FORTIS SERIES FUND INC, 485APOS, 1996-02-16

FORTIS SERIES FUND INC
485APOS, 1996-02-16

Previous: FORTIS BENEFITS INSURANCE CO VARIABLE ACCOUNT C, S-6EL24/A, 1996-02-16

Next: DEFINED ASSET FUNDS CORPORATE INCOME FUND MON PYMT SER 257, 24F-2NT, 1996-02-16

<PAGE>

1993 Act Registration No. 33-3920
1940 Act Registration No. 811-4615

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 16, 1996

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

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. ________
Post-Effective Amendment No. 18

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 18

(Check appropriate box or boxes.)

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

500 BIELENBERG DRIVE, WOODBURY, MINNESOTA 55125
(Address of Principal Executive Offices) (Zip Code)

(612) 738-4000
(Registrant's Telephone Number, including Area Code)

SCOTT R. PLUMMER, ESQ., ASST. SECRETARY
500 BIELENBERG DRIVE, WOODBURY, MINNESOTA 55125
(Name and Address of Agent for Service)

Copy to:
Michael J. Radmer, Esq.
Dorsey & Whitney P.L.L.P.
220 South Sixth Street
Minneapolis, Minnesota 55402

It is proposed that this filing will become effective (check appropriate box):

_____ immediately upon filing pursuant to paragraph (b) of Rule 485
_____ on (specify date) pursuant to paragraph (b) of Rule 485
_____ 75 days after filing pursuant to paragraph (a) of Rule 485
X on May 1, 1996, pursuant to paragraph (a) of Rule 485

The Registrant has registered an indefinite number of shares of common stock
under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment
Company Act of 1940. A Rule 24f-2 Notice for the Registrant's most recent
fiscal year will be filed by the Registrant on or before February 28, 1996.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

FORTIS SERIES FUND, INC.
Registration Statement on Form N-1A
- --------------------------------------------------------------------------------
CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
- --------------------------------------------------------------------------------

Item No. of
Form N-1A Caption in Prospectus
- --------- ---------------------

<S> <C>
1. Cover Page . . . . . . . . . . . . . . . . . . . . Cover Page (no caption)

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

3. Condensed Financial Information. . . . . . . . . . Financial Highlights

4. General Description of Registrant. . . . . . . . . Organization and Classification, The Separate
Accounts and the Contracts, Investment
Objectives and Policies; Risk Considerations

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

5A. Management's Discussion of Fund
Performance. . . . . . . . . . . . . . . . . . . . Financial Highlights

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

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

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

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

Caption in Statement of Additional Information
----------------------------------------------

<S> <C>
10. Cover Page . . . . . . . . . . . . . . . . . . . . Cover Page (no caption)

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

12. General Information and History. . . . . . . . . . Organization and Classification

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

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

15. Control Persons and Principal Holders
of Securities. . . . . . . . . . . . . . . . . . . Capital Stock

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 and Pricing
of Securities Being Offered. . . . . . . . . . . . Computation of Net Asset Value and Pricing;
Redemption

<PAGE>

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

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

22. Calculation of Performance Data. . . . . . . . . . Performance

23. Financial Statements . . . . . . . . . . . . . . . Financial Statements
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C>
PROSPECTUS DATED
UVW-Registered Trademark- FORTIS SERIES FUND, INC. May 1, 1996
MAILING ADDRESS: (A series fund with STREET ADDRESS:
P.O. BOX 64582 fifteen 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 fifteen 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, except the Global Bond 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 to maximize total
return (from income and market value change), while providing shareholders
with a high level of current income consistent with prudent investment risk
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 to maximize total return
(from income and market value change), 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 to maximize total return (from
income and market value change), 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 primary objective of the "Value Series" is short and long-term capital
appreciation. Current income is only a secondary objective. The Series invests
primarily in equity securities and selects stocks based on the concept of
fundamental value.

- - 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 objective of the "S&P 500 Index Series" is to replicate the total return
of the Standard & Poor's 500 Composite Stock Price Index primarily through
investments in equity securities.

- - The primary objective of the "Blue Chip Stock Series" is long-term growth of
capital. Current income is a secondary objective, and many of the stocks in
this Series' portfolio are expected to pay dividends.

- - 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, 1996) 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............................. 6
The Separate Accounts and the Contracts..................... 6
Investment Objectives and Policies; Risk Considerations..... 7
- Money Market Series................................... 7
- U.S. Government Securities Series..................... 8
- Diversified Income Series............................. 8
- Global Bond Series.................................... 9
- High Yield Series..................................... 9
- Asset Allocation Series............................... 11
- Global Asset Allocation Series........................ 11
- Value Series.......................................... 12
- Growth & Income Series................................ 12
- S&P 500 Index Series.................................. 12
- Blue Chip Stock Series................................ 13
- Growth Stock Series................................... 14
- Global Growth Series.................................. 14
- International Stock Series............................ 15
- Aggressive Growth Series.............................. 16
- Investment Policies, Restrictions, and Risks
Applicable to the Global Bond Series, Global Asset
Allocation Series, and International Stock Series... 16
- Investment Policies, Restrictions, and Risks
Applicable to More Than One Series.................. 17
- General Risks to Consider............................. 22

<CAPTION>
PAGE
<S> <C>
Management.................................................. 23
- Board of Directors.................................... 23
- The Investment Adviser/Transfer Agent/Dividend Agent.. 23
- The Sub-Advisers...................................... 23
- Expenses and Allocations Among Series................. 24
- Brokerage Allocation.................................. 25
- Periodic Reports...................................... 25
Capital Stock............................................... 25
- Voting Privileges..................................... 25
Dividends and Capital Gains Distributions................... 25
Taxation.................................................... 25
Purchase and Redemption of Shares........................... 25
- Generally............................................. 25
- Offering Price........................................ 25
- Transfers Among Subaccounts........................... 26
- The Underwriter....................................... 26
- Redemption............................................ 26
Appendix.................................................... 26
</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 and
the independent auditors' report of KPMG Peat Marwick LLP found in the Fund's
1995 Annual Report to Shareholders, which may be obtained without charge. 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 Value Series, S&P 500 Index Series, and Blue Chip Stock Series did
not commence operations until May 1, 1996, and therefore no data is presented.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31,
MONEY MARKET SERIES 1995 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 1995 1994 1993 1992 1991 1990 1989 1988 1987
<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
- ---------------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income -- net.... .71 .74 .78 .77 .76 .76 .85 .73
Net realized and unrealized
gains (losses) on
investments................ (1.54) .46 .15 .98 .31 .45 (.42) (.57)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from operations......... (.83) 1.20 .93 1.75 1.07 1.21 .43 .16
- ---------------------------------------------------------------------------------------------------------------------------------
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
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return(@)............... (6.44)% 9.45% 6.14% 14.36% 7.93% 13.14% 6.36% 1.60%
Net assets end of period (000s
omitted)..................... $172,656 $235,588 $132,683 $49,751 $10,750 $2,520 $1,959 $2,462
Ratio of expenses to average
daily net assets............. .53% .52% .57% .64% .76% .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%
Portfolio turnover rate....... 187% 141% 135% 77% 17% 23% 83% 179%
- ---------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
U.S. GOVERNMENT SECURITIES
SERIES 1986*
<S> <C>
- ------------------------------
Net asset value, beginning of
period....................... $10.00
- ------------------------------
Operations:
Investment income -- net.... .11
Net realized and unrealized
gains (losses) on
investments................ .03
- ------------------------------
Total from operations......... .14
- ------------------------------
Distribution to shareholders:
From investment income --
net........................ --
From net realized gains..... --
Excess distributions of net
realized gains............. --
- ------------------------------
Total distributions to
shareholders................. --
- ------------------------------
Net asset value, end of
period....................... $10.14
- ------------------------------
Total Return(@)............... 1.40%
Net assets end of period (000s
omitted)..................... $2,128
Ratio of expenses to average
daily net assets............. .75%**
Ratio of net investment income
to average daily net
assets....................... 5.90%**
Portfolio turnover rate....... 1%
- ------------------------------
<FN>
*Period from October 27, 1986 to December 31, 1986.
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
DIVERSIFIED INCOME SERIES 1995 1994 1993 1992 1991 1990 1989 1988*
<S> <C> <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>
FOR THE PERIOD
FROM
JANUARY 3, 1995
TO DECEMBER 31,
GLOBAL BOND SERIES 1995*
<S> <C>
- -------------------------------------------------------------------
Net asset value, beginning of period..............
- -------------------------------------------------------------------
Operations:
Investment income -- net........................
Net realized and unrealized gains (losses) on
investments....................................
- -------------------------------------------------------------------
Total from operations.............................
- -------------------------------------------------------------------
Distribution to shareholders:
From investment income -- net...................
- -------------------------------------------------------------------
Net asset value, end of period....................
- -------------------------------------------------------------------
Total Return(@)...................................
Net assets end of period (000s omitted)...........
Ratio of expenses to average daily net assets.....
Ratio of net investment income to average daily
net assets.......................................
Portfolio turnover rate...........................
- -------------------------------------------------------------------
<FN>
*The Series commenced operations on January 3, 1995. The Series' inception was
December 14, 1994, when it was initially capitalized. However, the Series'
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 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
HIGH YIELD SERIES 1995 DECEMBER 31, 1994*
<S> <C> <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.
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
ASSET ALLOCATION SERIES 1995 1994 1993 1992 1991 1990 1989 1988 1987*
<S> <C> <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>
FOR THE
PERIOD
FROM
JANUARY 3,
1995
TO
DECEMBER
GLOBAL ASSET ALLOCATION SERIES 31, 1995*
<S> <C>
- -----------------------------------------------------------------------------------------------------------
Net asset value, beginning of period...........................................................
- -----------------------------------------------------------------------------------------------------------
Operations:
Investment income -- net.....................................................................
Net realized and unrealized gains (losses) on investments....................................
- -----------------------------------------------------------------------------------------------------------
Total from operations..........................................................................
- -----------------------------------------------------------------------------------------------------------
Distribution to shareholders:
From investment income -- net................................................................
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period.................................................................
- -----------------------------------------------------------------------------------------------------------
Total Return(@)................................................................................
Net assets end of period (000s omitted)........................................................
Ratio of expenses to average daily net assets..................................................
Ratio of net investment income to average daily net assets.....................................
Portfolio turnover rate........................................................................
- -----------------------------------------------------------------------------------------------------------
<FN>
*The Series commenced operations on January 3, 1995. The Series' inception was
December 14, 1994, when it was initially capitalized. However, the Series'
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 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>

4
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED
GROWTH & INCOME SERIES 1995 DECEMBER 31, 1994*
<S> <C> <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 1995 1994 1993 1992 1991 1990 1989 1988
<S> <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
- ---------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income -- net.... .18 .09 .18 .22 .38 .26 .29
Net realized and unrealized
gains (losses) on
investments................ (.81) 1.77 .47 7.11 (.69) 3.67 .16
- ---------------------------------------------------------------------------------------------------------------------------
Total from operations......... (.63) 1.86 .65 7.33 (.31) 3.93 .45
- ---------------------------------------------------------------------------------------------------------------------------
Distribution to shareholders:
From investment income --
net........................ (.18) (.09) (.18) (.22) (.38) (.26) (.28)
From net realized gains..... -- -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total distributions to
shareholders................. (.18) (.09) (.18) (.22) (.38) (.26) (.28)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period....................... $ 22.11 $22.92 $21.15 $20.68 $13.57 $14.26 $10.59
- ---------------------------------------------------------------------------------------------------------------------------
Total Return(@)............... (2.82)% 8.78% 2.94% 53.50% (3.10)% 36.46% 4.49%
Net assets end of period (000s
omitted)..................... $377,483 $304,293 $188,172 $100,690 $25,623 $8,632 $3,023
Ratio of expenses to average
daily net assets............. .68% .69% .76% .81% 1.01% 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%
Portfolio turnover rate....... 19% 26% 24% 31% 50% 40% 85%
- ---------------------------------------------------------------------------------------------------------------------------

GROWTH STOCK SERIES 1987 1986*
<S> <C> <C>
- ------------------------------
Net asset value, beginning of
period....................... $9.53 $10.00
- ------------------------------
Operations:
Investment income -- net.... .20 .02
Net realized and unrealized
gains (losses) on
investments................ .92 (.49)
- ------------------------------
Total from operations......... 1.12 (.47)
- ------------------------------
Distribution to shareholders:
From investment income --
net........................ (.21) --
From net realized gains..... (.02) --
- ------------------------------
Total distributions to
shareholders................. (.23) --
- ------------------------------
Net asset value, end of
period....................... $10.42 $9.53
- ------------------------------
Total Return(@)............... 11.31% (4.70)%
Net assets end of period (000s
omitted)..................... $2,914 $1,716
Ratio of expenses to average
daily net assets............. 1.00% 1.00%**
Ratio of net investment income
to average daily net
assets....................... 1.79% 1.44%**
Portfolio turnover rate....... 64% 4%
- ------------------------------
<FN>
*Period from October 27, 1986 to December 31, 1986.
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
GLOBAL GROWTH SERIES 1995 1994 1993 1992*
<S> <C> <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.
- --------------------------
**Annualized.
@These are the Series total returns during the period, including reinvestment
of all dividend and capital gains distributions.
</TABLE>

5
<PAGE>

<TABLE>
<CAPTION>
FOR THE
PERIOD
FROM
JANUARY 3,
1995
TO
DECEMBER
INTERNATIONAL STOCK SERIES 31, 1995*
<S> <C>
- --------------------------------------------------------------------------------------------
Net asset value, beginning of period............................................
- --------------------------------------------------------------------------------------------
Operations:
Investment income -- net......................................................
Net realized and unrealized gains (losses) on investments.....................
- --------------------------------------------------------------------------------------------
Total from operations...........................................................
- --------------------------------------------------------------------------------------------
Distribution to shareholders:
From investment income -- net.................................................
- --------------------------------------------------------------------------------------------
Net asset value, end of period..................................................
- --------------------------------------------------------------------------------------------
Total Return(@).................................................................
Net assets end of period (000s omitted).........................................
Ratio of expenses to average daily net assets...................................
Ratio of net investment income to average daily net assets......................
Portfolio turnover rate.........................................................
- --------------------------------------------------------------------------------------------
<FN>
*The Series commenced operations on January 3, 1995. The Series' inception was
December 14, 1994, when it was initially capitalized. However, the Series'
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 Series' shares
were not registered during that period.
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
AGGRESSIVE GROWTH SERIES 1995 1994*
<S> <C> <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, 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>

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 management investment company." Fortis
Series is currently made up of fifteen separate Series as set forth on the cover
page of this Prospectus. While each Series except the Global Bond Series is
classified as a diversified investment company under the 1940 Act, the Global
Bond Series is classified as a non-diversified investment company. 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.

6
<PAGE>

INVESTMENT OBJECTIVES AND POLICIES; RISK CONSIDERATIONS

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. These risks are discussed below under sections
describing each Series, as well as under the section "General Risks to
Consider."

Fortis Advisers, Inc. is the investment adviser for all of the Series. As noted
below, for five of the Series Advisers has retained a sub-adviser. In selecting
equity securities for the equity Series for which Advisers does not use a
sub-adviser, Advisers uses two distinct equity investment philosophies.
Specifically, Asset Allocation, Growth Stock and Aggressive Growth Series use a
"growth" philosophy and Value uses a "value" philosophy. Growth & Income Series
may at times use either or both philosophies. Under both philosophies, Advisers
uses a "bottom up" investment style in which stock selection is driven primarily
by the merits of the company itself.

In managing "growth" portfolios, Advisers invests based on a concept of growth
potential, seeking to identify companies whose earnings and revenue growth
potential exceed industry averages. In addition to superior earnings growth
potential, Advisers seeks companies which it believes to be well managed with
above average returns on equity and invested capital, healthy balance sheets and
the potential to gain market share. Companies of this nature typically have
above average growth potential and a correspondingly higher than average
valuation level as measured by price to earnings, price to cash flow and price
to book value ratios.

In managing "value" portfolios, Advisers invests based on a concept of
fundamental value, seeking to identify companies whose shares appear inexpensive
relative to anticipated profit and dividend growth. The primary emphasis is
placed on companies expected to experience a significant acceleration in
earnings over the next three to five years. The prices of these stocks typically
do not reflect such improvement. Often a stock is "out of favor" and priced low
relative to the company's earnings, cash flow and book value. A second source of
"value" stocks are companies expected to sustain their historic rate of growth
but which are selling at a low price to earnings ratio in relation to this
anticipated growth.

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

7
<PAGE>
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 maximize
total return (from income and market value change), while providing shareholders
with a high level of current income consistent with prudent investment risk.

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 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 to maximize total return (from
income and market value change) 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

8
<PAGE>
(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,
1995, 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............................................... %
AA................................................ %
A................................................. %
BBB............................................... %
BB................................................ %
B................................................. %
CCC............................................... %
CC................................................ %
C................................................. %
D................................................. %
All unrated bonds as a group...................... %
-----
100.0%
-----
-----
</TABLE>

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

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, Mercury Asset Management
International Ltd. ("Mercury International") (formerly known as "Warburg
Investment Management International Ltd."), 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 Mercury
International 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, Mercury
International 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 Mercury International 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 Mercury International 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 Mercury International'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,
Mercury International 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, Mercury International
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 to maximize total return (from
income and market value change) 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

9
<PAGE>
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."

The table below shows the weighted average percentages of the High Yield Series'
long-term bond investments during the fiscal year ended December 31, 1995,
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.

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'

10
<PAGE>
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,
1995, 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.

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,

11
<PAGE>
Denmark, Finland, France, Germany, Ireland, Italy, Japan, Luxembourg, the
Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland and the United
Kingdom.

VALUE SERIES

The Value Series' primary investment objective is short and long-term capital
appreciation. Current income is only a secondary objective. The Series invests
primarily in equity securities and selects stocks based on the "value"
philosophy.

In seeking to attain its investment objective, Value 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, Value 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. Value Series may invest in repurchase agreements
and in both listed and unlisted securities.

Value 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 other investment practices and techniques of the Series,
see "Investment Policies, Restrictions and Risks Applicable to More Than One
Series."

The Series will not generally trade in securities for short-term profits, but
when circumstances warrant, securities may be purchased and sold without regard
to the length of time held. Although the Series cannot accurately predict its
annual portfolio turnover rate, Fortis Advisers, Inc. expects that, under normal
circumstances, the annual portfolio turnover rate of the Series will not exceed
100%. High portfolio turnover involves correspondingly greater transaction
costs, which would be borne directly by the Series.

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."

S&P 500 INDEX SERIES

The Series' investment objective is to replicate the total return of the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500 Index" or the
"Index") primarily through investments in equity securities.

The Series is not managed according to traditional methods of "active"
investment management, which involve the buying and selling of securities based
upon economic, financial and market analysis and investment judgment. Instead,
the Series utilizes a "passive" investment approach, attempting to duplicate the
investment performance of the S&P 500 Index through statistical procedures.

The S&P 500 Index is composed of 500 common stocks that are selected by Standard
& Poor's Corporation ("Standard & Poor's") to capture the best price performance
of a large cross-section of the U. S. publicly traded stock market. The 500
securities, most of which trade on the New York Stock Exchange ("NYSE"),
represent approximately 75% of the market value of all U.S. common stocks. Each
stock in the S&P 500 Index is weighted by its market capitalization. That is,
each security is weighted by its total market value relative to the total market
value of all the securities in the Index. Component stocks included in the S&P
500 Index are chosen with the aim of achieving a distribution at the index level
representative of the various components of the U. S. economy and therefore do
not represent the 500 largest companies. Aggregate market value and trading
activity are also considered in the selection process.

As the Series' assets increase, the Series expects to invest in all 500 stocks
in the S&P 500 Index in proportion to their weighting in the Index. To the
extent that the size of the Series does not permit it to invest in all 500
stocks in the Index, the Series will purchase a representative sample of stocks
from each industry sector included in the Index in proportion to that industry's
weighting in the Index.

To the extent that the Series seeks to replicate the S&P 500 Index using such
sampling techniques, a close correlation between the Series' performance and the
performance of the Index is anticipated in both rising and falling markets. The
Series attempts to achieve a correlation between the performance of its
investments and that of the Index of at least 0.95, before deduction of
expenses. A correlation of 1.00 would represent perfect correlation between
Series and Index performance. It is anticipated that the correlation of the
Series' performance to that of the Index will increase as the size of the Series
increases. The Series' ability to achieve significant correlation between Series
and Index performance may be affected by changes in securities markets, changes
in the composition of the Index and the timing of purchases and redemptions of
Series shares. The Series' investment adviser (Fortis Advisers, Inc.) and
sub-adviser (The Dreyfus Corporation) monitor this correlation and report
periodically to the Board of Directors of Fortis Series. Should the Series fail
to achieve an appropriate level of correlation, the Board will consider
alternative arrangements.

Under normal circumstances, the Series invests at least 95% of its total assets
in the common stocks included in the S&P 500 Index. To maintain liquidity, the
Series may invest up to 5% of its assets in the following instruments: U.S.
Government securities, commercial paper, bank certificates of deposit, bank
demand and time deposits, repurchase agreements, reverse repurchase agreements,
when-issued transactions and variable amount master demand notes. The Series may
enter into futures contracts and options to a limited extent. For further
information on these instruments and investment techniques, see "Investment
Policies, Restrictions and Risks Applicable to More Than One Series," below and
the Statement of Additional Information.

Standard & Poor's-Registered Trademark-, "S&P-Registered Trademark-," "S&P
500-Registered Trademark-," "Standard & Poor's 500," and "500" are trademarks of
McGraw-Hill, Inc. and have been licensed for use by Fortis Series. The Series is
not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard &
Poor's makes no representation regarding the advisability of investing in the
Series. Standard & Poor's makes no representation or warranty, express or
implied, to the owners of the Series

12
<PAGE>

or any member of the public regarding the advisability of investing in
securities generally or in the Series particularly or the ability of the S&P 500
Index to track general stock market performance. Standard & Poor's only
relationship to Fortis Series is the licensing of certain trademarks and trade
names of Standard & Poor's and of the S&P 500 Index which is determined,
composed and calculated by Standard & Poor's without regard to Fortis Series or
the Series. Standard & Poor's has no obligation to take the needs of Fortis
Series or the owners of the Series into consideration in determining, composing
or calculating the S&P 500 Index. Standard & Poor's is not responsible for and
has not participated in the determination of the prices and amount of the Series
or the timing of the issuance or sale of the Series or in the determination or
calculation of the equation by which the Series is to be converted into cash.
Standard & Poor's has no obligation or liability in connection with the
administration, marketing or trading of the Series.

STANDARD & POOR'S DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
S&P 500 INDEX OR ANY DATA INCLUDED THEREIN AND STANDARD & POOR'S SHALL HAVE NO
LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. STANDARD & POOR'S
MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE
SERIES, OWNERS OF THE SERIES OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE
S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. STANDARD & POOR'S MAKES NO EXPRESS
OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OR MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P 500 INDEX OR
ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT
SHALL STANDARD & POOR'S HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT,
OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE
POSSIBILITY OF SUCH DAMAGES.

The Series will not generally trade in securities for short-term profits, but
when circumstances warrant, securities may be purchased and sold without regard
to the length of time held. Although the Series cannot accurately predict its
annual portfolio turnover rate, The Dreyfus Corporation expects that, under
normal circumstances, the annual portfolio turnover rate of the Series will not
exceed %. High portfolio turnover involves correspondingly greater
transaction costs, which would be borne directly by the Series.

BLUE CHIP STOCK SERIES

The Series' primary investment objective is to provide long-term growth of
capital. Current income is a secondary objective, and many of the stocks in the
Series' portfolio are expected to pay dividends.

The Series will invest at least 65% of total assets in the common stocks of
large and medium-sized blue chip companies, as defined by T. Rowe Price, the
sub-adviser to the Series. These companies will be well established in their
industries and have the potential for above-average growth in earnings.

Most of the assets will be invested in U.S. common stocks. However, the Series
may also purchase other types of securities, for example, foreign securities,
preferred stocks, convertible stocks and bonds, and warrants, when considered
consistent with the Series' investment objectives and program. The Series may
also engage in a variety of investment management practices, such as buying and
selling futures and options. Investments in convertible securities, preferred
stocks and debt securities are limited to 25% of total assets.

STOCK SELECTION. In applying a "blue chip" investment approach, T. Rowe Price
analysts evaluate the growth prospects of companies and the industries in which
they operate. This approach seeks to identify companies with strong market
franchises in industries that appear to be strategically poised for long-term
growth. Its investment approach reflects T. Rowe Price's belief that the
combination of solid company fundamentals (with emphasis on the potential for
above-average growth in earnings) along with a positive outlook for the overall
industry will ultimately reward investors with a higher stock price. While
primary emphasis is placed on a company's prospects for future growth, the
Series will not purchase securities that, in T. Rowe Price's opinion, are
overvalued considering the underlying business fundamentals. In the search for
substantial capital appreciation, the Series looks for stocks attractively
priced relative to their anticipated long-term value.

The Series will generally take the following into consideration when selecting
stocks:

- LEADING MARKET POSITIONS. Blue chip companies often have leading
market positions that are expected to be maintained or enhanced over time.
Strong positions, particularly in growing industries, can give a company
pricing flexibility as well as the potential for good unit sales. These
factors, in turn, can lead to higher earnings growth and greater share price
appreciation.

- SEASONED MANAGEMENT TEAMS. Seasoned management teams with a
track record of providing superior financial results are important for a
company's long-term growth prospects. T. Rowe Price's analysts will evaluate
the depth and breadth of a company's management experience.

- STRONG FINANCIAL FUNDAMENTALS. Companies should demonstrate
faster earnings growth than their competitors and the market in general;
high profit margins relative to competitors; strong cash flow; a healthy
balance sheet with relatively low debt; and a high return on equity with a
comparatively low dividend payout ratio.

TYPES OF PORTFOLIO SECURITIES. In seeking to meet its investment objective, the
Series may invest in any type of security or instrument (including certain
potentially high risk derivatives) whose investment characteristics are
consistent with the Series' investment program. These and some of the other
investment techniques the Series may use are described below.

- PREFERRED STOCKS. While most preferred stocks pay a dividend, the
Series may purchase preferred stock where the issuer has omitted, or is in
danger of omitting, payment of its dividend. Such investments would be made
primarily for their capital appreciation potential.

- FOREIGN SECURITIES. The Series may invest up to 20% of its total
assets (excluding reserves) in foreign securities. These include
nondollar-denominated securities traded outside of the U.S. and
dollar-denominated securities traded in the U.S. (such as ADRs). See
"Investment Policies, Restrictions and Risks Applicable to More Than One
Series--Investment in Foreign Securities." The Series may invest in
securities from emerging markets, which have greater risks than foreign
securities in general. See "Investment Policies, Restrictions and Risks
Applicable to the Global Bond Series, Global Asset Allocation Series and
International Stock Series--Emerging Markets."

- FIXED-INCOME SECURITIES. The Series may invest in debt securities of
any type without regard to quality or rating. Such securities would be
purchased in companies which meet the investment criteria for the Series.

However, the Series will not purchase a non-investment grade debt security
(or junk bond) if immediately after such purchase the Series would have more
than 5% of its total assets invested in such securities. For further
information on "high yield" (or junk) bonds, including the risks of such
investments, see "Investment Objectives and Policies--High Yield Series."

- HYBRID INSTRUMENTS. These instruments (a type of potentially high-
risk derivative) can combine the characteristics of securities, futures and
options. For example, the principal amount, redemption or conversion terms
of a security could be related to the market price of some commodity,
currency or securities index. Such securities may bear interest or pay
dividends at below market (or even relatively nominal) rates. Under certain
conditions, the redemption value of such an investment could be zero. The
Series may invest up to 10% of

13
<PAGE>

its total assets in hybrid instruments. In addition, the Series will not
invest more than 10% of its total assets in derivatives, call and put
options, and futures contracts.

The Series may employ the following types of management practices:

- CASH POSITION. The Series will hold a certain portion of its assets in
U.S. and foreign dollar-denominated money market securities, including
repurchase agreements, in the two highest rating categories, maturing in one
year or less. For temporary, defensive purposes, the Series may invest
without limitation in such securities. This reserve position provides
flexibility in meeting redemptions, expenses, and the timing of new
investments, and serves as a short-term defense during periods of unusual
market volatility.

- BORROWING MONEY AND TRANSFERRING ASSETS. The Series can borrow
money from banks as a temporary measure for emergency purposes, to
facilitate redemption requests. Such borrowings may be collateralized with
Series assets, subject to restrictions. As a fundamental policy, borrowings
may not exceed 33 1/3% of the Series' total assets; however, an investment
policy changeable without shareholder approval further restricts such
Series' borrowing to temporary borrowing of 25% of total assets when
necessary to meet redemptions of the Series. As an operating policy, the
Series may not transfer as collateral any portfolio securities except as
necessary in connection with permissible borrowings or investments, and then
such transfers may not exceed 25% of the Series' total assets. The Series
may not purchase additional securities when borrowings exceed 5% of total
assets.

- FUTURES AND OPTIONS. Futures (a type of potentially high-risk
derivative) are often used to manage or hedge risk, because they enable the
investor to buy or sell an asset in the future at an agreed upon price.
Options (another type of potentially high-risk derivative) give the investor
the right, but not the obligation, to buy or sell an asset at a
predetermined price in the future. The Series may buy and sell futures and
options contracts for any number of reasons, including: to manage its
exposure to changes in securities prices and foreign currencies; as an
efficient means of adjusting its overall exposure to certain markets; to
enhance income; and to protect the value of portfolio securities. The Series
may purchase, sell or write call and put options on securities, financial
indices, and foreign currencies. The Series will not invest more than 10% of
its total assets in derivatives, call and put options, and futures
contracts.

Futures contracts and options may not always be successful hedges; their
prices can be highly volatile; using them could lower the Series' total
return and the potential loss from the use of futures can exceed the Series'
initial investment in such contracts.

- OPERATING POLICIES. Futures: Initial margin deposits and premiums
on options used for non-hedging purposes will not equal more than 5% of the
Series' net asset value. Options on securities: The total market value of
securities against which the Series has written call or put options may not
exceed 25% of its total assets. The Series will not commit more than 5% of
its total assets to premiums when purchasing call or put options.

- MANAGING FOREIGN CURRENCY RISK. Investors in foreign securities
may "hedge" their exposure to potentially unfavorable currency changes by
purchasing a contract to exchange one currency for another on some future
date at a specified exchange rate. In certain circumstances, a "proxy
currency" may be substituted for the currency in which the investment is
denominated, a strategy known as "proxy hedging." Although foreign currency
transactions will be used primarily to protect the Series' foreign
securities from adverse currency movements relative to the dollar, they
involve the risk that anticipated currency movements will not occur and the
Series' total return could be reduced.

- PORTFOLIO TURNOVER. The Series will not generally trade in securities
for short-term profits, but when circumstances warrant, securities may be
purchased and sold without regard to the length of time held. Although the
Series cannot accurately predict its annual portfolio turnover rate, T. Rowe
Price expects that, under normal circumstances, the annual portfolio
turnover rate of the Series will not exceed 100%. High portfolio turnover
involves correspondingly greater transaction costs, which would be borne
directly by the Series.

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 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 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

14
<PAGE>

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 infrastructure, 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 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

15
<PAGE>
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 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

16
<PAGE>
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." In addition,
the Series will not invest more than 10% of its total assets in derivatives,
call and put options, and futures contracts.

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

FOREIGN DIVERSIFICATION. 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

17
<PAGE>
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, Value Series, Growth & Income Series, S&P 500 Index Series,
Blue Chip Stock 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.

REAL ESTATE OR REAL ESTATE INVESTMENT TRUSTS. Each of Value Series and Growth &
Income Series is authorized to invest in real estate investment trusts
("REITs"), real estate development and real estate operating companies and other
real estate related businesses. Each of Value Series and Growth & Income Series
currently 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 interests 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.

Value Series has adopted a nonfundamental investment restriction that it will
not invest more than 10% of its total assets in REITs and will invest only in
REITs that are publicly distributed.

The Series' investments in real estate securities 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, REITs may be dependent
upon management skill and may be subject to the risks of obtaining adequate
financing for projects on favorable terms.

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, Value Series, Growth & Income Series, S&P 500 Index 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 borrowings by each such Series except Global Growth
Series to temporary borrowing of 25% of total assets when necessary to meet
redemptions of the Series. An investment policy changeable without shareholder
approval further restricts Global Growth 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 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

18
<PAGE>
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 the net
assets of each of 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 will be invested in any
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. Not more than
5% of the Global Growth Series' net assets collectively will be invested in such
obligations at any 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.

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

19
<PAGE>
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
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

20
<PAGE>
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, Value Series, Growth & Income Series, S&P 500 Index Series,
Blue Chip Stock 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; however, an investment policy
changeable without shareholder approval further restricts lending of its
portfolio securities by each such Series except Global Growth Series to 10% of
its total assets.

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") (or the sub-adviser, if there is one for the Series)
to be of good standing and will not be made unless, in the judgment of Advisers
(or the sub-adviser), 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. The Series which may invest in foreign securities 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.

21
<PAGE>

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

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.

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. As you will note in the Financial Highlights
tables on pages 2 through 6, for the fiscal year ended December 31, 1995, the
annual portfolio turnover rate of several of the fixed income Series exceeded
100%. This was the result of active portfolio management in recognition of
changing economic conditions. While a higher turnover rate may result in the
Series incurring higher transaction costs, the Series' managers attempt to have
such costs outweighed by the benefits of such transactions, although this cannot
be assured.

GENERAL RISKS TO CONSIDER

An investment in any of the Series involves certain risks in addition to those
noted elsewhere in this Prospectus and the Statement of Additional Information
with respect to particular Series. These include the following:

EQUITY SECURITIES GENERALLY. Market prices of equity securities generally, and
of particular companies' equity securities, frequently are subject to greater
volatility than prices of fixed income securities. Market prices of equity
securities as a group have dropped dramatically in a short period of time on
several occasions in the past, and they may do so again in the future. Each of
the Series which may purchase equity securities (such as common and preferred
stocks) is subject to the risk of generally adverse equity markets.

COMMON AND PREFERRED STOCKS. Stocks represent shares of ownership in a company.
Generally, preferred stock has a specified dividend and ranks after bonds and
before common stocks in its claim on income for dividend payments and on assets
should the company be liquidated. After other claims are satisfied, common
stockholders participate in company profits on a pro rata basis; profits may be
paid out in dividends or reinvested in the company to help it grow. Increases
and decreases in earnings are usually reflected in a company's stock price, so
common stocks generally have the greatest appreciation and depreciation
potential of all corporate securities.

SMALLER-CAPITALIZATION COMPANIES. The equity securities of
smaller-capitalization companies frequently have experienced greater price
volatility in the past than those of larger-capitalization companies, and they
may be expected to do so in the future. To the extent that the Series invest in
smaller-capitalization companies, they are subject to this risk of greater
volatility.

CONVERTIBLE SECURITIES AND WARRANTS. Certain Series may invest in debt or
preferred equity securities convertible into or exchangeable for equity
securities. Traditionally, convertible securities have paid dividends or
interest at rates higher than common stocks but lower than non-convertible
securities. They generally participate in the appreciation or depreciation of
the underlying stock into which they are convertible, but to a lesser degree. In
recent years, convertibles have been developed which combine higher or lower
current income with options and other features. Warrants are options to buy a
stated number of shares of common stock at a specified price any time during the
life of the warrants (generally, two or more years).

INTEREST RATE RISK. Interest rate risk is the risk that the value of a fixed-
rate debt security will decline due to changes in market interest rates. Because
the Series invest in fixed-rate debt securities, they are subject to interest
rate risk. In general, when interest rates rise, the value of a fixed-rate debt
security declines. Conversely, when interest rates decline, the value of a
fixed-rate debt security generally increases. Thus, shareholders in the Series
bear the risk that increases in market interest rates will cause the value of
their Series' portfolio investments to decline.

In general, the value of fixed-rate debt securities with longer maturities is
more sensitive to changes in market interest rates than the value of such
securities with shorter maturities. Thus, the net asset value of a Series which
invests in securities with longer weighted average maturities (or longer
durations) should be expected to have greater volatility in periods of changing
market interest rates than that of a Series which invests in securities with
shorter weighted average maturities (or shorter durations). As described below
under "--Mortgage-Backed Securities," it is more difficult to generalize about
the effect of changes in market interest rates on the values of mortgage-backed
securities.

Although Advisers (or a sub-adviser) may for certain Series engage in
transactions intended to hedge the value of a Series' portfolio against changes
in market interest rates, there is no assurance that such hedging transactions
will be undertaken or will fulfill their purpose.

CREDIT RISK. Credit risk is the risk that the issuer of a debt security will
fail to make payments on the security when due. Because the Series invest in
debt securities, they are subject to credit risk.

Securities issued or guaranteed by the United States Government generally are
viewed as carrying minimal credit risk. Securities issued by governmental
entities but not backed by the full faith and credit of the United States, and
securities issued by private entities, are subject to higher levels of credit
risk. The ratings and certain other requirements which apply to the Series'
permitted investments, as described elsewhere in this Prospectus, are intended
to limit the amount of credit risk undertaken by the Series. Nevertheless,
shareholders in the Series bear the risk that payment defaults could cause the
value of their Series' portfolio investments to decline.

CALL RISK. Many corporate bonds may be redeemed at the option of the issuer
("called") at a specified price prior to their stated maturity date. In general,
it is advantageous for a corporate issuer to call its bonds if they can be
refinanced through the issuance of new bonds which bear a lower interest rate
than that of the called bonds. Call risk is the risk that corporate bonds will
be called during a period of declining market interest rates so that such
refinancings may take place.

22
<PAGE>

If a bond held by a Series is called during a period of declining interest
rates, the Series probably will have to reinvest the proceeds received by it at
a lower interest rate than that borne by the called bond, thus resulting in a
decrease in the Series' income. To the extent that the Series invest in callable
corporate bonds, Series shareholders bear the risk that reductions in income
will result from the call of the bonds. Most United States Government securities
are not callable before their stated maturity.

MORTGAGE-BACKED SECURITIES. Because residential mortgage loans generally can be
prepaid in whole or in part by the borrowers at any time without any prepayment
penalty, the holder of a mortgage-backed security which represents an interest
in a pool of such mortgage loans is subject to a form of call risk which is
generally called "prepayment risk." In addition, it is more difficult to predict
the effect of changes in market interest rates on the return on mortgage-backed
securities than to predict the effect of such changes on the return of a
conventional fixed-rate debt instrument, the magnitude of such effects may be
greater in some cases, and the return on certain types of mortgage-backed
securities, such as interest-only, principal-only and inverse floating rate
mortgage-backed securities, is particularly sensitive to changes in interest
rates and in the rate at which the mortgage loans underlying the securities are
prepaid by borrowers. For these reasons, a Series' investments in
mortgage-backed securities may involve greater risks than investments in
governmental or corporate bonds. For further information, see "Investment
Policies, Restrictions, and Risks Applicable to More Than One Series--Mortgage
Related Securities."

ACTIVE MANAGEMENT. All of the Series other than the S&P 500 Index Series are
actively managed by Advisers or, in five Series, by the sub-advisers as well.
The performance of these Series therefore will reflect in part the ability of
Advisers (or the sub-advisers) to select securities which are suited to
achieving the Series' investment objectives. Due to their active management,
these Series could underperform other mutual funds with similar investment
objectives or the market generally.

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 Fortis AMEV and
50% by Fortis AG, diversified financial services companies. In addition to
providing investment advice, Advisers reviews the investments of the five
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 Howard G. Hudson, Robert C. Lindberg,
Maroun M. Hayek, and David C. Greenzang since August 1995.

U.S. Government Securities has been managed by Messrs. Hudson and Hayek and
Christopher J. Woods since August 1995.

Diversified Income Series has been managed by Messrs. Hudson and Hayek and
Charles J. Dudley since August 1995.

High Yield Series has been managed by Messrs. Hudson, Dudley, and Lindberg and
Stephen M. Rickert since August 1995.

Asset Allocation Series has been managed by Mr. Hudson since August 1995,
Stephen M. Poling since 1988, James S. Byrd since 1991, Keith R. Thomson since
1988 and Messrs. Dudley, Hayek, and Woods since August 1995.

Growth & Income Series has been managed since its inception by Messrs. Poling,
Byrd, and Thomson;

Value Fund has been managed by Fred Obser, Mr. Byrd and Nicholas L.M. DePeyster
since its inception.

Growth Stock Series has been managed by Messrs. Poling, Byrd, and Thomson since
1986, 1991, and 1988, respectively.

Global Growth Series has been managed since its inception by Messrs. Poling and
Byrd.

Aggressive Growth Series has been managed since its inception by Messrs. Poling,
Byrd, and Thomson.

Mr. Hudson, an Executive Vice President of Advisers and the head of Advisers'
fixed income department, has been managing debt securities for Fortis, Inc.
since 1991. Prior to that, Mr. Hudson managed investments for several firms,
including 20 years with Morgan Guaranty Trust, where he was the head of fixed
income for the Trust and Investment Division. Mr. Hudson reports to Gary N.
Yalen, the President and Chief Investment Officer of Advisers. The other
individuals identified herein, with the exception of Messrs. Poling, Byrd, and
Thomson, report directly or indirectly to Mr. Hudson. Messrs. Poling and Byrd
are Executive Vice Presidents and Mr. Thomson is a Vice President of Advisers.
Mr. Dudley, a Vice President of Advisers, began managing debt securities for
Advisers on August 14, 1995. Prior to joining Advisers, Mr. Dudley was a Senior
Vice President and Senior Portfolio Manager for SunAmerica Asset Management, New
York, NY. Mr. Lindberg, a Vice President of Advisers, has been managing debt
securities for Advisers since 1993. Prior to that, Mr. Lindberg was Vice
President and Chief Securities Trader for COMERICA, Inc., Detroit, MI. Mr.
Rickert, a Senior Credit Analyst for Advisers, has been involved in management
of debt securities for Fortis, Inc. since 1994. Prior to that, Mr. Rickert was a
corporate bond analyst for Dillon, Read & Co., Inc. in New York, NY and before
that Western Asset Management in Los Angeles, CA. Mr. Hayek, a Vice President of
Advisers, has been managing debt securities for Fortis, Inc. since 1987. Mr.
Woods, a Vice President of Advisers, has been managing debt securities for
Fortis, Inc. since 1993. Prior to that, Mr. Woods was the head of fixed income
for The Police and Firemen's Disability and Pension Fund of Ohio in Columbus,
OH. Mr. Greenzang, a Money Market Portfolio officer, has been involved in
management of debt securities for Fortis, Inc. since 1992. Prior to that, Mr.
Greenzang was an Associate with Dean Witter Reynolds, Inc. in New York, NY.
Messrs. Poling, Byrd, and Thomson have managed portfolios for Advisers for at
least the past five years. Mr. Obser has managed equity portfolios for Fortis,
Inc. for at least the past five years. Mr. DePeyster has done so since July,
1991, and prior thereto was a Research Associate with Smith Barney, Inc., New
York, NY. Messrs. Yalen, Hudson, Dudley, Lindberg, Rickert, Hayek, Woods, and
Greenzang are located at One Chase Manhattan Plaza, New York, NY 10005 and
Messrs. Poling, Byrd, and Thomson are located at 5500 Wayzata Blvd., Golden
Valley, MN 55416.

THE SUB-ADVISERS

This section describes only the five sub-advised Series.

23
<PAGE>

Each Series has retained a sub-adviser under an investment sub-advisory
agreement (the five 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 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. Mercury Asset Management International Ltd. ("Mercury
International"), 33 King William Street, London, EC4R 9AS, England, is the
sub-adviser of the Global Bond Series. Mercury International, which is
registered as an investment adviser with the Commission, is a wholly owned
subsidiary of Mercury Asset Management plc ("Mercury") which manages
approximately $112 billion of investments on behalf of clients. Mercury
International itself manages approximately $3.2 billion of investments.

The Strategy Committee of the Fixed Interest Division of Mercury International
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
Mercury International.

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 $13 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 principal of Morgan Stanley in December 1995. 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 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"), 30
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 $30 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.

S&P 500 INDEX SERIES. The Dreyfus Corporation ("Dreyfus"), 200 Park Avenue, New
York, New York 10166, is the sub-adviser to the S&P 500 Index Series. Dreyfus
was formed in 1947. Dreyfus is a wholly-owned subsidiary of Mellon Bank, which
is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As of
, 1995, Dreyfus managed or administered approximately $70 billion in
assets for more than 1.9 million investor accounts nationwide.

Mellon is a publicly owned multibank holding company incorporated under
Pennsylvania law in 1971 and registered under the Bank Holding Company Act of
1956, as amended. Mellon provides a comprehensive range of financial products
and services in domestic and selected international markets. Mellon is among the
twenty-five largest bank holding companies in the United States based on total
assets. Mellon's principal wholly-owned subsidiaries are Mellon Bank, Mellon
Bank (DE) National Association, Mellon Bank (MD) National Association, The
Boston Company, Inc., AFCO Credit Corporation and a number of companies known as
Mellon Financial Services Corporations. Through its subsidiaries, including
Dreyfus, Mellon managed approximately $ billion in assets as of ,
1995, including $ billion in mutual fund assets. As of , 1995,
Mellon, through various subsidiaries, provided non-investment services, such as
custodial or administration services, for approximately $ billion in assets,
including approximately $ billion in mutual fund assets.

BLUE CHIP STOCK SERIES. T. Rowe Price Associates, Inc. ("T. Rowe Price"), 100
East Pratt Street, Baltimore, MD 21202, is the sub-adviser of the Blue Chip
Stock Series. T. Rowe Price was founded in 1937, and it and its affiliates
managed over $70 billion for over 4 million individual and institutional
investor accounts as of December 31, 1995. Some of T. Rowe Price's accounts have
investment policies similar to those of the Series.

Two officers of T. Rowe Price have been co-managers of the Series since its
inception in 1996. Thomas H. Broadus, Jr., the lead manager, has been managing
investments since joining T. Rowe Price in 1966. Larry J. Puglia, the other
co-manager, has been managing investments since joining T. Rowe Price in 1990.

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, .75% for Global Bond Series, .50% for High Yield
Series, .50% for Asset Allocation Series, .90% for Global Asset

24
<PAGE>

Allocation Series, .70% for Growth and Income Series, .63% for Growth Stock
Series, .70% for Global Growth Series, .85% for International Stock Series, and
.70% for Aggressive Growth Series.

For the Value Series, S&P 500 Index Series, and Blue Chip 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>
Value For the first $100,000,000 .70%
For assets over $100,000,000 .60%
S&P 500 Index All levels of assets .40%
Blue Chip Stock For the first $100,000,000 .90%
For assets over $100,000,000 .85%
</TABLE>

BROKERAGE ALLOCATION

Advisers may consider sales of shares of Fortis Series, and of other funds
advised or administered by Advisers or a sub-adviser may be considered, 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 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

25
<PAGE>
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 that of Fortis Series. 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 Jon H. Nicholson are directors of
Investors and officers of both; and Dennis M. Ott, James S. Byrd, Robert C.
Lindberg, Keith R. Thomson, Larry A. Medin, Anthony J. Rotondi, Rhonda J.
Schwartz, Robert W. Beltz, Jr., Thomas D. Gualdoni, Richard P. Roche, Tamara L.
Fagely, John E. Hite, Carol M. Houghtby and Scott R. Plummer 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.

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

26
<PAGE>
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.

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.

27
<PAGE>
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.

28
<PAGE>
[This page has been intentionally left blank]

29
<PAGE>

PROSPECTUS

MAY 1, 1996

FORTIS

SERIES FUND, INC.

<TABLE>
<S> <C>
BULK RATE
U.S. POSTAGE
</TABLE>

UVW-REGISTERED TRADEMARK-

FORTIS FINANCIAL GROUP

<TABLE>
<S> <C>
MINNEAPOLIS, MN
PERMIT NO. 3794
</TABLE>

P.O. BOX 64284

ST. PAUL, MN 55164

<PAGE>

FORTIS SERIES FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 1, 1996

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, 1996. 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.

30
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
ORGANIZATION AND CLASSIFICATION................... 32
INVESTMENT OBJECTIVES AND POLICIES................ 32
- General..................................... 32
- Certificates of Deposit and Bankers'
Acceptances.................................. 32
- Mortgage-Related Securities................. 32
- Securities of Foreign Companies............. 34
- Repurchase Agreements....................... 34
- Reverse Repurchase Agreements............... 35
- Extendible Notes............................ 35
- Delayed Delivery Transactions............... 35
- Dollar Rolls................................ 35
- Lending of Portfolio Securities............. 36
- Options..................................... 36
- Futures Contracts and Options on
Futures Contracts........................... 36
- Forward Foreign Currency
Exchange Contracts.......................... 37
- Segregated Accounts......................... 37
- Restricted or Illiquid Securities........... 37
- Warrants or Rights.......................... 37
- Short Sales Against the Box................. 37
- Real Estate and Real Estate Investment
Trusts....................................... 37
- Investment Restrictions..................... 37
- Risk Factors................................ 44

DIRECTORS AND EXECUTIVE OFFICERS.................. 47
INVESTMENT ADVISORY AND OTHER SERVICES............ 49
- General..................................... 49
- Control and Management of Advisers and
Investors................................... 49
- Investment Advisory and Management
Agreement................................... 50
- Sub-Advisory Agreements..................... 51
PORTFOLIO TRANSACTIONS AND ALLOCATION OF
BROKERAGE........................................ 51
CAPITAL STOCK..................................... 53
COMPUTATION OF NET ASSET VALUE AND PRICING........ 54
REDEMPTION........................................ 55
TAXATION.......................................... 55
UNDERWRITER....................................... 55
PERFORMANCE....................................... 56
SYSTEMATIC WITHDRAWAL............................. 60
FINANCIAL STATEMENTS.............................. 61
CUSTODIAN; COUNSEL; ACCOUNTANTS................... 61
LIMITATION OF DIRECTOR LIABILITY.................. 61
ADDITIONAL INFORMATION............................ 61
APPENDIX--DESCRIPTION OF FUTURES, OPTIONS, AND
FORWARD CONTRACTS................................ 62
</TABLE>

31
<PAGE>
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. Each Series except the Global Bond 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. The Global Bond Series
operates as a "nondiversified" investment company.

INVESTMENT OBJECTIVES AND POLICIES

GENERAL

Each Series except the Global Bond Series will operate as a "diversified"
investment company as defined under the Investment Company Act of 1940 (the
"1940 Act"), which means that it 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.

Although the Global Bond Series is classified as a nondiversified investment
company under the 1940 Act, the Global Bond Series is still required to meet
certain diversification requirements in order to qualify as a "regulated
investment company" for federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code"). To so qualify, the Global Bond Series
must diversify its holdings so that, at the close of each quarter of its taxable
year, (a) at least 50% of the value of its total assets is represented by cash,
cash items, securities issued by the U.S. Government, its agencies and
instrumentalities, the securities of other regulated investment companies, and
other securities limited generally with respect to any one issuer to an amount
not more than 5% of the total assets of the Global Bond Series and not more than
10% of the outstanding voting securities of such issuer, and (b) not more than
25% of the value of its total assets is invested in the securities of any issuer
(other than securities issued by the U.S. Government, its agencies or
instrumentalities or the securities of other regulated investment companies), or
in two or more issuers that the Global Bond Series controls and that are engaged
in the same or similar trades or businesses.

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

32
<PAGE>
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, 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, the Series may, consistent with their 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.

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

33
<PAGE>

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 the net
assets of each of 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 will be invested in any one of
these items at any one time, and no more than 10% of the net assets of each of
such series will be invested in all such obligations at any one time. Not more
than 5% of the Global Growth Series' net assets collectively will be invested in
such obligations at any 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 payments (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.

An accrual or "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.

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 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,
Value 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

34
<PAGE>
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.

REVERSE REPURCHASE AGREEMENTS

The S&P 500 Index Series may enter into reverse repurchase agreements to meet
redemption requests where the liquidation of portfolio securities is deemed by
such Series to be inconvenient or disadvantageous. Although the Blue Chip Stock
Series has no such current intention, in the foreseeable future, of engaging in
reverse repurchase agreements, it reserves the right to do so. Reverse
repurchase agreements are ordinary repurchase agreements in which a Series is
the seller of, rather than the investor in, securities, and agrees to repurchase
them at an agreed upon time and price. Use of a reverse repurchase agreement may
be preferable to a regular sale and later repurchase of the securities because
it avoids certain market risks and transaction costs. A reverse repurchase
agreement may be viewed as a type of borrowing by the Series.

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 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.

35
<PAGE>
LENDING OF PORTFOLIO SECURITIES

Consistent with applicable regulatory requirements, the Global Bond Series, High
Yield Series, Global Asset Allocation Series, Value Series, Growth & Income
Series, S&P 500 Index Series, Blue Chip Stock 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 10% 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.

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.

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 Global Bond Series, High Yield Series, Global Asset
Allocation Series, Blue Chip Stock 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, Blue Chip Stock Series, Global Growth Series, and
International Stock Series may enter into interest rate futures contracts and
the Global Bond Series, Global Asset Allocation Series, Blue Chip Stock 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, Blue Chip Stock
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, Blue Chip Stock 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, Blue Chip Stock 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, Blue Chip Stock
Series, Global Growth Series, International Stock Series, and Aggressive Growth
Series may purchase and write options on foreign currency futures contracts.
(Unless otherwise specified, 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, Blue Chip Stock
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

36
<PAGE>
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, Blue
Chip Stock 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, Blue Chip Stock 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, Value Series, Growth & Income Series, S&P 500 Index Series, Blue Chip
Stock 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, S&P
500 Index 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, Value Series, Growth & Income Series, S&P 500 Index 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. 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.

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

37
<PAGE>
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 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.

(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, VALUE 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

38
<PAGE>
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 investment restrictions may be changed by the Board of Directors
without shareholder approval.

The High Yield Series, Value 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.

(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 except for borrowings up to 25% of its total assets when
borrowing is necessary to meet redemptions. ("Roll" transactions will not be
considered borrowing for purposes of this restriction).

(11) Lend its portfolio securities in an amount in excess of 10% of its total
assets.

(12) Invest in the aggregate more than 10% of its total assets in put and call
options, futures contracts, and derivatives.

39
<PAGE>
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 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.)

(8) Invest in real estate limited partnership interests.

40
<PAGE>
(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.

(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.

41
<PAGE>
(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 except for borrowing up to 25% of its total assets when
borrowing is necessary to meet redemptions temporary or emergency measure.
("Roll" transactions will not be considered borrowing for purposes of this
restriction.)

(12) Lend its portfolio securities in an amount in excess of 10% of its total
assets.

(13) Invest in the aggregate more than 10% of its total assets in put and call
options, futures contracts, and derivatives.

INVESTMENT RESTRICTIONS OF S&P 500 INDEX SERIES. As a result of the following
fundamental investment restrictions, the S&P 500 Index Series will not:

(1) Purchase any securities which would cause more than 25% of the value of
the Series' total assets at the time of such purchase to be invested in the
securities of one or more issuers conducting their principal activities in the
same industry. (For purposes of this limitation, U.S. Government securities, and
state or municipal governments and their political subdivisions, are not
considered members of any industry. In addition, this limitation does not apply
to investments in domestic banks, including U.S. branches of foreign banks and
foreign branches of U.S. banks).

(2) Borrow money or issue senior securities as defined in the 1940 Act except
that (a) the Series may borrow money in an amount not exceeding one-third of the
Series' total assets at the time of such borrowings. The purchase or sale of
futures contracts and related options shall not be considered to involve the
borrowing of money or issuance of senior securities.

(3) Make loans or lend securities, if as a result thereof more than one-third
of the Series' total assets would be subject to all such loans. For purposes of
this limitation debt instruments and repurchase agreements shall not be treated
as loans.

(4) Purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the Series from
investing in securities or other instruments backed by real estate, including
mortgage loans, or securities of companies that engage in real estate business
or invest or deal in real estate or interests therein).

(5) Underwrite securities issued by any other person, except to the extent
that the purchase of securities and later disposition of such securities in
accordance with the Series' investment program may be deemed an underwriting.

(6) Purchase or sell commodities except that the Series may enter into
futures contracts and related options, forward currency contracts and other
similar instruments.

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

(1) The Series shall not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that transactions in futures contracts are not deemed to
constitute selling short.

(2) The Series shall not purchase securities on margin, except that the
Series may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments in connection with futures
contracts and options on futures contracts shall not constitute purchasing
securities on margin.

(3) The Series shall not purchase oil, gas or mineral leases.

(4) The Series will invest no more than 15% of the value of its net assets in
illiquid securities, including repurchase agreements with remaining maturities
in excess of seven days, time deposits with maturities in excess of seven days
and other securities which are not readily marketable. For purposes of this
limitation, illiquid securities shall not include Section 4(2) paper and
securities which may be resold under Rule 144A under the Securities Act of 1933,
provided that the Board of Directors, or its delegate, determines that such
securities are liquid based upon the trading markets for the specific security.

(5) The Series may not invest in securities of other investment companies,
except as they may be acquired as part of a merger, consolidation or acquisition
of assets and except to the extent otherwise permitted by the 1940 Act.

(6) The Series shall not purchase any security while borrowings representing
more than 5% of the Fund's total assets are outstanding.

(7) The Series will not purchase warrants if at the time of such purchase:
(a) more than 5% of the value of the Series' assets would be invested in
warrants, or (b) more than 2% of the value of the Series' assets would be
invested in warrants that are not listed on the New York or American Stock
Exchange (for purposes of this limitation, warrants acquired by the Series in
units or attached to securities will be deemed to have no value).

(8) The Series will not purchase puts, calls, straddles, spreads and any
combination thereof if by reason thereof the value of its aggregate investment
in such classes of securities would exceed 5% of its total assets except that:
(a) this limitation shall not apply to standby commitments, and (b) this
limitation shall not apply to the Series' transactions in futures contracts and
related options.

(9) The Series will not invest more than 25% of the value of its total
assets, at the time of such purchase, in domestic banks, including U.S. branches
of foreign banks and foreign branches of U.S. banks.

(10) Lend its portfolio securities in an amount in excess of 10% of its total
assets.

(11) Borrow money except for borrowings up to 25% of its total assets when
borrowing is necessary to meet redemptions.

(12) Invest in the aggregate more than 10% of its total assets in put and call
options, futures contracts, and derivatives.

The Series engages, except as noted, in the following practices in furtherance
of its investment objective:

LOANS OF FUND SECURITIES. The Series has authority to lend its portfolio
securities provided (1) the loan is secured continuously by collateral
consisting of U.S. Government securities or cash or cash equivalents adjusted
daily to make a market value at least equal to the current market value of these
securities loaned; (2) the Series may at any time call the loan and regain the
securities loaned; (3) the Series will receive any interest or dividends paid on
the loaned securities; and (4) the aggregate market value of securities loaned
will not at any time exceed one-third of the total assets of the Series. In
addition, it is anticipated that the Series may share with the borrower some of
the income received on the collateral for the loan or that it will be paid a
premium for the loan. In determining whether to lend securities, the Series
considers all relevant factors and circumstances including the creditworthiness
of the borrower.

FUTURES CONTRACTS AND OPTIONS. For the purpose of creating market exposure for
uncommitted cash balances, reducing transaction costs associated with
rebalancing the Series, facilitating trading or seeking higher investment
returns when a futures contract is priced more attractively than the underlying
security or the index of the Series, the Series may enter into

42
<PAGE>

futures contracts, options, and options on futures contracts with respect to
securities in which the Series may invest and indices comprised of such
securities.

RESTRICTIONS ON THE USE OF FUTURES CONTRACTS AND OPTIONS. The Series will not
enter into futures contracts to the extent that its outstanding obligations
under these contracts would exceed 25% of the Series' total assets. To the
extent that the Series enters into futures contracts and options on futures
positions that are not for bona fide hedging purposes (as defined by the
Commodity Futures Trading Commission), the aggregate initial margin and premiums
on these positions (excluding the amount by which options are "in-the-money")
may not exceed 5% of the Series' net assets.

Transactions using options and futures contracts (other than options that the
Series has purchased) expose the Series to an obligation to another party. The
Series will not enter into any such transactions unless it owns either (1) an
offsetting ("covered") position in securities or other options or futures
contracts or (2) cash, receivables and short-term debt securities with a value
sufficient at all times to cover its potential obligations not covered as
provided in (1) above. The Series will comply with SEC guidelines regarding
cover for these instruments and, if the guidelines so require, set aside cash,
U.S. Government securities or other liquid, high-grade debt securities in a
segregated account with its custodian in the prescribed amount.

All options purchased or written by the Series must be listed on a national
securities or futures exchange or traded in the over-the-counter ("OTC") market.
The Series will not purchase or write OTC options if, as a result of such
transaction, the sum of (i) the market value of outstanding OTC options
purchased by the Series, (ii) the market value of the underlying securities
covered by outstanding OTC call options written by the Series, and (iii) the
market value of all other assets of the Series that are illiquid or are not
otherwise readily marketable, would exceed 15% of the net assets of the Series,
taken at market value. However, if an OTC option is sold by the Series to a
primary U.S. Government securities dealer recognized by the Federal Reserve Bank
of New York and the Series has the unconditional contractual right to repurchase
such OTC option from the dealer at a predetermined price, then the Series will
treat as illiquid such amount of the underlying securities as is equal to the
repurchase price less the amount by which the option is "in-the-money" (the
difference between current market value of the underlying security and the
option's strike price). The repurchase price with primary dealers is typically a
formula price which is generally based on a multiple of the premium received for
the option plus the amount by which the option is "in-the-money."

The Series may write only covered options. A call option is covered if the
Series owns the underlying security or a call option on the same security with a
lower strike price. A put option is covered if the Series segregates cash and/or
short-term debt securities in an amount necessary to pay the strike price of the
option or purchases a put option on the same underlying security with a higher
strike price.

The Series will not purchase puts, calls, straddles, spreads or any combination
thereof, if as a result of such purchase the value of the Series' aggregate
investment in such securities would exceed 5% of the Series' total assets.

INVESTMENT RESTRICTIONS OF BLUE CHIP STOCK SERIES. As a result of the following
fundamental investment restrictions, the Blue Chip Stock Series will not:

(1) Borrow money except that the Series may (i) borrow for non-leveraging,
temporary or emergency purposes and (ii) engage in reverse repurchase agreements
and make other investments or engage in other transactions, which may involve a
borrowing, in a manner consistent with the Series' investment objective and
program, provided that the combination of (i) and (ii) shall not exceed 33 1/3%
of the value of the Series' total assets (including the amount borrowed) less
liabilities (other than borrowings) or such other percentage permitted by law.
Any borrowings which come to exceed this amount will be reduced in accordance
with applicable laws. The Series may borrow from banks or other persons to the
extent permitted by applicable law.

(2) Purchase or sell physical commodities; except that it may enter into
futures contracts and options thereon.

(3) Purchase the securities of any issuer if, as a result, more than 25% of
the value of the Series' total assets would be invested in the securities of
issuers having their principal business activities in the same industry.

(4) Make loans, although the Series may (i) lend portfolio securities
provided that no such loan may be made if, as a result, the aggregate of such
loans would exceed 33 1/3% of the value of the Series' total assets; (ii)
purchase money market securities and enter into repurchase agreements; and (iii)
acquire publicly-distributed or privately-placed debt securities and purchase
debt.

(5) Purchase a security if, as a result, with respect to 75% of the value of
its total assets, more than 5% of the value of the Series' total assets would be
invested in the securities of a single issuer, except securities issued or
guaranteed by the U.S. Government or any of its agencies or instrumentalities.

(6) Purchase a security if, as a result, with respect to 75% of the value of
the Series' total assets, more than 10% of the outstanding voting securities of
any issuer would be held by the Series (other than obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities).

(7) Purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the Series from
investing in securities or other instruments backed by real estate or in
securities of companies engaged in the real estate business).

(8) Issue senior securities except in compliance with the Investment Company
Act of 1940.

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

The following notes should be read in connection with the above-described
fundamental policies. The notes are not fundamental policies.

With respect to investment restriction (2), the Series does not consider
currency contracts or hybrid investments to be commodities.

For purposes of investment restriction (3), U.S., state or local governments, or
related agencies or instrumentalities, are not considered an industry.
Industries are determined by reference to the classifications of industries set
forth in the Series' semi-annual and annual reports.

For purposes of investment restriction (4), the Series will consider the
acquisition of a debt security to include the execution of a note or other
evidence of an extension of credit with a term of more than nine months.

The following investment restrictions may be changed by the Board of Directors
without shareholder approval. The Blue Chip Growth Series will not:

(1) The Series will not purchase additional securities when money borrowed
exceeds 5% of its total assets.

43
<PAGE>

(2) Invest in companies for the purpose of exercising management or control.

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

(4) Purchase illiquid securities and securities of unseasoned issuers if, as
a result, more than 15% of its net assets would be invested in such securities,
provided that the Series will not invest more than 10% of its total assets in
restricted securities and not more than 5% in securities of unseasoned issuers.
Securities eligible for resale under Rule 144A of the Securities Act of 1933 are
not included in the 10% limitation but are subject to the 15% limitation.

(5) Purchase securities of open-end or closed-end investment companies except
in compliance with the Investment Company Act of 1940 and applicable state law.
Duplicate fees may result from such purchases.

(6) Purchase securities on margin, except (i) for use of short-term credit
necessary for clearance of purchases of portfolio securities and (ii) it may
make margin deposits in connection with futures contracts or other permissible
investments.

(7) Mortgage, pledge, hypothecate or, in any manner, transfer any security
owned by the Series as security for indebtedness except as may be necessary in
connection with permissible borrowings or investments and then such mortgaging,
pledging or hypothecating may not exceed 25% of the Series' total assets at the
time of borrowing or investment.

(8) Purchase participations or other direct interests in or enter into leases
with respect to, oil, gas, or other mineral exploration or development programs.

(9) Invest in puts, calls, straddles, spreads, or any combination thereof,
except to the extent permitted by the prospectus and Statement of Additional
Information.

(10) Lend its portfolio securities in an amount in excess of 10% of its total
assets.

(11) Borrow money except for borrowings up to 25% of its total assets when
borrowing is necessary to meet redemptions.

(12) Invest in the aggregate more than 10% of its total assets in put and call
options, futures contracts, and derivatives.

Any investment restriction or limitation, fundamental or otherwise, which
involves a maximum percentage of securities or assets shall not be considered to
be violated (except in the case of the limitation on illiquid investments)
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.

44
<PAGE>
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
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 on
behalf of the Global Bond Series, Global Asset Allocation Series, Blue Chip
Stock Series, Global Growth Series, and International Stock Series 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)
</TABLE>

45
<PAGE>

<TABLE>
<CAPTION>
COUNTRY BANK/DEPOSITORY
- ------------------ ---------------------------------------------------
<S> <C>
Finland Kansallis-Osake-Pankki
The Central Share Register of Finland
France Banque Paribas
Societe Interprofessionelle de
Compensation des Valeurs
Mobilieres (SICOVAM)
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)
Ireland Allied Irish Bank
Israel Bank Lueumi-Le Isreal
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)
<CAPTION>
COUNTRY BANK/DEPOSITORY
- ------------------ ---------------------------------------------------
<S> <C>
Slovak Republic Ceskoslovenska Obchodua Banka, A.S.
South Africa First National Bank of Southern
Africa, Ltd.
South Korea Standard Chartered Bank, Seoul
Spain Banco Santaden
Servicio de Compensacion y
Liquidacion de Valores (SCLV)
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.

46
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS

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

<TABLE>
<CAPTION>
POSITION WITH
NAME & ADDRESS AGE THE FUND
- ------------------------- --- --------------
<S> <C> <C> <C>
Richard W. Cutting 64 Director
137 Chapin Parkway
Buffalo, New York
Allen R. Freedman* 56 Director
One Chase Manhattan Plaza
New York, New York
Dr. Robert M. Gavin 55 Director
1600 Grand Avenue
St. Paul, Minnesota
Benjamin S. Jaffray 66 Director
4040 IDS Center
Minneapolis, Minnesota
Jean L. King 51 Director
12 Evergreen Lane
St. Paul, Minnesota
Dean C. Kopperud* 43 President and
500 Bielenberg Drive Director
Woodbury, Minnesota
Edward M. Mahoney 66 Director
2760 Pheasant Road
Excelsior, Minnesota
Robb L. Prince 54 Director
5108 Duggan Plaza
Edina, Minnesota
Leonard J. Santow 60 Director
75 Wall Street
21st Floor
New York, New York
Joseph M. Wikler 55 Director
12520 Davan Drive
Silver Spring, Maryland
Gary N. Yalen 53 Vice President
One Chase Manhattan Plaza
New York, New York
Howard G. Hudson 58 Vice President
One Chase Manhattan Plaza
New York, New York
Stephen M. Poling 64 Vice President
5500 Wayzata Boulevard
Golden Valley, Minnesota
Fred Obser 57 Vice President
One Chase Manhattan Plaza
New York, New York
Dennis M. Ott 49 Vice President
5500 Wayzata Boulevard
Golden Valley, Minnesota
James S. Byrd 45 Vice President
5500 Wayzata Boulevard
Golden Valley, Minnesota
Nicholas L. M. dePeyster 29 Vice President
41st Floor
One Chase Manhattan Plaza
New York, New York
Charles J. Dudley 36 Vice President
One Chase Manhattan Plaza
New York, New York

<CAPTION>
PRINCIPAL OCCUPATION AND AFFILIATIONS WITH
NAME & ADDRESS "AFFILIATED PERSONS" OR INVESTORS (PAST 5 YEARS)
- ------------------------- -------------------------------------------------------------------------------------
<S> <C>
Richard W. Cutting Certified public accountant and financial consultant.
137 Chapin Parkway
Buffalo, New York
Allen R. Freedman* Chairman, Chief Executive Officer, and President of Fortis, Inc. ("Fortis"); a
One Chase Manhattan Plaza Managing Director of Fortis International, N. V.
New York, New York
Dr. Robert M. Gavin President, Macalester College.
1600 Grand Avenue
St. Paul, Minnesota
Benjamin S. Jaffray Chairman of the Sheffield Group, Ltd., a financial consulting group.
4040 IDS Center
Minneapolis, Minnesota
Jean L. King President, Communi-King, a communications consulting firm.
12 Evergreen Lane
St. Paul, Minnesota
Dean C. Kopperud* Chief Executive Officer and a Director of Fortis Advisers, Inc. ("Advisers"),
500 Bielenberg Drive President and a Director of Fortis Investors, Inc. ("Investors"), and Senior Vice
Woodbury, Minnesota President and a Director of Fortis Benefits Insurance Company and Time Insurance
Company.
Edward M. Mahoney Retired; prior to December, 1994, Chairman and Chief Executive Officer and a Director
2760 Pheasant Road of Advisers and Investors, Senior Vice President and a Director of Fortis Benefits
Excelsior, Minnesota Insurance Company, and Senior Vice President of Time Insurance Company.
Robb L. Prince Retired; prior to June, 1995, Vice President and Treasurer, Jostens, Inc., a producer
5108 Duggan Plaza of products and services for the youth, education, sports award, and recognition
Edina, Minnesota markets.
Leonard J. Santow Principal, Griggs & Santow, Incorporated, economic and financial consultant.
75 Wall Street
21st Floor
New York, New York
Joseph M. Wikler Investment consultant and private investor; prior to January, 1994, Director of
12520 Davan Drive Research, Chief Investment Officer, Principal, and a Director, the Rothschild Co.,
Silver Spring, Maryland Baltimore, Maryland. The Rothschild Co. is an investment advisory firm.
Gary N. Yalen President and Chief Investment Officer of Advisers (since August, 1995) and Fortis
One Chase Manhattan Plaza Asset Management, a division of Fortis, Inc., New York, NY, and Senior Vice
New York, New York President, Investments, Fortis, Inc.
Howard G. Hudson Executive Vice President of Advisers (since August, 1995) and Senior Vice President,
One Chase Manhattan Plaza Fixed Income, Fortis Asset Management; prior to February, 1991, Senior Vice
New York, New York President, Fairfield Research, New Canaan, CT.
Stephen M. Poling Executive Vice President and Director of Advisers and Investors.
5500 Wayzata Boulevard
Golden Valley, Minnesota
Fred Obser Senior Vice President of Advisers (since August, 1995) and Senior Vice President,
One Chase Manhattan Plaza Equities, Fortis Asset Management.
New York, New York
Dennis M. Ott Senior Vice President of Advisers and Investors.
5500 Wayzata Boulevard
Golden Valley, Minnesota
James S. Byrd Executive 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
Nicholas L. M. dePeyster Vice President of Advisers (since August, 1995) and Vice President, Equities, Fortis
41st Floor Asset Management; prior to July, 1991, Research Associate, Smith Barney, Inc., New
One Chase Manhattan Plaza York, NY.
New York, New York
Charles J. Dudley Vice President of Advisers and Fortis Asset Management; prior to August, 1995, Senior
One Chase Manhattan Plaza Vice President, Sun America Asset Management, Los Angeles, CA
New York, New York
</TABLE>

47
<PAGE>

<TABLE>
<CAPTION>
POSITION WITH
NAME & ADDRESS AGE THE FUND
- ------------------------- --- --------------
<S> <C> <C> <C>
Maroun M. Hayek 48 Vice President
One Chase Manhattan Plaza
New York, New York
Robert C. Lindberg 43 Vice President
One Chase Manhattan Plaza
New York, New York
Kevin J. Michels 44 Vice President
One Chase Manhattan Plaza
New York, New York
Stephen M. Rickert 53 Vice President
One Chase Manhattan Plaza
New York, New York
Keith R. Thomson 58 Vice President
5500 Wayzata Boulevard
Golden Valley, Minnesota
Christopher J. Woods 36 Vice President
One Chase Manhattan Plaza
New York, New York
Robert W. Beltz, Jr. 46 Vice President
500 Bielenberg Drive
Woodbury, Minnesota
Thomas D. Gualdoni 47 Vice President
500 Bielenberg Drive
Woodbury, Minnesota
Larry A. Medin 46 Vice President
500 Bielenberg Drive
Woodbury, Minnesota
Jon H. Nicholson 46 Vice President
500 Bielenberg Drive
Woodbury, Minnesota
David A. Peterson 53 Vice President
500 Bielenberg Drive
Woodbury, Minnesota
Richard P. Roche 44 Vice President
500 Bielenberg Drive
Woodbury, Minnesota
Anthony J. Rotondi 51 Vice President
500 Bielenberg Drive
Woodbury, Minnesota
Rhonda J. Schwartz 38 Vice President
500 Bielenberg Drive
Woodbury, Minnesota
Michael J. Radmer 50 Secretary
220 South Sixth Street
Minneapolis, Minnesota
Tamara L. Fagely 37 Treasurer
500 Bielenberg Drive
Woodbury, Minnesota

<CAPTION>
PRINCIPAL OCCUPATION AND AFFILIATIONS WITH
NAME & ADDRESS "AFFILIATED PERSONS" OR INVESTORS (PAST 5 YEARS)
- ------------------------- -------------------------------------------------------------------------------------
<S> <C>
Maroun M. Hayek Vice President of Advisers (since August, 1995) and Vice President, Fixed Income,
One Chase Manhattan Plaza Fortis Asset Management.
New York, New York
Robert C. Lindberg Vice President of Advisers and Investors; prior to July, 1993, Vice President,
One Chase Manhattan Plaza Portfolio Manager, and Chief Securities Trader, COMERICA, Inc., Detroit, Michigan.
New York, New York COMERICA, Inc. is a bank.
Kevin J. Michels Vice President of Advisers (since August, 1995) and Vice President, Administration,
One Chase Manhattan Plaza Fortis Asset Management.
New York, New York
Stephen M. Rickert Vice President of Advisers (since August, 1995) and Corporate Bond Analyst, Fortis
One Chase Manhattan Plaza Asset Management; from August, 1993 to April, 1994, Corporate Bond Analyst, Dillon,
New York, New York Read & Co., Inc., New York, NY; prior to June, 1992, Corporate Bond Analyst, Western
Asset Management, Los Angeles, CA.
Keith R. Thomson Vice President of Advisers and Investors.
5500 Wayzata Boulevard
Golden Valley, Minnesota
Christopher J. Woods Vice President of Advisers (since August, 1995) and Vice President, Fixed Income,
One Chase Manhattan Plaza Fortis Asset Management; prior to November, 1992, Head of Fixed Income, The Police
New York, New York and Firemen's Disability and Pension Fund of Ohio, Columbus, OH.
Robert W. Beltz, Jr. Vice President--Securities Operations of Advisers and Investors.
500 Bielenberg Drive
Woodbury, Minnesota
Thomas D. Gualdoni Vice President of Advisers, Investors, and Fortis Benefits Insurance Company.
500 Bielenberg Drive
Woodbury, Minnesota
Larry A. Medin Senior Vice President--Sales of Advisers and Investors; from August 1992 to November
500 Bielenberg Drive 1994, Senior Vice President, Western Divisional Officer of Colonial Investment
Woodbury, Minnesota Services, Inc., Boston, Massachusetts; from June 1991 to August 1992, Regional Vice
President, Western Divisional Officer of Alliance Capital Management, New York, New
York; prior to June 1991, Senior Vice President, National Sales Director, Met Life
State Street Investment Services, Inc.
Jon H. Nicholson Vice President--Marketing and Product Development of Fortis Benefits Insurance
500 Bielenberg Drive Company.
Woodbury, Minnesota
David A. Peterson Vice President and Assistant General Counsel, Fortis Benefits Insurance Company,
500 Bielenberg Drive prior to January, 1991, Senior Vice President--Law, State Bond and Mortgage Company,
Woodbury, Minnesota Minneapolis, Minnesota.
Richard P. Roche Vice President of Advisers and Investors; prior to August, 1995, President of
500 Bielenberg Drive Prospecting By Seminars, Inc., Guttenberg, NJ.
Woodbury, Minnesota
Anthony J. Rotondi Senior Vice President of Advisers; from January, 1993 to August, 1995, Senior Vice
500 Bielenberg Drive President, Operations, Fortis Benefits Insurance Company; prior to January, 1993,
Woodbury, Minnesota Senior Vice President, Information Technology, Fortis, Inc.
Rhonda J. Schwartz Senior Vice President, General Counsel, and Secretary of Advisers and Investors;
500 Bielenberg Drive Senior Vice President and General Counsel--Life and Investment Products, Fortis
Woodbury, Minnesota Benefits Insurance Company and Vice President and General Counsel, Life and
Investment Products, Time Insurance Company; from 1993 to January 1996, Vice
President, General Counsel, Fortis, Inc.; prior to 1993, Attorney, Norris McLaughlin
& Marcus, Washington, D.C.
Michael J. Radmer Partner, Dorsey & Whitney LLP, the Fund's General Counsel.
220 South Sixth Street
Minneapolis, Minnesota
Tamara L. Fagely Second Vice President of Advisers and Investors.
500 Bielenberg Drive
Woodbury, Minnesota
</TABLE>

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

* Mr. Kopperud is an "interested person" (as defined under the 1940 Act) of
Fortis Series Fund, Inc., Advisers, and Investors primarily because he is an
officer and a director of each. Mr. Freedman is an "interested person" of
Fortis Series Fund, Inc., Advisers, and Investors because he is Chairman,
Chief Executive Officer and President of Fortis, Inc. ("Fortis"), the parent
company of Advisers and indirect parent company of Investors, and a Managing
Director of Fortis International, N. V., the parent company of Fortis.

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

48
<PAGE>

The following table sets forth the aggregate compensation received by each
director during the fiscal year ended December 31, 1995, as well as the total
compensation received by each director from Fortis Series and all other open-end
investment companies managed by Advisers during the fiscal year ended December
31, 1995. Neither Mr. Freedman, who is an officer of the parent company of
Advisers, nor Mr. Kopperud, who is an officer of Advisers and Investors,
received any such compensation and they are not included in the table. No
executive officer of Fortis Series received compensation from Fortis Series
during the fiscal year ended December 31, 1995.

<TABLE>
<CAPTION>
PENSION OR TOTAL COMPENSATION
AGGREGATE RETIREMENT BENEFITS ESTIMATED FROM FUND COMPLEX
COMPENSATION ACCRUED AS PART OF ANNUAL BENEFITS PAID TO DIRECTOR
DIRECTOR FROM THE COMPANY COMPANY EXPENSES UPON RETIREMENT (1)
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Richard W. Cutting
Dr. Robert M. Gavin
Benjamin S. Jaffray
Jean L. King
Edward M. Mahoney
Thomas R. Pellett (2)
Robb L. Prince
Leonard J. Santow
Joseph M. Wikler
</TABLE>

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

(1) Includes aggregate compensation paid by Fortis Series and all 10 Other
Fortis Funds paid to the director.

(2) Mr. Pellett resigned as a director of the Fortis Funds effective December 7,
1995.

As of March 31, 1996, none of the directors and executive officers beneficially
owned any of the outstanding shares of Fortis Series. Directors Kopperud,
Mahoney, Prince, Gavin and Jaffray 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, 1996, Advisers managed twenty-eight investment company
portfolios with combined net assets of approximately $ , and one private
account with net assets of approximately $ . As of March 31, 1996, the
investment company portfolios had an aggregate of shareholders.

During the fiscal years ended December 31, 1993, 1994, and 1995, the Series paid
investment advisory and management fees to Advisers as described in the
following table.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
SERIES 1993 1994 1995
- ------------------------------------------ --------- --------- ---------
<S> <C> <C> <C>
Money Market.............................. $ 76,324 $ 118,752 $
U.S. Government Securities................ 867,698 952,432
Diversified Income........................ 279,837 489,311
Global Bond............................... -- --
High Yield................................ -- 29,992
Asset Allocation.......................... 737,070 1,205,808
Global Asset Allocation................... -- --
Growth & Income........................... -- 38,143
Growth Stock.............................. 1,567,285 2,140,994
Global Growth............................. 220,060 833,424
International Stock....................... -- --
Aggressive Growth......................... -- 30,188
</TABLE>

During the fiscal year ended December 31, 1995, Advisers paid advisory fees to
the sub-advisers of Global Bond Series, Global Asset Allocation Series, and
International Stock Series in the amount of $ , $ , $ ,
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.

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 Chief Executive Officer of Advisers and President of
Investors; Gary N. Yalen is President and Chief Investment Officer of Advisers;
Stephen M. Poling is Executive Vice President of Advisers and Investors; Howard
G. Hudson is Executive Vice President of Advisers; Dennis M. Ott, Larry A.
Medin, and Anthony J. Rotondi are Senior Vice Presidents of Advisers and
Investors; Rhonda J. Schwartz is Senior Vice President, General Counsel, and
Secretary of Advisers and Investors; Fred Obser is Senior Vice President of
Advisers; Robert W. Beltz, Jr., James S. Byrd, Thomas D. Gualdoni, Robert C.
Lindberg, Jon H. Nicholson, Richard P. Roche, and Keith R. Thomson are Vice
Presidents of Advisers and Investors; Nicholas L. M. De Peyster, Charles J.
Dudley, Maroun M. Hayek; Kevin J. Michels, Stephen M. Rickert, and Christopher
J. Woods are Vice Presidents of Advisers; John E. Hite is 2nd Vice President and
Assistant Secretary of Advisers and Investors; Carol M. Houghtby is 2nd Vice
President and Treasurer of Advisers and Investors; Tamara L. Fagely and Barbara
W. Kirby are 2nd Vice Presidents of Advisers and Investors; David C. Greenzang
is Money Market Portfolio Officer of Advisers; Michael D. O'Connor is Qualified
Plan Officer of Advisers and Investors; Barbara J.

49
<PAGE>

Wolf is Trading Officer of Advisers; Scott R. Plummer is Assistant Secretary of
Advisers and Investors; Joanne M. Herron is Assistant Treasurer of Advisers and
Investors and Sharon R. Jibben is Assistant Secretary of Advisers.

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

All of the above persons reside or have offices in the Minneapolis/St. Paul
area, except Messrs. Yalen, Hudson, De Peyster, Dudley, Hayek, Lindberg,
Michels, Obser, Rickert, Woods and Greenzang, who are located in New York City.

INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT

Advisers acts as investment adviser and manager for the Growth Stock, U.S.
Government, Diversified Income, Money Market, Asset Allocation and Global 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 thereof 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"), which became effective on January 3,
1995, following approval by their then respective sole shareholders. Advisers
also acts as investment adviser and manager of Value, S&P 500 Index, and Blue
Chip Stock Series under an Investment Advisory and Management Agreement dated
March 22, 1996 (the "1996 Agreement"), which became effective May 1, 1996
following approval thereof by their respective sole shareholders. (The 1992
Agreement, the 1994 Agreement, 1995 Agreement and 1996 Agreement are
collectively referred to below as the "Agreements.") 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 7, 1995,
except that the 1996 Agreements were each approved March 22, 1996. 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, 1996, the Series' net assets totaled approximately
$ for Money Market Series, $ for U.S. Government Securities Series,
$ for Diversified Income Series, $ for Global Bond Series, $
for High Yield Series, $ for Asset Allocation Series, $ for Global
Asset Allocation Series, $ for Growth & Income Series, $ for Growth
Stock Series, $ for Global Growth Series, $ for International Stock
Series, and $ 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 .9%
Series For assets over $100 million .85%

Value For the first $100,000,000 .7%
For assets over $100,000,000 .6%

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

S&P 500 Index All levels of assets .4%

Blue Chip Stock For the first $100,000,000 .9%
For assets over $100,000,000 .85%

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 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

50
<PAGE>
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 %

S&P 500 Index Series Dreyfus All levels of assets .17 %

Blue Chip Stock Series T. Rowe Price For the first $100,000,000 .50 %
For assets over $100,000,000 .45 %

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
Value, S&P 500 Index, and Blue Chip Stock 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 1.25%, 1.25%, and 1.25%, 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, 1994 and 1996 (as to Value Series) 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, International Stock Series,
S&P 500 Index Series, and Blue Chip Stock Series have retained sub-advisers
under investment sub-advisory agreements (the five 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 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.

51
<PAGE>
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, 1995, for Asset Allocation Series,
brokerage commissions totaled $ , amounting to % of average net assets and
resulting in an average commission rate of % (calculated by dividing the total
dollar amount of transactions into the total dollar amount of commissions paid).
For Global Asset Allocation Series, brokerage commission totaled $ ,
amounting to % of average net assets and resulting in an average commission of
%. For Growth Stock Series, brokerage commissions totaled $ , amounting to
% of average net assets and resulting in an average commission rate of . For
Growth & Income Series, brokerage commissions totaled $ , amounting to % of
average net assets and resulting in an average commission rate of %. For
Global Growth Series, brokerage commissions totaled $ , amounting to % of
average net assets and resulting in an average commission rate of %. For
Aggressive Growth Series, brokerage commissions totaled $ , amounting to %
of average net assets and resulting in an average commission rate of %. For
International Stock Series, brokerage commissions totaled $ , amounting to
% of average net assets and resulting in an average commission of %. For
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, and Aggressive Growth Series, transactions having an aggregate
dollar value of approximately $ , $ , $ , $ , $ ,
$ , $ , $ , $ , $ , and $ , respectively,
were traded at net prices including a spread or markup.

During the fiscal year ended December 31, 1995, virtually all of the $ paid
in commissions by the Asset Allocation Series in connection with transactions
having an aggregate value of approximately $ , the $ paid in commissions
by the Global Asset Allocation Series in connection with transactions having an
aggregate value of approximately $ , the $ paid in commissions by the
Growth & Income Series in connection with transactions having an aggregate value
of approximately $ , the $ paid in commissions by the Growth Stock
Series in connection with transactions having an aggregate value of
approximately $ , the $ paid in commissions by the Global Growth
Series in connection with transactions having an aggregate value of
approximately $ , the $ paid in commissions by the Aggressive Growth
Series in connection with transactions having an aggregate value of
approximately $ and the $ paid in commission by the International
Stock Series in connection with transactions having an aggregate value of
approximately $ were paid to broker-dealers who furnished investment
research to Advisers, as outlined above.

The Series' acquisitions during the fiscal year ended December 31, 1995, 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.............................. $
Merrill Lynch, Pierce, Fenner & Smith Inc.........
Norwest Corp......................................
National Westminster..............................
General Motors Acceptance Corp....................
General Electric Capital Corp.....................
John Deere Credit Co..............................
American General Finance Corp.....................
Prudential-Bache Securities, Inc..................
First Bank (N.A.) Minneapolis.....................
Beneficial Corp...................................
U.S. Government Securities
Donaldson, Lufkin & Jenrette Sec..................
Nomura Securities International...................
First Bank (N.A.) Minneapolis.....................
Diversified Income
First Bank (N.A.) Minneapolis.....................
Nomura Securities International, Inc..............
Donaldson, Lufkin & Jenrette Sec..................
High Yield
Goldman, Sachs & Co...............................
General Motors Acceptance Corp....................
First Bank (N.A.) Minneapolis.....................
Asset Allocation
First Bank (N.A.) Minneapolis.....................
Donaldson, Lufkin & Jenrette Sec..................
</TABLE>

52
<PAGE>

<TABLE>
<CAPTION>
VALUE OF
SECURITIES OWNED
AT END OF PERIOD
NAME OF ISSUER ($)
- ---------------------------------------------------- ----------------
Growth & Income
<S> <C>
Goldman, Sachs & Co............................... $
First Bank (N.A.) Minneapolis.....................
Global Bond.........................................
Global Asset Allocation.............................
Growth Stock
General Motors Acceptance Corp....................
First Bank (N.A.) Minneapolis.....................
Ford Motor Credit Co..............................
National Westminster..............................
Goldman, Sachs & Co...............................
Global Growth
General Motors Acceptance Corp....................
First Bank (N.A.) Minneapolis.....................
Norwest Corp......................................
Ford Motor Credit Corp............................
Goldman, Sachs & Co...............................
<CAPTION>
VALUE OF
SECURITIES OWNED
AT END OF PERIOD
NAME OF ISSUER ($)
- ---------------------------------------------------- ----------------
<S> <C>
International Stock................................. $
Aggressive Growth
Goldman, Sachs & Co...............................
Norwest Corp......................................
National Westminster..............................
Ford Motor Credit Co..............................
General Motors Acceptance Corp....................
Merrill Lynch, Pierce, Fenner & Smith, Inc........
First Bank (N.A.) Minneapolis.....................
</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, 1996, 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)...............................
Fortis Benefits (startup money).......
</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)...............................
Fortis Benefits (startup money).......
</TABLE>

Fortis Series currently has fifteen 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.

53
<PAGE>
COMPUTATION OF NET ASSET VALUE AND PRICING

On December 31, 1995, the Series' net asset values per share was calculated as
follows:

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