions applicable to corporate and government securities in
the Series shall apply equally to the Series' investments in zero coupon
securities (including, for example, minimum corporate bond ratings).

VARIABLE AMOUNT MASTER DEMAND NOTES. Each Series may invest in variable amount
master demand notes. These instruments are short-term, unsecured promissory
notes issued by corporations to finance short-term

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credit needs. They allow the investment of fluctuating amounts by the Series at
varying market rates of interest pursuant to arrangements between the Series, as
lender, and the borrower. Variable amount master demand notes permit a series of
short-term borrowings under a single note. Both the lender and the borrower have
the right to reduce the amount of outstanding indebtedness at any time. Such
notes provide that the interest rate on the amount outstanding varies on a daily
basis depending upon a stated short-term interest rate barometer. Advisers will
monitor the creditworthiness of the borrower throughout the term of the variable
master demand note. It is not generally contemplated that such instruments will
be traded and there is no secondary market for the notes. Typically, agreements
relating to such notes provide that the lender shall not sell or otherwise
transfer the note without the borrower's consent. Thus, variable amount master
demand notes may under certain circumstances be deemed illiquid assets. However,
such notes will not be considered illiquid where the Series has a "same day
withdrawal option," i.e., where it has the unconditional right to demand and
receive payment in full of the principal amount of the amount then outstanding
together with interest to the date of payment.
MUNICIPAL SECURITIES. U.S. Government Securities Series, Diversified Income
Series, and Asset Allocation Series each may invest not more than 20% of their
total assets in municipal securities during periods when such securities appear
to offer more attractive returns than taxable securities.

PAYMENT-IN-KIND DEBENTURES. U.S. Government Securities Series, Diversified
Income Series, Global Bond Series, High Yield Series, Asset Allocation Series,
Global Asset Allocation Series, and International Stock Series may invest in
debentures the interest on which may be paid in other securities rather than
cash ("PIKs"). Typically, during a specified term prior to the debenture's
maturity, the issuer of a PIK may provide for the option or the obligation to
make interest payments in debentures, common stock, or other instruments (i.e.,
"in kind" rather than in cash). The type of instrument in which interest may or
will be paid would be known by Fortis Series at the time of the investment. The
investment restrictions regarding corporate bond quality are applicable to
investments in PIKs by such Series as well as to the securities which may
constitute interest payments on PIKs. While PIKs generate income for generally
accepted accounting standards purposes, they do not generate cash flow and thus
could cause such Series to be forced to liquidate securities at an inopportune
time in order to distribute cash, as required by the Internal Revenue Code.

MORTGAGE-RELATED SECURITIES._Each Series may invest in mortgage-related
securities. Mortgage-related securities are securities that, directly or
indirectly, represent a participation in (or are secured by and payable from)
mortgage loans on real property. Mortgage-related securities may represent the
right to receive both principal and interest payments on underlying mortgages or
may represent the right to receive varying proportions of such payments. One
type of mortgage-related security includes certificates which represent pools of
mortgage loans assembled for sale to investors by various governmental and
private organizations. Another type of mortgage-related security includes debt
securities which are secured, directly or indirectly, by mortgages on commercial
or residential real estate.

Investments in mortgage-related securities involve certain risks. In periods of
declining interest rates, prices of fixed income securities tend to rise.
However, during such periods, the rate of prepayment of mortgages underlying
mortgage-related securities tends to increase, with the result that such
prepayments must be reinvested at lower rates. In addition, the value of such
securities may fluctuate in response to the market's perception of the
creditworthiness of the issuers of mortgage-related securities owned by the
Series. The ability of the issuer of mortgage-related securities to reinvest
favorably in underlying mortgages may be limited by prevailing economic
conditions or by government regulation. Additionally, although mortgages and
mortgage-related securities are generally supported by some form of government
or private guarantee and/or insurance, there is no assurance that private
guarantors or insurers will be able to meet their obligations.

CMOS AND MULTI-CLASS PASS-THROUGH SECURITIES. The U.S. Government Securities
Series, Diversified Income Series, Global Bond Series, High Yield Series, Asset
Allocation Series, Global Asset Allocation Series, and International Stock
Series may invest in CMOs. CMOs are debt instruments issued by special purpose
entities which are secured by pools of mortgage loans or other mortgage-backed
Securities. Multi-class pass-through securities are interests in a trust
composed of mortgage loans or other mortgage-backed securities. Payments of
principal and interest on underlying collateral provide the funds to pay debt
service on the CMO or make scheduled distributions on the multi-class
pass-through security. Multi-class pass-through securities, CMOs, and classes
thereof (including those discussed below) are examples of the types of financial
instruments commonly referred to as "derivatives."

In a CMO, a series of bonds or certificates is issued in multiple classes. Each
class of CMOs, often referred to as a "tranche," is issued at a specified coupon
rate and has a stated maturity or final distribution date. Principal prepayments
on collateral underlying a CMO may cause it to be retired substantially earlier
than the stated maturities or final distribution dates. Interest is paid or
accrues on all classes of a CMO on a monthly, quarterly or semiannual basis. The
principal and interest on the underlying mortgages may be allocated among the
several classes of a series of a CMO in many ways. In a common structure,
payments of principal, including any principal prepayments, on the underlying
mortgages are applied according to scheduled cash flow priorities to classes of
the series of a CMO.

There are many classes of CMOs. There are IOs, which entitle the holder to
receive distributions consisting solely or primarily of all or a portion of the
interest in an underlying pool of mortgage loans or mortgage-backed securities),
("Mortgage Assets"). There are also "POs", which entitle the holder to receive
distributions consisting solely or primarily of all or a portion of the
principal of the underlying pool of Mortgage Assets. In addition, there are
"inverse floaters", which have a coupon rate that moves in the reverse direction
to an applicable index, and accrual (or "Z") bonds, which are described below.

As to IOs, POs, inverse floaters, and accrual bonds, not more than 5% of each of
the Global Growth Series, Global Asset Allocation Series, and International
Stock Series' net assets collectively will be invested in such obligations at
any time. Not more than 5% of the other Series' net assets will be invested in
any one of these items at any one time and no more than 10% of the net assets of
the Series will be invested in all such obligations at any one time.

Inverse floating CMOs are typically more volatile than fixed or adjustable rate
tranches of CMOs. Investments in inverse floating CMOs would be purchased by the
Series to attempt to protect against a reduction in the income earned on the
Series investments due to a decline in interest rates. The Series would be
adversely affected by the purchase of such CMOs in the event of an increase in
interest rates since the coupon rate thereon will decrease as interest rates
increase, and, like other mortgage-backed securities, the value will decrease as
interest rates increase.

The cash flows and yields on IO and PO classes are extremely sensitive to the
rate of principal payment (including prepayments) on the related underlying pool
of mortgage loans or mortgage-backed securities ("Mortgage Assets"). For
example, a rapid or slow rate of principal payments may have a material adverse
effect on the yield to maturity of IOs or POs, respectively. If the underlying
Mortgage Assets experience greater than anticipated prepayments of principal,
the holder of an IO may incur substantial losses, even if the IO class is rated
AAA. Conversely, if the underlying Mortgage Assets experience slower than
anticipated prepayments of principal, the yield and market value for the holder
of a PO will be affected more severely than would be the case with a traditional
Mortgage Backed Security.

However, if interest rates were expected to rise, the value of an IO might
increase and may partially offset other bond value declines, and if rates were
expected to fall, the inclusion of POs could balance lower reinvestment rates.

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An accrual of "Z" bond holder is not entitled to receive cash payments until one
or more other classes of the CMO have been paid in full from payments on the
mortgage loans underlying the CMO. During the period in which cash payments are
not being made on the Z tranche, interest accrues on the Z tranche at a stated
rate, and this accrued interest is added to the amount of principal which is due
to the holder of the Z tranche. After the other classes have been paid in full,
cash payments are made on the Z tranche until its principal (including
previously accrued interest which was added to principal, as described above)
and accrued interest at the stated rate have been paid in full. Generally, the
date upon which cash payments begin to be made on a Z tranche depends on the
rate at which the mortgage loans underlying the CMO are prepaid, with a faster
prepayment rate resulting in an earlier commencement of cash payments on the Z
tranche. Like a zero coupon bond, during its accrual period the Z tranche of a
CMO has the advantage of eliminating the risk of reinvesting interest payments
at lower rates during a period of declining market interest rates. At the same
time, however, and also like a zero coupon bond, the market value of a Z tranche
can be expected to fluctuate more widely with changes in market interest rates
than would the market value of a tranche which pays interest currently. Changes
in market interest rates also can be expected to influence prepayment rates on
the mortgage loans underlying the CMO of which a Z tranche is a part. As noted
above, such changes in prepayment rates will affect the date at which cash
payments begin to be made on a Z tranche, and therefore also will influence its
market value.

OPTIONS, FUTURES, AND CURRENCY STRATEGIES. To attempt to hedge against adverse
movements in exchange rates between currencies, the High Yield Series, Global
Growth Series, and Aggressive Growth Series may enter into forward currency
contracts for the purchase or sale of a specified currency at a specified future
date. Such contracts may involve the purchase or sale of a foreign currency
against the U.S. dollar, or may involve two foreign currencies. Although forward
contracts will be used primarily to protect such Series from adverse currency
movements, they also involve the risk that anticipated currency movements will
not be accurately predicted. These Series also may write covered call options
and purchase put and call options on currencies to hedge against movements in
exchange rates.

The High Yield Series, Global Growth Series, and Aggressive Growth Series may
write covered call options and purchase put and call options on equity and debt
securities to hedge against the risk of fluctuations in the prices of securities
held by such Series or which Advisers intends to include in such Series. The
Global Growth Series and Aggressive Growth Series each may use stock index
futures contracts and options thereon to hedge all or part of the equity portion
of its portfolio against negative stock market movements. Similarly, the High
Yield Series and Global Growth Series each may use interest rate futures
contracts and options thereon to hedge the debt portion of its portfolio against
changes in the general level of interest rates.

The High Yield Series, Global Growth Series, and Aggressive Growth Series may
write only "covered" call options. An option written on a security or currency
is "covered" when, so long as the Series is obligated under the option, it owns
the underlying security or currency. These Series each will "cover" options on
futures contracts it writes by maintaining in a segregated account either
marketable securities which, in Advisers' judgment, correlate to the underlying
futures contract or an amount of cash, U.S. government securities, or other
liquid, high quality debt securities equal in value to the amount such Series
would be required to pay were the option exercised.

The High Yield Series, Global Growth Series, and Aggressive Growth Series have
adopted two percentage restrictions on the use of options, futures, and forward
contracts. The first restriction is that each such Series will not enter into
any options, futures, or forward contract transactions if immediately thereafter
the amount of premiums paid for all options, initial margin deposits on all
futures contracts and/or options on futures contracts, and collateral deposited
with respect to forward contracts held by or entered into by the Series would
exceed 5% of the value of the total assets of the Series. The second restriction
is that the aggregate value of the Series' assets covering, subject to, or
committed to all options, futures, and forward contracts will not exceed 20% of
the value of the total assets of the Series. These two restrictions do not apply
to securities purchased on a when-issued, delayed delivery, or forward
commitment basis as described under "Delayed Delivery Transactions." However,
each such Series intends to limit its investment in futures during the coming
year so that the aggregate value of the Series assets subject to futures
contracts will not exceed 5% of the value of its net assets. In addition,
investments in options are further restricted by a nonfundamental investment
restriction that prohibits the Global Growth Series from investing more than an
aggregate of 10% of the value of its total assets in: (a) restricted securities
(both debt and equity) or in equity securities of any issuer which are not
readily marketable; (b) repurchase agreements with a maturity of more than seven
days; and (c) over-the-counter option and futures contracts.

SHORT-TERM TRADING. Money Market Series, U.S. Government Securities Series, and
Asset Allocation Series intend to use short-term trading of their securities as
a means of managing their portfolios to achieve their investment objectives. As
used herein, "short-term trading" means selling securities held for a relatively
brief period of time, usually less than three months. Short-term trading will be
used by the Series primarily in two situations:

(a) MARKET DEVELOPMENTS. A security may be sold to avoid depreciation in
what Advisers anticipates will be a market decline (a rise in interest
rates), or a security may be purchased in anticipation of a market rise (a
decline in interest rates) and later sold; and

(b) YIELD DISPARITIES. A security may be sold and another security of
comparable quality purchased at approximately the same time, in order to
take advantage of what Advisers believes is a temporary disparity in the
normal yield relationship between the two securities (a yield disparity).

Short-term trading techniques will be used principally in connection with higher
quality, nonconvertible debt securities, which are often better suited for
short-term trading because the market in such securities is generally of greater
depth and offers greater liquidity than the market in debt securities of lower
quality.

Each of Money Market Series, U.S. Government Securities Series, and Asset
Allocation Series will engage in short-term trading if it believes the
transactions, net of costs (including commission, if any), will result in
improving the appreciation potential or income of its investment portfolio.
Whether any improvement will be realized by short-term trading will depend upon
the ability of Advisers to evaluate particular securities and anticipate
relevant market factors, including interest rate trends and variations from such
trends. Short-term trading such as that contemplated by the Series places a
premium upon the ability of Advisers to obtain relevant information, to evaluate
it promptly, and to take advantage of its evaluations by completing transactions
on a favorable basis. To qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code, less than 30% of each Series' gross
income (on an annual basis) can be derived from the sale or other disposition of
securities held for less than three months. The Series will not engage in
short-term trading if it would result in violation of this provision.

DELAYED DELIVERY TRANSACTIONS. All Series except Money Market Series and Growth
Stock Series may purchase securities on a "when-issued" or delayed delivery
basis and purchase or sell securities on a "forward commitment" basis. When such
transactions are negotiated, the price is fixed at the time the commitment is
made, but delivery and payment for the securities take place at a later date.
Normally, the settlement date occurs within two months after the transaction,
but delayed settlements beyond two months may be negotiated. At the time the
Series enters into a transaction on a when-issued or forward commitment basis, a
segregated account consisting of cash, U.S. Government securities or liquid
high-grade debt securities equal to the value of the when-issued or forward
commitment securities will be established and maintained with the custodian and

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will be marked to the market daily. During the period between a commitment and
settlement, no payment is made for the securities and, thus, no interest accrues
to the purchaser from the transaction. If the Series disposes of the right to
acquire a when-issued security prior to its acquisition or disposes of its right
to deliver or receive against a forward commitment, it can incur a gain or loss
due to market fluctuation. The use of when-issued transactions and forward
commitments enables the Series to hedge against anticipated changes in interest
rates and prices. The Series may also enter into such transactions to generate
incremental income. In some instances, the third-party seller of when-issued or
forward commitment securities may determine prior to the settlement date that it
will be unable or unwilling to meet its existing transaction commitments without
borrowing securities. If advantageous from a yield perspective, the above Series
may, in that event, agree to resell its purchase commitment to the third-party
seller at the current market price on the date of sale and concurrently enter
into another purchase commitment for such securities at a later date. As an
inducement for the Series to "roll over" its purchase commitment, the Series may
receive a negotiated fee. The purchase of securities on a when-issued, delayed
delivery, or forward commitment basis exposes the Portfolio to risk because the
securities may decrease in value prior to their delivery. Purchasing securities
on a when-issued, delayed delivery, or forward commitment basis involves the
additional risk that the return available in the market when the delivery takes
place will be higher than that obtained in the transaction itself. These risks
could result in increased volatility of the Portfolio's net asset value to the
extent that the Portfolio purchases securities on a when-issued, delayed
delivery, or forward commitment basis while remaining substantially fully
invested. There is also a risk that the securities may not be delivered or that
a Portfolio may incur a loss or will have lost the opportunity to invest the
amount set aside for such transaction in the segregated asset account. As to
each Series, no more than 20% of its net assets may be invested in when-issued,
delayed delivery, or forward commitment transactions, and of such 20%, no more
than one-half (i.e., 10% of its net assets) may be invested in when-issued,
delayed delivery, or forward commitment transactions without the intention of
actually acquiring securities (i.e., dollar rolls).

SECURITIES LENDING. Global Bond Series, High Yield Series, Global Asset
Allocation Series, Growth & Income Series, Global Growth Series, International
Stock Series, and Aggressive Growth Series are authorized to make loans of their
portfolio securities to broker-dealers or to other institutional investors. The
borrower must maintain with such Series' custodian collateral consisting of
cash, U.S. government securities, or other liquid, high-grade debt securities
equal to at least 100% of the value of the borrowed securities, plus any accrued
interest. Such Series will receive any interest paid on the loaned securities
and a fee and/or a portion of the interest earned on the collateral. Such Series
will limit their loans of portfolio securities to an aggregate of 33 1/3%
(except for Global Growth Series, with a 30% limit) of the value of its total
assets, measured at the time any such loan is made.

The risks in lending portfolio securities, as with other extensions of secured
credit, consist of possible delay in receiving additional collateral or in the
recovery of the securities or possible loss of rights in the collateral should
the borrower fail financially. Loans will only be made to firms deemed by Fortis
Advisers, Inc. ("Advisers") to be of good standing and will not be made unless,
in the judgment of Advisers, the consideration to be earned from such loans
would justify the risk.

SHORT-TERM MONEY MARKET INSTRUMENTS. Each Series may at any time invest funds
awaiting investment or held as reserves for the purposes of satisfying
redemption requests, payment of dividends or making other distributions to
shareholders, in cash and short-term money market instruments. Short-term money
market instruments in which each Series may invest include (i) short-term U.S.
government securities and short-term obligations of foreign sovereign
governments and their agencies and instrumentalities, (ii) interest bearing
savings deposits on, and certificates of deposit and bankers' acceptances of,
United States and foreign banks, (iii) commercial paper of U.S. or foreign
issuers rated A-1 or higher by S&P or Prime-1 by Moody's or comparably rated by
another nationally recognized rating agency, or, if not rated, determined by a
Series sub-adviser to be of comparable quality and (iv) repurchase agreements
relating to the foregoing.

U.S. GOVERNMENT SECURITIES. Each Series may invest in U.S. government
securities, which include: (i) the following U.S. Treasury obligations: U.S.
Treasury bills (initial maturities of one year or less), U.S. Treasury notes
(initial maturities of one to 10 years), and U.S. Treasury bonds (generally
initial maturities of greater than 10 years), all of which are backed by the
full faith and credit of the United States; and (ii) obligations issued or
guaranteed by U.S. government agencies or instrumentalities, including
government guaranteed mortgage-related securities, some of which are backed by
the full faith and credit of the U.S. Treasury, e.g., direct pass-through
certificates of the Government National Mortgage Association; some of which are
supported by the right of the issuer to borrow from the U.S. government, e.g.,
obligations of Federal Home Loan Banks; and some of which are backed only by the
credit of the issuer itself, e.g., obligations of the Student Loan Marketing
Association. U.S. government securities are backed by the full faith and credit
of the U.S. government or guaranteed by the issuing agency or instrumentality
and, therefore, there is generally considered to be no risk as to the issuer's
capacity to pay interest and repay principal. Nevertheless, due to fluctuations
in interest rates, there is no guarantee as to the market value of U.S.
government securities. See "Investment Objectives and Policies" in the Statement
of Additional Information for a further description of obligations issued or
guaranteed by U.S. government agencies or instrumentalities.

INVESTMENT IN FOREIGN SECURITIES. Investing in securities issued by foreign
governments and corporations or entities involves considerations and possible
risks not typically associated with investing in obligations issued by the U.S.
government and domestic corporations. The values of foreign investments are
affected by changes in currency rates or exchange control regulations,
application of foreign tax laws, including withholding taxes, changes in tax
laws, governmental administration or economic or monetary policy (in the United
States or abroad) or changed circumstances in dealings between nations. Costs
are incurred in connection with conversions between various currencies. In
addition, foreign brokerage commissions are generally higher than in the United
States, and foreign securities markets may be less liquid, more volatile and
less subject to governmental supervision than in the United States. Investments
in foreign countries could be affected by other factors not present in the
United States, including seizure, expropriation, confiscatory taxation, risk of
war, lack of uniform accounting and auditing standards and potential
difficulties in enforcing contractual obligations, and could be subject to
extended settlement periods.

DEPOSITARY RECEIPTS. Global Bond Series, Global Asset Allocation Series, Global
Growth Series, and International Stock Series may hold equity securities of
foreign issuers in the form of American Depositary Receipts ("ADRs") or other
securities convertible into securities of eligible European or Far Eastern
Issuers. These securities may not necessarily be denominated in the same
currency as the securities for which they may be exchanged. ADRs are receipts
typically issued by an American bank or trust company that evidence ownership of
underlying securities issued by a foreign corporation. Generally, ADRs in
registered form are designed for use in the United States securities markets.
For purposes of the Series' investment policies, the Series' investments in ADRs
and EDRs will be deemed to be investments in the equity securities representing
securities of foreign issuers into which they may be converted.

Any investment restriction or limitation, fundamental or otherwise, that
involves a maximum percentage of securities or assets shall not be considered to
be violated unless an excess over the percentage occurs immediately after an
acquisition of securities or utilization of assets, and such excess results
therefrom.

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<PAGE>

After purchase by any Series, a security may cease to be rated or its rating may
be reduced below the minimum required for purchase by such Series. Neither event
will require a sale of such security by a Series. To the extent the ratings may
change as a result of changes in the rating organizations or the rating systems,
each Series will attempt to use comparable ratings as standards for investments
in accordance with the investment policies contained in this Prospectus and in
the Statement of Additional Information. The ratings of S&P and Moody's are more
fully described in the Appendix attached hereto.

The insurance laws and regulations of various states as well as the Code and
regulations thereunder may, from time to time, impose additional restrictions on
the investments of the various Series.
MANAGEMENT
BOARD OF DIRECTORS
Under Minnesota law, the Board of Directors of Fortis Series (the "Board of
Directors") has overall responsibility for managing Fortis Series in good faith,
in a manner reasonably believed to be in the best interests of Fortis Series,
and with the care an ordinarily prudent person would exercise in similar
circumstances. However, this management may be delegated. The Articles of
Incorporation of Fortis Series limit the liability of directors to the fullest
extent permitted by law.
THE INVESTMENT ADVISER/TRANSFER AGENT/DIVIDEND AGENT

Fortis Advisers, Inc. ("Advisers") is the investment adviser, transfer agent,
and dividend agent for each Series. Advisers has been managing investment
company portfolios since 1949, and is indirectly owned 50% by N.V. AMEV and 50%
by Compagnie Financiere et de Reassurance du Groupe AG, diversified financial
services companies. In addition to providing investment advice, Advisers reviews
the investments of the three sub-advised Series and provides executive and other
personnel for the management of Fortis Series' business affairs. The Board of
Directors of Fortis Series has overall authority over the business affairs of
the Fortis Series as conducted by Advisers and the sub-advisers. Advisers'
address is P.O. Box 64284, St. Paul, MN 55164.

Money Market Series has been managed by Dennis M. Ott and Diane M. Gotham since
1986 and 1994, respectively.

U.S. Government Securities Series has been managed by Dennis M. Ott and Chris J.
Neuharth since 1986 and 1989, respectively.

Diversified Income Series has been managed by Dennis M. Ott, David G. Carroll,
and Chris J. Neuharth since 1988, 1988, and 1989, respectively.

High Yield Series has been managed since its inception by Dennis M. Ott and
David G. Carroll;

Asset Allocation Series has been managed by Stephen M. Poling, Dennis M. Ott,
James S. Byrd, Keith R. Thomson, David G. Carroll, and Chris J. Neuharth since
1987, 1987, 1991, 1988, 1987, and 1989, respectively.

Growth & Income Series has been managed since its inception by Stephen M.
Poling, James S. Byrd, and Keith R. Thomson;

Growth Stock Series has been managed by Stephen M. Poling, James S. Byrd, and
Keith R. Thomson since 1986, 1991, and 1988, respectively.

Global Growth Series has been managed since its inception by Stephen M. Poling
and James S. Byrd.

Aggressive Growth Series has been managed since its inception by Stephen M.
Poling, James S. Byrd, and Keith R. Thomson;

All of the above managers except James S. Byrd and Diane M. Gotham have managed
portfolios for Advisers for at least the past five years. Prior to 1991, Mr.
Byrd was Senior Vice President of Templeton Investment Counsel, Inc., Ft.
Lauderdale, Florida. Prior to June, 1994, Ms. Gotham was Advisory Systems
Engineer of IBM Corp., Minneapolis, Minn. All of the above managers are Vice
Presidents of Advisers except Mssrs. Poling (Executive Vice President and a
director), Ott (Senior Vice President), Carroll (2nd Vice President), and
Neuharth (2nd Vice President), and Ms. Gotham (Fixed Income Analyst).

THE SUB-ADVISERS

This section describes only the three sub-advised Series.

Each Series has retained a sub-adviser under an investment sub-advisory
agreement (the three sub-advisory agreements are collectively referred to as the
"Sub-Advisory Agreements") to provide investment advice and, in general, to
conduct the management investment program of each Series, subject to the general
control of Advisers and the Board of Directors of the Fortis Series. Pursuant to
the Sub-Advisory Agreements, each sub-adviser will regularly provide its
respective Series with investment research, advice and supervision and furnish
continuously an investment program for such Series consistent with its
investment objectives and policies, including the purchase, retention and
disposition of securities.

The sub-adviser of each Series is also responsible for the selection of brokers
and dealers to effect securities transactions and the negotiation of brokerage
commissions, if any. Purchases and sales of securities on a securities exchange
are effected through brokers who charge a negotiated commission for their
services. Orders may be directed to any broker including, to the extent and in
the manner permitted by applicable law, affiliates of the sub-advisers.
Brokerage services provided by affiliates of the sub-advisers are performed in
conformity with Rule 17e-1 under the 1940 Act and procedures adopted by the
Board of Directors of Fortis Series. In addition, sales of shares of Fortis
Series may be considered in the selection of broker-dealers to execute Fortis
Series' securities transactions when it is believed that this can be done
without causing Fortis Series to pay more in brokerage commissions than it would
otherwise.

GLOBAL BOND SERIES. Warburg Investment Management International Ltd.
("Warburg"), 33 King William Street, London, EC4R 9AS, England, is the
sub-adviser of the Global Bond Series. Warburg, which is registered as an
investment adviser with the Commission, is a wholly owned subsidiary of Mercury
Asset Management plc ("Mercury"). Mercury manages approximately $93 billion of
investments on behalf of clients. Warburg itself manages approximately $2.9
billion of investments.

The Strategy Committee of the Fixed Interest Division of Warburg has primary
portfolio management responsibility for the Global Bond Series. Each of the four
members of the Strategy Committee is an officer or director of Warburg.

GLOBAL ASSET ALLOCATION SERIES. Morgan Stanley Asset Management Limited ("Morgan
Stanley"), 25 Cabot Square, Canary Wharf, London, E14 4QA, England, is the
sub-adviser of the Global Asset Allocation Series. Morgan Stanley, which is
registered as an investment adviser with the Commission, is a wholly owned
subsidiary of the Morgan Stanley Group, Inc. Morgan Stanley provides a broad
range of portfolio management services to customers in the United States and
abroad and currently manages investments totaling approximately $10 billion.

Portfolio responsibility for the Global Asset Allocation Series is split between
Frances Campion and Michael Smith. Frances Campion joined Morgan Stanley in
January 1990 and her responsibilities include the day-to-day management of the
global equity product. Frances has ten years global investment experience and
became a Vice President of Morgan Stanley in 1992. Prior to joining Morgan
Stanley she was a US equity analyst with Lombard Odier Limited where she had
responsibility for the management of global equity portfolios. Michael Smith
joined Morgan Stanley in October 1990 and his responsibilities include the
day-to-day management of the global and european fixed income and money market
products. Mike has twelve years global investment experience and became a Vice
President of Morgan Stanley in 1992. Prior to joining Morgan Stanley

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<PAGE>

he was a fixed income fund manager for Gartmore Investment Management Limited
and an analyst and fund manager with Legal & General Investment.

INTERNATIONAL STOCK SERIES._Lazard Freres Asset Management ("Lazard Freres"),
One Rockefeller Plaza, New York, New York 10020, is the sub-adviser of the
International Stock Series. Lazard Freres is a division of Lazard Freres & Co.
LLC, a New York limited liability company founded in 1848, which is registered
as an investment adviser with the Commission and is a member of the New York,
American and Midwest Stock Exchanges. Lazard Freres & Co. LLC, provides its
clients with a wide variety of investment banking, brokerage and related
services.

Lazard Freres Asset Management provides investment management services to client
discretionary accounts with assets currently totaling approximately $22 billion.
Its clients are both individuals and institutions, some of whose accounts have
investment policies similar to those of the Series.

John R. Reinsberg, a managing director of Lazard Freres, has primary portfolio
management responsibility for the International Stock Series. Prior to joining
Lazard Freres, he was Executive Vice President of General Electric Investment
Company. Mr. Reinsberg has been primarily responsible for the investment of the
assets of the Lazard International Equity Portfolio of The Lazard Funds, Inc.
since January 1992. In addition, Herbert W. Gullquist, a managing director and
the Chief Investment Officer of Lazard Freres since 1982, has overall
responsibility for managing the Series.

EXPENSES AND ALLOCATIONS AMONG SERIES

For the most recent fiscal year, the ratio of Fortis Series' investment advisory
and management fee as a percentage of average daily net assets was .30% for
Money Market Series, .46% for U.S. Government Securities Series, .47% for
Diversified Income Series, .50% for High Yield Series, .50% for Asset Allocation
Series, .70% for Growth and Income Series, .63% for Growth Stock Series, .70%
for Global Growth Series, and .70% for Aggressive Growth Series. For Global Bond
Series, Global Asset Allocation Series, and International Stock Series, the
following table shows the advisory fee schedule:

<TABLE>
<CAPTION>
ANNUAL INVESTMENT
ADVISORY AND
SERIES AVERAGE NET ASSETS MANAGEMENT FEE
<S> <C> <C>
Global Bond Series For the first $100 million .75%
For assets over $100 million .65%
Global Asset For the first $100 million .90%
Allocation Series For assets over $100 million .85%
International Stock For the first $100 million .85%
Series For assets over $100 million .80%
</TABLE>

BROKERAGE ALLOCATION

Advisers may consider sales of shares of Fortis Series, and of other funds
advised by Advisers, as a factor in the selection of broker-dealers to execute
Fortis Series' securities transactions when it is believed that this can be done
without causing Fortis Series to pay more in brokerage commissions than it would
otherwise.

PERIODIC REPORTS

Contract owners will receive semiannual reports including the financial
statements of the Series to which their premiums have been allocated and the
investments held in each such Series.

CAPITAL STOCK

Fortis Series has only common shares with equal voting rights.

VOTING PRIVILEGES

The voting privileges of Contract owners, and limitations thereon, are explained
in the accompanying prospectus for the Contracts. The shareholders are entitled
to vote all of the shares of Fortis Series, but they will generally do so in
accordance with the instructions of the Contract owners. Under certain
circumstances, however, shareholders may disregard voting instructions received
from Contract owners. For additional information describing how shareholders
will vote the shares of Fortis Series, see "Voting Privileges" in the
accompanying prospectus(es) for the applicable Contracts.

DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS

Fortis Series intends to distribute at least annually as dividends substantially
all the net investment income, if any, of each Series. For dividend purposes,
net investment income of each Series will consist of all dividends (other than
stock dividends) or interest received by such Series less the accrued expenses
of each such Series. Fortis Series will also declare and distribute all net
realized capital gains annually. Dividends from investment income of the Series
and capital gains distributions will be reinvested in additional full and
fractional shares. Dividends and distributions on shares not attributable to
Contracts, however, may be paid in cash.

TAXATION

Each Series intends to qualify as a regulated investment company under the
Internal Revenue Code of 1986, as amended. So long as each Series so qualifies,
the Series is not taxed on the income it distributes to the Separate Accounts.
So long as each Series qualifies as a regulated investment company and meets
certain diversification tests applicable to the segregated asset accounts
underlying variable annuity and life insurance contracts, the Contract owners
will not be considered to be the owners of the shares of the Series, and income
earned with respect to the Contracts will not be taxed currently to the Contract
owners.

For the tax consequences of owning a Contract, see the accompanying prospectus
for the Contracts. For more information concerning the taxation of the Series,
see "Taxation" in the Statement of Additional Information.

PURCHASE AND REDEMPTION OF SHARES

GENERALLY

Shares in Fortis Series are currently offered at the respective per share net
asset values of the Series. Such shares are offered only to the Separate
Accounts, which fund benefits payable under the Contracts described in the
accompanying prospectus. Fortis Series sells its shares to the Separate Accounts
through Fortis Investors, Inc. ("Investors"). Investors receives no underwriting
compensation from Fortis Series. Fortis Series may in the future also offer its
shares to separate accounts of other insurance companies.

The Board of Directors will monitor events for the existence of any material
irreconcilable conflict between or among owners of insurance or annuity
contracts, and the relevant insurance companies will take whatever remedial
action may be necessary and appropriate. Fortis Benefits and First Fortis
currently do not foresee any disadvantages to their respective Contract owners
arising out of the fact that Fortis Series offers its shares both for variable
life insurance policies and variable annuity contracts. However, should an
irreconcilable conflict arise between the Separate Accounts, the conflict could
result in one or more of the Separate Accounts terminating its relationship with
Fortis Series, thus necessitating the liquidation of portfolio securities and
thereby potentially having an adverse impact on the net asset values of the
affected Series.

On each day when Fortis Series values its assets, shares of each Series are
purchased or redeemed by the Separate Accounts based upon, among other things,
the amounts of net premiums allocated to the Separate Account, dividends and
distributions reinvested, transfers to and among subaccounts of the Separate
Accounts, Policy loans, loan repayments and benefit payments to be processed on
that date. Such purchases and redemptions for the Separate Account are effected
at the net asset value per share for each Series determined as of that same
date. Any orders to purchase or

19
<PAGE>
redeem Fortis Series shares that do not result automatically from Contract
transactions will be effected at the net asset value per share next computed
after the order is placed.

OFFERING PRICE

The offering prices of the Series' shares are determined once daily, and are
equal to the net asset values per share of the shares next calculated after
receipt of the purchase order. The Series' net asset values per share are
determined by dividing the value of the securities owned by the Series, plus any
cash or other assets, less all liabilities, by the number of the Series' shares
outstanding. All significant expenses, including the investment advisory fee
payable to Advisers, are accrued daily. The portfolio securities in which the
Series invest fluctuate in value, and hence the net asset values per share of
the Series also fluctuate. The net asset values of the Series' shares are
determined as of the primary closing time for business on the New York Stock
Exchange (the "Exchange") on each day on which the Exchange is open.

Securities are generally valued at market value. A security listed or traded on
an exchange is valued at its last sale price on the exchange where it is
principally traded on the day of valuation. Lacking any sales on the exchange
where it is principally traded on the day of valuation, prior to the time as of
which assets are valued, the security generally is valued at the previous day's
last sale price on that exchange. A security listed or traded on the Nasdaq
National Market is valued at its last sale price that day, and lacking any sales
that day on the Nasdaq National Market, the security generally is valued at the
last bid price. Options will be valued at market value or fair value, as
determined in good faith by the Board of Directors, if no market exists. Futures
contracts will be valued in a like manner except that open futures contracts
sales will be valued using the closing settlement price or, in the absence of
such a price, the most recent quoted asked price.

When market quotations are not readily available, or when restricted securities
or other assets are being valued, such securities or other assets are valued at
fair value as determined in good faith by management under supervision of the
Board of Directors. Trading in securities on European and Far Eastern securities
exchanges and over-the-counter markets is normally completed well before the
close of the business day in New York. However, debt securities may be valued on
the basis of valuations furnished by a pricing service which utilizes electronic
data processing techniques to determine valuations for normal institutional-size
trading units of debt securities when such valuations are believed to more
accurately reflect the fair market value of such securities. Short-term
investments in debt securities with maturities of less than 60 days when
acquired, or which subsequently are within 60 days of maturity, are valued at
amortized cost. Purchases and sales by the non-sub-advised Series after 2:00
P.M. Central Time--and purchases and sales by the sub-advised Series--normally
are not recorded until the following day.

Any assets or liabilities initially expressed in terms of foreign currencies are
translated into U.S. dollars at the official exchange rate or, alternatively, at
the mean of the current bid and asked prices of such currencies against the U.S.
dollar last quoted by a major bank that is a regular participant in the foreign
exchange market or on the basis of a pricing service that takes into account the
quotes provided by a number of such major banks. If neither of these
alternatives is available nor provides a suitable methodology for converting a
foreign currency into U.S. dollars, the Board of Directors in good faith will
establish a conversion rate for such currency.

European or Far Eastern securities trading may not take place on all days on
which the Exchange is open. Further, trading takes place in Japanese markets on
certain Saturdays and in various foreign markets on days on which the Exchange
is not open and therefore the Series' net asset value is not calculated. The
calculation of the Series' net asset value therefore may not take place
contemporaneously with the determination of the prices of securities held by the
Series. Events affecting the values of portfolio securities that occur between
the time their prices are determined and the close of the Exchange will not be
reflected in the Series' net asset value unless management, under the
supervision of the Board of Directors, determines that the particular event
would materially affect net asset value. As a result, the Series' net asset
value may be significantly affected by such trading on days when Fortis Series
is not open for shareholder purchases and redemptions.

TRANSFERS AMONG SUBACCOUNTS

Contract owners may transfer amounts among the subaccounts available to them,
and may change allocations of premiums as explained in the accompanying
prospectus for the Contracts. Transfers between subaccounts are not taxable
under current Federal income tax law.

THE UNDERWRITER

Fortis Investors, Inc. ("Investors"), a subsidiary of Advisers, is Fortis
Series' underwriter. Investors' address is P.O. Box 64284, St. Paul, MN 55164.
Investors reserves the right to reject any purchase order. The following persons
are affiliated with both Investors and Fortis Series: Dean C. Kopperud is a
director and officer of both; Stephen M. Poling and Robert J. Clancy are
directors of Investors and officers of both; and Dennis M. Ott, James S. Byrd,
Robert C. Lindberg, Keith R. Thomson, Robert W. Beltz, Jr., Thomas D. Gualdoni,
Larry A. Medin, John W. Norton, David G. Carroll, Chris J. Neuharth, Carol M.
Houghtby, Tamara L. Fagely, John E. Hite, Thomas E. Erickson, and Gregory S.
Swenson are officers of both.

REDEMPTION

Fortis Series is required to redeem all full and fractional shares of Fortis
Series for cash within seven days of receipt of proper notice of redemption. The
net asset value of redeemed shares may be more or less than the net asset value
of the same shares at the time the Separate Account invested in such shares.

For further information, Contract owners may also contact Fortis Benefits'
office, the address of which is the same as that of Fortis Series, as set forth
on the cover of this Prospectus. New York contract owners should instead contact
First Fortis' office: P.O. Box 3209, Syracuse, New York 13220.

APPENDIX

COMMERCIAL PAPER RATINGS

STANDARD & POOR'S CORPORATION. A Standard & Poor's commercial paper rating is a
current assessment of the likelihood of timely payment of debt having an
original maturity of no more than 365 days. Ratings are graded into categories
ranging from "A" for the highest quality obligations to "D" for the lowest.

"A" Issues assigned this highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with
the numbers 1, 2 and 3 to indicate the relative degree of safety.

"A-1" This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a (+) sign
designation.

"A-2" Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues
designated "A-1."

"A-3" Issues carrying this designation have a satisfactory capacity for timely
payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the higher
designations.

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<PAGE>
The commercial paper rating is not a recommendation to purchase or sell a
security. The ratings are based on current information furnished to Standard &
Poor's by the issuer or obtained from other sources it considers reliable. The
ratings may be changed, suspended, or withdrawn as a result of changes in or
unavailability of such information.

MOODY'S INVESTORS SERVICE, INC. Moody's short-term debt ratings are opinions of
the ability of the issuers to repay punctually senior debt obligations which
have an original maturity not exceeding one year. Moody's makes no
representation that such obligations are exempt from registration under the
Securities Act of 1933, nor does it represent that any specific note is a valid
obligation of a rated issuer or issued in conformity with any applicable law.
Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment capacity of rated issuers:

"Prime-1" Superior ability for repayment of senior short-term debt obligations.

"Prime-2" Strong ability for repayment of senior short-term debt obligations.

"Prime-3" Acceptable ability for repayment of senior short-term debt
obligations.

CORPORATE BOND RATINGS

STANDARD & POOR'S CORPORATION. Its ratings for corporate bonds have the
following definitions:

Debt rated "AAA" has the highest rating assigned by Standard & Poor's. Capacity
to pay interest and repay principal is extremely strong.

Debt rated "AA" has a very strong capacity to pay interest and repay principal
and differs from the higher rated issues only in a small degree.

Debt rated "A" has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

Debt rated "BBB" is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories.

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

Debt rated "BB" has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The "BB"
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied "BBB-" rating.

Debt rated "B" has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The "B" rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied "BB" or "BB-"
rating.

Debt rated "CCC" has a currently identifiable vulnerability to default, and is
dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The "CCC" rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
"B" or "B-" rating.

The rating "CC" is typically applied to debt subordinated to senior debt that is
assigned an actual or implied "CCC" rating.

The rating "C" is typically applied to debt subordinated to senior debt which is
assigned an actual or implied "CCC-" debt rating. The "C" rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.

The rating "CI" is reserved for income bonds on which no interest is being paid.

Debt rated "D" is in payment default. The "D" rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The "D" rating also will be
used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.

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

"NR" indicates that no rating has been requested, that there is insufficient
information on which to base a rating, or that Standard & Poor's does not rate a
particular type of obligation as a matter of policy.

MOODY'S INVESTORS SERVICE, INC. Its ratings for corporate bonds include the
following:

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

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

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

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

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

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

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

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

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

BOND INVESTMENT QUALITY STANDARDS: Under present commercial bank regulations
issued by the Comptroller of the Currency, bonds rated in the top four
categories (Moody's ratings Aaa, Aa, A and Baa, and Standard & Poor's ratings
AAA, AA, A and BBB, commonly known as "Investment Grade" ratings) are generally
regarded as eligible for bank investment. In addition, the Legal Investment Laws
of various states impose certain rating or other standards for obligations
eligible for investment by savings banks, trust companies, insurance companies
and fiduciaries generally.

PREFERRED STOCK RATING

STANDARD & POOR'S CORPORATION. Its ratings for preferred stock have the
following definitions:

An issue rated "AAA" has the highest rating that may be assigned by Standard &
Poor's to a preferred stock issue and indicates an extremely strong capacity to
pay the preferred stock obligations.

A preferred stock issue rated "AA" also qualifies as a high-quality fixed income
security. The capacity to pay preferred stock obligations is very strong,
although not as overwhelming as for issues rated "AAA."

An issue rated "A" is backed by a sound capacity to pay the preferred stock
obligations, although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.

An issue rated "BBB" is regarded as backed by an adequate capacity to pay the
preferred stock obligations. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions, or changing circumstances are more
likely to lead to a weakened capacity to make payments for a preferred stock in
this category than for issues in the "A" category.

MOODY'S INVESTORS SERVICE, INC. Its ratings for preferred stock include the
following:

An issue which is rated "Aaa" is considered to be a top-quality preferred stock.
This rating indicates good asset protection and the least risk of dividend
impairment within the universe of preferred stocks.

An issue which is rated "Aa" is considered a high-grade preferred stock. This
rating indicates that there is reasonable assurance that earnings and asset
protection will remain relatively well maintained in the foreseeable future.

An issue which is rated "A" is considered to be an upper-medium grade preferred
stock. While risks are judged to be somewhat greater than in the "aaa" and "aa"
classifications, earnings and asset protection are nevertheless expected to be
maintained at adequate levels.

An issue which is rated "Baa" is considered to be medium grade, neither highly
protected nor poorly secured. Earnings and asset protection appear adequate at
present but may be questionable over any great length of time.

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PART B

STATEMENT OF ADDITIONAL INFORMATION

<PAGE>

FORTIS SERIES FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 1, 1995

This Statement of Additional Information is NOT a prospectus, but should be read
in conjunction with the Fortis Series Fund, Inc. ("Fortis Series")

Prospectus dated May 1, 1995. A copy of that prospectus may be obtained from
Fortis Series, P.O. Box 64582, St. Paul, Minnesota 55164.

No broker-dealer, sales representative, or other person has been authorized to
give any information or to make any representations other than those contained
in this Statement of Additional Information, and if given or made, such
information or representations must not be relied upon as having been authorized
by Fortis Benefits Insurance Company ("Fortis Benefits"), First Fortis Life
Insurance Company ("First Fortis"), Fortis Series, or Fortis Investors, Inc.
("Investors"). This Statement of Additional Information does not constitute an
offer or solicitation by anyone in any state in which such offer or solicitation
is not authorized, or in which the person making such offer or solicitation is
not qualified to do so, or to any person to whom it is unlawful to make such
offer or solicitation.

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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
ORGANIZATION AND CLASSIFICATION................... 26
INVESTMENT OBJECTIVES AND POLICIES................ 26
-Certificates of Deposit and Bankers'
Acceptances.................................. 26
- Mortgage-Related Securities................. 26
- Securities of Foreign Companies............. 27
- Repurchase Agreements....................... 28
- Extendible Notes............................ 28
-Delayed Delivery Transactions................ 28
-Dollar Rolls................................. 28
- Lending of Portfolio Securities............. 29
- Options..................................... 29
- Futures Contracts and Options on
Futures Contracts........................... 29
- Forward Foreign Currency
Exchange Contracts.......................... 30
- Segregated Accounts......................... 30
- Restricted or Illiquid Securities........... 30
- Warrants or Rights.......................... 30
- Short Sales Against the Box................. 30
- Portfolio Turnover.......................... 31
- Investment Restrictions..................... 31
- Risk Factors................................ 35

DIRECTORS AND EXECUTIVE OFFICERS.................. 38
INVESTMENT ADVISORY AND OTHER SERVICES............ 39
- General..................................... 39
- Control and Management of Advisers and
Investors................................... 39
- Investment Advisory and Management
Agreement................................... 40
-Sub-Advisory Agreements...................... 41
PORTFOLIO TRANSACTIONS AND ALLOCATION OF
BROKERAGE........................................ 41
CAPITAL STOCK..................................... 43
COMPUTATION OF NET ASSET VALUE AND PRICING........ 44
REDEMPTION........................................ 44
TAXATION.......................................... 45
UNDERWRITER....................................... 45
PERFORMANCE....................................... 46
SYSTEMATIC WITHDRAWAL............................. 50
FINANCIAL STATEMENTS.............................. 51
CUSTODIAN; COUNSEL; ACCOUNTANTS................... 51
LIMITATION OF DIRECTOR LIABILITY.................. 51
ADDITIONAL INFORMATION............................ 51
APPENDIX--DESCRIPTION OF FUTURES, OPTIONS, AND
FORWARD CONTRACTS................................ 52
</TABLE>

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ORGANIZATION AND CLASSIFICATION

An investment company is an arrangement by which a number of persons invest in a
company that in turn invests in securities of other companies. Fortis Series
operates as an "open-end" investment company because it generally must redeem an
investor's shares upon request. Fortis Series operates as a "diversified"
investment company because it offers investors an opportunity to minimize the
risk inherent in all investments in securities by spreading their investment
over a number of companies in various industries. However, diversification
cannot eliminate such risks.

INVESTMENT OBJECTIVES AND POLICIES

Fortis Series operates as a "diversified" investment company as defined under
the Investment Company Act of 1940 (the "1940 Act"), which means that each
Series must meet the following requirements:
At least 75% of the value of its total assets will be represented by
cash and cash items (including receivables), Government securities,
securities of other investment companies, and other securities for
the purposes of this calculation limited in respect of any one
issuer to an amount not greater in value than 5% of the value of the
total assets of the Series and to not more than 10% of the
outstanding voting securities of such issuer.

CERTIFICATES OF DEPOSIT AND BANKERS' ACCEPTANCES

As noted in the Prospectus, the Series may invest in certificates of deposits.
Certificates of deposit are receipts issued by a bank in exchange for the
deposit of funds. The issuer agrees to pay the amount deposited plus interest to
the bearer of the receipt on the date specified on the certificate. The
certificate usually can be traded in the secondary market prior to maturity.
Bankers' acceptances typically arise from short-term credit arrangements
designed to enable businesses to obtain funds to finance commercial
transactions. Generally, an acceptance is a time draft drawn on a bank by an
exporter or importer to obtain a stated amount of funds to pay for specific
merchandise. The draft is then "accepted" by a bank that, in effect,
unconditionally guarantees to pay the face value of the instrument on its
maturity date. The acceptance may then be held by the accepting bank as an
earning asset or it may be sold in the secondary market at the going rate of
discount for a specific maturity. Although maturities for acceptances can be as
long as 270 days, most acceptances have maturities of six months or less.

MORTGAGE-RELATED SECURITIES

Consistent with the investment objectives and policies of all but the Aggressive
Growth Series as set forth in the Prospectus, and the investment restrictions
set forth below, the Series may invest in certain types of mortgage-related
securities. One type of mortgage-related security includes certificates which
represent pools of mortgage loans assembled for sale to investors by various
governmental and private organizations. These securities provide a monthly
payment, which consists of both an interest and a principal payment, which is in
effect a "pass-through" of the monthly payment made by each individual borrower
on his or her residential mortgage loan, net of any fees paid to the issuer or
guarantor of such securities. Additional payments are caused by repayments of
principal resulting from the sale of the underlying residential property,
refinancing or foreclosure, net of fees or costs which may be incurred. Some
certificates (such as those issued by the Government National Mortgage
Association) are described as "modified pass-through." These securities entitle
the holder to receive all interest and principal payments owed on the mortgage
pool, net of certain fees, regardless of whether the mortgagor actually makes
the payment.
A major governmental guarantor of pass-through certificates is the Government
National Mortgage Association ("GNMA"). GNMA guarantees, with the full faith and
credit of the United States government, the timely payments of principal and
interest on securities issued by institutions approved by GNMA (such as savings
and loan institutions, commercial banks and mortgage bankers) and backed by
pools of FHA-insured or VA-guaranteed mortgages. Other governmental guarantors
(but not backed by the full faith and credit of the United States Government)
include the Federal National Mortgage Association ("FNMA") and the Federal Home
Loan Mortgage Corporation ("FHLMC"). FNMA purchases residential mortgages from a
list of approved seller/servicers which include state and federally-chartered
savings and loan associations, mutual savings banks, commercial banks and credit
unions and mortgage bankers.

(i) GNMA CERTIFICATES. Certificates of the GNMA ("GNMA Certificates")
evidence an undivided interest in a pool of mortgage loans. GNMA
Certificates differ from bonds in that principal is paid back monthly as
payments of principal, including prepayments, on the mortgages in the
underlying pool are passed through to holders of the GNMA Certificates
representing interests in the pool, rather than returned in a lump sum at
maturity. "Modified pass-through" GNMA Certificates entitle the holder to
receive a share of all interest and principal payments paid or owed to
the mortgage pool, net of fees paid or due to the "issuer" and GNMA,
regardless of whether or not the mortgagor actually makes the payment.

(ii) GNMA GUARANTEE. The National Housing Act authorizes GNMA to
guarantee the timely payment of principal and interest on securities
backed by a pool of mortgages insured by the Federal Housing
Administration ("FHA") or the Farmers' Home Administration ("FmHA"), or
guaranteed by the Veterans Administration ("VA"). GNMA is also empowered
to borrow without limitation from the U.S. Treasury, if necessary, to
make any payments required under its guarantee.

(iii) LIFE OF GNMA CERTIFICATES. The average life of a GNMA Certificate
is likely to be substantially less than the stated maturity of the
mortgages underlying the securities. Prepayments of principal by
mortgagors and mortgage foreclosures will usually result in the return of
the greater part of principal investment long before the maturity of the
mortgages in the pool. Foreclosures impose no risk of loss of the
principal balance of a Certificate, because of the GNMA guarantee, but
foreclosure may impact the yield to shareholders because of the need to
reinvest proceeds of foreclosure.

As prepayment rates of individual mortgage pools vary widely, it is not
possible to predict accurately the average life of a particular issue of
GNMA Certificates. However, statistics published by the FHA indicate that
the average life of single family dwelling mortgages with 25 to 30-year
maturities, the type of mortgages backing the vast majority of GNMA
Certificates, is approximately 12 years. Prepayments are likely to
increase in periods of falling interest rates. It is customary to treat
GNMA Certificates as 30-year mortgage-backed securities which prepay
fully in the twelfth year.

(iv) YIELD CHARACTERISTICS OF GNMA CERTIFICATES. The coupon rate of
interest of GNMA Certificates is lower than the interest rate paid on the
VA-guaranteed or FHA-insured mortgages underlying the certificates, by
the amount of the fees paid to GNMA and the issuer.

The coupon rate by itself, however, does not indicate the yield which
will be earned on GNMA Certificates. First, GNMA Certificates may be
issued at a premium or discount, rather than at par, and, after issuance,
GNMA Certificates may trade in the secondary market at a premium or
discount. Second, interest is earned monthly, rather than semi-annually
as with traditional bonds; monthly compounding raises the effective yield
earned. Finally,

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<PAGE>

the actual yield of a GNMA Certificate is influenced by the prepayment
experience of the mortgage pool underlying it. For example, if interest
rates decline, prepayments may occur faster than had been originally
projected and the yield to maturity and investment income would be
reduced.

(v) FHLMC SECURITIES. "FHLMC" is a federally chartered corporation
created in 1970 through enactment of Title III of the Emergency Home
Finance Act of 1970. Its purpose is to promote development of a
nationwide secondary market in conventional residential mortgages.

The 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 or owed on the
underlying pool. The FHLMC guarantees timely payment of interest on PCs
and the ultimate payment of principal. Like GNMA Certificates, PCs are
assumed to be prepaid fully in their twelfth year.

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. The expected average life of these
securities is approximately ten years.

(vi) FNMA SECURITIES. "FNMA" is a federally chartered and privately owned
corporation which was established in 1938 to create a secondary market in
mortgages insured by the FHA. It was originally established as a
government agency and was transformed into a private corporation in 1968.

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 or owed on the underlying pool. FNMA guarantees
timely payment of interest on FNMA certificates and the full return of
principal. Like GNMA Certificates, FNMA Certificates are assumed to be
prepaid fully in their twelfth year.

Commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers, and other secondary market issuers also create
pass-through pools of conventional residential mortgage loans. Such issuers may
in addition be the originators of the underlying mortgage loans as well as the
guarantors of the pass-through certificates. Pools created by such
non-governmental issuers generally offer a higher rate of interest than
governmental pools because there are no direct or indirect governmental
guarantees of payments in the former pools. However, timely payment of interest
and principal of these pools may be supported by various forms of insurance or
guarantees, including individual loan, title, pool, and hazard insurance. The
insurance and guarantees are issued by government entities, private insurers,
and the mortgage poolers.

Fortis Series expects that governmental or private entities may create mortgage
loan pools offering pass-through investments in addition to those described
above. As new types of pass-through securities are developed and offered to
investors, Fortis Series' adviser may, consistent with the Series' (except
Aggressive Growth's) investment objectives, policies and restrictions, consider
making investments in such new types of securities.

Other types of mortgage-related securities include debt securities which are
secured, directly or indirectly, by mortgages on commercial real estate or
residential rental properties, or by first liens on residential manufactured
homes (as defined in section 603(6) of the National Manufactured Housing
Construction and Safety Standards Act of 1974), whether such manufactured homes
are considered real or personal property under the laws of the states in which
they are located.

Securities in this investment category include, among others, standard
mortgage-related bonds and newer collateralized mortgage obligations (CMOs).
Mortgage-related bonds are secured by pools of mortgages, but, unlike
pass-through securities, payments to bondholders are not determined by payments
on the mortgages. The bonds consist of a single class, with interest payable
monthly and principal payable on the stated date of maturity. CMO's have
characteristics of both pass-through securities and mortgage-related bonds.
CMO's are secured by pools of mortgages, typically in the form of "guaranteed"
pass-through certificates such as GNMA, FNMA, or FHLMC securities. The payments
on the collateral securities determine the payments to the bondholders, but
there is not a direct "pass-through" of payments. CMO's are structured into
multiple classes, each bearing a different date of maturity. Monthly payments of
principal received from the pool of underlying mortgages, including prepayments,
is first returned to investors holding the shortest maturity class. Investors
holding the longest maturity classes receive principal only after the shorter
maturity classes have been retired.

CMO's are issued by entities that operate under orders from the Securities and
Exchange Commission (the SEC) exempting such issuers from the provisions of the
Investment Company Act of 1940 (the 1940 Act). Until recently, the staff of the
SEC had taken the position that such issuers were investment companies and that,
accordingly, an investment by an investment company (such as the Series) in the
securities of such issuers was subject to limitations imposed by Section 12 of
the 1940 Act. However, in reliance on a recent SEC staff interpretation, the
Series may invest in securities issued by certain "exempted issuers" without
regard to the limitations of Section 12 of the 1940 Act. In its interpretation,
the SEC staff defined "exempted issuers" as unmanaged, fixed asset issuers that
(a) invest primarily in mortgage-backed securities, (b) do not issue redeemable
securities as defined in Section 2(a)(32) of the 1940 Act, (c) operate under
general exemptive orders exempting them from "all provisions of the [1940] Act"
and (d) are not registered or regulated under the 1940 Act as investment
companies.

Investments in mortgage-related securities involve certain risks. In periods of
declining interest rates, prices of fixed income securities tend to rise.
However, during such periods, the rate of prepayment of mortgages underlying
mortgage-related securities tends to increase, with the result that such
prepayments must be reinvested by the issuer at lower rates. In addition, the
value of such securities may fluctuate in response to the market's perception of
the creditworthiness of the issuers of mortgage-related securities owned by
Fortis Series. Because investments in mortgage-related securities are interest
sensitive, the ability of the issuer to reinvest or to reinvest favorably in
underlying mortgages may be limited by government regulation or tax policy. For
example, action by the Board of Governors of the Federal Reserve System to limit
the growth of the nation's money supply may cause interest rates to rise and
thereby reduce the volume of new residential mortgages. Additionally, although
mortgages and mortgage-related securities are generally supported by some form
of government or private guarantees and/or insurance, there is no assurance that
private guarantors or insurers will be able to meet their obligations.

SECURITIES OF FOREIGN COMPANIES

In certain countries, governmental restrictions and other limitations on
investment may affect the maximum percentage of equity ownership in any one
company. In addition, in some instances only special classes of securities may
be purchased by foreigners, and the market prices, liquidity, and rights with
respect to those securities may vary from shares owned by nationals. Money
Market Series, U.S. Government Securities Series, and Asset Allocation Series
each may invest in securities of, or guaranteed by, the Government of Canada, a
Province of Canada, or any instrumentality or

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<PAGE>
political subdivision thereof in an amount not exceeding 25% of the value of its
total assets. Money Market Series and Asset Allocation Series each may invest up
to an additional 15% and 20%, respectively of its total assets in securities of
foreign companies (which does not include domestic branches of foreign banks and
foreign branches of domestic banks), provided that no more than 15% of Asset
Allocation Series' total assets may be invested in foreign securities that are
not traded on national foreign securities exchanges or traded in the United
States. However, these Series each may not invest more than 49% of the value of
its total assets collectively in: (i) securities of, or guaranteed by, the
Government of Canada, a Province of Canada, or any instrumentality or political
subdivision thereof; (ii) securities of foreign companies; and (iii) securities
of domestic branches of foreign banks and foreign branches of domestic banks.
High Yield Series, Growth & Income Series, Growth Stock Series, and Aggressive
Growth Series each may invest up to 10% of its total assets in securities of
foreign governments and companies.

Investing in foreign securities may result in greater risk than that incurred by
investing in domestic securities. See "Risk Factors."

REPURCHASE AGREEMENTS

Each of the Series may invest in repurchase agreements. A repurchase agreement
is an instrument under which securities are purchased from a bank or securities
dealer with an agreement by the seller to repurchase the securities at a
mutually agreed upon date, interest rate, and price. Generally, repurchase
agreements are of short duration--usually less than a week, but on occasion for
longer periods. Each of the Money Market Series, U.S. Government Securities
Series, Diversified Income Series, Global Bond Series, Asset Allocation Series,
Global Asset Allocation Series, Growth Stock Series, Global Growth Series, and
International Stock Series, will limit its investment in repurchase agreements
with a maturity of more than seven days to 10% of its net assets (subject to the
collective limitations regarding restricted or illiquid securities set forth
below). In investing in repurchase agreements, a Series' risk is limited to the
ability of such bank or securities dealer to pay the agreed upon amount at the
maturity of the repurchase agreement. In the opinion of management, such risk is
not material; if the other party defaults, the underlying security constitutes
collateral for the obligation to pay--although the Series may incur certain
delays in obtaining direct ownership of the collateral, plus costs in
liquidating the collateral. In the event a bank or securities dealer defaults on
the repurchase agreement, management believes that, barring extraordinary
circumstances, the Series will be entitled to sell the underlying securities or
otherwise receive adequate protection (as defined in the federal Bankruptcy
Code) for its interest in such securities. To the extent that proceeds from any
sale upon a default were less than the repurchase price, the Series could suffer
a loss. If the Series owns underlying securities following a default on the
repurchase agreement, the Series will be subject to risk associated with changes
in the market value of such securities. The Series' custodian will hold the
securities underlying any repurchase agreement or such securities may be part of
the Federal Reserve Book Entry System. The market value of the collateral
underlying the repurchase agreement will be determined on each business day. If
at any time the market value of the collateral falls below the repurchase price
of the repurchase agreement (including any accrued interest), the Series will
promptly receive additional collateral (so the total collateral is in an amount
at least equal to the repurchase price plus accrued interest). The Board of
Directors of Fortis Series (the "Board of Directors") evaluates the
creditworthiness of issuers which are securities dealers.

U.S. Government Securities Series will only execute repurchase agreements in
which the underlying security meets the criteria of the Series' investment
policies. U.S. Government Securities Series will limit transactions involving
repurchase agreements to domestic commercial banks and/or recognized dealers in
United States government securities believed by Advisers to present minimum
credit risks.

EXTENDIBLE NOTES

Money Market Series, Global Bond Series, Asset Allocation Series, and Global
Asset Allocation Series each are permitted to invest up to 25% of the value of
its total assets in extendible notes. An extendible note is a debt arrangement
under which the holder, at its option, may require the issuer, typically a
financial or an industrial concern, to repurchase the note for a predetermined
fixed price at one or more times prior to the ultimate maturity date of the
note. Typically, an extendible note is issued at an interest rate that can be
adjusted at fixed times throughout its term. At the same times as the interest
rate is adjusted by the issuer, the holder of the note is typically given the
option to "put" the note back to the issuer at a predetermined price (e.g., at
100% of the outstanding principal amount plus unpaid accrued interest) if the
extended interest rate is undesirable to the holder. This option to put the note
back to the issuer (i.e., to require the issuer to repurchase the note) provides
the holder with an optional maturity date that is shorter than the actual
maturity date of the note.

Extendible notes are typically issued with maturity dates in excess of 13 months
from the date of issuance. If such extendible notes provide for an optional
maturity date of 13 months or less, however, then such notes are deemed by these
Series to have been issued for the shorter optional maturity date. Accordingly,
investment in such extendible notes would not be in contravention of the
investment policy of the Series not to invest in securities having a maturity
date in excess of 13 months from the date of acquisition. Investment in
extendible notes is not expected to have a material impact on the effective
portfolio maturity of these Series.

An investment in an extendible note is liquid, and the note may be resold to
another investor prior to its optional maturity date at its market value. The
market value of an extendible note with a given optional maturity date is
determined and fluctuates in a similar manner to the market value of a fixed
maturity note with a maturity equivalent to the optional maturity of the
extendible note. Compared to fixed-term notes of the same issuer, however,
extendible notes with equivalent optional maturities generally yield higher
returns without a material increase in risk to the Series buying them.

The creditworthiness of the issuers of the extendible notes is monitored and
rated by Moody's and by S&P, and investments by these Series in such extendible
notes are restricted to notes with the same investment ratings as are acceptable
to the Series with respect to other forms of investment. The creditworthiness of
such issuers is also monitored by Advisers (as well as the sub-adviser for
Global Bond Series and Global Asset Allocation Series).

DELAYED DELIVERY TRANSACTIONS

The purchase of securities on a when-issued, delayed delivery or forward
commitment basis exposes a Series to risk because the securities may decrease in
value prior to their delivery. Purchasing securities on a when-issued, delayed
delivery or forward commitment basis involves the additional risk that the
return available in the market when the delivery takes place will be higher than
that obtained in the transaction itself. These risks could result in increased
volatility of a Series' net asset value to the extent that the Series purchases
securities on a when-issued, delayed delivery or forward commitment basis while
remaining substantially fully invested.

DOLLAR ROLLS

In connection with their ability to purchase securities on a when-issued or
forward commitment basis, each Series other than Money Market Series and Growth
Stock Series may enter into "dollar rolls" in which a Series sells securities
for delivery in the current month and simultaneously contracts with the same
counterparty to repurchase similar (same type, coupon and maturity) but not
identical securities on a specified future date. Each Series gives up the right
to receive principal and interest paid on the securities sold. However, each
Series would benefit to the extent of any

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difference between the price received for the securities sold and the lower
forward price for the future purchase plus any fee income received. Unless such
benefits exceed the income and capital appreciation that would have been
realized on the securities sold as part of the dollar roll, the use of this
technique will diminish the investment performance of each Series compared with
what such performance would have been without the use of dollar rolls. Each
Series will hold and maintain in a segregated account until the settlement date
cash, government securities or liquid high-grade debt securities in an amount
equal to the value of the when-issued or forward commitment securities. The
benefits derived from the use of dollar rolls may depend, among other things,
upon Advisers (or the sub-adviser's) ability to predict interest rates
correctly. There is no assurance that dollar rolls can be successfully employed.
In addition, the use of dollar rolls by a Series while remaining substantially
fully invested increases the amount of each Series' assets that are subject to
market risk to an amount that is greater than each Series' net asset value,
which could result in increased volatility of the price of each Series' shares.

LENDING OF PORTFOLIO SECURITIES

Consistent with applicable regulatory requirements, the Global Bond Series, High
Yield Series, Global Asset Allocation Series, Growth & Income Series, Global
Growth Series, International Stock Series, and Aggressive Growth Series, may
lend their portfolio securities (principally to broker-dealers) where such loans
are callable at any time and are continuously secured by collateral (cash, U.S.
government securities, certificates of deposit, or other high-grade, short-term
obligations or interest-bearing cash equivalents) equal to no less than the
market value, determined daily, of the securities loaned. Such Series will
receive amounts equal to dividends or interest on the securities loaned. These
Series will also earn income for having made the loan. Such Series will limit
such lending to not more than 33 1/3% of the value of each such Series' total
assets and Global Growth Series will limit such lending to not more than 30% of
the value of its total assets (for each such Series, including the amount lent
as well as the collateral securing such loans). Where voting or consent rights
with respect to loaned securities pass to the borrower, management will follow
the policy of calling the loan, in whole or in part as may be appropriate, to
permit the exercise of such voting or consent rights if the issues involved have
a material effect on such Series investment in the securities loaned. Apart from
lending its securities, investing in repurchase agreements, and acquiring debt
securities, as described in the Prospectus and Statement of Additional
Information, these Series will not make loans to other persons.

OPTIONS

As provided below, in order to protect against declines in the value of Series
securities or increases in the costs of securities to be acquired and in order
to increase the gross income of the Global Growth Series, the Global Growth
Series may enter into transactions in options on a variety of instruments and
indices. The types of instruments to be purchased and sold are further described
in the Appendix of this Statement of Additional Information, which should be
read in conjunction with the following sections.

OPTIONS ON SECURITIES. The Gobal Bond Series, High Yield Series, Global Asset
Allocation Series, Global Growth Series, International Stock Series, and
Aggressive Growth Series may write (sell) covered call and covered put options
and purchase call and put options on securities (provided that International
Stock Series and Aggressive Growth Series will write and purchase options only
on equity securities and Global Bond Series and High Yield Series will write and
purchase options only on debt securities). Where such Series write an option
which expires unexercised or is closed out by such Series at a profit, it will
retain all or a portion of the premium received for the option, which will
increase its gross income and will offset in part the reduced value of any such
Series' security underlying the option, or the increased cost of such Series'
securities to be acquired. In contrast, however, if the price of the underlying
security moves adversely to such Series' position, the option may be exercised
and such Series will be required to purchase or sell the underlying security at
a disadvantageous price, which may only be partially offset by the amount of the
premium, if at all. Such Series may also write combinations of put and call
options on the same security, known as "straddles." Such transactions can
generate additional premium income but also present increased risk.

Such Series may also purchase put or call options in anticipation of market
fluctuations which may adversely affect the value of its portfolio or the prices
of securities that such Series wants to purchase at a later date. In the event
that the expected market fluctuations occur, such Series may be able to offset
the resulting adverse effect on its portfolio, in whole or in part, through the
options purchased. The premium paid for a put or call option plus any
transaction costs will reduce the benefit, if any, realized by such Series upon
exercise or liquidation of the option, and, unless the price of the underlying
security changes sufficiently, the option may expire without value to such
Series.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS

FUTURES CONTRACTS. The Global Bond Series, High Yield Series, Global Asset
Allocation Series, Global Growth Series, and International Stock Series may
enter into interest rate futures contracts and the Global Bond Series, Global
Asset Allocation Series, Global Growth Series, International Stock Series, and
Aggressive Growth Series may enter into stock index futures contracts for
hedging purposes. The Global Bond Series, High Yield Series, Global Asset
Allocation Series, Global Growth Series, International Stock Series, and
Aggressive Growth Series may also enter into foreign currency futures contracts.
(Unless otherwise specified, interest rate futures contracts, stock index
futures contracts and foreign currency futures contracts are collectively
referred to as "Futures Contracts.")

Purchases or sales of stock index futures contracts are used to attempt to
protect current or intended stock investments from broad fluctuations in stock
prices. Interest rate and foreign currency futures contracts are purchased or
sold to attempt to hedge against the effects of interest or exchange rate
changes on a Series' current or intended investments in fixed income or foreign
securities. In the event that an anticipated decrease in the value of a Series'
securities occurs as a result of a general stock market decline, a general
increase in interest rates, or a decline in the dollar value of foreign
currencies in which portfolio securities are denominated, the adverse effects of
such changes may be offset, in whole or in part, by gains on the sale of Futures
Contracts. Conversely, the increased cost of a Series' securities to be
acquired, caused by a general rise in the stock market, a general decline in
interest rates, or a rise in the dollar value of foreign currencies, may be
offset, in whole or in part, by gains on Futures Contracts purchased by such
Series. The Series will incur brokerage fees when it purchases and sells Futures
Contracts, and it will be required to make and maintain margin deposits.

OPTIONS ON FUTURES CONTRACTS. The Global Bond Series, High Yield Series, Global
Asset Allocation Series, and Global Growth Series, may purchase and write
options to buy or sell interest rate futures contracts. In addition, the Global
Asset Allocation Series, Global Growth Series, International Stock Series, and
Aggressive Growth Series, may purchase and write options on stock index futures
contracts, and the Global Bond Series, High Yield Series, Global Asset
Allocation Series, Global Growth Series, International Stock Series, and
Aggressive Growth Series may purchase and write options on foreign currency
futures contracts. (Unless otherwise specified,

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options on interest rate futures contracts, options on stock index futures
contracts, and options on foreign currency futures contracts are collectively
referred to as "Options on Futures Contracts.") Such investment strategies will
be used as a hedge and not for speculation.

Put and call Options on Futures Contracts may be traded by the Global Bond
Series, High Yield Series, Global Asset Allocation Series, Global Growth Series,
International Stock Series, and Aggressive Growth Series in order to protect
against declines in the values of such Series securities or against increases in
the cost of securities to be acquired. Purchases of Options on Futures Contracts
may present less risk in hedging than the purchase or sale of the underlying
Futures Contracts since the potential loss is limited to the amount of the
premium plus related transaction costs. The writing of such options, however,
does not present less risk than the trading of futures contracts and will
constitute only a partial hedge, up to the amount of the premium received, and,
if an option is exercised, these Series may suffer a loss on the transaction.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS

The Global Bond Series, High Yield Series, Global Asset Allocation Series,
Global Growth Series, International Stock Series, and Aggressive Growth Series
may enter into contracts for the purchase or sale of a specific currency at a
future date at a price set at the time of the contract (a "Currency Contract").
These Series will enter into Currency Contracts for hedging purposes only, in a
manner similar to such Series' use of foreign currency futures contracts. These
Series may enter into Currency Contracts either with respect to specific
transactions or with respect to the portfolio positions of such Series. For
example, when one of such Series anticipates making a purchase or sale of a
security, it may enter into a Currency Contract in order to set the rate (either
relative to the U.S. dollar or another currency) at which a currency exchange
transaction related to the purchase or sale will be made. Further, when Advisers
believes that a particular currency may decline compared to the U.S. dollar or
another currency, one of such Series may enter into a Currency Contract to sell
the currency Advisers expects to decline in an amount approximating the value of
some or all of the portfolio securities of each such Series denominated in that
currency. These transactions will include forward purchases or sales of foreign
currencies for the purpose of protecting the dollar value of securities
denominated in a foreign currency or protecting the dollar equivalent of
interest or dividends to be paid on such securities. By entering into such
transactions, however, these Series may be required to forego the benefits of
advantageous changes in exchange rates. Currency Contracts are traded
over-the-counter, and not on organized commodities or securities exchanges. As a
result, such contracts operate in a manner distinct from exchange-traded
instruments, and their use involves certain risks beyond those associated with
transactions in the futures and option contracts described above. Except for the
use of forward contracts in connection with the settlement of investment
purchases or sales, each such Series will establish a segregated account with
its custodian containing cash, U.S. Government securities, and liquid high grade
debt obligations to cover its obligations with respect to forward contracts it
has entered into. The value of such assets will be marked to market on a daily
basis.

OPTIONS ON FOREIGN CURRENCIES. The Global Bond Series, High Yield Series, Global
Asset Allocation Series, Global Growth Series, International Stock Series, and
Aggressive Growth Series may purchase and write put and call options on foreign
currencies for the purpose of protecting against declines in the dollar value of
foreign portfolio securities and against increases in the dollar cost of foreign
securities to be acquired. As in the case of other types of options, however,
the writing of an option on foreign currency will constitute only a partial
hedge, up to the amount of the premium received, and these Series could be
required to purchase or sell foreign currencies at disadvantageous exchange
rates, thereby incurring losses. The purchase of an option on foreign currency
may constitute an effective hedge against fluctuations in exchange rates,
although, in the event of rate movements adverse to such Series' position, it
may forfeit the entire amount of the premium plus related transaction costs. As
in the case of Currency Contracts, certain options on foreign currencies are
traded over-the-counter and involve risks which may not be present in the case
of exchange-traded instruments.

SEGREGATED ACCOUNTS

To comply with the 1940 Act, a Series engaging in certain transactions involving
options, futures, reverse repurchase agreements, and forward contracts on
foreign currencies will "cover" its positions by establishing a segregated
account. These segregated accounts will be established and maintained with the
Fortis Series' custodian and will contain only liquid assets such as cash, U.S.
Government securities, or other liquid high grade debt obligations.

RESTRICTED OR ILLIQUID SECURITIES

As fundamental policies, each of the Money Market Series, U.S. Government
Securities Series, Diversified Income Series, Asset Allocation Series, and
Growth Stock Series may invest up to 5%, and Global Growth Series up to 10% of
its total assets (at the time of investment) in securities which such Series may
not be free to sell to the public without registration under the Securities Act
of 1933 (or in the case of Global Growth Series, registered under the applicable
securities laws of the country in which such securities are traded) ("restricted
securities"). The Global Bond Series, High Yield Series, Global Asset Allocation
Series, Growth & Income Series, International Stock Series, and Aggressive
Growth Series each have nonfundamental policies prohibiting investment of more
than 15% of their respective net assets in illiquid securities. These
restrictions do not include securities which may be resold to qualified
institutional buyers in accordance with the provisions of Rule 144A under the
Securities Act of 1933 ("Rule 144A securities"). The staff of the Securities and
Exchange Commission has taken the position that the liquidity of Rule 144A
securities in the portfolio of a fund offering redeemable securities is a
question of fact for a board of directors of such a fund to determine, based
upon a consideration by such board of the readily available trading markets and
a review of any contractual restrictions. The SEC staff also acknowledges that,
while such a board retains ultimate responsibility, it may delegate this
function to the fund's investment adviser. At the present time, it is not
possible to predict with assurance exactly how the market for Rule 144A
securities will develop. A Rule 144A security which when purchased enjoyed a
fair degree of marketability may subsequently become illiquid, thereby adversely
affecting the liquidity of the Series' portfolio.

WARRANTS OR RIGHTS

Warrants or rights may be acquired by the Global Asset Allocation Series Global
Growth Series, and International Stock Series in connection with other
securities or separately and provide such Series with the right to purchase at a
later date other securities of the issuer. Each of these Series has undertaken
that its investments in warrants or rights, valued at the lower of cost or
market, will not exceed 5% of the value of its net assets and not more than 2%
of such assets will be invested in warrants and rights which are not listed on
established stock exchanges, such as the London, Tokyo, or New York Stock
Exchanges. Warrants or rights acquired by such Series in units or attached to
securities will be deemed to be without value for purpose of this restriction.

SHORT SALES AGAINST THE BOX

Each of the Global Bond Series, High Yield Series, Global Asset Allocation
Series, Growth & Income Series, Global Growth Series, International Stock
Series, and Aggressive Growth Series may sell a security to the extent such
Series contemporaneously owns or has the right to obtain securities identical to
those sold short without payment of any additional consideration.

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Such a short sale is referred to as a short sale "against the box." The
aggregate market value of the underlying securities subject to all outstanding
short sales may not exceed 5% of the net assets of the Series.

PORTFOLIO TURNOVER

The portfolio turnover rate for a Series is calculated by dividing the lesser of
purchases or sales by such Series of investment securities for the particular
fiscal year by the monthly average value of investment securities owned by the
Series during the same fiscal year. "Investment securities" for purposes of this
calculation do not include securities with a maturity date less than twelve
months from the date of investment. A 100% portfolio turnover rate would occur,
for example, if the lesser of the value of purchases or sales of investment
securities for a particular year were equal to the average monthly value of the
investment securities owned during such year.

INVESTMENT RESTRICTIONS

Certain investment restrictions are fundamental to the operation of the Series
and may not be changed except with the approval of the holders of a majority of
the outstanding shares of the Series affected. For this purpose, "majority of
the outstanding voting securities" means the lesser of (i) 67% of the
outstanding shares of the affected Series present at the meeting of shareholders
if more than 50% of the outstanding shares of the affected Series are present in
person or by proxy, or (ii) more than 50% of the outstanding shares of the
affected Series. For a discussion of contract owner voting privileges, see the
accompanying Prospectus pertaining to the Contract.

INVESTMENT RESTRICTIONS OF MONEY MARKET SERIES, U.S. GOVERNMENT SECURITIES
SERIES, DIVERSIFIED INCOME SERIES, ASSET ALLOCATION SERIES, AND GROWTH STOCK
SERIES. As a result of the following fundamental investment restrictions, except
as otherwise noted below, Money Market Series, U.S. Government Securities
Series, Diversified Income Series, Asset Allocation Series, and Growth Stock
Series will not:

(1) Purchase securities on margin or otherwise borrow money or issue senior
securities, except that Diversified Income Series, U.S. Government Securities
Series and Asset Allocation Series, in accordance with their investment
objectives and policies, may purchase securities on a when-issued and delayed
delivery basis, within the limitations set forth in the Prospectus and Statement
of Additional Information. Fortis Series may also obtain such short-term credit
as it needs for the clearance of securities transactions, and may borrow from a
bank, for the account of Money Market Series, U.S. Government Securities Series,
Diversified Income Series, Asset Allocation Series, and Growth Stock Series, as
a temporary measure to facilitate redemptions (but not for leveraging or
investment) an amount that does not exceed 10% of the value of the Series' total
assets. Investment securities will not be purchased for a Series while
outstanding bank borrowings exceed 5% of the value of such Series' total assets.

(2) Write, purchase or sell puts, calls or combinations thereof.

(3) Mortgage, pledge or hypothecate its assets, except in an amount not
exceeding 10% of the value of its total assets to secure temporary or emergency
borrowing.

(4) Invest in commodities or commodity contracts.

(5) Act as an underwriter of securities of other issuers, except to the
extent that, in connection with the disposition of portfolio securities, Fortis
Series may be deemed an underwriter under applicable laws.

(6) Participate on a joint or a joint and several basis in any securities
trading account.

(7) Invest in real estate, except a Series may invest in securities issued by
companies owning real estate or interests therein.

(8) Makes loans to other persons. Repurchase agreements and the purchase of
publicly traded debt obligations are not considered to be "loans" for this
purpose and may be entered into or purchased by a Series in accordance with its
investment objectives and policies.

(9) Concentrate its investments in any particular industry, except that (i)
it may invest up to 25% of the value of its total assets in any particular
industry, and (ii) there is no limitation with respect to investments in
obligations issued or guaranteed by the United States Government or its agencies
and instrumentalities, or obligations of domestic commercial banks. As to
utility companies, gas, electric, water and telephone companies will be
considered as separate industries. As to finance companies, the following
categories will be considered as separate industries: (a) captive automobile
finance, such as General Motors Acceptance Corp. and Ford Motor Credit Corp.;
(b) captive equipment finance companies, such as Honeywell Finance Corporation
and General Electric Credit Corp.; (c) captive retail finance companies, such as
Macy Credit Corp. and Sears Roebuck Acceptance Corp.; (d) consumer loan
companies, such as Beneficial Finance Corporation and Household Finance
Corporation; (e) diversified finance companies such as CIT Financial Corp.,
Commercial Credit Corporation and Borg Warner Acceptance Corp.; and (f) captive
oil finance companies, such as Shell Credit, Inc., Mobil Oil Credit Corp. and
Texaco Financial Services, Inc. [For purposes of this restriction, securities of
each foreign government will be considered a separate "industry".]

(10) Purchase from or sell to any officer, director, or employee of Fortis
Series, or its adviser or underwriter, or any of their officers or directors,
any securities other than shares of Fortis Series' common stock.

(11) Make short sales, except for sales "against the box." While a short sale
is made by selling a security the Series does not own, a short sale is "against
the box" to the extent that the Series contemporaneously owns or has the right
to obtain securities identical to those sold short at no added cost.

(12) Invest more than 5% of the value of its assets in restricted securities.
(Securities sold under Section 4(2) of the Securities Act of 1933 (the "1933
Act") that are eligible for resale pursuant to Rule 144A under the 1933 Act that
have been determined to be liquid by the Board of Directors or the investment
adviser subject to the oversight of the Board of Directors will not be
considered to be "restricted securities" and will not be subject to this
limitation.)

The following seven investment restrictions may be changed by the Board of
Directors without shareholder approval.

The Money Market Series, U.S. Government Securities Series, Diversified Income
Series, Asset Allocation Series, and Growth Stock Series will not:

(1) Purchase securities of other investment companies.

(2) Invest in a company for the purposes of exercising control or management.

(3) Buy or sell foreign exchange, except as incidental to the purchase or
sale of permissible foreign investments.

(4) Investment in securities which would expose such Series to liabilities
exceeding the amount invested.

(5) Invest in interests (including partnership interests) in oil, gas, or
other mineral exploration or development programs, except it may purchase or
sell securities issued by corporations engaging in oil, gas, or other mineral
exploration or development business.

(6) Purchase or retain the securities of any issuer if those officers and
directors of Fortis Series or its investment adviser owning (including
beneficial ownership) individually more than 1/2 of 1% of the securities of such
issuer together own (including beneficial ownership) more than 5% of the
securities of such issuer.

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(7) Invest more than an aggregate of 10% of the value of its total assets in
(a) restricted securities (both debt and equity) or in equity securities of any
issuer which are not readily marketable; and (b) companies which have been in
business for less than three years (except that a company will be deemed to have
been in business for more than three years if such company is the subsidiary of
another company which has been in business for more than three years).
(Securities sold under Section 4(2) of the 1933 Act that are eligible for resale
pursuant to Rule 144A under the 1933 Act that have been determined to be liquid
by the Board of Directors or the investment adviser subject to the oversight of
the Board of Directors will not be considered to be "restricted securities" or
"debt or equity securities of any issuer which are not readily marketable" and
will not be subject to this limitation.)

INVESTMENT RESTRICTIONS OF HIGH YIELD SERIES, GROWTH & INCOME SERIES, AND
AGGRESSIVE GROWTH SERIES. As a result of the following fundamental investment
restrictions, except as otherwise noted below, High Yield Series, Growth &
Income Series and Aggressive Growth Series will not:

(1) Concentrate its investments in any particular industry, except that (i)
it may invest up to 25% of the value of its total assets in any particular
industry, and (ii) there is no limitation with respect to investments in
obligations issued or guaranteed by the United States Government or its agencies
and instrumentalities, or obligations of domestic commercial banks. As to
utility companies, gas, electric, water and telephone companies will be
considered as separate industries. As to finance companies, the following
categories will be considered as separate industries: (a) captive automobile
finance, such as General Motors Acceptance Corp. and Ford Motor Credit Corp.;
(b) captive equipment finance companies, such as Honeywell Finance Corporation
and General Electric Credit Corp.; (c) captive retail finance companies, such as
Macy Credit Corp. and Sears Roebuck Acceptance Corp.; (d) consumer loan
companies, such as Beneficial Finance Corporation and Household Finance
Corporation; (e) diversified finance companies such as CIT Financial Corp.,
Commercial Credit Corporation and Borg Warner Acceptance Corp.; and (f) captive
oil finance companies, such as Shell Credit, Inc., Mobil Oil Credit Corp. and
Texaco Financial Services, Inc.

(2) Purchase or sell physical commodities (such as grains, livestock, etc.)
or futures or options contracts thereon. However, it may purchase or sell any
forms of financial instruments or contracts that might be deemed commodities.

(3) Invest directly in real estate or interests in real estate; however, the
Series may invest in interests in real estate investment trusts, debt securities
secured by real estate or interests therein, or debt or equity securities issued
by companies which invest in real estate or interests therein.

(4) Mortgage, pledge, hypothecate, or in any manner transfer, as security for
indebtedness, any securities owned or held by the Series, provided that this
restriction shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.

(5) Act as an underwriter of securities of other issuers, except to the
extent that, in connection with the disposition of portfolio securities, the
Series may be deemed an underwriter under applicable laws.

(6) Purchase securities on margin, except that the Series, in accordance with
its investment objectives and policies, may purchase securities on a
when-issued, delayed delivery or forward commitment basis. The Series may also
obtain such short-term credit as it needs for the clearance of securities
transactions and may make margin deposits in connection with futures contracts.

(7) Make short sales, except for sales "against the box." While a short sale
is made by selling a security the Series does not own, a short sale is "against
the box" to the extent the Series contemporaneously owns or has the right to
obtain securities identical to those sold short without payment of any
additional consideration.

(8) Make loans to other persons, except: (i) each Series may lend its
portfolio securities in an amount not to exceed 33 1/3% of the value of its
total assets if such loans are secured by collateral equal to at least the
market value of the securities lent, provided that such collateral shall be
limited to cash, securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, certificates of deposit or other high-grade,
short-term obligations or interest-bearing cash equivalents; and (ii) it may
purchase debt securities through private placements (restricted securities) in
accordance with the Series' investment objectives and policies.

(9) Issue senior securities (as defined in the 1940 Act) other than as set
forth in restriction #10 below and except to the extent that using options and
futures contracts or purchasing or selling securities on a when issued, delayed
delivery or forward commitment basis (including the entering into of roll
transactions) may be deemed to constitute issuing a senior security.

(10) Borrow money except from banks for temporary or emergency purposes not in
excess of 33 1/3% of the value of the Series' total assets. The Series will not
purchase securities while borrowings (including "roll" transactions) in excess
of 5% of total assets are outstanding. In the event that the asset coverage for
the Series' borrowings falls below 300%, the Series will reduce, within three
days (excluding Sundays and holidays), the amount of its borrowings in order to
provide for 300% asset coverage.

The following ten investment restrictions may be changed by the Board of
Directors without shareholder approval.

The High Yield Series, Growth & Income Series, and Aggressive Growth Series will
not:

(1) Invest more than 5% of the value of its total assets in securities of
other investment companies, except in connection with a merger, consolidation,
acquisition, or reorganization; provided that the Series shall not purchase or
otherwise acquire more than 3% of the total outstanding voting stock of any
other investment company. (Since each Series indirectly absorbs its pro rata
share of the other investment companies' expenses through the return received on
these securities, "double" investment advisory fees in effect are paid on those
portfolio assets invested in shares of other investment companies. However,
management believes that at times the return and liquidity features of these
securities will be more beneficial to the Series than other types of securities,
and that the indirect absorption of these expenses has a de minimis effect on
the Series' return.)

(2) Invest in a company for the purposes of exercising control or management.

(3) Invest in interests (including partnership interests or leases) in oil,
gas, or other mineral exploration or development programs, except the Series may
purchase or sell securities issued by corporations engaging in oil, gas, or
other mineral exploration or development business.

(4) Purchase or retain the securities of any issuer if those officers and
directors of Fortis Series or its investment adviser owning (including
beneficial ownership) individually more than 1/2 of 1% of the securities of such
issuer together own (including beneficial ownership) more than 5% of the
securities of such issuer.

(5) Invest more than 5% of its total assets in securities of unseasoned
issuers, including their predecessors, which have been in operation for less
than three years.

(6) Invest more than 15% of its net assets in all forms of illiquid
investments, as determined pursuant to applicable Securities and Exchange
Commission rules and interpretations.

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(7) Enter into any options, futures, or forward contract transactions if
immediately thereafter (a) the amount of premiums paid for all options, initial
margin deposits on all futures contracts and/or options on futures contracts,
and collateral deposited with respect to forward contracts held by or entered
into by the Series would exceed 5% of the value of the total assets of the
Series or (b) the Series' assets covering, subject to, or committed to all
options, futures, and forward contracts would exceed 20% of the value of the
total assets of the Series. (This restriction does not apply to securities
purchased on a when-issued, delayed delivery, or forward commitment basis.)

(8) Invest in real estate limited partnership interests.

(9) Purchase the securities of any issuer if such purchase at the time
thereof would cause more than 10% of the voting securities of any issuer to be
held by the Series.

(10) Borrow money in excess of 10% of its total assets, except as a temporary
or emergency measure. ("Roll" transactions will not be considered borrowing for
purposes of this restriction).

INVESTMENT RESTRICTIONS OF GLOBAL GROWTH SERIES. As a result of the following
fundamental investment restrictions, the Global Growth Series will not:

(1) Concentrate its investments, that is, invest 25% or more of its total
assets in any particular industry.

(2) Buy or sell commodities or commodity contracts, including futures
contracts, other than within the limitations set forth in the Prospectus and
Statement of Additional Information.

(3) Purchase or sell real estate or other interests in real estate, or
interests in real estate investment trusts; however, the Global Growth Series
may invest in debt securities secured by real estate or interests therein or
issued by corporations which invest in real estate or interests.

(4) Mortgage, pledge, hypothecate, or in any manner transfer, as security for
indebtedness, any securities owned or held by the Global Growth Series, provided
that this restriction shall not apply to the transfer of securities in
connection with any permissible borrowing or to collateral arrangements in
connection with permissible activities.

(5) Act as an underwriter of securities of other issuers, except to the
extent that, in connection with the disposition of portfolio securities, the
Global Growth Series may be deemed an underwriter under applicable laws and
except that the Global Growth Series may invest up to 10% of the value of its
assets (at time of investment) in portfolio securities which are not registered
under the applicable securities laws of the country in which such securities are
traded and for which no alternative market is readily available (such securities
are referred to herein as "restricted securities"). (Securities sold under
Section 4(2) of the 1933 Act that are eligible for resale pursuant to Rule 144A
under the 1933 Act that have been determined to be liquid by the Board of
Directors or the investment adviser subject to the oversight of the Board of
Directors will not be considered to be "restricted securities" and will not be
subject to this limitation.)

(6) Purchase securities on margin, except that the Global Growth Series, in
accordance with its investment objectives and policies, may purchase securities
on a when-issued, delayed delivery or forward commitment basis, within the
limitations set forth in the Prospectus and Statement of Additional Information.
The Global Growth Series may also obtain such short-term credit as it needs for
the clearance of securities transactions and may make margin deposits in
connection with futures contracts.

(7) Make short sales, except for sales "against the box." While a short sale
is made by selling a security the Global Growth Series does not own, a short
sale is "against the box" to the extent the Global Growth Series
contemporaneously owns or has the right to obtain securities identical to those
sold short without payment of any additional consideration.

(8) Make loans to other persons, except that it may purchase readily
marketable bonds, debentures, or other debt securities, whether or not publicly
distributed, enter into repurchase agreements, and make loans of portfolio
securities to an aggregate of 30% of the value of its total assets, measured at
the time any such loan is made.

(9) Issue senior securities, except that the Global Growth Series may
purchase securities on a when-issued, delayed delivery or forward commitment
basis and enter into roll transactions and other transactions within the
limitations set forth in the Prospectus and Statement of Additional Information
which may be deemed to constitute borrowing.

(10) Borrow money except from banks for temporary or emergency purposes not in
excess of 33 1/3% of the value of the Global Growth Series' total assets. The
Global Growth Series will not purchase securities while borrowings (including
"roll" transactions) in excess of 5% of total assets are outstanding. In the
event that the asset coverage for the Series' borrowings falls below 300%, the
Global Growth Series will reduce, within three days (excluding Sundays and
holidays), the amount of its borrowings in order to provide for 300% asset
coverage.

The following investment restrictions may be changed by the Board of Directors
without shareholder approval.

The Global Growth Series will not:

(1) Invest more than 5% of the value of its total assets in securities of
other investment companies, except in connection with a merger, consolidation,
acquisition, or reorganization; provided that the Series shall not purchase or
otherwise acquire more than 3% of the total outstanding voting stock of any
other investment company. (Since the Global Growth Series indirectly absorbs its
pro rata share of the other investment companies' expenses through the return
received on these securities, "double" investment advisory fees in effect are
paid on those portfolio assets invested in shares of other investment companies.
However, management believes that at times the return and liquidity features of
these securities will be more beneficial to the Global Growth Series than other
types of securities, and that the indirect absorption of these expenses has a de
minimis effect on the Series' return.)

(2) Invest in a company for the purposes of exercising control or management.

(3) Invest in interests (including partnership interests or leases) in oil,
gas, or other mineral exploration or development programs, except the Global
Growth Series may purchase or sell securities issued by corporations engaging in
oil, gas, or other mineral exploration or development business.

(5) Invest more than 5% of its total assets in securities of unseasoned
issuers, including their predecessors, which have been in operation for less
than three years, and in equity securities of issuers which are not readily
marketable. (Securities sold under Section 4(2) of the 1933 Act that are
eligible for resale pursuant to Rule 144A under the 1933 Act that have been
determined to be liquid by the Board of Directors or the investment adviser
subject to the oversight of the Board of Directors will not be considered to be
"equity securities of issuers which are not readily marketable" and will not be
subject to this limitation.)

(6) Invest more than an aggregate of 10% of the value of its total assets in
(a) restricted securities (both debt and equity) or in debt or equity securities
of any issuer which are not readily marketable; (b) repurchase agreements with a
maturity of more than seven days; and (c) over-the-counter option and futures
contracts; provided further, that

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the Series will not invest more than 5% of its total assets in restricted
securities. (Securities sold under Section 4(2) of the 1933 Act that are
eligible for resale pursuant to Rule 144A under the 1933 Act that have been
determined to be liquid by the Board of Directors or Advisers subject to the
oversight of the Board of Directors will not be considered to be "restricted
securities" or "debt or equity securities of any issuer which are not readily
marketable" and will not be subject to this limitation.)
(7) Enter into any options, futures, or forward contract transactions if
immediately thereafter (a) the amount of premiums paid for all options, initial
margin deposits on all futures contracts and/or options on futures contracts,
and collateral deposited with respect to forward contracts held by or entered
into by the Series would exceed 5% of the value of the total assets of the
Series or (b) the Series' assets covering, subject to, or committed to all
options, futures, and forward contracts would exceed 20% of the value of the
total assets of the Series. (This restriction does not apply to securities
purchased on a when-issued, delayed delivery, or forward commitment basis.)
(8) Invest in real estate limited partnership interests.
(9) Purchase the securities of any issuer if such purchase at the time
thereof would cause more than 10% of the voting securities of any issuer to be
held by the Series.
(10) Borrow money in excess of 10% of its total assets, except as a temporary
or emergency measure. ("Roll" transactions will not be considered borrowing for
purposes of this restriction).

INVESTMENT RESTRICTIONS OF GLOBAL BOND SERIES, GLOBAL ASSET ALLOCATION SERIES,
AND INTERNATIONAL STOCK SERIES. As a result of the following fundamental
investment restrictions, the International Stock Series, Global Bond Series, and
Global Asset Allocation Series will not:

(1) Concentrate its investments in any particular industry, except that (i) a
Series may invest up to 25% of the value of its total assets in any particular
industry, and (ii) there is no limitation with respect to investments in
obligations issued or guaranteed by the United States government or its agencies
and instrumentalities, or obligations of domestic commercial banks. As to
utility companies, gas, electric, water and telephone companies will be
considered as separate industries. As to finance companies, the following
categories will be considered as separate industries: (a) captive automobile
finance, such as General Motors Acceptance Corp. and Ford Motor Credit Corp.;
(b) captive equipment finance companies, such as Honeywell Finance Corporation
and General Electric Credit Corp.; (c) captive retail finance companies, such as
Macy Credit Corp. and Sears Roebuck Acceptance Corp.; (d) consumer loan
companies, such as Beneficial Finance Corporation and Household Finance
Corporation; (e) diversified finance companies, such as CIT Financial Corp.,
Commercial Credit Corporation and Borg Warner Acceptance Corp.; and (f) captive
oil finance companies, such as Shell Credit, Inc., Mobil Oil Credit Corp. and
Texaco Financial Services, Inc. [For purposes of this restriction, securities of
each foreign government or agency thereof will be considered separate
"industries".]

(2) Purchase or sell physical commodities (such as grains, livestock, et
cetera) or futures or options contracts thereon; however, a Series may purchase
or sell any forms of financial instruments or contracts that might be deemed
commodities.

(3) Invest directly in real estate or interests in real estate; however, a
Series may invest in interests in real estate investment trusts, debt securities
secured by real estate or interests therein, or debt or equity securities issued
by companies that invest in real estate or interests therein.

(4) Act as an underwriter of securities of other issuers, except to the
extent that, in connection with the disposition of portfolio securities, a
Series may be deemed an underwriter under applicable laws.

(5) Purchase securities on margin or otherwise borrow money, except that a
Series, in accordance with its investment objectives and policies, may purchase
securities on a when-issued, delayed delivery or forward commitment basis, and
may make margin deposits in connection with dealing in commodities or options
thereon. A Series also may obtain such short-term credit as it needs for the
clearance of securities transactions, and may borrow from a bank an amount that
does not exceed 33 1/3% of the value of a Series' total assets. A Series will
not purchase investment securities while outstanding bank borrowings (including
"roll" transactions) in excess of 5% of its total assets are outstanding in the
event that the asset coverage for a Series' borrowings falls below 300%, such
Series will reduce, within three days (excluding Sundays and holidays), the
amount of its borrowings in order to provide for 300% asset coverage.

(6) Make loans to other persons, except that a Series may lend its portfolio
securities in an amount not to exceed 33 1/3% of the value of its total assets
(including the amount lent as well as the collateral securing such loans), if
such loans are secured by collateral at least equal to the market value of the
securities lent, provided that such collateral shall be limited to cash,
government securities, certificates of deposit or other high-grade, short-term
obligations or interest-bearing cash equivalents (including repurchase
agreements pertaining to such securities or obligations). Loans shall not be
deemed to include repurchase agreements or the purchase or acquisition of a
portion of an issue of notes, bonds, debentures or other debt securities,
whether or not such purchase or acquisition is made upon the original issuance
of the securities.

(7) Issue senior securities (as defined in the 1940 Act) other than as set
forth in restriction 5 concerning borrowing and except to the extent that using
options and futures contracts or purchasing or selling securities on a
when-issued, delayed delivery or forward commitment basis (including the
entering into of roll transactions) may be deemed to constitute issuing a senior
security.

The following investment restrictions may be changed by the Board of Directors
without shareholder approval.

The Global Bond Series, Global Asset Allocation Series, and International Stock
Series will not:

(1) Invest more than 5% of the value of its total assets in securities of
other investment companies, except in connection with a merger, consolidation,
acquisition or reorganization; provided that no Series shall purchase or
otherwise acquire more than 3% of the total outstanding voting stock of any
other investment company. (Since a Series indirectly absorbs its pro rata share
of the other investment companies' expenses through the return received on these
securities, "double" investment advisory fees in effect are paid on those
portfolio assets invested in shares of other investment companies. However,
management believes that at times the return and liquidity features of these
securities could be more beneficial to a Series than other types of securities,
and that the indirect absorption of these expenses has a de minimis effect on
the Series' return.)

(2) Invest in a company for the purposes of exercising control or management.

(3) Invest in interests (including partnership interests or leases) in oil,
gas or other mineral exploration or development programs, except it may purchase
or sell securities issued by corporations engaging in oil, gas or other mineral
exploration or development business.

34
<PAGE>

(5) Invest more than 5% of its total assets in securities of unseasoned
issuers, including their predecessors, which have been in operation for less
than three years.

(6) Invest more than 15% of the value of its net assets in illiquid
securities, as determined pursuant to applicable Commission rules and
interpretations. Securities that have been determined to be liquid by the Board
of Directors of Fortis Series, or by Advisers subject to the oversight of such
Board of Directors, will not be subject to this limitation.

(7) Enter into any options, futures or forward contract transactions if
immediately thereafter the amount of premiums paid for all options, initial
margin deposits on all futures contracts and/or options on futures contracts,
and collateral deposited with respect to forward contracts held by or entered
into by such Series would exceed 5% of the value of the total assets of such
Series. (This restriction does not apply to securities purchased on a
when-issued, delayed delivery or forward commitment basis.)

(8) Make short sales, except for sales "against the box" and except for
foreign currency forward exchange contracts for hedging or cross-hedging
purposes.

(9) Mortgage, pledge or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and except for collateral arrangements
in connection with permissible activities.

(10) Purchase the securities of any issuer if such purchase at the time
thereof would cause more than 10% of the voting securities of any issuer to be
held by the Series.

(11) Borrow money in excess of 10% of its total assets, except as a temporary
or emergency measure. ("Roll" transactions will not be considered borrowing for
purposes of this restriction.)

Any investment restriction or limitation, fundamental or otherwise, which
involves a maximum percentage of securities or assets shall not be considered to
be violated unless an excess over the percentage occurs immediately after an
acquisition of securities or utilization of assets, and such excess results
therefrom.

The insurance laws and regulations of various states could impose additional
restrictions on the investments of the various Series. One such restriction
currently prohibits the Separate Accounts from acquiring the voting securities
of any issuer if, as a result of the acquisition, the Separate Accounts and
Fortis Benefits, in the aggregate, will own more than 10% of the total issued
and outstanding voting securities of the issuer. Another restriction currently
prohibits the underlying Series of the Separate Accounts from acquiring the
securities of any issuer, other than securities issued or guaranteed as to
principal and interest by the United States Government, if immediately after
such acquisition, the value of the investment together with prior investments in
the security would exceed 10% of the value of the underlying Series of the
Separate Accounts' total assets.

RISK FACTORS

RISKS OF TRANSACTIONS IN HIGH-YIELDING SECURITIES. Participation in lower-rated
securities transactions generally involves greater returns in the form of higher
average yields. However, participation in such transactions involves greater
risks, often related to sensitivity to interest rates, economic changes,
solvency, and relative liquidity in the secondary trading market.

Yields on high yield securities will fluctuate over time. The prices of high-
yielding securities have been found to be less sensitive to interest rate
changes than higher-rated investments, but more sensitive to adverse economic
changes or individual corporate developments. Also, during an economic downturn
or substantial period of rising interest rates highly leveraged issuers may
experience financial stress which would adversely affect their ability to
service their principal and interest payment obligations, to meet projected
business goals, and to obtain additional financing. If the issuer of a security
held by the Diversified Income Series, High Yield Series, or Asset Allocation
Series defaulted, such Series may incur additional expenses to seek recovery. In
addition, periods of economic uncertainty and changes can be expected to result
in increased volatility of market prices of high-yielding securities and such
Series' asset value. Furthermore, in the case of high-yielding securities
structured as zero coupon or payment in kind securities ("PIKs"), their market
prices are affected to a greater extent by interest rate changes and thereby
tend to be more volatile than securities which pay interest periodically and in
cash.

High-yielding securities present risks based on payment expectations. For
example, high-yielding securities may contain redemption or call provisions. If
an issuer exercises these provisions in a declining interest rate market, these
Series likely would have to replace the security with a lower-yielding security,
resulting in a decreased return for investors. Conversely, a high-yielding
security's value will decrease in a rising interest rate market, as will the
value of such Series' assets. If such Series experience unexpected net
redemptions, this may force them to sell their high-yielding securities, without
regard to their investment merits, thereby decreasing the asset base upon which
the Series' expenses can be spread and possibly reducing the rate of return.

To the extent that there is no established secondary market, there may be thin
trading of high-yielding securities. This may adversely affect the ability of
the Board of Directors to accurately value high-yielding securities and such
Series' assets and such Series' ability to dispose of the securities. Securities
valuation becomes more difficult and judgment plays a greater role in valuation
because there is less reliable, objective data available. Adversely publicity
and investor perceptions, whether or not based on fundamental analysis, may
decrease the values and liquidity of high-yielding securities, especially in a
thinly traded market. Illiquid or restricted high-yielding securities purchased
by such Series may involve special registration responsibilities, liabilities
and costs, and liquidity and valuation difficulties.

New laws and proposed new laws could have an adverse impact on the market for
such securities. As examples, recent legislation requires federally-insured
savings and loan associations to divest their investments in high-yielding
securities and pending proposals are designed to limit the use, or tax and other
advantages of high-yielding securities. The new legislation and the proposals,
if enacted, could have an adverse effect on these Series' net asset value and
investment practices, with the extent of the impact depending upon the
composition of such Series at that time.

Certain risks are associated with applying credit ratings as a method for
evaluating high-yielding securities. For example, credit ratings evaluate the
safety of principal and interest payments, not market value risk of high-
yielding securities. Since credit rating agencies may fail to timely change the
credit ratings to reflect subsequent events, Advisers continuously monitors the
issuers of high-yielding securities held by these Series to determine if the
issuers will have sufficient cash flow and profits to meet required principal
and interest payments, and to assure the securities' liquidity so such Series
can meet redemption requests. The achievement of the investment objective of
such Series may be more dependent upon Advisers' own credit analysis than is the
case for higher quality bonds. Also, these Series may retain a portfolio
security whose rating has been changed if the security otherwise meets the
Series' investment objectives and investment criteria.

RISKS OF INVESTING IN FOREIGN SECURITIES. Investing in securities of non-U.S.
companies may entail additional risks due to the potential political and
economic instability of certain countries and risks of expropriation,
nationalization, confiscation, or the imposition of restrictions on foreign
investment and on repatriation of capital invested. In the event of such

35
<PAGE>

expropriation, nationalization, or other confiscation, by any country, the
Series could lose its entire investment in any such country. Certain countries
prohibit or impose substantial restrictions on investments in their capital
markets, particularly their equity markets, by foreign entities such as the
Series. As illustrations, certain countries require governmental approval prior
to investments by foreign persons, or limit the amount of investment by foreign
persons in a particular company, or limit the investment by foreign persons to
only a specific class of securities of a company that may have less advantageous
terms than securities of the company available for purchase by nationals.
Moreover, the national policies of certain countries may restrict investment
opportunities in issuers or industries deemed sensitive to national interests.
In addition, some countries require governmental approval for the repatriation
of investment income, capital, or the proceeds of securities sales by foreign
investors. A Series, particularly the Global Bond Series, Global Asset
Allocation Series, Global Growth Series, and International Stock Series, could
be adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation, as well as by the application to it of
other restrictions on investments.

Foreign companies are not generally subject to uniform accounting, auditing, and
financial reporting standards or to other regulatory requirements comparable to
those applicable to U.S. companies. Most of the securities held by the Global
Bond Series, Global Asset Allocation Series, Global Growth Series, and
International Stock Series will not be registered with the SEC or regulators of
any foreign country, nor will the issuers thereof be subject to the SEC's
reporting requirements. Thus, there will be less available information
concerning foreign issuers of securities held by the Series than is available
concerning U.S. issuers. In instances where the financial statements of an
issuer are not deemed to reflect accurately the financial situation of the
issuer, the Series will take appropriate steps to evaluate the proposed
investment, which may include on-site inspection of the issuer, interviews with
its management and consultations with accountants, bankers, and other
specialists.

Because the Global Bond Series, Global Asset Allocation Series, Global Growth
Series, and International Stock Series will each invest at least a majority of
its total assets in the securities of foreign issuers which are denominated in
foreign currencies, the strength or weakness of the U.S. dollar against such
foreign currencies may account for part of the Series' investment performance. A
decline in the value of any particular currency against the U.S. dollar will
cause a decline in the U.S. dollar value of the Series' holdings of securities
denominated in such currency and, therefore, will cause an overall decline in
the Series' net asset value and any net investment income and capital gains to
be distributed in U.S. dollars to shareholders of such Series.

The rate of exchange between the U.S. dollar and other currencies is determined
by several factors including the supply and demand for particular currencies,
central bank efforts to support particular currencies, the movement of interest
rates, the pace of business activity in certain other countries, and the U.S.,
and other economic and financial conditions affecting the world economy.

Although the Global Bond Series, Global Asset Allocation Series, Global Growth
Series, and International Stock Series each values its assets daily in terms of
U.S. dollars, each such Series does not intend to convert its holdings of
foreign currencies into U.S. dollars on a daily basis. These Series will do so
from time to time, and investors should be aware of the costs of currency
conversion. Although foreign exchange dealers do not charge a fee for
conversion, they do realize a profit based on the difference (the "spread")
between the prices at which they are buying and selling various currencies.
Thus, a dealer may offer to sell a foreign currency to the Series at one rate,
while offering a lesser rate of exchange should the Series desire to sell that
currency to the dealer.

Securities of many foreign issuers may be less liquid and their prices more
volatile than securities of comparable U.S. issuers. In addition, foreign
securities exchanges and brokers are generally subject to less governmental
supervision and regulation than in the U.S., and foreign securities exchange
transactions are usually subject to fixed commissions, which are generally
higher than negotiated commissions on U.S. transactions. In addition, foreign
securities exchange transactions may be subject to difficulties associated with
the settlement of such transactions. Delays in settlement could result in
temporary periods when assets of the Series are uninvested and no return is
earned thereon. The inability of the Series to make intended security purchases
due to settlement problems could cause the Series to miss attractive
opportunities. Inability to dispose of a portfolio security due to settlement
problems either could result in losses to the Series due to subsequent declines
in value of the portfolio security or, if the Series has entered into a contract
to sell the security, could result in possible liability to the purchaser. The
Series will consider such difficulties when determining the allocation of the
Series' assets, although the Series does not believe that such difficulties will
have a material adverse effect on the portfolio trading activities.

The Series' net investment income from foreign issuers may be subject to
non-U.S. withholding taxes, thereby reducing the Series' net investment income.
See "Taxation" in the Prospectus.

Pursuant to Rule 17f-5 under the 1940 Act, the Board of Directors approved the
use of the following subcustodian banks to maintain foreign securities in or
near the market in which they are principally traded and to maintain cash in
amounts reasonably necessary to effect foreign securities transactions in such
locations. The Board of Directors may from time to time approve other countries
and subcustodian banks pursuant to Rule 17f-5.

<TABLE>
<CAPTION>
COUNTRY BANK/DEPOSITORY
- ------------------ ---------------------------------------------------
<S> <C>
Argentina Citibank, N.A. (Buenos Aires Branch)
Caja de Valores ("CDV")
Australia Australia and New Zealand Banking
Group Limited (ANZ)
Austra Clear Ltd.
Austria Creditanstalt-Bankverein
Osteneichische Kontrollebank
(OeKB)
Belgium Generale Bank
Caisse Interprofessionelle de Depots
et de Virements de Titres S.A.
(C.I.K.)
Brazil Citibank, N.A. (Sao Paulo Branch)
The Bolsa de Valores de Sao Paulo
(BOVESPA)
Canada The Toronto-Dominion Bank
Canadian Depository for Securities
Limited (CDS)
Chile Citibank, N.A. (Santiago Branch)
China Standard Chartered Bank
Shanghai Securities Central Clearing
and Registration Corp.
Colombia Cititrust Colombia, S.A.
Deposito Central de Valores (DLV)
Czech Republic Ceskoslovenska Obchodi Banka, A.S.
Stredisko Cennych Papinu (SCP)
Denmark Den Danske Bank Vaerdipapircentralen (Danish
Securities Centre)
Finland Kansallis-Osake-Pankki
The Central Share Register of Finland
France Banque Paribas
Societe Interprofessionelle de
Compensation des Valeurs
Mobilieres (SICOVAM)
</TABLE>

36
<PAGE>

<TABLE>
<CAPTION>
COUNTRY BANK/DEPOSITORY
- ------------------ ---------------------------------------------------
<S> <C>
Germany Dresdner Bank, AG
Deutscher Kassenverein A.G.
(Kassenverein)
Greece National Bank of Greece S.A.
Apothetirio Titlon
Hong Kong Standard Chartered Bank
Central Clearing and Securities
System (CCAS)
Hungary Citibank Budapest Rt.
The Central Depository and Clearinghouse
India The Hong Kong and Shanghai
Banking Corporation Limited
(HSBC)
Indonesia Standard Chartered Bank
Italy Citibank, N.A. (Milan Branch) Monte Titoli, S.p.A.
Japan The Bank of Tokyo
Japan Securities Depository
(JASDEC)
Korea Standard Chartered Bank
Korea Securities Settlement
Corporation (KSSC)
Luxembourg Cedel Luxembourg
Malaysia Chung Khiaw Bank (Malaysia)
Malaysian Central Depository
Sdn Bhd (MCD)
Mexico Bancomer S.A., Institution DeBanca Multiple,
Grupo Financiero
Instituto para el Deposito de Valores
(S.D. Indeval) (equity securities only)
Netherlands ABN-AMRO Bank
Nederlands Centraal
Institut voor Giraal Effectenverkeer
B.V. (NECIGEF)
New Zealand Australia and New Zealand Banking
Group Limited (ANZ)
Austraclear NZ
Norway Euroclear
Norwegian Registry of Securities
(NRS/VPS)
Pakistan Standard Chartered Bank
Peru Citibank, N.A. (Lima Branch)
Caja de Valores (CAVAL)
Philippines Standard Chartered Bank
Poland Citibank (Poland), S.A.
National Depository of Securities
Portugal Banco Espirito Santo E Comercial
De Lisboa, SA (BESCL)
Central de Valores Mobiliarios (CVM)
Singapore United Overseas Bank Ltd.
The Central Securities Depository
(PTE) Ltd. (CDP)
South Africa First National Bank of Southern
Africa, Ltd.
Spain Banco Santader
Servicio de Compensacion y
Liquidacion de Valores (SCLV)
<CAPTION>
COUNTRY BANK/DEPOSITORY
- ------------------ ---------------------------------------------------
<S> <C>
Sri Lanka Standard Chartered Bank
The Central Depository System Ltd.
Sweden Svenska Handelsbanken Vardepappercentralen VPC
AB
Switzerland Bankers Trust A.G.
Schweizerische Effekten
Giro A G (SEGA)
Taiwan Central Trust of China-Taipai
The Taiwan Securities Central Depository Company
Ltd.
Thailand Standard Chartered Bank
The Share Depository Center (SDC)
Turkey Osmanli Bankasi A.S. (Ottoman Bank)
Istanbul Stock Exchange
United Kingdom/ Bankers Trust Company
Ireland (London Branch)
Central Gilts Office
Venezuela Citibank, N.A. (Caracas Branch)
Transnational Euroclear
Transnational Cedel
</TABLE>

RISKS OF INVESTING IN ILLIQUID SECURITIES. The sale of restricted or 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 over-the-counter
markets. Restricted securities often sell at a price lower than similar
securities that are not subject to restrictions on resale.

RISKS OF TRANSACTIONS IN OPTIONS, FUTURES CONTRACTS, AND FORWARD
CONTRACTS. Although the Global Bond Series, High Yield Series, Global Asset
Allocation Series, Global Growth Series, International Stock Series, and
Aggressive Growth Series may enter into transactions in Futures Contracts,
Options on Futures Contracts, Currency Contracts, and certain options solely for
hedging purposes, their use does involve certain risks. For example, a lack of
correlation between the index or instrument underlying an option or futures
contract and the assets being hedged or unexpected adverse price movements,
could render such Series' hedging strategy unsuccessful and could result in
losses. These Series also may enter into transactions in options on securities
and indexes of securities for other than hedging purposes, which involves
greater risk. In addition, there can be no assurance that a liquid secondary
market will exist for any contract purchased or sold, such Series may be
required to maintain a position until exercise or expiration, which could result
in losses.

Transactions in options, Futures Contracts, Options on Futures Contracts, and
Currency Contracts may be entered into on United States exchanges regulated by
the SEC or the Commodity Futures Trading Commission, as well as in the
over-the-counter market and on foreign exchanges. In addition, the securities
underlying options and Futures Contracts may include domestic as well as foreign
securities. Investors should recognize that transactions involving foreign
securities or foreign currencies, and transactions entered into in foreign
countries, may involve considerations and risks not typically associated with
investing in U.S. markets.

37
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS

The names, addresses, principal occupations, and other affiliations of directors
and executive officers of Fortis Series are given below:

<TABLE>
<CAPTION>
POSITION WITH PRINCIPAL OCCUPATION AND AFFILIATIONS WITH
NAME & ADDRESS FORTIS SERIES "AFFILIATED PERSONS" OR INVESTORS (PAST 5 YEARS)
- ------------------------- --------------- --------------------------------------------------------------------------------
<S> <C> <C>
Richard W. Cutting Director Certified public accountant and financial consultant.
137 Chapin Parkway
Buffalo, New York
Allen R. Freedman* Director Chairman and Chief Executive Officer of Fortis, Inc.; a Managing Director of
Suite 5001 Fortis International, N. V.
One World Trade Center
New York, New York
Dr. Robert M. Gavin Director President, Macalester College.
1600 Grand Avenue
St. Paul, Minnesota
Jean L. King Director President, Communi-King, a communications consulting firm.
12 Evergreen Lane
St. Paul, Minnesota
Dean C. Kopperud* President and President and a Director of Advisers and Investors and Senior Vice President of
500 Bielenberg Drive Director Fortis Benefits Insurance Company and Time Insurance Company.
Woodbury, Minnesota
Edward M. Mahoney Director Retired; prior to December, 1994, Chairman and Chief Executive Officer and a
2760 Pheasant Road Director of Advisers and Investors, Senior Vice President and a Director of
Excelsior, Minnesota Fortis Benefits Insurance Company, and Senior Vice President of Time Insurance
Company.
Thomas R. Pellett Director Retired; prior to January, 1991, Senior Vice President--Administration and
731 Havenwood Circle Corporate Affairs, Pet Incorporated, which is in the food products business.
Drive
Warson Woods, Missouri
Robb L. Prince Director Vice President and Treasurer, Jostens, Inc., a producer of products and services
5501 Norman Center Dr. for the youth, education, sports award, and recognition markets.
Minneapolis, Minnesota
Leonard J. Santow Director Principal, Griggs & Santow, Incorporated, economic and financial consultants.
75 Wall Street
21st Floor
New York, New York
Joseph M. Wikler Director Investment consultant and private investor; prior to January, 1994, Director of
12520 Davan Drive Research, Chief Investment Officer, Principal, and a Director, The Rothschild
Silver Spring, Maryland Co., Baltimore, Maryland. The Rothschild Co. is an investment advisory firm.
Stephen M. Poling Vice President Executive Vice President and a Director of Advisers and Investors.
5500 Wayzata Boulevard
Golden Valley, Minnesota
Dennis M. Ott Vice President Senior Vice President of Advisers and Investors.
5500 Wayzata Boulevard
Golden Valley, Minnesota
James S. Byrd Vice President Vice President of Advisers and Investors; prior to March, 1991, Senior Vice
5500 Wayzata Boulevard President, Templeton Investment Counsel, Inc., Fort Lauderdale, Florida.
Golden Valley, Minnesota
Robert C. Lindberg Vice President Vice President of Advisers and Investors; prior to July, 1993, Vice President,
5500 Wayzata Boulevard Portfolio Manager, and Chief Securities Trader, COMERICA, Inc. Detroit,
Golden Valley, Minnesota Michigan. COMERICA, Inc. is a bank.
Keith R. Thomson Vice President Vice President of Advisers and Investors.
5500 Wayzata Boulevard
Golden Valley, Minnesota
Robert W. Beltz, Jr. Vice President Vice President--Mutual Fund Operations of Advisers and Investors.
500 Bielenberg Drive
Woodbury, Minnesota
Robert J. Clancy Vice President Senior Vice President and a Director of Advisers and Investors and Senior Vice
500 Bielenberg Drive President, Investment Products of Fortis Benefits Insurance Company.
Woodbury, Minnesota
Thomas D. Gualdoni Vice President Vice President of Advisers, Investors, and Fortis Benefits Insurance Company.
500 Bielenberg Drive
Woodbury, Minnesota
</TABLE>

38
<PAGE>

All of the above officers and directors also are officers and/or directors of
other investment companies of which Advisers is the investment adviser. No
compensation is paid by Fortis Series to any of its officers or directors except
for a fee of $200 per month, $100 per meeting attended, and $50 per applicable
committee meeting attended (and reimbursement of travel expenses to attend
meetings) to each director not affiliated with Advisers. During the fiscal year
ended December 31, 1994, the Money Market Series, U.S. Government Securities
Series, Diversified Income Series, High Yield Series, Asset Allocation Series,
Growth & Income Series, Growth Stock Series, Global Growth Series, and
Aggressive Growth Series paid $1,446, $7,300, $3,800, $492, $8,635, $211,
$12,779, $4,361, and $192, respectively, to directors who were not affiliated
with Advisers or Investors and reimbursed two such directors a total of $120,
$800, $200, $49, $772, $29, $1,155, $200, and $4, respectively, for travel
expenses incurred in attending directors' meetings. Legal fees and expenses of
$2,715, $13,200, $5,900, $5,184, $15,832, $5,171, $22,146, $8,229, and $4,984,
respectively, also were paid to a law firm of which Fortis Series' Secretary is
a partner. As of March 31, 1995, none of the directors and executive officers
beneficially owned any of the outstanding shares of Fortis Series. Directors
Kopperud, Mahoney, Prince, and King are members of the Executive Committee of
the Board of Directors. While the Executive Committee is authorized to act in
the intervals between regular board meetings with full capacity and authority of
the full Board of Directors, except as limited by law, it is expected that the
Committee will act only infrequently.

INVESTMENT ADVISORY AND OTHER
SERVICES

GENERAL

Fortis Advisers, Inc. ("Advisers") has been the investment adviser and manager
of Fortis Series since Fortis Series began business in 1986. Investors acts as
Fortis Series' underwriter. Both act as such pursuant to written agreements
periodically approved by the directors or shareholders of Fortis Series. The
address of both Advisers and Investors is P.O. Box 64284, St. Paul, MN 55164.

As of March 31, 1995, Advisers managed twenty-eight investment company
portfolios with combined net assets of approximately $3,481,569,000, and one
private account with net assets of approximately $15,301,000. As of March 31,
1995, the investment company portfolios had an aggregate of 213,111
shareholders.

During the fiscal year ended December 31, 1992, Money Market Series, U.S.
Government Securities Series, Diversified Income Series, Asset Allocation
Series, Growth Stock Series, and Global Growth Series paid investment advisory
and management fees of $60,394, $432,321, $88,226, $276,514, $905,529 and
$28,982, respectively.

During the fiscal year ended December 31, 1993, such Series paid investment
advisory and management fees of $76,324, $867,698, $279,837, $737,070,
$1,567,285, and $220,060, respectively.

During the fiscal year ended December 31, 1994, such Series paid investment
advisory and management fees of $118,752, $952,432, $489,311, $1,205,808,
$2,140,994, and $833,424, respectively, and High Yield Series, Growth & Income
Series, and Aggressive Growth Series paid advisory and management fees of
$29,992, $38,143, and $30,188, respectively.

CONTROL AND MANAGEMENT OF ADVISERS AND INVESTORS

Fortis owns 100% of the outstanding voting securities of Advisers, and Advisers
owns all of the outstanding voting securities of Investors.

Fortis, located in New York, New York, is a wholly owned subsidiary of Fortis
International, N.V., which has approximately $100 billion in assets worldwide
and is in turn a wholly owned subsidiary of AMEV/VSB 1990 N.V. ("AMEV/VSB
1990").

AMEV/VSB 1990 is a corporation organized under the laws of The Netherlands to
serve as the holding company for all U.S. operations and is owned 50% by Fortis
AMEV and 50% by Fortis AG ("Group AG"). AMEV/VSB 1990 owns a group of companies
active in insurance, banking and financial services, and real estate development
in The Netherlands, the United States, Western Europe, Australia, and New
Zealand.

39
<PAGE>

Fortis AMEV is a diversified financial services company headquartered in
Utrecht, The Netherlands, where its insurance operations began in 1847. Fortis
AG is a diversified financial services company headquartered in Brussels,
Belgium, where its insurance operations began in 1824. N.V. AMEV and Group AG
own a group of companies (of which AMEV/VSB 1990 is one) active in insurance,
banking and financial services, and real estate development in The Netherlands,
Belgium, the United States, Western Europe, and the Pacific Rim.

Dean C. Kopperud is President of Advisers and Investors; Stephen M. Poling is
Executive Vice President of Advisers and Investors; Robert J. Clancy, Larry A.
Medin, and Dennis M. Ott are Senior Vice Presidents of Advisers and Investors;
John W. Norton is Senior Vice President, General Counsel, and Secretary of
Advisers and Investors; Robert W. Beltz, Jr., James S. Byrd, Thomas D. Gualdoni,
Robert C. Lindberg, Lee V. Rosenblum, Kyle R. Selberg, Keith R. Thomson, and
Sylvia R. Wagner are Vice Presidents of Advisers and Investors; Carol M.
Houghtby is Treasurer of Advisers and Investors; Barbara W. Kirby, David G.
Carroll, Carol M. Houghtby, and Chris J. Neuharth are 2nd Vice Presidents of
Advisers and Investors; Michael D. O'Connor is Qualified Plan Officer of
Advisers and Investors; Tamara L. Fagely is Fund Accounting Officer of Advisers
and Investors; John E. Hite is Corporate Counsel and Assistant Secretary of
Advisers and Investors; Gregory S. Swenson and Thomas E. Erickson are Assistant
Secretaries of Advisers and Investors; Sharon R. Jibben is Assistant Secretary
of Advisers; and Barbara J. Wolf is Trading Officer of Advisers.

Messrs. Kopperud, Clancy, and Poling are the Directors of Advisers.

All of the above persons reside or have offices in the Minneapolis/St. Paul
area.

INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT

Advisers acts as investment adviser and manager of all of the Series except High
Yield Series, Growth & Income Series, and Aggressive Growth Series under an
Investment Advisory and Management Agreement dated May 1, 1992 (the "1992
Agreement"), which became effective the same date following approval by the
shareholders of Growth Stock Series, U.S. Government Securities Series, Money
Market Series, Asset Allocation Series, and Diversified Income Series on April
21, 1992. The 1992 Agreement became effective with respect to Global Growth
Series on May 1, 1992, following approval by its then sole shareholder on the
same date. Advisers also acts as investment adviser and manager of High Yield
Series, Growth & Income Series, and Aggressive Growth Series under an Investment
Advisory and Management Agreement dated May 1, 1994 (the "1994 Agreement"),
following approval by their then respective sole shareholders. Advisers also
acts as investment adviser and manager of Global Bond Series, Global Asset
Allocation Series, and International Stock Series under an Investment Advisory
and Management Agreement dated December 8, 1994 (the "1995 Agreement" and
together with the 1992 and 1994 Agreements, the "Agreements"), which became
effective on January 3, 1995, following approval by their then respective sole
shareholders. The 1992 Agreement will be submitted to holders of Global Growth
Series for approval at the next shareholders meeting of Fortis Series. The
Agreements were last approved by the Board of Directors (including a majority of
the directors who are not parties to the Agreements or interested persons of the
Agreements) on December 8, 1994. The Agreements will terminate automatically in
the event of their assignment. In addition, the Agreements are terminable at any
time, without penalty, by the Board of Directors or, with respect to any
particular Series, by vote of a majority of the outstanding voting securities of
the applicable Series, on not more than 60 days' written notice to Advisers, and
by Advisers on 60 days' notice to Fortis Series. Unless sooner terminated, each
Agreement shall continue in effect for more than two years after its execution
only so long as such continuance is specifically approved at least annually by
either the Board of Directors or, with respect to any particular Series, by vote
of a majority of the outstanding voting securities of the applicable Series,
provided that in either event such continuance is also approved by the vote of a
majority of the directors who are not parties to such Agreement, or interested
persons of such parties, cast in person at a meeting called for the purpose of
voting on such approval.

The Agreements collectively provide for an investment advisory and management
fee calculated as described in the following table. As you can see from the
table, this fee decreases (as a percentage of each Series net assets) as the
Series grows. As of March 31, 1995, the Series' net assets totaled approximately
$41,937,000 for Money Market Series, $169,676,000 for U.S. Government Securities
Series, $98,972,000 for Diversified Income Series, $7,504,000 for Global Bond
Series, $16,706,000 for High Yield Series, $277,240,000 for Asset Allocation
Series, $8,022,000 for Global Asset Allocation Series, $24,312,000 for Growth &
Income Series, $404,465,000 for Growth Stock Series, $149,132,000 for Global
Growth Series, $7,474,000 for International Stock Series, and $18,761,000 for
Aggressive Growth Series.

<TABLE>
<CAPTION>
ANNUAL
INVESTMENT
ADVISORY AND
SERIES AVERAGE NET ASSETS MANAGEMENT FEE

<S> <C> <C>
Money Market Series For the first $500 million .3%
For assets over $500 million .25%

U.S. Government Securities For the first $50 million .5%
Series For assets over $50 million .45%

Diversified Income Series For the first $50 million .5%
For assets over $50 million .45%

Global Bond Series For the first $100 million .75%
For assets over $100 million .65%

High Yield Series For the first $250 million .5%
For assets over $250 million .45%

Asset Allocation Series For the first $250 million .5%
For assets over $250 million .45%

Global Asset Allocation For the first $100 million .90%
Series For assets over $100 million .85%

Growth & Income Series For the first $100 million .7%
For assets over $100 million .6%

Growth Stock Series For the first $100 million .7%
For assets over $100 million .6%

Global Growth Series For the first $500 million .7%
For assets over $500 million .6%

International Stock Series For the first $100 million .85%
For assets over $100 million .80%

Aggressive Growth Series For the first $100 million .7%
For assets over $100 million .6%
</TABLE>

Advisers pays the advisory fees of the investment sub-advisers of the Series. In
addition, Advisers, at its own expense, furnishes suitable office space,
facilities, equipment, administrative services, and clerical and other personnel
as may be required for the management of the affairs and business of Fortis
Series, and acts as Fortis Series' registrar, transfer agent, and dividend
disbursing agent. Fortis Series pays all its expenses which are not expressly
assumed by Advisers or Investors. These expenses include, among others, the
investment advisory and management fee, the fees and expenses of directors and
officers of Fortis Series who are not "affiliated persons" of Advisers, interest
expenses, taxes, brokerage fees and commissions, fees and expenses of
registering and qualifying Fortis Series and its shares for distribution under
Federal securities laws, expenses of preparing prospectuses and of printing and
distributing prospectuses annually to existing Contract owners, custodian
charges, auditing and legal expenses, insurance expenses, association membership
dues, and the expense of reports to shareholders and Contract owners,
shareholders' meetings, and proxy solicitations. Fortis Series is also liable
for such nonrecurring

40
<PAGE>
expenses as may arise, including litigation to which it may be a party. Fortis
Series may have an obligation to indemnify its directors and officers with
respect to such litigation.
Advisers bears the costs of acting as Fortis Series transfer agent, registrar,
and dividend agent. Investors has agreed to pay all expenses of distributing
Fortis Series' shares, including, but not limited to, costs of printing and
distributing prospectuses to new Contract owners. Pursuant to a separate
Distribution Agreement between Fortis Benefits and investors, Fortis Benefits
reimburses Investors for these costs and expenses with respect to variable life
insurance policies issued by Fortis Benefits or pays them on Investors' behalf.

From its advisory fee, Advisers pays the following fees to each of the sub-
advisers:

<TABLE>
<CAPTION>
ANNUAL SUB-
SERIES SUB-ADVISER ASSETS ADVISORY FEE
<S> <C> <C> <C>
Global Bond Series Warburg For the first $100 million .35 %
For assets over $100 million .225 %
Global Asset Allocation Morgan Stanley For the first $100 million .50 %
Series For assets over $100 million .40 %
International Stock Series Lazard Freres For the first $100 million .45 %
For assets over $100 million .375 %
</TABLE>

Out of its advisory fee, but not in excess thereof, Advisers will reimburse
International Stock Series, Global Bond Series, and Global Asset Allocation
Series for their expenses, until their net assets first reach $10 million, to
the extent that the expenses of the applicable Series (including the investment
advisory fees, but excluding interest, taxes, brokerage fees, and commissions)
exceed an amount equal, on an annual basis, to 2.0%, 2.0%, and 2.0%,
respectively, of the average daily net assets of the applicable Series. In
addition to this expense reimbursement, Advisers reserves the right, but shall
not be obligated, to institute voluntary expense reimbursement programs which,
if instituted, shall be in such amounts and based on such terms and conditions
as Advisers, in its sole and absolute discretion, determines. Furthermore,
Advisers reserves the absolute right to discontinue any of such reimbursement
programs at any time without notice to Fortis Series.

Expenses that relate exclusively to a particular Series, such as custodian
charges and registration fees for shares, are charged to that Series. Other
expenses of Fortis Series are allocated between the Series in an equitable
manner as determined by officers of Fortis Series under the supervision of the
Board of Directors, usually on the basis of net assets or number of contract
holders.

Under the 1992 and 1994 Agreements, Advisers, as investment adviser to Fortis
Series, has the sole authority and responsibility to make and execute investment
decisions for Fortis Series within the framework of Fortis Series' investment
policies, subject to review by the Board of Directors. Advisers also furnishes
Fortis Series with all required management services, facilities, equipment, and
personnel.

Although investment decisions for each Series are made independently from those
of the other Series or those of other funds or private accounts managed by
Advisers, sometimes the same security is suitable for more than one Series,
fund, or account. If and when two or more Series, funds, or accounts
simultaneously purchase or sell the same security, the transactions will be
allocated as to price and amount in accordance with arrangements equitable to
each Series, fund, or account. The simultaneous purchase or sale of the same
securities by a Series and another Series, fund, or account may have a
detrimental effect on the Series, as this may affect the price paid or received
by the Series or the size of the position obtainable by the Series.

SUB-ADVISORY AGREEMENTS

Global Bond Series, Global Asset Allocation Series, and International Stock
Series have retained sub-advisers under investment sub-advisory agreements (the
three sub-advisory agreements are collectively referred to as the "Sub-Advisory
Agreements"). Each of the Sub-Advisory Agreements will terminate automatically
upon the termination of the Investment Advisory and Management Agreement between
Fortis Series and Advisers, and in the event of its assignment. In addition, the
Sub-Advisory Agreements are terminable at any time, without penalty, by the
Board of Directors of Fortis Series, by Advisers or by a vote of the majority of
the applicable Series' outstanding voting securities on 60 days' written notice
to such Series' sub-adviser and by a sub-adviser on 60 days' written notice to
Advisers. Unless sooner terminated, the Sub-Advisory Agreements shall continue
in effect from year to year if approved at least annually by the Board of
Directors of Fortis Series or by a vote of a majority of the outstanding voting
securities of the applicable Series, provided that in either event such
continuance is also approved by the vote of a majority of the directors who are
not interested persons of any party to the Sub-Advisory Agreements, cast in
person at a meeting called for the purpose of voting on such approval.

PORTFOLIO TRANSACTIONS AND ALLOCATION OF BROKERAGE

Advisers, or if applicable a sub-adviser, is responsible for decisions to buy
and sell securities for the Series, the selection of brokers and dealers to
effect the transactions and the negotiation of brokerage commissions, if any,
subject to Advisers' general control. Transactions on a stock exchange in equity
securities will be executed primarily through brokers that will receive a
commission paid by the Series. The Series which buy fixed income securities, on
the other hand, will not normally incur any brokerage commissions. Fixed income
securities, as well as equity securities traded in the over-the-counter market,
are generally traded on a "net" basis with dealers acting as principals for
their own accounts without a stated commission, although the price of the
security usually includes a profit to the dealer. In underwritten offerings,
securities are purchased at a fixed price that includes an amount of
compensation to the underwriter, generally referred to as the underwriter's
concession or discount. Certain of these securities may also be purchased
directly from an issuer, in which case neither commissions nor discounts are
paid.

In placing orders for securities transactions, the primary criterion for the
selection of a broker-dealer is the ability of the broker-dealer, in the opinion
of Advisers, to secure prompt execution of the transactions on favorable terms,
including the reasonableness of the commission and considering the state of the
market at the time. When consistent with these objectives, business may be
placed with broker-dealers who furnish investment research services to Advisers
or a sub-adviser. Such research services include advice, both directly and in
writing, as to the value of securities; the advisability of investing in,
purchasing, or selling securities; and the availability of securities, or
purchasers or sellers of securities; as well as analyses and reports concerning
issues, industries, securities, economic factors and trends, portfolio strategy,
and the performance of accounts. This allows Advisers and the sub-advisers to
supplement their own investment research activities and to obtain the views and
information of individuals and research staffs of many different securities
research firms prior to making investment decisions for the Series. To the
extent such commissions are directed to these other broker-dealers who furnish
research services, Advisers or a sub-adviser receives a benefit, not capable of
evaluation in dollar amounts, without providing any direct monetary benefit to
the Series from these commissions. Most research services obtained by Advisers
or a sub-adviser generally benefit several or all of the investment companies
and private accounts which it manages, as opposed to solely benefiting one
specific managed fund or account. Normally, research services obtained through
managed funds or accounts investing in common stocks would primarily benefit the
managed funds or accounts which invest

41
<PAGE>
in common stock; similarly, services obtained from transactions in fixed income
securities would normally be of greater benefit to the managed funds or accounts
which invest in debt securities.

Neither Advisers nor any sub-adviser has entered into any formal or informal
agreements with any broker-dealers, nor does it maintain any "formula" which
must be followed in connection with the placement of Fortis Series transactions
in exchange for research services provided Advisers, except as noted below.
However, Advisers and each of the sub-advisers does maintain an informal list of
broker-dealers, which is used from time to time as a general guide in the
placement of Fortis Series business, in order to encourage certain
broker-dealers to provide Advisers with research services which Advisers
anticipates will be useful to it. Because the list is merely a general guide,
which is to be used only after the primary criterion for the selection of
broker-dealers (discussed above) has been met, substantial deviations from the
list are permissible and may be expected to occur. Advisers (or the
sub-advisers) will authorize Fortis Series to pay an amount of commission for
effecting a securities transaction in excess of the amount of commission another
broker-dealer would have charged only if Advisers (or the sub-advisers)
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker-dealer, viewed in terms of either that particular transaction or
Advisers' overall responsibilities with respect to the accounts as to which
Advisers (or the sub-advisers) exercises investment discretion. Generally,
Fortis Series pays higher commissions than the lowest rates available. Morgan
Stanley has agreements in place with several broker-dealers that relate to
equity trades directed by Morgan Stanley. Under these agreements, the brokers
pay for services which assist the investment manager (Morgan Stanley) in making
investment decisions. The brokers are obligated to achieve best execution and
the commission rates charged by the brokers are comparable to those charged by
brokers with which there is no such agreement.

Under the 1940 Act, no Series may purchase portfolio securities from any
underwriting syndicate of which an affiliate of the Adviser or a sub-adviser is
a member, except under certain limited conditions set forth in Rule 10f-3 under
the 1940 Act. The Rule sets forth requirements relating to, among other things,
the terms of an issue of securities purchased by a Series, the amount of
securities that may be purchased in any one issue, and the assets of a Series
that may be invested in a particular issue. In addition, purchases of securities
made pursuant to the terms of the Rule must be approved at least quarterly by
the Board of Directors of Fortis Series, including a majority of the members
thereof who are not interested persons of Fortis Series.

Portfolio transactions may be effected through affiliates of the sub-advisers.
Prior to executing any such transactions, the Board of Directors of Fortis
Series will adopt policies incorporating the standards of Rule 17e-1 under the
1940 Act, which requires that the commissions paid to affiliates must be
reasonable and fair compared to the commissions, fees or other remuneration
received or to be received by other brokers in connection with comparable
transactions involving similar securities during a comparable period of time.
The Rule also contains review requirements and requires that reports be
furnished to the Board of Directors and that records be maintained in connection
with such reviews.

During the fiscal year ended December 31, 1994, for Asset Allocation Series,
brokerage commissions totaled $92,639, amounting to .04% of average net assets
and resulting in an average commission rate of .23% (calculated by dividing the
total dollar amount of transactions into the total dollar amount of commissions
paid). For Growth Stock Series, brokerage commissions totaled $161,072,
amounting to .05% of average net assets and resulting in an average commission
rate of .25%. For Growth & Income Series, brokerage commissions totaled $19,246,
amounting to .23% of average net assets and resulting in an average commission
rate of .15%. For Global Growth Series, brokerage commissions totaled $278,249,
amounting to .23% of average net assets and resulting in an average commission
rate of .47%. For Aggressive Growth Series, brokerage commissions totaled
$6,275, amounting to .09% of average net assets and resulting in an average
commission rate of .21%. For Money Market Series, U.S. Government Securities
Series, Diversified Income Series, High Yield Series, Asset Allocation Series,
Growth & Income Series, Growth Stock Series, Global Growth Series, and
Aggressive Growth Series, transactions having an aggregate dollar value of
approximately $705,526,000, $769,701,000, $298,245,000, $16,081,000,
$363,077,000, $328,000, $108,482,000, $43,070,000, and $7,514,000, respectively,
were traded at net prices including a spread or markup.

During the fiscal year ended December 31, 1994, virtually all of the $92,639
paid in commissions by the Asset Allocation Series in connection with
transactions having an aggregate value of approximately $39,493,000, the $19,246
paid in commissions by the Growth & Income Series in connection with
transactions having an aggregate value of approximately $13,077,000, the
$161,072 paid in commissions by the Growth Stock Series in connection with
transactions having an aggregate value of approximately $63,836,000, the
$278,249 paid in commissions by the Global Growth Series in connection with
transactions having an aggregate value of approximately $59,633,000 and the
$6,275 paid in commissions by the Aggressive Growth Series in connection with
transactions having an aggregate value of approximately $2,942,000 were paid to
broker-dealers who furnished investment research to Advisers, as outlined above.

The Series' acquisitions during the fiscal year ended December 31, 1994, of
securities of its regular brokers or dealers or of the parent of those brokers
or dealers that derive more than fifteen percent of their gross revenue from
securities-related activities is presented below:

<TABLE>
<CAPTION>
VALUE OF
SECURITIES OWNED
AT END OF PERIOD
NAME OF ISSUER ($)
- ---------------------------------------------------- ----------------
<S> <C>
Money Market
Ford Motor Credit Co.............................. $ 1,996,273
Merrill Lynch, Pierce, Fenner & Smith Inc......... 1,995,775
Norwest Corp...................................... 1,991,973
National Westminster.............................. 1,991,778
General Motors Acceptance Corp.................... 1,991,225
General Electric Capital Corp..................... 1,989,422
John Deere Credit Co.............................. 1,986,935
American General Finance Corp..................... 1,985,138
Prudential-Bache Securities, Inc.................. 1,982,869
First Bank (N.A.) Minneapolis..................... 1,949,000
Beneficial Corp................................... 1,881,158
U.S. Government Securities
Donaldson, Lufkin & Jenrette Sec.................. 8,247,764
Nomura Securities International................... 7,043,574
First Bank (N.A.) Minneapolis..................... 2,312,000
Diversified Income
First Bank (N.A.) Minneapolis..................... 2,038,000
Nomura Securities International, Inc.............. 1,739,154
Donaldson, Lufkin & Jenrette Sec.................. 1,409,291
High Yield
Goldman, Sachs & Co............................... 588,000
General Motors Acceptance Corp.................... 499,670
First Bank (N.A.) Minneapolis..................... 279,000
Asset Allocation
First Bank (N.A.) Minneapolis..................... 6,535,000
Donaldson, Lufkin & Jenrette Sec.................. 1,409,291
Growth & Income
Goldman, Sachs & Co............................... 517,000
First Bank (N.A.) Minneapolis..................... 312,000
</TABLE>

42
<PAGE>

<TABLE>
<CAPTION>
VALUE OF
SECURITIES OWNED
AT END OF PERIOD
NAME OF ISSUER ($)
- ---------------------------------------------------- ----------------
Growth Stock
<S> <C>
General Motors Acceptance Corp.................... 16,985,479
First Bank (N.A.) Minneapolis..................... 16,973,595
Ford Motor Credit Co.............................. 16,971,903
National Westminster.............................. 16,967,133
Goldman, Sachs & Co............................... 2,840,000
Global Growth
General Motors Acceptance Corp.................... 6,489,348
First Bank (N.A.) Minneapolis..................... 6,091,000
Norwest Corp...................................... 1,199,025
Ford Motor Credit Corp............................ 1,498,550
Goldman, Sachs & Co............................... 1,198,000
<CAPTION>
VALUE OF
SECURITIES OWNED
AT END OF PERIOD
NAME OF ISSUER ($)
- ---------------------------------------------------- ----------------
<S> <C>
Aggressive Growth
Goldman, Sachs & Co............................... $ 557,000
Norwest Corp...................................... 548,486
National Westminster.............................. 499,749
Ford Motor Credit Co.............................. 499,583
General Motors Acceptance Corp.................... 499,238
Merrill Lynch, Pierce, Fenner & Smith, Inc........ 499,075
First Bank (N.A.) Minneapolis..................... 266,000
</TABLE>

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

CAPITAL STOCK
Fortis Series' shares have a par value of $.01 per share and equal rights to
share in dividends and assets. The shares possess no preemptive or conversion
rights.

On March 31, 1995, Fortis Series' ownership of record or, to its knowledge,
beneficially was as follows:

<TABLE>
<CAPTION>
U.S.
GOVERNMENT DIVERSIFIED ASSET
MONEY MARKET SECURITIES INCOME GLOBAL BOND HIGH YIELD ALLOCATION
NAME OR IDENTITY OF GROUP SHARES OWNED SHARES OWNED SHARES OWNED SHARES OWNED SHARES OWNED SHARES OWNED
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Separate Accounts of
Fortis Benefits (policyholder
money)............................... 4,038,718 17,179,649 9,050,732 180,040 1,556,764 19,163,887
Fortis Benefits (seed money).......... -- -- -- 500,000 130,019 49,250
</TABLE>

<TABLE>
<CAPTION>
GLOBAL ASSET GROWTH & INTERNATIONAL AGGRESSIVE
ALLOCATION INCOME GROWTH STOCK GLOBAL GROWTH STOCK SERIES GROWTH
NAME OR IDENTITY OF GROUP SHARES OWNED SHARES OWNED SHARES OWNED SHARES OWNED SHARES OWNED SHARES OWNED
- ---------------------------------------- ------------ ------------ ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Separate Accounts of
Fortis Benefits (policyholder
money)............................... 264,637 2,195,280 17,454,824 11,743,688 243,881 1,783,267
Fortis Benefits (seed money).......... 500,000 60,009 57,877 40,750 500,000 60,003
</TABLE>

Fortis Series currently has twelve Series, each constituting a separate series
of shares. Under Fortis Series' Articles of Incorporation, the Board of
Directors is authorized to create new series in addition to those already
existing without the approval of the shareholders of Fortis Series. Each share
of stock will have a pro-rata interest in the assets of the Series to which the
stock of that series relates and will have no interest in the assets of any
other Series. In the event of liquidation, each share of a Series would have the
same rights to dividends and assets as every other share of that Series.

Each share of a Series has one vote (with proportionate voting for fractional
shares) irrespective of the relative net asset value of the Series' shares. On
some issues, such as the election of directors, all shares of Fortis Series vote
together as one series. Cumulative voting is not authorized. This means that the
holders of more than 50% of the shares voting for the election of directors can
elect 100% of the directors if they choose to do so, and, in such event, the
holders of the remaining shares will be unable to elect any directors.

On an issue affecting only a particular Series, the shares of the affected
Series vote as a separate series. An example of such an issue would be a
fundamental investment restriction pertaining to only one Series. In voting on
the Agreement, approval of the Agreement by the shareholders of a particular
Series would make the Agreement effective as to that Series whether or not it
had been approved by the shareholders of the other Series. (Although Fortis
Benefits and First Fortis are the only shareholders of each Series, all shares
held by them will generally be voted in accordance with the instructions of the
Contract owners. See "Voting Privileges" below.)

Fortis Series is not required under Minnesota law to hold annual or periodically
scheduled regular meetings of shareholders. Minnesota corporation law provides
for the Board of Directors to convene shareholder meetings when it deems
appropriate. In addition, if a regular meeting of shareholders has not been held
during the immediately preceding fifteen months, a shareholder or shareholders
holding three percent or more of the voting shares of Fortis Series may demand a
regular meeting of shareholders by written notice of demand given to the chief
executive officer or the chief financial officer of Fortis Series. Within ninety
days after receipt of the demand, a regular meeting of shareholders must be held
at Fortis Series' expense. Additionally, the 1940 Act requires shareholder votes
for all amendments to fundamental investment policies and restrictions and for
all investment advisory contracts and amendments thereto.

43
<PAGE>
COMPUTATION OF NET ASSET VALUE AND PRICING

On December 31, 1994, the Series' net asset values per share was calculated as
follows:

<TABLE>
<S> <C>
MONEY MARKET SERIES

Net Assets ($44,832,735)
- ------------------------- = Net Asset Value Per Share ($10.63)
Shares Outstanding (4,217,239)
U.S. GOVERNMENT SECURITIES SERIES

Net Assets ($172,656,498)
- ------------------------- = Net Asset Value Per Share ($9.40)
Shares Outstanding (18,372,413)
DIVERSIFIED INCOME SERIES

Net Assets ($98,313,821)
- ------------------------- = Net Asset Value Per Share ($10.40)
Shares Outstanding (9,451,604)
HIGH YIELD SERIES
Net Assets($13,705,814)
- ------------------------- = Net Asset Value Per Share ($9.47)
Shares Outstanding (1,447,594)
ASSET ALLOCATION SERIES

Net Assets ($260,593,105)
- ------------------------- = Net Asset Value Per Share ($13.56)
Shares Outstanding (19,215,350)
GROWTH & INCOME SERIES
Net Assets($16,276,085)
- ------------------------- = Net Asset Value Per Share ($10.07)
Shares Outstanding (1,616,348)
GROWTH STOCK SERIES

Net Assets ($377,482,538)
- ------------------------- = Net Asset Value Per Share ($22.11)
Shares Outstanding (17,075,189)
GLOBAL GROWTH SERIES

Net Assets ($144,646,911)
- ------------------------- = Net Asset Value Per Share ($12.31)
Shares Outstanding (11,754,070)
AGGRESSIVE GROWTH SERIES
Net Assets($13,525,687)
- ------------------------- = Net Asset Value Per Share ($9.80)
Shares Outstanding (1,380,724)
</TABLE>

The primary close of trading currently is 3:00 P.M. (Central Time), but this
time may be changed. The offering price for purchase orders received in the
office of Fortis Series after the beginning of each day the New York Stock
Exchange (the "Exchange") is open for trading is based on net asset value
determined as of the primary closing time for business on the Exchange that day;
the price in effect for orders received after such close is based on the net
asset value as of such close of the Exchange on the next day the Exchange is
open for trading.

Generally, the net asset value of each Series' shares is determined on each day
on which the Exchange is open for business. The Exchange is not open for
business on the following holidays (nor on the nearest Monday or Friday if the
holiday falls on a weekend): New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
Additionally, net asset value need not be determined (i) on days on which
changes in the value of the portfolio securities will not materially affect the
current net asset value of the Series' shares; or (ii) on days during which no
such Series' shares are tendered for redemption and no orders to purchase or
sell such Series' shares are received by Fortis Series.

REDEMPTION

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

Redemption of shares, or payment, may be suspended at times (a) when the
Exchange is closed for other than customary weekend or holiday

44
<PAGE>
closings, (b) when trading on said Exchange is restricted, (c) when an emergency
exists, as a result of which disposal by Fortis Series of securities owned by it
is not reasonably practicable, or it is not reasonably practicable for Fortis
Series fairly to determine the value of its net assets, or during any other
period when the Securities and Exchange Commission, by order, so permits;
provided that applicable rules and regulations of the Securities and Exchange
Commission shall govern as to whether the conditions prescribed in (b) or (c)
exist. The Exchange is not open for business on the following holidays (nor on
the nearest Monday or Friday if the holiday falls on a weekend), on which the
Fund will not redeem shares: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.

TAXATION

Each Series of Fortis Series then in existence qualified in 1994, and each
Series intends to continue to qualify (or to initially qualify, if applicable),
as a regulated investment company under the Internal Revenue Code of 1986, as
amended (the "Code"). As long as each such Series so qualifies, the Series is
not taxed on the income it distributes to the shareholders. Generally, in order
to qualify as a regulated investment company, a Series must derive at least 90
percent of its gross income from dividends, interest, and gains from the sale or
other disposition of stock or securities or other income derived with respect to
its investing in such stock or securities. In addition, less than 30 percent of
its income may be derived from sales of stock or securities held for less than
three months. Being qualified as a regulated investment company does not mean
that the Internal Revenue Service supervises Fortis Series or approves its
policies.

Under the Code, each Series of Fortis Series will generally be treated as a
separate entity for federal tax purposes. Therefore, each Series will be treated
separately in determining whether it qualifies as a regulated investment company
and in determining the net ordinary income (or loss), net realized capital gains
(or losses) and distributions necessary to relieve each Series of Fortis Series
of any federal income tax liability.
Pursuant to the Code, each Series will be subject to a nondeductible excise tax
for each calendar year equal to 4 percent of the excess, if any, of the amount
required to be distributed over the amount distributed. However, the excise tax
does not apply to any income on which a Series pays income tax. In order to
avoid the imposition of this excise tax, each Series generally must declare
dividends by the end of a calendar year representing 98 percent of the Series'
ordinary income for the calendar year and 98 percent of its capital gain net
income (both long-term and short-term capital gains) for the twelve-month period
ending October 31 of the calendar year.

The Code imposes certain diversification requirements on the investments of
segregated asset accounts underlying variable annuity and life insurance
contracts. Treasury Regulations interpret those requirements. Under the Code and
the Regulations, if a variable contract is based in part or in whole on a
segregated asset account that fails to meet the diversification standards, the
variable contract will not be treated as an annuity or life insurance contract
for federal income tax purposes. As a consequence, the income on the contract
for any taxable year, whether or not distributed, will be treated as ordinary
income received by the Contract owner during such year.

As a general rule, each Series of Fortis Series may invest not more than 55% of
the value of its total assets in the securities of a single issuer, not more
than 70% of the value of its total assets in the securities of any two issuers,
not more than 80% of the value of its total assets in the securities of any
three issuers, and not more than 90% of the value of its total assets in the
securities of any four issuers. Under the Code and the Regulations, for purposes
of the diversification tests, the securities of each agency or instrumentality
of the U.S. government are considered the securities of a separate issuer. Each
Series intends to satisfy either the diversification test described above or an
alternative diversification test provided by the Code, so that the variable
contracts invested in each Series will be treated as variable contracts under
the Code and the income earned with respect to the contracts will not be
currently taxable to the Contract owners.

If the U.S. Government Securities Series, Diversified Income Series, Global Bond
Series, High Yield Series, Asset Allocation Series, Global Asset Allocation
Series, or Global Growth Series invest in zero coupon obligations upon their
issuance, such obligations will have original issue discount in the hands of
such Series. Generally, original issue discount equals the difference between
the "stated redemption price at maturity" of the obligation and its "issue
price" as those terms are defined in the Code. These Series are required to
accrue as ordinary interest income a portion of such original issue discount
even though such Series receive no cash currently as interest payments on the
obligation. Similarly, in the case of PIKs, such Series are required to
recognize interest income in the amount of the fair market value of the
securities received as interest payments on the PIKs, even though they receive
no cash.

For Federal income tax purposes the Series had the following capital loss
carryovers at December 31, 1994, which, if not offset by subsequent capital
gains, will expire in 1995 through 2003. It is unlikely the Board of Directors
will authorize a distribution of any net realized gains until the available
capital loss carryovers have been offset or expired.

<TABLE>
<S> <C>
Money Market Series..................... $ 127,374
U.S. Government Securities Series....... 19,846,342
Diversified Income Series............... 7,192,213
Asset Allocation Series................. 7,884,707
Growth & Income Series.................. 50,423
Growth Stock Series..................... 26,110,262
Global Growth Series.................... 5,826,999
Aggressive Growth Series................ 109,579
</TABLE>

UNDERWRITER

On December 8, 1994, the Board of Directors (including a majority of the
directors who are not parties to the contract, or interested persons of any such
party) last approved the Underwriting Agreement with Investors dated May 1,
1994, which became effective May 1, 1994. This Underwriting Agreement may be
terminated by Fortis Series or Investors at any time by the giving of 60 days'
written notice, and terminates automatically in the event of its assignment.
Unless sooner terminated, the Underwriting Agreement shall continue in effect
for more than two years after its execution only so long as such continuance is
also approved by the vote of a majority of the directors who are not parties to
such Underwriting Agreement, or interested persons of such parties, cast in
person at a meeting called for the purpose of voting on such approval.

The Underwriting Agreement requires Investors to pay all promotional expenses in
connection with the distribution of the Fortis Series' shares, including paying
for printing and distributing prospectuses and shareholder reports to new Policy
owners, and the costs of sales literature. Pursuant to a separate distribution
agreement between Fortis Benefits and Investors, Fortis Benefits reimburses
Investors for these expenses or pays them on Investors' behalf, to the extent
they involve shares issued to fund variable life insurance policies issued by
Fortis Benefits.

In the Underwriting Agreement, Investors undertakes to indemnify Fortis Series
against all costs of litigation and other legal proceedings, and against any
liability incurred by or imposed upon Fortis Series in any way arising out of or
in connection with the sale or distribution of the Fortis Series' shares, except
to the extent that such liability is the result of information which was
obtainable by Investors only from persons affiliated with Fortis Series but not
with Investors.

45
<PAGE>

PERFORMANCE

Cumulative total return is computed by finding the cumulative compounded rate of
return over the period indicated in the advertisement that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:

<TABLE>
<S> <C> <C>
Where: CTR = Cumulative total return;
ERV = ending redeemable value at the end of the period
of a hypothetical $1,000 payment made at the
beginning of such period; and
P = initial payment of $1,000
</TABLE>

This calculation assumes all dividends and capital gains distributions are
reinvested at net asset value on the appropriate reinvestment dates as described
in the Prospectus and includes all recurring fees, such as investment advisory
and management fees, charged to all shareholder accounts.

Average annual total return figures are computed by finding the average annual
compounded rates of return over the periods indicated in the advertisement that
would equate the initial amount invested to the ending redeemable value,
according to the following formula:

<TABLE>
<S> <C> <C>
Where: P = a hypothetical initial payment of $1,000
T = average annual total return;
n = number of years; and
ERV = ending redeemable value at the end of the period
of a hypothetical $1,000 payment made at the
beginning of such period.
</TABLE>

This calculation assumes all dividends and capital gains distributions are
reinvested at net asset value on the appropriate reinvestment dates as described
in the Prospectus, and includes all recurring fees, such as investment advisory
and management fees, charged to all shareholder accounts.

Yield is computed by dividing the net investment income per share (as defined
under Securities and Exchange Commission rules and regulations) earned during
the computation period by the maximum offering price per share on the last day
of the period, according to the following formula:

<TABLE>
<S> <C> <C> <C> <C>
(a-b)
YIELD = 2 [ --- +1 ] 6 -1
cd
</TABLE>

<TABLE>
<S> <C> <C>
Where: a = dividends and interest earned during the period;
b = expenses accrued for the period (net of
reimbursements);
c = the average daily number of shares outstanding
during the period that were entitled to receive
dividends; and
d = the maximum offering price per share on the last
day of the period.
</TABLE>

Current yield (calculated over a seven-day period) is a percentage computed by
determining the net change, exclusive of capital changes, in the value of a
hypothetical preexisting account having a balance of one share at the beginning
of the period, subtracting a hypothetical charge reflecting deductions from
shareholder accounts, and dividing the difference by the value of the account at
the beginning of the base period to obtain the base period return, and then
multiplying the base period return by (365/7) with the resulting figure carried
to at least the nearest hundredth of one percent. Effective yield (calculated
over a seven-day period) is computed by determining the net change, exclusive of
capital changes, in the value of a hypothetical preexisting account having a
balance of one share at the beginning of the period, subtracting a hypothetical
charge reflecting deductions from shareholder accounts, and dividing the
difference by the value of the account at the beginning of the base period to
obtain the base period return, and then compounding the base period return by
adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting
1 from the result, according to the following formula:

<TABLE>
<C> <C> <S> <C> <C>
Effective Yield = [ (Base Period Return +1) 365/7 ] -1
</TABLE>

The Series also may quote annual yield figures, calculated similarly to the
above methods.

46
<PAGE>
Current yield information is useful in reviewing performance, but because
current yield will fluctuate, (1) such information may not provide a basis for
comparison with bank deposits or other investments which pay a fixed yield for a
stated period of time and may be insured and (2) the current yield is not
necessarily representative of future results.

AVERAGE ANNUAL TOTAL RETURNS

<TABLE>
<CAPTION>
1/1/94 1/1/90 1/13/87
TO TO TO
SERIES 12/31/94 12/31/94 12/31/94
- ---------------------------------------- -------- -------- ---------
<S> <C> <C> <C>
U.S. Government Securities.............. -6.44 % 6.05% 6.31%(1)
Diversified Income(4)................... -5.22 % 7.40 % N/A
High Yield(5)........................... N/A N/A N/A
Asset Allocation(2)..................... -.31 % 8.80 % N/A
Growth & Income(6)...................... N/A N/A N/A
Growth Stock............................ -2.82 % 10.11 % 11.59%(1)
Global Growth(3)........................ -2.98 % N/A N/A
Aggressive Growth(7).................... N/A N/A N/A
<FN>
- ------------------------
(1)From effective date of the Series' SEC registration. (However, March 24, 1987
was the first day any separate account assets from Contracts were invested in
the Series and the average annual total returns from March 24, 1987 to
December 31, 1994 were 9.29% and 6.35%, respectively, for the Growth Stock
and U.S. Government Securities Series.)
(2)The average annual total return for the Asset Allocation Series from its
inception on May 1, 1987 through December 31, 1994 was 8.30%.
(3)The average annual total return for the Global Growth Series from its
inception on May 1, 1992 through December 31, 1994, was 9.32%.
(4)The average annual total return for the Diversified Income Series from its
inception on May 2, 1988 through December 31, 1994, was 7.97%.
(5)The average annual total return for the High Yield Series from its inception
on May 2, 1994 through December 31, 1994, was -.75%.
(6)The average annual total return for the Growth & Income Series from its
inception on May 2, 1994 through December 31, 1994, was 1.74%.
(7)The average annual total return for the Aggressive Growth Series from its
inception on May 2, 1994 through December 31, 1994, was -1.89%.
</TABLE>

CUMULATIVE TOTAL RETURNS

<TABLE>
<CAPTION>
1/1/94 1/1/90 1/13/87
TO TO TO
SERIES 12/31/94 12/31/94 12/31/94
- ---------------------------------------- -------- -------- --------
<S> <C> <C> <C>
U.S. Government Securities.............. -6.44 % 34.16 % 62.75 %
Diversified Income(4)................... -5.22 % 42.87 % N/A
High Yield(5)........................... N/A N/A N/A
Asset Allocation(2)..................... -.31 % 52.43 % N/A
Growth & Income(6)...................... N/A N/A N/A
Growth Stock............................ -2.82 % 61.87 % 139.58 %
Global Growth(3)........................ -2.98 % N/A N/A
Aggressive Growth(7).................... N/A N/A N/A
<FN>
- ------------------------
(1)From effective date of the Series' SEC registration. (However, March 24, 1987
was the first day any separate account assets from Contracts were invested in
the Series and the cumulative total returns from March 24, 1987 to December
31, 1994 were 108.05% and 61.35%, respectively, for the Growth Stock and U.S.
Government Securities Series.)
(2)The cumulative total return for the Asset Allocation Series from its
inception on May 1, 1987 through December 31, 1994 was 84.39%.
(3)The cumulative total return for the Global Growth Series from its inception
on May 1, 1992 through December 31, 1994 was 26.85%.
(4)The cumulative total return for the Diversified Income Series from its
inception on May 2, 1988 through December 31, 1994 was 66.70%.
(5)The cumulative total return for the High Yield Series from its inception on
May 2, 1994 through December 31, 1994 was -.75%.
(6)The cumulative total return for the Growth & Income Series from its inception
on May 1, 1994 through December 31, 1994 was 1.74%.
(7)The cumulative total return for the Aggressive Growth Series from its
inception on May 1, 1994 through December 31, 1994 was -1.89%.
</TABLE>

As noted in the Prospectus, Fortis Series may advertise the Series' relative
performance as compiled by outside organizations or refer to publications which
have mentioned its performance.

Fortis Series may from time to time compare the Series with the following:

(1) The Salomon Brothers Non-U.S. Dollars Indices, which are measures of the
total return performance of high-quality non-U.S. dollar denominated securities
in major sectors of the worldwide bond markets.

(2) The Shearson Lehman Government/Corporate Bond Index, which is a
comprehensive measure of all public obligations of the U.S. Treasury (excluding
flower bonds and foreign targeted issues), a publicly issued debt of agencies of
the U.S. Government (excluding mortgage-backed securities), and all public,
fixed rate, nonconvertible investment grade domestic corporate debt rated at
least Baa by Moody's or BBB by S&P, or, in the case of nonrated bonds. BBB by
Fitch Investors Service (excluding Collateralized Mortgage Obligations).

(3) Average of Savings Accounts, which is a measure of all kinds of savings
deposits, including longer-term certificates (based on figures supplied by the
U.S. League of Savings Institutions). Savings accounts offer a guaranteed rate
of return on principal, but no opportunity for capital growth. During a portion
of the period, the maximum rates paid on some savings deposits were fixed by
law.

47
<PAGE>
(4) The Consumer Price Index, which is a measure of the average change in
prices over time in a fixed market basket of goods and services (e.g., food,
clothing, shelter, fuels, transportation fares, charges for doctors' and
dentists' services, prescription medicines, and other goods and services that
people buy for day-to-day living).

(5) Bear Stearns Foreign Bond Index, which provides simple average returns
for individual countries and GNP-weighted index, beginning in 1975. The returns
are broken down by local market and currency.

(6) Ibbottson Associates International Bond Index, which provides a detailed
breakdown of local market and currency returns since 1960.

(7) Standard & Poor's "500" Index ("S&P 500") which is a widely recognized
index composed of the capitalization-weighted average of the price of 500 of the
largest publicly traded stocks in the United States.

(8) Salomon Brothers Broad Investment Grade Index which is a widely used
index composed of U.S. domestic government, corporate and mortgage-backed fixed
income securities.

(9) Dow Jones Industrial Average.

(10) Financial News Composite Index.

(11) Morgan Stanley Capital International World Indices, including, among
others, the Morgan Stanley Capital International Europe, Australia, Far East
Index ("EAFE Index"). The EAFE Index is an unmanaged index of more than 800
companies of Europe, Australia, and the Far East.

Indices prepared by the research departments of such financial organizations as
Salomon Brothers, Inc.; Merrill Lynch, Pierce, Fenner & Smith, Inc.; Bear
Stearns & Co., Inc.; Morgan Stanley; and Ibbottson Associates may be used, as
well as information provided by the Federal Reserve Board.

Fortis Series may refer to the rating services listed below.

RATINGS SERVICE
Lipper Analytical Services, Inc.
Wiesenberger Investment Companies Services
Morningstar Publications, Inc.
Johnson's Charts
CDA Investment Technologies, Inc.

As noted in the Prospectus, Fortis Series may refer to publications which have
mentioned its performance.

48
<PAGE>
Following is a list of the publications whose articles may be referred to:

AMERICAN BANKER (The)
AP-DOW Jones News Service
ASSOCIATED PRESS (The)
BARRON'S
BETTER INVESTING
BOARDROOM REPORTS
BOND BUYER & CREDIT MARKETS (The)
BOND BUYER (The)
BONDWEEK
BUSINESS MONTH
BUSINESS WEEK
CABLE NEWS NETWORK
CASHFLOW MAGAZINE
CFO
CHICAGO TRIBUNE (The)
CHRISTIAN SCIENCE MONITOR
CITY BUSINESS/CORPORATE REPORT
CITYBUSINESS PUBLICATIONS
COMMERCIAL & FINANCIAL CHRONICLE
CONSUMER GUIDE
CORPORATE FINANCE
DALLAS MORNING NEWS
DOLLARS & SENSE
DOW-JONES NEWS SERVICE
ECONOMIST (The)
EQUITY INTERNATIONAL
EUROMONEY
FINANCIAL EXECUTIVE
FINANCIAL PLANNING
FINANCIAL SERVICES WEEK
FINANCIAL TIMES
FINANCIAL WORLD
FORBES
FORTUNE
FUTURES
GLOBAL FINANCE
GLOBAL INVESTOR
INDUSTRY WEEK
INSTITUTIONAL INVESTOR
INTERNATIONAL HERALD TRIBUNE
INVESTMENT DEALER'S DIGEST
INVESTOR'S BUSINESS DAILY
KIPLINGER PERSONAL FINANCE
KIPLINGER CALIF. LETTER (The)
KIPLINGER FLORIDA LETTER
KIPLINGER TEXAS LETTER
KIPLINGER WASHINGTON LETTER (The)
KNIGHT/RIDDER FINANCIAL
LA TIMES
LIPPER ANALYTICAL SERVICES
MARKET CHRONICLE
MINNEAPOLIS STAR TRIBUNE
MONEY
MONEY MANAGEMENT LETTER
MOODY'S INVESTORS SERVICE, INC.
NATIONAL THRIFT NEWS
NATIONAL UNDERWRITER
NELSON'S RESEARCH MONTHLY
NEW YORK DAILY NEWS
NEW YORK NEWSDAY
NEW YORK TIMES (The)
NEWSWEEK
NIGHTLY BUSINESS REPORT (The)
PENSION WORLD
PENSIONS & INVESTMENT AGE
PERSONAL INVESTOR
PORTFOLIO LETTER
REGISTERED REPRESENTATIVE
RUETERS
SECURITIES PRODUCT NEWS
SECURITIES WEEK
SECURITY TRADERS HANDBOOK
SAINT PAUL PIONEER PRESS
STANDARD & POOR'S CORPORATION
STANGER'S INVESTMENT ADVISOR
STANGER'S SELLING MUTUAL FUNDS
STOCK MARKET MAGAZINE (The)
TIME
TRUSTS & ESTATES
U.S. NEWS & WORLD REPORT
UNITED PRESS INTERNATIONAL
USA TODAY
WALL STREET JOURNAL (The)
WASHINGTON POST (The)
FORTIS BENEFITS INSURANCE COMPANY
WOODBURY BULLETIN
WIESENBERGER INVESTMENT COMPANIES SERVICES

49
<PAGE>
SYSTEMATIC WITHDRAWAL

CONVENIENT INCOME

If you are over 59 1/2 years old, your Fortis variable annuity can be a source
of income. For qualified plans or IRAs, you can use a systematic withdrawal plan
to satisfy the minimum distribution requirement when you turn age 70 1/2.

YOU CAN HAVE MONTHLY INCOME

- Directly deposited to a Fortis Money Fund account for convenient check
writing.*

- Electronically deposited directly to a checking, money market* or
brokerage account.

- Sent directly in the form of a check.

- Conveniently forwarded to another address to pay disability insurance,
life insurance, long-term care premiums, mortgage, etc.

CHOOSE YOUR STRATEGY:

- -EARNINGS ONLY--withdraw any profits, leave your principal intact.

- Principal never touched to provide income.

- Amount varies with the performance of the investments you choose.

- -SPECIFY EXACT DOLLAR AMOUNT:

- Ideal for paying planned expenses or supplementing your income.

- Any additional earnings continue to grow tax deferred.

HOW TO GET STARTED

Your registered representative can help you decide what systematic withdrawal
plan is right for you. Complete the Systematic Withdrawal section of the
Variable Annuity Service Request Form (#97212.)

[LOGO]

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

* A money market fund is neither insured nor guaranteed by the U.S. Government.
While a stable net asset value is a goal of the fund, it is not a guarantee.

Withdrawals from an annuity are subject to tax and may be subject to an early
withdrawal charge. The IRS charges a 10% tax penalty on most withdrawals prior
to owner age 59 1/2.

Subaccount unit values fluctuate. When units are redeemed, their value may be
worth more or less than their original cost.

Opportunity and Masters are two separate annuities with distinct features and
charges. This material must be preceded or accompanied by a Masters or
Opportunity annuity brochure.

For more complete information about Fortis annuities including charges and
expenses, send for a prospectus from Fortis Investors, Inc. P.O. Box 64284, St.
Paul, MN 55164. Read it carefully before you invest.

This investment is not FDIC insured, is not an obligation of, nor guaranteed by
any bank or financial institution, and involves investment risks, including
possible loss of principal.

50
<PAGE>
Fortis Series also may advertize data concerning its portfolio securities'
performance and biographical information about its portfolio managers.

FINANCIAL STATEMENTS

The financial statements included as part of Fortis Series' 1994 Annual Report
to Shareholders, filed with the Securities and Exchange Commission in February,
1995, are incorporated herein by reference. The Annual Report accompanies this
Statement of Additional Information.

CUSTODIAN; COUNSEL; ACCOUNTANTS

First Bank National Association, First Bank Place, Minneapolis MN 55101 acts as
custodian of Fortis Series' assets and portfolio securities; Dorsey & Whitney
P.L.L.P., 220 South Sixth Street, Minneapolis, MN 55402, is the independent
General Counsel for Fortis Series; and KPMG Peat Marwick LLP, 4200 Norwest
Center, Minneapolis, MN 55402, acts as Fortis Series' independent auditors.

LIMITATION OF DIRECTOR LIABILITY

Under Minnesota law, each director of Fortis Series owes certain fiduciary
duties to Fortis Series and to its shareholders. Minnesota law provides that a
director "shall discharge the duties of the position of director in good faith,
in a manner the director reasonably believes to be in the best interests of the
corporation, and with the care an ordinarily prudent person in a like position
would exercise under similar circumstances." Fiduciary duties of a director of a
Minnesota corporation include, therefore, both a duty of "loyalty" (to act in
good faith and act in a manner reasonably believed to be in the best interests
of the corporation) and a duty of "care" (to act with the care an ordinarily
prudent person in a like position would exercise under similar circumstances).
Minnesota law authorizes corporations to eliminate or limit the personal
liability of a director to the corporation or its shareholders for monetary
damages for breach of the fiduciary duty of "care." Minnesota law does not,
however, permit a corporation to eliminate or limit the liability of a director
(i) for any breach of the director's duty of "loyalty" to the corporation or its
shareholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for authorizing a
dividend, stock repurchase or redemption or other distribution in violation of
Minnesota law or for violation of certain provisions of Minnesota securities
laws, or (iv) for any transaction from which the director derived an improper
personal benefit. The Articles of Incorporation of Fortis Series limit the
liability of directors to the fullest extent permitted by Minnesota statutes,
except to the extent that such a liability cannot be limited as provided in the
1940 Act (which act prohibits any provisions which purport to limit the
liability of directors arising from such directors' willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of their role as directors).

Minnesota law does not eliminate the duty of "care" imposed upon a director. It
only authorizes a corporation to eliminate monetary liability for violations of
that duty. Minnesota law, further, does not permit elimination or limitation of
liability of "officers" to the corporation for breach of their duties as
officers (including the liability of directors who serve as officers for breach
of their duties as officers). Minnesota law does not permit elimination or
limitation of the availability of equitable relief, such as injunctive or
rescissionary relief. Further, Minnesota law does not permit elimination or
limitation of a director's liability under the Securities Act of 1933 or the
Securities Exchange Act of 1934, and it is uncertain whether and to what extent
the elimination of monetary liability would extend to violations of duties
imposed on directors by the 1940 Act and the rules and regulations adopted under
such Act.

ADDITIONAL INFORMATION

Fortis Series has filed with the Securities and Exchange Commission, Washington,
D.C. 20549, a Registration Statement under the Securities Act of 1933, as
amended, with respect to the common stock offered hereby. The Prospectus and
this Statement of Additional Information do not contain all of the information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with Rules and Regulations of the Commission. The Registration
Statement may be inspected at the principal office of the Commission at 450
Fifth Street, N.W., Washington, D.C., and copies thereof may be obtained from
the Commission at prescribed rates.

51
<PAGE>
APPENDIX

DESCRIPTION OF FUTURES, OPTIONS AND FORWARD CONTRACTS

OPTIONS ON SECURITIES

An option on a security provides the purchaser, or "holder," with the right, but
not the obligation, to purchase, in the case of a "call" option, or sell, in the
case of a "put" option, the security or securities underlying the option, for a
fixed exercise price up to a stated expiration date or, in the case of certain
options, on such date. The holder pays a nonrefundable purchase price for the
option, known as the "premium." The maximum amount of risk the purchaser of the
option assumes is equal to the premium plus related transaction costs, although
this entire amount may be lost. The risk of the seller, or "writer," however, is
potentially unlimited, unless the option is "covered." A call option written by
the Series is "covered" if the Series owns the underlying security covered by
the call or has an absolute and immediate right to acquire that security without
additional cash consideration (or for additional cash consideration held in a
segregated account by its custodian) upon conversion or exchange of other
securities held in its portfolio. A call option is also covered if the Series
holds a call on the same security and in the same principal amount as the call
written where the exercise price of the call held (a) is equal to or less than
the exercise price of the call written or (b) is greater than the exercise price
of the call written if the difference is maintained by the Series in cash and
high grade government securities in a segregated account with its custodian. A
put option written by the Series is "covered" if the Series maintains cash and
high grade government securities with a value equal to the exercise price in a
segregated account with its custodian, or else holds a put on the same security
and in the same principal amount as the put written where the exercise price of
the put held is equal to or greater than the exercise price of the put written.
If the writer's obligation is not so covered, it is subject to the risk of the
full change in value of the underlying security from the time the option is
written until exercise.

Upon exercise of the option, the holder is required to pay the purchase price of
the underlying security, in the case of a call option, or to deliver the
security in return for the purchase price in the case of a put option.
Conversely, the writer is required to deliver the security, in the case of a
call option, or to purchase the security, in the case of a put option. Options
on securities which have been purchased or written may be closed out prior to
exercise or expiration by entering into an offsetting transaction on the
exchange on which the initial position was established, subject to the
availability of a liquid secondary market.

Options on securities and options on indexes of securities, discussed below, are
traded on national securities exchanges, such as the Chicago Board Options
Exchange and the New York Stock Exchange, which are regulated by the SEC. The
Options Clearing Corporation guarantees the performance of each party to an
exchange-traded option, by in effect taking the opposite side of each such
option. A holder or writer may engage in transactions in exchange-traded options
on securities and options on indexes of securities only through a registered
broker-dealer which is a member of the exchange on which the option is traded.

In addition, options on securities and options on indexes of securities may be
traded on exchanges located outside the United States and over-the-counter
through financial institutions dealing in such options as well as the underlying
instruments. The particular risks of transactions on foreign exchanges and
over-the-counter transactions are set forth more fully in the Statement of
Additional Information.

OPTIONS ON STOCK INDEXES

In contrast to an option on a security, an option on a stock index provides the
holder with the right to make or receive a cash settlement upon exercise of the
option, rather than the right to purchase or sell a security. The amount of this
settlement is equal to (a) the amount, if any, by which the fixed exercise price
of the option exceeds (in the case of a call) or is below (in the case of a put)
the closing value of the underlying index on the date of exercise, multiplied by
(b) a fixed "index multiplier." The purchaser of the option receives this cash
settlement amount if the closing level of the stock index on the day of exercise
is greater than, in the case of a call, or less than, in the case of a put, the
exercise price of the option. The writer of the option is obligated, in return
for the premium received, to make delivery of this amount if the option is
exercised. As in the case of options on securities, the writer or holder may
liquidate positions in stock index options prior to exercise or expiration by
entering into closing transactions on the exchange on which such positions were
established, subject to the availability of a liquid secondary market.

The Series will cover all options on stock indexes by owning securities whose
price changes, in the opinion of Advisers, are expected to be similar to those
of the index, or in such other manner as may be in accordance with the rules of
the exchange on which the option is traded and applicable laws and regulations.
Nevertheless, where the Series covers a call option on a stock index through
ownership of securities, such securities may not match the composition of the
index. In that event, the Series will not be fully covered and could be subject
to risk of loss in the event of adverse changes in the value of the index. The
Series will secure put options on stock indexes by segregating assets equal to
the option's exercise price, or in such other manner as may be in accordance
with the rules of the exchange on which the option is traded and applicable laws
and regulations.

The index underlying a stock option index may be a "broad-based" index, such as
the Standard & Poor's 500 Index or the New York Stock Exchange Composite Index,
the changes in value of which ordinarily will reflect movements in the stock
market in general. In contrast, certain options may be based upon narrower
market indexes, such as the Standard & Poor's 100 Index, or on indexes of
securities of particular industry groups, such as those of oil and gas or
technology companies. A stock index assigns relative values to the stocks
included in the index and the index fluctuates with changes in the market values
of the stocks so included.

FUTURES CONTRACTS ON FIXED INCOME SECURITIES, STOCK INDEXES AND FOREIGN
CURRENCIES

A Futures Contract is a bilateral agreement providing for the purchase and sale
of a specified type and amount of a financial instrument or foreign currency, or
for the making and acceptance of a cash settlement, at a stated time in the
future for a fixed price. By its terms, a Futures Contract provides for a
specified settlement date on which, in the case of the majority of interest rate
and foreign currency futures contracts, the fixed income securities or currency
underlying the contract are delivered by the seller and paid for by the
purchaser, or on which, in the case of stock index futures contracts and certain
interest rate and foreign currency futures contracts, the difference between the
price at which the contract was entered into and the contract's closing value is
settled between the purchaser and the seller in cash. Futures Contracts differ
from options in that they are bilateral agreements, with both the purchaser and
the seller equally obligated to complete the transaction. Futures Contracts call
for settlement only on the expiration date, and cannot be "exercised" at any
other time during their term.

The purchase or sale of a Futures Contract differs from the purchase or sale of
a security or the purchase of an option in that no purchase price is paid or
received. Instead, an amount of cash or cash equivalents, which varies but may
be as low as 5% or less of the value of the contract, must be deposited with the
broker as "initial margin." Subsequent payments to and from the broker, referred
to as "variation margin," are made on a daily basis as the value of the index or
instrument underlying the Futures Contract fluctuates, making positions in the
Futures Contracts more or less valuable, a process known as "marking to the
market."

U.S. Futures Contracts may be purchased or sold only on an exchange, known as a
"contract market," designated by the CFTC for the trading of such contract, and
only through a registered futures commission merchant which is a member of such
contract market. A commission must be paid on each completed purchase and sale
transaction. The contract market clearing house guarantees the performance of
each party to a Futures Contract, by in effect taking the opposite side of such
contract. At any time prior to the expiration of a Futures Contract, a trader
may elect to close out its position by taking an opposite position on the
contract market on which the position was entered into, subject to the
availability of a secondary market, which will operate to terminate the initial
position. At that time, a final

52
<PAGE>
determination of variation margin is made and any loss experienced by the trader
is required to be paid to the contract market clearing house while any profit
due to the trader must be delivered to it. Futures Contracts may also be traded
on foreign exchanges.

Interest rate Futures Contracts currently are traded on a variety of fixed
income securities, including long-term U.S. Treasury Bonds, Treasury Notes,
Government National Mortgage Association modified pass-through mortgage-backed
securities , and U.S. Treasury Bills. In addition, interest rate Futures
Contracts include contracts on indexes of municipal securities. Foreign currency
Futures Contracts currently are traded on the British pound, Canadian dollar,
Japanese yen, Swiss franc, West German mark, and on Eurodollar deposits.

A stock index or Eurodollar Futures Contract provides for the making and
acceptance of a cash settlement in much the same manner as the settlement of an
option on a stock index. The types of indexes underlying stock index futures
contracts are essentially the same as those underlying stock index options, as
described above. The index underlying a municipal bond index futures contract is
a broad-based index of municipal securities designed to reflect movements in the
municipal securities market as a whole. The index assigns weighted values to the
securities included in the index and its composition is changed periodically.

OPTIONS ON FUTURES CONTRACTS

An Option on a Futures Contract provides the holder with the right to enter into
a "long" position in the underlying Futures Contract, in the case of a call
option, or a "short" position in the underlying Futures Contract, in the case of
a put option, at a fixed exercise price up to a stated expiration date or, in
the case of certain options, on such date. Upon exercise of the option by the
holder, the contract market clearing house establishes a corresponding short
position for the writer of the option, in the case of a call option, or a
corresponding long position, in the case of a put option. In the event that an
option is exercised, the parties will be subject to all the risks associated
with the trading of Futures Contracts, such as payment of variation margin
deposits. In addition, the writer of an Option on a Futures Contract, unlike the
holder, is subject to initial and variation margin requirements on the option
position.

A position in an Option on a Futures Contract may be terminated by the purchaser
or the seller prior to expiration by affecting a closing purchase or sale
transaction, subject to the availability of a liquid secondary market, which is
the purchase or sale of an option of the same series (i.e., the same exercise
price and expiration date) as the option previously purchased or sold. The
difference between the premiums paid and received represents the trader's profit
or loss on the transaction.

Options on Futures Contracts that are written or purchased by the Series on
United States exchanges are traded on the same contract market as the underlying
Futures Contract and, like Futures Contracts, are subject to regulation by the
CFTC and the performance guarantee of the exchange clearing house. In addition,
Options on Futures Contracts may be traded on foreign exchanges.

An option, whether based on a Futures Contract, a stock index, or security,
becomes worthless to the holder when it expires. Upon exercise of an option, the
exchange or contract market clearing house assigns exercise notices on a random
basis to those of its members which have written options of the same series and
with the same expiration date. A brokerage firm receiving such notices then
assigns them on a random basis to those of its customers which have written
options of the same series and expiration date. A writer therefore has no
control over whether an option will be exercised against it, nor over the timing
of such exercise.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS

A Currency Contract is a contractual obligation to purchase or sell a specific
quantity of a given foreign currency for a fixed exchange rate at a future date.
Currency Contracts are individually negotiated and are traded through the
"interbank currency market," an informal network of banks and brokerage firms
which operates around the clock and throughout the world. Transactions in the
interbank market may be executed only through financial institutions acting as
market-makers in the interbank market, or through brokers exercising purchases
and sales through such institutions. Market-makers in the interbank market
generally act as principals in taking the opposite side of their customers'
positions in Currency Contracts, and ordinarily charge a mark-up commission
which may be included in the cost of the Contract. In addition, market-makers
may require their customers to deposit collateral upon entering into a Currency
Contract, as security for the customer's obligation to make or receive delivery
of currency, and to deposit additional collateral if exchange rates move
adversely to the customer's position. Such deposits may function in a manner
similar to the margining of Futures Contracts, described above.

Prior to the stated maturity date of a Currency Contract, it may be possible to
liquidate the transaction by entering into an offsetting contract. In order to
do so, however, a customer may be required to maintain both contracts as open
positions until maturity and to make or receive a settlement of the difference
owed to or from the market-maker or broker at that time.

OPTIONS ON FOREIGN CURRENCIES

Options on foreign currencies are traded in a manner substantially similar to
options on securities. In particular, an option on foreign currency provides the
holder with the right to purchase, in the case of a call option, or to sell, in
the case of a put option, a stated quantity of a particular currency for a fixed
price up to a stated expiration date or, in the case of certain options, on such
date. The writer of the option undertakes the obligation to deliver, in the case
of a call option, or to purchase, in the case of a put option, the quantity of
the currency called for in the option, upon exercise of the option by the
holder.

As in the case of other types of options, the holder of an option on foreign
currency is required to pay a one-time, nonrefundable premium, which represents
the cost of purchasing the option. The holder can lose the entire amount of this
premium, as well as related transaction costs, but not more than this amount.
The writer of the option, in contract, generally is required to make initial and
variation margin payments, similar to margin deposits required in the trading of
Futures Contracts and the writing of other types of options. The writer is
therefore subject to risk of loss beyond the amount originally invested and
above the value of the option at the time it is entered into.

Certain options on foreign currencies, like Currency Contracts, are traded
over-the-counter through financial institutions acting as market-makers in such
options and the underlying currencies. Such transactions therefore involve risks
not generally associated with exchange-traded instruments, which are discussed
below. Options on foreign currencies may also be traded on national securities
exchanges regulated by the SEC and on exchanges located in foreign countries.

Over-the-counter transactions can only be entered into with a financial
institution willing to take the opposite side, as principal, of the Series'
position, unless the institution acts as broker and is able to find another
counterparty willing to enter into the transaction with the Series. Where no
such counterparty is available, it will not be possible to enter into a desired
transaction. There also may be no liquid secondary market in the trading of
over-the-counter contracts, and the Series could be required to retain options
purchased or written until exercise, expiration or maturity. This in turn could
limit the Series' ability to profit from open positions or to reduce losses
experienced, and could result in greater losses.

Further, over-the-counter transactions are not subject to the guarantee of an
exchange clearing house, and the Series will therefore be subject to the risk of
default by, or the bankruptcy of, the financial institution serving as its
counterparty. One or more of such institutions also may decide to discontinue
their role as market-makers in a particular currency or security, thereby
restricting the Series' ability to enter into desired hedging transactions. The
Series will enter into an over-the-counter transaction only with parties whose
creditworthiness has been reviewed and found satisfactory by Advisers.

96724 (REV. 5/95)

53
<PAGE>

FORTIS SERIES FUND, INC.

ANNUAL REPORT
DECEMBER 31, 1994

Representing the portfolios of Masters Variable Annuity
Opportunity Fixed & Variable Annuity
Wall Street Series VUL 100, 220, & 500

Contents
Letter to Shareholders 1
Highlights 9
Schedules of Investments
Money Market Series 11
U.S. Government Sercurities Series 12
Diversified Income Series 14
High Yield Series 17
Asset Allocation Series 20
Growth & Income Series 24
Growth Stock Series 26
Global Growth Series 28
Aggressive Growth Series 30
Statements of Assets and Liabilities 32
Statements of Operations 34
Statements of Changes in Net Assets 36
Notes to Financial Statements 38
Independent Auditors' Report 43
Board of Directors and Officers 44

DEAR SHAREHOLDER:

We're pleased to present the Fortis Series Fund, Inc. annual report for the
period ended December 31, 1994. This fund includes the Money Market Series, U.S.
Government Securities Series, Diversified Income Series, High Yield Series,
Asset Allocation Series, Growth and Income Series, Growth Stock Series, Global
Growth Series and Aggressive Growth Series. The Fortis Series Fund supports the
variable subaccounts of the Fortis Opportunity Fixed & Variable Annuity, Masters
Variable Annuity, and Wall Street Series Variable Universal Life Insurance 100,
250 and 500 contracts.

ECONOMIC REVIEW AND INVESTMENT STRATEGIES

As we reflect upon the 1994 investment year, we can safely say that it was amost
difficult year for investors. In general, the bond markets suffered their
largest 12-month losses since systematic records began about 50 years ago. For
example, the total return of a 30-year treasury bond from January 1, 1994,
through December 31, 1994, was -11.9 percent. And stocks fared little better.
Whereas the Standard & Poor's 500 Stock Index returned 1.3 percent with
dividends, the broader Wilshire 500 Index (which includes smaller stocks) fell
0.07 percent for the year.

The market's troubles started in February when the Federal Reserve began a
progressively restrictive interest rate policy that led to six different
interest rate hikes during the year. The increasing rate environment contributed
to investor unease for the remainder of the year. Investors tried to accurately
size up the course of the Fed's monetary policy, only to repeatedly
underestimate how committed it was to containing inflation. We believe the
monetary tightening will have a positive long-term effect on stocks and bonds,
as it demonstrates the Federal Reserve's resolve to keep inflation in check.
However, this long-term effect does not preclude temporary sell-offs based on
concerns that rate hikes are either excessive or insufficient.

For investors who prefer to share our long-term view, we feel that over time,
corporate profits and dividends should make further progress, increasing the
relative attractiveness of stocks. Current inflation fears are likely to prove
exaggerated, and
<PAGE>

we expect it to remain contained in 1995 as a result of the Federal Reserve's
vigilance. These conditions continue to provide a positive environment for
financial assets (such as stocks and bonds) that thrive on low inflation.

MONEY MARKET SERIES

Our primary objectives for this portfolio are safety, quality and liquidity. The
investments are drawn from a carefully researched and approved list. Over the
past 12 months, the average maturity has varied between 20 and 25 days, and we
do not anticipate any changes in the asset mix or maturity in the near future.

U.S. GOVERNMENT SECURITIES SERIES

The portfolio's long duration helps explain its disappointing performance. When
the year began, duration was 6.5 years. It was shortened to five years by mid-
year, then extended to 5.5 years by year-end. While we believe rates could move
still higher in 1995, we feel the portfolio has experienced most of the negative
impact. We believe the economy will eventually feel the Fed's actions, which
will allow rates to decline moderately. In addition, our holdings included some
mortgage derivative securities. While these securities helped portfolio
performance in 1993, they hurt performance by about 1 percent in 1994. At year-
end, the total derivative portion was just over 2 percent of assets.

DIVERSIFIED INCOME SERIES

Higher interest rates had a negative impact on this portfolio. In hindsight, the
duration on the government/ investment grade portion was too long. At the
beginning of the year, the portfolio's duration was 6.5 years, which declined to
5.5 at year-end. The portion allocated to high yield bonds started the year at
25 percent, but, in February, the allocation was reduced to its current 20
percent level. Overall, the high yield component aided performance by slightly
more than 1 percent. We added holdings throughout the year from the municipal
sector. In November, this sector looked especially attractive, so we added a 5
percent position in tax-free bonds.

HIGH YIELD SERIES

This portfolio joined the variable accounts on May 2, 1994. As in all our high
yield portfolios, diversification is a key element. At year-end, the portfolio
had 69 different issues across a broad range of industries. Nearly 10 percent of
the portfolio was invested in cyclical holdings that have benefited from the
economy's strength. In addition, 12 percent of the portfolio was allocated to
the relatively stable area of food, beverage and tobacco.

ASSET ALLOCATION SERIES

The portfolio experienced several asset allocation changes over the course of
the year. In May, the stock to bond ratio of 55% stocks/45% bonds changed to 40%
stocks/55% bonds/ 5% cash to reflect the rapid rise in interest rates and the
relative attractiveness of bonds to stocks. In November, we committed the 5
percent cash position to bonds, again to reflect our view that bonds offered the
best risk return ratio of the three asset categories. We also made changes
within the bond portion, reducing the high yield portion from 25 percent to 20
percent in February. In addition, we established a municipal holding of 3
percent of fixed assets in June, and in November, increased it to 5 percent.

GROWTH AND INCOME SERIES

This series invests in companies with yields that can help achieve an overall
portfolio yield close to the market average yield. At year-end, the S&P 500
Stock Index had a dividend yield of 2.9 percent. Besides an absolute yield
requirement, we select stocks of companies we believe will grow their earnings
to increase dividends in future years thereby providing an attractive total
return over the long term. The initial purchases in the portfolio are highly
diversified across a number of industries, including retail, financial,
telephone, energy-related, environmental and some industrial areas.

GROWTH STOCK SERIES

Most of 1994 was difficult for growth stock investors. Growth stocks tend to
underperform in times of rising interest rates. Higher interest rates question
the higher valuations growth stocks normally carry relative to other stocks, and
they also provide competitive rates of return for fixed income securities
relative to equities in general. The Federal Reserve was instrumental in
promoting higher interest rates to restrain economic growth and prevent
increased inflation rates. If successful in producing moderate but
noninflationary growth, this effort will benefit both the bond and stock markets
and should produce a particularly favorable environment for growth stocks.
<PAGE>

Throughout the year, we attempted to moderate the market decline by assigning a
significant portion of the portfolio in cash or its equivalents. In the stock
segment, technology stocks continue to represent a heavy weighting -- an
exposure that's been a mixed blessing. We believe capital investment and exports
will be the main engines of economic growth and that technology will drive
capital spending. Other areas of portfolio emphasis include health care
(focusing on managed care); restaurants (especially casual dining); and
retailers (those providing quality goods, value prices and good service).

GLOBAL GROWTH SERIES

The Global Growth Series provides a highly diversified portfolio of rapidly
growing companies. As of December 31, the portfolio was invested in 23 countries
with foreign holdings representing 59 percent of total equity assets. The
remaining equity holdings were in the United States, with short-term cash
investments representing 19 percent of the portfolio. Rising interest rates
reduced global liquidity flows, which caused a negative effect on many global
equity markets in 1994. The emerging market sector and smaller growth companies
were most negatively affected by this sensitivity to higher interest rates. We
continue our strategy of investing in well-managed companies with above-average
growth characteristics. The correction experienced by growth portfolios is not
unusual by historic standards, and it offers an opportunity to accumulate many
of the world's best positioned growth companies at reasonable valuations. Today,
growth-oriented stocks provide both value and excellent earnings prospects. This
combination rarely occurs in equity markets, except during periods of
uncertainty.

AGGRESSIVE GROWTH SERIES

Another newcomer to the lineup of investment choices, this portfolio includes
stocks of relatively small companies experiencing strong growth in their
revenues and earnings. Specifically, these companies are generating revenues of
between $50 million and $300 million and growing them at an annual rate of at
least 25 percent.

Generally, these companies are in the stage of growth where revenues are
increasing fairly dramatically and earnings are growing even faster, since
volume is spread over a less rapidly growing cost base. Investors are usually
willing to pay higher valuations for this kind of growth potential. The rewards
for investors in successful high growth companies can be significant. On the
other hand, there is little margin for error in their high valuations should
management fail to meet expectations. Initial purchases in the portfolio
included computer software, restaurant and specialty retailers, gas exploration
technology and telecommunications equipment companies.

IN CLOSING

We appreciate your investment in the Fortis Series Fund, Inc. If you have any
questions, please call us or talk with your investment professional.

Sincerely,

Dean C. Kopperud President

Stephen M. Poling Vice President

Dennis M. Ott Vice President

James S. Byrd Vice President

January 19, 1995

U.S. GOVERNMENT SECURITIES SERIES

TOP TEN HOLDINGS AS OF 12/31/94

Percent of
Bonds Net Assets
1 U.S. Treasury Bond (8.125%) 2021 9.1%
2 FHLB Note (7.31%) 2004 8.2%
3 FHLB Global Note (6.125%) 1996 6.8%
4 Mortgage Obligation Structured
Trust (6.85%) 2018 5.9%
5 FNMA Global Note (7.40%) 2004 5.5%
6 Green Tree Financial Corp. (7.65%) 2019 5.3%
<PAGE>

7 DLJ Mtg Acceptance Corp. (8.50%) 2001 4.8%
8 Nomura Asset Securities Corp. (6.68%) 2003 4.1%
9 U.S. Treasury Note (8.75%) 1997 3.6%
10 FNMA REMIC (7.50%) 2022 3.2%

DIVERSIFIED INCOME SERIES

TOP TEN HOLDINGS AS OF 12/31/94
Percent of
Bonds Net Assets
1 U.S. Treasury Note (7.50%) 2001 6.0%
2 U.S. Treasury Note (9.375%) 1996 5.2%
3 FNMA Global Note (7.40%) 2004 4.8%
4 FNMA (7.00%) 2024 4.5%
5 GNMA (7.00%) 2022 4.4%
6 FHLB (7.31%) 2004 4.3%
7 U.S. Treasury Bond (8.125%) 2021 3.1%
8 U.S. Treasury Note (8.625%) 1995 3.1%
9 Mortgage Obligation Structured Trust (6.85%) 2018 2.8%
10 Hydro-Quebec (8.00%) 2013 2.8%

HIGH YIELD SERIES

TOP TEN HOLDINGS AS OF 12/31/94
Percent of
Bonds Net Assets
1 White Rose Foods, Inc. (17.03%) 1998 2.0%
2 Plastic Specialty & Technologies (11.25%) 2003 1.9%
3 Rexene Corp. (11.75%) 2004 1.9%
4 Malette, Inc. (12.25%) 2004 1.8%
5 Young Broadcasting, Inc. (11.75%) 2004 1.8%
6 NL Industries (11.75%) 2003 1.8%
7 IVEX Packaging Corp. (12.50%) 2002 1.8%
8 Florsheim Shoe Co. (12.75%) 2002 1.8%
9 Doehler Jarvis, Inc. (11.875%) 2002 1.8%
10 Petro PSC Properties L.P. (12.50%) 2002 1.8%

ASSET ALLOCATION SERIES

TOP TEN HOLDINGS AS OF 12/31/94
Percent of
Stocks Net Assets
1 3Com Corp. 1.5%
2 Oracle Systems Corp. 1.4%
3 Silicon Graphics, Inc. 1.3%
4 Microsoft Corp. 1.2%
5 Ericsson (L.M.) Telephone Co. Class B ADR 1.2%

Bonds
1 FHLB Global Note (6.125%) 1996 5.6%
2 U.S. Treasury Note (7.50%) 2001 4.5%
3 Mortgage Obligation Structured Trust (6.85%) 2018 2.5%
4 U.S. Treasury Note (8.125%) 2021 2.1%
5 Hydro-Quebec (8.00%) 2013 2.1%

PORTFOLIO CHANGES FOR THE YEAR ENDED 12/31/94

STOCK ADDITIONS:
Applied Materials, Inc.
Cisco Systems, Inc.
Columbia/HCA Healthcare Corp.
H & R Block, Inc.
Nokia ADS
Price/Costco, Inc.
Value Health, Inc.
Viacom, Inc. Non-Voting
Vodafone Group plc ADR
WMX Technologies, Inc.
STOCK ELIMINATIONS:
ALZA Corp., Class A
CML Group, Inc.
Caesars World, Inc.
Chrysler Corp.
Circuit City Stores, Inc.
<PAGE>

Circus Circus Enterprises, Inc.
Grupo Televisa, S.A. de C.V. ADR
MCI Communications Corp.
Primerica Corp.
Progressive Corp. (The)
Schlumberger Ltd.
Shaw Industries, Inc.
SynOptics Communications, Inc.
Tele-Communications, Inc. Class A
Telefonos de Mexico, S.A. de C.V. ADR

GROWTH & INCOME SERIES

TOP TEN HOLDINGS AS OF 12/31/94
Percent of
Stocks Net Assets
1 Rite Aid 2.0%
2 Baxter International, Inc. 1.9%
3 Household International, Inc. 1.9%
4 Sears Roebuck & Co. 1.9%
5 Clorox Co. 1.9%
6 American Brands, Inc. 1.9%
7 American Express Co. 1.9%
8 Readers Digest Assoc., Inc. Class A Non-Voting 1.9%
9 Pfizer, Inc. 1.9%
10 Kerr McGee Corp. 1.9%

GROWTH STOCK SERIES

TOP TEN HOLDINGS AS OF 12/31/94
Percent of
Stocks Net Assets
1 3Com Corp. 4.5%
2 Oracle Systems Corp. 3.6%
3 Tellabs, Inc. 3.3%
4 Cisco Systems, Inc. 2.8%
5 Informix Corp. 2.6%
6 DSC Communications Corp. 2.4%
7 Home Depot, Inc. 2.2%
8 Microsoft Corp. 2.1%
9 Newbridge Networks Corp. 1.8%
10 Sterling Software, Inc. 1.8%

PORTFOLIO CHANGES FOR THE YEAR ENDED 12/31/94

ADDITIONS:
Biogen, Inc.
Centocor, Inc.
Compaq Computer Corp.
E M C Corp.
LDDS Communications, Inc.
Lam Research Corp.
Landmark Graphics Corp.
Lowe's Companies, Inc.
Mobile Telecommunications Technologies Corp.
Paging Network, Inc.
Sensormatic Electronics Corp.
Solectron Corp.
ELIMINATIONS:
ALZA Corp., Class A
Bombay Co., Inc.
CML Group, Inc.
Comcast Corp., Class A Special
Cott Corp.
Damark International, Inc.
Electronic Arts
Information Resources, Inc.
North American Mortgage Co.
Novell, Inc.
Perrigo Co.
President Riverboat Casinos, Inc.
QVC Network, Inc.
QUALCOMM, Inc.
Snapple Beverage Corp.
Sofamor/Danek Group, Inc.
Sports & Recreation, Inc.
<PAGE>

Sun Television & Appliances, Inc.
SynOptics Communications, Inc.
Toys 'R' Us, Inc.
Wellfleet Communications, Inc.

GLOBAL GROWTH SERIES

TOP TEN HOLDINGS AS OF 12/31/94
Percent of
Stocks Net Assets
1 Nokia (AB) OY (Finland) 3.8%
2 SAP AG Systeme Non Voting (Germany) 2.5%
3 Gartner Group, Inc. Class A (US) 2.2%
4 Wisconsin Central Transportation Corp. (US) 1.6%
5 Tandy Corp. (US) 1.6%
6 Astra 'B' Free (Sweden) 1.6%
7 3Com Corp. (US) 1.6%
8 DSC Communications Corp. (US) 1.5%
9 Huaneng Power International, Inc. ADS (China) 1.5%
10 Newbridge Networks Corp. (Canada) 1.5%

PORTFOLIO CHANGES FOR THE YEAR ENDED 12/31/94
Additions:
Alcatel Cable
Applebees International,Inc.
Applied Materials, Inc.
AutobacsSeven Co. Ltd.
Bajaj Auto Ltd.
British Sky Broadcasting
Celsius Industrier Class B
Continente Cent Co.
DDI Corp.
Elsevier NV
Empresa Nacional Electricidad
Franklin Quest Co.
Gartner Group, Inc. Class A
Huaneng Power International, Inc. ADS
ITEL Corp.
Jusco Co.
KLM KON Luchtvaart
Kyocera Corp.
Mercury Finance Co.
News Corp., Preferred ADS
Nippon Telegraph & Telephone
Ranstadt Holdings
Royal PPT Nederland NV
R.P. Sherer Corp.
SkyWest, Inc.
Synopsys, Inc.
Technology Resources Industries
Tele Danmark A/S
Telewest Communications ORDS
Teva Pharmaceutical Industries ADR
3Com Corp.
U.S. Healthcare, Inc.
Wabash National Corp.
ELIMINATIONS:
ACE Limited
Alcatel Alsthom CIE Generale D'Electricite S.A.
Bombay Co., Inc.
British Airways plc ADS
BroadBand Technologies, Inc.
Broadcasting Partners, Inc. Class A
Caesars World, Inc.
Cafe de Coral Holdings
Call-Net Enterprises, Inc. Class B
Circus Circus Enterprises, Inc.
Consorcio G Grupo Dina, S.A. de C.V. ADR
Cott Corp.
Creative Technology Ltd.
Discount Auto Parts, Inc.
Electronic Arts
Enersis S.A. ADS
Fairwood Holdings Ltd.
<PAGE>

Fu Hui Jewellery Co. HK Ltd.
GMIS, Inc.
Grupo Embotellador de Mexico, S.A. de C.V. ADR
Grupo Financiero Bancomer, S.A. de C.V. ADR
Intel Corp.
International Colin Energy Corp.
Mircosoft Corp.
Mid Ocean Ltd.
President Riverboat Casinos, Inc.
Progressive Corp. (The)
ReLife, Inc. Class A
Roche Holdings, A.G., Genusscheine NVP
Scholastic Corp.
Snapple Beverage Corp.
SynOptics Communications, Inc.

AGGRESSIVE GROWTH SERIES

TOP TEN HOLDINGS AS OF 12/31/94
Percent of
Stocks Net Assets
1 Books-A-Million, Inc. 1.8%
2 StrataCom, Inc. 1.8%
3 Input/Output, Inc. 1.8%
4 Ultratech Stepper, Inc. 1.8%
5 United Waste System, Inc. 1.8%
6 Unitrode Corp. 1.8%
7 Synopsys, Inc. 1.7%
8 Petroleum Geo Services A/S ADS 1.7%
9 Wall Data 1.7%
10 Informix Corp. 1.7%

HIGHLIGHTS
<TABLE>
<CAPTION>
U.S.
Money Government Diversified High Asset Growth
Market Securities Income Yield* Allocation & Income*
Series Series Series Series Series Series
<S> <C> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED DECEMBER 31, 1994:
Net Asset Value per share:
Beginning of period $10.23 $10.94 $11.93 $10.00 $14.14 $10.00
End of period $10.63 $ 9.40 $10.40 $ 9.47 $13.56 $10.07
Accumulation unit performance:
Fortis Opportunity Annuity/Masters Variable Annuity +2.52% -7.71% -6.50% -1.66% -1.65% +0.83%
Harmony Investment Life +3.14% -7.15% -5.94% -1.27% -1.06% +1.24%
Wall Street Series 220/500 +2.70% -7.54% -6.34% -1.54% -1.47% +0.95%
Growth Global Aggressive
Stock Growth Growth*
Series Series Series
NET ASSET VALUE PER SHARE:
Beginning of period $22.92 $12.77 $10.03
End of period $22.11 $12.31 $ 9.80
Accumulation unit performance:
Fortis Opportunity Annuity/Masters Variable Annuity -4.12% -4.28% -2.76%
Harmony Investment Life -3.54% -3.71% -2.38%
Wall Street Series 220/500 -3.95% -4.11% -2.65%
<FN>
*Period from May 2, 1994 (first offering) to December 31, 1994.
</TABLE>
OPERATING EXPENSES:***

<TABLE>
<CAPTION>
U.S.
Money Government Diversified High Asset Growth
Market Securities Income Yield** Allocation & Income**
Series Series Series Series Series Series
<S> <C> <C> <C> <C> <C> <C>
For the year ended December 31, 1994:
Investment Advisory and Management Fee .30% .46% .47% .50% .50% .70%
Other Expenses .10% .07% .08% .25% .06% .16%
Total Fortis Series Operating Expenses .40% .53% .55% .75% .56% .86%
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
Growth Global Aggressive
Stock Growth Growth**
Series Series Series
<S> <C> <C> <C>
Investment Advisory and Management Fee .63% .70% .70%
Other Expenses .05% .11% .18%
Total Fortis Series Operating Expenses .68% .81% .88%
<FN>
** For the period from April 26, 1994 (inception) to December 31, 1994
Annualized.
*** Represent the expenses of the series itself, without the expenses
associated with the variable annuities or variable universal life insurance
policies.
</TABLE>

FORTIS FINANCIAL GROUP'S OTHER PRODUCTS AND SERVICES

MUTUAL FUNDS/PORTFOLIOS

FORTIS ADVANTAGE PORTFOLIOS, INC.
ASSET ALLOCATION PORTFOLIO
CAPITAL APPRECIATION PORTFOLIO
GOVERNMENT TOTAL RETURN PORTFOLIO
HIGH YIELD PORTFOLIO

Fortis Capital Fund

Fortis Fiduciary Fund, Inc.

Fortis Global Growth Fund Portfolio

Fortis Growth Fund, Inc.

Fortis Money Fund

Fortis Tax-Free Portfolios, Inc.

MINNESOTA PORTFOLIO
NATIONAL PORTFOLIO
NEW YORK PORTFOLIO

Fortis U.S. Government Securities Fund
Fixed and Variable Annuities
Fortis Opportunity Fixed &Variable Annuity
Masters Variable Annuity
FIXED ACCOUNT
MONEY MARKET
U.S. GOVERNMENT SECURITIES
DIVERSIFIED INCOME
GLOBAL BOND
HIGH YIELD
ASSET ALLOCATION
GLOBAL ASSET ALLOCATION
GROWTH &INCOME
GROWTH STOCK
GLOBAL GROWTH
INTERNATIONAL STOCK
AGGRESSIVE GROWTH

Fortune Fixed Annuities
SINGLE PREMIUM ANNUITY
FLEXIBLE PREMIUM ANNUITY

Income Annuities
GUARANTEED FOR LIFE
GUARANTEED FOR A SPECIFIC PERIOD

LIFE AND DISABILITY
<PAGE>

WALL STREET SERIES VUL100, 220&500

FIXED ACCOUNT
MONEY MARKET
U.S. GOVERNMENT SECURITIES
DIVERSIFIED INCOME
GLOBAL BOND
HIGH YIELD
ASSET ALLOCATION
GLOBAL ASSET ALLOCATION
GROWTH &INCOME
GROWTH STOCK
GLOBAL GROWTH
INTERNATIONAL STOCK
AGGRESSIVE GROWTH

Adaptable Life
Universal Life
Disability

THE FORTIS FINANCIAL GROUP manages and distributes mutual funds, annuities and
life insurance products. The mutual funds, variable life and variable annuity
products are distributed through FORTIS INVESTORS, INC. and managed by FORTIS
ADVISERS, INC. The insurance products are issued by FORTIS BENEFITS INSURANCE
COMPANY and TIME INSURANCE COMPANY.

FOR MORE COMPLETE INFORMATION, INCLUDING CHARGES AND EXPENSES, SEND FOR A
PROSPECTUS. WRITE TO: FORTIS INVESTORS, INC., P.O. BOX 64284, ST. PAUL, MN
55164. READ IT CAREFULLY BEFORE INVESTING OR SENDING MONEY.

<PAGE>

FORTIS SERIES FUND, INC. MONEY MARKET SERIES

Schedule of Investments
December 31, 1994

SHORT-TERM INVESTMENTS - 99.78%

<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (a) Value (b)
BANKS - 17.46%
<S> <C> <C> <C> <C>
$ 1,900,000 Banc One Funding Corp., 5.72% 1-19-1995 (c) A1 $ 1,894,405 $ 1,894,405
1,949,000 First Trust Money Market Variable Rate Time Deposit Account,
Current Rate - 5.54% A1 1,949,000 1,949,000
2,000,000 National Westminster Bancorp, 6.06% 1-25-1995 A1+ 1,991,778 1,991,778
2,000,000 Norwest Corp., 6.14% 1-24-1995 A1+ 1,991,973 1,991,973
7,827,156 7,827,156
BROKERAGE & INVESTMENT - 4.45%
2,000,000 Merrill Lynch & Co., Inc., 5.97% 1-13-1995 A1+ 1,995,775 1,995,775

CAPTIVE AUTO FINANCE - 8.89%
2,000,000 Ford Motor Credit Corp., 5.72% 1-12-1995 A1 1,996,273 1,996,273
2,000,000 General Motors Acceptance Corp., 6.00% 1-27-1995 D1* 1,991,225 1,991,225
3,987,498 3,987,498
CAPTIVE EQUIPMENT FINANCE - 8.88%
2,000,000 IBM Credit Corp., 5.85% 1-18-1995 A1 1,994,290 1,994,290
2,000,000 John Deere Capital Corp., 6.18% 2-8-1995 A1 1,986,935 1,986,935
3,981,225 3,981,225
CAPTIVE OIL FINANCE - 4.46%
2,000,000 Chevron Oil Finance Co., 5.60% 1-6-1995 A1+ 1,998,177 1,998,177
CONSUMER FINANCE - 17.53%
2,000,000 American General Finance Corp., 6.23% 2-13-1995 A1+ 1,985,138 1,985,138
1,900,000 Beneficial Corp., 6.17% 3-1-1995 A1 1,879,666 1,881,158
2,000,000 Commercial Credit Co., 5.59% 1-11-1995 A1 1,996,669 1,996,669
2,000,000 Household Finance Corp., 5.59% 1-9-1995 A1 1,997,275 1,997,275
7,858,748 7,860,240
DIVERSIFIED FINANCE - 20.42%
1,200,000 Associates Corp. Master Variable Rate Note, Current Rate - 5.57% A1+ 1,200,000 1,200,000
2,000,000 CIT Group Holdings, Inc., 5.86% 1-23-1995 A1 1,992,691 1,992,691
2,000,000 General Electric Capital Corp., 6.07% 2-1-1995 A1+ 1,989,422 1,989,422
2,000,000 Heller Financial, Inc., 5.91% 1-30-1995 A1 1,990,383 1,990,383
2,000,000 Prudential Funding Corp., 6.07% 2-21-1995 A1+ 1,982,869 1,982,869
9,155,365 9,155,365
INDUSTRIAL - 4.43%
2,000,000 Xerox Credit Corp., 6.18% 2-15-1995 A1 1,984,590 1,984,590
TOBACCO - 4.45%
2,000,000 Philip Morris Companies, Inc., 5.54% 1-17-1995 A1 1,994,900 1,994,900
UTILITIES - 8.81%
2,000,000 Central & South West Credit Corp., 6.27% 2-27-1995 A1 1,980,344 1,980,344
1,970,000 Minnesota Power & Light Co., 5.56% 1-4-1995 A1 1,968,814 1,968,814
3,949,158 3,949,158
TOTAL SHORT-TERM INVESTMENTS (COST: $44,732,592) (a) $44,734,084
<FN>
(a) At December 31, 1994, the cost of securities for federal income tax
purposes was $44,732,592 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $1,492
Unrealized depreciation 0
Net unrealized appreciation $1,492
(b) See Note A of accompanying Notes to Financial Statements regarding
valuation of securities.
(c) Commercial paper sold within terms of a private placement memorandum,
exempt from registration under section 4(2) of the Securities Act of
1933, as amended, and may be sold only to dealers in that program or
other "accredited investors". These securities have been determined
to be liquid under the guidelines established by the Board of
Directors.
(d) Note: Percentage of investments as shown is the ratio of the total
market value to total net asset.
</TABLE>
<PAGE>

FORTIS SERIES FUND, INC. U.S. GOVERNMENT SECURITIES SERIES

Schedule of Investments
December 31, 1994

LONG-TERM DEBT SECURITIES - 98.24%
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (a) Value (b)
<S> <C> <C> <C> <C>
ASSET BACKED SECURITIES - 25.46%
$ 8,501,000 DLJ Mtg Acceptance Corp., 8.50% Ser 1994-MF4 CI A2 4-18-2001 A $ 8,568,742 $ 8,247,764
10,000,000 Green Tree Financial Corp., 7.65% Ser 1994-1 CI A5 Sr Sub Pass Thru
Certificate 4-15-2019 Aa2* 9,960,938 9,069,010
3,000,000 Green Tree Mfg Housing Corp., 8.35% Ser 1994-7 CI A4 3-15-2020 AAA 2,996,250 2,996,250
11,000,000 Mortgage Obligation Structured Trust, 6.85% Ser 1993-1 Cl A2 10-25-2018 AAA 10,749,062 10,247,204
8,100,000 Nomura Asset Securites Corp., 6.68% Ser 1993-1 CI A3 Congregate Care
Pass Thru Certificate 12-15-2003 A 7,879,578 7,043,574
3,000,000 Oakwood Mtg Investors Mfg Housing, 8.40% Ser 1994-A CI A2 Sr Sub Pass
Thru Certificate 2-15-2015 AAA 2,995,781 2,994,177
3,430,503 Vanderbilt Mtg & Finance, Inc., 7.00% Ser 1994-A CI A1 Mfg Housing
Contract 7-10-2019 AA 3,428,359 3,359,899
46,578,710 43,957,878
MUNICIPAL OBLIGATIONS - 2.38%
1,500,000 Kansas City (City of) KS, 6.375% Utility System Rev Ref & Improvement
Bond FGIC Insured 9-1-2023 AAA 1,368,820 1,462,275
1,000,000 Los Angeles Dept. of Water and Power, 5.125% Electric Plant
Rev MBIA-IBC 10-15-2024 AAA 780,351 782,960
2,000,000 New York State Power Auth, 6.25% Ser AA 1-1-2023 AA - 1,851,398 1,863,060
4,000,569 4,108,295
U.S. GOVERNMENT SECURITIES - 70.40%

FEDERAL HOME LOAN MORTGAGE CORP. - 7.15%
Mortgage Backed Securities:
3,280,481 9.50% 2016 3,530,105 3,369,667
103,029 11.25% 2015 112,076 110,788
3,642,181 3,480,455
REMICS:
5,976,087 6.50% Trust #1757-B 2008 5,083,409 5,131,965
4,434,983 7.50% Trust #1157-L Z-TRANCHE 2021 (e) 4,359,812 3,734,872
9,443,221 8,866,837
TOTAL FEDERAL HOME LOAN MORTGAGE CORP. SECURITIES 13,085,402 12,347,292

FEDERAL NATIONAL MORTGAGE ASSOCIATION - 23.95%
Mortgage Backed Securities:
8,068 6.50% 2024 8,068 7,095
4,447,020 7.00% 2023 4,473,424 4,034,278
5,863,657 7.00% 2024 5,672,172 5,319,434
4,009,668 7.50% 2023 4,126,199 3,742,772
395,491 8.50% 2017 404,909 387,829
299,145 9.00% 2020-2021 299,545 300,453
1,971,037 9.75% 2020 2,126,256 2,047,720
17,110,573 15,839,581
NOTE:
10,000,000 7.40% Global Note 2004 10,021,000 9,504,380

REMICS:
$ 2,730,276 3.80% Inverse COFI Floating Rate 2024 (d) $ 1,556,258 $ 672,331
3,703,950 7.50% Trust #1991-136G 2019 3,841,112 3,651,091
5,000,000 7.50% Trust #1992-G31H 2020 4,600,000 4,680,395
6,000,000 7.50% Trust #1992-43E 2022 6,298,125 5,464,554
1,500,000 9.00% Trust #1991-39J 2021 1,531,875 1,541,668
17,827,370 16,010,039
TOTAL FEDERAL NATIONAL MORTGAGE ASSOCIATION SECURITIES 44,958,943 41,354,000

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 8.25%
Mortgage Backed Securities:
4,979,753 7.00% 2024 4,884,826 4,466,215
<PAGE>

4,096,021 7.50% 2022 4,294,423 3,797,778
155,398 9.00% 2021 153,602 156,758
4,543,523 Fleet Mtg Securities, 9.125% Ser 1989-3 CI D 3-1-2018 (GNMA Backed) 4,651,432 4,597,496
1,200,380 9.50% 2018-2021 1,247,904 1,239,017
15,232,187 14,257,264
OTHER DIRECT FEDERAL OBLIGATIONS - 14.97%

FEDERAL HOME LOAN BANK
12,000,000 6.125% Global Note 1996 11,972,113 11,697,024
15,000,000 7.31% Note 2004 14,994,531 14,142,015
26,966,644 25,839,039
RESOLUTION FUNDING CORP. - 1.11%
9,000,000 7.933% Zero Coupon Strip 2014 (c) 2,010,399 1,911,321
U. S. TREASURY NOTES - 14.97%
2,000,000 7.50% 1999 1,982,500 1,971,872
2,000,000 7.875% 2004 1,979,687 2,005,622
15,500,000 8.125% 2021 16,489,688 15,727,633
6,000,000 8.75% 1997 6,597,187 6,136,866
27,049,062 25,841,993
Total U.S. Government & Agencies 129,302,637 121,550,909

TOTAL LONG-TERM DEBT SECURITIES $179,881,916 $169,617,082
</TABLE>

SHORT-TERM INVESTMENTS - 1.34%

Principal Market
Amount Value (b)
<S> <C> <C>
TIME DEPOSIT:
$ 2,312,000 First Trust Money Market Variable Rate Time Deposit Account, Current Rate - 5.54% $ 2,312,000

TOTAL INVESTMENTS IN SECURITIES (COST: $182,193,916) (A) $171,929,082
<FN>
(a) At December 31, 1994, the cost of securities for federal income
tax purposes was $182,427,872 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $ 276,469
Unrealized depreciation (10,775,259)
Net unrealized depreciation ($10,498,790)
(b) See Note A of accompanying Notes to Financial Statements
regarding valuation of securities.
(c) The interest rate disclosed for zero coupon issues represents
the effective yield on the date of acquisition.
(d) Inverse floaters represent securities that pay interest at a
rate that increases (decreases) with a decline (increase) in a
specified index. The relationship between a change in the
specified index and the interest rate paid may be greater
than a one-to-one relationship. Interest rate disclosed is the
rate in effect on December 31,1994.
(e) Z-Tranche securities pay no principal or interest during their
initial accrual period, but accrue additional principal
at a specified coupon rate. The interest rate disclosed
represents the coupon rate at which the additional principal is
being accrued.
(f) Note: Percentage of investments as shown is the ratio of the
total market value to total net assets.
</TABLE>

FORTIS SERIES FUND, INC. - DIVERSIFIED INCOME SERIES

Schedule of Investments
December 31, 1994

LONG-TERM DEBT SECURITIES - 95.47%

Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (a) Value (b)
<S> <C> <C> <C> <C>
ASSET BACKED, CORPORATE, FOREIGN AND MUNICIPAL DEBT SECURITIES-45.45%
INVESTMENT GRADE ASSET BACKED, CORPORATE, FOREIGN, AND MUNICIPAL DEBT SECURITIES - 25.08%
COMMERCIAL LOANS - 1.77%
$2,000,000 Nomura Asset Securities Corp., 6.68% 1993-1 A-3 Congregate Care Pass Thru
Certificate 12-15-2003 A $ 1,957,500 $ 1,739,154
MANUFACTURED HOMES - 4.07%
2,000,000 Green Tree Mfg Housing Corp., 8.35% Ser 1994-7 Class A4 3-15-2020 Aaa * 1,997,500 1,997,500
2,000,000 Oakwood Mtg Investors Mfg Housing, 8.40% Ser 1994-A Class A2 Sr Sub
Pass Thru Certificates 2-15-2015 AAA 1,997,187 1,996,118
3,994,687 3,993,618
</TABLE>

<PAGE>

MISCELLANEOUS - 7.43%
<S> <C> <C> <C> <C>
3,000,000 Greentree Financial Corp., 7.65% Sr Sub Pass-Through Certificates
1994-1 Class A-5 4-15-2019 Aa2 * 2,988,281
2,720,703
3,000,000 Mortgage Obligation Structured Trust, 6.85% 1993-1 Class A2 10-25-2018 AAA 2,931,563 2,794,692
1,829,601 Vanderbilt Mtg & Finance, Inc., 7.00% Ser 1994-A Class A1 Mfg Housing
Contract 7-10-2019 AA 1,828,458 1,791,946
7,748,302 7,307,341
MULTI-FAMILY LOANS - 1.43%
1,500,000 DLJ Mortgage Acceptance, 1993 Multi-Family 12 Class B-1 8.80% 9-18-2003 BBB ** 1,473,750 1,409,291
CAPTIVE AUTO FINANCE - 0.50%
500,000 General Motors Acceptance Corp., 7.75% Note 4-15-1997 BBB+ 522,545 490,912
FINANCE COMPANIES - 0.53%
500,000 Tenneco Credit Corp., 9.625% Note 8-15-2001 BBB- 528,440 525,279
FOREIGN - GOVERNMENT - 3.33%
3,000,000 Hydro-Quebec, 8.00% Deb 2-1-2013 A+ 3,220,020 2,764,821
500,000 Quebec (Province of), 8.80% Bond 4-15-2003 A+ 545,890 505,057

3,765,910 3,269,878
MEDIA - 0.95%
1,000,000 News America Holdings, Inc., 8.875% Sr Note 4-26-2023 BBB- 991,397 933,822
TRANSPORTATION - 1.93%
1,000,000 Massachusetts Bay Transportation Authority Transportation System,
6.10% Ser C 3-1-2023 A+ 869,955 903,370
1,000,000 Port Authority of NY & NJ, 74th Ser 6.75% 8-1-2026 AA- 951,140 996,020

1,821,095 1,899,390
UTILITIES - ELECTRIC - 3.14%
1,000,000 Kansas City (City of) KS, 6.375% Utility System Rev Ref & Improvement Bond FGIC
Insured 9-1-2023 AAA 912,547 974,850
1,000,000 Los Angeles Dept. of Water and Power, 5.125% Electric Plant Rev MBIA -
IBC 10-15-2024 AAA 780,351 782,960
1,500,000 Saltriver Project, Ariz. 5.75% Agric Imp & Pur System Rev 1-1-2019 AA 1,274,041 1,326,150

2,966,939 3,083,960
TOTAL INVESTMENT GRADE ASSET BACKED, CORPORATE, FOREIGN AND MUNICIPAL DEBT SECURITIES 25,770,565 24,652,645

NON-INVESTMENT GRADE ASSET BACKED, CORPORATE AND FOREIGN DEBT SECURITIES - 20.37%
BUILDING MATERIALS - 3.06%
750,000 American Standard, Inc., 9.25% Sinking Fund Deb 12-1-2016 B+ 745,312 678,750
750,000 Essex Group, 10.00% Sr Note 5-1-2003 B+ 754,688 690,000
1,000,000 Inter-City Products Corp., 9.75% Sr Secured Note 3-1-2000 B 981,250 935,000
750,000 Wickes Lumber Co., 11.625% Sr Sub Note 12-15-2003 B- 750,000 705,000

3,231,250 3,008,750
CHEMICALS - 1.74%
1,000,000 Arcadian Partners L.P., 10.75% Sr Note Ser B 5-1-2005 B+ 997,971 930,000
750,000 Huntsman Corp., 11.00% First Mortgage Note 4-15-2004 BB- 750,000 778,125
1,747,971 1,708,125

CONTAINERS AND PACKAGING - 2.49%
975,000 Domtar, Inc., 11.25% Sinking Fund Deb 9-15-2017 BB- 952,875 955,500
750,000 Stone Container Corp., 10.75% 1st Mtg Note 10-1-2002 B+ 733,125 746,250
750,000 Williamhouse-Regency of Delaware, 11.50% Sr Sub Deb 6-15-2005 B- 773,437 746,250
2,459,437 2,448,000

ENERGY - 0.67%
710,009 Midland Cogeneration Venture, L.P., 10.33% Midland Funding Sr Secured Lease
Obligation Bond Ser C 7-23-2002 BB 726,211 670,484

FOOD-GROCERY, MISCELLANEOUS - 2.89%
500,000 Fleming Companies, Inc. 10.625% Sr Note 12-15-2001 BB+ 499,500 498,750
750,000 Fresh Del Monte Produce N.V.,10.00% Note Ser B 5-1-2003 B 758,750 510,000
1,000,000 Pilgrims Pride Corp., 10.875% Sr Sub Deb 8-1-2003 B- 1,005,418 945,000
1,000,000 Specialty Foods Corp., 10.25% Sr Note Ser B 8-15-2001 B 991,250 890,000
3,254,918 2,843,750

LEISURE TIME-AMUSEMENTS - 0.58%
750,000 Trump Plaza Funding, 10.875% First Mortgage Note 6-15-2001 B 576,077 570,000

MACHINERY - 0.49%
500,000 Spreckels Industries, 11.50% Sr Secured Note 9-1-2000 B 493,125 482,500

MEDIA - 0.91%
1,000,000 Cablevision Industries, Inc., 9.25% Sr Note 4-1-2008 BB- 975,625 895,000

RESTAURANTS & FRANCHISING - 2.14%
750,000 Carrols Corp., 11.50% Sr Note 8-15-2003 B+ 743,750 690,000
750,000 Family Restaurants, Inc., 9.75% Sr Note 2-1-2002 B 728,438 586,875
1,000,000 Flagstar Corp., 11.25% Sr Sub Deb 11-1-2004 CCC+ 1,038,437 827,500
<PAGE>
2,510,625 2,104,375
RETAIL - 2.50%
750,000 Farm Fresh, Inc., 12.25% Sr Note 10-1-2000 B- 765,813 645,000
500,000 Pantry (The), Inc., 12.00% Sr Note Ser B 11-15-2000 B 490,000 480,000
750,000 Pathmark Stores, Inc., 9.625%, Sr. Sub Note 5-1-2003 B 746,375 661,875
1,000,000 Southland Corp., 5.00% Sr Sub Deb 12-15-2003 BB+ 679,000 672,500
2,681,188 2,459,375

TECHNOLOGY - 0.90%
500,000 Computervision Corp., 10.875% Sr Note 8-15-1997 B 466,875 458,750
500,000 U.S. Banknote Corp., 10.375% Sr Note 6-1-2002 BB- 426,000 422,500
892,875 881,250

TEXTILE MANUFACTURING - 1.50%
750,000 CMI Industries, Inc., 9.50% Sr Sub Note 10-1-2003 B+ 744,687 600,000
1,000,000 U.S. Leather, Inc., 10.25% Sr Note 7-31-2003 B+ 988,951 870,000
1,733,638 1,470,000

TRANSPORTATION - 0.50%
500,000 Petro PSC Properties L.P., 12.50% Sr Note 6-1-2002 B 497,500 488,750

TOTAL NON-INVESTMENT GRADE ASSET BACKED, CORPORATE & FOREIGN DEBT SECURITIES 21,780,440 20,030,359

TOTAL ASSET BACKED, CORPORATE, FOREIGN, & MUNICIPAL DEBT SECURITIES 47,551,005 44,683,004

U.S. GOVERNMENT SECURITIES - 50.02%

FEDERAL HOME LOAN MORTGAGE CORPORATION - 3.69%

REMICS:
2,988,044 6.50% Trust #1757-B 2008 2,541,704 2,565,982
1,260,804 7.50% Trust #1157 Z 2021 (e) 1,239,527 1,061,772
3,781,231 3,627,754
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 11.64%

GLOBAL NOTE
5,000,000 7.40% 2004 5,009,375 4,752,190

REMICS
1,127,719 9.99% Trust #1993-170 SA Inverse COFI Floating Rate 2008 (d) 1,172,123 816,187

MORTGAGE BACKED SECURITIES
4,886,381 7.00% 2024 4,726,810 4,432,862
1,545,958 7.50% 2022 1,597,893 1,443,054
6,324,703 5,875,916

TOTAL FEDERAL NATIONAL MORTGAGE ASSOCIATION 12,506,201 11,444,293

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 5.96%
4,867,710 7.00% 2022 4,774,919 4,365,728
1,414,399 Fleet Mtg Securities, 9.125% Ser 1989-3 Cl D 3-1-2018 (GNMA backed) 1,447,991 1,431,201
69,274 9.50% 2019 68,711 71,503
6,291,621 5,868,432

OTHER DIRECT FEDERAL OBLIGATIONS - 6.30%

FEDERAL HOME LOAN BANK
4,500,000 7.31% Note 2004 4,516,172 4,242,604
2,000,000 6.125% Global Note 1996 1,993,281 1,949,504
6,509,453 6,192,108

RESOLUTION FUNDING CORPORATION - 0.53%
2,500,000 7.42% Zero Coupon Strip 2014 (c) 602,560 520,272

U.S. TREASURY NOTES - 21.90%
2,000,000 7.50% 1999 1,982,500 1,971,872
6,000,000 7.50% 2001 6,762,188 5,889,366
2,500,000 7.875% 2004 2,474,609 2,507,028
3,000,000 8.125% 2021 3,547,500 3,044,058
3,000,000 8.625% 1995 3,023,438 3,001,875
5,000,000 9.375% 1996 5,364,453 5,112,500
23,154,688 21,526,699

TOTAL U.S. GOVERNMENT & AGENCIES 52,845,754 49,179,558

TOTAL LONG-TERM DEBT SECURITIES $100,396,759 $93,862,562
</TABLE>

SHORT-TERM INVESTMENTS - 2.07%

Principal Market
Amount Value (b)
<S> <C> <C>
TIME DEPOSIT:
$ 2,038,000 First Trust Money Market Variable Rate Time Deposit Account, Current Rate - 5.54% $ 2,038,000
<PAGE>

<FN>
TOTAL INVESTMENTS IN SECURITIES (COST: $102,434,759) (A) $95,900,562
(a) At December 31, 1994, the cost of securities for federal income
tax purposes was $102,434,759 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $ 298,680
Unrealized depreciation (6,873,667)
Net unrealized depreciation ($6,534,197)
(b) See Note A of accompanying Notes to Financial Statements,
regarding valuation of securities.
(c) The interest rate disclosed for these issues represents original
issue discount yields on the date of acquisition.
(d) Inverse floaters represent securities that pay interest at a rate
that increases (decreases) with a decline (increase) in a
specified index. The relationship between a change in the
specified index and the interest rate paid may be greater than
a one-to-one relationship. Interest rates disclosed are the rates
in effect on December 31, 1994.
(e) Z-Tranche securities pay no principal or interest during their
initial accrual period, but accrue additional principal at a
specified coupon rate. The interest rate disclosed represents the
coupon rate at which the additional principal is being accrued.
(f) Note: Percentage of investments as shown is the ratio of the total
maket value to total net assets.
</TABLE>

FORTIS SERIES FUND, INC. HIGH YIELD SERIES

SCHEDULE OF INVESTMENTS

DECEMBER 31, 1994

CORPORATE DEBT SECURITIES - 89.46%

<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (a) Value (b)
<S> <C> <C> <C>
AUTOMOBILE AND MOTOR VEHICLE PARTS - 3.31%
$ 250,000 Doehler Jarvis, Inc., 11.875% Sr Note 6-1-2002 B $ 252,500 $ 245,000
230,000 Penda Corp., 10.75% Sr Note Ser B 3-1-2004 B- 212,750 209,300
465,250 454,300

BEVERAGE - 3.87%
250,000 All-American Bottling Corp., 13.00% Sr Secured Note 8-15-2001 (and Warrants) B- 232,500 235,000
200,000 Heileman Acquisition Co., 9.625% Sr Sub Note 1-31-2004 B- 178,125 150,000
166,000 Seven-Up/RC Bottling Co. of Southern CA, 11.50% Sr Secured Note 8-1-1999 B- 166,420 145,250
577,045 530,250

BUILDING MATERIALS/CONSTRUCTION - 3.74%
200,000 Associated Materials, Inc., 11.50% Sr Sub Note 8-15-2003 B- 204,750 188,000
100,000 Nortek, Inc., 9.875% Sr Sub Note 3-1-2004 CCC 89,750 89,500
250,000 Wickes Lumber Co., 11.625% Sr Sub Note 12-15-2003 B- 234,500 235,000
529,000 512,500

CHEMICALS - 5.12%
350,000 Indspec Chemical Corp., 11.30% Sr Sub Zero Coupon Disc Note Ser B 12-1-2003 (c) B- 228,552 197,750
250,000 NL Industries, 11.75% Sr Secured Note 10-15-2003 B+ 237,500 248,750
250,000 Rexene Corp., 11.75% Sr Note 12-1-2004 B+ 246,250 255,000
712,302 701,500

CONSUMER GOODS/SERVICES - 9.72%
100,000 Allied Waste Industries, Inc., 10.75% Sr Sub Note 2-1-2004 B 95,750 93,000
200,000 Chattem, Inc., 12.75% Sr Sub Note Ser A 6-15-2004 (and Warrants) B- 197,400 188,250
250,000 Florsheim Shoe Co., 12.75% Sr Note 9-1-2002 B+ 250,000 246,250
250,000 Hosiery Corp. of America, Inc., 13.75% Sr Sub Note 8-1-2002 (e) B- 247,134 240,000
100,000 Mid-American Waste Systems, Inc., 12.25% Sr Sub Note 2-15-2003 B 100,000 100,500
300,000 Plastic Specialty & Technologies, 11.25% Sr Secured Note 12-1-2003 B- 276,250 265,500
200,000 Solon Automated Services, Inc., 12.75% Sr Note 7-15-2001 B+ 204,250 198,000
1,370,784 1,331,500

CONTAINERS AND PACKAGING - 7.82%
100,000 Crown Packaging Ltd., 10.75% Sr Secured Note Ser B 11-1-2000 B3* 99,250 100,250
100,000 Domtar, Inc., 11.25% Sinking Fund Deb 9-15-2017 BB- 98,500 98,000
250,000 IVEX Packaging Corp., 12.50% Sr Sub Note 12-15-2002 B- 248,131 247,500
200,000 Mail-Well Corp., 10.50% Sr Sub Note 2-15-2004 (f) B- 179,625 174,000
250,000 Malette, Inc., 12.25% Sr Secured Note 7-15-2004 BB- 250,000 252,500
<PAGE>

200,000 Williamhouse-Regency of Delaware, Inc., 11.50% Sr Sub Deb 6-15-2005 B- 193,000 199,000
1,068,506 1,071,250

FOOD - GROCERY, MISCELLANEOUS - 6.93%
250,000 Di Giorgio Corp., 12.00% Sr Note 2-15-2003 B 246,000 233,750
250,000 Envirodyne Industries, Inc., 10.25% Sr Note 12-1-2001 B- 217,375 177,500
100,000 Pilgrim's Pride Corp., 10.875% Sr Sub Deb 8-1-2003 B- 95,000 94,500
200,000 Specialty Foods Corp., 11.25% Sr Sub Note 8-15-2003 B- 172,000 174,000
500,000 White Rose Foods, Inc., 17.03% Sr Note Zero Coupon 11-1-1998 (c) B- 266,871 270,000
997,246 949,750
LEISURE - 6.29%
150,000 Boomtown, Inc., 11.50% First Mtg Note 11-1-2003 B+ $ 134,250 $ 121,125
150,000 Casino Magic Finance Corp., 11.50% First Mtg Note Ser B 10-15-2001 N/R 132,000 94,500
150,000 PRT Funding Corp., 11.625% Sr Note 4-15-2004 B- 114,250 103,500
100,000 Roadmaster Industries, Inc., 11.75% Sr Sub Note 7-15-2002 B- 101,000 93,375
250,000 Trump Plaza, Inc., 10.875% First Mtg Note 6-15-2001 B 194,754 190,000
200,000 Trump Taj Mahal Funding, Inc., 11.35% First Mtg Note 11-15-1999
(Interest is 9.375% cash and 1.975% Payable-in-Kind) N/R 150,883 127,394
250,000 Trump's Castle Funding, Inc., 11.75% First Mtg Bond 11-15-2003 Caa * 150,500 132,500
977,637 862,394

MACHINERY - 5.70%
250,000 Specialty Equipment Companies, Inc., 11.375% Sr Sub Note 12-1-2003 B- 250,625 241,250
200,000 Spreckels Industries, Inc., 11.50% Sr Secured Note 9-1-2000 B 197,250 193,000
215,333 Terex Corp., 13.00% Sr Secured Note 8-1-1996 (f) N/R 201,331 203,490
150,000 Thermadyne Industries, Inc., 10.75% Sr Sub Note 11-1-2003 CCC 147,000 143,250
796,206 780,990

MEDIA - 6.02%
500,000 American Telecasting, Inc., 13.15% Sr Sub Zero Coupon Disc Note 6-15-2004
(and Warrants) (c) CCC+ 277,299 225,000
100,000 Cablevision Industries, Inc., 9.25% Sr Note 4-1-2008 BB- 86,500 89,500
158,250 Falcon Holding Group, L.P., 11.00% Sr Sub Note Ser B 9-15-2003 (Interest
is Payable-in-Kind) N/R 147,395 137,155
200,000 Marvel (Parent) Holdings, Inc., 12.70% Sr Secured Zero Coupon Disc
Note 4-15-1998 (c) B 133,782 121,000
250,000 Young Broadcasting, Inc., 11.75% Sr Sub 11-15-2004 B 250,000 252,500
894,976 825,155

METALS & MINERALS - 5.33%
250,000 Bayou Steel Corp., 10.25% First Mtg Note 3-1-2001 B 229,750 225,000
150,000 Haynes International, Inc., 11.25% Sr Secured Note Ser A 6-15-1998 CCC+ 135,750 130,500
250,000 Renco Metals, Inc., 12.00% Sr Note 7-15-2000 B+ 235,000 232,500
150,000 Sheffield Steel Corp., 12.00% First Mtg Note 11-1-2001 (and Warrants) B- 151,500 142,500
752,000 730,500

RESTAURANTS AND FRANCHISING - 4.61%
250,000 Carrols Corp., 11.50% Sr Note 8-15-2003 B+ 236,750 230,000
250,000 Family Restaurants, Inc., 9.75% Sr Secured Note 2-1-2002 B 223,875 195,625
250,000 Flagstar Corp., 11.25% Sr Sub Deb 11-1-2004 CCC+ 230,375 206,875
691,000 632,500

RETAIL - 8.42%
250,000 Farm Fresh, Inc., 12.25% Sr Sub Deb 10-1-2000 B- 231,500 215,000
150,000 Grand Union Co., 12.25% Sr Sub Note 7-15-2002 (d) D 151,375 58,500
200,000 Mayfair Supermarkets, Inc., 11.75% Sr Sub Note 3-20-2003 B- 185,000 166,000
250,000 Pantry (The), Inc., 12.00% Sr Note Ser B 11-15-2000 B 247,000 240,000
100,000 Pathmark Stores, Inc., 9.625% Sr Sub Note 5-1-2003 B 92,500 88,250
100,000 Purity Supreme, Inc., 11.75% Sr Secured Note 8-1-1999 (and Warrants) CCC+ 95,500 83,000
100,000 Southland Corp., 5.00% Sr Sub Deb 12-15-2003 BB+ 67,000 67,250
250,000 Thrifty Payless, Inc., 12.25% Sr Sub Note 4-15-2004 B- 248,438 236,250
1,318,313 1,154,250

TECHNOLOGY - 4.07%
250,000 Computervision Corp., 11.375% Sr Sub Note 8-15-1999 CCC+ 221,437 202,500
150,000 Genicom Corp., 12.50% Sr Sub Note 2-15-1997 N/R 133,500 135,000
250,000 U.S. Banknote Corp., 11.625% Sr Note 8-1-2002 B+ 244,977 220,000
599,914 557,500

TEXTILE MANUFACTURING - 2.24%
250,000 Synthetic Industries, Inc., 12.75% Sr Sub Deb 12-1-2002 B $ 246,250 $ 220,000
<PAGE>

100,000 U.S. Leather, Inc., 10.25% Sr Note 7-31-2003 B+ 92,250 87,000
338,500 307,000

TOBACCO - 1.31%
250,000 Liggett Group, 11.50% Ser B Secured Note 2-1-1999 N/R 166,250 180,000

TRANSPORTATION - 4.96%
250,000 GPA Delaware, Inc., 8.75% Deb 12-15-1998 CCC+ 208,250 191,250
250,000 K & F Industries, Inc., 11.875% Sr Secured Note 12-1-2003 B+ 235,500 243,750
250,000 Petro PSC Properties L.P., 12.50% Sr Note 6-1-2002 (and Warrants) B 249,250 244,375
693,000 679,375

TOTAL CORPORATE DEBT SECURITIES $12,947,929 $12,260,714
</TABLE>

SHORT-TERM INVESTMENTS - 10.73%

Principal Market
Amount Value (b)
<S> <C> <C>
DISCOUNT NOTES:
$ 500,000 General Motors Acceptance Corp., 6.05% 1-4-1995 $ 499,670

MASTER NOTES:
104,0000 Associates Corp. Master Variable Rate Note, Current Rate - 5.57% 104,000
588,000 Goldman Sachs Master Variable Rate Note, Current Rate - 6.24%. 588,000
692,000

TIME DEPOSIT:
279,000 First Trust Money Market Variable Rate Time Deposit Account, Current Rate - 5.54%. 279,000

TOTAL SHORT-TERM INVESTMENTS 1,470,670

TOTAL INVESTMENTS IN SECURITIES (COST: $14,418,599) (A) $13,731,384
<FN>
(a) At December 31, 1994, the cost of securities for federal
income tax purposes was $14,419,974 and the aggregate gross
unrealized appreciation and depreciation based on that cost
was:
Unrealized appreciation $ 69,538
Unrealized depreciation (758,128)
Net unrealized depreciation ($688,590)
(b) See Note A of accompanying Notes to Financial Statements
regarding valuation of securities.
(c) The interest rates disclosed for zero coupon issues represent
effective yields on the date of acquisition.
(d) Presently non-income producing. For corporate debt securities,
items identified are in default as to payment of interest
and/or principal.
(e) Securities sold within terms of a private placement
memorandum, exempt from registration under Section 144A of the
Securities Act of 1933, as amended, and may be sold only to
dealers in that program or other "accredited investors". These
investments have been identified by portfolio management as
illiquid securities. The value of these securities at December
31, 1994, was $240,000 which represents 1.75% of net assets.
(f) Securities sold within terms of a private placement
memorandum, exempt from registration under Section 144A of the
Securities Act of 1993, as amended, and may be sold only to
dealers in that program or other "accredited investors."
Pursuant to guidelines adopted by the Board of Directors,
these issues are determined to be liquid.
(g) Note: Percentage of investments as shown is the ratio of the
total market value to total net asset.
</TABLE>

FORTIS SERIES FUND, INC. ASSET ALLOCATION SERIES

SCHEDULE OF INVESTMENTS

DECEMBER 31, 1994

EQUITY INVESTMENTS - 38.23%

Market
Shares Cost (b) Value (c)
<S> <C> <C> <C>
BROADCASTING - 2.00%
57,400 CUC International, Inc. (a) $1,409,916 $1,922,900
66,000 The News Corp., Ltd. ADS 1,133,687 1,031,250
33,000 The News Corp., Preferred ADS 490,507 457,875
44,436 Viacom, Inc. Non-Voting (a) 1,703,979 1,805,213
4,738,089 5,217,238
<PAGE>

BUSINESS SERVICES AND SUPPLIES - 3.20%
48,700 First Data Corp. 1,659,110 2,307,162
24,823 First Financial Management Corp. 1,373,111 1,529,717
101,000 MBNA Corp. 2,232,557 2,360,875
59,450 Sensormatic Electronics Corp. 1,727,374 2,140,200
6,992,152 8,337,954

COMPUTER-SOFTWARE - 3.23%
42,000 Lotus Development Corp. (a) 1,971,984 1,722,000
40,250 Microsoft Corp. (a) 2,137,287 3,071,531
82,200 Oracle Systems Corp. (a) 772,270 3,627,075
4,881,541 8,420,606

ELECTRONIC-CONTROLS AND EQUIPMENT - 0.71%
44,000 Applied Materials, Inc. (a) 1,719,115 1,859,000

ELECTRONIC-SEMICONDUCTOR AND
CAPACITOR - 1.40%
20,800 Intel Corp. 1,074,391 1,328,600
40,000 Motorola, Inc. 1,197,452 2,315,000
2,271,843 3,643,600

FINANCE COMPANIES - 1.93%
23,000 Federal National Mortgage Association 1,827,740 1,676,125
36,000 Franklin Resources, Inc. 1,472,500 1,282,500
68,498 Green Tree Financial Corp. 1,723,135 2,080,627
5,023,375 5,039,252

HEALTH CARE SERVICES - 3.75%
60,000 Columbia/HCA Healthcare Corp. 2,266,050 2,190,000
31,400 PacifiCare Health Systems, Inc.,
Class B (a) 1,836,933 2,072,400
49,475 U.S. HealthCare, Inc. 1,684,751 2,040,844
39,400 United Healthcare Corp. 1,370,454 1,777,925
45,000 Value Health, Inc. (a) 1,893,735 1,676,250
9,051,923 9,757,419

HOTEL AND MOTEL - 0.68%
85,750 Mirage Resorts, Inc. (a) 1,933,090 1,757,875

MEDICAL SUPPLIES - 0.35%
16,600 Medtronic, Inc. (and rights) 533,185 923,375

OFFICE EQUIPMENT AND SUPPLIES - 3.17%
106,000 Silicon Graphics, Inc. (a) 1,597,488 3,272,750
65,000 Sterling Software, Inc. (a) 1,601,021 2,388,750
51,900 Tandy Corp. 2,281,100 2,601,488
5,479,609 8,262,988
PUBLISHING - 0.71%
36,300 Scholastic Corp. (a) 1,851,033 1,851,300

RESTAURANTS AND FRANCHISING - 0.36%
52,000 Brinker International, Inc. (a) 1,171,158 942,500

RETAIL-DEPARTMENT STORES - 1.14%
41,600 Kohl's Corp. (a) 1,624,871 1,653,600
62,000 Wal-Mart Stores, Inc. 1,465,000 1,317,500
3,089,871 2,971,100

RETAIL-MISCELLANEOUS - 5.06%
85,600 AutoZone, Inc. (a) 1,881,356 2,075,800
41,500 Home Depot, Inc. 1,353,846 1,909,000
82,000 Lowe's Companies, Inc. 1,666,017 2,849,500
68,100 Office Depot, Inc. (a) 821,547 1,634,400
45,500 Pep Boys Manny Moe & Jack 1,106,736 1,410,500
94,000 Price/Costco, Inc. (a) 1,881,464 1,210,250
62,000 Talbots (The), Inc. 1,580,882 1,937,500
4,762 Toys 'R' Us, Inc. (a) 121,198 145,241
10,413,046 13,172,191
<PAGE>

TELECOMMUNICATIONS - 5.26%
78,000 3Com Corp. (a) 1,314,140 4,021,875
59,400 Cisco Systems, Inc. (a) 1,486,066 2,086,425
55,000 Ericsson (L.M.) Telephone Co.,
Class B ADR 2,657,302 3,031,875
73,000 General Instrument Corp. (a) 1,794,415 2,190,000
31,800 Nokia ADS (NOK) 1,300,065 2,385,000
8,551,988 13,715,175

TELEPHONE SERVICES - 0.87%
116,994 LDDS Communications, Inc. (a) 1,880,775 2,274,071

TOYS - 0.78%
80,577 Mattel, Inc. 1,501,328 2,024,497

UTILITIES-TELEPHONE - 2.90%
59,787 ALC Communications Corp. (a) 1,528,617 1,860,870
83,200 Air Touch Communications, Inc. (a) 2,101,440 2,423,200
34,000 Telephone & Data Systems, Inc. 1,805,400 1,568,250
51,000 Vodafone Group plc ADR 1,618,683 1,714,875
7,054,140 7,567,195

WASTE DISPOSAL - 0.73%
72,000 WMX Technologies, Inc. 1,979,021 1,890,000

TOTAL EQUITY INVESTMENTS $80,116,282 $99,627,336
</TABLE>

LONG-TERM DEBT SECURITIES - 58.23%
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
<S> <C> <C>
ASSET BACKED, CORPORATE, MUNICIPAL, & FOREIGN DEBT SECURITIES - 26.31%

INVESTMENT GRADE ASSET BACKED, CORPORATE, MUNICIPAL & FOREIGN DEBT
SECURITIES - 14.46%

ASSET BACKED - 8.65%
$ 1,500,000 DLJ Mortgage Acceptance, 1993
Multi-Family 12 Class B-1 8.80%
9-18-2003 Bbb* $ 1,473,750 $ 1,409,291
4,000,000 Green Tree Financial Corp.,
7.65% Ser 1994-1 Class A5 Sr Sub
Pass Thru Certificate 4-15-2019 Aa2** 3,984,375 3,627,604
3,000,000 Green Tree Mfg Housing Corp.,
8.35% Ser 1994-7 Class A4
3-15-2020 Aaa** 2,996,250 2,996,250
7,000,000 Mortgage Obligation Structured
Trust, 6.85% Ser 1993-1 Class
A2 10-25-2018 AAA 6,840,312 6,520,948
3,500,000 Oakwood Mtg Investors Mfg Housing,
8.40% Ser 1994-A Class A2 Sr Sub
Pass Thru Certificate 2-15-2015 AAA 3,495,079 3,493,206
4,574,004 Vanderbilt Mtg & Finance, Inc.,
7.00% Ser 1994-A Class A1 Mfg
Housing Contract 7-10-2019 AA 4,571,145 4,479,866
23,360,911 22,527,165

CAPTIVE AUTO FINANCE - 0.28%
750,000 General Motors Acceptance Corp.,
7.75% Note 4-15-1997 BBB+ 783,817 736,367

FOREIGN-GOVERNMENT - 2.12%
6,000,000 Hydro-Quebec, 8.00% Deb 2-1-2013 A+ 6,182,400 5,529,642

MEDIA - 0.34%
400,000 News America Holdings, Inc.,
10.125% Sr Note 10-15-2012 BBB- 400,000 424,894
500,000 News America Holdings, Inc.,
8.875% Sr Note 4-26-2023 BBB- 495,698 466,911
895,698 891,805

MISCELLANEOUS - 0.10%
250,000 New York (City of), 10.00%
General Obligation Taxable Bond
Fiscal 1991 Ser D 8-1-2005 A- 235,282 268,139

MUNICIPAL - 2.97%
1,500,000 Kansas City (City of) KS,
6.375% Utility System Rev Ref
& Improvement Bond FGIC Insured
9-1-2023 AAA 1,368,817 1,462,275
1,000,000 Los Angeles Dept. of Water and
Power, 5.125% Electric Plant
Rev MBIA-IBC 10-15-2024 AAA 780,351 782,960
1,000,000 Massachusetts Bay Transportation
Authority Transportation System,
6.10% Ser C 3-1-2023 A+ 869,955 903,370
1,000,000 New York State Power Auth,
6.25% Ser AA 1-1-2023 AA- 925,700 931,530
1,450,000 Port Authority of NY & NJ,
74th Ser 6.75% 8-1-2026 AA- 1,379,153 1,444,229
2,500,000 Saltriver Project, Ariz. Agric
Imp & Pur System Rev. 5.75%
1-1-2019 AA 2,123,402 2,210,250
7,447,378 7,734,614

TOTAL INVESTMENT GRADE ASSET BACKED, CORPORATE, MUNICIPAL
& FOREIGN DEBT SECURITIES 38,905,486 37,687,732

NON-INVESTMENT GRADE CORPORATE & FOREIGN DEBT SECURITIES - 11.85%

<PAGE>

BEVERAGE - 0.43%
1,250,000 Royal Crown Corp., 9.75% Sr
Secured Note 8-1-2000 B+ 1,231,875 1,112,500

BUILDING MATERIALS - 1.15%
750,000 American Standard, Inc., 9.25%
Sinking Fund Deb 12-1-2016 B+ 698,438 678,750
750,000 Essex Group, 10.00% Sr Note
5-1-2003 B+ 754,687 690,000
1,000,000 Inter-City Products Corp.,
9.75% Sr Secured Note 3-1-2000 B 981,250 935,000
750,000 Wickes Lumber Co., 11.625%
Sr Sub Note 12-15-2003 B- 748,750 705,000
3,183,125 3,008,750

CHEMICALS - 2.15%
1,250,000 Arcadian Partners L.P., 10.75%
Sr Note Ser B 5-1-2005 B+ 1,243,860 1,162,500
750,000 Huntsman Corp., 11.00% First
Mortgage Note 4-15-2004 BB- 750,000 778,125
1,250,000 NL Industries 11.75% Sr Secured
Note 10-15-2003 B 1,187,500 1,243,750
1,250,000 Rexene Corp., 11.75% Senior
Note 12-1-2004 B+ 1,231,250 1,275,000
2,000,000 Indspec Chemical Corp., 13.01%
Sr Sub Disc Note Ser B
12-1-2003 (zero coupon until
12-1-1998) (d) B- 1,154,640 1,130,000
5,567,250 5,589,375

CONTAINERS AND PACKAGING - 1.04%
1,240,000 Domtar, Inc., 11.25% Sinking
Fund Deb 9-15-2017 BB- 1,213,900 1,215,200
750,000 Stone Container Corp., 10.75%
1st Mtg Note 10-1-2002 B+ 733,125 746,250
750,000 Williamhouse-Regency of Delaware,
Inc. 11.50% Sr Sub Deb 6-15-2005 B- 762,813 746,250
2,709,838 2,707,700

ENERGY - 0.43%
1,183,348 Midland Cogeneration Venture,
L.P., 10.33% Midland Funding
Sr Secured Lease Obligation
Bond Ser C 7-23-2002 BB $ 1,207,098 $ 1,117,473

FOOD-GROCERY, MISCELLANEOUS - 1.28%
1,000,000 Fleming Companies, Inc., 10.625%
Sr Note 12-15-2001 BB+ 999,000 997,500
750,000 Fresh Del Monte Produce N.V.,
10.00% Note Ser B 5-1-2003 B 750,000 510,000
1,000,000 Pilgrims Pride Corp., 10.875%
Sr Sub Deb 8-1-2003 B- 967,148 945,000
1,000,000 Specialty Foods Corp., 10.25%
Sr Note Ser B 8-15-2001 B 991,250 890,000
3,707,398 3,342,500

LEISURE TIME-AMUSEMENTS - 0.29%
1,000,000 Trump Plaza Funding, 10.875%
First Mortgage Note 6-15-2001 B 794,210 760,000

MACHINERY - 0.37%
1,000,000 Spreckels Industries, 11.50% Sr
Secured Note 9-1-2000 B 986,250 965,000

MEDIA - 0.75%
1,250,000 Cablevision Industries, Inc.,
9.25% Sr Note 4-1-2008 BB- 1,166,250 1,118,750
950,000 Marvel III Holdings, Inc., 9.125%
Sr Secured Note 2-15-1998 B 833,625 826,500
1,999,875 1,945,250

RESTAURANTS AND FRANCHISING - 1.05%
1,000,000 Carrols Corp., 11.50% Sr Note
8-15-2003 B+ 961,250 920,000
1,000,000 Family Restaurants, Inc.,
9.75% Sr Note 2-1-2002 B 951,250 782,500
1,250,000 Flagstar Corp., 11.25% Sr
Sub Deb 11-1-2004 CCC+ 1,265,937 1,034,375
3,178,437 2,736,875

RETAIL - 1.29%
1,250,000 Farm Fresh, Inc., 12.25% Sr
Note 10-1-2000 B- 1,250,063 1,075,000
1,000,000 Pantry (The), Inc., 12.00% Sr
Note Ser B 11-15-2000 B 980,000 960,000
750,000 Pathmark Stores, Inc., 9.625%,
Sr. Sub Note 5-1-2003 B 746,374 661,875
1,000,000 Southland Corp., 5.00% Sr
Sub Deb 12-15-2003 BB+ 652,250 672,500
3,628,687 3,369,375

TECHNOLOGY - 0.68%
1,000,000 Computervision Corp., 10.875%
Sr Note 8-15-1997 B 933,750 917,500
1,000,000 U.S. Banknote Corp., 10.375%
Sr Note 6-1-2002 BB- 878,500 845,000
1,812,250 1,762,500

TEXTILE MANUFACTURING - 0.56%
750,000 CMI Industries, Inc., 9.50%
Sr Sub Note 10-1-2003 B+ 744,687 600,000
1,000,000 U.S. Leather, Inc., 10.25%
Sr Note 7-31-2003 B+ 990,928 870,000
1,735,615 1,470,000

TRANSPORTATION - 0.38%
1,000,000 Petro PSC Properties L.P.,
12.50% Sr Note 6-1-2002
(and warrants) B 995,000 977,500

TOTAL NON-INVESTMENT GRADE CORPORATE
& FOREIGN DEBT SECURITIES 32,736,908 30,864,798

TOTAL ASSET BACKED, CORPORATE,
MUNICIPAL, & FOREIGN DEBT SECURITIES 71,642,394 68,552,530

U.S. GOVERNMENT SECURITIES - 31.92%
<PAGE>

FEDERAL HOME LOAN MORTGAGE CORPORATION - 1.97%
$ 5,976,087 6.50% 2008 $ 5,083,409 $ 5,131,965

FEDERAL NATIONAL MORTGAGE ASSOCIATION - 8.25%
4,964,104 7.00% 2024 5,072,694 4,503,371
5,863,657 7.00% 2024 5,672,172 5,319,434
5,000,000 7.40% 2004 5,009,375 4,752,190
2,318,937 7.50% 2022 2,396,837 2,164,581
5,000,000 7.50% 2020 4,600,000 4,680,395
91,242 9.00% 2021 91,042 91,641
22,842,120 21,511,612
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 2.79%
2,948,561 7.50% 2024 2,969,294 2,733,867
3,046,669 7.50% 2023 2,974,310 2,824,831
1,590,233 Fleet Mtg Securities, 9.125% Ser
1989-3 Cl D, 3-1-2018 (GNMA Backed) 1,628,000 1,609,124
99,715 9.50% 2020 99,467 102,925
-7,671,071 7,270,747
OTHER DIRECT FEDERAL OBLIGATIONS - 7.24%
FEDERAL HOME LOAN BANK
15,000,000 6.125% Global Registered Note 1996 14,968,363 14,621,280
4,500,000 7.31% Note 2004 4,516,174 4,242,605
19,484,537 18,863,885
RESOLUTION FUNDING CORPORATION - 0.40%
5,000,000 7.415% Zero Coupon Strip 2014 (d) 1,205,119 1,040,545

U.S. TREASURY NOTES - 11.27%
4,000,000 7.50% 1999 3,965,000 3,943,744
12,000,000 7.50% 2001 13,125,000 11,778,732
5,500,000 7.875% 2004 5,444,141 5,515,461
5,500,000 8.125% 2021 6,095,000 5,580,773
2,500,000 9.375% 1996 2,752,344 2,556,250
31,381,485 29,374,960

TOTAL U.S. GOVERNMENT & AGENCIES 87,667,741 83,193,714

TOTAL LONG-TERM DEBT SECURITIES 159,310,135 151,746,244

TOTAL LONG-TERM INVESTMENTS $ 239,426,417 $ 251,373,580
</TABLE>

SHORT-TERM INVESTMENTS - 2.51%

Principal Market
Amount Value (c)
<S> <C> <C>
TIME DEPOSIT:
$6,535,000 First Trust Money Market Variable Rate
Time Deposit Account, Current Rate - 5.54% $ 6,535,000

TOTAL INVESTMENTS IN SECURITIES (COST:
$245,961,417) (B) $ 257,908,580
(a) Presently not paying dividend income.
(b) At December 31, 1994, the cost of securities
for federal income tax purposes was
$245,961,417 and the aggregate gross
unrealized appreciation and depreciation
based on that cost was:
Unrealized appreciation $22,792,130
Unrealized depreciation (10,844,967)

Net unrealized appreciation $11,947,163

(c) See Note A of accompanying Notes to Financial
Statements, regarding valuation of securities.
(d) The interest rates disclosed for zero coupon
securities represent the original issue
discount yields on the date of acquisition.
(e) Note: Percentage of investments as shown is
the ratio of the total market value to total
net assets. Market value of investments in
foreign securities represents 3.31% of net
assets as of December 31, 1994.
</TABLE>

FORTIS SERIES FUND, INC. GROWTH & INCOME SERIES

Schedule of Investments

December 31, 1994

COMMON STOCKS - 80.05%

<TABLE>
<CAPTION>
Market
Shares Cost (a) Value (b)
<S> <C> <C> <C>
APPAREL - 0.97%
7,500 Kellwood Co. $ 171,138 $ 157,500
<PAGE>

AUTOMOBILE AND MOTOR VEHICLE PARTS - 1.68%
9,100 Echlin, Inc. 275,226 273,000

BUSINESS SERVICES AND SUPPLIES - 2.90%
8,900 MBNA Corp. 216,793 208,038
5,100 Omnicom Group, Inc. 251,917 263,925
468,710 471,963
CHEMICALS - 5.73%
9,000 Chemed Corp. 301,095 300,375
3,400 Crompton And Knowles Corp. 63,361 56,100
28,300 Ethyl Corp. 311,606 272,387
6,800 Lubrizol Corp. 229,632 230,350
2,800 Petrolite Corp. 92,688 72,800
998,382 932,012
COMPUTERS-SOFTWARE - 2.57%
4,800 National Data Corp. 93,592 123,600
9,000 Shared Medical Systems Corp. 232,275 294,750
325,867 418,350
DRUGS - 6.67%
8,100 Abbott Laboratories 244,786 264,262
7,800 Merck & Co., Inc. 274,168 297,375
4,000 Pfizer, Inc. 274,648 309,000
2,900 Schering-Plough Corp. 195,629 214,600
989,231 1,085,237
ELECTRIC PRODUCTS - 1.65%
3,700 AMP, Inc. 260,548 269,175
FINANCE COMPANIES MISCELLANEOUS - 8.76%
10,500 American Express Company 300,695 309,750
3,800 Federal National Mortgage Association 301,927 276,925
8,500 Hanson PLC 167,527 153,000
8,500 Household International, Inc. 306,215 315,563
22,700 Mercury Finance Co. 313,298 295,100
2,300 Student Loan Marketing Association 89,530 74,750
1,479,192 1,425,088
HOUSEHOLD PRODUCTS - 1.92%
5,300 Clorox Co. 284,100 312,038

INSURANCE - 1.91%
8,300 American Brands, Inc. 301,207 311,250

MACHINERY - 3.68%
16,000 Dresser Industries, Inc. 327,322 302,000
12,000 McDermott International, Inc. 303,515 297,000
630,837 599,000
MACHINERY-OIL AND WELL - 5.34%
8,600 Baker Hughes, Inc. 171,069 156,950
6,600 Halliburton Co. 216,939 218,625
6,700 Kerr McGee Corp. 316,343 308,200
6,600 Sonat, Inc. 206,339 184,800
910,690 868,575
MEDICAL SUPPLIES - 3.29%
11,200 Baxter International, Inc. 308,323 316,400
4,000 Johnson & Johnson 185,035 219,000
493,358 535,400
MISCELLANEOUS - 2.88%
6,000 General Electric Co. 301,540 306,000
4,400 H & R Block, Inc. 193,907 163,350
495,447 469,350
NATURAL RESOURCES - 0.96%
5,100 Enron Corp. 155,442 155,550
OIL-CRUDE PETROLEUM AND GAS - 3.57%
4,500 Amoco Corp. 263,442 266,063
3,900 Louisiana Land & Exploration Co. 166,031 141,862
8,800 Panhandle Eastern Corp. 190,952 173,800
620,425 581,725
PUBLISHING - 3.54%
4,000 McGraw-Hill, Inc. 276,510 267,500
<PAGE>

6,300 Readers Digest Association, Inc.
Class A Non-Voting 282,239 309,487
558,749 576,987
RETAIL-CLOTHING - 0.57%
6,000 TJX Companies, Inc. 134,490 93,750

RETAIL-DEPARTMENT STORES - 2.80%
3,200 JC Penney Company, Inc. 166,890 142,800
6,800 Sears Roebuck & Co. 317,797 312,800
484,687 455,600
RETAIL-MISCELLANEOUS - 2.01%
14,000 Rite Aid 297,810 327,250
TELECOMMUNICATIONS - 3.73%
7,800 Beneficial Corp. 307,500 304,200
15,800 Hong Kong Telecommunications Ltd. ADR 310,388 302,175
617,888 606,375
TELEPHONE SERVICES - 1.64%
5,300 AT & T Corp. 282,649 266,325
Tobacco - 3.57%
4,800 Philip Morris Companies, Inc. 271,192 276,000
11,000 UST, Inc. 313,238 305,250
584,430 581,250
UTILITIES-TELEPHONE - 4.57%
2,800 Bell Atlantic Corp. 147,581 139,300
14,300 Rochester Telephone Corp. 311,737 302,088
5,900 Telecom Corp. of New Zealand Ltd. ADR 303,236 303,112
762,554 744,500
WASTE DISPOSAL - 3.14%
9,500 Browning-Ferris Industries, Inc. 288,880 269,562
9,200 WMX Technologies Inc. 249,208 241,500
538,088 511,062
TOTAL COMMON STOCKS $13,121,145 $13,028,312
</TABLE>

SHORT-TERM INVESTMENTS--40.20%
- -----------------------------------------------------------------------------------------------------
Principal Market
Amount Value (b)
<S> <C> <C>
Discount Notes:
$ 700,000 Federal Home Loan Bank, 5.86% 1-4-1995 $ 699,551
1,700,000 Federal Home Loan Mortgage Corp., 5.84% 1-23-1995 1,693,777
800,000 Federal Home Loan Mortgage Corp., 5.97% 2-2-1995 795,710
600,000 Federal National Mortgage Association, 5.99% 1-4-1995 599,608
850,000 Federal National Mortgage Association, 6.03% 1-10-1995 848,602
700,000 Federal National Mortgage Association, 6.04% 1-20-1995 697,694
5,334,942
Master Notes:
379,000 Associates Corp. Master Variable Rate Note,
Current Rate - 5.57% 379,000
517,000 Goldman Sachs Master Variable Rate Note,
Current Rate - 6.24% 517,000
896,000
TIME DEPOSIT:
312,000 First Trust Money Market Variable Rate Time Deposit Account,
Current Rate - 5.54% $ 312,000
TOTAL SHORT-TERM INVESTMENTS 6,542,942
TOTAL INVESTMENTS IN SECURITIES (COST: $19,664,087) (A) $ 19,571,254

<FN>
(a) At December 31, 1994, the cost of securities for federal income
tax purposes was $19,664,087 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $ 378,639
Unrealized depreciation (471,472)
Net unrealized depreciation $ (92,833)
(b) See Note A of accompanying Notes to Financial Statements
regarding valuation of securities.
(c) Note: Percentage of investments as shown is the ratio of
the total market value to total net assets. Market value of investments
in foreign securities represents 3.72% of net assets as of December 31, 1994.
</TABLE>

<PAGE>

FORTIS SERIES FUND, INC. GROWTH STOCK SERIES

Schedule of Investments
December 31, 1994

COMMON STOCKS - 76.60%
Market
Shares Cost (b) Value (c)
<S> <C> <C> <C>
BIOMEDICS, GENETICS RESEARCH AND DEVELOPMENT - 1.60%
82,500 Biogen Inc. (a) $ 4,408,687 $ 3,444,375
159,000 Centocor, Inc. (a) 2,841,420 2,583,750
7,250,107 6,028,125
BROADCASTING - 0.72%
86,000 Grupo Televisa, S.A. de C.V. ADR 4,703,096 2,730,500

BUSINESS SERVICES AND SUPPLIES - 1.68%
15,538 First Financial Management Corp. 821,196 957,529
71,300 Landmark Graphics Corp. (a) 1,580,900 1,283,400
114,300 Sensormatic Electronics Corp. 3,887,742 4,114,800
6,289,838 6,355,729
COMPUTER SOFTWARE - 15.78%
102,400 BMC Software, Inc. (a) 5,086,954 5,824,000
169,300 Compuware Corp. (a) 4,183,900 6,094,800
220,000 E M C Corp. (a) 4,563,561 4,757,500
310,000 Informix Corp. (a) 6,588,991 9,958,750
132,100 Microsoft Corp. (a) 4,693,098 8,074,613
308,800 Oracle Systems Corp. (a) 2,530,805 13,625,800
144,900 Parametric Technology Corp. (a) 4,008,045 4,999,050
120,200 Sybase, Inc. (a) 1,868,316 6,250,400
33,523,670 59,584,913
DRUGS - 1.39%
112,500 Forest Laboratories, Inc. (a) 5,010,053 5,245,312

ELECTRONICS - CONTROLS AND
EQUIPMENT - 5.56%
273,400 American Power Conversion Corp. (a) 4,065,901 4,476,925
105,000 Applied Materials, Inc. (a) 5,289,990 4,436,250
153,600 Lam Research Corp. (a) 5,121,804 5,721,600
231,600 Solectron Corp. (a) 6,733,790 6,369,000
21,211,485 21,003,775
ELECTRONICS - SEMICONDUCTOR AND CAPACITOR - 0.88%
52,300 Intel Corp. 2,312,057 3,340,663

FINANCE COMPANIES MISCELLANEOUS - 3.62%
86,000 Federal National Mortgage Association 6,763,724 6,267,250
100,000 Franklin Resources, Inc. 3,604,950 3,562,500
295,700 Mercury Finance Co. 4,837,805 3,844,100
15,206,479 13,673,850
HEALTH CARE SERVICES - 6.00%
68,200 PacifiCare Health Systems, Inc., Class B (a) 3,523,006 4,501,200
80,100 Quantum Health Resources, Inc. (a) 2,265,776 2,302,875
113,600 United Healthcare Corp. 4,071,193 5,126,200
133,862 U.S. Healthcare, Inc. 4,966,681 5,521,808
139,744 Value Health, Inc. (a) 5,374,086 5,205,464
20,200,742 22,657,547
HOTEL AND MOTEL - 0.86%
104,400 Promus Companies, Inc. (a) 3,658,895 3,236,400

MISCELLANEOUS - 1.74%
195,800 CUC International, Inc. (a) 5,588,558 6,559,300

OFFICE EQUIPMENT AND SUPPLIES - 2.76%
95,000 Compaq Computer Corp. (a) 3,514,430 3,752,500
181,100 Sterling Software, Inc. (a) 4,434,718 6,655,425
7,949,148 10,407,925
PUBLISHING - 0.74%
54,700 Scholastic Corp. (a) 2,787,578 2,789,700
Recreation Equipment - 1.42%

<PAGE>

162,150 Acclaim Entertainment, Inc. (a) 1,866,694 2,330,906
194,400 International Game Technology 820,760 3,013,200

2,687,454 5,344,106
RESTAURANTS AND FRANCHISING -- 4.09%
94,105 Brinker International, Inc. (a) 1,267,663 1,705,653
92,000 Buffets, Inc. (a) 851,375 908,500
161,212 Cracker Barrel Old Country Store, Inc. 4,296,459 2,982,422
274,400 Lone Star Steakhouse & Saloon, Inc. (a) 5,048,875 5,488,000
185,300 Outback Steakhouse, Inc. (a) 3,827,338 4,354,550
15,291,710 15,439,125
RETAIL -- DEPARTMENT STORES -- 1.66%
42,700 Kohl's Corp. (a) 1,372,378 1,697,325
214,800 Wal-Mart Stores, Inc. 4,432,621 4,564,500
5,804,999 6,261,825
RETAIL -- MISCELLANEOUS -- 8.11%
196,000 AutoZone, Inc. (a) 4,253,372 4,753,000
116,500 Barnes & Noble, Inc. (a) 2,987,298 3,640,625
177,200 Home Depot, Inc. 6,435,766 8,151,200
142,000 Lowes Companies Inc. 5,279,932 4,934,500
174,375 Office Depot, Inc. (a) 2,250,275 4,185,000
160,000 Pep Boys Manny Moe & Jack 3,807,194 4,960,000
25,013,837 30,624,325
TELECOMMUNICATIONS -- 14.97%
296,500 Cisco Systems, Inc. (a) 3,696,167 10,414,562
250,000 DSC Communications Corp. (a) 7,671,124 8,968,750
26,000 MFS Communications Co. (a) 1,300,000 851,500
181,000 Newbridge Networks Corp. (a) 3,644,044 6,923,250
225,000 Tellabs, Inc. (a) 5,568,200 12,543,750
325,800 3Com Corp. (a) 3,783,856 16,799,063
25,663,391 56,500,875
TELEPHONE SERVICES -- 3.02%
200,000 LDDS Communications, Inc. (a) 4,296,875 3,887,500
170,000 Mobile Telecommunications Tech., Corp. (a) 3,671,115 3,315,000
123,000 Paging Network, Inc. (a) 3,720,750 4,182,000
11,688,740 11,384,500
TOTAL COMMON STOCKS $221,841,837 $289,168,495
</TABLE>

SHORT-TERM INVESTMENTS -- 25.50%
Principal Market
Amount Value (c)
<S> <C>
DISCOUNT NOTES:
$6,600,000 Federal Home Loan Bank, 5.96% 1-27-1995 $ 6,571,043
18,200,000 Federal National Mortgage Association, 6.04% 1-20-1995 18,140,041
17,000,000 Ford Motor Credit Corp., 6.06% 1-10-1995 16,971,903
17,000,000 General Motors Acceptance Corp., 6.27% 1-5-1995 16,985,479
17,000,000 National Westminster Bancorp., 5.89% 1-12-1995 16,967,133
75,635,599
MASTER NOTES:
827,000 Associates Corp. Master Variable Rate Note, Current Rate 5.57% 827,000
2,840,000 Goldman Sachs Master Variable Rate Note, Current Rate 6.24% 2,840,000
3,667,000
TIME DEPOSIT:
16,973,595 First Trust Money Market Variable Rate Time Deposit Account, Current Rate 5.54% 16,973,595
TOTAL SHORT-TERM INVESTMENTS 96,276,194
TOTAL INVESTMENTS IN SECURITIES (COST: $ 318,118,031) (B) $385,444,689
<FN>
(a) Presently not paying dividend income.
(b) At December 31, 1994, the cost of securities for federal income tax purposes
was $318,118,031 and the aggregate gross unrealized appreciation and depreciation
based on that cost was:
Unrealized appreciation $ 77,034,470
Unrealized depreciation (9,707,812)
Net unrealized appreciation $67,326,658
(c) See Note A of accompanying Notes to Financial Statements regarding valuation
of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market value
to total net assets. Market value of investments in foreign securities represents .72%
of net assets on December 31, 1994.
</TABLE>

<PAGE>

FORTIS SERIES FUND, INC. GLOBAL GROWTH SERIES

Schedule of Investments
December 31, 1994

COMMON STOCKS -- 78.33%
Market
Shares Cost (b) Value (c)
<S> <C> <C> <C>
ARGENTINA -- 1.51%
7,000 Telecom de Argentina ADR (e) -- UTILITIES--TELEPHONE $ 408,625 $ 362,250
7,000 Telefonica de Argentina ADR --

UTILITIES--TELEPHONE 478,625 371,000
68,000 YPF Sociedadanoni ADR -- OIL--CRUDE PETROLEUM AND GAS 1,656,715 1,453,500
2,543,965 2,186,750

AUSTRALIA -- 0.56%
52,000 The News Corp., Ltd. ADS -- BROADCASTING 916,065 812,500

AUSTRIA -- 0.74%
13,000 Maculan Holding ORDS -- CONSTRUCTION 1,384,220 1,072,655

CANADA -- 2.22%
55,000 Newbridge Networks Corp. (a) -- TELECOMMUNICATIONS 2,229,687 2,103,750
38,000 Rogers Cantel Mobile Communications, Inc. Class B (a) -- TELECOMMUNICATIONS 974,875 1,107,936
3,204,562 3,211,686
CHILE -- 0.55%
10,000 Compania de Telefonos de Chile S.A. ADS -- TELEPHONE SERVICES 758,197 787,500

CHINA -- 1.48%
145,000 Huaneng Power International, Inc. ADS (a) -- ELECTRIC PRODUCTS 2,900,000 2,138,750

DENMARK -- 0.88%
50,000 Tele Danmark A/S (a) -- TELECOMMUNICATIONS 1,222,110 1,275,000

FINLAND -- 3.78%
37,000 Nokia (AB) OY (FIM 20) -- TELECOMMUNICATIONS 2,478,815 5,464,673

FRANCE -- 2.38%
7,000 Alcatel Cable -- ELECTRONIC--CONTROLS AND EQUIPMENT 808,677 576,077
9,000 Castorama Dubois -- RETAIL--MISCELLANEOUS 1,035,308 1,124,835
30,000 Total Co Francaise Petroles "B" -- OIL--CRUDE PETROLEUM AND GAS 1,705,469 1,743,746
3,549,454 3,444,658
HONG KONG -- 1.29%
700,000 Dairy Farm International Holdings Ltd. -- Food -- GROCERY, MISCELLANEOUS 1,179,317 750,933
178,000 Swire Pacific Ltd. -- REAL ESTATE 1,394,163 1,108,899
2,573,480 1,859,832
INDIA -- 0.40%
26,000 Bajaj Auto Ltd. (a)(e) -- AUTOMOBILE MANUFACTURERS 671,443 584,337

ISRAEL -- 1.56%
84,000 ECI Telecom Ltd. -- TELECOMMUNICATIONS 1,662,746 1,144,500
46,000 Teva Pharmaceutical Industries ADR-- DRUGS 1,236,500 1,112,625
2,899,246 2,257,125
ITALY -- 2.01%
57,700 Fila Holdings S.p.A. ADS -- APPAREL 968,696 1,139,575
52,000 Industrie Natuzzi S.p.A. ADS -- FURNITURE 1,160,467 1,768,000
2,129,163 2,907,575
JAPAN -- 7.40%
70,000 Alpine Electronics -- ELECTRONIC -- CONTROLS AND EQUIPMENT 1,166,284 1,347,098
12,100 Autobacs Seven Co. Ltd.-- RETAIL--MISCELLANEOUS 1,290,142 1,443,219
15,000 Canon, Inc. ADR -- OFFICE EQUIPMENT AND SUPPLIES 1,073,138 1,275,000
231 DDI Corp. -- TELECOMMUNICATIONS 1,255,229 1,991,179
75,000 Jusco Co. -- RETAIL--MISCELLANEOUS 1,676,321 1,668,838
23,000 Kyocera Corp. -- ELECTRONIC--CONTROLS AND EQUIPMENT 1,618,352 1,703,618
145 Nippon Telegraph & Telephone -- TELEPHONE SERVICES 1,307,430 1,280,395
9,386,896 10,709,347

MALAYSIA -- 0.44%
200,000 Technology Resources Industries (a) -- TELECOMMUNICATIONS 835,873 638,332

MEXICO -- 1.18%
20,000 Grupo Televisa, S.A. de C.V. ADR -- BROADCASTING 1,122,365 635,000

<PAGE>

34,000 Panamerican Beverages, Inc. Class A -- BEVERAGE 1,189,321 1,075,250
2,311,686 1,710,250

NETHERLANDS -- 6.43%
135,000 Elsevier NV -- PUBLISHING 1,217,762 1,408,102
70,000 IHC Caland -- MACHINERY--OIL AND WELL 1,402,766 1,770,860
42,000 KLM KON Luchtvaart (a) -- TRANSPORTATION 1,142,193 1,031,052
50,000 Royal PTT Nederland NV --
TELEPHONE SERVICES 1,422,863 1,685,573
30,000 Ranstadt Holdings (a) -- BUSINESS SERVICES & SUPPLIES 1,601,062 1,623,336
24,000 Wolters Kluwer Br Dep Receipt -- PUBLISHING 1,404,741 1,775,815
8,191,387 9,294,738

PANAMA -- 0.43%
20,000 Banco Latinoamericano De Exportaciones S.A. Class E -- BANKS 751,490 625,000

SINGAPORE -- 0.31%
60,000 Sembawang Shipyard Ltd. -- CONSTRUCTION 446,497 448,568

SPAIN -- 1.40%
50,000 Continente Cent Co. (a) -- RETAIL--MISCELLANEOUS 1,038,064 1,006,609
25,000 Empresa Nacional Electricidad -- ELECTRIC PRODUCTS 1,214,280 1,018,005
2,252,344 2,024,614

SWEDEN -- 3.29%
90,000 Astra "B" Free -- DRUGS 1,860,144 2,294,168
54,000 Celsius Industrier Class B -- CONSTRUCTION 1,329,254 1,198,536
23,000 Ericsson (L.M.) Telephone Co. Class B ADR -- TELECOMMUNICATIONS 1,136,250 1,267,875
4,325,648 4,760,579

UNITED KINGDOM -- 5.03%
495,000 British Sky Broadcasting (a) --
BROADCASTING 2,033,450 1,986,406
500,000 Kwik Fit Holdings -- RETAIL--MISCELLANEOUS 1,179,586 1,302,447
260,000 Powerscreen International plc --
CONSTRUCTION 1,304,787 964,045
375,000 Telewest Communications ORDs (a) -- TELECOMMUNICATIONS 1,073,914 1,003,235
60,000 Vodafone Group plc ADR -- UTILITIES--TELEPHONE 1,645,028 2,017,500
7,236,765 7,273,633

UNITED STATES -- 33.06%
90,000 Apple South, Inc. -- RESTAURANTS AND FRANCHISING 1,097,670 1,181,250
85,000 Applebees International, Inc. -- RESTAURANTS AND FRANCHISING 1,454,875 1,136,875
38,000 Applied Materials, Inc. (a) -- ELECTRONIC--CONTROLS AND EQUIPMENT 1,866,800 1,605,500
60,000 AutoZone, Inc. (a) -- RETAIL--MISCELLANEOUS 1,430,966 1,455,000
40,000 Boomtown, Inc. (a) -- MISCELLANEOUS 853,608 630,000
45,000 Brinker International, Inc. (a) -- RESTAURANTS AND FRANCHISING 1,203,127 815,625
28,000 Catalina Marketing Corp. (a) -- BUSINESS SERVICES AND SUPPLIES 1,240,539 1,557,500
40,000 Cisco Systems, Inc. (a) -- TELECOMMUNICATIONS 917,000 1,405,000
45,000 Cracker Barrel Old Country Store, Inc. -- RESTAURANTS AND FRANCHISING 1,246,000 832,500
42,500 Cross Timbers Oil Co. -- Oil--CRUDE PETROLEUM AND GAS 675,685 637,500
60,000 DSC Communications Corp. (a) -- TELECOMMUNICATIONS 1,794,076 2,152,500
35,000 Forest Laboratories, Inc. (a) -- DRUGS 1,594,380 1,631,875
39,500 Franklin Quest Co. (a) -- RETAIL--MISCELLANEOUS 1,419,730 1,180,063
80,000 Gartner Group, Inc. Class A (a) -- BUSINESS SERVICES AND SUPPLIES 1,600,000 3,120,000
40,000 Input/Output, Inc. (a) -- COMPUTERS--SOFTWARE 290,375 945,000
36,000 International Game Technology -- RECREATION EQUIPMENT 1,061,848 558,000
24,200 ITEL Corp. (a) -- ELECTRIC PRODUCTS 836,094 837,925
40,000 Kirby Corp. (a) -- TRANSPORTATION 801,640 790,000
60,000 Landmark Graphics Corp. (a) -- BUSINESS SERVICES AND SUPPLIES 1,315,660 1,080,000
60,000 Mercury Finance Co. -- FINANCE COMPANIES 923,095 780,000
31,500 Office Depot, Inc. (a) -- RETAIL--MISCELLANEOUS 544,628 756,000
32,000 Oracle Systems Corp. (a) -- COMPUTER--SOFTWARE 968,000 1,412,000
50,000 Parametric Technology Corp. (a) -- COMPUTER--SOFTWARE 1,506,616 1,725,000
59,000 Perrigo Co. (a) -- MEDICAL SUPPLIES 1,167,625 737,500
35,000 R.P. Sherer Corp. (a) -- DRUGS 1,400,000 1,588,125
55,000 Shaw Industries, Inc. -- FURNITURE 1,157,793 818,125
33,000 SkyWest, Inc. -- TRANSPORTATION 1,106,584 412,500
40,000 Stein Mart, Inc. (a) -- RETAIL--MISCELLANEOUS 760,563 510,000
26,000 Sybase, Inc. (a) -- COMPUTER--SOFTWARE 832,500 1,352,000
40,000 Synopsys, Inc. (a) -- COMPUTER--SOFTWARE 1,733,112 1,750,000
72,000 TNT Freightways Corp. -- TRANSPORTATION 1,557,563 1,845,000
46,000 Tandy Corp. -- OFFICE EQUIPMENT AND SUPPLIES 1,759,922 2,305,750
44,000 3Com Corp. (a) -- TELECOMMUNICATIONS 1,155,000 2,268,750
32,000 U.S. HealthCare, Inc. -- HEALTH CARE SERVICES 1,253,138 1,320,000

<PAGE>

28,000 Wabash National Corp. -- TRANSPORTATION 919,870 1,092,000
57,000 Wisconsin Central Transportation Corp. (a) -- TRANSPORTATION 1,943,225 2,351,250
21,000 Xilinx, Inc. (a) -- ELECTRONIC--SEMICONDUCTOR AND CAPACITOR 862,124 1,244,250
44,251,431 47,820,363
TOTAL COMMON STOCKS $107,220,737 $113,308,465

PREFERRED STOCKS -- 2.79%
AUSTRALIA -- 0.25%
26,000 The News Corp., Preferred ADS (a) -- BROADCASTING $ 395,785 $ 360,750

AUSTRIA -- 0.06%
1,000 Maculan Holding Vorzueg -- CONSTRUCTION 100,525 82,512

GERMANY -- 2.48%
6,300 SAP AG Systeme Non--Voting preference bearer shares DEM 50 (e)
-- COMPUTERS & SOFTWARE 2,010,752 3,592,995
TOTAL PREFERRED STOCKS 2,507,062 4,036,257
TOTAL EQUITY INVESTMENTS $109,727,799 $117,344,722
</TABLE>

SHORT-TERM INVESTMENTS -- 19.19%
Principal Market
Amount Value (c)
<S> <C> <C>
DISCOUNT NOTES:
$1,500,000 Ford Motor Credit Co., 5.89% 1-6-1995 $ 1,498,550
6,500,000 Federal Home Loan Bank, 5.90% 1-17-1995 6,482,197
6,500,000 General Motors Acceptance Corp.,
6.00% 1-10-1995 6,489,348
1,200,000 Norwest Corp., 5.95% 1-5-1995 1,199,025
15,669,120
MASTER NOTES:
4,794,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.57% 4,794,000
1,198,000 Goldman Sachs Master Variable Rate Note,
Current rate -- 6.24% 1,198,000
5,992,000
TIME DEPOSIT:
6,091,000 First Trust Money Market Variable Rate Time
Deposit Account, Current rate -- 5.54% 6,091,000
TOTAL SHORT-TERM INVESTMENTS 27,752,120
TOTAL INVESTMENTS IN SECURITIES
(COST: $137,479,919) (B) $145,096,842
<FN>
(a) Presently not paying dividend income.
(b) At December 31, 1994, the cost of securities for federal income tax purposes
was $137,479,919 and the aggregate gross unrealized appreciation and depreciation
based on that cost was:
Unrealized appreciation $17,383,462
Unrealized depreciation (9,766,539)
Net unrealized appreciation $ 7,616,923
(c) See Note A of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market value
to total net assets.
(e) Common and Preferred Stock sold within terms of private placement
memorandums, exempt from registration under Section 144A of the Securities Act of 1933,
as amended, and may be sold only to dealers in that program or other "accredited investors".
These investments have been identified by portfolio management as illiquid securities.
The aggregate value of these securities at December 31, 1994 was $4,539,582 which represents 3.14%
of total net assets.
</TABLE>

FORTIS SERIES FUND, INC. -- AGGRESSIVE GROWTH SERIES

Schedule of Investments
December 31, 1994

COMMON STOCKS -- 76.65%
Market
Shares Cost (b) Value (c)
<S> <C> <C> <C>
APPAREL -- 1.56%

<PAGE>

15,300 Cygne Designs, Inc. (a) $ 260,138 $ 210,375
BIOMEDICS, GENETICS RESEARCH AND DEVELOPMENT -- 0.96%
8,000 Centocor, Inc. (a) 143,158 130,000

BROADCASTING -- 0.70%
1,700 America Online, Inc. (a) 57,575 95,200

BUSINESS SERVICES AND SUPPLIES -- 3.90%
8,300 Acxiom Corp. (a) 213,512 230,325
3,600 Catalina Marketing Corp. (a) 200,394 200,250
5,400 Landmark Graphics Corp. (a) 140,186 97,200
554,092 527,775
COMPUTER--SOFTWARE -- 9.34%
7,300 Informix Corp. (a) 159,429 234,513
10,300 Input/Output, Inc. (a) 237,446 243,337
6,500 Parametric Technology Corp. (a) 193,785 224,250
1,100 Powersoft Corp. (a) 59,537 90,475
5,400 Synopsys, Inc. (a) 229,063 236,250
5,900 Wall Data (a) 215,775 234,525
1,095,035 1,263,350
CONSTRUCTION -- 1.42%
4,700 Fastenal Co. 182,975 192,113

ELECTRONIC--CONTROLS AND EQUIPMENT -- 6.94%
9,400 Benchmark Electronics, Inc. (a) 233,529 226,775
8,700 DOVatron International, Inc. (a) 219,625 224,025
7,000 StrataCom, Inc. (a) 174,125 245,000
6,400 Ultratech Stepper, Inc. (a) 200,337 243,200
827,616 939,000
ELECTRONIC--SEMICONDUCTOR AND CAPACITOR -- 1.96%
12,800 Unitrode Corp. (a) 240,320 238,400
450 Xilinx, Inc. (a) 23,288 26,662
263,608 265,062
HEALTH CARE SERVICES -- 6.28%
6,850 Genesis Health Ventures, Inc. (a) 188,649 216,631
7,500 Health Care & Retirement Corp. (a) 207,863 225,938
4,600 Healthsource, Inc. (a) 184,644 188,025
5,000 Omnicare, Inc. 197,500 219,375
778,656 849,969
HOTEL AND MOTEL -- 0.35%
3,900 Rio Hotel & Casino, Inc. (a) 54,869 47,288

INSURANCE -- 1.01%
6,000 Mid Atlantic Medical Services, Inc. (a) 178,980 137,250

MACHINERY--OIL AND WELL -- 1.74%
12,600 Petroleum Geo Services A/S ADS (a) 231,512 234,675

MEDICAL SUPPLIES -- 1.68%
23,000 Resound Corp. (a) 223,925 227,125

OFFICE EQUIPMENT AND SUPPLIES -- 3.04%
6,400 Avid Technology, Inc. (a) 191,925 205,600
5,600 Sterling Software, Inc. (a) 180,249 205,800
372,174 411,400
RECREATIONAL EQUIPMENT -- 1.42%
5,800 Callaway Golf Co. 209,226 192,125

RESTAURANTS AND FRANCHISING -- 3.30%
9,200 Applebees International, Inc. 143,065 123,050
8,200 Lone Star Steakhouse & Saloon, Inc. (a) 186,300 164,000
5,600 Papa John's International, Inc. (a) 153,850 159,600
483,215 446,650
RETAIL--MISCELLANEOUS -- 15.52%
16,100 Authentic Fitness Corp. (a) 242,380 223,387
6,800 Bed, Bath & Beyond, Inc. (a) 184,525 204,000
14,800 Books-A-Million, Inc. (a) 199,800 249,750
11,000 Corporate Express, Inc. (a) 201,875 214,500
7,800 Franklin Quest Co. (a) 264,996 233,025
7,700 Gymboree Corp. (a) 202,987 221,375
6,000 Micro Warehouse, Inc. (a) 160,938 210,000
6,700 PETsMART, Inc. (a) 224,600 231,150
8,400 Starbucks Corp. (a) 233,650 231,000
3,000 Stein Mart, Inc. (a) 59,525 38,250

<PAGE>

2,200 West Marine, Inc. (a) 45,200 42,350
2,020,476 2,098,787
TELECOMMUNICATIONS -- 8.76%
5,900 Cisco Systems, Inc. (a) 161,188 207,238
6,200 DSC Communications Corp. (a) 177,675 222,425
10,500 ECI Telecom Ltd. 194,200 143,062
6,800 MFS Communications Co. (a) 238,223 222,700
5,500 Newbridge Networks Corp. (a) 210,018 210,375
3,200 Tellabs, Inc.(a) 115,875 178,400
1,097,179 1,184,200
TRANSPORTATION -- 1.59%
10,800 American Freightways Corp. (a) 241,770 214,650

UTILITIES--TELEPHONE -- 3.39%
17,200 IntelCom Group, Inc. (a) 241,782 227,900
8,600 LCI International, Inc. (a) 151,500 230,050
393,282 457,950

WASTE DISPOSAL -- 1.79%
9,700 United Waste System, Inc. (a) 220,325 242,500

TOTAL COMMON STOCK $ 9,889,786 $10,367,444

</TABLE>

SHORT-TERM INVESTMENTS -- 41.70%
Principal Market
Amount Value (c)
<S> <C> <C>
DISCOUNT NOTES:
$1,200,000 Federal National Mortgage Association, 5.89% 1-9-1995 $ 1,198,260
500,000 Federal National Mortgage Association, 5.93% 1-30-1995 497,575
500,000 Ford Motor Credit Co., 6.11% 1-5-1995 499,583
500,000 General Motors Acceptance Corp., 6.21% 1-9-1995 499,238
500,000 Merrill Lynch & Co., Inc., 6.17% 1-11-1995 499,075
500,000 National Westminster Bancorp, 6.14% 1-3-1995 499,749
550,000 Norwest Corp., 5.94% 1-17-1995 548,486
4,241,966
MASTER NOTES:
575,000 Associates Corp. Master Variable Rate Note, Current Rate -- 5.57% 575,000
557,000 Goldman Sachs Master Variable Rate Note, Current Rate -- 6.24% 557,000
1,132,000
TIME DEPOSIT:
266,000 First Trust Money Market Variable Rate Time Deposit Account, Current Rate -- 5.54% 266,000
TOTAL SHORT-TERM INVESTMENTS 5,639,966
TOTAL INVESTMENTS IN SECURITIES (COST: $15,529,752) (B) $ 16,007,410
<FN>
(a) Presently not paying dividend income.
(b) At December 31, 1994, the cost of securities for federal income tax purposes
was $15,529,752, and the aggregate gross unrealized appreciation and depreciation
based on that cost was:
Unrealized appreciation $ 886,512
Unrealized depreciation (408,854)
Net unrealized appreciation $ 477,658
(c) See Note A of accompanying Notes to Financial Statements regarding valuation of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market value to total net
assets. Market value of investments in foreign securities represents 1.73% of net assets as of
December 31, 1994.
</TABLE>

<PAGE>

FORTIS SERIES FUND, INC.

Statements of Assets and Liabilities

December 31, 1994

MONEY U.S. GOV'T. DIVERSIFIED HIGH ASSET
Market Securities Income Yield Allocation
Series Series Series Series Series
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, as detailed in the
accompanying schedules, at market (cost
$44,732,592; $182,193,916; $102,434,759;
$14,418,599; $245,961,417; $19,664,087;
$318,118,031; $137,479,919; and $15,529,752,
respectively) (Note A) $ 44,734,084 $171,929,082 $ 95,900,562 $ 13,731,384 $257,908,580
Cash on deposit with custodian (includes foreign
currency of $2,149,153) 403 261 -- 66,624 3,159
Receivables:
Forward foreign currency contracts held, at market
(Notes A and C) -- -- -- -- --
Investment securities sold -- 2,427,401 810,781 -- 1,621,563
Interest and dividends 14,533 1,757,412 1,598,047 345,226 2,523,335
Subscriptions of capital stock 211,306 24,873 92,184 57,109 157,766
Deferred registration costs (Note A) -- 5,981 3,864 -- 5,909

TOTAL ASSETS 44,960,326 176,145,010 98,405,438 14,200,343 262,220,312

LIABILITIES:
Bank overdraft -- -- 11,898 -- --
Payable for investment securities purchased -- 3,060,000 -- 426,500 1,233,723
Forward foreign currency contracts held, at market
(Notes A and C) -- -- -- -- --
Redemptions of capital stock 108,429 340,783 28,940 55,640 272,183
Payable for investment advisory and management fees
(Note B) 11,486 68,987 39,749 5,589 109,076
Accounts payable and accrued expenses 7,676 18,742 11,030 6,800 22,225

TOTAL LIABILITIES 127,591 3,488,512 91,617 494,529 1,627,207

NET ASSETS:
Net proceeds of capital stock, par value $.01 per
share-authorized 20,000,000,000 shares; outstanding
4,217,239; 18,372,413; 9,451,604; 1,447,594;
19,215,350; 1,616,348; 17,075,189; 11,754,070; and
1,380,724 shares, respectively 43,387,789 202,992,960 112,036,284 14,393,885 256,525,604
Unrealized appreciation (depreciation) of investments
in securities and other assets and liabilities
denominated in foreign currency 1,492 (10,264,834) (6,534,197) (687,215) 11,947,163
Undistributed net investment income 1,570,828 8,670 3,947 153 5,045
Accumulated net realized loss from sale of investments
and foreign currency (127,374) (20,080,298) (7,192,213) (1,009) (7,884,707)

TOTAL NET ASSETS $ 44,832,735 $172,656,498 $ 98,313,821 $ 13,705,814 $260,593,105

NET ASSET VALUE PER SHARE $10.63 $ 9.40 $10.40 $ 9.47 $13.56

GROWTH & GROWTH GLOBAL AGGRESSIVE
Income Stock Growth Growth
Series Series Series Series
ASSETS:
Investments in securities, as detailed in the
accompanying schedules, at market (cost
$44,732,592; $182,193,916; $102,434,759;
$14,418,599; $245,961,417; $19,664,087;
$318,118,031; $137,479,919; and $15,529,752,
respectively) (Note A) $ 19,571,254 $385,444,689 $ 145,096,842 $ 16,007,410
Cash on deposit with custodian (includes foreign
currency of $2,149,153) 2,758 474 2,231,020 76,315
Receivables:
Forward foreign currency contracts held, at market
(Notes A and C) -- -- 949,998 --
Investment securities sold -- -- 536,025 --
Interest and dividends 39,860 116,207 149,637 7,418
Subscriptions of capital stock 366,341 -- 363,795 137,330
Deferred registration costs (Note A) -- 4,643 3,352 --

TOTAL ASSETS 19,980,213 385,566,013 149,330,669 16,228,473

LIABILITIES:
Bank overdraft -- -- -- --
Payable for investment securities purchased 3,693,170 6,862,690 3,485,341 2,666,788
Forward foreign currency contracts held, at market
(Notes A and C) -- -- 951,031 --
Redemptions of capital stock -- 998,636 131,800 26,753
Payable for investment advisory and management fees
(Note B) 8,955 194,527 83,697 7,287
Accounts payable and accrued expenses 2,003 27,622 31,889 1,958

TOTAL LIABILITIES 3,704,128 8,083,475 4,683,758 2,702,786

NET ASSETS:
Net proceeds of capital stock, par value $.01 per
share-authorized 20,000,000,000 shares; outstanding
4,217,239; 18,372,413; 9,451,604; 1,447,594;
19,215,350; 1,616,348; 17,075,189; 11,754,070;
and 1,380,724 shares, respectively 16,415,948 336,265,429 142,856,129 13,157,502
Unrealized appreciation (depreciation) of investments
in securities and other assets and liabilities
denominated in foreign currency (92,833) 67,326,658 7,617,781 477,658
Undistributed net investment income 3,393 713 -- 106
Accumulated net realized loss from sale of investments
and foreign currency (50,423) (26,110,262) (5,826,999) (109,579)

TOTAL NET ASSETS $ 16,276,085 $377,482,538 $ 144,646,911 $ 13,525,687

NET ASSET VALUE PER SHARE $10.07 $22.11 $12.31 $9.80

</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

*Moody's Rating

FORTIS SERIES FUND, INC.

Statements of Operations

For the Year Ended December 31, 1994

MONEY U.S. GOV'T. DIVERSIFIED HIGH ASSET
Market Securities Income Yield Allocation
Series Series Series Series** Series
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income $ 1,729,620 $15,240,569 $ 8,401,413 $ 672,289 $10,665,768
Dividend income -- -- -- -- 469,400
Total Income 1,729,620 15,240,569 8,401,413 672,289 11,135,168
Expenses:

GROWTH & GROWTH GLOBAL AGGRESSIVE
Income Stock Growth Growth
Series** Series Series Series**

NET INVESTMENT INCOME:
Income:
Interest income $ 83,982 $ 4,524,640 $ 1,202,799 $ 91,501
Dividend income 134,278 544,308 740,286* 1,655
Total Income 218,260 5,068,948 1,943,085 93,156
Expenses:

</TABLE>

<PAGE>

<TABLE>

<S> <C> <C> <C> <C> <C>
Investment advisory and management fees (Note B) 118,752 952,432 489,311 29,992 1,205,808
Custodian fees 13,905 32,500 21,450 8,101 35,137
Legal and auditing fees (Note B) 13,068 29,900 17,400 5,558 32,649
Shareholders' notices and reports 6,489 37,800 17,100 450 38,760
Registration fees 1,299 34,500 19,500 147 34,200
Directors' fees and expenses 1,566 8,100 4,000 539 9,407
Other 3,713 4,357 3,921 156 4,751
Total Expenses 158,792 1,099,589 572,682 44,943 1,360,712

NET INVESTMENT INCOME 1,570,828 14,140,980 7,828,731 627,346 9,774,456

REALIZED AND UNREALIZED LOSS ON INVESTMENTS (NOTE A):
Net realized gain (loss) from security and foreign
currency transactions -- (19,946,447) (7,154,191) 56 (7,840,971)
Net change in unrealized appreciation (depreciation)
of investments and other assets and liabilities
denominated in foreign currency 655 (9,243,143) (6,437,751) (687,215) (2,146,775)

NET GAIN (LOSS) ON INVESTMENTS 655 (29,189,590) (13,591,942) (687,159) (9,987,746)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ 1,571,483 $(15,048,610) $ (5,763,211) $ (59,813) $ (213,290)

Investment advisory and management fees (Note B) 38,143 2,140,994 833,424 30,188
Custodian fees 2,641 32,000 73,695 2,229
Legal and auditing fees (Note B) 5,171 40,146 20,902 5,469
Shareholders' notices and reports 367 54,168 16,220 620
Registration fees 3 32,557 17,781 10
Directors' fees and expenses 218 13,934 4,561 196
Other 580 4,700 3,921 57
Total Expenses 47,123 2,318,499 970,504 38,769

NET INVESTMENT INCOME 171,137 2,750,449 972,581 54,387

REALIZED AND UNREALIZED LOSS ON INVESTMENTS (NOTE A):
Net realized gain (loss) from security and foreign
currency transactions (50,423) (12,889,598) (5,130,583) (109,579)
Net change in unrealized appreciation (depreciation)
of investments and other assets and liabilities
denominated in foreign currency (92,833) 1,797,152 738,355 477,658

NET GAIN (LOSS) ON INVESTMENTS (143,256) (11,092,446) (4,392,228) 368,079

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ 27,881 $ (8,341,997) $ (3,419,647) $ 422,466

<FN>
**Net of foreign withholding taxes of $90,079.

**For the period April 26, 1994 to December 31, 1994.

</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

FORTIS SERIES FUND, INC.

Statements of Changes in Net Assets

U.S. GOVERNMENT
Money Market Series Securities Series

FOR THE YEAR ENDED FOR THE YEAR ENDED
December 31, December 31, December 31, December 31,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 1,570,828 $ 696,777 $ 14,140,980 $ 12,171,573
Net realized gain (loss) -- -- (19,946,447) 3,965,834
Net change in unrealized appreciation (depreciation) 655 (5,308) (9,243,143) (1,196,523)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 1,571,483 691,469 (15,048,610) 14,940,884

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income -- (696,777) (14,140,980) (12,171,573)
Tax return of capital (Note A) -- (643) -- --
From realized gains on investments -- -- (59,124) (3,881,922)
Excess distributions of net realized gains (Note A) -- -- (52,219) (109,985)

TOTAL DISTRIBUTIONS TO SHAREHOLDERS -- (697,420) (14,252,323) (16,163,480)

CAPITAL STOCK SOLD AND REPURCHASED*:
Proceeds from sale of shares 57,442,716 70,118,602 14,559,877 93,840,623
Proceeds from shares issued as a result of reinvested dividends -- 697,420 14,252,323 16,163,480
Less cost of repurchase of shares (42,863,568) (69,655,492) (62,443,054) (5,876,582)

NET INCREASE (DECREASE) IN NET ASSETS FROM SHARES TRANSACTIONS 14,579,148 1,160,530 (33,630,854) 104,127,521

TOTAL INCREASE (DECREASE) IN NET ASSETS 16,150,631 1,154,579 (62,931,787) 102,904,925

NET ASSETS:
Beginning of period 28,682,104 27,527,525 235,588,285 132,683,360
End of period** $ 44,832,735 $ 28,682,104 $ 172,656,498 $ 235,588,285

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH
GROWTH STOCK SERIES GLOBAL GROWTH SERIES SERIES

For the
Period from
April 26, 1994
For the Year Ended For the Year Ended (Inception) to
December 31, December 31, December 31, December 31, December 31,
1994 1993 1994 1993 1994
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 2,750,449 $ 1,115,936 $ 972,581 $ 167,861 $ 54,387
Net realized gain (loss) (12,889,598) (3,688,649) (5,130,583) (517,201) (109,579)
Net change in unrealized appreciation (depreciation) 1,797,152 24,086,778 738,355 5,956,493 477,658

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS (8,341,997) 21,514,065 (3,419,647) 5,607,153 422,466

DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (2,749,736) (1,115,936) (972,581) (167,861) (54,281)
Tax return of capital (Note A) -- (18,511) (1,799) (12,779) --

TOTAL DISTRIBUTIONS TO SHAREHOLDERS (2,749,736) (1,134,447) (974,380) (180,640) (54,281)

CAPITAL STOCK SOLD AND REPURCHASED*:
Proceeds from sale of shares 96,931,353 138,507,368 78,040,666 63,176,893 14,286,485
Proceeds from shares issued as a result of
reinvested dividends 2,749,735 1,134,447 974,380 180,640 54,281
Less cost of repurchase of shares (15,399,487) (43,900,768) (5,856,364) (3,992,708) (1,183,264)

NET INCREASE (DECREASE) IN NET ASSETS FROM SHARES
TRANSACTIONS 84,281,601 95,741,047 73,158,682 59,364,825 13,157,502

TOTAL INCREASE (DECREASE) IN NET ASSETS 73,189,868 116,120,665 68,764,655 64,791,338 13,525,687

NET ASSETS:
Beginning of period 304,292,670 188,172,005 75,882,256 11,090,918 --
End of period** $ 377,482,538 $ 304,292,670 $ 144,646,911 $ 75,882,256 $ 13,525,687

</TABLE>

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

HIGH YIELD GROWTH &
DIVERSIFIED INCOME SERIES SERIES ASSET ALLOCATION SERIES INCOME SERIES
FOR THE FOR THE
PERIOD FROM PERIOD FROM
APRIL 26, 1994 APRIL 26, 1994
FOR THE YEAR ENDED (INCEPTION) TO FOR THE YEAR ENDED (INCEPTION) TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1994 1994 1993 1994

<S> <C> <C> <C> <C> <C>
$ 7,828,731 $ 4,096,639 $ 627,346 $ 9,774,456 $ 5,496,773 $ 171,137
(7,154,191) 2,144,267 56 (7,840,971) 919,708 (50,423)
(6,437,751) (350,411) (687,215) (2,146,775) 7,771,882 (92,833)
(5,763,211) 5,890,495 (59,813) (213,290) 14,188,363 27,881
(7,830,824) (4,097,507) (627,346) (9,774,456) (5,499,188) (167,744)
-- -- -- -- (7,247) --
-- (2,029,132) -- -- (671,383) --
(34,075) (35,438) (912) (38,691) (36,670) --
(7,864,899) (6,162,077) (628,258) (9,813,147) (6,214,488) (167,744)

26,359,470 60,275,289 15,805,154 63,664,374 102,186,245 16,474,699
7,864,899 6,162,077 628,258 9,813,147 6,214,488 167,744
(14,871,791) (2,066,930) (2,039,527) (7,460,742) (847,697) (226,495)
19,352,578 64,370,436 14,393,885 66,016,779 107,553,036 16,415,948
5,724,468 64,098,854 13,705,814 55,990,342 115,526,911 16,276,085

92,589,353 28,490,499 -- 204,602,763 89,075,852 --
$ 98,313,821 $ 92,589,353 $ 13,705,814 $ 260,593,105 $ 204,602,763 $ 16,276,085

</TABLE>

Shares Issued as a
*Shares of Capital Stock Result of Reinvested
Sold and Repurchased Shares Sold Dividends Shares Repurchased

1994 1993 1994 1993 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Money Market Series 5,534,894 6,787,294 -- 68,194 (4,121,372) (6,746,772)
U.S. Government Securities Series 1,374,168 8,204,064 1,513,371 1,473,453 (6,042,060) (514,779)
Diversified Income Series 2,249,744 4,898,522 755,986 516,031 (1,315,724) (165,354)
High Yield Series*** 1,585,268 -- 66,657 -- (204,331) --
Asset Allocation Series 4,552,973 7,386,571 725,867 441,188 (535,631) (61,603)
Growth & Income Series*** 1,622,064 -- 16,661 -- (22,377) --
Growth Stock Series 4,372,727 6,439,922 125,651 49,931 (701,569) (2,110,272)
Global Growth Series 6,209,644 5,247,894 79,949 14,290 (476,944) (342,240)
Aggressive Growth Series*** 1,500,811 -- 5,595 -- (125,682) --

Net Increase (Decrease)
of Shares
1994 1993

Money Market Series 1,413,522 108,716
U.S. Government Securities Series (3,154,521) 9,162,738
Diversified Income Series 1,690,006 5,249,229
High Yield Series*** 1,447,594 --
Asset Allocation Series 4,743,209 7,766,156
Growth & Income Series*** 1,616,348 --
Growth Stock Series 3,796,809 4,379,581
Global Growth Series 5,812,649 4,919,944
Aggressive Growth Series*** 1,380,724 --

<FN>
***For the period from April 26, 1994 (inception) to December 31, 1994.

</TABLE>

Year Ended Year Ended
** Includes Undistributed Net December 31, December 31,
Investment Income of: 1994 1993
<S> <C> <C>
Money Market Series $1,570,828 $ --
U.S. Government Securities Series 8,670 --
Diversified Income Series 3,947 2,093
High Yield Series* 153 --
Asset Allocation Series 5,045 --
Growth & Income Series* 3,393 --
Growth Stock Series 713 --
Global Growth Series -- --
Aggressive Growth Series* 106 --

</TABLE>

<PAGE>

FORTIS SERIES FUND, INC.

Notes to Financial Statements

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The fund is a diversified, open-
end management investment company which currently is comprised of nine
separate investment portfolios and series of capital stock: Money Market
Series, U.S. Government Securities Series, Diversified Income Series, High
Yield Series, Asset Allocation Series, Growth & Income Series, Growth Stock
Series, Global Growth Series, and Aggressive Growth Series, each of which
has different investment objectives and its own investment portfolio and net
asset value. All series of the fund are organized as diversified series. The
articles of incorporation of Fortis Series Fund, Inc., permits the Board of
Directors to create additional portfolios in the future.

Shares of the fund will not be sold directly to the public, but sold only to
Fortis Benefits Insurance Company separate accounts in connection with
variable insurance contracts and policies.

SECURITY VALUATION: Investments in securities traded on a national
securities exchange or on the NASDAQ National Market System are valued at
the last reported sales price; listed securities and over-the-counter
securities for which no sale was reported and securities traded in the over-
the-counter market are valued at the last reported bid price. Long-term debt
securities are valued at current market prices on the basis of valuations
furnished by an independent pricing service. Short-term investments, with
maturities of less than 60 days when acquired, or which subsequently are
within 60 days of maturity, are valued at amortized cost.

SECURITIES PURCHASED ON A WHEN-ISSUED BASIS: Delivery and payment for
securities that have been purchased by all portfolios except for Money
Market Series and Growth Stock Series on a forward commitment or when-issued
basis can take place a month or more after the transaction date. During this
period, such securities are subject to market fluctuation and the portfolio
maintains, in a segregated account with its custodian, assets with a market
value equal to the amount of its purchase commitments. As of December 31,
1994, the portfolio had entered into outstanding when-issued or forward
commitments of $0.

FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS:
Securities and other assets and liabilities denominated in foreign
currencies are translated daily into U.S. dollars at the closing rate of
exchange. Foreign currency amounts related to the purchase or sale of
securities, income and expenses are translated at the exchange rate on the
transaction date. The effect of changes in foreign exchange rates on
realized and unrealized security gains or losses is reflected as a component
of such gains or losses. In the statement of operations, net realized gains
or losses from foreign currency transactions may arise from sales of foreign
currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement dates on securities transactions, and
other translation gains or losses on dividends, interest income and foreign
withholding taxes.

The fund may enter into forward foreign currency exchange contracts for
operational purposes and to protect against adverse exchange rate
fluctuation. The net U.S. dollar value of foreign currency underlying all
contractual commitments held by the fund and the resulting unrealized
appreciation or depreciation are determined using foreign currency exchange
rates from an independent pricing service. The fund is subject to the credit
risk that the other party will not complete the obligations of the contract.

SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security transactions
are accounted for on the trade date and dividend income is recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Realized
security gains and losses are determined using the identified cost method.
For financial reporting purposes, except for original issue discount, each
portfolio does not amortize bond premium and discount.

For the year ended December 31, 1994, the cost of purchases and proceeds
from sales of securities for Money Market Series were $361,402,080 and
$344,124,323, respectively. The cost of purchases and proceeds from sales of
securities (other than short-term securities) for the other portfolios were
as follows:

Cost of Proceeds
Purchases from Sales
<S> <C> <C>
U.S. Government Securities Series $371,825,926 $397,874,924
Diversified Income Series 159,693,033 138,552,305
High Yield Series* 14,514,662 1,566,789
Asset Allocation Series 247,270,881 155,299,269
Growth & Income Series* 13,288,345 116,777
Growth Stock Series 129,600,896 42,717,056
Global Growth Series 84,459,110 18,243,779
Aggressive Growth Series* 10,227,911 228,546

<FN>
*For the period from April 26, 1994 (inception) to December 31, 1994.

</TABLE>

FEDERAL TAXES: The portfolios intend to qualify, under the Internal Revenue
Code, as regulated investment companies and if so qualified, will not have
to pay federal income taxes to the extent their taxable net income is
distributed. For tax purposes, each portfolio is a single taxable entity. On
a calendar year basis, each portfolio intends to distribute substantially
all of its net investment income and realized gains, if any.

Net investment income and net realized gains differ for financial statement
and tax purposes primarily because of the recognition of market discount as
ordinary income and the deferral of "wash sale" losses for tax purposes. The
character of distributions made during the year from net investment income
or net realized gains may also differ from its ultimate characterization for
federal income tax purposes. The effect on dividend distributions of certain
current year permanent book-to-tax differences is reflected as excess
distributions of net realized gains or tax return of capital in the
statements of changes in net assets.

On the Statements of Assets and Liabilities, due to permanent book-to-tax
differences, reclassification adjustments in the following amounts have been
made to increase accumulated net realized loss with an offsetting increase
to undistributed net investment income.

U.S. Diversified Asset
Government Income High Yield Allocation
Series Series Series Series

<PAGE>

<S> <C> <C> <C> <C>
Accumulated Net Realized Loss $8,670 $3,947 $153 $5,045
Undistributed Net Investment Income 8,670 3,947 153 5,045

</TABLE>

For federal income tax purposes the portfolios had the following capital
loss carryovers at December 31, 1994, which, if not offset by subsequent
capital gains, will expire in 1995 through 2003. It is unlikely the Board of
Directors will authorize a distribution of any net realized gains until the
available capital loss carryovers have been offset or expired.

<S> <C>
Money Market Series $ 127,374
U.S. Government Securities Series 19,846,342
Diversified Income Series 7,192,213
Asset Allocation Series 7,884,707
Growth & Income Series 50,423
Growth Stock Series 26,110,262
Global Growth Series 5,826,999
Aggressive Growth Series 109,579

</TABLE>

DEFERRED COSTS: Registration costs are deferred and charged to income over
the registration period.

INCOME AND CAPITAL GAINS DISTRIBUTIONS: The portfolios intend to make income
and capital gains distributions, if any, on an annual basis. All
distributions will be reinvested in additional shares of the portfolio at
net asset value.

B. PAYMENTS TO RELATED PARTIES: Fortis Advisers, Inc., is the investment
adviser for each series. Investment advisory and management fees are based
on each series' average daily net assets and decrease in reduced percentages
as average daily net assets increase.

The following chart represents the annual fee percentages:

<TABLE>
<CAPTION>
Annual
Investment Advisory
Average Net Assets and Management Fee
<S> <C> <C>
Money Market For the first $500 million .3%
Series For assets over $500 million .25%

U.S. Government For the first $50 million .5%
Securities Series For assets over $50 million .45%

Diversified For the first $50 million .5%
Income Series For assets over $50 million .45%

High Yield For the first $250 million .5%
Series For assets over $250 million .45%

Asset For the first $250 million .5%
Allocation Series For assets over $250 million .45%

Growth & Income For the first $100 million .7%
Series For assets over $100 million .6%

Growth Stock For the first $100 million .7%
Series For assets over $100 million .6%

Global Growth For the first $500 million .7%
Series For assets over $500 million .6%

Aggressive For the first $100 million .7%
Growth Series For assets over $100 million .6%

</TABLE>

Legal fees and expenses aggregating $2,715 for the Money Market Series,
$13,200 for the U.S. Government Securities Series, $5,900 for the
Diversified Income Series, $5,184 for the High Yield Series, $15,832 for the
Asset Allocation Series, $5,171 for the Growth & Income Series, $22,146 for
the Growth Stock Series, $8,229 for the Global Growth Series, and $4,984 for
the Aggressive Growth Series were paid to a law firm of which the secretary
of the fund is a partner.

C. FORWARD FOREIGN CURRENCY CONTRACTS: At December 31, 1994, the Global Growth
Series portfolio entered a forward foreign currency exchange contract that
obligated the portfolio to deliver currencies at a specified future date.
The unrealized depreciation of $1,033 on this contract is included in the
accompanying financial statements. The terms of the open contract are as
follows:

U.S. Dollar U.S. Dollar
Currency to Value as of Currency to Value as of
Settle Date be Delivered December 31, 1994 be Received December 31, 1994
<S> <C> <C> <C> <C>
Jan. 3, 1995 951,031 $951,031 607,222 $949,998
U.S. Dollar British Pound
Sterling

</TABLE>

D. FINANCIAL HIGHLIGHTS:

Selected per share historical data for each of the Series is presented based
upon average fund shares outstanding.

Year Ended December 31,
MONEY MARKET SERIES 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 10.23 $ 10.21 $ 10.15 $ 10.19 $ 9.92
<PAGE>

Operations:
Investment income - net .41 .28 .36 .62 .78
Net realized and unrealized gains (losses) on investments (.01) 02 .06 (.02) .28
Total from operations .40 .30 .42 .60 1.06
Distribution to shareholders:
From investment income - net -- (.28) (.36) (.64) (.79)
Net asset value, end of year $ 10.63 $ 10.23 $ 10.21 $ 10.15 $ 10.19
Total Return@ 3.92% 2.77% 3.36% 5.91% 7.87%
Net assets end of year (000s omitted) $ 44,833 $ 28,682 $ 27,528 $ 10,737 $ 8,897
Ratio of expenses to average daily net assets .40% .44% .46% .55% .60%
Ratio of net investment income to average daily net assets 3.96% 2.74% 3.51% 5.74% 7.75%
Portfolio turnover rate N/A* N/A* N/A* N/A* 58%

<FN>
* Pursuant to Rule 2a-7 under the Investment Company Act of 1940, under which
the Money Market Series qualified on May 1, 1991, the portfolio turnover
rate is not applicable.

@ These are the portfolios total returns during the period, including
reinvestment of all dividend and and capital gains distributions.
</TABLE>

Year Ended December 31,
U.S. GOVERNMENT SECURITIES SERIES 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 10.94 $ 10.73 $ 10.77 $ 9.80 $ 9.48
Operations:
Investment income - net .71 .74 .78 .77 .76
Net realized and unrealized gains (losses) on investments (1.54) .46 .15 .98 .31
Total from operations (.83) 1.20 .93 1.75 1.07
Distribution to shareholders:
From investment income - net (.71) (.74) (.78) (.78) (.75)
From net realized gains -- (.24) (.19) -- --
Excess distributions of net realized gains -- (.01) -- -- --
Total distributions to shareholders (.71) (.99) (.97) (.78) (.75)
Net asset value, end of year $ 9.40 $ 10.94 $ 10.73 $ 10.77 $ 9.80
Total Return@ (6.44%) 9.45% 6.14% 14.36% 7.93%
Net assets end of year (000s omitted) $172,656 $235,588 $132,683 $49,751 $10,750
Ratio of expenses to average daily net assets .53% .52% .57% .64% .76%
Ratio of net investment income to average daily net assets 6.87% 6.49% 7.10% 7.57% 7.90%
Portfolio turnover rate 187% 141% 135% 77% 17%
</TABLE>

Year Ended December 31,
DIVERSIFIED INCOME SERIES 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 11.93 $ 11.34 $ 11.22 $ 10.40 $ 10.26
Operations:
Investment income - net .87 .87 .82 .81 .88
Net realized and unrealized gains (losses) on investments (1.53) 1.03 .33 .87 .13
Total from operations (.66) 1.90 1.15 1.68 1.01
Distribution to shareholders:
From investment income - net (.87) (.87) (.81) (.86) (.87)
From net realized gains -- (.01) (.01) -- --
Excess distributions of net realized gains -- (.43) (.21) -- --
Total distributions to shareholders (.87) (1.31) (1.03) (.86) (.87)
Net asset value, end of year $ 10.40 $ 11.93 $ 11.34 $ 11.22 $ 10.40
Total Return@ (5.22%) 12.76% 7.08% 14.68% 8.87%
Net assets end of year (000s omitted) $98,314 $92,589 $28,490 $8,503 $4,945
Ratio of expenses to average daily net assets .55% .57% .67% .75% .75%
Ratio of net investment income to average daily net assets 7.59% 7.15% 7.08% 7.42% 8.27%
Portfolio turnover rate 142% 125% 83% 25% 35%

</TABLE>

<S> <C>
HIGH YIELD SERIES 1994**
Net asset value, beginning of period $ 10.00
Operations:
Investment income - net .71
Net realized and unrealized gains (losses) on investments (.53)
Total from operations .18

<PAGE>

Distribution to shareholders:
From investment income - net (.71)
Net asset value, end of period $ 9.47
Total Return@ (.75%)
Net assets end of period (000s omitted) $13,706
Ratio of expenses to average daily net assets .75%*
Ratio of net investment income to average daily net assets 10.44%*
Portfolio turnover rate 20%

<FN>

* Annualized.

** For the Period May 2, 1994 (commencement of operations) to December 31,
1994. The portfolio's inception was April 26, 1994, when it was initially
capitalized. However, the portfolio's shares did not become effectively
registered under the Securities Act of 1933 until May 2, 1994. Supplementary
information is not presented for the period from April 26, 1994, through May
2, 1994, as the portfolio's shares were not registered during that period.

@ These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions.
</TABLE>

Year Ended December 31,
ASSET ALLOCATION SERIES 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>

Net asset value, beginning of year $ 14.14 $ 13.28 $ 12.81 $ 10.37 $ 10.59
Operations:
Investment income - net .56 .52 .62 .59 .57
Net realized and unrealized gains (losses)
on investments (.58) .92 .47 2.43 (.20)
Total from operations (.02) 1.44 1.09 3.02 .37
Distribution to shareholders:
From investment income - net (.56) (.52) (.62) (.58) (.59)
From net realized gains -- (.06) -- -- --
Total distributions to shareholders (.56) (.58) (.62) (.58) (.59)
Net asset value, end of year $ 13.56 $ 14.14 $ 13.28 $ 12.81 $ 10.37
Total Return@ (.31%) 9.79% 6.95% 27.65% 2.01%
Net assets end of year (000s omitted) $260,593 $204,603 $89,076 $31,821 $13,153
Ratio of expenses to average daily net assets .56% .56% .60% .70% .85%
Ratio of net investment income to average daily
net assets 4.05% 3.72% 4.78% 5.04% 5.40%
Portfolio turnover rate 73% 74% 54% 42% 75%

GROWTH & INCOME SERIES 1994**
Net asset value, beginning of period $ 10.00
Operations:
Investment income - net .21
Net realized and unrealized gains
(losses) on investments .07
Total from operations .28
Distribution to shareholders:
From investment income - net (.21)
Net asset value, end of period $ 10.07

Total Return@ 1.74%
Net assets end of period (000s omitted) $16,276
Ratio of expenses to average daily net assets .86%*
Ratio of net investment income to average daily
net assets 3. 12%*
Portfolio turnover rate 2%

<FN>
* Annualized.

** For the Period May 2, 1994 (commencement of operations) to December 31,
1994. The portfolio's inception was April 26, 1994, when it was initially
capitalized. However, the portfolio's shares did not become effectively
registered under the Securities Act of 1933 until May 2, 1994.
Supplementary information is not presented for the period from April 26,
1994, through May 2, 1994, as the portfolio's shares were not registered
during that period.

@ These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions.
</TABLE>

Year Ended December 31,
GROWTH STOCK SERIES 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>

Net asset value, beginning of year $ 22.92 $ 21.15 $ 20.68 $ 13.57 $ 14.26
Operations:
Investment income - net .18 .09 .18 .22 .38
Net realized and unrealized gains (losses) on
investments (.81) 1.77 .47 7.11 (.69)
<PAGE>
Total from operations (.63) 1.86 .65 7.33 (.31)
Distribution to shareholders:
From investment income - net (.18) (.09) (.18) (.22) (.38)
Net asset value, end of year $ 22.11 $ 22.92 $ 21.15 $ 20.68 $ 13.57
Total Return@ (2.82%) 8.78% 2.94% 53.50% (3.10%)
Net assets end of year (000s omitted) $377,483 $304,293 $188,172 $100,690 $25,623
Ratio of expenses to average daily net assets .68% .69% .76% .81% 1.01%
Ratio of net investment income to average
daily net assets .81% .46% .92% 1.28% 2.72%
Portfolio turnover rate 19% 26% 24% 31% 50%
</TABLE>

<TABLE>
<CAPTION>
Year Ended December 31,
<S> <C> <C> <C>
GLOBAL GROWTH SERIES 1994 1993 1992***
Net asset value, beginning of period $ 12.77 $ 10.86 $ 9.82
Operations:
Investment income - net .10 .06 .05
Net realized and unrealized gains
(losses) on investments (.46) 1.91 1.04
Total from operations (.36) 1.97 1.09
Distribution to shareholders:
From investment income - net (.10) (.06) (.05)
Net asset value, end of period $ 12.31 $ 12.77 $ 10.86
Total Return@ (2.98%) 17.92% 10.88%
Net assets end of period (000s omitted) $144,647 $ 75,882 $ 11,091
Ratio of expenses to average daily net assets .81% 1.02% 1.22%*
Ratio of net investment income to average
daily net assets .82% .53% .73%*
Portfolio turnover rate 20% 19% 21%

AGGRESSIVE GROWTH SERIES 1994**
Net asset value, beginning of period $ 10.03
Operations:
Investment income - net .08
Net realized and unrealized gains
(losses) on investments (.23)
Total from operations (.15)
Distribution to shareholders:
From investment income - net (.08)
Net asset value, end of period $ 9.80

Total Return@ (1.89%)
Net assets end of period (000s omitted) $13,526
Ratio of expenses to average daily net assets .88%*
Ratio of net investment income to average daily
net assets 1.24%*
Portfolio turnover rate 5%
<FN>
* Annualized.

** For the Period May 2, 1994 (commencement of operations) to December 31,
1994. The portfolio's inception was April 26, 1994, when it was initially
capitalized. However, the portfolio's shares did not become effectively
registered under the Securities Act of 1933 until May 2, 1994.
Supplementary information is not presented for the period from April 26,
1994, through May 2, 1994, as the portfolio's shares were not registered
during that period.

*** For the Period May 1, 1992 (commencement of operations) to December 31,
1992. The portfolio's inception was April 13, 1992, when it was initially
capitalized. However, the portfolio's shares did not become effectively
registered under the Securities Act of 1933 until May 1, 1992.
Supplementary information is not presented for the period from April 13,
1992, through May 1, 1992, as the portfolio's shares were not registered
during that period.

@ These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions.
</TABLE>

INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Fortis Series Fund, Inc.:

We have audited the accompanying statements of assets and liabilities, including
the schedules of investments in securities, of Money Market Series, U.S.
Government Securities Series, Diversified Income Series, High Yield Series,
Asset Allocation Series, Growth & Income Series, Growth Stock Series, Global
Growth Series and Aggressive Growth Series (series within Fortis Series Fund,
Inc.) as of December 31, 1994 and the related statements of operations for the
year then ended (period from April 26, 1994
<PAGE>

to December 31, 1994 for High Yield Series, Growth & Income Series and
Aggressive Growth Series), the statements of changes in net assets for each of
the years in the two-year period then ended (period from April 26, 1994 to
December 31, 1994 for High Yield Series, Growth & Income Series and Aggressive
Growth Series), and the financial highlights for each of the years in the five-
year period ended December 31, 1994 (for each of the years in the two-year
period ended December 31, 1994 and the period from May 1, 1992 to December 31,
1992 for Global Growth Series and for the period from May 2, 1994 to December
31, 1994 for High Yield Series, Growth & Income Series and Aggressive Growth
Series). These financial statements and the financial highlights are the
responsibility of fund management. Our responsibility is to express an opinion
on these financial statements and the financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Investment securities held in custody are confirmed to us by the
custodian. As to securities purchased and sold but not received or delivered, we
request confirmations from brokers, and where replies are not received, we carry
out other appropriate auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of
Money Market Series, U.S. Government Securities Series, Diversified Income
Series, High Yield Series, Asset Allocation Series, Growth & Income Series,
Growth Stock Series, Global Growth Series and Aggressive Growth Series as of
December 31, 1994 and the results of their operations, changes in their net
assets and the financial highlights for the periods stated in the first
paragraph above, in conformity with generally accepted accounting principles.

KPMG Peat Marwick LLP

Minneapolis, Minnesota
February 10, 1995

DIRECTORS

RICHARD W. CUTTING, CPA and Financial Consultant
ALLEN R. FREEDMAN, Chairman and Chief Executive Officer, Fortis, Inc.; Managing
Director of Fortis International, N.V
DR. ROBERT M. GAVIN, President, Macalester College
BENJAMIN S. JAFFRAY, Chairman, Sheffield Group, Ltd.
JEAN L. KING, President, Communi - King
EDWARD M. MAHONEY, Prior to January 1995, Chairman and Chief Executive Officer,
Fortis Advisers, Inc., Fortis Investors, Inc.
THOMAS R. PELLETT, Prior to January, 1991, Senior Vice President -
Administration and Corporate Affairs and Director, Pet Inc.
ROBB L. PRINCE, Vice President and Treasurer, Jostens, Inc.
LEONARD J. SANTOW, Principal, Griggs & Santow, Inc.
JOSEPH M. WIKLER, Prior to January, 1994, Director of Research, Chief Investment
Officer, Principal, and Director, The Rothschild Co.

OFFICERS

DEAN C. KOPPERUD, President and Director
STEPHEN M. POLING, Vice President
DENNIS M. OTT, Vice President
JAMES S. BYRD, Vice President
ROBERT C. LINDBERG, Vice President
KEITH R. THOMSON, Vice President
ROBERT W. BELTZ, JR., Vice President
ROBERT J. CLANCY, Vice President
THOMAS D. GUALDONI, Vice President
<PAGE>

LARRY A. MEDIN, Vice President
JON H. NICHOLSON, Vice President
JOHN W. NORTON, Vice President
DAVID A. PETERSON, Vice President
MICHAEL J. RADMER, Secretary
TAMARA L. FAGELY, Treasurer
DAVID G. CARROLL, 2nd Vice President
CHRIS J. NEUHARTH, 2nd Vice President

INVESTMENT MANAGER, REGISTRAR AND TRANSFER AGENT, Fortis Advisers, Inc., Box
64284, St. Paul, Minnesota 55164
PRINCIPAL UNDERWRITER, Fortis Investors, Inc., Box 64284, St. Paul, Minnesota
55164
CUSTODIAN, First Bank, National Association, Minneapolis, Minnesota
GENERAL COUNSEL, Dorsey &Whitney, Minneapolis, Minnesota
INDEPENDENT AUDITORS, KPMGPeat Marwick LLP, Minneapolis, Minnesota
THE USE OF THIS MATERIAL IS AUTHORIZED ONLY WHEN PRECEDED OR ACCOMPANIED BY A
PROSPECTUS.

<PAGE>
FORTIS SERIES FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES

(Unaudited)

March 31, 1995

International Global Global
Stock Bond Asset Allocation
Series Series Series
------ ------ ------
<S> <C> <C> <C>

ASSETS:
Investments in securities, as detailed
in the accompanying schedule, at market
cost ($7,687,086; $6,474,278;
$7,418,162; respectively) (Note A) $ 7,767,814 $ 6,863,455 $ 7,710,508
Cash on deposit with custodian -- 667,746 --
Foreign currency on deposit with custodian 1,381 39,980 --
Receivables:

Forward foreign currency contracts
held, at market (Notes A and C) 267,178 1,818,816 149,395
Interest and dividends 18,930 107,179 99,945
Investment securities sold (Note A) 2,319 525,000 72,870
Subscriptions of capital stock 41,222 17,356 204,485
Prepaid expenses 8,075 8,029 7,836
------------- ------------- -------------
TOTAL ASSETS 8,106,919 10,047,561 8,245,039
------------- ------------- -------------
LIABILITIES:
Payable for investment securities purchased (Note A) 356,733 713,851 65,128
Forward foreign currency contracts
held, at market (Notes A and C) 265,362 1,820,155 147,786
Payable for investment advisory
and management fees (Note B) 4,924 3,949 5,484
Accounts payable and accrued expenses 5,746 5,628 5,136
------------- ------------- -------------
TOTAL LIABILITIES 632,765 2,543,583 223,534
------------- ------------- -------------
NET ASSETS:
Net proceeds of capital stock, par
value $.01 per share - authorized
20,000,000,000 shares; outstanding
743,881; 680,040; and 764,637 shares,
respectively 7,397,296 6,925,893 7,681,895
Unrealized appreciation of investments in
securities and other assets and liabilities
denominated in foreign currency 80,384 393,205 297,133
Undistributed net investment income 20,074 163,891 37,087
Accumulated not realized gain (loss)
from sale of investments and
foreign currency (23,600) 20,989 5,390
------------- ------------- -------------
TOTAL NET ASSETS $ 7,474,154 $ 7,503,978 $ 8,021,505
------------- ------------- -------------
------------- ------------- -------------
NET ASSET VALUE PER SHARE $10.05 $11.03 $10.49
------------- ------------- -------------
------------- ------------- -------------

</TABLE>

See accompanying Notes to Financial Statements.

<PAGE>

FORTIS SERIES FUND, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For the Period from December 14, 1994 to March 31, 1995

International Global
Stock Global Bond Asset Allocation
Series Series Series
------ ------ ------

<S> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income $ 23,168 $ 82,153 $ 53,136
Dividend income 17,603 -- 10,890
------------- ------------- -------------
Total Income* 40,771 82,153 64,026
------------- ------------- -------------
Expenses:
Investment advisory and
management fees (Note B) 12,316 10,071 13,635
Custodian fees 4,890 4,807 4,849
Legal and auditing fees (Note B) 2,701 2,645 2,839
Shareholders' notices and reports 550 541 545
Directors' fees and expenses 135 132 133
Registration fees 122 120 99
Other 57 74 92
------------- ------------- -------------
Total Expenses 20,771 18,390 22,192
------------- ------------- -------------
NET INVESTMENT INCOME 20,000 63,763 41,834
------------- ------------- -------------

Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency (Note A):
Net realized gain (loss) from:
Investments (23,600) 20,989 5,390
Foreign currency transactions 74 100,128 (4,747)
Net change in unrealized appreciation
(depreciation) of:
Investments 80,728 138,647 200,487
Translation of assets and
liabilities denominated
in foreign currency (344) 254,558 96,646
------------- ------------- -------------
NET GAIN ON INVESTMENTS AND FOREIGN
CURRENCY 56,858 514,322 297,776
------------- ------------- -------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 76,858 $ 578,085 $ 339,610
------------- ------------- -------------
------------- ------------- -------------

<FN>
* Net of foreign withholding taxes of $575; $4,969; and $214; respectively
</TABLE>

See accompanying Notes to Financial Statements.

<PAGE>

FORTIS SERIES FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
GLOBAL BOND SERIES

Period Ended
March 31, 1995
(Unaudited)
--------------
<S> <C>
OPERATIONS:
Net investment income $ 63,763
Net realized gain from
security transactions 20,989
Net realized gain from
foreign currency transactions 100,128
Net change in unrealized appreciation
(depreciation) of investments 138,647
Net change in unrealized appreciation
(depreciation) of translation of
assets and liabilities
denominated in foreign currency 254,558
--------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 578,085
--------------
CAPITAL STOCK SOLD AND REPURCHASED:
Proceeds from sale of 681,607 shares
(Note B) 6,942,067
Less cost of repurchase of 1,567 shares (16,174)
--------------
Net Increase of 680,040 shares 6,925,893
--------------
TOTAL INCREASE IN NET ASSETIS 7,503,978
--------------
NET ASSETS:
Beginning of period --
--------------
End of period (includes undistributed
net investment income of $163,891) $ 7,503,978
--------------
--------------

</TABLE>

See accompanying Notes to Financial Statements.

<PAGE>

FORTIS SERIES FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS

INTERNATIONAL STOCK SERIES

Period Ended
March 31, 1995
(Unaudited)
---------------
<S> <C>
OPERATIONS:
Net investment income $ 20,000
Net realized gain from
security transactions (23,600)
Net realized gain from
foreign currency transactions 74
Net change in unrealized appreciation
(depreciation) of investments 80,728
Net change in unrealized appreciation
(depreciation) of translation of
assets and liabilities
denominated in foreign currency (344)
-------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 76,858
-------------

CAPITAL STOCK SOLD AND REPURCHASED:
Proceeds from sale of 750,286 shares
(Note B) 7,460,081
Less cost of repurchase of 6,405 shares 62,785
-------------
Net Increase of 743,881 shares 7,397,296
-------------
TOTAL INCREASE IN NET ASSETS 7,474,154
-------------
NET ASSETS:
Beginning of period --
-------------
End of period (includes undistributed
net investment income of $20,074) $ 7,474,154
-------------
-------------

</TABLE>

See accompanying Notes to Financial Statements.

<PAGE>

FORTIS SERIES FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS

GLOBAL ASSET ALLOCATION SERIES

Period Ended
March 31, 1995
(Unaudited)
--------------
<S> <C>
OPERATIONS:
Net investment income $ 41,834
Net realized gain from
security transactions 5,390
Net realized gain from
foreign currency transactions (4,747)
Net change in unrealized appreciation
(depreciation) of investments 200,487
Net change in unrealized appreciation
(depreciation) of translation of
assets and liabilities
denominated in foreign currency 96,646
--------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 339,610
--------------
CAPITAL STOCK SOLD AND REPURCHASED:
Proceeds from sale of 765,043 shares
(Note B) 7,686,026
Less cost of repurchase of 406 shares (4,131)
--------------
Net Increase of 764,637 shares 7,681,895
--------------
TOTAL INCREASE IN NET ASSETS 8,021,505
--------------
NET ASSETS:
Beginning of period --
--------------
End of period (includes undistributed
net investment income of $37,087) $ 8,021,505
--------------
--------------

</TABLE>

<PAGE>

FORTIS SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS

(Unaudited)

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The fund is a diversified, open-end management investment company which
currently is comprised of twelve separate investment portfolios and series
of capital stock including International Stock Series, Global Bond Series,
and Global Asset Allocation Series. The Articles of Incorporation of Fortis
Series Fund, Inc., permits the Board of Directors to create additional
portfolios in the future.

Shares of the fund will not be sold directly to the public, but sold only to
Fortis Benefits Insurance Company (formerly Western Life Insurance Company)
separate accounts in connection with variable insurance contracts and policies.

The inception of International Stock Series, Global Bond Series, and Global
Asset Allocation Series was December 14, 1994 and the commencement of operations
was January 3, 1995.

SECURITY VALUATION:
Investments in securities traded on a national securities exchange or on the
NASDAQ National Market System are valued at the last reported sales price;
listed securities and over-the-counter securities for which no sale was reported
and securities traded in the over-the-counter market are valued at the last
reported bid price. Long-term debt securities are valued at current market
prices on the basis of valuations furnished by an independent pricing service.
Short-term investments, with maturities of less than 60 days when acquired, or
which subsequently are within 60 days of maturity, are valued at amortized cost.

SECURITIES PURCHASED ON A WHEN-ISSUED BASIS:
Delivery and payment for securities that have been purchased on a forward
commitment or when-issued basis can take place a month or more after the
transaction date. During this period, such securities are subject to market
fluctuation and the portfolio maintains, in a segregated account with its
custodian, assets with a market value equal to the amount of its purchase
commitments. As of March 31, 1995 the portfolios have entered into no
outstanding when-issued or forward commitments.

FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS:
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars at the closing rate of exchange.
Foreign currency amounts related to the purchase or sale of securities,
income and expenses are translated at the exchange rate on the transaction
date. The effect of changes in foreign exchange rates on realized and
unrealized security gains or losses is reflected as a component of such gains
or losses. In the statement of operations, net realized gains or losses from
foreign currency transactions may arise from sales of foreign currency,
closed forward contracts, exchange gains or losses realized between the trade
date and settlement dates on securities transactions, and other translation
gains or losses on dividends, interest income and foreign

<PAGE>

withholding taxes. It is not practical to identify that portion of realized and
unrealized gain (loss) arising from changes in the exchange rates from the
portion arising from changes in the market value of investments.

SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME:
Security transactions are accounted for on the trade date and dividend income is
recorded on the ex-dividend date. Interest income is recorded on the accrual
basis. Realized security gains and losses are determined using the identified
cost method. For financial reporting purposes, except for original issue
discount, each portfolio does not amortize bond premium and market discount.

The cost of purchases and proceeds from sales of securities (other than
short-term securities) for the other portfolios were as follows:

Cost of Proceeds
Purchases from Sales
- ---------------------------------------------------------------------------
<S> <C> <C>
International Stock Series $ 7,283,956 $ 422,469
Global Bond Series 5,796,071 1,342,782
Global Asset Allocation Series 7,054,893 221,479
</TABLE>

FEDERAL TAXES:
The portfolios intend to qualify, under the Internal Revenue Code, as regulated
investment companies and if so qualified, will not have to pay federal income
taxes to the extent their taxable net income is distributed. For tax purposes,
each portfolio is a single taxable entity. On a calendar year basis, each
portfolio intends to distribute substantially all of its net investment income
and realized gains, if any.

Net investment income and net realized gains differ for financial statement and
tax purposes primarily because of the recognition of market discount and foreign
currency gains (losses) as ordinary income (loss) and the deferral of "wash
sale" losses for tax purposes. The character of distributions made during the
year from net investment income or net realized gains may also differ from its
ultimate characterization for federal income tax purposes. The effect on
dividend distributions of certain current year permanent book-to-tax differences
is reflected as excess distributions of net realized gains or tax return of
capital in the statements of changes in net assets.

On the Statements of Assets and Liabilities, due to permanent book-to-tax
differences, reclassification adjustments in the following amounts have been
made to increase (decrease) accumulated net realized gain (loss) with an
offsetting increase (decrease) to undistributed net invesment income.

Global Global International
Asset Allocation Bond Stock
Series Series Series
---------------- --------- -------------
<S> <C> <C> <C>
Accumulated Net Realized Gain (Loss) $4,747 ($100,128) $(74)
Undistributed Net Investment Income $(4,747) $100,128 $74

</TABLE>

<PAGE>

B. PAYMENTS TO RELATED PARTIES:Fortis Advisers, Inc., is the investment adviser
for each series. Investment advisory and management fees are based on each
series' average daily net assets and decrease in reduced percentages as average
daily net assets increase.

Annual
Series Average Net Assets Advisory Fee
- ---------------------------------------------------------------------------
International For the first $100 million .85%
Stock Series For assets over $100 million .80%
Global Bond For the first $100 million .75%
Series For assets over $100 million .65%
Global Asset For the first $100 million .90%
Allocation For assets over $100 million .85%
Series

Each portfolio has retained as sub-adviser under an investment sub-advisory
agreement to provide investment advice and, in general, to conduct the
management investment program of each portfolio, subject to the general control
of Advisers and the Board of Directors of the Fortis Series. Pursuant to the
sub-advisory agreements, each sub-adviser will regularly provide its respective
portfolio with investment research, advice and supervision and furnish
continuously an investment program for each portfolio consistent with its
investment objectives and policies, including the purchase, retention and
disposition of securities.

From its advisory fee, Advisers pays the following fees to each of the
sub-advisers:

Annual
Series Sub-Adviser Average Net Assets Advisory Fee
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
International Lazard-Freres For the first $100 million .45%
Stock Series Asset Management For assets over $100 million .375%

Global Bond Warburg Investment For the first $100 million .35%
Series Management For assets over $100 million .225%
International Ltd.

Global Asset Morgan Stanley For the first $100 million .50%
Allocation Asset Management For assets over $100 million .40%
Series Limited

</TABLE>

Out of its advisory fee, but not in excess thereof, Advisers will reimburse the
International Stock Series, the Global Bond Series and the Global Asset
Allocation Series for their expenses, until each series' net assets first reach
$10 million, to the extent that the expenses of the applicable series (including
the investment advisory fees, but excluding interest, taxes, brokerage fees and
comissions) exceed an amount equal, on an annual basis, to 2% of the average
daily net assets of the applicable portfolios.

<PAGE>

Legal fees and expenses aggregating $1,956 for the International Stock Series,
$2,404 for the Global Bond Series, and $2,596 for the Global Asset Allocation
Series were paid to a law firm of which the secretary of the fund is a partner.

C. FORWARD FOREIGN CURRENCY CONTRACTS

At March 31, 1995, the International Stock Series, the Global Bond Series,
and the Global Asset Allocation Series entered into forward foreign
currency exchange contracts that obligated the portfolio to deliver/receive
currencies at a specified future date. The unrealized appreciation
(depreciation) of $(1,816), $(1,339), and $1,609, respectively, on these
contracts is included in the accompanying financial statements. The terms
of the open contracts are as follows:

International Stock Series
- --------------------------
U.S. Dollar U.S. Dollar
Currency To Value As Of Currency To Value As Of
Settle Date Be Delivered March 31, 1995 Be Received March 31, 1995
- -------------- ------------ -------------- ----------- ---------------
<S> <C> <C> <C> <C>
April 4, 1995 3,162 $ 2,319 2,283 $ 2,283
Australian Dollar U.S. Dollar
April 4, 1995 85,148 85,148 627,411 85,130
U.S. Dollar Swedish Krona
April 4, 1995 50,821 50,821 4,383,320 50,733
U.S. Dollar Japanese Yen
April 6, 1995 32,714 32,714 20,455 33,318
U.S. Dollar British Pound Sterling
April 6, 1995 23,889 23,889 27,952 24,823
U.S. Dollar Swiss Franc
April 13, 1995 33,758 33,758 20,841 33,945
U.S. Dollar British Pound Sterling
April 28, 1995 36,713 36,713 177,194 36,946
----------- ---------
U.S. Dollar French Franc
$ 265,362 $ 267,178

</TABLE>

<PAGE>

GLOBAL BOND SERIES

U.S. Dollar U.S. Dollar
Currency to Value As Of Currency To Value As Of
Settle Date Be Delivered March 31, 1995 Be Received March 31, 1995
- ----------- ------------ -------------- ----------- --------------
<S> <C> <C> <C> <C>
May 18, 1995 144,000 $105,540 104,184 $104,184
Australian Dollars U.S. Dollars
May 18, 1995 191,000 309,283 437,940 300,734
British Pound Sterling Deutsche Marks
May 18, 1995 427,840 305,792 191,000 311,710
Deutsche Marks British Pound Sterling
May 18, 1995 401,356 286,863 450,000 292,414
Deutsche Marks Netherland Guilders
May 18, 1995 239,278 238,278 1,185,000 246,080
U.S. Dollars French Francs
May 18, 1995 24,138,000 280,594 271,793 271,793
Japenese Yen U.S. Dollars
May 18, 1995 430,000 292,805 401,358 286,921
---------- ----------
Netherland Guilders Deutshe Marks
$1,820,155 $1,818,815

</TABLE>

GLOBAL ASSET ALLOCATION SERIES

U.S. Dollar U.S. Dollar
Currency To Value As Of Currency To Value As Of
Settle Date Be Delivered March 31, 1995 Be Received March 31, 1995
- ----------- ------------ -------------- ----------- --------------
<S> <C> <C> <C> <C>
June 20, 1995 74,618 $ 74,618 114,910 $ 74,777
U.S. Dollar New Zealand Dollar
June 20, 1995 100,000 73,168 74,518 74,518
----------- ---------
Australian Dollar U.S. Dollar
$147,785 149,395

</TABLE>

<PAGE>

D. FINANCIAL HIGHLIGHTS:
Selected per share historical data for each of the Series is presented based
upon weighted average fund shares outstanding.

International Global Global
Stock Bond Asset Allocation
Series Series Series
------ ------ ------
1995* 1995** 1995**
------------- ---------- ------------
<S> <C> <C> <C>
Not asset value,
beginning of period $10.00 $10.00 $10.00
-----------------------------------------------
Operations:
Investment income-net .03 .11 .06
-----------------------------------------------
Not realized and unrealized
gains (losses) on
investments .02 .92 .43
-----------------------------------------------
Total from operations .05 1.03 .49
-----------------------------------------------
Net asset value, end of period $10.05 $11.03 $10.49
-----------------------------------------------
Total Return@ .47% 10.35% 4.91%
Net assets end of period
(000s omitted) $ 7,474 $ 7,504 $8,022
Ratio of expenses to
average daily net assets 1.41%* 1.35%* 1.39%*
Ratio of net investment
income to average daily
net assets 1.37%* 4.68%* 2.62%*
Portfolio turnover rate 10% 32% 5%

<FN>
* Annualized.
** For the Period January 3, 1995 (commencement of operations) to March 31,
1995. The portfolio's inception was December 14, 1994, when it was
initially capitalized. However, the portfolio's shares did not become
effectively registered under the Securities Act of 1933 until January 3,
1995. Supplementary information is not presented for the period from
December 14, 1994, through January 3, 1995, as the portfolio's shares
were not registered during that period.
@ These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions. This does
not include the effect of any expenses associated with the variable
annuities or variable universal life policies.

</TABLE>

<PAGE>
PART C - OTHER INFORMATION

ITEM 24 FINANCIAL STATEMENTS AND EXHIBITS:

(b) Exhibits

(1) Copy of the Charter as now in effect;

(2) Copies of the existing bylaws or instruments corresponding thereto;

(3) Copies of any voting trust agreement with respect to more than 5 percent of
any class of equity securities of the Registrant;

Inapplicable

(4) Copies of all instruments defining the rights of holders of the securities
being registered, including where applicable, the relevant portion of the
articles of incorporation or bylaws of the Registrant;

Inapplicable

(5) Copies of all investment advisory contracts relating to the management of
the assets of the Registrant;

* and **

(6) Copies of each underwriting or distribution contract between the Registrant
and a principal underwriter, and specimens or copies of all agreements
between principal underwriters and dealers;

(7) Copies of all bonus, profit sharing, pension or other similar contracts or
arrangements wholly or partly for the benefit or directors or officers of
the Registrant in their capacity as such; if any such plan is not set forth
in a formal document, furnish a reasonably detailed description thereof;

Inapplicable

(8) Copies of all custodian agreements and depository contracts under Section
17(f) of the 1940 Act, with respect to securities and similar investments
of the Registrant, including the schedule of remuneration;

(9) Copies of all other material contracts not made in the ordinary course of
business which are to be performed in whole or in part at or after the date
of filing the Registration Statement;

Inapplicable
<PAGE>
(10) An opinion and consent of counsel as to the legality of the securities
being registered, indicating whether they will when sold be legally issued,
fully paid and non-assessable;

(11) Copies of any other opinions, appraisals or rulings and consents to the use
thereof relied on in the preparation of this Registration Statement and
required by Section 7 of the 1933 Act;

Consent of KPMG Peat Marwick LLP

(12) All financial statements omitted from Item 23;

Inapplicable

(13) Copies of any agreements or understandings made in consideration for
providing the initial capital between or among the Registrant, the
underwriter, adviser, promoter or initial stockholders and written
assurances from promoters or initial stockholders that their purchases were
made for investment purposes without any present intention of redeeming or
reselling;

Inapplicable

(14) Copies of the model plan used in the establishment of any retirement plan
in conjunction with which Registrant offers its securities, any
instructions thereto and any other documents making up the model plan. Such
form(s) should disclose the costs and fees charged in connection therewith;

Inapplicable

(15) Copies of any plan entered into by Registrant pursuant to Rule 12b-1 under
the 1940 Act, which describes all material aspects of the financing of
distribution of Registrant's shares, and any agreements with any person
relating to implementation of such plan;

Inapplicable

(16) Schedule for computation of each performance quotation provided in the
Registration Statement in response to Item 22 (which need not be audited);

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

* Incorporated by reference to Part C of Post-Effective Amendment Numbers 7,
11, 13 and 14 to Registrant's Registration Statement filed with the
Securities and Exchange Commission in March 1990, October 1992, February
1994, and October 1994, respectively.
** Incorporated by reference to Part C of Post-Effective Amendment Number 15
to Registrant's Registration Statement filed with the Securities and
Exchange Commission in March 1995.

<PAGE>
ITEM 25 PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:

Furnish a list or diagram of all persons directly or indirectly controlled
by or under common control with the Registrant and as to each person indicate
(1) if a company, the state or other sovereign power under the laws of which it
is organized; and (2) the percentage of voting securities owned or other basis
of control by the person, if any, immediately controlling it.

Inapplicable

ITEM 26 NUMBER OF HOLDERS OF SECURITIES:

State in substantially the tabular form indicated, as of a specified date
within 90 days prior to the date of filing, the number of record holders
of each class of securities of the Registrant:

The following table sets forth the number of holders of shares of Fortis
Series Fund, Inc. as of March 31, 1995.

(1) (2)
Number of
Title of Class Record Holders
-------------- --------------

Common shares, par value
$.01 per share, Series A
(Growth Stock Series) 1

Common shares, par value
$.01 per share, Series B
(U.S. Government Securities
Series) 1

Common shares, par value
$.01 per share, Series C
(Money Market Series) 1

Common shares, par value
$.01 per share, Series D
(Asset Allocation Series) 1

Common shares, par value
$.01 per share, Series E
(Diversified Income Series) 1

Common Shares, par value
$.01 per share, Series F
(Global Growth Series) 1

Common Shares, par value
$.01 per share, Series G
(High Yield Series) 1

Common Shares, par value
$.01 per share, Series H
(Growth & Income Series) 1

Common Shares, par value
$.01 per share, Series I
(Aggressive Growth Series) 1
<PAGE>
Common Shares, par value
$.01 per share, Series J
(International Stock Series) 1

Common Shares, par value
$.01 per share, Series K
(Global Bond Series) 1

Common Shares, par value
$.01 per share, Series L
(Global Asset Allocation
Series) 1

ITEM 27 INDEMNIFICATION:

State the general effect of any contract, arrangement or statute under which any
director, officer, underwriter or affiliated person of the Registrant is insured
or indemnified in any manner against any liability which may be incurred in such
capacity, other than insurance provided by any director, officer, affiliated
person or underwriter for their own protection.

Incorporated by reference to Post-effective Amendment Number 5 to
Registrant's Registration Statement, filed with the Securities and Exchange
Commission in February, 1988.

ITEM 28 BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER:

Describe any other business, profession, vocation or employment of a substantial
nature in which each investment adviser of the Registrant, and each director,
officer or partner, of any such investment adviser, is or has been, at any time
during the past two fiscal years, engaged for his own account or in the capacity
of director, officer, employee, partner or trustee.

In addition to those listed in the Statement of Additional Information:

Other business,
profession, vocation or
employment of a
Current Position substantial nature during
Name With Advisers past two fiscal years
- ---- ------------- ---------------------

Michael D. O'Connor Qualified Plan Officer Qualified Plan Officer of
Fortis Benefits Insurance
Company and Qualified
Plan Officer for
Investors.

ITEM 29 PRINCIPAL UNDERWRITERS:

(a) Furnish the name of each investment company (other than the Registrant) for
which each principal underwriter currently distributing securities of the
Registrant also acts as a principal underwriter, depositor or investment
adviser.

Fortis Advantage Portfolios, Inc.
Fortis Equity Portfolios, Inc.
Fortis Fiduciary Fund, Inc.
<PAGE>
Fortis Growth Fund, Inc.
Fortis Income Portfolios, Inc.
Fortis Money Portfolios, Inc.
Fortis Securities, Inc.
Fortis Tax-Free Portfolios, Inc.
Fortis Worldwide Portfolios, Inc.
Special Portfolios, Inc.
Variable Accounts C of Fortis Benefits Insurance Company
Variable Accounts D of Fortis Benefits Insurance Company

(b) Furnish the information required by the following table with respect to
each director, officer or partner of each principal underwriter named in
the answer to Item 21.

In addition to those listed in the Statement of Additional Information:

Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- -------------------------------------------------------------------------------
Carol M. Houghtby* Treasurer Accounting Officer

Thomas E. Erickson* Assistant Secretary Assistant Secretary

Gregory S. Swenson* Assistant Secretary Assistant Secretary

John E. Hite* Corporate Counsel
and Assistant Secretary Assistant Secretary
- -------------------------------------------------------------------------------

* The business address of these persons is 500 Bielenberg Drive, Woodbury,
Minnesota 55125

(c) Furnish the information required by the following table with respect to all
commissions and other compensation received by each principal underwriter
who is not an affiliated person of the Registrant or an affiliated person
of such an affiliated person, directly or indirectly, from the Registrant
during the Registrant's last fiscal year.

Inapplicable

ITEM 30 LOCATION OF ACCOUNTS AND RECORDS:

With respect to each account, book or other document required to be maintained
by Section 31(a) of the 1940 Act and the Rules (17 CFR 270, 31a-1 to 31a-3)
promulgated thereunder, furnish the name and address of each person maintaining
physical possession of each such account, book or other document.

Fortis Advisers, Inc., 500 Bielenberg Drive, Woodbury, Minnesota 55125

ITEM 31 MANAGEMENT SERVICE:

Furnish a summary of the substantive provisions of any management-related
service contract not discussed in Part I of this Form (because the contract was
not believed to be material to a purchaser of securities of the Registrant)
under which services are provided to the Registrant, indicating the parties to
the contract, the total dollars paid and by whom, for the last three fiscal
years.

Inapplicable
<PAGE>
ITEM 32 UNDERTAKINGS:

Furnish the following undertakings in substantially the following form in all
initial Registration Statements filed under the 1933 Act:

(a) An undertaking to file an amendment to the Registration Statement with
certified financial statements showing the initial capital received before
accepting subscriptions from any persons in excess of 25 if Registrant
proposes to raise its initial capital pursuant to Section 14(a) (3) of the
1940 Act:

Inapplicable

(b) An undertaking to file a post-effective amendment, using financial
statements which need not be certified, within four to six months from the
effective date of Registrant's 1933 Act Registration Statement.

Registrant has undertaken, on behalf of International Stock Series,
Global Bond Series and Global Asset Allocation Series, to file a post-
effective amendment, using financial statements which need not be
certified, within four to six months from the effective date of
Post-Effective Amendment No. 15 to the Registrant's 1933 Act
Registration Statement.

(c) If the information called for by Item 5A is contained in the latest annual
report to shareholders, an undertaking to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual
report to shareholders, upon request and without charge.

Inapplicable
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment to its
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment to its Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Woodbury, State of Minnesota, on April 26, 1995.

Fortis Series Fund, Inc.

By: /s/ Dean C. Kopperud
------------------------------
Dean C. Kopperud, President

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to Registration Statement has been signed below by the
following persons in the capacities and on the dates shown.

Signature and Title

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

/s/ Dean C. Kopperud Dated: April 26, 1995
- ----------------------------------------
Dean C. Kopperud, President
(principal executive officer)

/s/ Tamara L. Fagely Dated: April 26, 1995
- ----------------------------------------
Tamara L. Fagely, Treasurer
(principal financial and accounting officer)

Richard W. Cutting* Leonard J. Santow*
Director Director

Allen R. Freedman* Joseph M. Wikler
Director Director

Robert M. Gavin*
Director /s/ Dean C. Kopperud
-----------------------------------
Benjamin S. Jaffray* Dean C. Kopperud, Pro Se and
Director Attorney-in-Fact

Jean L. King* Dated: April 26, 1995
Director

Edward M. Mahoney* * Registrant's directors
Director executing Power of Attorney
dated March 30, 1995
Thomas R. Pellett*
Director

Robb L. Prince*
Director
<PAGE>
FORTIS SERIES FUND, INC.

POWER OF ATTORNEY
TO SIGN POST-EFFECTIVE AMENDMENTS
TO REGISTRATION STATEMENT

The undersigned, directors of FORTIS SERIES FUND, INC. (the "Company"),
hereby appoint MICHAEL J. RADMER, JOHN W. NORTON, and DEAN C. KEPPERUD, or any
one of them, as attorneys-in-fact for the purpose of signing in their names and
on their bahalf as directors of this Company and filing with the Securities and
Exchange Commission any and all post-effective amendments to the Registration
Statement of the Company on Form N-1A.

Dated: March 30, 1995 /s/ Richard W. Cutting
-------------------------------
RICHARD W. CUTTING, DIRECTOR

/s/ Allen R. Freedman
-------------------------------
ALLEN R. FREEDMAN, DIRECTOR

/s/ Robert M. Gavin
-------------------------------
DR. ROBERT M. GAVIN, DIRECTOR

/s/ Benjamin S. Jaffray
-------------------------------
BENJAMIN S. JAFFRAY, DIRECTOR

/s/ Jean L. King
-------------------------------
JEAN L. KING, DIRECTOR

/s/ Dean C. Kopperud
-------------------------------
DEAN C. KOPPERUD, DIRECTOR

/s/ Edward M. Mahoney
-------------------------------
EDWARD M. MAHONEY, DIRECTOR

/s/ Thomas R. Pellett
-------------------------------
THOMAS R. PELLETT, DIRECTOR

/s/ Robb L. Prince
-------------------------------
ROBB L. PRINCE, DIRECTOR

/s/ Leonard J. Santow,

-------------------------------
LEONARD J. SANTOW, DIRECTOR

/s/ Joseph M. Wikler
-------------------------------
JOSEPH M. WIKLER, DIRECTOR

<PAGE>
EXHIBIT 24(b)(11)

PEAT MARWICK LLP

4200 Norwest Center Telephone 612 341 2222 Telefax 612 341 0202
90 South Seventh Street
Minneapolis, MN 55402

INDEPENDENT AUDITORS' CONSENT

The Board of Directors
Fortis Series Fund, Inc.:

We consent to the use of our report included herein and the reference to our
Firm under the heading "Custodian; Counsel; Accountants" in the Statement of
Additional Information contained in Part B of the Registration Statement.

/s/ KPMG Peat Marwick LLP

KPMG Peat Marwick LLP

Minneapolis, Minnesota
April 19, 1995