FORTIS SERIES FUND INC, 485BPOS, 2000-05-01

FORTIS SERIES FUND INC
485BPOS, 2000-05-01

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<PAGE> 1
1933 Act Registration No. 33-3920
1940 Act Registration No. 811-4615

As filed with the Securities and Exchange Commission on May 1, 2000

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No. ______
Post-Effective Amendment No. __27__
------

AND/OR

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. __27__

(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)

(651) 738-4000
(Registrant's Telephone Number, including Area Code)

Scott R. Plummer, Esq.
500 Bielenberg Drive
Woodbury, Minnesota 55125
(Name and Address of Agent for Service)

COPY TO:
Michael J. Radmer, Esq.
Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402-1498

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

__x__ 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
_____ on (specify date) pursuant to paragraph (a) of Rule 485
_____ 60 days after filing pursuant to paragraph (a) of Rule 485
<PAGE> 2

[FORTIS Solid partners, flexible solutions(SM) LOGO]

Fortis Series Fund Prospectus

May 1, 2000

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or determined if this prospectus is
truthful or complete. Any statement to the contrary is a criminal offense.

Mailing address:
P.O. Box 64284
St. Paul, Minnesota 55164-0284

Street address:
500 Bielenberg Drive
Woodbury, Minnesota 55125-1400

Telephone: (651) 738-4000
Toll free: (800) 800-2000, extension 3012
<PAGE> 3

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PAGE
<S> <C>
The Series
Money Market Series....................................... 1
U.S. Government Securities Series......................... 2
Diversified Income Series................................. 3
Multisector Bond Series................................... 4
High Yield Series......................................... 5
Global Asset Allocation Series............................ 6
Asset Allocation Series................................... 8
American Leaders Series................................... 10
Value Series.............................................. 11
Capital Opportunities Series.............................. 12
Growth & Income Series.................................... 13
S&P 500 Index Series...................................... 14
Blue Chip Stock Series.................................... 15
Blue Chip Stock Series II................................. 16
International Stock Series................................ 17
Mid Cap Stock Series...................................... 18
Small Cap Value Series.................................... 19
Global Growth Series...................................... 20
Global Equity Series...................................... 21
Large Cap Growth Series................................... 22
Investors Growth Series................................... 23
Growth Stock Series....................................... 24
Aggressive Growth Series.................................. 25

Shareholder Information
Separate accounts and the contracts....................... 26
Pricing of Series shares.................................. 26
Purchase and redemption of Series shares.................. 26
Transfers among subaccounts............................... 26
Taxation.................................................. 26
Contract owner inquiries.................................. 26

Series Management
Investment adviser........................................ 27
Sub-advisers.............................................. 28

More Information on Series Objectives, Investment Strategies
and Risks
Objectives................................................ 30
Investment strategies..................................... 30
Principal risks........................................... 30

Financial Highlights........................................ 34
</TABLE>
<PAGE> 4

THE SERIES
- --------------------------------------------------------------------------------

This section briefly describes the objectives, principal investment strategies
and principal risks of Money Market Series, U.S. Government Securities Series,
Diversified Income Series, Multisector Bond Series, High Yield Series, Global
Asset Allocation Series, Asset Allocation Series, American Leaders Series, Value
Series, Capital Opportunities Series, Growth & Income Series, S&P 500 Index
Series, Blue Chip Stock Series, Blue Chip Stock Series II, International Stock
Series, Mid Cap Stock Series, Small Cap Value Series, Global Growth Series,
Global Equity Series, Large Cap Growth Series, Investors Growth Series, Growth
Stock Series and Aggressive Growth Series (the "Series"). It also provides you
with information on how the Series have performed. Because of their limited
history of operations, performance information is not provided for American
Leaders Series, Capital Opportunities Series, Blue Chip Stock Series II, Global
Equity Series and Investors Growth Series. For further information on a Series,
please read the section entitled "More Information on Series Objectives,
Investment Strategies and Risks."

Shares of the Series may be purchased only by the separate accounts of insurance
companies for the purpose of funding variable annuity contracts or variable life
insurance policies. The Series' investment adviser also acts as the investment
adviser to a number of retail mutual funds which have names and investment
objectives and strategies similar to those of certain Series. The Series are not
duplicates of these retail mutual funds and their performance will differ.

An investment in a Series is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

MONEY MARKET SERIES

OBJECTIVE

Money Market Series' objectives are high levels of capital stability and
liquidity and, to the extent consistent with these objectives, a high level of
current income.

PRINCIPAL INVESTMENT STRATEGIES

Money Market Series pursues its objective by investing in high quality,
short-term debt obligations, including:

- commercial paper;

- obligations of United States, Canadian-chartered and foreign banks having
total assets in excess of one billion dollars, including certificates of
deposits, letters of credit and bankers' acceptances;

- obligations issued or guaranteed by the United States Government, its
agencies or instrumentalities;

- other corporate debt obligations; and

- repurchase agreements in connection with the above obligations.

The Series' adviser selects securities based on yield relationships among the
various types and maturities of money market securities and the adviser's
interest rate outlook. For example, the adviser may focus on commercial paper if
it offers a yield advantage over other money market instruments. In selecting
commercial paper investments, the adviser may purchase longer-maturity
securities if interest rates are expected to fall. These purchases would be made
to try to preserve the Series' income level, since longer maturity investments
typically have higher yields than those with shorter maturities. Conversely,
shorter maturities may be favored if interest rates are expected to rise.
Unlike a traditional money market mutual fund, the Series does not attempt to
maintain its net asset value at any set price. The Series does, however, attempt
to maintain a high level of capital stability by investing only in U.S.
dollar-denominated securities that mature in 397 days or less, except that
obligations issued by the United States Government, its agencies or
instrumentalities may have maturities of up to 762 days. The Series may invest
in securities with variable or floating interest rates and securities with
demand features. The maturities of these securities are determined according to
regulations which allow the Series to consider some of the securities to have
maturities shorter than their stated maturity dates. Money Market Series will
maintain a dollar-weighted average portfolio maturity of 90 days or less. All of
the Series' investments must be in high quality securities which have been
determined by the Series' adviser to present minimal credit risk.

PRINCIPAL RISKS

Money Market Series' share price and yield will change daily because of changes
in interest rates and other factors. The principal risks of investing in Money
Market Series include:

- CREDIT OR DEFAULT RISK. If a bond issuer's credit quality declines or its
credit agency ratings are downgraded, there may be a resulting decline in
the bond's price. If credit quality deteriorates to the point of possible or
actual default (inability to pay interest or repay principal on a timely
basis), the bond's market value could decline precipitously.

- INTEREST RATE RISK. Debt obligations in the Series will fluctuate in
value with changes in interest rates. In general, debt securities will
increase in value when interest rates fall and decrease in value when
interest rates rise. Securities with longer maturities generally have more
volatile prices than securities of comparable quality with shorter
maturities.

- INCOME RISK. Income risk is the potential for a decline in the Series'
income due to falling interest rates.

- FOREIGN INVESTMENT RISKS. The Series' investment in foreign securities
involves risks not typically associated with U.S. investing. Risks of
foreign investing include limited liquidity and volatile prices of non-U.S.
securities, limited availability of information regarding non-U.S.
companies, investment and repatriation restrictions, and foreign taxation.

SERIES PERFORMANCE

The bar chart and table below provide you with information on Money Market
Series' volatility and performance. The bar chart shows you how performance of
the Series has varied from year to year. The table illustrates the Series'
performance over different time periods. Both the chart and the table assume
that all dividends and distributions have been reinvested. Fees and charges
attributable to variable annuity contracts and variable life insurance policies
are not taken into account in calculating the Series' returns. If they had been,
returns would be lower. Remember, how the Series has performed in the past is
not necessarily an indication of how it will perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

[FORTIS ANNUAL TOTAL RETURN BAR GRAPH]

<TABLE>
<CAPTION>
MONEY MARKET SERIES
-------------------
<S> <C>
1990 7.87
1991 5.92
1992 3.36
1993 2.77
1994 3.92
1995 5.71
1996 5.17
1997 5.34
1998 5.32
1999 4.96
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was 1.39%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 2.12% quarter ended December 31, 1990
WORST QUARTER: 0.66% quarter ended June 30, 1993
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
SINCE
ONE YEAR FIVE YEARS TEN YEARS INCEPTION*
-------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Money Market Series..... 4.96% 5.30% 5.02% 5.63%
</TABLE>

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

* Inception date was March 24, 1987.

1
<PAGE> 5

U.S. GOVERNMENT SECURITIES SERIES

OBJECTIVE

The objective of the U.S. Government Securities Series is to maximize total
return (from income and market value change), while providing you with a high
level of current income consistent with prudent investment risk.

PRINCIPAL INVESTMENT STRATEGIES

U.S. Government Securities Series pursues its objective by investing primarily
in securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities. These securities include both U.S. Treasury obligations and
obligations of U.S. Government agencies and instrumentalities. The Series may
invest a significant portion of its assets in mortgage-backed securities.

The Series' investments in mortgage-backed securities may include collateralized
mortgage obligations ("CMOs") issued by government agencies or by private
entities. Some types of CMOs, such as interest-only classes ("IOs"),
principal-only classes ("POs"), inverse floaters and accrual bonds, can be
highly volatile in response to changing interest rates. The Series will not
invest more than 5% of its net assets in any one of these types of securities or
more than 10% of its net assets collectively in IOs, POs, inverse floaters and
accrual bonds. In addition, any CMOs issued by private entities must be rated
within the three highest grades assigned by Moody's Investors Service, Inc.
("Moody's") or Standard & Poor's Rating Services ("S&P"), comparably rated by
another nationally recognized rating organization, or unrated and determined to
be of comparable quality by the Series' adviser.

The Series also may invest in zero coupon obligations of the U.S. Government and
its agencies. Because these obligations do not pay interest currently, their
prices can be highly volatile as interest rates rise and fall.

The Series' portfolio may change based upon factors such as the anticipated
timing and magnitude of changes in interest rates and expectations concerning
the future performance of different asset categories. The decision to purchase a
particular security is based upon a number of factors, the most important of
which are the characteristics of the security (interest rate, term, call
provisions, etc.) and diversification in the Series. It is anticipated that the
average effective duration of the Series will be between three and seven years.

PRINCIPAL RISKS

U.S. Government Securities Series' share price and yield will change daily
because of changes in interest rates and other factors. You may lose money if
you invest in the Series. The principal risks of investing in U.S. Government
Securities Series include:
- INTEREST RATE RISK. Debt securities in the Series will fluctuate in value
with changes in interest rates. In general, debt securities will increase in
value when interest rates fall and decrease in value when interest rates
rise. One measure of interest rate risk is duration. Securities with longer
durations generally have more volatile prices than securities of comparable
quality with shorter durations.

- INCOME RISK. Income risk is the potential for a decline in the Series'
income due to falling interest rates.

- CALL RISK. The Series is subject to the possibility that, under certain
conditions, especially during periods of falling interest rates, a bond
issuer will "call"--or repay--its bonds before their maturity date. The
Series may then be forced to invest the unanticipated proceeds at lower
interest rates, resulting in a decline in the Series' income.

- RISKS OF MORTGAGE-BACKED SECURITIES. Because the Series may invest
significantly in mortgage-backed securities, it is subject to early
prepayment risk and/or extension risk. Similar to call risk, early
prepayment risk is the risk that falling interest rates could cause faster
than expected prepayments of the mortgages underlying the Series'
mortgage-backed securities. These prepayments pass through to the Series,
which must reinvest them at a time when interest rates on new mortgage
investments are falling, reducing the Series' income. Extension risk is the
risk that rising interest rates could cause mortgage prepayments to slow,
which would lengthen the duration of the Series' mortgage-backed securities
and cause their prices to decline.

SERIES PERFORMANCE

The bar chart and table below provide you with information on U.S. Government
Securities Series' volatility and performance. The bar chart shows you how
performance of the Series has varied from year to year. The table compares the
Series' performance over different time periods to that of a broad measure of
market performance. Both the chart and the table assume that all dividends and
distributions have been reinvested. Fees and charges attributable to variable
annuity contracts and variable life insurance policies are not taken into
account in calculating the Series' returns. If they had been, returns would be
lower. Remember, how the Series has performed in the past is not necessarily an
indication of how it will perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES SERIES
---------------------------------
<S> <C>
1990 7.93
1991 14.36
1992 6.14
1993 9.45
1994 -6.44
1995 18.78
1996 2.21
1997 9.08
1998 8.87
1999 -1.94
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was 1.85%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 5.86% quarter ended June 30, 1995
WORST QUARTER: -4.55% quarter ended March 31, 1994
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
SINCE
ONE YEAR FIVE YEARS TEN YEARS INCEPTION*
-------- ---------- --------- ----------
<S> <C> <C> <C> <C>
U.S. Government
Series................ -1.94% 7.17% 6.61% 6.74%
Lehman Brothers
Intermediate
Government Bond
Index**............... 0.49% 6.93% 7.10% 7.17%
</TABLE>

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

* Inception date was March 24, 1987.

** An unmanaged index of government bonds with an average maturity of three to
four years.

2
<PAGE> 6

DIVERSIFIED INCOME SERIES

OBJECTIVE

The objective of Diversified Income Series is to maximize total return from
income and market value change.

PRINCIPAL INVESTMENT STRATEGIES

Diversified Income Series pursues its objective by investing primarily in a
diversified portfolio of government securities and investment grade corporate
bonds, including:

- corporate fixed income securities;

- securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities;

- mortgage-backed securities; and

- asset-backed securities.

The Series may invest up to 30% of its total assets in non-investment grade
corporate bonds (sometimes referred to as "junk bonds" or "high yield"
securities) and unrated corporate bonds. Up to 10% of the Series' assets may be
invested in "non-performing" securities. These are securities rated lower than
Caa by Moody's Investors Service ("Moody's") or CCC by Standard & Poor's Ratings
Service ("S&P"), that are comparably rated by another nationally recognized
rating organization, or that are unrated and determined by the Series' adviser
to be of comparable quality. Non-performing securities are highly speculative
and may be in default or there may be elements of danger with respect to the
payment of principal or interest.

The Series may invest up to 25% of its total assets in securities of foreign
governments and companies.

The Series' portfolio may change based upon factors such as the anticipated
timing and magnitude of changes in interest rates and expectations concerning
the future performance of different asset categories. The decision to purchase a
particular security is based upon many factors, the most important of which are
the characteristics of the security (interest rate, term, call provisions,
etc.), the financial stability and managerial strength of the issuer, and
diversification in the Series. It is anticipated that the average effective
duration of the Series will be between three and seven years.

PRINCIPAL RISKS

Diversified Income Series' share price and yield will change daily because of
changes in interest rates and other factors. You may lose money if you invest in
the Series. The principal risks of investing in Diversified Income Series
include:

- INTEREST RATE RISK. Debt securities in the Series will fluctuate in value
with changes in interest rates. In general, debt securities will increase in
value when interest rates fall and decrease in value when interest rates
rise. One measure of interest rate risk is duration. Securities with longer
durations generally have more volatile prices than securities of comparable
quality with shorter durations.

- INCOME RISK. Income risk is the potential for a decline in the Series'
income due to falling interest rates.

- RISKS OF MORTGAGE- AND ASSET-BACKED SECURITIES. Because the Series may
invest significantly in mortgage- and asset-backed securities, it is subject
to prepayment risk and extension risk. Similar to call risk, prepayment risk
is the risk that falling interest rates could cause faster than expected
prepayments of the obligations underlying the Series' mortgage- and
asset-backed securities. These prepayments pass through to the Series, which
must reinvest them at a time when interest rates on new investments are
falling, reducing the Series' income. Extension risk is the risk that rising
interest rates could cause prepayments on the obligations to slow, which
would lengthen the duration of the Series' mortgage- and asset-backed
securities and cause their prices to decline.

- RISKS OF HIGH YIELD/HIGH RISK SECURITIES. A significant portion of the
Series' portfolio may consist of non-investment grade fixed income
securities, commonly referred to as "high yield" securities or "junk bonds."
These securities generally have more volatile prices and carry more risk to
principal than investment grade securities.

- RISKS OF FOREIGN INVESTING. The Series' investment in foreign securities
subject it to risks not typically associated with U.S. investing. Because of
these risks, the Series may be subject to greater volatility than most
mutual funds that invest principally in domestic securities. The Series may
experience a decline in net asset value resulting from changes in exchange
rates between the United States dollar and foreign currencies. Other risks
of foreign investing include limited liquidity and volatile prices of
non-U.S. securities, limited availability of information regarding non-U.S.
companies, investment and repatriation restrictions, and foreign taxation.

SERIES PERFORMANCE

The bar chart and table below provide you with information on Diversified Income
Series' volatility and performance. The bar chart shows you how performance of
the Series has varied from year to year. The table compares the Series'
performance over different time periods to that of a broad measure of market
performance. Both the chart and the table assume that all dividends and
distributions have been reinvested. Fees and charges attributable to variable
annuity contracts and variable life insurance policies are not taken into
account in calculating the Series' returns. If they had been, returns would be
lower. Remember, how the Series has performed in the past is not necessarily an
indication of how it will perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

<TABLE>
<CAPTION>
DIVERSIFIED INCOME SERIES
-------------------------
<S> <C>
1990 8.87
1991 14.67
1992 7.08
1993 12.76
1994 -5.22
1995 17.26
1996 4.15
1997 10.44
1998 6.31
1999 -1.68
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was 1.37%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 5.16% quarter ended March 31, 1993
WORST QUARTER: -3.79% quarter ended March 31, 1994
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
SINCE
ONE YEAR FIVE YEARS TEN YEARS INCEPTION*
-------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Diversified Income
Series................ -1.68% 7.11% 7.25% 7.60%
Lehman Brothers
Aggregate
Bond Index**.......... -0.82% 7.73% 7.70% 8.21%
</TABLE>

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

* Inception date was May 2, 1988.

** An unmanaged index of government, corporate and mortgage-backed securities
with an average maturity of approximately nine years.

3
<PAGE> 7

MULTISECTOR BOND SERIES

From its inception on January 3, 1995 until March 15, 2000, this Series was
managed by a different sub-adviser and was named the Global Bond Series. As the
Global Bond Series, the Series invested principally in high quality U.S. and
foreign government and corporate fixed income securities. As of March 15, 2000,
the Series has been sub-advised by A I M Capital Management, Inc. in the manner
described below.

OBJECTIVE

The objective of Multisector Bond Series is to achieve a high level of current
income consistent with reasonable concern for safety of principal.

PRINCIPAL INVESTMENT STRATEGIES

Multisector Bond Series pursues its objective by investing primarily in
fixed-rate corporate debt and U.S. Government obligations.

The Series may invest up to 40% of its total assets in securities of foreign
governments and companies.

The Series may invest up to 35% of its total assets in non-investment grade
corporate bonds (sometimes referred to as "junk bonds" or "high yield"
securities) and unrated corporate bonds deemed by the Series' sub-adviser to be
of comparable quality. The Series may also invest in preferred stock issues and
convertible corporate debt.

The Series' sub-adviser, A I M Capital Management, Inc. ("AIM"), focuses on
securities that it believes have favorable prospects for current income,
consistent with its concern for safety of principal. The decision to purchase a
particular security is based upon many factors, the most important of which are
the characteristics of the security (interest rate, term, call provisions,
etc.), the financial stability and managerial strength of the issuer, and
diversification in the Series. AIM considers whether to sell a particular
security when any one of these factors materially changes. It is anticipated
that the average effective duration of the Series will be between four and eight
years.

PRINCIPAL RISKS
Multisector Bond Series' share price and yield will change daily because of
changes in interest rates and other factors. You may lose money if you invest in
the Series. The principal risks of investing in Multisector Bond Series include:

- INCOME RISK. Income risk is the potential for a decline in the Series'
income due to falling interest rates.

SERIES PERFORMANCE

The bar chart and table below provide you with information on Multisector Bond
Series' (formerly Global Bond Series) volatility and performance. The bar chart
shows you how performance of the Series has varied from year to year. The table
compares the Series' performance over different time periods to that of a broad
measure of market performance. Both the chart and the table assume that all
dividends and distributions have been reinvested. Fees and charges attributable
to variable annuity contracts and variable life insurance policies are not taken
into account in calculating the Series' returns. If they had been, returns would
be lower. Remember, how the Series has performed in the past is not necessarily
an indication of how it will perform in the future. The following information
reflects the Series' performance when it was managed as the Global Bond Series.

ANNUAL TOTAL RETURN as of December 31 each year*

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was -0.98%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 10.35% quarter ended March 31, 1995
WORST QUARTER: -4.87% quarter ended March 31, 1999
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
ONE YEAR FIVE YEARS SINCE INCEPTION*
-------- ---------- ----------------
<S> <C> <C> <C>
Multisector Bond Series..... -7.53% 5.28% 5.29%
Salomon Brothers World
Government Bond Index**... -4.27% 6.41% 6.41%
</TABLE>

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

* Inception date was January 3, 1995.

** An unmanaged index of world government bonds with maturities of at least one
year.

4
<PAGE> 8

HIGH YIELD SERIES

OBJECTIVE

The objective of High Yield Series is to maximize return from income and market
value change.

PRINCIPAL INVESTMENT STRATEGIES

High Yield Series pursues its objective by investing primarily in a portfolio of
non-investment grade fixed income securities, also referred to as "high yield"
securities or "junk bonds."

The Series may invest without limitation in securities rated as low as Caa by
Moody's or CCC by S&P, or comparably rated by another nationally recognized
rating organization. In addition, up to 10% of the Series' assets may be
invested in "non-performing" securities rated lower than Caa or CCC.
Non-performing securities are highly speculative and may be in default or there
may be elements of danger with respect to the payment of principal or interest.
The Series may also invest in unrated securities which the Series' adviser
believes are of comparable quality to those rated within the foregoing
categories.

The Series may also invest in certain types of accrual bonds, including zero
coupon bonds, payment-in-kind securities and deferred payment securities. The
holder of an accrual bond does not receive cash interest during the accrual
period. Zero coupon bonds are issued at a significant discount to par with
interest and principal paid at maturity. Payment-in-kind securities pay interest
in the form of additional securities. Deferred payment securities accrue
interest until a predetermined date, after which they pay cash interest. The
market prices for these securities are affected to a greater extent by interest
rate changes and are typically more volatile than the market prices of
securities that pay interest periodically and in cash. The Series may invest up
to 25% of its net assets in accrual bonds.

The Series may invest up to 25% of its total assets in securities of foreign
governments and companies.

In considering investments for the Series, the adviser will attempt to identify
high-yielding securities of issuer companies whose financial condition is stable
or is expected to improve in the future. The adviser's 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
issuer companies. It is anticipated that the average effective duration of the
Series will be between three and seven years.

PRINCIPAL RISKS

High Yield Series' share price and yield will change daily because of changes in
interest rates and other factors. You may lose money if you invest in the
Series. The principal risks of investing in High Yield Series include:

- INCOME RISK. Income risk is the potential for a decline in the Series'
income due to falling interest rates.

- RISKS OF HIGH YIELD/HIGH RISK SECURITIES. The Series invests primarily in
non-investment grade fixed income securities, commonly referred to as "high
yield" securities or "junk bonds." These securities generally have more
volatile prices and carry more risk to principal than investment grade
securities.

SERIES PERFORMANCE

The bar chart and table below provide you with information on High Yield Series'
volatility and performance. The bar chart shows you how performance of the
Series has varied from year to year. The table compares the Series' performance
over different time periods to that of a broad measure of market performance.
Both the chart and the table assume that all dividends and distributions have
been reinvested. Fees and charges attributable to variable annuity contracts and
variable life insurance policies are not taken into account in calculating the
Series' returns. If they had been, returns would be lower. Remember, how the
Series has performed in the past is not necessarily an indication of how it will
perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

<TABLE>
<CAPTION>
HIGH YIELD SERIES
-----------------
<S> <C>
1995 12.73
1996 10.52
1997 9.76
1998 0.62
1999 1.17
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was -1.79%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 5.64% quarter ended June 30, 1997
WORST QUARTER: -4.50% quarter ended September 30, 1998
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
ONE YEAR FIVE YEARS SINCE INCEPTION*
-------- ---------- ----------------
<S> <C> <C> <C>
High Yield Series........... 1.17% 6.84% 5.87%
Lehman Brothers High Yield
Index**................... 2.39% 9.31% 8.47%
</TABLE>

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

* Inception date was May 2, 1994.

** An unmanaged index of lower quality, high yield corporate debt securities.

5
<PAGE> 9

GLOBAL ASSET ALLOCATION SERIES

OBJECTIVE

The objective of Global Asset Allocation Series is maximum total return to be
derived primarily from capital appreciation, dividends and interest.

PRINCIPAL INVESTMENT STRATEGIES

Global Asset Allocation Series invests in equity and fixed-income securities of
issuers located throughout the world, including the United States. The Series
pursues its objective 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.

- EQUITY INVESTMENTS. The Series' equity investments may include common
stocks, 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 and other depositary receipts.

- FIXED-INCOME INVESTMENTS. Fixed-income investments in which the Series
invests include securities issued or guaranteed by U.S. and foreign
governments and their agencies and instrumentalities, securities of
supranational entities, Eurobonds and corporate bonds with varying
maturities denominated in various currencies and money market instruments.

The Series may engage in forward currency exchange contracts and currency
financial futures and options, both to hedge its portfolio against unfavorable
currency movements and to attempt to enhance returns.

In selecting equity securities for the Series, the Series' sub-adviser, Morgan
Stanley Dean Witter Investment Management Limited ("Morgan Stanley"), initially
identifies those securities that it believes to be undervalued in relation to
the issuer's assets, cash flow, earnings and, where appropriate, revenues.
Morgan Stanley then evaluates the future value of these securities by applying a
dividend discount model to the information obtained. Holdings are regularly
reviewed and subjected to fundamental analysis to determine whether they
continue to meet Morgan Stanley's value criteria. Securities that no longer
conform to those criteria are sold. The median market capitalization of the
equity portion of the Series' portfolio was $13.6 billion as of March 31, 2000.

In selecting 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 which carry a credit rating of at least A-/A3 as rated
by S&P or Moody's, comparably rated by another nationally recognized rating
agency or, if unrated, determined to be of comparable quality by Morgan Stanley.
Morgan Stanley will attempt to maintain an average effective duration of two to
eight years for the fixed-income securities portion of the Series' portfolio.

PRINCIPAL RISKS

Global Asset Allocation Series' share price and yield will change daily because
of changes in stock prices, interest rates and other factors. You may lose money
if you invest in the Series. The principal risks of investing in the Series
include:

- RISKS OF COMMON STOCKS. Prices of stocks in the Series' portfolio may
decline over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, value stocks may underperform
the market as a whole. As you consider an investment in the Series, you
should take into account your personal tolerance for daily fluctuations of
the stock market.

- RISKS OF VALUE STOCKS. The Series' sub-adviser looks for companies whose
stocks appear to be undervalued in relation to the issuer's assets, cash
flow, earnings and, where appropriate, revenues. These stocks can remain
undervalued for years. There is a risk that a stock's price will never reach
what the Series' sub-adviser believes is its true value, or that the stock's
price will go down.

- INCOME RISK. Income risk is the potential for a decline in the Series'
income due to falling interest rates.

- RISKS OF FOREIGN INVESTING. The Series' investments in foreign securities
subject it to risks not typically associated with U.S. investing. Because of
these risks, the Series may be subject to greater volatility than most
mutual funds which invest principally in domestic securities. The Series may
experience a decline in net asset value resulting from changes in exchange
rates between the United States dollar and foreign currencies. Other risks
of foreign investing include limited liquidity and volatile prices of
non-U.S. securities, limited availability of information regarding non-U.S.
companies, investment and repatriation restrictions, and foreign taxation.

- RISKS OF FOREIGN CURRENCY TRANSACTIONS. If the Series uses foreign
currency transactions it will be exposed to additional risks and
transactions costs. Successful use of these derivative instruments depends
on the sub-adviser's ability to forecast correctly the direction of market
movements. The Series' performance could be worse than if the Series had not
used these instruments if the sub-adviser's judgment proves incorrect. In
addition, even if the sub-adviser's judgment is correct, there may be an
imperfect correlation between the price of derivative instruments and
movements in the prices of the currencies being hedged.

- RISKS OF ACTIVE MANAGEMENT. Because the Series may invest in a wide range
of investments and markets, the Series' sub-adviser has substantially more
investment discretion than the advisers of most mutual funds. The
performance of the Series will reflect in part the sub-adviser's ability to
effectively allocate the Series' assets among these investments and markets.

6
<PAGE> 10

SERIES PERFORMANCE

The bar chart and table below provide you with information on Global Asset
Allocation Series' volatility and performance. The bar chart shows you how
performance of the Series has varied from year to year. The table compares the
Series' performance over different time periods to that of a broad measure of
market performance. Both the chart and the table assume that all dividends and
distributions have been reinvested. Fees and charges attributable to variable
annuity contracts and variable life insurance policies are not taken into
account in calculating the Series' returns. If they had been, returns would be
lower. Remember, how the Series has performed in the past is not necessarily an
indication of how it will perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

<TABLE>
<CAPTION>
GLOBAL ASSET ALLOCATION SERIES
------------------------------
<S> <C>
1995 17.47
1996 12.72
1997 13.51
1998 15.96
1999 -0.87
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was 0.20%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 12.15% quarter ended December 31, 1998
WORST QUARTER: -4.09% quarter ended March 31, 1999
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
ONE YEAR FIVE YEARS SINCE INCEPTION*
-------- ---------- ----------------
<S> <C> <C> <C>
Global Asset Allocation
Series.................... -0.87% 11.56% 11.58%
Salomon Brothers World
Government Bond Index**... -4.27% 6.41% 6.41%
MSCI World Index***......... 25.34% 20.24% 20.24%
</TABLE>

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

* Inception date was January 3, 1995

** An unmanaged index of world government bonds with maturities of at least one
year.

*** An unmanaged index of the world's major equity markets in U.S. dollars,
weighted by stock market value.

7
<PAGE> 11

ASSET ALLOCATION SERIES

OBJECTIVE

The objective of Asset Allocation Series is maximum total return to be derived
primarily from capital appreciation, dividends and interest.

PRINCIPAL INVESTMENT STRATEGIES

Asset Allocation Series invests primarily in common stocks and fixed-income
securities. The Series pursues its objective by following a flexible asset
allocation strategy. This strategy contemplates increased ownership of common
stocks during periods when stock market conditions appear favorable and
increased ownership of fixed-income securities during periods when stock market
conditions are less favorable. Depending on prevailing economic and market
conditions, the Series may at any given time be primarily comprised of common
stocks, fixed-income securities, short-term money market securities or any
combination of these securities. The Series' investments may include the
following:

- COMMON STOCKS. The Series will generally invest in common stocks which
the Series' adviser believes have superior earnings growth potential.

- U.S. GOVERNMENT SECURITIES. The Series may invest in securities issued or
guaranteed by the United States Government, it agencies or
instrumentalities.

- MORTGAGE-BACKED SECURITIES. The Series may invest in mortgage-backed
securities, including pass-through certificates issued by the Government
National Mortgage Association ("GNMA") and the Federal National Mortgage
Association ("FNMA") and collateralized mortgage obligations ("CMOs"). CMOs
are debt instruments issued by special purpose entities which are secured by
pools of mortgage loans or other mortgage-backed securities.

- ASSET-BACKED SECURITIES. The Series may invest in asset-backed
securities, which are similar to CMOs, but backed by other types of
obligations, such as automobile loans, home equity loans or credit card
receivables.

- ZERO COUPON OBLIGATIONS. The Series may invest in zero coupon obligations
issued by the U.S. Government and its agencies and by corporate issuers.
Because these obligations do not pay interest currently, their prices can be
highly volatile as interest rates rise and fall.

- MUNICIPAL OBLIGATIONS. The Series may invest up to 20% of its total
assets in municipal securities during periods when these securities appear
to offer more attractive returns than taxable securities.

- CORPORATE OBLIGATIONS. The Series may invest in debt securities such as
bonds, debentures and notes issued by corporations.

- BANK OBLIGATIONS. The Series may invest in obligations of United States
banks, and in U.S. dollar denominated obligations of Canadian chartered
banks and United States branches or agencies of foreign banks.

- COMMERCIAL PAPER. The Series may invest in commercial paper rated at the
time of purchase Prime-2 or higher by Moody's, A-2 or higher by Standard &
Poor's, or comparably rated by another nationally recognized rating
organization, or unrated and issued by a corporation with an outstanding
debt issue rated A or better by Moody's or Standard & Poor's or comparably
rated by another nationally recognized rating organization.

The Series may invest without limitation in fixed income securities rated within
the four highest grades at the time of purchase by Moody's or S&P, comparably
rated by another nationally recognized rating organization, or unrated and
determined to be of comparable quality by the Series' adviser. These are
commonly referred to as "investment grade" securities. In addition, the Series
may invest up to 30% of its total assets in fixed income securities rated lower
than investment grade (or unrated and of comparable quality), commonly known as
"junk bonds." The Series will not invest in bonds rated below Caa by Moody's or
CCC by S&P, comparably rated by another nationally recognized rating
organization, or unrated and determined to be of comparable quality by the
Series' adviser.

The Series may invest up to 25% of its total assets in securities of foreign
governments and companies.

In managing the common stock portion of the Series' portfolio, the Series'
adviser generally invests in stocks of companies whose earnings and growth
potential, in its judgment, exceed industry averages. In addition to superior
earnings growth potential, the adviser 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 shares. 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. The adviser uses a "bottom up" investment style in
which stock selection is driven primarily by the merits of the company itself.
The series may engage in active and frequent trading to achieve its principal
investment strategies. The median market capitalization of the common stock
portion of the Series' portfolio was $45.3 billion as of March 31, 2000.

The adviser bases its decision to purchase a particular fixed-income security
upon many factors, the most important of which are the characteristics of the
security (interest rate, term, call provisions, etc.), the financial stability
and managerial strength of the issuer of the security and diversification in the
Series. The Series will attempt to maintain an average effective duration of
three to seven years for the debt securities portion of its portfolio.

PRINCIPAL RISKS

Asset Allocation Series' share price and yield will change daily because of
changes in stock prices, interest rates and other factors. You may lose money if
you invest in the Series. The principal risks of investing in Asset Allocation
Series include:

- RISKS OF COMMON STOCKS. Prices of stocks in the Series' portfolio may
decline over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, growth stocks may
underperform the market as a whole. As you consider an investment in the
Series, you should take into account your personal tolerance for daily
fluctuations of the stock market.

- RISKS OF GROWTH STOCKS. In investing in common stocks, the Series'
adviser generally invests in companies that it believes have superior
earnings growth potential. If the adviser incorrectly assesses a company's
prospects for earnings growth, or if its judgment about how other investors
will value the company's earnings growth is wrong, then the price of the
company's stock may decrease, or it may not increase to the level that the
Series' adviser had anticipated.

- RISKS OF SHORT-TERM TRADING. Due to many factors, the Series may trade
securities frequently and hold securities in its portfolio for one year or
less. Frequent purchases and sales of portfolio securities will increase the
Series' transaction costs. Factors that can lead to short-term trading
include market volatility; a significant positive or negative development
concerning a security; and the need to sell a security to meet redemption
activity in the Series.

- INCOME RISK. Income risk is the potential for a decline in the Series'
income due to falling interest rates.

8
<PAGE> 12

- CREDIT OR DEFAULT RISK. If a bond issuer's credit quality declines or its
agency ratings are downgraded, there may be a resulting decline in the
bond's price. If credit quality deteriorates to the point of possible or
actual default (inability to pay interest or repay principal on a timely
basis), the bond's market value could decline precipitously.

- RISKS OF HIGH YIELD/HIGH RISK SECURITIES. A significant portion of the
Series' portfolio may consist of non-investment grade debt securities,
commonly referred to as "high yield" securities or "junk bonds." These
securities generally have more volatile prices and carry more risk to
principal than investment grade securities.

- RISKS OF ACTIVE MANAGEMENT. Because the Series may invest in a wide range
of investments, the Series' investment adviser has substantially more
investment discretion than the advisers of most mutual funds. The
performance of the Series will reflect in part the adviser's ability to
effectively allocate the Series' assets among these investments.

SERIES PERFORMANCE

The bar chart and table below provide you with information on Asset Allocation
Series' volatility and performance. The bar chart shows you how performance of
the Series has varied from year to year. The table compares the Series'
performance over different time periods to that of a broad measure of market
performance. Both the chart and the table assume that all dividends and
distributions have been reinvested. Fees and charges attributable to variable
annuity contracts and variable life insurance policies are not taken into
account in calculating the Series' returns. If they had been, returns would be
lower. Remember, how the Series has performed in the past is not necessarily an
indication of how it will perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

<TABLE>
<CAPTION>
ASSET ALLOCATION SERIES
-----------------------
<S> <C>
1990 2.01
1991 27.64
1992 6.95
1993 9.79
1994 -0.31
1995 21.97
1996 12.5
1997 20.24
1998 19.97
1999 19.56
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was 5.09%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 18.26% quarter ended December 31, 1999
WORST QUARTER: -7.49% quarter ended September 30, 1990
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
SINCE
ONE YEAR FIVE YEARS TEN YEARS INCEPTION*
-------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Asset Allocation
Series............. 19.56% 18.80% 13.69% 12.33%
Lehman Brothers
Aggregate Bond
Index**............ -0.82% 7.73% 7.70% 8.13%
S&P 500 Index***..... 21.04% 28.51% 18.17% 16.77%
</TABLE>

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

* Inception date was May 1, 1987.

** An unmanaged index of government, corporate, and mortgage-backed securities
with an average maturity of approximately nine years.

*** An unmanaged index of 500 common stocks.

9
<PAGE> 13

AMERICAN LEADERS SERIES

OBJECTIVE

The investment objective of American Leaders Series is long-term growth of
capital. The secondary objective of the Series is to provide income.

PRINCIPAL INVESTMENT STRATEGIES

American Leaders Series invests primarily in equity securities of blue chip
companies. The Series' holdings ordinarily will be in large capitalization
companies that are in the top 25% of their industry sectors in terms of revenues
and, in the opinion of the Series' sub-adviser, Federated Investment Management
Company ("Federated"), are trading at a low valuation in relation to their
history, to their current market value and to their expected future price. The
Series' investments may include securities traded in the over-the-counter
markets.

Companies with similar characteristics may be grouped together in broad
categories called sectors. Federated diversifies the Series' investments,
limiting the Series' risk exposure with respect to individual securities and
industry sectors. In determining the amount to invest in a security, and in
order to manage sector risk, Federated attempts to limit the Series' exposure to
each major sector in the Standard & Poor's 500 Index, as a general matter, to
not less than 50% nor more than 200% of the Index's allocation to that sector.

The Series' equity investments principally consist of common stocks, but also
may include American Depositary Receipts ("ADRs"). ADRs represent interests in
underlying securities issued by a foreign company, but are traded in the United
States. The Series invests primarily in ADRs of companies with significant
operations within the United States.

Federated performs traditional fundamental analysis to select securities that
exhibit the most promising long-term value for the Series' portfolio. In
selecting securities, Federated focuses on the current financial condition of
the issuing company, in addition to examining each issuer's business and product
strength, competitive position, and management expertise. Further, Federated
considers current economic, financial market, and industry factors, which may
affect the issuing company. To determine the timing of purchases and sales of
portfolio securities, Federated looks at recent stock price performance and the
direction of current fiscal year earnings estimates of various companies.

PRINCIPAL RISKS

American Leaders Series' share price will change daily because of changes in
stock prices and other factors. You may lose money if you invest in the Series.
The principal risks of investing in the Series include:

- RISKS OF COMMON STOCKS. Prices of stocks in the Series' portfolio may
decline over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, value stocks and/or stocks of
large capitalization companies may underperform the market as a whole. As
you consider an investment in the Series, you should take into account your
personal tolerance for daily fluctuations of the stock market.

- RISKS OF VALUE STOCKS. The Series' sub-adviser looks for companies whose
stocks appear to be undervalued in relation to their history, to their
current market value and to their expected future price. These stocks can
remain undervalued for years. There is a risk that a stock's price will
never reach what the sub-adviser believes is its true value, or that the
stock's price will go down.

- RISKS OF LARGE CAP COMPANIES. In the long run, large company stocks may
produce more modest gains than stocks of smaller companies.

- SECTOR RISK. Because the Series may allocate relatively more of its
assets to one or more industry sectors than to other sectors, the Series'
performance will be more susceptible to any developments which affect the
sectors emphasized by the Series.

- OVER-THE-COUNTER RISK. Over-the-counter ("OTC") transactions involve
risks in addition to those associated with transactions in securities traded
on exchanges. OTC listed companies may have limited product lines, markets
or financial resources. Many OTC stocks trade less frequently and in smaller
volume than exchange-listed stocks. The values of these stocks may be more
volatile than exchange-listed stocks, and the Series may experience
difficulty in establishing or closing out positions in these stocks at
prevailing market prices.

- RISKS OF INVESTING IN ADRS. Because the Series may invest in American
Depositary Receipts issued by foreign companies, the Series' share price may
be more affected by foreign economic and political conditions, taxation
policies and accounting and auditing standards than would otherwise be the
case.

SERIES PERFORMANCE

A bar chart and performance table are not provided for the Series because it did
not commence operations until the date of this Prospectus.

10
<PAGE> 14

VALUE SERIES

OBJECTIVE

The objective of Value Series is short and long term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

Value Series invests primarily in common stocks. The Series' adviser uses a
"bottom up" investment style in which stock selection is driven primarily by the
merits of the company itself. The adviser selects stocks 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 fully reflect this anticipated improvement. Often such 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 is provided by 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. The Series' investments
may include securities traded in the over-the-counter markets.

Under normal market conditions, it is the Series' intention to maintain a median
market capitalization for its portfolio of over $5 billion--making the Series a
"mid to large cap value fund." The Series' median market capitalization was
$12.8 billion as of March 31, 2000.

PRINCIPAL RISKS

Value Series' share price will change daily because of changes in stock prices
and other factors. You may lose money if you invest in the Series. The principal
risks of investing in Value Series include:

- RISKS OF COMMON STOCKS. Prices of stocks in the Series' portfolio may
decline over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, value stocks and/or stocks of
mid and large capitalization companies may underperform the market as a
whole. As you consider an investment in the Series, you should take into
account your personal tolerance for daily fluctuations of the stock market.

- RISKS OF VALUE STOCKS. The Series' adviser looks for companies whose
stocks appear inexpensive relative to anticipated profit and dividend
growth. These stocks can remain undervalued for years. There is a risk that
a stock's price will never reach what the Series' adviser believes is its
true value, or that the stock's price will go down.

- RISKS OF LARGE CAP COMPANIES. In the long run, large company stocks may
produce more modest gains than stocks of smaller companies.

- RISKS OF MID CAP COMPANIES. Mid-sized companies may have somewhat limited
product lines, markets and financial resources and may depend upon a
relatively small management group. Stocks of these companies may therefore
be more vulnerable to adverse developments than those of large companies.

SERIES PERFORMANCE

The bar chart and table below provide you with information on Value Series'
volatility and performance. The bar chart shows you how performance of the
Series has varied from year to year. The table compares the Series' performance
over different time periods to that of a broad measure of market performance.
Both the chart and the table assume that all dividends and distributions have
been reinvested. Fees and charges attributable to variable annuity contracts and
variable life insurance policies are not taken into account in calculating the
Series' returns. If they had been, returns would be lower. Remember, how the
Series has performed in the past is not necessarily an indication of how it will
perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

<TABLE>
<CAPTION>
VALUE SERIES
------------
<S> <C>
1997 25.24
1998 9.64
1999 8.96
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was 4.35%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 16.01% quarter ended December 31, 1998
WORST QUARTER: -14.35% quarter ended September 30, 1998
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
ONE YEAR SINCE INCEPTION*
-------- ----------------
<S> <C> <C>
Value Series.......................... 8.96% 14.97%
S&P 500 Index**....................... 21.04% 26.73%
S&P Barra Value Index***.............. 12.72% 19.20%
</TABLE>

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

* Inception date was May 1, 1996.

** An unmanaged index of 500 common stocks.

*** An unmanaged capitalization-weighted index of all the stocks in the Standard
& Poor's 500 that have low price-to-book ratios. Going forward, the Series
will use the Barra Value Index as a measure of comparable total return
because it is better suited for the investment strategy of the Series.

11
<PAGE> 15

CAPITAL OPPORTUNITIES SERIES

OBJECTIVE

The objective of Capital Opportunities Series is capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The Series invests primarily in common stocks and equity-related securities,
such as preferred stocks, convertible securities and depositary receipts. The
Series focuses on companies which the Series' sub-adviser, Massachusetts
Financial Service Company ("MFS"), believes have favorable growth prospects and
attractive valuations based on current and expected earnings or cash flow. The
Series' investments may include securities traded in the over-the-counter
markets.

The Series may invest in foreign securities (including emerging market
securities), and may have exposure to foreign currencies through its investment
in these securities, its direct holdings of foreign currencies or through its
use of foreign currency exchange contracts for the purchase or sale of a fixed
quantity of a foreign currency at a future date.

The Series may engage in active and frequent trading to achieve its principal
investment strategies.

MFS uses a bottom-up, as opposed to a top-down, investment style in managing the
Series. This means that securities are selected based upon fundamental analysis
(such as an analysis of earnings, cash flows, competitive position and
management's abilities) performed by the Series' sub-adviser and its large group
of equity research analysts.

Under normal market conditions, it is the Series' intention to maintain a median
market capitalization for its portfolio of greater than $5 billion -- making it
a "large cap fund."

PRINCIPAL RISKS

Capital Opportunities Series' share price will change daily because of changes
in stock prices and other factors. You may lose money if you invest in the
Series. The principal risks of investing in the Series include:

- RISKS OF COMMON STOCKS. Prices of stocks in the Series' portfolio may
decline over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, growth stocks and/or the
stocks of large capitalization companies may underperform the market as a
whole. As you consider an investment in the Series, you should take into
account your personal tolerance for daily fluctuations of the stock market.

- RISKS OF GROWTH STOCKS. The Series focuses on companies which the Series'
sub-adviser believes have favorable growth prospects and attractive
valuations based on current and expected earnings or cash flow. If the
sub-adviser incorrectly assesses a company's prospects for earnings growth,
or if its judgment about how other investors will value the company's
earnings growth is wrong, then the price of the company's stock may
decrease, or it may not increase to the level that the sub-adviser had
anticipated.

- RISKS OF LARGE CAP COMPANIES. In the long run, large company stocks may
produce more modest gains than stocks of smaller companies.

- RISKS OF FOREIGN INVESTMENT. Investing in foreign securities involves
risks not typically associated with U.S. investing. These investments may
involve increased political and economic risk. In addition, the Series may
experience a decline in net asset value resulting from changes in exchange
rates between the United States dollar and foreign currencies.

- RISKS OF EMERGING MARKETS. The risks of foreign investing are
particularly significant in emerging markets. Securities issued by companies
located in emerging markets may exhibit greater price volatility and have
less liquidity than securities issued by companies located in developed
foreign markets.

- RISKS OF FOREIGN CURRENCY TRANSACTIONS. If the Series uses foreign
currency transactions it will be exposed to additional risks and transaction
costs. Successful use of these derivative instruments depends on the
sub-adviser's ability to forecast correctly the direction of market
movements. The Series' performance could be worse than if the Series had not
used these instruments if the sub-adviser's judgment proves incorrect. In
addition, even if the sub-adviser's judgment is correct, there may be an
imperfect correlation between the price of the derivative instruments and
movements in the prices of the currencies being hedged.

- RISKS OF SHORT-TERM TRADING. Due to many factors, the Series may trade
securities frequently and hold securities in its portfolio for one year or
less. Frequent purchases and sales of portfolio securities will increase the
Series' transaction costs. Factors that can lead to short-term trading
include market volatility; a significant positive or negative development
concerning a security; an attempt to maintain the Series' market
capitalization target; and the need to sell a security to meet redemption
activity in the Series.

SERIES PERFORMANCE

A bar chart and performance table are not provided for the Series because it did
not commence operations until the date of this Prospectus.

12
<PAGE> 16

GROWTH & INCOME SERIES

OBJECTIVE

The objectives of Growth & Income Series are capital appreciation and current
income.

PRINCIPAL INVESTMENT STRATEGIES

Growth & Income Series invests primarily in common stocks, with an emphasis on
stocks of companies that have a history of dividend payments. The Series'
adviser uses a "bottom up" investment style in which stock selection is driven
primarily by the merits of the company itself. The adviser may select stocks
using either a "value" or a "growth" philosophy. In looking for growth stocks,
the adviser seeks to identify companies whose earnings and revenue growth
potential exceed industry averages. Value stocks are those which the adviser
believes are inexpensive relative to anticipated profit and dividend growth. The
Series' investments may include securities traded in the over-the-counter
markets.

Under normal market conditions, the Series intends to maintain a median market
capitalization for its portfolio of greater than $8 billion--making it a "large
cap fund." The Series' median market capitalization was $36.9 billion as of
March 31, 2000.

PRINCIPAL RISKS

Growth & Income Series' share price will change daily because of changes in
stock prices and other factors. You may lose money if you invest in the Series.
The principal risks of investing in Growth & Income Series include:

- RISKS OF COMMON STOCKS. Prices of stocks in the Series' portfolio may
decline over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, stocks of large
capitalization companies may underperform the market as a whole. As you
consider an investment in the Series, you should take into account your
personal tolerance for daily fluctuations of the stock market.

- RISKS OF LARGE CAP COMPANIES. In the long run, large company stocks may
produce more modest gains than stocks of smaller companies.

SERIES PERFORMANCE

The bar chart and table below provide you with information on Growth & Income
Series' volatility and performance. The bar chart shows you how performance of
the Series has varied from year to year. The table compares the Series'
performance over different time periods to that of a broad measure of market
performance. Both the chart and the table assume that all dividends and
distributions have been reinvested. Fees and charges attributable to variable
annuity contracts and variable life insurance policies are not taken into
account in calculating the Series' returns. If they had been, returns would be
lower. Remember, how the Series has performed in the past is not necessarily an
indication of how it will perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

<TABLE>
<CAPTION>
GROWTH & INCOME SERIES
----------------------
<S> <C>
1995 29.7
1996 21.51
1997 27.69
1998 13.21
1999 10.72
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was 3.39%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 13.46% quarter ended December 31, 1999
WORST QUARTER: -9.49% quarter ended September 30, 1999
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
ONE YEAR FIVE YEARS SINCE INCEPTION*
-------- ---------- ----------------
<S> <C> <C> <C>
Growth & Income Series...... 10.72% 20.33% 18.10%
S&P 500 Index**............. 21.04% 28.51% 25.61%
</TABLE>

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

* Inception date was May 2, 1994.

** An unmanaged index of 500 common stocks.

13
<PAGE> 17

S&P 500 INDEX SERIES

OBJECTIVE

The objective of S&P 500 Index Series is to replicate the total return of the
Standard & Poor's 500 Composite Stock Price Index (the "Index").

PRINCIPAL INVESTMENT STRATEGIES

S&P 500 Index Series generally invests at least 95% of its total assets in the
common stocks included in the Index. The Series may also use stock index futures
contracts, options on such contracts and options on stock indices as a
substitute for the sale or purchase of securities.

The Index is an unmanaged index of 500 common stocks chosen to reflect the
industries of the U.S. economy and is often considered a proxy for the stock
market in general. Each stock is weighted by its market capitalization, which
means larger companies have greater representation in the index than smaller
ones.

The Series' sub-adviser, The Dreyfus Corporation, utilizes a passive investment
approach, attempting to duplicate the investment performance of the Index
through statistical procedures. The Series expects to invest in all 500 stocks
in the 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.

Because the Series may not always hold all of the stocks included in the Index,
and because the Series has expenses and the Index does not, the Series will not
duplicate the Index's performance precisely. However, the Series' adviser and
sub-adviser believe there should be a close correlation between the Series
performance and that of the Index 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. If the Series fails to achieve an appropriate level of correlation
over time, the Series' Board of Directors will consider alternative strategies
for the Series.

The Series' median market capitalization was $94.9 billion as of March 31, 2000.

"Standard & Poor's(R)," "S&P(R)," "Standard & Poor's 500" and "S&P 500(R)" are
trademarks of The McGraw-Hill Companies, Inc., and have been licensed for use by
the Series. The Series is not sponsored, endorsed or sold by Standard & Poor's.
Standard & Poor's makes no representation regarding the advisability of
investing in the Series.

PRINCIPAL RISKS

S&P 500 Index Series' share price will change daily because of changes in stock
prices and other factors. You may lose money if you invest in the Series. The
principal risks of investing in the Series include:

- RISKS OF COMMON STOCKS. Prices of stocks in the Series' portfolio may
decline over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, stocks of the companies in
the Index may underperform the market as a whole. As you consider an
investment in the Series, you should take into account your personal
tolerance for daily fluctuations of the stock market.

- RISKS OF LARGE CAP COMPANIES. The Index is made up of large company
stocks. In the long run, stocks of these companies may produce more modest
gains than stocks of smaller companies.

- FAILURE TO MATCH PERFORMANCE OF THE INDEX. The Series' ability to
replicate the performance of the Index may be affected by, among other
things, changes in securities markets, changes in the composition of the
Index, and the timing of purchases and redemptions of Series shares.

- RISKS OF AN INDEXING STRATEGY. The Series uses an indexing strategy. It
does not attempt to manage market volatility, use defensive strategies or
reduce the effects of any long-term periods of poor stock market
performance.

- RISKS OF FUTURES AND OPTIONS. If the Series uses options and futures
contracts it will be exposed to additional risks and transaction costs.
There may be an imperfect correlation between the price of derivative
instruments and movements in the prices of the securities.

SERIES PERFORMANCE

The bar chart and table below provide you with information on S&P 500 Index
Series' volatility and performance. The bar chart shows you how performance of
the Series has varied from year to year. The table compares the Series'
performance over different time periods to that of a broad measure of market
performance. Both the chart and the table assume that all dividends and
distributions have been reinvested. Fees and charges attributable to variable
annuity contracts and variable life insurance policies are not taken into
account in calculating the Series' returns. If they had been, returns would be
lower. Remember, how the Series has performed in the past is not necessarily an
indication of how it will perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

<TABLE>
<CAPTION>
S&P 500 INDEX SERIES
--------------------
<S> <C>
1997 32.32
1998 28.11
1999 20.34
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was 2.13%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 21.19% quarter ended December 31, 1998
WORST QUARTER: -9.99% quarter ended September 30, 1998
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
ONE YEAR SINCE INCEPTION*
-------- ----------------
<S> <C> <C>
S&P 500 Index Series.................. 20.34% 25.97%
S&P 500 Index**....................... 21.04% 26.73%
</TABLE>

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

* Inception date was May 1, 1996.

** An unmanaged index of 500 common stocks.

14
<PAGE> 18

BLUE CHIP STOCK SERIES

OBJECTIVE

The primary objective of Blue Chip Stock Series is long-term growth of capital.
Current income is a secondary objective.

PRINCIPAL INVESTMENT STRATEGIES

Blue Chip Stock Series pursues its objectives by primarily investing in common
stocks of large and medium-sized blue chip growth companies, as defined by T.
Rowe Price Associates, Inc. ("T. Rowe Price"), the sub-adviser to the Series.
These are companies that, in T. Rowe Price's view, are well established in their
industries and have the potential for above-average earnings. T. Rowe Price
focuses on companies with leading market position, seasoned management, and
strong financial fundamentals. Its investment approach reflects its belief that
solid company fundamentals (with emphasis on strong growth in earnings per share
or operating cash flow) combined with a positive industry outlook will
ultimately reward investors with strong investment performance. Some of the
companies that are targeted will have good prospects for dividend growth.

While most of the Series' assets will be invested in U.S. common stocks, the
Series may also purchase other types of securities, including foreign
securities, preferred stocks and convertible securities, when they are
considered consistent with the Series' investment objectives. The Series may
also buy and sell futures contracts and options on futures contracts. This may
be done to hedge the value of the Series' portfolio against potential adverse
movements in securities prices, to enhance returns, or to maintain market
exposure.

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

Under normal market conditions, it is the Series' intention to maintain a median
market capitalization for its portfolio of greater than $8 billion -- making it
a "large cap fund." The Series' median market capitalization was $70.1 billion
as of March 31, 2000.

PRINCIPAL RISKS

Blue Chip Stock Series' share price will change daily because of changes in
stock prices and other factors. You may lose money if you invest in the Series.
The principal risks of investing in the Series include:

- RISKS OF COMMON STOCKS. Prices of stocks in the Series' portfolio may
decline over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, growth stocks or blue chip
stocks may underperform the market as a whole. As you consider an investment
in the Series, you should take into account your personal tolerance for
daily fluctuations of the stock market.

- RISKS OF GROWTH STOCKS. The Series invests primarily in stocks of
companies that the sub-adviser believes have the potential for above-average
earnings growth. If the sub-adviser incorrectly assesses a company's
prospects for earnings growth, or if its judgment about how other investors
will value the company's earnings growth is wrong, then the price of the
company's stock may decrease, or it may not increase to the level that the
sub-adviser had anticipated.

- RISKS OF LARGE- AND MEDIUM-SIZED BLUE CHIP COMPANIES. In the long run,
large blue chip company stocks may produce more modest gains than stocks of
smaller companies. Medium-sized blue chip companies may have greater
volatility than larger blue chip companies.

- RISKS OF FUTURES. If the Series uses futures contracts or options on
futures contracts it will be exposed to additional risks and transactions
costs. Successful use of these derivative instruments depends on the
sub-adviser's ability to forecast correctly the direction of market
movements. The Series' performance could be worse than if the Series had not
used these instruments if the sub-adviser's judgment proves incorrect. In
addition, even if the sub-adviser's forecast is correct, there may be an
imperfect correlation between the price of derivative instruments and
movements in the prices of the securities being hedged.

SERIES PERFORMANCE

The bar chart and table below provide you with information on Blue Chip Stock
Series' volatility and performance. The bar chart shows you how performance of
the Series has varied from year to year. The table compares the Series'
performance over different time periods to that of a broad measure of market
performance. Both the chart and the table assume that all dividends and
distributions have been reinvested. Fees and charges attributable to variable
annuity contracts and variable life insurance policies are not taken into
account in calculating the Series' returns. If they had been, returns would be
lower. Remember, how the Series has performed in the past is not necessarily an
indication of how it will perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

<TABLE>
<CAPTION>
BLUE CHIP STOCK SERIES
----------------------
<S> <C>
1997 27.00
1998 28.07
1999 19.88
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was 6.22%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 24.38% quarter ended December 31, 1998
WORST QUARTER: -11.94% quarter ended September 30, 1998
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
ONE YEAR SINCE INCEPTION*
-------- ----------------
<S> <C> <C>
Blue Chip Stock Series................ 19.88% 25.00%
S&P 500 Index**....................... 21.04% 26.73%
</TABLE>

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

* Inception date was May 1, 1996.

** An unmanaged index of 500 common stocks.

15
<PAGE> 19

BLUE CHIP STOCK SERIES II

OBJECTIVE

The primary objective of Blue Chip Stock Series II is long-term growth of
capital with a secondary objective of current income.

PRINCIPAL INVESTMENT STRATEGIES

Blue Chip Stock Series II pursues its objectives by primarily investing in
common stocks of blue chip companies, as defined by A I M Capital Management,
Inc. ("AIM"), the sub-adviser to the Series. These are companies that AIM
believes have the potential for above-average growth in earnings and that are
well-established in their respective industries. AIM considers whether to sell a
particular security when they believe the security no longer has the potential
for above-average growth.

When AIM believes securities other than common stocks offer the opportunity for
long-term growth of capital and current income, the Series may invest in U.S.
government securities, convertible securities and high-quality debt securities.
The Series may also invest up to 25% of its total assets in foreign securities.

PRINCIPAL RISKS

Blue Chip Stock Series II's share price will change daily because of changes in
stock prices and other factors. You may lose money if you invest in the Series.
The principal risks of investing in the Series include:

- RISKS OF COMMON STOCKS. Prices of stocks in the Series' portfolio may
decline over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, growth stocks or blue chip
stocks may underperform the market as a whole. As you consider an investment
in the Series, you should take into account your personal tolerance for
daily fluctuations of the stock market.

- RISKS OF LARGE CAP COMPANIES. In the long run, large company stocks may
produce more modest gains than stocks of smaller companies.

SERIES PERFORMANCE

A bar chart and performance table are not provided for the Series because it did
not commence operations until the date of this Prospectus.

16
<PAGE> 20

INTERNATIONAL STOCK SERIES

OBJECTIVE

The objective of International Stock Series is long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

International Stock Series invests primarily in equity securities, principally
common stocks, of relatively large non-United States companies that the Series'
sub-adviser, Lazard Asset Management ("Lazard"), believes are undervalued based
on their earnings, cash flow or asset value. The allocation of the Series'
assets among geographic sectors may shift from time to time based on Lazard's
judgment. However, Lazard currently intends to invest the Series' assets
primarily in companies based in developed markets.

In selecting investments for the Series, Lazard attempts to identify undervalued
securities through traditional measures of value, including low price to
earnings ratios, high yield, unrecognized assets, potential for management
change and the potential to improve profitability. Lazard's global investment
specialists apply both quantitative and qualitative analysis to securities
selection, and focus on individual stock selection rather than on general stock
market trends.

The Series may engage in forward currency exchange contracts to hedge its
portfolio against unfavorable currency movements and to enhance returns.

The Series' median market capitalization was $26.1 billion as of March 31, 2000.

PRINCIPAL RISKS

International Stock Series' share price will change daily because of changes in
stock prices and other factors. You may lose money if you invest in the Series.
The principal risks of investing in International Stock Series include:

- RISKS OF EQUITY SECURITIES. Prices of equity securities in the Series'
portfolio may decline over short or extended periods of time. Price changes
may occur in the market as a whole, or they may occur in only a particular
company, industry or sector of the market. In addition, value stocks and/or
stocks of large capitalization companies may underperform the market as a
whole. As you consider an investment in the Series, you should take into
account your personal tolerance for daily fluctuations of the stock market.

- RISKS OF VALUE STOCKS. The Series' sub-adviser looks for companies
worldwide that it believes are undervalued based on their earnings, cash
flow or asset value. These stocks can remain undervalued for years. There is
a risk that a stock's price will never reach what the sub-adviser believes
is its true value, or that the stock's price will go down.

- RISKS OF LARGE CAP COMPANIES. In the long run, large company stocks may
produce more modest gains than stocks of smaller companies.

- RISKS OF FOREIGN CURRENCY TRANSACTIONS. If the Series uses foreign
currency hedging transactions it will be exposed to additional risks and
transactions costs. Successful use of these derivative instruments depends
on the sub-adviser's ability to forecast correctly the direction of market
movements. The Series' performance could be worse than if the Series had not
used these instruments if the sub-adviser's judgment proves incorrect. In
addition, even if the sub-adviser's judgment is correct, there may be an
imperfect correlation between the price of derivative instruments and
movements in the prices of the currencies being hedged.

SERIES PERFORMANCE

The bar chart and table below provide you with information on International
Stock Series' volatility and performance. The bar chart shows you how
performance of the Series has varied from year to year. The table compares the
Series' performance over different time periods to that of a broad measure of
market performance. Both the chart and the table assume that all dividends and
distributions have been reinvested. Fees and charges attributable to variable
annuity contracts and variable life insurance policies are not taken into
account in calculating the Series' returns. If they had been, returns would be
lower. Remember, how the Series has performed in the past is not necessarily an
indication of how it will perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

<TABLE>
<CAPTION>
INTERNATIONAL STOCK SERIES
--------------------------
<S> <C>
1995 14.35
1996 14.02
1997 11.99
1998 16.47
1999 23.99
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was -2.72%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 18.26% quarter ended December 31, 1998
WORST QUARTER: -16.92% quarter ended September 30, 1998
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
ONE YEAR FIVE YEARS SINCE INCEPTION*
-------- ---------- ----------------
<S> <C> <C> <C>
International Stock
Series.................... 23.99% 16.09% 16.12%
MSCI EAFE Index**........... 27.30% 13.14% 13.14%
</TABLE>

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

* Inception date was January 3, 1995.

** An unmanaged index of stocks of Europe, Australia and the Far East.

17
<PAGE> 21

MID CAP STOCK SERIES

OBJECTIVE

The objective of Mid Cap Stock Series is total investment returns, including
capital appreciation and income, that consistently outperform the Standard &
Poor's 400 MidCap Index ("S&P MidCap").

PRINCIPAL INVESTMENT STRATEGIES

The Mid Cap Stock Series invests primarily in common stocks of medium
capitalization companies that have market values between $200 million and $10
billion. The Series' median market capitalization was $4.4 billion as of March
31, 2000. The Series' investments may include securities traded in the
over-the-counter markets.

The Series sub-adviser, The Dreyfus Corporation ("Dreyfus"), selects common
stocks so that, in the aggregate, the investment characteristics and risk
profile of the Series are similar to those of the S&P MidCap. However, the
Series seeks to invest in stocks that, in the aggregate, will provide a higher
return than the S&P MidCap. The Series is not an index series and its
investments are not limited to securities of issuers included in the S&P MidCap.

Dreyfus utilizes computer techniques to track and, if possible, outperform the
S&P MidCap. Dreyfus employs valuation models designed to identify common stocks
of companies that are believed to have superior return potential in order to
construct a portfolio that resembles the S&P MidCap but is weighted toward the
stocks that Dreyfus believes are most attractive.

The Series may buy and sell futures and options contracts. This will be done
primarily to hedge the value of the Series' portfolio against potential adverse
movements in securities prices, but may also be done to enhance returns.

PRINCIPAL RISKS

Mid Cap Stock Series' share price will change daily because of changes in stock
prices and other factors. You may lose money if you invest in the Series. The
principal risks of investing in Mid Cap Stock Series include:

- RISKS OF COMMON STOCKS. Prices of stocks in the Series' portfolio may
decline over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, stocks of mid capitalization
companies may underperform the market as a whole. As you consider an
investment in the Series, you should take into account your personal
tolerance for daily fluctuations of the stock market.

- RISKS OF FUTURES AND OPTIONS. If the Series uses options and futures
contracts it will be exposed to additional risks and transactions costs.
Successful use of these derivative instruments depends on the sub-adviser's
ability to forecast correctly the direction of market movements. The Series'
performance could be worse than if the Series had not used these instruments
if the sub-adviser's judgment proves incorrect. In addition, even if the
sub-adviser's forecast is correct, there may be an imperfect correlation
between the price of derivative instruments and movements in the prices of
the securities being hedged.

SERIES PERFORMANCE

The bar chart and table below provide you with information on Mid Cap Stock
Series' volatility and performance. The bar chart is intended to show you how
performance of the Series has varied from year to year. However, because the
Series was not offered until May 1, 1998 only one calendar year of information
is available. The table compares the Series' performance over different time
periods to that of a broad measure of market performance. Both the chart and the
table assume that all dividends and distributions have been reinvested. Fees and
charges attributable to variable annuity contracts and variable life insurance
policies are not taken into account in calculating the Series' returns. If they
had been, returns would be lower. Remember, how the Series has performed in the
past is not necessarily an indication of how it will perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

<TABLE>
<CAPTION>
MID CAP STOCK SERIES
--------------------
<S> <C>
1999 10.97
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was 10.57%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 24.18% quarter ended December 31, 1998
WORST QUARTER: -16.59% quarter ended September 30, 1998
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
ONE YEAR SINCE INCEPTION*
-------- ----------------
<S> <C> <C>
Mid Cap Stock Series.................. 10.97% 4.58%
S&P 400 Mid Cap Index**............... 14.70% 11.99%
</TABLE>

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

* Inception date was May 1, 1998.

** An unmanaged index of common stocks that measures the performance of the
mid-range sector of the U.S. stock market.

18
<PAGE> 22

SMALL CAP VALUE SERIES

OBJECTIVE

The objective of Small Cap Value Series is capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

Small Cap Value Series primarily invests in the common stocks of small companies
whose stock prices are believed to be undervalued. The Series' securities
selection focuses on companies that are out of favor with markets or have not
yet been discovered by the broader investment community.

The Series is sub-advised by Berger LLC, which has contracted with Perkins,
Wolf, McDonnell & Company (the "Manager") to provide day-to-day investment
management for the Series. In selecting securities for the Series, the Manager
generally looks for companies with:

- a low price relative to their assets, earnings, cash flow or business
franchise;

- products and services that give them a competitive advantage; and

- quality balance sheets and strong management.

The Manager's philosophy is to weigh a security's downside risk before
considering its upside potential, which may help provide an element of capital
preservation.

Under normal circumstances, the Series invests at least 65% of its assets in
common stocks of small companies whose market capitalization, at the time of
initial purchase, is less than the 12-month average of the maximum market
capitalization for companies included in the Russell 2000 Index ($8.51 billion
as of March 31, 2000). This average is updated monthly. The Series' median
market capitalization was $830 million as of March 31, 2000. The Series'
investments may include securities traded in the over-the-counter markets.

PRINCIPAL RISKS

Small Cap Value Series' share price will change daily because of changes in
stock prices and other factors. You may lose money if you invest in the Series.
The principal risks of investing in Small Cap Value Series include:

- RISKS OF COMMON STOCKS. Prices of stocks in the Series' portfolio may
decline over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, value stocks and/or stocks of
small capitalization companies may underperform the market as a whole. As
you consider an investment in the Series, you should take into account your
personal tolerance for daily fluctuations of the stock market.

- RISKS OF VALUE STOCKS. The Series' manager looks for companies whose
stock prices appear to be undervalued. These stocks can remain undervalued
for years. There is a risk that a stock's price will never reach what the
manager believes is its true value, or that the stock's price will go down.

- RISKS OF SMALL CAP COMPANIES. The securities of small capitalization
companies involve greater risk than is customarily associated with
investments in larger companies. Small capitalization companies often have
limited product lines, markets or financial resources and may be dependent
on a small, inexperienced management group. The securities of small
capitalization 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. The
Series' investments are often focused in a small number of business sectors,
which increases the risk should adverse economic developments occur in one
of those sectors. In addition, the Series may invest in certain securities
with unique risks, such as special situations. Special situations are
companies about to undergo a structural, financial or management change
which may significantly affect the value of their securities.

SERIES PERFORMANCE

The bar chart and table below provide you with information on Small Cap Value
Series' volatility and performance. The bar chart is intended to show you how
performance of the Series has varied from year to year. However, because the
Series was not offered until May 1, 1998 only one calendar year of information
is available. The table compares the Series' performance over different time
periods to that of a broad measure of market performance. Both the chart and the
table assume that all dividends and distributions have been reinvested. Fees and
charges attributable to variable annuity contracts and variable life insurance
policies are not taken into account in calculating the Series' returns. If they
had been, returns would be lower. Remember, how the Series has performed in the
past is not necessarily an indication of how it will perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

<TABLE>
<CAPTION>
SMALL CAP VALUE SERIES
----------------------
<S> <C>
1999 15.34
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was 3.37%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 24.20% quarter ended June 30, 1999
WORST QUARTER: -15.60% quarter ended September 30, 1998
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
ONE YEAR SINCE INCEPTION*
-------- ----------------
<S> <C> <C>
Small Cap Value Series................ 15.34% 5.31%
Russell 2000 Index**.................. 21.36% 4.11%
</TABLE>

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

* Inception date was May 1, 1998.

** An unmanaged index of common stocks of the smallest 2000 companies in the
Russell 3000 Index, which represents approximately 11% of the Russell 3000
Index.

19
<PAGE> 23

GLOBAL GROWTH SERIES

OBJECTIVE

The objective of Global Growth Series is long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

Global Growth Series pursues its objective by investing primarily in common
stocks of issuers located in various developed countries and regions of the
world, including the United States, Canada, the United Kingdom, other Western
European nations, Japan and Australia. The Series focuses primarily on medium-
to large-sized, established growth companies with one or more of the following
characteristics:

- a dominant market position,

- superior growth prospects,

- strong management with a focused growth strategy, and

- the ability to finance future growth.

The Series also may invest in common stocks of U.S. and non-U.S. emerging growth
companies. These companies generally have smaller capitalizations than
established growth companies. In selecting emerging growth companies, the
Series' investment adviser looks for companies that it believes:

- have the potential for earnings growth over time that is above the growth
rate of more established companies, or

- are early in their life cycles and have the potential to become major
enterprises.

Although the Series invests primarily in common stocks of issuers located in
developed countries, the Series also may invest in less developed markets of the
world. In selecting emerging market securities, the Series' investment adviser
looks for companies with characteristics similar to those which it looks for in
companies located in developed countries. Emerging market companies, however,
have the potential to benefit from the economic growth of the developing region.

Under normal market conditions, it is the Series' intention to maintain a median
market capitalization for its portfolio of over $5 billion. The Series' median
market capitalization was $22.3 billion as of March 31, 2000.

PRINCIPAL RISKS

Global Growth Series' share price will change daily because of changes in the
values of the securities held by the Series. You may lose money if you invest in
the Series. The principal risks of investing the Global Growth Series include:

- RISKS OF COMMON STOCKS. Prices of common stocks in the Series' portfolio
may decline over short or extended periods of time. Price changes may occur
in the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, stocks of established and
emerging growth companies may underperform the market as a whole. As you
consider an investment in the Series, you should take into account your
personal tolerance for daily fluctuations of the stock market.

- RISKS OF GROWTH STOCKS. The Series invests in stocks of both established
and emerging growth companies. If the Series' adviser incorrectly assesses a
company's prospects for earnings growth, or if its judgment about how other
investors will value the company's earnings growth is wrong, then the price
of the company's stock may decrease, or it may not increase to the level
that the Series' adviser anticipated.

- RISKS OF LARGE CAP COMPANIES. In the long run, large company stocks may
produce more modest gains than stocks of smaller companies.

- RISKS OF MID AND SMALL CAP COMPANIES. The securities of both U.S. and
non-U.S. medium- and smaller-capitalization companies involve greater risk
than is customarily associated with investments in larger companies. These
companies often have limited product lines, markets or financial resources
and they may be dependent on a small, inexperienced management group. The
securities of medium-and smaller-capitalization 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.

SERIES PERFORMANCE

The bar chart and table below provide you with information on Global Growth
Series' volatility and performance. The bar chart shows you how performance of
the Series has varied from year to year. The table compares the Series'
performance over different time periods to that of a broad measure of market
performance. Both the chart and the table assume that all dividends and
distributions have been reinvested. Fees and charges attributable to variable
annuity contracts and variable life insurance policies are not taken into
account in calculating the Series' returns. If they had been, returns would be
lower. Remember, how the Series has performed in the past is not necessarily an
indication of how it will perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

<TABLE>
<CAPTION>
GLOBAL GROWTH SERIES
--------------------
<S> <C>
1993 17.92
1994 -2.98
1995 30.49
1996 19.1
1997 6.82
1998 11.36
1999 57.68
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was 8.16%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 39.86% quarter ended December 31, 1999
WORST QUARTER: -20.55% quarter ended September 30, 1998
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
ONE YEAR FIVE YEARS SINCE INCEPTION*
-------- ---------- ----------------
<S> <C> <C> <C>
Global Growth Series........ 57.68% 23.86% 18.60%
MSCI World Index**.......... 25.34% 20.24% 17.02%
</TABLE>

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

* Inception date was May 1, 1992.

** An unmanaged index of the world's major equity markets in U.S. dollars,
weighted by stock market value.

20
<PAGE> 24

GLOBAL EQUITY SERIES

OBJECTIVE

The objective of Global Equity Series is capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

The Series invests primarily in common stocks and equity-related securities,
such as preferred stocks, convertible securities and depositary receipts, of
U.S. and foreign (including emerging market) issuers. The Series spreads its
investments across these markets and focuses on companies which the Series'
sub-adviser, Massachusetts Financial Service Company ("MFS"), believes have
favorable growth prospects and attractive valuations based on current and
expected earnings or cash flow. Under normal market conditions, the Series
invests in at least three different countries. The Series generally seeks to
purchase securities of companies with relatively large market capitalizations
relative to the market in which they are traded. The Series' investments may
include securities traded in the over-the-counter markets.

A company's principal activities are determined to be located in a particular
country if the company (a) is organized under the laws of, and maintains a
principal office in a country, (b) has its principal securities trading market
in a country, (c) derives 50% of its total revenues from goods or services
performed in the country, or (d) has 50% or more of its assets in the country.

The Series may have exposure to foreign currencies through its investment in
foreign securities, its direct holdings of foreign currencies or through its use
of foreign currency exchange contracts for the purchase or sale of a fixed
quantity of a foreign currency at a future date.

PRINCIPAL RISKS

Global Equity Series' share price will change daily because of changes in stock
prices and other factors. You may lose money if you invest in the Series. The
principal risks of investing in the Series include:

- RISKS OF COMMON STOCKS. Prices of stocks in the Series' portfolio may
decline over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, growth stocks may
underperform the market as a whole. As you consider an investment in the
Series, you should take into account your personal tolerance for daily
fluctuations of the stock market.

- RISKS OF LARGE CAP COMPANIES. In the long run, large company stocks may
produce more modest gains than stocks of smaller companies.

- OVER-THE-COUNTER RISK. Over-the-counter (OTC) transactions involve risks
in addition to those associated with transactions in securities traded on
exchanges. OTC listed companies may have limited product lines, markets or
financial resources. Many OTC stocks trade less frequently and in smaller
volume than exchange-listed stocks. The values of these stocks may be more
volatile than exchange-listed stocks, and the Series may experience
difficulty in establishing or closing out positions in these stocks at
prevailing market prices.

SERIES PERFORMANCE

A bar chart and performance table are not provided for the Series because it did
not commence operations until the date of this Prospectus.

21
<PAGE> 25

LARGE CAP GROWTH SERIES

OBJECTIVE

The objective of Large Cap Growth Series is long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

Large Cap Growth Series pursues its objective by investing primarily in the
common stocks of a limited number of large, carefully selected, high quality
United States companies whose securities are believed likely to achieve superior
earnings growth. Normally, about 40 to 50 companies will be represented in the
Series' portfolio, with the 25 most highly regarded of these companies usually
constituting approximately 70% of the Series' assets. The Series' focus on a
relatively small number of intensively researched companies is not typical of
most equity mutual funds. The Series is designed for those seeking to accumulate
capital over time with less volatility than that typically associated with
investments in smaller companies.

The sub-adviser of Large Cap Growth Series, Alliance Capital Management L.P.
("Alliance"), relies heavily upon the fundamental analysis and research of its
large internal staff. The Alliance staff generally follows a primary research
universe of more than 500 companies that have strong management, superior
industry positions, excellent balance sheets and superior earnings growth
prospects. An emphasis is placed on identifying companies with substantially
above average prospective earnings growth that is not fully reflected in current
market valuations.

Alliance expects the average market capitalization of companies represented in
the Series' portfolio normally to be in the range, or in excess, of the average
market capitalization of companies comprising the S&P 500. As of March 31, 2000,
the average market capitalization of companies comprising the S&P 500 was $94.9
billion. The Series' average market capitalization as of such date was $89.5
billion.

Although the Series invests primarily in stocks of United States companies, it
may invest up to 15% of its total assets in securities of foreign companies.

PRINCIPAL RISKS

Large Cap Growth Series' share price will change daily because of changes in
stock prices and other factors. You may lose money if you invest in the Series.
The principal risks of investing in Large Cap Growth Series include:

- RISKS OF COMMON STOCKS. Prices of stocks in the Series' portfolio may
decline over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, stocks of growth and/or large
capitalization companies may underperform the market as a whole. As you
consider an investment in the Series, you should take into account your
personal tolerance for daily fluctuations of the stock market.

- RISKS OF LARGE CAP COMPANIES. In the long run, large company stocks may
produce more modest gains than stocks of smaller companies.

- RISKS OF FOCUSING ON A SMALL NUMBER OF COMPANIES. Because the Series
focuses on a limited number of companies, it may be more significantly
affected by adverse developments in one of those companies than if it had
held a more diverse portfolio of securities.

- RISKS OF GROWTH STOCKS. The Series invests primarily in stocks of
companies that the sub-adviser believes are likely to achieve superior
earnings growth. If the sub-adviser incorrectly assesses a company's
prospects for earnings growth, or if its judgment about how other investors
will value the company's earnings growth is wrong, then the price of the
company's stock may decrease, or it may not increase to the level that the
sub-adviser had anticipated.

SERIES PERFORMANCE

The bar chart and table below provide you with information on Large Cap Growth
Series' volatility and performance. The bar chart is intended to show you how
performance of the Series has varied from year to year. However, because the
Series was not offered until May 1, 1998 only one calendar year of information
is available. The table compares the Series' performance over different time
periods to that of a broad measure of market performance. Both the chart and the
table assume that all dividends and distributions have been reinvested. Fees and
charges attributable to variable annuity contracts and variable life insurance
policies are not taken into account in calculating the Series' returns. If they
had been, returns would be lower. Remember, how the Series has performed in the
past is not necessarily an indication of how it will perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

<TABLE>
<CAPTION>
LARGE CAP GROWTH SERIES
-----------------------
<S> <C>
1999 27.22
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was 5.91%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 29.14% quarter ended December 31, 1999
WORST QUARTER: -12.01% quarter ended September 30, 1999
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
ONE YEAR SINCE INCEPTION*
-------- ----------------
<S> <C> <C>
Large Cap Growth Series............... 27.22% 27.97%
S&P 500 Index**....................... 21.04% 19.79%
</TABLE>

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

* Inception date was May 1, 1998.

** An unmanaged index of 500 common stocks.

22
<PAGE> 26

INVESTORS GROWTH SERIES

OBJECTIVE

The investment objective of Investors Growth Series is to provide long-term
growth of capital and future income rather than current income.

PRINCIPAL INVESTMENT STRATEGIES

The Series invests its assets, except for working cash balances, in the common
stocks and securities convertible into common stocks of companies which the
Series' sub-adviser, Massachusetts Financial Services Company ("MFS"), believes
offer better than average prospects for long-term growth.

In managing the Series, MFS seeks to purchase securities of companies which MFS
considers well-run and poised for growth. MFS looks particularly for companies
which demonstrate:

- a strong franchise, strong cash flows and a recurring revenue stream;

- a strong industry position, where there

-- is potential for high profit margins

-- are substantial barriers to new entry in the industry;

- a strong management with a clearly defined strategy;

- new products or services.

Consistent with its investment strategy the Series may invest in foreign
securities through which it may have exposure to foreign currencies. The Series
may also enter into foreign currency exchange contracts for the purchase or sale
of a fixed quantity of a foreign currency at a future date.

The Series' investments may include securities traded in the over-the-counter
markets.

Under normal market conditions, it is the Series' intention to maintain a median
market capitalization for its portfolio of greater than $5 billion, making it a
"large cap fund."

PRINCIPAL RISKS

Investors Growth Series' share price will change daily because of changes in
stock prices and other factors. You may lose money if you invest in the Series.
The principal risks of investing in the Series include:

- RISKS OF COMMON STOCKS. Prices of stocks in the Series' portfolio may
decline over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, growth stocks and/or the
stocks of large capitalization companies may underperform the market as a
whole. As you consider an investment in the Series, you should take into
account your personal tolerance for daily fluctuations of the stock market.

- RISKS OF LARGE CAP COMPANIES. In the long run, large company stocks may
produce more modest gains than stocks of smaller companies.

- RISKS OF GROWTH STOCKS. The Series focuses on companies which the Series'
sub-adviser believes offer better than average prospects for long-term
growth. If the sub-adviser incorrectly assesses a company's prospects for
earnings growth, or if its judgment about how other investors will value the
company's earnings growth is wrong, then the price of the company's stock
may decrease, or it may not increase to the level that the sub-adviser had
anticipated.

SERIES PERFORMANCE

A bar chart and performance table are not provided for the Series because it did
not commence operations until the date of this Prospectus.

23
<PAGE> 27

GROWTH STOCK SERIES

OBJECTIVE

The objective of Growth Stock Series is long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

Growth Stock Series invests primarily in common stocks. The Series' adviser uses
a "bottom up" investment style in which stock selection is driven primarily by
the merits of the company itself. The adviser generally invests in stocks of
companies whose earnings and growth potential, in its judgment, exceed industry
averages. In addition to superior earnings growth potential, the adviser 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. The
Series may engage in active and frequent trading to achieve its principal
investment strategies.

The Series' investments may include securities traded in the over-the-counter
markets.

Under normal market conditions, the Series intends to maintain a median market
capitalization for its portfolio of $1 billion to $8 billion--making it a "mid
cap growth fund." The Series' median market capitalization was $5.9 billion as
of March 31, 2000.

PRINCIPAL RISKS

Growth Stock Series' share price will change daily because of changes in stock
prices and other factors. You may lose money if you invest in the Series. The
principal risks of investing in Growth Series include:

- RISKS OF COMMON STOCKS. Prices of stocks in the Series' portfolio may
decline over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, growth stocks and/or stocks
of mid capitalization companies may underperform the market as a whole. As
you consider an investment in the Series, you should take into account your
personal tolerance for daily fluctuations of the stock market.

- RISKS OF GROWTH STOCKS. The Series invests primarily in stocks of
companies that the adviser believes have superior earnings growth potential.
If the adviser incorrectly assesses a company's prospects for earnings
growth, or if its judgment about how other investors will value the
company's earnings growth is wrong, then the price of the company's stock
may decrease, or it may not increase to the level that the adviser had
anticipated.

- RISKS OF SHORT-TERM TRADING. Due to many factors, the Series may trade
securities frequently and hold securities in its portfolio for one year or
less. Frequent purchases and sales of portfolio securities will increase the
Series' transaction costs. Factors that can lead to short-term trading
include market volatility; a significant positive or negative development
concerning a security; an attempt to maintain the Series' market
capitalization target; and the need to sell a security to meet redemption
activity in the Series.

SERIES PERFORMANCE

The bar chart and table below provide you with information on Growth Stock
Series' volatility and performance. The bar chart shows you how performance of
the Series has varied from year to year. The table compares the Series'
performance over different time periods to that of a broad measure of market
performance. Both the chart and the table assume that all dividends and
distributions have been reinvested. Fees and charges attributable to variable
annuity contracts and variable life insurance policies are not taken into
account in calculating the Series' returns. If they had been, returns would be
lower. Remember, how the Series has performed in the past is not necessarily an
indication of how it will perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

<TABLE>
<CAPTION>
GROWTH STOCK SERIES
-------------------
<S> <C>
1990 -3.1
1991 53.5
1992 2.94
1993 8.78
1994 -2.82
1995 27.66
1996 16.41
1997 12.42
1998 19.01
1999 55.17
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was 15.85%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 44.29% quarter ended December 31, 1999
WORST QUARTER: -16.04% quarter ended September 30, 1998
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
SINCE
ONE YEAR FIVE YEARS TEN YEARS INCEPTION*
-------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Growth Stock Series..... 55.17% 25.28% 17.45% 15.79%
S&P 500 Index**......... 21.04% 28.51% 18.17% 16.57%*
S&P 400 Midcap
Index***.............. 14.70% 23.01% 15.10% 13.41%
</TABLE>

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

* Inception date was March 24, 1987.

** An unmanaged index of 500 common stocks.

*** An unmanaged capitalization-weighted index that measures the performance of
the mid-range sector of the U.S. stock market. Going forward, the Series
will use S&P Midcap Index as a measure of comparable total return because it
is better suited for the investment strategy of the Series.

24
<PAGE> 28

AGGRESSIVE GROWTH SERIES

OBJECTIVE

The objective of Aggressive Growth Series is maximum long-term capital
appreciation.

PRINCIPAL INVESTMENT STRATEGIES

Aggressive Growth Series invests primarily in common stocks. The Series focuses
on:

- common stocks of small and medium sized companies that are early in their
life cycles, but which the Series' adviser believes have the potential to
become major enterprises (emerging growth companies); and

- common stocks of more established companies whose rates of earnings growth
are expected to accelerate because of special factors such as new products
or services, changes in demand factors, basic changes in the economic
environment or rejuvenated management.

The Series' investments include common stocks purchased in initial public
offerings (IPOs) and securities traded in the over-the-counter markets.

The Series selects stocks based upon their growth potential. The Series' adviser
uses a "bottom up" investment style in which stock selection is driven primarily
by the merits of the company itself. The Series may engage in active and
frequent trading to achieve its principal investment strategies.

Under normal market conditions, the Series intends to maintain a median market
capitalization for its portfolio of less than $1.5 billion -- making it a "small
cap growth fund." The Series median market capitalization was $1.3 billion as of
March 31, 2000.

PRINCIPAL RISKS

Aggressive Growth Series' share price will change daily because of changes in
stock prices and other factors. You may lose money if you invest in the Series.
The principal risks of investing in Aggressive Growth Series include:

- RISKS OF COMMON STOCKS. Prices of stocks in the Series' portfolio may
decline over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market. In addition, growth stocks and/or stocks
of small capitalization companies may underperform the market as a whole. As
you consider an investment in the Series, you should take into account your
personal tolerance for daily fluctuations of the stock market.

- RISKS OF INITIAL PUBLIC OFFERINGS. Companies making initial public
offerings of their stock generally have limited operating histories and
prospects for future profitability may be uncertain. Prices of IPOs may also
be unstable due to the absence of a prior public market and the small number
of shares available for trading.

The Series' total return during 1999 was enhanced by its investments in
IPOs. The effect of IPOs on the Series' total returns going forward may not
be positive, or as significant, either as a result of changes in the IPO
market or growth of the Series' assets which may reduce the Series' total
return.

- RISKS OF SHORT-TERM TRADING. Due to many factors, the Series may trade
securities frequently and hold securities in its portfolio for one year or
less. Frequent purchases and sales of portfolio securities will increase the
Series' transaction costs. Factors that can lead to short-term trading
include market volatility; a significant positive or negative development
concerning a security; an attempt to maintain the Series' market
capitalization target; and the need to sell a security to meet redemption
activity in the Series.

SERIES PERFORMANCE

The bar chart and table below provide you with information on Aggressive Growth
Series' volatility and performance. The bar chart shows you how performance of
the Series has varied from year to year. The table compares the Series'
performance over different time periods to that of a broad measure of market
performance. Both the chart and the table assume that all dividends and
distributions have been reinvested. Fees and charges attributable to variable
annuity contracts and variable life insurance policies are not taken into
account in calculating the Series' returns. If they had been, returns would be
lower. Remember, how the Series has performed in the past is not necessarily an
indication of how it will perform in the future.

ANNUAL TOTAL RETURN as of December 31 each year*

<TABLE>
<CAPTION>
AGGRESSIVE GROWTH SERIES
------------------------
<S> <C>
1995 29.89
1996 7.64
1997 1.43
1998 21.17
1999 109.25
</TABLE>

* The Series' total return for the period from January 1, 2000 through March 31,
2000 was 26.76%.

<TABLE>
<S> <C> <C>
BEST QUARTER: 60.73% quarter ended December 31, 1999
WORST QUARTER: -21.85% quarter ended September 30, 1998
</TABLE>

AVERAGE ANNUAL TOTAL RETURNS as of December 31, 1999

<TABLE>
<CAPTION>
ONE YEAR FIVE YEARS SINCE INCEPTION*
-------- ---------- ----------------
<S> <C> <C> <C>
Aggressive Growth Series.... 109.25% 29.17% 24.92%
S&P 500 Index**............. 21.04% 28.51% 25.61%
Russell 2000 Index***....... 21.36% 15.04% 12.97%
</TABLE>

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

* Inception date was May 2, 1994.

** An unmanaged index of 500 common stocks.

*** An unmanaged index of common stocks of the smallest 2000 companies in the
Russell 3000 Index, which represents approximately 11% of the Russell 3000
Index. Going forward, the Series will use the Russell 2000 Index as a
measure of comparable total return because it is better suited for the
investment strategy of the Series.

25
<PAGE> 29

SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------

SEPARATE ACCOUNTS AND THE CONTRACTS

Shares in the Series are currently sold to separate accounts of Fortis Benefits
Insurance Company ("Fortis Benefits") and First Fortis Life Insurance Company
("First Fortis") which fund benefits under variable life insurance policies and
variable annuity contracts issued by those companies. These variable life
insurance policies and variable annuity contracts are sometimes referred to as
"Contracts." As a Contract owner, you allocate the value of your Contract among
subaccounts of the separate accounts. Each subaccount invests in a different
Series. The rights of the separate accounts as shareholders should be
distinguished from your rights as a Contract owner, which are described in your
variable life insurance policy or variable annuity contract.

PRICING OF SERIES SHARES

The net asset values of the Series' shares are determined as of the primary
closing time of business on the New York Stock Exchange (usually 3 p.m. Central
time) on each day the exchange is open.

Each Series' net asset value per share is determined by dividing the value of
the securities and other assets owned by the Series, less all liabilities, by
the number of the Series' shares outstanding. The securities owned by the Series
are generally valued at market value. However, there are times when market
values are not readily available. In these cases, securities are valued at fair
value as determined in good faith by the Series' adviser under supervision of
the Board of Directors.

A significant portion of certain Series' assets may consist of securities of
foreign issuers that trade on weekends or other days when the Series do not
price their shares. As a result, the net asset value of each such Series' shares
may change on days when the Series is not open for shareholder purchases or
redemptions.

PURCHASE AND REDEMPTION OF SERIES SHARES

Series shares are offered only to the separate accounts. On each day when the
Series value their assets, shares of the Series may be purchased or redeemed by
the separate accounts based upon, among other things, the amounts of net
premiums allocated to the separate accounts, 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. These
purchases and redemptions for the separate accounts are effected at the net
asset value per share for each Series determined as of that same date.

TRANSFERS AMONG SUBACCOUNTS

You may transfer amounts among the subaccounts available, and may change
allocations of premiums as explained in the accompanying prospectus for the
Contracts. These transfers have the effect of changing your participation in the
various Series. Transfers between subaccounts are not taxable to you under
current Federal income tax law.

TAXATION

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 contracts and variable life insurance policies, you
will not be considered to be an owner of shares of the Series, and income earned
with respect to the Contracts will not be taxed to you.

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.

CONTRACT OWNER INQUIRIES

For further information, please 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. If you are a New York Contract owner, please contact First Fortis'
office: P.O. Box 3209, Syracuse, New York 13220.

26
<PAGE> 30

SERIES MANAGEMENT
- --------------------------------------------------------------------------------

INVESTMENT ADVISER
Fortis Advisers, Inc. ("Advisers") is the investment adviser for the Series, and
also serves as the Series' transfer agent and dividend agent. Advisers has been
managing investment company portfolios since 1949. In addition to providing
investment advice, Advisers is responsible for the management of the Series'
business affairs, subject to the overall authority of the Board of Directors.
Advisers' address is 500 Bielenberg Drive, Woodbury, Minnesota 55125-1400.

Each Series pays Advisers a monthly fee for providing investment advisory
services. The services provided by Advisers include:

- General management of all Series.

- Investment management for those Series that do not have a sub-adviser.

- Ultimate responsibility (subject to oversight by the Fund's Board of
Directors) to oversee any sub-advisers hired to manage all or a portion of
any of the Series and recommend the hiring, termination and replacement of
sub-advisers.

The Fund has received an exemptive order from the Securities and Exchange
Commission under which the Fund uses a "Manager of Managers" structure. This
permits Advisers to appoint new sub-advisers, with approval by the Fund's Board
of Directors and without obtaining approval from those contract holders that
participate in the applicable Series. Within 90 days after hiring any new
sub-adviser, affected contract holders will receive all information about the
new sub-advisory relationship that would have been included if a proxy statement
had been required. Advisers will not enter into a sub-advisory agreement with an
affiliated sub-adviser unless contract holders approve such agreement.

Advisers has entered into investment sub-advisory agreements on behalf of
Multisector Bond Series, Global Asset Allocation Series, American Leaders
Series, Capital Opportunities Series, International Stock Series, S&P 500 Index
Series, Global Equity Series, Mid Cap Stock Series, Blue Chip Stock Series, Blue
Chip Stock Series II, Small Cap Value Series, Large Cap Growth Series and
Investors Growth Series. For their services, the sub-advisers are paid a fee by
Advisers. During their most recent fiscal year, the Series paid the following
investment advisory fees to Advisers:

<TABLE>
<CAPTION>
ADVISORY FEE
AS A PERCENTAGE OF
AVERAGE DAILY NET ASSETS
------------------------
<S> <C>
Money Market Series...................... .30%
U.S. Government Securities Series........ .47%
Diversified Income Series................ .47%
Multisector Bond Series.................. .75%
High Yield Series........................ .50%
Global Asset Allocation Series........... .90%
Asset Allocation Series.................. .47%
American Leaders Series*................. .90%
Value Series............................. .70%
Capital Opportunities Series*............ .90%
Growth & Income Series................... .63%
S&P 500 Index Series..................... .40%
Blue Chip Stock Series................... .87%
Blue Chip Stock Series II*............... .95%
International Stock Series............... .84%
Mid Cap Stock Series..................... .90%
Small Cap Value Series................... .90%
Global Growth Series..................... .70%
Global Equity Series*.................... 1.00%
Large Cap Growth Series.................. .90%
</TABLE>

<TABLE>
<CAPTION>
ADVISORY FEE
AS A PERCENTAGE OF
AVERAGE DAILY NET ASSETS
------------------------
<S> <C>
Investors Growth Series*................. .90%
Growth Stock Series...................... .61%
Aggressive Growth Series................. .66%
</TABLE>

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

* Rate shown is the contractual rate since these Series have just commenced
operations.

Individuals affiliated with Advisers are responsible for the day-to-day
management of Money Market Series, U.S. Government Securities Series,
Diversified Income Series, High Yield Series, Asset Allocation Series, Value
Series, Growth & Income Series, Global Growth Series, Growth Stock Series and
Aggressive Growth Series. Howard G. Hudson supervises the portfolio management
of the fixed income Series, including the fixed income portion of the Asset
Allocation Series. Lucinda S. Mezey supervises the portfolio management of the
equity Series and the equity portion of the Asset Allocation Series. The
individuals responsible for the day-to-day management of the Series are listed
below.

MONEY MARKET SERIES. David C. Greenzang, Maroun M. Hayek and Robert C. Lindberg
have been primarily responsible for the day-to-day management of the Series
since 1995.

U.S. GOVERNMENT SECURITIES SERIES. Mr. Hayek, Christopher J. Pagano and
Christopher J. Woods are primarily responsible for the day-to-day management of
the Series. Messrs. Hayek and Woods have managed the Series since 1995 and Mr.
Pagano since 1996.

DIVERSIFIED INCOME SERIES. Mr. Hayek, Mr. Pagano, Kendall C. Peterson and Mr.
Woods are primarily responsible for the day-to-day management of the Series.
Messrs. Hayek and Woods have managed the Series since 1995, Mr. Pagano since
1996 and Mr. Peterson since 1999.

HIGH YIELD SERIES. Mr. Peterson, Mr. Hayek and Mr. Lindberg are primarily
responsible for the day-to-day management of the Series. Messrs. Hayek and
Lindberg have managed the Series since 1995 and Mr. Peterson since 1999.

ASSET ALLOCATION SERIES. Charles L. Mehlhouse has been primarily responsible
for the day-to-day management of the equity portion of the Series since 1996.
Messrs. Hayek, Pagano, Peterson and Woods are primarily responsible for the
day-to-day management of the fixed-income portion of the Series. Messrs. Hayek
and Woods have managed the Series since 1995, Mr. Pagano since 1996 and Mr.
Peterson since 1999.

VALUE SERIES. Nicholas M. De Peyster has been primarily responsible for the
day-to-day management of the Series since its inception.

GROWTH & INCOME SERIES. Mr. Mehlhouse has been primarily responsible for the
day-to-day management of the Series since 1996.

GLOBAL GROWTH SERIES. James S. Byrd and Diane M. Gotham are primarily
responsible for the day-to-day management of the Series. Mr. Byrd has managed
the Series since its inception, Ms. Gotham since 1998.

GROWTH STOCK SERIES. Michael J. Romanowski has been primarily responsible for
the day-to-day management of the Series since 1998.

AGGRESSIVE GROWTH SERIES. Laura E. Granger has been primarily responsible for
the day-to-day management of the Series since 1998.

Additional information about these investment supervisors and portfolio managers
is set forth below.

- Mr. Hudson, an Executive Vice President of Advisers and Head of Fixed
Income Investments of Advisers since 1991, has been managing fixed income
securities for Fortis, Inc. since 1991.

27
<PAGE> 31

- Mr. Greenzang, a Money Market Portfolio Officer, has been involved in
management of debt securities for Fortis, Inc. since 1992.

- Mr. Hayek, a Vice President of Advisers since 1995, has been managing debt
securities for Fortis, Inc. since 1987.

- Mr. Lindberg, a Vice President of Advisers since 1993, has been managing
debt securities for Advisers since that time.

- Mr. Pagano, a Vice President of Advisers since 1996, has been managing
debt securities for Advisers since that time. From 1995 to 1996, Mr.
Pagano was a Government Strategist for Merrill Lynch, New York, New York.

- Mr. Peterson, a Vice President of Advisers, has been managing
non-investment grade fixed income securities for Advisers since July 1999.
From 1985 to July 1999 he was employed by Prudential Insurance Company of
America in Newark, New Jersey with his last position being Vice President
and portfolio manager.

- Mr. Woods, a Vice President of Advisers since 1995, has been managing debt
securities for Fortis, Inc. since 1993.

- Ms. Mezey, an Executive Vice President of Advisers and Head of Equity
Investments of Advisers since October 1997, manages equity securities for
Advisers. From 1995 to October 1997, she was Chief Investment Officer,
Alex Brown Capital Advisory and Trust Co., Baltimore, MD. From 1970 to
1995 she was employed by PNC Bank, Philadelphia, Pennsylvania with her
last position being Senior Vice President and Head of Equity Investments.

- Mr. Byrd has been an Executive Vice President of Advisers since 1995,
prior to which he was a Vice President of Advisers.

- Mr. De Peyster, a Vice President of Advisers since 1995, has managed
equity securities for Advisers since 1991.

- Ms. Granger, a Vice President of Advisers since 1998, manages equity
securities for Advisers. From July 1993 to July 1998, she was portfolio
manager for General Motors Investment Management in New York, New York.

- Ms. Gotham has been a Vice President of Advisers since 1998. From 1994 to
1998 she was a securities analyst for Advisers.

- Mr. Mehlhouse, a Vice President of Advisers, has managed equity securities
for Advisers since 1996. From 1993 to 1996, he was a portfolio manager for
Marshall & IIsley Bank Corp., Milwaukee, Wisconsin.

- Mr. Romanowski, a Vice President of Advisers since 1998, was a portfolio
manager for Value Line, New York, NY from October 1995 to March 1998,
prior to which he was a securities analyst for Conning & Co. in Hartford,
CT from 1992 to 1995.

SUB-ADVISERS

GLOBAL ASSET ALLOCATION SERIES. Morgan Stanley Dean Witter Investment
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 is a wholly owned subsidiary of Morgan Stanley Dean Witter & Co.,
a global financial services firm that maintains major market positions in each
of its three primary businesses--securities, asset management and credit
services. Morgan Stanley provides a broad range of portfolio management services
to customers in the United States and abroad and as of December 31, 1999,
together with its affiliated institutional investment managers, managed
investments totaling approximately $184.4 billion.

Portfolio responsibility for the Global Asset Allocation Series is split between
Morgan Stanley's equity team led by Frances Campion, Richard Boon and Paul
Boyne, and a team of fixed income portfolio managers with respect to fixed
income securities. Frances Campion, a Managing Director of Morgan Stanley,
joined Morgan Stanley in 1990 and her responsibilities have included the
day-to-day management of the global equity portion of the Series since the
Series' inception. Richard Boon is a Principal of Morgan Stanley. His
responsibilities include security analysis on North American equities. He joined
Morgan Stanley in 1995. Paul Boyne is a Principal of Morgan Stanley. His
responsibilities include the analysis of North American equities. He joined
Morgan Stanley in 1993. The investment strategy and allocation of the fixed
income portion is set by a team of portfolio managers, the primary members of
which are David Germany, Michael Kushma, Paul O'Brien, Christian Roth and David
Stanley. David Germany joined Morgan Stanley in 1997 and is a Managing Director.
He was previously a partner and portfolio manager at Miller Anderson & Sherrerd,
LLP. Michael Kushma joined Morgan Stanley & Co. Incorporated in 1987, became a
Principal in 1996, and moved to Morgan Stanley in 1998. Paul O'Brien, a
Principal of Morgan Stanley, joined Morgan Stanley in 1996 as a portfolio
manager. He was head of European Economics from 1993 through 1995 for JP Morgan.
Christian Roth, a Principal of Morgan Stanley, joined Morgan Stanley in 1991.
David Stanley joined Morgan Stanley in 1994 and became a Vice President in 1997.

INTERNATIONAL STOCK SERIES. Lazard Asset Management ("Lazard"), 30 Rockefeller
Plaza, New York, New York 10112, is the sub-adviser of the International Stock
Series. Lazard is a division of Lazard Freres & Co. LLC ("Lazard Freres"), a New
York limited liability company. Lazard Freres provides its clients with a wide
variety of investment banking, brokerage and related services. Lazard provides
investment management services to client discretionary accounts with assets as
of December 31, 1999 totaling approximately $75 billion. Its clients are both
individuals and institutions, some of whose accounts have investment policies
similar to those of the Series.

Herbert W. Gullquist is Chief Investment Officer of Lazard and a Vice Chairman
and Managing Director of Lazard Freres. Mr. Gullquist is responsible for
monitoring all investment activity to ensure adherence to Lazard's investment
philosophy and guidelines. John R. Reinsberg is a Managing Director of Lazard
Freres responsible for international/global equity management and overseeing the
day-to-day operations of Lazard's international equity investment team. Mr.
Gullquist and Mr. Reinsberg have been primarily responsible for the day-to-day
management of International Stock Series since its inception.

S&P 500 INDEX SERIES AND MID CAP STOCK SERIES. The Dreyfus Corporation
("Dreyfus"), 200 Park Avenue, New York, New York 10166, is the sub-adviser to
the S&P 500 Index Series and the Mid Cap Stock Series. Founded in 1947, Dreyfus
manages one of the nation's leading mutual fund complexes, with more than $127
billion in over 160 mutual fund portfolios. Dreyfus is the primary mutual fund
business of Mellon Financial Corporation, a global financial services company
with approximately $2.5 trillion of assets under management, administration or
custody, including approximately $485 billion under management. Mellon provides
wealth management, global investment services and a comprehensive array of
banking services for individuals, businesses and institutions. Mellon is
headquartered in Pittsburgh, Pennsylvania.

John O'Toole and Steven A. Falci have primary responsibility for the day-to-day
management of Mid Cap Stock Series. Mr. O'Toole, who has been employed by the
Mellon organization since 1979, has managed the Series since 1999. Mr. Falci,
who has been employed by the Mellon organization since 1994, has managed the
Series since its inception.

28
<PAGE> 32

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, together with its
affiliates, managed over $179.9 billion for over eight million individual and
institutional investor accounts as of December 31, 1999. Some of T. Rowe Price's
accounts have investment policies similar to those of the Series.

The Series has an investment advisory committee chaired by Larry J. Puglia. Mr.
Puglia has had the day-to-day responsibilities of managing the Series since 1996
and has been managing investments since joining T. Rowe Price in 1990.

SMALL CAP VALUE SERIES. Berger LLC ("Berger"), 210 University Boulevard,
Denver, Colorado 80206, the sub-adviser of the Small Cap Value Series, has
entered into an agreement with Perkins, Wolf, McDonnell & Company (the
"Manager") under which Berger LLC will pay the Manager a fee to provide the
day-to-day investment management for the Series.

Robert H. Perkins has been primarily responsible for the day-to-day management
of Small Cap Value Series since its inception. Mr. Perkins is President and a
Director of the Manager and has been an investment manager since 1970.

LARGE CAP GROWTH SERIES. Alliance Capital Management L.P. ("Alliance"), a
Delaware limited partnership with principal offices at 1345 Avenue of the
Americas, New York, New York 10105, is the sub-adviser of the Large Cap Growth
Series. Alliance is an international investment manager supervising client
accounts with assets as of December 31, 1999 totaling more than $368 billion (of
which approximately $169 billion represented the assets of investment
companies). Alliance's clients are primarily major corporate employee benefit
funds, public employee retirement systems, investment companies, foundations and
endowment funds. The 52 registered investment companies managed by Alliance
comprising 105 separate investment portfolios currently have over 5 million
shareholders.

Alliance Capital Management Corporation ("ACMC"), the sole general partner of,
and owner of a 1% general partnership interest in, Alliance, is an indirect
wholly-owned subsidiary of The Equitable Life Assurance Society of the United
States ("Equitable"), which is a wholly-owned subsidiary of AXA Financial, Inc.,
a holding company controlled by AXA, a French insurance holding company.

James G. Reilly, an Executive Vice President of Alliance, has been primarily
responsible for the day-to-day management of Large Cap Growth Series since its
inception. Mr. Reilly joined Alliance in 1984 and has been a portfolio manager
on the U.S. Large Cap team since 1988. Mr. Reilly has 16 years investment
experience.

MULTISECTOR BOND SERIES AND BLUE CHIP STOCK SERIES II. A I M Capital
Management, Inc. ("AIM"), 11 Greenway Plaza, Suite 100, Houston, Texas, 77046,
is the sub-adviser to the Multisector Bond Series and the Blue Chip Stock Series
II. AIM has acted as an investment adviser since its organization in 1986. As of
December 31, 1999, AIM, together with its affiliates, advises or manages
approximately $160 billion in assets for over 125 investment portfolios.

AIM uses a team approach to investment management for both the Multisector Bond
Series and Blue Chip Stock Series II. The individual members of the team who are
primarily responsible for the day-to-day management of the Multisector Bond
Series are Robert G. Alley, Jan H. Friedli and Carolyn L. Gibbs. Mr. Alley,
Senior Portfolio Manager, has been associated with AIM and/or its affiliates
since 1992. Mr. Friedli, Portfolio Manager, has been associated with AIM and/or
its affiliates since 1999. From 1997 to 1999, Mr. Friedli was global
fixed-income portfolio manager for Nicholas-Applegate Capital Management and,
from 1994 to 1997, he was international fixed-income trader and analyst for
Strong Capital Management. Ms. Gibbs, Senior Portfolio Manager, has been
associated with AIM and/or its affiliates since 1992.

The individual members of the team who are primarily responsible for the
day-to-day management of the Blue Chip Stock Series II are Monika H. Degan, Joel
E. Dobberpuhl and Jonathan C. Schoolar. Ms. Degan, Senior Portfolio Manager, has
been associated with AIM and/or its affiliates since 1995, prior to which she
was a Senior Financial Analyst for Shell Oil Co. Pension Trust. Mr. Dobberpuhl,
Senior Portfolio Manager, has been associated with AIM and/or its affiliates
since 1990. Mr. Schoolar, Senior Portfolio Manager, has been associated with AIM
and/or its affiliates since 1986.

CAPITAL OPPORTUNITIES SERIES, GLOBAL EQUITY SERIES AND INVESTORS GROWTH
SERIES. Massachusetts Financial Services Company ("MFS"), 500 Boylston Street,
Boston, Massachusetts 02116, is the sub-adviser of Capital Opportunities Series,
Global Equity Series and Investors Growth Series. MFS is America's oldest mutual
fund organization. MFS and its predecessor organizations have a history of money
management dating from 1924 and the founding of the first mutual fund,
Massachusetts Investors Trust. Net assets under management of the MFS
organization were approximately $136.72 billion as of December 31, 1999.

Maura A. Shaughnessy, a Senior Vice President of MFS, is the portfolio manager
of Capital Opportunities Series. Ms. Shaughnessy has been employed in the
investment management area of MFS since 1991. David R. Mannheim, a Senior Vice
President of MFS, is the portfolio manager of Global Equity Series. Mr. Mannheim
has been employed in the investment management area of MFS since 1988. Stephen
Pesek and Thomas D. Barrett are the portfolio managers of the Investors Growth
Series. Mr. Pesek, a Senior Vice President of MFS, has been employed in the
investment management area of MFS since 1994. Mr. Barrett, a Vice President of
MFS, has been employed in the investment management areas of MFS since 1996.
Prior to joining MFS in 1996, Mr. Barrett had been an Assistant Vice President
and Equity Research Analyst with The Boston Company Asset Management, Inc.

AMERICAN LEADERS SERIES. Federated Investment Management Company ("Federated"),
Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, Pennsylvania
15222-3779, is the sub-adviser to the American Leaders Series. Federated is a
subsidiary of Federated Investors, Inc. Federated and other subsidiaries of
Federated Investors, Inc. advise approximately 176 mutual funds and separate
accounts, which total approximately $124 billion in assets as of January 31,
2000. Federated Investors, Inc. was established in 1955 and is one of the
largest mutual fund investment managers in the United States with approximately
1,900 employees.

Michael P. Donnelly and Arthur J. Barry are portfolio managers of American
Leaders Series. Mr. Donnelly joined Federated Investors, Inc. in 1989 as an
investment analyst and has been a portfolio manager since 1994. Mr. Donnelly has
been a Senior Vice President of Federated since May 1999 and is a Chartered
Financial Analyst and received his M.B.A. from the University of Virginia. Mr.
Barry joined Federated Investors, Inc. in 1994 as an investment analyst. He
served as an Assistant Vice President of Federated from 1997 through June 1998
and has been a Vice President of Federated since July 1998. Mr. Barry is a
Chartered Financial Analyst. He earned his M.S.I.A. with concentrations in
finance and accounting from Carnegie Mellon University.

29
<PAGE> 33

MORE INFORMATION ON SERIES OBJECTIVES, INVESTMENT STRATEGIES AND RISKS
- --------------------------------------------------------------------------------

OBJECTIVES

The Series' objectives, which are described above under "The Series," may be
changed without shareholder approval.

INVESTMENT STRATEGIES

The principal investment strategies of each Series are described above under
"The Series." These are the strategies that Advisers and the respective
sub-advisers believe are most likely to be important in trying to achieve each
Series' objective. Of course, there is no guarantee that any Series will achieve
its objectives. You should be aware that a Series may also use strategies and
invest in securities that are not described below, but are described in the
Statement of Additional Information.

SECURITIES LENDING

To generate additional income, U.S. Government Securities Series, Diversified
Income Series, Asset Allocation Series, Value Series, Growth & Income Series,
S&P 500 Index Series, Blue Chip Stock Series, Global Growth Series, Growth Stock
Series and Aggressive Growth Series currently lend their portfolio securities.
While currently not the case, the other Series may also lend their portfolio
securities.

TEMPORARY DEFENSIVE MEASURES

In an attempt to respond to adverse market, economic, political or other
conditions, a Series may invest its assets for temporary defensive purposes,
without limit, in the following manner:

- Multisector Bond Series, High Yield Series, Global Asset Allocation
Series, Asset Allocation Series, American Leaders Series, Value Series,
Capital Opportunities Series, Growth & Income Series, Blue Chip Stock
Series II, Small Cap Value Series, Global Equity Series, Large Cap Growth
Series, Investors Growth Series, Growth Stock Series and Aggressive Growth
Series may invest in cash, money market instruments, bonds or other debt
securities.

- Blue Chip Stock Series may invest in U.S. and foreign dollar-denominated
money market securities, including repurchase agreements, which are in the
two highest rating categories and mature in one year or less. In addition,
the Series may invest in shares of the Reserve Investment Fund, a money
market fund managed by T. Rowe Price, the Series' sub-adviser.

- International Stock Series may invest in the equity securities of U.S.
companies or short-term money market instruments or hold its assets in
cash.

- Global Growth Series may invest in high-quality debt securities of U.S.
and non-U.S. issuers, may hold cash (U.S. dollars, foreign currencies, or
multinational currency units) and/or high-quality money market
instruments.

During periods when a Series assumes a temporary defensive position, the Series
will not be pursuing and may not achieve its investment objective. S&P 500 Index
Series and Mid Cap Stock Series do not intend to take temporary defensive
positions that are inconsistent with their principal investment strategies.

PORTFOLIO TURNOVER

Before investing in a Series you should review its portfolio turnover rate for
an indication of the potential effect of transaction costs on the Series' future
returns. In general, the greater the volume of buying and selling by the Series,
the greater the impact that brokerage commissions and other transaction costs
will have on its return.

The Series, while they generally do not invest or trade for short-term profits,
are actively managed and the portfolio managers may trade securities frequently.
As a result, each Series may, from time to time, have an annual portfolio
turnover rate of over 100%. Factors contributing to a Series' higher turnover
rate may include general market volatility, significant positive or negative
developments concerning particular security holdings, an attempt to maintain the
Series' market capitalization target and the need to sell holdings to meet
redemption activity in the Series. For the fiscal year ended December 31, 1999
Multisector Bond Series (194%), Asset Allocation Series (178%), Value Series
(211%), Growth Stock Series (175%) and Aggressive Growth Series (264%) had
portfolio turnover rates in excess of 100%. While higher turnover rates may
result in increased transaction costs, the Series' managers attempt to have the
benefits of these transactions outweigh the costs, although this cannot be
assured. The "Financial Highlights" section of this Prospectus shows each
Series' historical portfolio turnover rate.

DURATION

As discussed above under "The Series," certain Series attempt to maintain the
average effective durations of their portfolios within specified ranges.
Effective duration, one measure of interest rate risk, measures how much the
value of a security is expected to change with a given change in interest rates.
The longer a security's effective duration, the more sensitive its price to
changes in interest rates. For example, if interest rates were to increase by
one percentage point, the market value of a bond with an effective duration of
five years would decrease by 5%, with all other factors being constant.
Effective duration is based on assumptions and subject to a number of
limitations. It is most useful when interest rate changes are small, rapid and
occur equally in short-term and long-term securities. In addition, it is
difficult to calculate precisely for bonds with prepayment options, such as
mortgage-backed securities, because the calculation requires assumptions about
prepayment rates.

PRINCIPAL RISKS

The principal risks of investing in the Series are summarized above under "The
Series." More information about Series risks is presented below. Please
remember, you may lose money if you invest in a Series.

Money Market Series, U.S. Government Securities Series, Diversified Income
Series, Multisector Bond Series and High Yield Series are sometimes referred to
in this section as the "Fixed Income Series" and American Leaders Series, Value
Series, Capital Opportunities Series, Growth & Income Series, S&P 500 Index
Series, Blue Chip Stock Series, Blue Chip Stock Series II, International Stock
Series, Mid Cap Stock Series, Small Cap Value Series, Global Growth Series,
Global Equity Series, Large Cap Growth Series, Investors Growth Series, Growth
Stock Series and Aggressive Growth Series are sometimes referred to as the
"Equity Series."

- INTEREST RATE RISK. The Fixed Income Series, Global Asset Allocation
Series and Asset Allocation Series are subject to interest rate risk. Debt
securities in the Series will fluctuate in value with changes in interest
rates. In general, debt securities will increase in value when interest
rates fall and decrease in value when interest rates rise. Longer term debt
securities are generally more sensitive to interest rate changes. In
addition, investments made by certain Series may be highly volatile in
response to changing interest rates. These investments include IOs, POs,
inverse floaters, accrual bonds, payment-in-kind bonds and zero-coupon
obligations.

30
<PAGE> 34

- CREDIT OR DEFAULT RISK. The Fixed Income Series, Global Asset Allocation
Series and Asset Allocation Series are subject to credit or default risk.
This is the risk that the issuers of debt securities held by the Series will
not make payments on the securities, or that the other party to a contract
(such as a securities lending agreement or repurchase agreement) will
default on its obligations. There is also the risk that an issuer could
suffer adverse changes in financial condition that could lower the credit
quality of a security. This could lead to greater volatility in the price of
the security and in shares of the Series. Also, a change in the credit
quality rating of a bond can affect the bond's liquidity and make it more
difficult for the Series to sell. When a Series purchases unrated
securities, it will depend on the adviser's or sub-adviser's analysis of
credit risk more heavily than usual.

- RISKS OF HIGH YIELD/HIGH RISK SECURITIES. High Yield Series invests
primarily in non-investment grade fixed income obligations, and a
significant portion of the portfolios of Multisector Bond Series,
Diversified Income Series and Asset Allocation Series may consist of such
obligations. Non-investment grade obligations are commonly referred to as
"high yield" securities or "junk bonds." Although these securities usually
offer higher yields than investment grade securities, they also involve more
risk. High yield bonds may be more susceptible to real or perceived adverse
economic conditions than investment grade bonds. In addition, the secondary
trading market may be less liquid. High yield securities generally have more
volatile prices and carry more risk to principal than investment grade
securities. Multisector Bond Series may invest up to 35% of its total
assets, and Diversified Income Series and Asset Allocation Series may invest
up to 30% of their total assets in securities rated as low as Caa by
Moody's, CCC by Standard & Poor's or comparably rated by another rating
agency. High Yield Portfolio may invest without limitation in these
securities, and may invest up to 10% of its total assets in "non-performing"
securities rated lower than Caa or CCC. Securities in the Caa/CCC rating
category are considered to be of poor standing and are predominantly
speculative. "Non-performing" securities may be in default, or there may be
present elements of danger with respect to the payment of principal or
interest. These securities are highly speculative.

- CALL RISK. U.S. Government Securities Series, Diversified Income Series,
Multisector Bond Series, High Yield Series, Global Asset Allocation Series
and Asset Allocation Series are subject to call risk. Many corporate bonds
may be redeemed ("called") at the option of the issuer before their stated
maturity date. In general, an issuer will call its bonds if they can be
refinanced by issuing new bonds which bear a lower interest rate. The Series
are subject to the possibility that during periods of falling interest
rates, a bond issuer will call its high-yielding bonds. A Series would then
be forced to invest the unanticipated proceeds at lower interest rates,
resulting in a decline in the Series' income.

- RISKS OF MORTGAGE- AND ASSET-BACKED SECURITIES. U.S. Government
Securities Series, Diversified Income Series and Asset Allocation Series are
subject to both prepayment and extension risk in connection with their
investments in mortgage-backed and/or asset-backed securities. To the extent
it invests in mortgage-backed and/or asset-backed securities, High Yield
Series may also be subject to the risks of investing in these types of
securities.

Prepayment risk. Mortgage-backed securities are secured by and payable
from pools of mortgage loans. Similarly, asset-backed securities are
supported by obligations such as automobile loans or home equity loans.
These mortgages and other obligations generally can be prepaid at any
time. As a result, mortgage- and asset-backed securities are subject to
prepayment risk, which is the risk that falling interest rates could
cause prepayments of the securities to occur more quickly than
expected. This occurs because, as interest rates fall, more homeowners
refinance the mortgages underlying mortgage-backed securities or prepay
the debt obligations underlying asset-backed securities. A Series
holding these securities must reinvest the prepayments at a time when
interest rates on new investments are falling, reducing the income of
the Series. In addition, when interest rates fall, prices on mortgage-
and asset-backed securities may not rise as much as for other types of
comparable debt securities because investors may anticipate an increase
in prepayments.

Extension risk. Mortgage- and asset-backed securities are also subject
to extension risk, which is the risk that rising interest rates could
cause mortgages or other obligations underlying the securities to be
prepaid more slowly than expected, resulting in slower prepayments of
securities. This would, in effect, convert a short- or medium-duration
mortgage-or asset-backed security into a longer-duration security,
increasing its sensitivity to interest rate changes and causing its
price to decline.

- INCOME RISK. The Fixed Income Series, Global Asset Allocation Series and
Asset Allocation Series are subject to income risk, which is the potential
for a decline in the Series' income due to falling interest rates.

- RISKS OF COMMON STOCKS. Because of their investments in common stocks,
the Equity Series, Global Asset Allocation Series and Asset Allocation
Series are subject to the following risks:

Market risk. All stocks are subject to price movements due to changes
in general economic conditions, changes in the level of prevailing
interest rates, changes in investor perceptions of the market, or the
outlook for overall corporate profitability.

Company risk. Individual stocks can perform differently than the
overall market. This may be a result of specific factors such as
changes in corporate profitability due to the success or failure of
specific products or management strategies, or it may be due to changes
in investor perceptions regarding a company.

Sector risk. The stocks of companies within specific industries or
sectors of the economy can periodically perform differently than the
overall market. This can be due to changes in such things as the
regulatory or competitive environment or to changes in investor
perceptions of a particular industry or sector.

- RISKS OF GROWTH STOCKS. Asset Allocation Series, Capital Opportunities
Series, Blue Chip Stock Series, Blue Chip Stock Series II, Global Growth
Series, Global Equity Series, Large Cap Growth Series, Investors Growth
Series, Growth Stock Series and Aggressive Growth Series focus on stocks
which Advisers, or a Series' sub-adviser, believes have the potential for
superior earnings growth. Growth & Income Series may also use this approach.
If Advisers or a Series' sub-adviser incorrectly assesses a company's
prospects for earnings growth, or if Advisers' or the sub-adviser's judgment
about how other investors will value the company's earnings growth is wrong,
then the price of the company's stock may decrease, or it may not increase
to the level that Advisers or the sub-adviser had anticipated.

- RISKS OF VALUE STOCKS. Global Asset Allocation Series, American Leaders
Series, Value Series, Small Cap Value Series and International Stock Series
focus on stocks of companies whose shares appear to be undervalued. Growth &
Income Series may also use this approach. These "value stocks" can remain
undervalued for years. There is the risk that a value stock may never reach
what Advisers, or a Series' sub-adviser, believes is its full value, or that
the stock's price will go down.

- RISKS OF SMALL CAP COMPANIES. Small Cap Value Series, Global Growth
Series and Aggressive Growth Series are subject to the risks of investing in
smaller-capitalization companies. To the extent it invests in
smaller-capitalization companies, Global Asset Allocation Series may also be
subject to the risks of investing in such

31
<PAGE> 35

companies. Smaller-capitalization companies often have limited product
lines, markets or financial resources, and they may be dependent on a small,
inexperienced management group. The securities of smaller-capitalization
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. 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.

- RISKS OF MID CAP COMPANIES. Value Series, Mid Cap Stock Series, Global
Growth Series and Growth Stock Series are subject to the risks of investing
in mid-sized companies. To the extent they invest in mid-sized companies,
Blue Chip Stock Series and Global Asset Allocation Series may also be
subject to the risks of investing in mid cap companies. Mid-sized companies
may have somewhat limited product lines, markets and financial resources and
may depend upon a relatively small management group. Stocks of these
companies may therefore be more vulnerable to adverse developments than
those of larger companies and therefore may have greater volatility than
more established companies.

- RISKS OF LARGE CAP COMPANIES. Each Equity Series, Asset Allocation Series
and Global Asset Allocation Series may invest in stocks of
large-capitalization companies, and American Leaders Series, Value Series,
Growth & Income Series, S&P 500 Index Series, Blue Chip Stock Series, Blue
Chip Stock Series II and Large Cap Growth Series focus on such stocks. Large
company stocks historically have tended to be less volatile than stocks of
smaller companies. In the long run, however, large company stocks may
produce more modest gains than stocks of smaller companies as a trade-off
for this potentially lower risk.

- OVER-THE-COUNTER RISK. Each Equity Series, Asset Allocation Series and
Global Asset Allocation Series may invest in companies whose stocks trade in
the over-the-counter market. Over-the-counter ("OTC") transactions involve
risks in addition to those associated with transactions in securities traded
on exchanges. OTC listed companies may have limited product lines, markets
or financial resources. Many OTC stocks trade less frequently and in smaller
volume than exchange-listed stocks. The values of these stocks may be more
volatile than exchange-listed stocks, and the Series may experience
difficulty in establishing or closing out positions in these stocks at
prevailing market prices.

- RISKS OF INITIAL PUBLIC OFFERINGS. Each Equity Series, Asset Allocation
Series and Global Asset Allocation Series may invest in initial public
offerings ("IPOs"). Companies making initial public offerings of their stock
generally have limited operating histories and prospects for future
profitability may be uncertain. Prices of IPOs may also be unstable due to
the absence of a prior public market and the small number of shares
available for trading.

- RISKS OF FOREIGN INVESTING. Money Market Series, Diversified Income
Series, Multisector Bond Series, High Yield Series Global Asset Allocation
Series, Asset Allocation Series, American Leaders Series, Capital
Opportunities Series, Blue Chip Stock Series, Blue Chip Stock Series II,
International Stock Series, Global Growth Series, Global Equity Series,
Large Cap Growth Series and Investors Growth Series may invest in foreign
securities as a principal investment strategy. A Series' investment in
foreign securities subjects it to risks not typically associated with U.S.
investing. Because of these risks, the Series may be subject to greater
volatility than most mutual funds which invest principally in domestic
securities. These risks include:

Currency risk. Because the Series invest in securities denominated in
currencies other than the U.S. dollar, and because the Series may hold
foreign currencies, the Series may be affected favorably or unfavorably
by changes in currency exchange rates. Changes in exchange rates will
affect a Series' net asset value, the value of dividends and interest
earned, and gains and losses realized on the sale of securities. This
risk factor does not apply to Money Market Series, which invests only
in U.S. dollar denominated obligations.

Information risk. There may be less publicly available information
about foreign securities and issuers than is available about domestic
securities and issuers. In addition, foreign companies are not subject
to uniform accounting, auditing and financial reporting standards,
practices and requirements comparable to those which apply to domestic
companies.

Foreign securities market risk. Securities of some foreign companies
are less liquid than securities of comparable domestic companies, and
their prices may be more volatile. In addition, there may be delays in
the settlement of foreign securities transactions. Trading volume on
foreign stock exchanges is substantially less than that on the New York
Stock Exchange. Securities traded on foreign exchanges may be subject
to further risks due to the possibility of permanent or temporary
termination of trading, and greater spreads between bid and asked
prices for securities. In addition, there is generally less
governmental supervision and regulation of foreign stock exchanges.
Stock markets in emerging markets can be more volatile during periods
of investment uncertainty than established major exchanges.

Political and economic risk. International investing is subject to the
risk of political, social or economic instability in the country of the
issuer of a security, the difficulty of predicting international trade
patterns, the possibility of the imposition of exchange controls,
expropriation, limits on removal of currency or other assets and
nationalization of assets.

- RISKS OF EMERGING MARKETS. Multisector Bond Series, Capital Opportunities
Series, Global Growth Series and Global Equity Series may invest in emerging
markets as a principal investment strategy. The other Series that invest in
foreign securities may invest in emerging markets to a more limited extent.
Emerging markets tend to be in the less economically developed regions of
the world. The risks of foreign investing are of greater concern in the case
of investments in emerging markets, which may exhibit greater price
volatility and have less liquidity. Risks of investing in securities issued
by companies in emerging market countries include, among other things,
greater social, political and economic instability, lack of liquidity and
greater price volatility due to small market size and low trading volume,
certain national policies that restrict investment opportunities and the
lack of a developed judicial system.

- RISKS OF FORWARD CURRENCY EXCHANGE CONTRACTS, FUTURES AND OPTIONS
TRANSACTIONS. Multisector Bond Series, Global Asset Allocation Series,
Capital Opportunities Series, S&P 500 Index Series, Blue Chip Stock Series,
Blue Chip Stock Series II, International Stock Series, Mid Cap Stock Series,
Global Equity Series, Large Cap Growth Series and Investors Growth Series
may engage in forward currency exchange contracts and/or futures and options
transactions as a principal investment strategy. The use of these derivative
instruments exposes the Series to additional investment risks and
transaction costs. Risks inherent in the use of derivative instruments
include:

the risk that interest rates, securities prices or currency markets
will not move in the direction that Advisers or a Series' sub-adviser
anticipates;

an imperfect correlation between the price of derivative instruments
and movements in the prices of the securities, interest rates or
currencies being hedged;

the possible absence of a liquid secondary market for any particular
instrument and possible exchange-imposed price

32
<PAGE> 36

fluctuation limits, either of which may make it difficult or impossible
to close out a position when desired;

leverage risk, which is the risk that adverse price movements in an
instrument can result in a loss substantially greater than the Series'
initial investment in that instrument; and

particularly in the case of privately negotiated instruments, the risk
that the counterparty will fail to perform its obligations, which could
leave the Series worse off than if it had not entered into the
position.

If a Series uses derivative instruments and if Advisers' or the Series'
sub-adviser's judgment proves incorrect, the Series' performance could be
worse than if it had not used these instruments.

- RISKS OF SECURITIES LENDING. Each Series may lend up to 33 1/3% of the
value of its total assets. When a Series loans its portfolio securities, it
will receive cash collateral equal to at least 100% of the value of the
loaned securities. Nevertheless, the Series risks a delay in the recovery of
the loaned securities, or even the loss of rights in the collateral
deposited by the borrower if the borrower should fail financially. In
addition, each Series invests the cash collateral in high grade money market
securities, which are subject to credit or default risk.

- RISKS OF SHORT-TERM TRADING. Due to many factors, each Series may trade
securities frequently and hold securities in their portfolios for one year
or less. Frequent purchases and sales of portfolio securities will increase
a Series' transaction costs. Factors that can lead to short-term trading
include market volatility; a significant positive or negative development
concerning a security; for the Equity Series, an attempt to maintain the
Series' market capitalization target; and the need to sell a security to
meet redemption activity in the Series.

- MANAGEMENT RISK. All Series, with the exception of S&P 500 Index Series,
are actively managed by professionals with extensive money management
experience and expertise. The performance of a Series will reflect in part
the ability of Advisers or the Series' sub-adviser to select securities
which are suited to achieving the Series' investment objectives. Due to
their active management, the Series could underperform other mutual funds
with similar investment objectives or the market generally.

- INFLATION RISK. Even if the principal value of your investment in a
Series, or your income from that investment, remains constant or increases,
their real value may be less in the future because of inflation. Thus, as
inflation occurs, the purchasing power of your Series shares and
distributions may decline, even if their value in dollars increases.

- EURO CONVERSION. On January 1, 1999, the European Monetary Union ("EMU")
introduced a single currency, the Euro, which was adopted as the common
legal currency for participating member countries. Existing sovereign
currencies of the participating countries will remain legal tender in those
countries, as denominations of the Euro, until January 1, 2002. Countries
participating in the EMU are Austria, Belgium, Finland, France, Germany,
Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.

Whether the Euro conversion will materially affect the performance of Series
investing in foreign securities is uncertain. A Series may be affected by
the Euro's impact on the business or financial condition of European issuers
held by that Series. The ongoing process of establishing the Euro may result
in market volatility. In addition, the transition to the Euro and the
elimination of currency risk among EMU countries may change the economic
environment and behavior of investors, particularly in European markets. To
the extent the Series hold non-U.S. dollar (Euro or other) denominated
securities, they will still be exposed to currency risk due to fluctuations
in those currencies versus the U.S. dollar.

33
<PAGE> 37

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

The tables that follow present performance information about the shares of each
Series. This information is intended to help you understand each Series'
financial performance for the past five years or, if shorter, the period of the
Series' operations. Some of this information reflects financial results for a
single Series share. The total returns in the tables represent the rate that you
would have earned or lost on an investment in a Series, assuming you reinvested
all of your dividends and distributions. Information is not presented for
American Leaders Series, Capital Opportunities Series, Blue Chip Stock Series
II, Global Equity Series and Investors Growth Series, because they had not
commenced operations during the years presented.

This information has been audited by KPMG LLP, independent auditors, whose
report, along with the Series' financial statements, is included in the Series'
annual report, which is available upon request.
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
MONEY MARKET SERIES 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......................... $11.06 $11.03 $10.94 $10.83 $10.63
- ----------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income - net................................... .54 .57 .58 .57 .60
Net realized and unrealized gain (loss) on investments.... -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Total from operations....................................... .54 .57 .58 .57 .60
- ----------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.............................. (.40) (.54) (.49) (.46) (.40)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year................................ $11.20 $11.06 $11.03 $10.94 $10.83
- ----------------------------------------------------------------------------------------------------------------------------
Total return@............................................... 4.96% 5.32% 5.34% 5.17% 5.71 %
Net assets end of year (000s omitted)....................... $124,105 $ 77,097 $ 57,009 $ 61,906 $ 41,807
Ratio of expenses to average daily net assets............... .35% .35% .38% .38% .40 %
Ratio of net investment income to average daily net
assets.................................................... 4.88% 5.18% 5.19% 5.14% 5.44 %
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

@ These are the Series' total returns during the period, including reinvestment
of all dividend and capital gains distributions.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
U.S. GOVERNMENT SECURITIES SERIES 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......................... $10.93 $10.68 $10.57 $11.16 $9.40
- ----------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income - net................................... .63 .60 .80 .67 .70
Net realized and unrealized gain (loss) on investments.... (.84) .34 .12 (.51) 1.06
- ----------------------------------------------------------------------------------------------------------------------------
Total from operations....................................... (.21) .94 .92 .16 1.76
- ----------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.............................. (.59) (.69) (.81) (.75) --
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year................................ $10.13 $10.93 $10.68 $10.57 $11.16
- ----------------------------------------------------------------------------------------------------------------------------
Total return@............................................... (1.94%) 8.87% 9.08% 2.21% 18.78%
Net assets end of year (000s omitted)....................... $138,658 $152,672 $142,070 $161,678 $182,687
Ratio of expenses to average daily net assets............... .52% .51% .54% .53% .53 %
Ratio of net investment income to average daily net
assets.................................................... 5.64% 5.53% 6.03% 6.17% 6.78 %
Portfolio turnover rate..................................... 97% 114% 148% 176% 115 %
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

@ These are the Series' total returns during the period, including reinvestment
of all dividend and capital gains distributions.

34
<PAGE> 38

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
DIVERSIFIED INCOME SERIES 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year................ $11.91 $11.98 $11.70 $12.20 $10.40
- ---------------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income - net......................... .85 .73 .91 .82 .88
Net realized and unrealized gain (loss) on
investments................................... (1.05) .01 .26 (.40) .92
- ---------------------------------------------------------------------------------------------------------------------------------
Total from operations............................. (.20) .74 1.17 .42 1.80
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.................... (.80) (.81) (.89) (.91) --
Excess distributions of net realized gains...... -- -- -- (.01) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders............... (.80) (.81) (.89) (.92) --
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year...................... $10.91 $11.91 $11.98 $11.70 $12.20
- ---------------------------------------------------------------------------------------------------------------------------------
Total return@..................................... (1.68%) 6.31% 10.44% 4.15% 17.26 %
Net assets end of year (000s omitted)............. $101,153 $115,182 $105,200 $105,831 $109,120
Ratio of expenses to average daily net assets..... .54% .52% .55% .55% .55 %
Ratio of net investment income to average daily
net assets...................................... 6.78% 6.56% 7.11% 6.86% 7.78 %
Portfolio turnover rate........................... 87% 96% 166% 171% 139 %
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

@ These are the Series' total returns during the period, including reinvestment
of all dividend and capital gains distributions.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- ------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------
MULTISECTOR BOND SERIES (FORMERLY GLOBAL BOND SERIES) 1999 1998 1997 1996 1995+
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year....... $11.56 $10.65 $11.11 $11.30 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income - net................ .57 .30 .46 .57 .54
Net realized and unrealized gain (loss) on
investments and foreign currency transactions... (1.44) 1.13 (.45) (.13) 1.52
- ------------------------------------------------------------------------------------------------------------------------------------
Total from operations.................... (.87) 1.43 .01 .44 2.06
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net......... (.35) (.19) (.37) (.43) (.54)
From net realized gains.............. (.08) (.33) (.10) (.20) (.22)
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders...... (.43) (.52) (.47) (.63) (.76)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year............. $10.26 $11.56 $10.65 $11.11 $11.30
- ------------------------------------------------------------------------------------------------------------------------------------
Total return@............................ (7.53%) 13.49% 0.14% 3.32% 19.14 %
Net assets end of year (000s omitted).... $24,926 $24,659 $20,692 $20,228 $13,187
Ratio of expenses to average daily net assets... .90% .88% 1.10% 1.02% 1.28 %*
Ratio of net investment income to average daily net
assets................................. 3.83% 4.19% 4.41% 5.07% 5.01 %*
Portfolio turnover rate.................. 194% 190% 168% 129% 184 %
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

* Annualized.
+ For the period January 3, 1995 (commencement of operations) to December 31,
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.
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.
@ These are the Series' total returns during the period, including reinvestment
of all dividend and capital gains distributions.

35
<PAGE> 39

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
HIGH YIELD SERIES 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......................... $9.91 $10.77 $9.83 $9.74 $9.47
- ---------------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income - net................................... .89 .75 .96 1.04 1.15
Net realized and unrealized gain (loss) on investments.... (.80) (.71) -- .13 .30
- ---------------------------------------------------------------------------------------------------------------------------------
Total from operations....................................... .09 .04 .96 1.17 1.45
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.............................. (.91) (.83) (.02) (1.03) (1.14)
From net realized gains................................... -- (.07) -- -- --
Excess distributions of net realized gains................ -- -- -- (.05) (.04)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders......................... (.91) (.90) (.02) (1.08) (1.18)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year................................ $9.09 $9.91 $10.77 $9.83 $9.74
- ---------------------------------------------------------------------------------------------------------------------------------
Total return@............................................... 1.17% .62% 9.76% 10.52% 12.73 %
Net assets end of year (000s omitted)....................... $68,166 $70,983 $59,228 $42,578 $28,129
Ratio of expenses to average daily net assets............... .57% .56% .62% .63% .63 %
Ratio of net investment income to average daily net
assets.................................................... 9.19% 9.39% 10.31% 10.22% 11.30 %
Portfolio turnover rate..................................... 75% 120% 353% 235% 130 %
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

@ These are the Series' total returns during the period, including reinvestment
of all dividend and capital gains distributions.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- ---------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------
GLOBAL ASSET ALLOCATION SERIES 1999 1998 1997 1996 1995+
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......................... $ 14.32 $13.29 $12.34 $11.42 $10.00
- ---------------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income - net................................... .22 .28 .28 .36 .35
Net realized and unrealized gain (loss) on investments and
foreign currency transactions........................... (.34) 1.81 1.39 1.19 1.55
- ---------------------------------------------------------------------------------------------------------------------------------
Total from operations....................................... (.12) 2.09 1.67 1.55 1.90
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.............................. (.24) (.31) (.26) (.38) (.34)
From net realized gains................................... (.79) (.75) (.46) (.25) (.14)
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders......................... (1.03) (1.06) (.72) (.63) (.48)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year................................ $13.17 $14.32 $13.29 $12.34 $11.42
- ---------------------------------------------------------------------------------------------------------------------------------
Total return@............................................... (.87%) 15.96% 13.51% 12.72% 17.47 %
Net assets end of year (000s omitted)....................... $66,067 $69,086 $52,482 $37,307 $20,080
Ratio of expenses to average daily net assets............... 1.02% 1.01% 1.16% 1.20% 1.28 %*
Ratio of net investment income to average daily net
assets.................................................... 2.26% 2.13% 2.42% 3.01% 3.26 %*
Portfolio turnover rate..................................... 59% 69% 51% 46% 44%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

36
<PAGE> 40

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------
ASSET ALLOCATION SERIES 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year..................... $21.09 $17.62 $16.99 $15.90 $13.56
- ---------------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income - net.............................. .54 .49 .59 .61 .65
Net realized and unrealized gain (loss) on
investments........................................ 3.27 3.02 2.82 1.38 2.35
- ---------------------------------------------------------------------------------------------------------------------------------
Total from operations.................................. 3.81 3.51 3.41 1.99 3.00
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net......................... (.49) (.01) (.59) (.61) (.64)
From net realized gains.............................. (1.63) (.03) (2.19) (.28) (.02)
Excess distributions of net realized gains........... -- -- -- (.01) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders.................... (2.12) (.04) (2.78) (.90) (.66)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year........................... $22.78 $21.09 $17.62 $16.99 $15.90
- ---------------------------------------------------------------------------------------------------------------------------------
Total return@.......................................... 19.56% 19.97% 20.24% 12.50% 21.97 %
Net assets end of year (000s omitted).................. $679,957 $593,878 $482,280 $397,712 $341,511
Ratio of expenses to average daily net assets.......... .52% .51% .53% .54% .55 %
Ratio of net investment income to average daily net
assets............................................... 2.58% 2.64% 3.16% 3.66% 4.25 %
Portfolio turnover rate................................ 178% 114% 113% 115% 98 %
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

@ These are the Series' total returns during the period, including reinvestment
of all dividend and capital gains distributions.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -----------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------
VALUE SERIES 1999 1998 1997 1996+
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......................... $14.38 $13.42 $11.38 $10.27
- -----------------------------------------------------------------------------------------------------------------------
Operations:
Investment income - net................................... .13 .16 .12 .14
Net realized and unrealized gain on investments........... 1.15 1.13 2.75 1.10
- -----------------------------------------------------------------------------------------------------------------------
Total from operations....................................... 1.28 1.29 2.87 1.24
- -----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.............................. -- (.16) (.13) (.13)
From net realized gains................................... (.01) (.17) (.70) --
- -----------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders......................... (.01) (.33) (.83) (.13)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of year................................ $15.65 $14.38 $13.42 $11.38
- -----------------------------------------------------------------------------------------------------------------------
Total return@............................................... 8.96% 9.64% 25.24% 11.49 %
Net assets end of year (000s omitted)....................... $94,583 $87,604 $55,058 $13,951
Ratio of expenses to average daily net assets............... .78% .76% .83% .87 %*
Ratio of net investment income to average daily net
assets.................................................... .85% 1.26% 1.41% 1.72 %*
Portfolio turnover rate..................................... 211% 332% 121% 36 %
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

* Annualized
+ For the period May 1, 1996 (commencement of operations) to December 31, 1996.
The Series' inception was March 28, 1996, when it was initially capitalized.
However, the Series' shares did not become effectively registered under the
Securities Act of 1933 until May 1, 1996. Information is not presented for
the period from March 28, 1996, through May 1, 1996, as the Series' shares
were not registered during that period.
@ These are the Series' total returns during the period, including reinvestment
of all dividend and capital gains distributions.

37
<PAGE> 41

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------
GROWTH & INCOME SERIES 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year...................... $21.23 $18.76 $15.16 $12.83 $10.07
- ---------------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income - net............................... .33 .48 .40 .34 .33
Net realized and unrealized gain on investments....... 1.81 2.00 3.80 2.54 2.76
- ---------------------------------------------------------------------------------------------------------------------------------
Total from operations................................... 2.14 2.48 4.20 2.88 3.09
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.......................... (.50) -- (.39) (.34) (.33 )
From net realized gains............................... (.93) (.01) (.21) (.21) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders..................... (1.43) (.01) (.60) (.55) (.33 )
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year............................ $21.94 $21.23 $18.76 $15.16 $12.83
- ---------------------------------------------------------------------------------------------------------------------------------
Total return@........................................... 10.72% 13.21% 27.69% 21.51% 29.70 %
Net assets end of year (000s omitted)................... $317,186 $312,939 $244,970 $134,932 $59,533
Ratio of expenses to average daily net assets........... .69% .67% .70% .76% .80 %
Ratio of net investment income to average daily net
assets................................................ 1.41% 2.45% 2.63% 2.38% 2.86 %
Portfolio turnover rate................................. 95% 30% 11% 20% 17 %
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

@ These are the Series' total returns during the period, including reinvestment
of all dividend and capital gains distributions.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
S&P 500 INDEX SERIES 1999 1998 1997 1996+
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......................... $18.83 $14.93 $11.47 $10.09
- ----------------------------------------------------------------------------------------------------------------------
Operations:
Investment income - net................................... .17 .16 .12 .10
Net realized and unrealized gain on investments........... 3.66 4.03 3.58 1.37
- ----------------------------------------------------------------------------------------------------------------------
Total from operations....................................... 3.83 4.19 3.70 1.47
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.............................. -- (.16) (.12) (.09)
From net realized gains................................... -- (.13) (.12) --
- ----------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders......................... -- (.29) (.24) (.09)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of year................................ $22.66 $18.83 $14.93 $11.47
- ----------------------------------------------------------------------------------------------------------------------
Total return@............................................... 20.34% 28.11% 32.32% 14.29 %
Net assets end of year (000s omitted)....................... $424,773 $252,832 $109,572 $21,979
Ratio of expenses to average daily net assets............... .46% .46% .51% .79 %*
Ratio of net investment income to average daily net
assets.................................................... .92% 1.17% 1.41% 1.47 %*
Portfolio turnover rate..................................... 3% 3% 5% 6 %
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

* Annualized.
+ For the period May 1, 1996 (commencement of operations) to December 31, 1996.
The Series' inception was March 28, 1996, when it was initially capitalized.
However, the Series' shares did not become effectively registered under the
Securities Act of 1933 until May 1, 1996. Supplementary information is not
presented for the period from March 28, 1996, through May 1, 1996, as the
Series' shares were not registered during that period.
@ These are the Series' total returns during the period, including reinvestment
of all dividend and capital gains distributions.

38
<PAGE> 42

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------
BLUE CHIP STOCK SERIES 1999 1998 1997 1996+
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......................... $18.58 $14.76 $11.67 $10.07
- ------------------------------------------------------------------------------------------------------------------
Operations:
Investment income - net................................... .02 .05 .07 .07
Net realized and unrealized gain on investments and
foreign currency transactions........................... 3.65 4.09 3.08 1.60
- ------------------------------------------------------------------------------------------------------------------
Total from operations....................................... 3.67 4.14 3.15 1.67
- ------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.............................. (.02) (.06) (.06) (.07)
From net realized gains................................... (.30) (.26) -- --
- ------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders......................... (.32) (.32) (.06) (.07)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of year................................ $21.93 $18.58 $14.76 $11.67
- ------------------------------------------------------------------------------------------------------------------
Total return@............................................... 19.88% 28.07% 27.00% 16.24%
Net assets end of year (000s omitted)....................... $284,229 $182,921 $78,729 $17,606
Ratio of expenses to average daily net assets............... .92% .94% 1.02% 1.13%*
Ratio of net investment income to average daily net
assets.................................................... .10% .41% .75% .82%*
Portfolio turnover rate..................................... 40% 34% 24% 17%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

* Annualized.
+ For the period May 1, 1996 (commencement of operations) to December 31,
1996. The Series' inception was March 28, 1996, when it was initially
capitalized. However, the Series' shares did not become effectively
registered under the Securities Act of 1933 until May 1, 1996. Supplementary
information is not presented for the period from March 28, 1996, through May
1, 1996, as the Series' shares were not registered during that period.
@ These are the Series' total returns during the period, including reinvestment
of all dividend and capital gains distributions.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
INTERNATIONAL STOCK SERIES 1999 1998 1997 1996 1995+
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......................... $14.48 $13.36 $12.44 $11.27 $10.00
- --------------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income - net................................... .18 .15 .13 .20 .14
Net realized and unrealized gain on investments and
foreign currency transactions........................... 3.30 2.03 1.35 1.48 1.38
- --------------------------------------------------------------------------------------------------------------------------------
Total from operations....................................... 3.48 2.18 1.48 1.68 1.52
- --------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.............................. (.01) (.26) (.15) (.21) (.09)
From net realized gains................................... (.01) (.80) (.41) (.30) (.16)
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders......................... (.02) (1.06) (.56) (.51) (.25)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year................................ $17.94 $14.48 $13.36 $12.44 $11.27
- --------------------------------------------------------------------------------------------------------------------------------
Total return@............................................... 23.99% 16.47% 11.99% 14.02% 14.35%
Net assets end of year (000s omitted)....................... $143,969 $103,056 $79,142 $52,331 $21,327
Ratio of expenses to average daily net assets............... .94% .94% 1.08% 1.15% 1.14%*
Ratio of net investment income to average daily net
assets.................................................... 1.26% 1.20% 1.10% 1.71% 1.41%*
Portfolio turnover rate..................................... 29% 44% 30% 27% 39%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

39
<PAGE> 43

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
MID CAP STOCK SERIES 1999 1998+
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period........................ $9.64 $9.94
- --------------------------------------------------------------------------------------
Operations:
Investment income - net................................... .01 .02
Net realized and unrealized gain (loss) on investments.... 1.04 (.30)
- --------------------------------------------------------------------------------------
Total from operations....................................... 1.05 (.28)
- --------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.............................. (.01) (.02)
- --------------------------------------------------------------------------------------
Net asset value, end of period.............................. $10.68 $9.64
- --------------------------------------------------------------------------------------
Total return@............................................... 10.97% (2.89%)
Net assets end of period (000s omitted)..................... $24,800 $12,995
Ratio of expenses to average daily net assets............... 1.18% 1.25%*(a)
Ratio of net investment income to average daily net
assets.................................................... .15% .19%*(a)
Portfolio turnover rate..................................... 73% 66%
- --------------------------------------------------------------------------------------
</TABLE>

* Annualized.
+ For the period May 1, 1998 (commencement of operations) to December 31, 1998.
The Series' inception was March 25, 1998, when it was initially capitalized.
However, the Series' shares did not become effectively registered under the
Securities Act of 1933 until May 1, 1998. Information is not presented for
the period from March 25, 1998, through May 1, 1998, as the Series' shares
were not registered during that period.
@ These are the Series' total returns during the period, including reinvestment
of all dividend and capital gains distributions.

(a) For the period presented, Advisers voluntarily limited annual expenses for
Mid Cap Stock Series (exclusive of interest, taxes, brokerage commissions
and non-recurring extraordinary charges and expenses) to 1.25% of the
average net assets. For the period ended December 31, 1998, had this waiver
and reimbursement of expenses not been in effect, the ratios of expenses and
net investment income to average daily net assets would have been 1.40% and
.04%, respectively.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
SMALL CAP VALUE SERIES 1999 1998+
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period........................ $9.28 $9.96
- --------------------------------------------------------------------------------------
Operations:
Investment income - net................................... .12 .07
Net realized and unrealized gain (loss) on investments.... 1.27 (.62)
- --------------------------------------------------------------------------------------
Total from operations....................................... 1.39 (.55)
- --------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.............................. (.11) (.07)
From net realized gains................................... (.36) (.06)
- --------------------------------------------------------------------------------------
Total distributions to shareholders......................... (.47) (.13)
- --------------------------------------------------------------------------------------
Net asset value, end of period.............................. $10.20 $9.28
- --------------------------------------------------------------------------------------
Total return@............................................... 15.34% (5.48%)
Net assets end of period (000s omitted)..................... $39,171 $16,503
Ratio of expenses to average daily net assets............... 1.04% 1.24%*
Ratio of net investment income to average daily net
assets.................................................... 1.57% 1.56%*
Portfolio turnover rate..................................... 68% 57%
- --------------------------------------------------------------------------------------
</TABLE>

40
<PAGE> 44

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------
GLOBAL GROWTH SERIES 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year..................... $22.57 $20.29 $19.00 $15.97 $12.31
- ---------------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income - net.............................. -- .03 .02 .03 .09
Net realized and unrealized gain (loss) on
investments and foreign currency transactions...... 12.78 2.27 1.27 3.03 3.66
- ---------------------------------------------------------------------------------------------------------------------------------
Total from operations.................................. 12.78 2.30 1.29 3.06 3.75
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net......................... (.03) (.02) -- (.03) (.09)
From net realized gains.............................. (.60) -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions to shareholders.................... (.63) (.02) -- (.03) (.09)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year........................... $34.72 $22.57 $20.29 $19.00 $15.97
- ---------------------------------------------------------------------------------------------------------------------------------
Total return@.......................................... 57.68% 11.36% 6.82% 19.10% 30.49%
Net assets end of year (000s omitted).................. $474,180 $351,476 $353,255 $319,831 $207,913
Ratio of expenses to average daily net assets.......... .77% .75% .79% .79% .80%
Ratio of net investment income (loss) to average daily
net assets........................................... (.01%) .12% .12% .15% .64%
Portfolio turnover rate................................ 44% 32% 35% 14% 29%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

@ These are the Series' total returns during the period, including reinvestment
of all dividend and capital gains distributions.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
LARGE CAP GROWTH SERIES 1999 1998+
- ----------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period........................ $12.04 $ 10.16
- ----------------------------------------------------------------------------------
Operations:
Investment income (loss) - net............................ (.01) --
Net realized and unrealized gain (loss) on investments.... 3.28 1.88
- ----------------------------------------------------------------------------------
Total from operations....................................... 3.27 1.88
Distributions to shareholders:
From net realize gains.................................... (.26) --
- ----------------------------------------------------------------------------------
Net asset value, end of period.............................. $15.05 $ 12.04
- ----------------------------------------------------------------------------------
Total return@............................................... 27.22% 18.61%
Net assets end of period (000s omitted)..................... $87,061 $19,121
Ratio of expenses to average daily net assets............... .97% 1.25%*(a)
Ratio of net investment income (loss) to average daily net
assets.................................................... (.09%) .03%*(a)
Portfolio turnover rate..................................... 50% 36%
- ----------------------------------------------------------------------------------
</TABLE>

(a) For the period presented, Advisers voluntarily limited annual expenses for
Large Cap Growth Series (exclusive of interest, taxes, brokerage commissions
and non-recurring extraordinary charges and expenses) to 1.25% of the
average net assets. For the period ended December 31, 1998, had this waiver
and reimbursement of expenses not been in effect, the ratios of expenses and
net investment income to average daily net assets would have been 1.27% and
.01%, respectively.

41
<PAGE> 45

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------
GROWTH STOCK SERIES 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.............. $ 41.09 $ 36.64 $ 32.59 $ 28.09 $ 22.11
- ---------------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income (loss) - net................ (.05) .09 .12 .12 .13
Net realized and unrealized gain (loss) on
investments................................. 17.42 6.40 3.93 4.50 5.98
- ---------------------------------------------------------------------------------------------------------------------------------
Total from operations........................... 17.37 6.49 4.05 4.62 6.11
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.................. (.09) (.13) -- (.12) (.13)
From net realized gains on investments........ (13.23) (1.91) -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders............. (13.32) (2.04) -- (.12) (.13)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year.................... $ 45.14 $ 41.09 $ 36.64 $ 32.59 $ 28.09
- ---------------------------------------------------------------------------------------------------------------------------------
Total return@................................... 55.17% 19.01% 12.42% 16.41% 27.66%
Net assets end of year (000s omitted)........... $1,044,728 $762,354 $707,155 $661,217 $530,945
Ratio of expenses to average daily net assets... .66% .65% .66% .67% .67%
Ratio of net investment income (loss) to average
daily net assets.............................. (.18)% .21% .33% .39% .51%
Portfolio turnover rate......................... 175% 106% 19% 30% 20%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

@ These are the Series' total returns during the period, including reinvestment
of all dividend and capital gains distributions.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------
AGGRESSIVE GROWTH SERIES 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year................ $ 16.70 $ 13.81 $ 13.62 $ 12.68 $ 9.80
- ---------------------------------------------------------------------------------------------------------------------------------
Operations:
Investment income (loss) - net.................. (.04) .01 .03 .03 .07
Net realized and unrealized gain (loss) on
investments................................... 17.86 2.91 .16 .94 2.88
- ---------------------------------------------------------------------------------------------------------------------------------
Total from operations............................. 17.82 2.92 .19 .97 2.95
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.................... (.01) (.03) -- (.03) (.07)
From net realized gains......................... (.72) -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders............... (.73) (.03) -- (.03) (.07)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of year...................... $ 33.79 $ 16.70 $ 13.81 $ 13.62 $ 12.68
- ---------------------------------------------------------------------------------------------------------------------------------
Total return@..................................... 109.25% 21.17% 1.43% 7.64% 29.89%
Net assets end of year (000s omitted)............. $333,158 $149,860 $122,455 $ 96,931 $ 46,943
Ratio of expenses to average daily net assets..... .72% .72% .76% .78% .81%
Ratio of net investment income (loss) to average
daily net assets................................ (.22)% .06% .24% .22% .58%
Portfolio turnover rate........................... 264% 135% 25% 22% 21%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

@ These are the Series' total returns during the period, including reinvestment
of all dividend and capital gains distributions.

42
<PAGE> 46

[FORTIS(SM) LOGO]

FORTIS FINANCIAL GROUP
P.O. Box 64284
St. Paul, Minnesota 55164-0284

Prospectus
May 1, 2000
- - Series Fund

SEC file numbers: 811-04615

[FORTIS(SM) LOGO]
FORTIS FINANCIAL GROUP
Fortis Advisers, Inc. (fund management since 1949)
Fortis Investors, Inc. (principal underwriter; member NASD, SIPC)
Fortis Benefits Insurance Company & Fortis Insurance Company
(issuers of FFG's insurance products)
P.O. Box 64284 - St. Paul, MN 55164-0284 - (800) 800-2000
http://www.ffg.us.fortis.com

This prospectus is intended for use in connection with variable life insurance
policies and variable annuity contracts issued by Fortis Benefits and First
Fortis.

More information about the Fund is available in the Series' Statement of
Additional Information (SAI) and annual and semiannual reports.

- - STATEMENT OF ADDITIONAL INFORMATION. The SAI provides more details about the
Series and their policies. A current SAI is on file with the Securities and
Exchange Commission (SEC) and is incorporated into this Prospectus by
reference, which means that it is legally considered part of this Prospectus.

- - ANNUAL AND SEMIANNUAL REPORTS. Additional information about Series'
investments is available in the Series' annual and semiannual reports to
shareholders. In the Series' annual report, you will find a discussion of the
market conditions and investment strategies that significantly affected the
Series' performance during their last fiscal year.

You can obtain a free copy of the Series' SAI and/or free copies of the Series'
most recent annual or semiannual reports by calling (800) 800-2000, extension
3012. The material you request will be sent by first-class mail, or other means
designed to ensure equally prompt delivery, within three business days of
receipt of request.

You can also obtain copies by visiting the SEC's public reference room in
Washington DC, or by sending your request and a duplicating fee to the SEC's
Public Reference Section, Washington DC 20549-6009. For more information, call
(800) SEC-0330.

Information about the Series is available on the Internet. Text-only versions of
the Series documents can be viewed online or downloaded from the SEC's Internet
site at http://www.sec.gov.

The Fortis logo and Fortis(SM) are servicemarks of Fortis (NL) N.V. and Fortis
(B).
<PAGE> 47
MONEY MARKET SERIES
U.S. GOVERNMENT SECURITIES SERIES
DIVERSIFIED INCOME SERIES
MULTISECTOR BOND SERIES
HIGH YIELD SERIES
GLOBAL ASSET ALLOCATION SERIES
ASSET ALLOCATION SERIES
AMERICAN LEADERS SERIES
VALUE SERIES
CAPITAL OPPORTUNITIES SERIES
GROWTH & INCOME SERIES
S&P 500 INDEX SERIES
BLUE CHIP STOCK SERIES
BLUE CHIP STOCK SERIES II
INTERNATIONAL STOCK SERIES
MID CAP STOCK SERIES
SMALL CAP VALUE SERIES
GLOBAL GROWTH SERIES
GLOBAL EQUITY SERIES
LARGE CAP GROWTH SERIES
INVESTORS GROWTH SERIES
GROWTH STOCK SERIES
AGGRESSIVE GROWTH SERIES
EACH A SERIES OF FORTIS SERIES FUND, INC.

STATEMENT OF ADDITIONAL INFORMATION

DATED MAY 1, 2000

This Statement of Additional Information is not a prospectus. This
Statement of Additional Information relates to a Prospectus for the Series
listed above (individually, a "Fund" and collectively, the "Funds") dated May 1,
2000, and should be read in conjunction therewith. The financial statements
included as a part of the Funds' Annual Report to Shareholders for the fiscal
year ended December 31, 1999 are incorporated by reference into this Statement
of Additional Information. Copies of the Funds' Prospectus and/or Annual Report
are available, without charge, by writing or calling the Funds, P.O. Box 64284,
St. Paul, Minnesota 55164 (telephone: (651) 738-4000 or (800) 800-2000).
<PAGE> 48

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----

<S> <C>
Fund History ................................................................ 1
Investment Strategies and Risk Considerations ............................... 1
Investment Restrictions ..................................................... 37
Management of the Funds ..................................................... 39
Principal Holders of Securities ............................................. 44
Investment Advisory and Other Services ...................................... 44
Brokerage Allocation and Other Practices .................................... 52
Capital Stock ............................................................... 56
Pricing of Shares ........................................................... 57
Redemption of Shares ........................................................ 59
Taxation .................................................................... 59
Underwriter ................................................................. 60
Performance Information ..................................................... 61
Other Service Providers ..................................................... 65
Limitation of Director Liability ............................................ 65
Additional Information ...................................................... 65
Financial Statements ........................................................ 66
Appendix A -- Description of Futures, Options and Forward Contracts ......... 67
Appendix B -- Commercial Paper, Corporate Bond and Preferred Stock Ratings .. 72
</TABLE>

<PAGE> 49

FUND HISTORY

Each Fund is a series of Fortis Series Fund, Inc. ("Fortis Series"), which
was incorporated in Minnesota in 1986. Fortis Series is registered with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended (the "1940 Act") as an open-end management investment company. The
Funds are advised by Fortis Advisers, Inc. ("Advisers"). For certain Funds,
Advisers has retained the services of a sub-adviser. See "Investment Advisory
and Other Services -- Sub-Advisory Agreements."

Shares of the Funds 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 and variable annuity
contracts issued by Fortis Benefits and First Fortis. The Separate Accounts
invest in shares of the Funds through subaccounts that correspond to the
different Funds.

INVESTMENT STRATEGIES AND RISK CONSIDERATIONS

This section of the Statement of Additional Information contains more
information on the types of securities in which the Funds may invest and the
investment strategies that the Funds may use, including securities and
strategies not discussed in the Prospectus. Unless, otherwise noted,
investment strategies used by the Funds may be changed without the approval of
shareholders.

MONEY MARKET SERIES

Although Money Market Series does not attempt to maintain its net asset
value at any set price, it is nevertheless subject to certain investment
restrictions of Rule 2a-7 under the 1940 Act, in addition to the other policies
and restrictions discussed herein and in the Prospectus. Rule 2a-7 requires
that the Fund invest exclusively in securities that mature within 397 days from
the date of purchase and that it maintain an average dollar weighted maturity
of not more than 90 days. Under Rule 2a-7, securities which are subject to
specified types of demand or put features may be deemed to mature at the next
demand or put date although they have a longer stated maturity. Rule 2a-7 also
requires that all investments by the Fund be limited to United States
dollar-denominated investments that (a) present "minimal credit risk" and (b)
are at the time of acquisition "Eligible Securities." Eligible Securities
include, among others, securities that are rated by two Nationally Recognized
Statistical Rating Organizations ("NRSROs") in one of the two highest
categories for short-term debt obligations, such as A-1 or A-2 by Standard &
Poor's Rating Services ("S&P"), a division of The McGraw-Hill Companies, Inc.,
or Prime-1 or Prime-2 by Moody's Investors Service, Inc. ("Moody's"). It is
the responsibility of Advisers to determine that the Fund's investments present
only "minimal credit risks" and are Eligible Securities, pursuant to the
oversight of, and written guidelines and procedures established by, the Fund's
Board of Directors.

Rule 2a-7 requires that the Fund may not invest more than 5% of its total
assets in the securities of a single issuer, other than United States
"Government Securities" (as defined in the 1940 Act), provided that the Fund
may invest in First Tier Securities (as defined in Rule 2a-7) in excess of that
limitation for a period of up to three business days after the purchase
thereof, but the Fund may not make more than one such investment at any time.
Rule 2a-7 also requires that (1) 95% of the assets of the Fund be invested in
Eligible Securities that are deemed First Tier Securities, which include, among
others, securities rated by two NRSROs in the highest category (such as A-1 and
P-1), (2) the Fund may not invest more than 5% of its total assets in Second
Tier Securities (i.e., Eligible Securities that are not First Tier Securities)
and (3) the Fund's investment in Second Tier Securities of a single issuer may
not exceed the greater of 1% of the Fund's total assets or $1,000,000.

<PAGE> 50

As noted in the Prospectus, Money Market Series' investments in U.S.
dollar-denominated foreign securities may include obligations of foreign banks
having total assets in excess of one billion dollars, and obligations of
foreign branches of domestic banks which have total assets in excess of one
billion dollars. In addition, Money Market Series may invest in U.S.
dollar-denominated securities 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
U.S. dollar-denominated 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. No
more than 49% of Money Market Series' total assets may be invested collectively
foreign securities.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

Money Market Series may invest in obligations other than those listed in
this Statement of Additional Information or in the Prospectus 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 Fund.

Money Market Series (i) may enter into repurchase agreements and (ii) sell
securities short against the box. For information about these investment
strategies, restrictions on their use and certain associated risks, see related
headings under "More Information on Certain Investments and Investment
Strategies."

U.S. GOVERNMENT SECURITIES SERIES

At least 65% of U.S. Government Securities Series' total assets will be
invested in securities issued or guaranteed by the United States government or
its agencies or instrumentalities, and in repurchase agreements pertaining to
such securities.

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 (Aaa, Aa or A)
or S&P (AAA, AA or A), or comparably rated by another nationally recognized
rating agency. See Appendix B 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 Fund's
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 Fund's total assets);

(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; and

<PAGE> 51

(5) Cash, 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 Fund's investments may include mortgage-backed securities. There is
no percentage limitation on the Fund's purchase of mortgage-backed securities
issued or guaranteed by the United States government or its agencies or
instrumentalities. The Fund may also invest in mortgage-backed securities
issued and insured by private organizations if such securities fall within the
investment restrictions for marketable non-convertible debt securities set
forth above.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) purchase
securities on a "when-issued" or delayed delivery basis; (iii) enter into
dollar roll transactions; and (iv) sell securities short against the box. For
more information about these investment strategies, restrictions on their use
and certain associated risks, see the related headings under "More Information
on Certain Investments and Investment Strategies."

DIVERSIFIED INCOME SERIES

Under normal circumstances, Diversified Income Series invests at least 70%
of its total assets in (a) corporate fixed income securities rated within one
of the four highest grades assigned by Moody's (Aaa, Aa, A and Baa) or S&P
(AAA, AA, A and BBB), or comparably rated by another nationally recognized
rating agency; (b) securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities; (c) mortgage-backed securities in which 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 rate 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.

The Fund may also invest in common and preferred stocks, convertible
securities and dollar denominated foreign securities. Under normal
circumstances, up to 30% of Diversified Income Series' total assets may be
invested in any combination of (a) common and preferred stocks and convertible
securities; (b) foreign securities (provided that such investments in foreign
securities will be limited to 25% of the Fund's total assets); and (c)
non-investment grade bonds (sometimes referred to as "junk bonds") and
non-rated corporate bonds.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) purchase
securities on a "when-issued" or delayed delivery basis; (iii) enter into
dollar roll transactions; and (iv) sell securities short against the box. For
more information about these investment strategies, restrictions on their use
and certain associated risks see the related headings under "More Information
on Certain Investments and Investment Strategies."

MULTISECTOR BOND SERIES

<PAGE> 52

Multisector Bond Series (formerly "Global Bond Series") generally acquires
bonds in new offerings or in principal trades with broker-dealers. Ordinarily,
the Fund does not purchase securities with the intention of engaging in
short-term trading. However, any particular security will be sold, and the
proceeds reinvested, whenever such action is deemed prudent from the viewpoint
of the Fund's investment objective, regardless of the holding period of that
security.

A portion of the Fund's assets may be held in cash and high quality,
short-term money market instruments including money market funds that have the
Fund's subadviser, A I M Capital Management ("AIM"), or an affiliate of AIM as
an investment adviser, certificates of deposit, commercial paper, bankers'
acceptances, short-term U.S. Government obligations, taxable municipal
securities, master notes, and repurchase agreements, pending investment in
portfolio securities, to meet anticipated short-term cash needs such as
dividend payments or redemptions of shares, or for temporary defensive
purposes.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) enter into reverse
repurchase agreements; (iii) purchase securities on a "when-issued" or delayed
delivery basis; (iv) enter into dollar roll transactions; (v) engage in the
lending of portfolio securities; (vi) enter into futures contracts and options
thereon; (vii) purchase, write or sell options on securities or financial
indices; (viii) purchase or sell foreign currency forward exchange contracts;
(ix) purchase and write put and call options on foreign currencies; and (x)
sell securities short against the box. For more information about these
investment strategies, restrictions on their use and certain associated risks,
see the related headings under "More Information on Certain Investments and
Investment Strategies."

HIGH YIELD SERIES

High Yield Series invests at least 65% of its total assets in a
diversified portfolio of high-yield, high-risk, fixed income securities
(sometimes referred to as "junk bonds"). The Fund also may invest up to 15% of
net assets in collateralized mortgage obligations ("CMOs"), issued by
government agencies or by private entities, and up to 25% of total assets in
certain types of accrual bonds. The Fund may also invest in foreign securities
(provided that such investments in foreign securities will be limited to 25% of
the Fund's total assets), investment grade fixed income instruments,
convertible securities, common and preferred stocks, other equity securities
and cash or cash equivalents.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) purchase
securities on a "when-issued" or delayed delivery basis; (iii) enter into
dollar roll transactions; (iv) engage in the lending of portfolio securities;
(v) enter into futures contracts and options thereon; (vi) write call options
and purchase put and call options on securities; (vii) purchase or sell foreign
currency forward exchange contracts; (viii) purchase and write put and call
options on foreign currencies; and (ix) sell securities short against the box.
For more information about these investment strategies, restrictions on their
use and certain associated risks, see the related headings under "More
Information on Certain Investments and Investment Strategies."

<PAGE> 53

GLOBAL ASSET ALLOCATION SERIES

Global Asset Allocation Series invests in equity and fixed-income
securities of issuers located throughout the world, including the United
States.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) purchase
securities on a "when-issued" or delayed delivery basis; (iii) enter into
dollar roll transactions; (iv) engage in the lending of portfolio securities;
(v) enter into futures contracts and options thereon; (vi) purchase, write or
sell options on securities or financial indices; (vii) purchase or sell foreign
currency forward exchange contracts; (viii) purchase and write put and call
options on foreign currencies; and (ix) sell securities short against the box.
For more information about these investment strategies, restrictions on their
use and certain associated risks, see the related headings under "More
Information on Certain Investments and Investment Strategies."

ASSET ALLOCATION SERIES

Asset Allocation Series invests primarily in common stocks and fixed-income
securities. As noted in the Prospectus, Asset Allocation Series may invest up
to 25% of its total assets in foreign securities. However, no more than 15% of
the Fund's total assets may be invested in foreign securities that are not
traded on national foreign securities exchanges or traded in the United States.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) purchase
securities on a "when-issued" or delayed delivery basis; (iii) enter into
dollar roll transactions; (iv) engage in the lending of portfolio securities;
and (v) sell securities short against the box. For more information about
these investment strategies, restrictions on their use and certain associated
risks, see the related headings under "More Information on Certain Investments
and Investment Strategies."

AMERICAN LEADERS SERIES

American Leaders Series invests at least 65% of its assets in equity
securities issued by blue chip companies. These equity securities may include
common stocks, preferred stocks, securities of limited liability companies,
business trusts and companies organized outside the United States that are
comparable to common or preferred stock, real estate investment trusts,
warrants, convertible securities and American Depositary Receipts. The Fund may
also invest in certain fixed income securities.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) enter into reverse
repurchase agreements; (iii) purchase securities on a "when-issued" or delayed
delivery basis; (iv) enter into dollar roll transactions; (v) engage in the
lending of portfolio securities; (vi) enter into futures contracts and options
thereon; (vii) purchase, write or sell options on securities or financial
indices; and (viii) sell securities short against the box. For more
information about these investment strategies, restrictions on their use and
certain associated risks, see the related headings under "More Information on
Certain Investments and Investment Strategies."

VALUE SERIES

<PAGE> 54

Value Series invests primarily in common stocks. The Fund may also invest
in securities convertible into common stocks, and may occasionally invest
limited amounts in other types of securities (such as nonconvertible preferred
stock and debt securities). Value Series may invest in both listed and
unlisted securities. The Fund may invest up to 10% of its total assets in
foreign securities.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) purchase
securities on a "when-issued" or delayed delivery basis; (iii) enter into
dollar roll transactions; (iv) engage in the lending of portfolio securities;
(v) enter into futures contracts and options thereon; (vi) write call options
and purchase put and call options on securities; (vii) purchase or sell foreign
currency forward exchange contracts; and (viii) sell securities short against
the box. For more information about these investment strategies, restrictions
on their use and certain associated risks, see the related headings under "More
Information on Certain Investments and Investment Strategies."

CAPITAL OPPORTUNITIES SERIES

Capital Opportunities Series invests, under normal market conditions, at
least 65% of its total assets in common stocks and equity-related securities,
such as preferred stocks, convertible securities and depositary receipts. Up to
15% of the Fund's net assets may be invested in fixed income securities that are
rated Ba or lower by Moody's, BB or lower by S&P, comparably rated by another
nationally recognized rating agency, or are unrated and determined to be of
comparable quality by the Fund's sub-adviser. See "More Information on Certain
Investments and Investment Strategies -- High-Yield/High-Risk Securities." Up
to 35% of the Fund's net assets may be invested in foreign securities, including
securities of issuers located in emerging markets. See "More Information on
Certain Investments and Investment Strategies -- Securities of Foreign Issuers"
and "More Information on Certain Investments and Investment Strategies --
Emerging Markets."

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) purchase
securities on a "when-issued" or delayed delivery basis; (iii) engage in the
lending of portfolio securities; (iv) enter into futures contracts and options
thereon; (v) purchase, write or sell options on securities or financial
indices; (vi) purchase or sell foreign currency forward exchange contracts;
(vii) purchase and write put and call options on foreign currencies; and (viii)
sell securities short against the box. For more information about these
investment strategies, restrictions on their use and certain associated risks,
see the related headings under "More Information on Certain Investments and
Investment Strategies."

GROWTH & INCOME SERIES

Growth & Income Series invests primarily in common stocks. The Fund may
also invest in securities convertible into common stocks, and may occasionally
invest limited amounts in other types of securities (such as nonconvertible
preferred stock and debt securities). Growth & Income Series may invest in
both listed and unlisted securities. The Fund may invest up to 10% of its
total assets in foreign securities.

<PAGE> 55

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) purchase
securities on a "when-issued" or delayed delivery basis; (iii) enter into
dollar roll transactions; (iv) engage in the lending of portfolio securities;
(v) enter into futures contracts and options thereon; (vi) write call options
and purchase put and call options on securities; (vii) purchase or sell foreign
currency forward exchange contracts; and (viii) sell securities short against
the box. For more information about these investment strategies, restrictions
on their use and certain associated risks, see the related headings under "More
Information on Certain Investments and Investment Strategies."

S & P 500 INDEX SERIES

Under normal circumstances, S&P 500 Index Series invests at least 95% of
its total assets in the common stocks included in the S&P 500 Index. To
maintain liquidity, the Fund also may invest in U.S. Government securities,
commercial paper, bank certificates of deposit and bank demand and time
deposits.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) enter into reverse
repurchase agreements; (iii) purchase securities on a "when-issued" or delayed
delivery basis; (iv) enter into dollar roll transactions; (iv) engage in the
lending of portfolio securities; (v) enter into stock index futures contracts
and options thereon; (vi) purchase and sell options on stock indexes; and (vii)
sell securities short against the box. For more information about these
investment strategies, restrictions on their use and certain associated risks,
see the related headings under "More Information on Certain Investments and
Investment Strategies."

Standard & Poor's(R), "S&P(R)," "S&P 500(R)," "Standard & Poor's 500," and
"500" are trademarks of McGraw-Hill, Inc. and have been licensed for use by
Fortis Series. The Fund is not sponsored, endorsed, sold or promoted by S&P
and S&P makes no representation regarding the advisability of investing in the
Fund. S&P makes no representation or warranty, express or implied, to the
owners of the Fund or any member of the public regarding the advisability of
investing in securities generally or in the Fund particularly or the ability of
the S&P 500 Index to track general stock market performance. S&P's only
relationship to Fortis Series is the licensing of certain trademarks and trade
names of S&P and of the S&P 500 Index which is determined, composed and
calculated by S&P without regard to Fortis Series or the Fund. S&P has no
obligation to take the needs of Fortis Series or the owners of the Fund into
consideration in determining, composing or calculating the S&P 500 Index. S&P
is not responsible for and has not participated in the determination of the
prices and amount of the Fund or the timing of the issuance or sale of the Fund
or in the determination or calculation of the equation by which the Fund is to
be converted into cash. S&P has no obligation or liability in connection with
the administration, marketing or trading of the Fund.

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500
INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NOT LIABILITY FOR ANY
ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR
IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE FUND, OWNERS OF THE FUND OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED
THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS
ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE
WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY

<PAGE> 56

FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

BLUE CHIP STOCK SERIES

Blue Chip Stock Series will invest at least 65% of its total assets in the
common stocks of large and medium-sized blue chip growth companies, as defined
by the Fund's sub-adviser. The Fund may also purchase other types of
securities, such as preferred stocks, convertible stocks and bonds, and
warrants, when considered consistent with the Fund's investment objectives.
The Fund may invest in fixed income securities of any type without regard to
quality or rating. Such securities would be purchased in companies,
municipalities and entities that meet the investment criteria for the Fund.
However, the Fund will not purchase a non-investment grade fixed income
security if, immediately after such purchase, the Fund would have more than 5%
of its total assets invested in such securities. Investments in convertible
securities, preferred stocks and fixed income securities are limited to 25% of
total assets.

The Fund may also invest in hybrid instruments (a type of potentially
high-risk derivative) that 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 Fund may invest up to 10% of its total assets in hybrid instruments.

The Fund will hold a certain portion of its assets in money market
reserves. Reserve positions are expected to consist primarily of shares of the
T. Rowe Price Reserve Investment Fund, a money market fund managed by T. Rowe
Price, the Fund's subadviser, and available to clients of T. Rowe Price.
Short-term, high quality U.S. and foreign dollar-denominated money market
securities, including repurchase agreements, in the two highest rating
categories, maturing in one year or less may also be held. This reserve
position provides flexibility in meeting redemptions, expenses, and the timing
of new investments, and can serve as a short-term defense during periods of
unusual market volatility. During periods when the Fund assumes a temporary
defensive position, it will not be pursuing its investment objective.

The Fund may invest up to 20% of its total assets (excluding reserves) in
foreign securities, including securities from emerging markets. These include
non-dollar-denominated securities traded outside of the U.S. and
dollar-denominated securities of foreign issuers traded in the U.S. (such as
ADRs).

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) enter into reverse
repurchase agreements; (iii) purchase securities on a "when-issued" or delayed
delivery basis; (iv) enter into dollar roll transactions; (v) engage in the
lending of portfolio securities; (vi) enter into futures contracts and options
thereon; (vii) purchase, write or sell options on securities or financial
indices; (viii) purchase or sell foreign currency forward exchange contracts;
and (ix) purchase and write put and call options on foreign currencies. For
more information about these investment strategies, restrictions on their use
and certain associated risks, see the related headings under "More Information
on Certain Investments and Investment Strategies."

BLUE CHIP STOCK SERIES II

Blue Chip Stock Series II's primary investment objective is long-term
growth of capital with a secondary objective of current income. It is
anticipated that at least 65% of the Fund's total assets will be

<PAGE> 57

invested in common stocks, convertible securities and bonds of blue chip
companies (i.e., companies with leading market positions and which possess
strong financial characteristics, as described below). While current income is
a secondary objective, most of the stocks in the Series' portfolio are expected
to pay dividends. The Fund will generally invest in large-sized companies
(listed in the United States) which possess the following characteristics:

o MARKET CHARACTERISTICS - Blue chip companies are those which occupy (or in
AIM's judgment have the potential to occupy) leading market positions that
are expected to be maintained or enhanced over time. Strong market
positions, particularly in growing industries can give a company pricing
flexibility as well as the potential for strong unit sales. These factors
can in turn lead to higher earnings growth and greater share appreciation.
Market leaders can be identified within an industry as those companies
which have (i) superior growth prospects compared with other companies in
the same industry; (ii) possession of proprietary technology with the
potential to bring about major changes within an industry; and/or (iii)
leading sales within an industry, or the potential to become a market
leader.

o FINANCIAL CHARACTERISTICS - A blue chip company possesses at least one of
the following attributes: (i) faster earnings growth than its competitors
and the market in general; (ii) higher profit margins relative to its
competitors; (iii) strong cash flow relative to its competitors; and/or a
balance sheet with relatively low debt and a high return on equity
relative to its competitors.

The Fund will diversify among industries and therefore will not invest
25% or more of its total assets in any one industry. Under normal market
conditions, Blue Chip's portfolio will be diversified among industries in a
manner similar to the industry diversification of broad market indices.

The Fund will not invest in non-convertible corporate debt securities
rated below investment grade by Standard and Poor's Rating Services ("S&P") and
Moody's Investors Service ("Moody's") or in unrated non-convertible corporate
debt securities believed by the Fund's investment adviser to be below
investment grade quality. For information on ratings of fixed income
securities see Appendix A.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

INTERNATIONAL STOCK SERIES

International Stock Series invests primarily in the equity securities of
non-U.S. companies (i.e., incorporated or organized outside the United States).
However, the Fund may have substantial investments in American Depositary
Receipts and in convertible bonds and other convertible securities. The Fund
may invest up to 20% of the value of its total assets in fixed income
securities and short-term money market instruments. International Stock
Series' fixed income investments will be limited to those rated A or better by
S&P or Moody's or comparably rated by another nationally recognized rating
agency, or, if unrated,

<PAGE> 58

determined by the Fund's sub-adviser to be of comparable quality. See Appendix
B for a description of the ratings of fixed income securities.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) purchase
securities on a "when-issued" or delayed delivery basis; (iii) enter into
dollar roll transactions; (iv) engage in the lending of portfolio securities;
(v) enter into futures contracts and options thereon; (vi) purchase, write or
sell options on securities or financial indices; (vii) purchase or sell foreign
currency forward exchange contracts; (viii) purchase and write put and call
options on foreign currencies; and (ix) sell securities short against the box.
For more information about these investment strategies, restrictions on their
use and certain associated risks, see the related headings under "More
Information on Certain Investments and Investment Strategies."

MID CAP STOCK SERIES

Under normal circumstances, at least 65% of Mid Cap Stock Series' total
assets will be invested in common stocks. The Fund may also invest in: (1)
obligations issued or guaranteed as to interest and principal by the U.S.
government or its agencies or instrumentalities; (2) instruments of U.S. and
foreign banks, including certificates of deposit (including Eurodollar and
Yankee certificates of deposit), banker's acceptances and time deposits
(including Eurodollar time deposits); (3) corporate obligations rated at least
Baa by Moody's or BBB by S&P or, if unrated, of comparable quality as
determined by Fund's sub-adviser; (4) Eurodollar bonds and notes; (5)
securities of foreign companies evidenced by American Depository Receipts; and
(6) commercial paper.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

SMALL CAP VALUE SERIES

Small Cap Value Series invests at least 65% of its total assets in common
stocks of companies whose market capitalization, at the time of initial
purchase, is less than the 12-month average of the maximum market
capitalization for companies included in the Russell 2000 Index. Market
capitalization is defined as total current market value of a company's
outstanding common stock. The Fund may also invest in common stocks of
companies with market capitalizations in excess of such 12-month average;
equity securities other than common stocks, such as convertible securities,
preferred stocks, warrants and rights; government securities; short-term
investments; or other securities. In addition, Small Cap Value Series may
invest in certain securities with unique risks, such as special situations and
securities of unseasoned issuers. The Fund may also invest in foreign
securities.

<PAGE> 59

Special Situations. The Fund may invest in special situations, that is,
in common stocks of companies that have recently experienced or are anticipated
to experience a significant change in structure, management, products or
services. Examples of special situations are companies being reorganized or
merged, companies having unusual new products, or which enjoy particular tax
advantages, or companies that are run by new management or may be probable
takeover candidates. The opportunity to invest in special situations, however,
is limited and depends in part on the market's assessment of these issuers and
their circumstances. In addition, stocks of companies in special situations
may be more volatile, since the market value of these stocks may decline if an
anticipated event or benefit does not materialize.

Unseasoned Issuers. The Fund may invest in securities of unseasoned
issuers. Unseasoned issuers are companies with a record of less than three
years' continuous operation, including the operations of any predecessors and
parents. Investment decisions for these securities may place a greater
emphasis on current or planned product lines and the reputation and experience
of the company's management and less emphasis on fundamental valuation factors
than would be the case for more mature growth companies. In addition, many
unseasoned issuers may be small companies and involve the risks and price
volatility associated with smaller companies.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) purchase
securities on a "when-issued" or delayed delivery basis; (iii) enter into
dollar roll transactions; (iv) engage in the lending of portfolio securities;
(v) enter into futures contracts and options thereon; (vi) write call options
and purchase put and call options on securities; and (vii) purchase or sell
foreign currency forward exchange contracts. For more information about these
investment strategies, restrictions on their use and certain associated risks,
see the related headings under "More Information on Certain Investments and
Investment Strategies."

GLOBAL GROWTH SERIES

Global Growth Series invests primarily in common stocks. The Fund may
also invest in other types of equity securities, such as preferred stocks and
warrants, and in debt obligations. The debt obligations in which the Fund may
invest include a variety of government bonds and corporate debt obligations.
Global Growth Series expects that a large portion of its debt investments will
be high quality government or corporate bonds. High quality debt securities
are securities rated within one of the two highest 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 the Advisers. Government bonds which the Fund may purchase include
debt obligations issued or guaranteed by the U.S. government or foreign
governments (including foreign states, provinces, or municipalities) or their
agencies, authorities or instrumentalities and also 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 which the Fund may purchase include corporate
bonds and debt obligations convertible into equity securities or having
attached warrants or rights to purchase equity securities. The Fund may also
purchase securities that are issued by the government or a corporation or
financial institution of one nation but denominated in the currency of another
nation (or a multinational currency unit). No more than 5% of the Fund's net
assets may be invested in debt securities rated lower than Baa or BBB. A
description of the Moody's and S&P ratings is included in Appendix B.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

<PAGE> 60

GLOBAL EQUITY SERIES

Global Equity Series invests, under normal market conditions, at least 65%
of its total assets in common stocks and equity-related securities, such as
preferred stocks, convertible securities and depositary receipts, of U.S. and
foreign (including emerging market) issuers. Up to 100% of the Fund's net
assets may be invested in foreign securities. See "More Information on Certain
Investments and Investment Strategies - Securities of Foreign Issuers" and
"More Information on Certain Investments and Investment Strategies - Emerging
Markets."

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) purchase
securities on a "when-issued" or delayed delivery basis; (iii) engage in the
lending of portfolio securities; (iv) enter into futures contracts and options
thereon; (v) purchase, write or sell options on securities or financial
indices; (vi) purchase or sell foreign currency forward exchange contracts; and
(vii) purchase and write put and call options on foreign currencies. For more
information about these investment strategies, restrictions on their use and
certain associated risks, see the related headings under "More Information on
Certain Investments and Investment Strategies."

LARGE CAP GROWTH SERIES

Large Cap Growth Series invests primarily in the common stocks of a
limited number of large U.S. companies. The Fund normally invests at least 85%
of its total assets in the equity securities of U.S. companies. These are
companies (i) organized under United States law that have their principal
office in the United States, and (ii) the equity securities of which are traded
principally in the United States.

Large Cap Growth Series may also: (1) invest up to 20% of its net assets
in convertible securities of companies whose common stocks are eligible for
purchase; (2) invest up to 5% of its net assets in rights or warrants; (3)
invest up to 15% of its total assets in securities of foreign issuers whose
common stocks are eligible for purchase.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) purchase
securities on a "when-issued" or delayed delivery basis; (iii) enter into
dollar roll transactions; (iv) engage in the lending of portfolio securities;
(v) enter into futures contracts and options thereon; (vi) write call options
on securities and purchase and sell put and call options on securities and
financial indices; and (vii) purchase or sell foreign currency forward exchange
contracts. For more information about these investment strategies,
restrictions on their use and certain associated risks, see the related
headings under "More Information on Certain Investments and Investment
Strategies."

<PAGE> 61

INVESTORS GROWTH SERIES

Investors Growth Series invests its assets, except for working cash
balances, in the common stocks and securities convertible into common stocks of
companies which the Fund's sub-adviser believes offer better than average
prospects for long-term growth. Up to 35% of the Fund's net assets may be
invested in foreign securities, including securities of issuers located in
emerging markets. See "More Information on Certain Investments and Investment
Strategies - Securities of Foreign Issuers" and "More Information on Certain
Investments and Investment Strategies - Emerging Markets."

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) purchase
securities on a "when-issued" or delayed delivery basis; (iii) engage in the
lending of portfolio securities; (iv) enter into futures contracts and options
thereon; (v) purchase, write or sell options on securities or financial
indices; (vi) purchase or sell foreign currency forward exchange contracts; and
(vii) purchase and write put and call options on foreign currencies. For more
information about these investment strategies, restrictions on their use and
certain associated risks, see the related headings under "More Information on
Certain Investments and Investment Strategies."

GROWTH STOCK SERIES

Growth Stock Series invests primarily in common stocks. The Fund may also
invest in securities convertible into common stocks, and may occasionally
invest limited amounts in other types of securities (such as nonconvertible
preferred and debt securities). Growth Stock Series may invest in both listed
and unlisted securities. The Fund may also invest up to 10% of its total
assets in foreign securities.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements and (ii) sell securities
short against the box. For information about this investment strategy,
restrictions on its use and certain associated risks, see "More Information on
Certain Investments and Investment Strategies."

AGGRESSIVE GROWTH SERIES

Aggressive Growth Series invests at least 65% of its total assets in
common stocks of emerging growth companies and more established companies whose
rates of earnings growth are expected to accelerate because of special factors.
The Fund 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. Aggressive Growth Series may invest up
to 10% of its total assets in foreign securities.

For more information on the types of securities in which the Fund may
invest, see "More Information on Certain Investments and Investment
Strategies."

The Fund may (i) enter into repurchase agreements; (ii) purchase
securities on a "when-issued" or delayed delivery basis; (iii) enter into
dollar roll transactions; (iv) engage in the lending of portfolio securities;
(v) enter into futures contracts and options thereon; (vi) purchase, write or
sell options on securities or financial indices; and (vii) purchase or sell
foreign currency forward exchange contracts; (viii) purchase and write put and
call options on foreign currencies; and (ix) sell securities short against the
box.

<PAGE> 62

For more information about these investment strategies, restrictions on their
use and certain associated risks, see the related headings under "More
Information on Certain Investments and Investment Strategies."

MORE INFORMATION ON CERTAIN INVESTMENTS AND INVESTMENT STRATEGIES

COMMON AND PREFERRED STOCKS. Each Fund other than Money Market Series and
U.S. Government Securities Series may invest in common and preferred stocks
(except that Multisector Bond Series does not invest in common stock and S&P
500 Index Series does not invest in 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.

CONVERTIBLE SECURITIES. Each Fund other than Money Market Series, U.S.
Government Securities Series and S&P 500 Index Series may invest in debt or
preferred stock convertible into or exchangeable for common stock.
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 OR RIGHTS. Warrants or rights may be acquired by each Fund
(except Investors Growth Series) in connection with other securities or
separately. 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). Asset Allocation Series, S&P 500 Index Series, Blue Chip
Stock Series, International Stock Series, Mid Cap Stock Series, Small Cap Value
Series and Global Growth Series each may invest up to 5% of their net assets in
warrants or rights. Large Cap Growth Series may invest up to 5% of total
assets in warrants or rights.

SECURITIES OF OTHER INVESTMENT COMPANIES. The Funds may purchase the
securities of open-end or closed-end investment companies if such purchases are
in compliance with the 1940 Act. If a Fund invests in securities of other
investment companies, the return on any such investments will be reduced by the
operating expenses, including investment advisory and administrative fees, of
such investment companies. (Such Fund indirectly absorbs its pro rata share of
the other investment companies' expenses.) However, Advisers and the
sub-advisers believe that at times the return and liquidity features of these
securities will be more beneficial than other types of securities. The Blue
Chip Stock Series may invest in shares of the T. Rowe Price Reserve Investment
Fund, a money market fund managed by T. Rowe Price (the Fund's subadviser) and
made available to clients of T. Rowe Price. The Reserve Investment Fund does
not charge investment advisory fees and T. Rowe Price received an exemptive
order from the Securities and Exchange Commission that permits a fund to invest
up to 25% of total assets in the Reserve Investment Fund. Multisector Bond
Series may invest in shares that have AIM, the Fund's subadviser, or an
affiliate of AIM as an investment adviser ("the Affiliated Money Market
Funds"), provided that such purchases are in compliance with the 1940 Act.
With respect to Multisector Bond Series' purchase of shares of the Affiliated
Money Market Funds, the Fund will pay the advisory fees and other operating
expenses of the Affiliated Money Market Funds.

<PAGE> 63

SHORT-TERM MONEY MARKET INSTRUMENTS. Each Fund 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 Fund 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
Advisers (or a Fund's sub-adviser, if applicable) to be of comparable quality
and (iv) repurchase agreements relating to the foregoing.

CERTIFICATES OF DEPOSIT AND BANKERS' ACCEPTANCES. Each Fund may invest in
certificates of deposit. 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.

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 Advisers (or a
Fund's sub-adviser, if applicable), are of investment quality comparable to
other permitted investments of such Fund, may be used for letter of
credit-backed investments.

EXTENDIBLE NOTES. Money Market Series, Diversified Income Series,
Multisector Bond Series, High Yield Series, Global Asset Allocation Series and
Asset Allocation Series each are permitted to invest up to 25% of the value of
their 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 time 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 397
days from the date of issuance. If such extendible notes provide for an
optional maturity date of 397 days or less, however, then such notes are deemed
by the Funds 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 Money Market Series not to invest in securities
having a maturity date in excess of 397 days from the date of acquisition.
Investment in extendible notes is not expected to have a material impact on the
effective portfolio maturities of the Funds.

<PAGE> 64

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 Fund 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 the Funds in such
extendible notes are restricted to notes with the same investment ratings as
are acceptable to the Funds with respect to other forms of investment. The
creditworthiness of such issuers is also monitored by Advisers (or the
sub-advisers for Multisector Bond Series and Global Asset Allocation Series).

FLOATING AND VARIABLE RATE INSTRUMENTS. Certain of the debt obligations
that the Funds may purchase have floating or variable rates 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 Fund limits its purchases of floating and variable rate
obligations to those of the same quality as it otherwise is allowed to
purchase. Advisers (or a Fund's sub-adviser, if applicable) monitors on an
ongoing basis the ability of an issuer of a demand instrument to pay principal
and interest on demand. A Fund's right to obtain payment at par on a demand
instrument can be affected by events occurring between the date such Fund
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 Fund's custodian, subject to a subcustodian agreement approved
by the Fund between the bank and the Fund's custodian.

The floating and variable rate obligations that the Funds may purchase
include certificates of participation in obligations purchased from banks. A
certificate of participation gives the Fund an undivided interest in the
underlying obligations in the proportion that such Fund's 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 restrictions pertaining to investments
in illiquid securities.

VARIABLE AMOUNT MASTER DEMAND NOTES. Each Fund 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 a Fund at varying market
rates of interest pursuant to arrangements between the Fund, 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 (or
a Fund's sub-adviser, if applicable) will monitor the creditworthiness of the
borrower throughout the term of the variable master demand note. It is not
generally contemplated that such instruments will be traded and there is no
secondary market for the notes. Typically, agreements relating to such notes
provide that the lender shall not sell or otherwise transfer the note without
the borrower's consent. Thus, variable amount master demand notes may under
certain circumstances be deemed illiquid assets. However, such notes will not
be considered illiquid where the Fund 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 then outstanding together with interest to the date of
payment.

<PAGE> 65

U.S. GOVERNMENT SECURITIES. Each Fund 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-backed 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 little or
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.

U.S. government securities in which the Funds may invest include U.S.
Treasury inflation-protection securities. Inflation-protection securities are
new types of marketable book-entry securities issued by the United States
Department of Treasury ("Treasury") with a nominal return linked to the
inflation rate in prices. Inflation-protection securities are auctioned and
issued on a quarterly basis on the 15th of January, April, July, and October.
Initially, they will be issued as 10-year notes, with other maturities added
thereafter. The index used to measure inflation will be the non-seasonally
adjusted U.S. City Average All Items Consumer Price Index for All Urban
Consumers ("CPI-U").

The value of the principal will be adjusted for inflation, and every six
months the security will pay interest, which will be an amount equal to a fixed
percentage of the inflation-adjusted value of the principal. The final payment
of principal of the security will not be less than the original par amount of
the security at issuance.

The principal of the inflation-protection security will be indexed to the
non-seasonally adjusted CPI-U. To calculate the inflation-adjusted principal
value for a particular valuation date, the value of the principal at issuance
is multiplied by the index ratio applicable to that valuation date. The index
ratio for any date is the ratio of the reference CPI applicable to such date to
the reference CPI applicable to the original issue date. Semiannual coupon
interest is determined by multiplying the inflation-adjusted principal amount
by one-half of the stated rate of interest on each interest payment date.

Inflation-adjusted principal or the original par amount, whichever is
larger, will be paid on the maturity date as specified in the applicable
offering announcement. If at maturity the inflation-adjusted principal is less
than the original principal value of the security, an additional amount will be
paid at maturity so that the additional amount plus the inflation-adjusted
principal equals the original principal amount. Some inflation-protection
securities may be stripped into principal and interest components. In the case
of a stripped security, the holder of the stripped principal would receive this
additional amount. The final interest payment, however, will be based on the
final inflation-adjusted principal value, not the original par amount.

The reference CPI for the first day of any calendar month is the CPI-U for
the third preceding calendar month. (For example, the reference CPI for
December 1 is the CPI-U reported for September of the same year, which is
released in October.) The reference CPI for any other day of the month is
calculated by a linear interpolation between the reference CPI applicable to
the first day of the month and the reference CPI applicable to the first day of
the following month.

<PAGE> 66

Any revisions the Bureau of Labor Statistics (or successor agency) makes
to any CPI-U number that has been previously released will not be used in
calculations of the value of outstanding inflation-protection securities. In
the case that the CPI-U for a particular month is not reported by the last day
of the following month, the Treasury will announce an index number based on the
last year-over-year CPI-U inflation rate available. Any calculations of the
Treasury's payment obligations on the inflation-protection security that need
that month's CPI-U number will be based on the index number that the Treasury
has announced. If the CPI-U is rebased to a different year, the Treasury will
continue to use the CPI-U series based on the base reference period in effect
when the security was first issued as long as that series continues to be
published. If the CPI-U is discontinued during the period the
inflation-protection security is outstanding, the Treasury will, in
consultation with the Bureau of Labor Statistics (or successor agency),
determine an appropriate substitute index and methodology for linking the
discontinued series with the new price index series. Determinations of the
Secretary of the Treasury in this regard are final.

Inflation-protection securities will be held and transferred in either of
two book-entry systems: the commercial book-entry system (TRADES) and TREASURY
DIRECT. The securities will be maintained and transferred at their original
par amount, i.e., not at their inflation-adjusted value. STRIPS components
will be maintained and transferred in TRADES at their value based on the
original par amount of the fully constituted security.

ACCRUAL BONDS. U.S. Government Securities Series, Diversified Income
Series, Multisector Bond Series, High Yield Series, Global Asset Allocation
Series, Asset Allocation Series, American Leaders Series, Capital Opportunities
Series, International Stock Series, Global Equity Series, Investors Growth
Series and Global Growth Series may invest in certain types of accrual bonds,
including zero coupon obligations, payment-in-kind debentures and deferred
payment securities. The holder of an accrual bond does not receive cash
interest during the accrual period of the bond. High Yield Series may invest
up to 25% of its net assets in accrual bonds.

Zero Coupon Obligations. The Funds which may invest in accrual bonds, may
invest in zero coupon obligations of 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. The Funds may invest in either type of zero coupon obligation. A
Fund's investment policies and restrictions applicable to corporate and
government securities shall apply equally to such Fund's investments in zero
coupon securities (including, for example, minimum corporate bond ratings).

Payment-in-Kind Debentures. A payment-in-kind debenture ("PIK") pays
interest in securities rather than cash. 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

<PAGE> 67

be paid would be known by the Fund at the time of the investment. A Fund's
investment restrictions regarding corporate bond quality are applicable to
investments in PIKs by such Fund 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 a Fund to be forced to liquidate securities at an inopportune time
in order to distribute cash, as required by the Internal Revenue Code.

Deferred payment securities. With deferred payment securities interest
payments accrue on the security for a predetermined period of time. At the end
of the period, the accumulated cash interest is paid to the holder of the
security. Deferred payment securities are, similar to zero coupon bonds,
issued at a significant discount from face value. The discount approximates
the total amount of interest the bonds will accrue and compound over the period
until the first interest payment date at a rate of interest reflecting the
market rate of the security at the time of issuance.

MORTGAGE-BACKED SECURITIES. Each Fund other than Aggressive Growth Series
may invest in certain types of mortgage-backed securities. One type of
mortgage-backed 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.

U.S. Government Pass-Through Securities. 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. Information on the mortgage-backed securities issued by
these entities is set forth below.

(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

<PAGE> 68

by the Federal Housing Administration ("FHA") or the Farmers' Home
Administration ("FmHA"), or guaranteed by the Veterans Administration
("VA"). GNMA is also empowered to borrow without limitation from the
U.S. Treasury, if necessary, to make any payments required under its
guarantee.

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

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

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

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

<PAGE> 69

(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.

Private Pass-Through Securities. 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 Funds may, consistent with their investment
objectives, policies and restrictions, consider making investments in such new
types of securities.

CMOs, Multi-Class Pass-Through Securities and Other Types of
Mortgage-Backed Securities. Other types of mortgage-backed 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, collateralized mortgage obligations (CMOs) and
multi-class pass-through securities. 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.

U.S. Government Securities Series, Diversified Income Series, Multisector
Bond Series, High Yield Series, Global Asset Allocation Series, Asset
Allocation Series, Capital Opportunities Series, International Stock Series,
Global Equity Series and Investors Growth Series may invest in CMOs and
multi-class pass-through securities. 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.

<PAGE> 70

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. CMOs 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.

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 Z bonds, which are described below.

As to IOs, POs, inverse floaters, and Z bonds, not more than 5% of the net
assets of each of U.S. Government Securities Series, Diversified Income Series,
Multisector Bond Series, High Yield Series, Global Asset Allocation Series,
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 Fund will be invested in all such obligations at any one time.
Not more than 5% of 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 a Fund to attempt to protect against a reduction in the income earned on
such Fund's investments due to a decline in interest rates. The Fund 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 Mortgage
Assets. For example, a rapid or slow rate of principal payments may have a
material adverse effect on the yield to maturity of IOs or POs, respectively.
If the underlying Mortgage Assets experience greater than anticipated
prepayments of principal, the holder of an IO may incur substantial losses,
even if the IO class is rated AAA. Conversely, if the underlying Mortgage
Assets experience slower than anticipated prepayments of principal, the yield
and market value for the holder of a PO will be affected more severely than
would be the case with a traditional mortgage-backed security.

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

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A 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-backed 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-backed 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-backed securities
owned by a Fund. Because investments in mortgage-backed 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-backed 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.

REAL ESTATE OR REAL ESTATE INVESTMENT TRUSTS. Diversified Income Series,
Multisector Bond Series, Asset Allocation Series, American Leaders Series,
Value Series, Growth & Income Series, Blue Chip Stock Series II and Small Cap
Value Series may invest in real estate investment trusts ("REITs"), real estate
development and real estate operating companies and other real estate related
businesses. 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. In addition, Value Series may invest up to 10% of its
total assets in REITs, but will invest only in REITs that are publicly
distributed. Growth & Income Series and Value Series currently intend to make
any REIT investments 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. Debt REITs invest in obligations secured by mortgages on real
property or interests in real property.

The Funds' 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.

<PAGE> 72

MUNICIPAL SECURITIES. U.S. Government Securities Series, Diversified
Income Series, Multisector Bond Series, Global Asset Allocation 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. Capital Opportunities Series,
Global Equity Series and Investors Growth Series may also invest in municipal
securities.

BRADY BONDS. Global Asset Allocation Series, Capital Opportunities
Series, Global Equity Series and Investors Growth Series may invest in Brady
Bonds. Brady Bonds are fixed income securities that are created through the
exchange of existing commercial bank loans to foreign entities for new
obligations in connection with debt restructuring under a plan introduced by
Nicholas G. Brady when he was the U.S. Secretary of the Treasury. They may be
collateralized or uncollateralized and issued in various currencies (although
most are U.S. dollar-denominated) and they are actively traded in the
over-the-counter secondary market. Global Asset Allocation Series will invest
in Brady Bonds only if they are consistent with the Fund's quality
specifications. However, Brady Bonds should be viewed as speculative in light
of the history of defaults with respect to commercial bank loans by public and
private entities of countries issuing Brady Bonds.

HIGH-YIELD/ HIGH-RISK SECURITIES. Diversified Income Series, Multisector
Bond Series, High Yield Series, Asset Allocation Series, American Leaders
Series and Capital Opportunities Series may invest in securities rated lower
than investment grade (commonly known as "high yield" or "junk" bonds).
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 a Fund defaulted, such Fund might 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 in the net asset values of Funds investing in such
securities. Furthermore, in the case of high-yielding securities structured as
zero coupon or payment in kind securities, 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, a
Fund holding the security likely would have to replace it 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 net asset value of a Fund holding such security. If the Funds
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 Funds' 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 a Fund's ability to dispose of such securities. Securities valuation
becomes more difficult and judgment plays a greater role in valuation because
there is less reliable, objective data

<PAGE> 73

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 the Funds 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 the Funds' net
asset values and investment practices, with the extent of the impact depending
upon the composition of such Funds at that time.

Certain risks are associated with applying credit ratings as a method for
evaluating high-yielding securities. For example, credit ratings evaluate the
safety of principal and interest payments, not market value risk of
high-yielding securities. Since credit rating agencies may fail to timely
change the credit ratings to reflect subsequent events, Advisers (or a Fund's
sub-adviser, if applicable) continuously monitors the issuers of high-yielding
securities held by these Funds 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 Funds can meet redemption requests.
The achievement of the investment objectives of such Funds may be more
dependent upon the Advisers' or a sub-adviser's own credit analysis than is the
case for higher quality bonds.

SECURITIES OF FOREIGN ISSUERS. Multisector Bond Series, Global Asset
Allocation Series, International Stock Series, Global Growth Series and Global
Equity Series invest significantly in securities of foreign issuers. Money
Market Series and U.S. Government Securities 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 also
may invest in obligations of foreign banks and foreign branches of domestic and
foreign banks, provided such banks have total assets in excess of $1 billion,
and it may invest up to 15% of its total assets in securities of foreign
companies. However, 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 foreign banks and their branches and securities of foreign
branches of domestic banks. Multisector Bond Series may invest up to 40% of its
total assets in securities of foreign governments or companies. Investors
Growth Series and Capital Opportunities Series each may invest up to 35% of net
assets in foreign securities. Asset Allocation Series may invest up to 25% of
its total asset 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.
Diversified Income Series and High Yield Series may each invest up to 25% of
their net assets in foreign securities. Blue Chip Stock Series II may invest
up to 25% of its total assets in foreign securities. Blue Chip Stock Series
may invest up to 20% of its total assets (excluding reserves) in foreign
securities. Large Cap Growth Series may invest up to 15% of its total assets
in foreign securities. Value Series, Growth & Income Series, Growth Stock
Series, and Aggressive Growth Series each may invest up to 10% of total assets
in securities of foreign governments and companies. Small Cap Value Series may
invest in foreign securities without limitation. Investments in foreign
securities by American Leaders Series are limited to American Depositary
Receipts (see "-- Depositary Receipts" below).

Investing in foreign securities may result in greater risk than that
incurred by investing in domestic securities 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

<PAGE> 74

repatriation of capital invested. In the event of such expropriation,
nationalization, or other confiscation, by any country, a Fund 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 Funds. 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
Fund, particularly Multisector Bond Series, Global Asset Allocation Series,
International Stock Series, Global Growth Series and Global Equity 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. A significant portion of the
securities held by the Multisector Bond Series, Global Asset Allocation Series,
International Stock Series, Global Growth Series and Global Equity Series will
not be registered with the Securities and Exchange Commission ("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 these Funds 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 Funds 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 Multisector Bond Series, Global Asset Allocation Series,
International Stock Series, Global Growth Series and Global Equity Series will
each invest significantly 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 each such Fund's
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 a
Fund's holdings of securities denominated in such currency and, therefore, will
cause an overall decline in that Fund's net asset value and any net investment
income and capital gains to be distributed in U.S. dollars to shareholders of
that Fund.

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 Multisector Bond Series, Global Asset Allocation Series,
International Stock Series, Global Growth Series and Global Equity Series each
values its assets daily in terms of U.S. dollars, each such Fund does not
intend to convert its holdings of foreign currencies into U.S. dollars on a
daily basis. These Funds 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 a Fund at one rate, while offering a lesser rate of exchange should
the Fund desire to sell that currency to the dealer.

<PAGE> 75

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 a Fund are uninvested and no return is earned
thereon. The inability of a Fund to make intended security purchases due to
settlement problems could cause the Fund to miss attractive opportunities.
Inability to dispose of a portfolio security due to settlement problems either
could result in losses to a Fund due to subsequent declines in value of the
portfolio security or, if the Fund has entered into a contract to sell the
security, could result in possible liability to the purchaser. Each Fund will
consider such difficulties when determining the allocation of its assets,
although the Funds do not believe that such difficulties will have a material
adverse effect on their portfolio trading activities.

A Fund's net investment income from foreign issuers may be subject to
non-U.S. withholding taxes, thereby reducing the Fund's net investment income.

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. In addition,
obligations of foreign branches of domestic banks and domestic branches of
foreign banks are not insured by the Federal Deposit Insurance Corporation.
Such investments are also subject to the risk of investing in foreign
securities generally, as discussed above.

EMERGING MARKETS. Each Fund that may invest in foreign securities may
invest in emerging market countries, with the exception of U.S. Government
Securities Series. Global Growth Series is limited to investing up to 45% of
its total assets 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 has led to defaults on certain obligations and the
restructuring of certain indebtedness.

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.

DEPOSITARY RECEIPTS. The Funds which may invest in foreign securities may
hold equity securities of foreign issuers in the form of American Depositary
Receipts ("ADRs"), Global Depositary Receipts ("GDRs") 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

<PAGE> 76

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 Funds' investment
policies, the Funds' investments in ADRs and GDRs will be deemed to be
investments in the equity securities representing securities of foreign issuers
into which they may be converted.

OPTIONS. Multisector Bond Series, High Yield Series, Global Asset
Allocation Series, American Leaders Series, Value Series, Capital Opportunities
Series, Growth & Income Series, Blue Chip Stock Series, Blue Chip Stock Series
II, International Stock Series, Mid Cap Stock Series, Small Cap Value Series,
Global Growth Series, Global Equity Series, Large Cap Growth Series, Investors
Growth Series and Aggressive Growth Series may write (i.e., sell) covered call
and secured put options (except that Large Cap Growth Series may not write put
options), and purchase and sell put and call options on securities written by
others. Multisector Bond Series, Global Asset Allocation Series, American
Leaders Series, Capital Opportunities Series, Blue Chip Stock Series, Blue Chip
Stock Series II, Mid Cap Stock Series, Global Equity Series, Large Cap Growth
Series, Investors Growth Series, Aggressive Growth Series and S&P 500 Index
Series may also purchase and write put and call options on financial indices.
A Fund generally enters into an option transaction to hedge against the risk of
fluctuations in the prices of (a) securities held by such Fund or (b)
securities which Advisers or a Fund's sub-adviser intends to include in such
Fund. However, Multisector Bond Series, Global Asset Allocation Series,
American Leaders Series, Blue Chip Stock Series, Blue Chip Stock Series II, Mid
Cap Stock Series, International Stock Series and Aggressive Growth Series may
enter into such transactions for other than hedging purposes, which involves
greater risk. For Blue Chip Stock Series, in connection with options on
securities, the total market value of securities against which the Fund has
written call or put options may not exceed 25% of its total assets. In
addition, Blue Chip Stock Series will not commit more than 5% of its total
assets to premiums when purchasing call or put options. Large Cap Growth
Series may write covered call option on its securities of up to 15% of its
total assets, and may purchase and sell call and put options on common stocks
written by others of up to, for all options, 10% of its total assets.

All options purchased or written by S&P 500 Index Series and Mid Cap Stock
Series must be listed on a national securities or futures exchange or traded in
the over-the-counter ("OTC") market. These Funds will not purchase or write an
OTC option if, as a result of such transaction, the sum of (i) the market value
of outstanding OTC options purchased by the Fund, (ii) the market value of the
underlying securities covered by outstanding OTC call options written by the
Fund, and (iii) the market value of all other assets of the Fund that are
illiquid or are not otherwise readily marketable, would exceed 15% of the net
assets of the Fund, taken at market value. However, if an OTC option is sold
by the Fund to a primary U.S. Government securities dealer recognized by the
Federal Reserve Bank of New York and the Fund has the unconditional contractual
right to repurchase such OTC option from the dealer at a predetermined price,
then the Fund 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." S&P 500 Index Series and Mid Cap Stock Series will not
purchase puts, calls, straddles, spreads or any combination thereof, if as a
result of such purchase the value of a Fund's aggregate investment in such
securities would exceed 5% of the Fund's total assets.

Options give the investor the right, but not the obligation, to buy or
sell an asset at a predetermined price in the future. Where a Fund writes an
option which expires unexercised or is closed out by the Fund 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
securities held by the Fund underlying the option, or the increased cost of
securities to be acquired by the Fund. In contrast, however, if the price of
the

<PAGE> 77

underlying security moves adversely to the Fund's position, the option may be
exercised and the Fund 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 received by the Fund, if at all. Each Fund 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.

The Funds may write only covered options. A call option is covered if the
Fund owns the underlying security or a call option on the same security with a
lower strike price. A put option is covered if the Fund 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.

Each of the above Funds may also purchase and sell put or call options
written by others in anticipation of market fluctuations which may adversely
affect the value of its portfolio or the prices of securities that the Fund
wants to purchase at a later date. In the event that the expected market
fluctuations occur, a Fund 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 the Fund upon exercise or liquidation of the
option, and, unless the price of the underlying security changes sufficiently,
the option may expire without value to the Fund.

Additional information regarding options transactions appears in Appendix
A to this Statement of Additional Information.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS.

Futures Contracts. Multisector Bond Series, High Yield Series, Global
Asset Allocation Series, American Leaders Series, Capital Opportunities Series,
Global Equity Series and Investors Growth Series may enter into interest rate
futures contracts. Global Asset Allocation Series, American Leaders Series,
Capital Opportunities Series, Value Series, Growth & Income Series, S&P 500
Index Series, Blue Chip Stock Series, Blue Chip Stock Series II, International
Stock Series, Mid Cap Stock Series, Small Cap Value Series, Global Growth
Series, Global Equity Series, Large Cap Growth Series, Investors Growth Series
and Aggressive Growth Series may enter into stock index futures contracts.
Multisector Bond Series, High Yield Series, Global Asset Allocation Series,
Capital Opportunities Series, Blue Chip Stock Series, Blue Chip Stock Series
II, International Stock Series, Mid Cap Stock Series, Small Cap Value Series,
Global Growth Series, Global Equity Series, Large Cap Growth Series, Investors
Growth Series and Aggressive Growth Series may also enter into foreign currency
futures contracts.

A "purchase" of a futures contract means the undertaking of a contractual
obligation to acquire the securities 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 securities
underlying the index is made.

Purchases or sales of stock index futures contracts are used to attempt to
protect a Fund's 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 Fund's current or intended investments in fixed
income or foreign securities. In the event that an anticipated decrease in the
value of a Fund's 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,

<PAGE> 78

by gains on the sale of futures contracts. Conversely, the increased cost of a
Fund's 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 Fund. A Fund 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. Each Fund that may enter into futures
contracts may also purchase and write put and call options on such contracts.
The Funds may use such options on futures contracts in connection with their
hedging strategies in lieu of purchasing and writing options directly on the
underlying securities or purchasing and selling the underlying futures
contracts.

Purchases of options on futures contracts may present less risk in hedging
than the purchase or sale of the underlying futures contracts since the
potential loss is limited to the amount of the premium plus related transaction
costs. The writing of such options, however, does not present less risk than
the trading of futures contracts. The writing of a call option on a futures
contract generates a premium which may partially offset a decline in the value
of the Fund's portfolio assets. By writing a call option, a Fund becomes
obligated to sell a futures contract, which may have a value higher than the
exercise price. Conversely, the writing of a put option on a futures contract
generates a premium, but the Fund becomes obligated to purchase a futures
contract, which may have a lower value than the exercise price. Thus, the loss
incurred by a Fund in writing options on futures contracts may exceed the
amount of the premium received.

For more information of futures contracts and options thereon, see
Appendix A to this Statement of Additional Information.

FOREIGN CURRENCY FORWARD EXCHANGE CONTRACTS. Multisector Bond Series,
High Yield Series, Global Asset Allocation Series, Value Series, Capital
Opportunities Series, Growth & Income Series, Blue Chip Stock Series, Blue Chip
Stock Series II, International Stock Series, Mid Cap Stock Series, Small Cap
Value Series, Global Growth Series, Global Equity Series, Large Cap Growth
Series, Investors Growth Series and Aggressive Growth 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 Fund invests. A forward contract is an
obligation to purchase or sell a specific currency for an agreed price at a
future date. The contract is individually negotiated and privately traded by
currency traders and their customers. Each Fund 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 Fund believes that a foreign currency (for example, the British pound)
may suffer a decline against any other currency or currencies in the Fund (for
example, the U.S. dollar), it may enter into a forward sale contract to sell an
amount of the foreign currency expected to decline (the British pound) that
approximates the value of some or all of the Fund's investment securities
denominated in such foreign currency (the British pound) (a "position hedge").
In such cases, a Fund also may enter into a forward sale contract to sell a
foreign currency for a fixed amount in another currency (other than the U.S.
dollar) where the Fund believes that the value of the currency to be sold
pursuant to the forward sale contract will fall whenever there is a decline in
the value of the currency (other than the U.S. dollar) in which certain
portfolio securities of the Fund are denominated (a "cross-hedge").

Under certain conditions, Securities and Exchange Commission (the
"Commission") guidelines require investment companies to set aside cash or any
security that is not considered illiquid in a segregated account to cover
forward contracts. As required by Commission guidelines, any Fund that has the
ability to enter into a forward contract for an essentially speculative purpose
will, upon entering into such a

<PAGE> 79

transaction, segregate assets to cover such forward contracts. At the present
time, only the Global Asset Allocation Series and International Stock Series
may enter into speculative forward contracts. A speculative forward contract
is one which, unlike the hedging situations defined above, does not have an
underlying position in a security or securities. The Funds will not segregate
assets to cover forward contracts entered into for hedging purposes.

Although forward contracts will be used primarily to protect the Funds
from adverse currency movements, they also involve the risk that anticipated
currency movements would not be accurately predicted.

OPTIONS ON FOREIGN CURRENCIES. Multisector Bond Series, High Yield Series,
Global Asset Allocation Series, Capital Opportunities Series, Blue Chip Stock
Series, Blue Chip Stock Series II, International Stock Series, Mid Cap Stock
Series, Global Growth Series, Global Equity Series, Investors Growth 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 Funds 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 a Fund's 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 Fund are traded
on U.S. and foreign exchanges or over-the-counter.

SWAPS, CAPS, COLLARS AND FLOORS. Global Asset Allocation Series, Capital
Opportunities Series, Global Equity Series and Investors Growth Series may
enter into swap, cap, collar and floor transactions. Swaps are
privately-negotiated over-the-counter derivative products in which two parties
agree to exchange payment streams calculated in relation to a rate, index,
instrument or certain securities and a particular "notional amount." As with
many of the other derivative products available to the Funds, the underlying
may include an interest rate (fixed or floating), a currency exchange rate, a
commodity price index, and a security, securities index or a combination
thereof. A great deal of flexibility is possible in the way the product may be
structured, with the effect being that the parties may have exchanged amounts
equal to the return on one rate, index or group of securities for another. For
example, in a simple fixed-to-floating interest rate swap, one party makes
payments equivalent to a fixed interest rate, and the other makes payments
equivalent to a specified interest rate index. The Funds may engage in simple
or more complex swap transactions involving a wide variety of underlyings. The
currency swaps that the Funds may enter will generally involve an agreement to
pay interest streams in one currency based on a specified index in exchange for
receiving interest streams denominated in another currency. Such swaps may
involve initial and final exchanges that correspond to the agreed upon notional
amount.

Caps, collars and floors are privately-negotiated option-based derivative
products. The Funds may use one or more of these products in addition to or in
lieu of a swap involving a similar rate or index. As in the case of a put or
call option, the buyer of a cap or floor pays a premium to the writer. In
exchange for that premium, the buyer receives the right to a payment equal to
the differential if the specified index or rate rises above (in the case of a
cap) or falls below (in the case of a floor) a pre-determined strike level. As
in the case of swaps, obligations under caps and floors are calculated based
upon an agreed notional amount, and like most swaps (other than foreign
currency swaps), the entire notional amount is not exchanged and thus is not at
risk. A collar is a combination product in which the same party, such a Fund,
buys a cap from and sells a floor to the other party. As with put and call
options, the amount at risk is limited for the buyer, but, if the cap or floor
is not hedged or covered, may be unlimited for the seller.

<PAGE> 80

Under current market practice, caps, collars and floors between the same two
parties are generally documented under the same "master agreement." In some
cases, options and forward agreements may also be governed by the same master
agreement. In the event of default, amounts owed under all transactions
entered into under, or covered by, the same master agreement would be netted
and only a single payment would be made.

Swaps, caps, collars and floors are credit-intensive products. The Funds
bear the risk of default, i.e., nonpayment by the other party. The guidelines
under which the Funds enter into derivative transactions, along with some
features of the transactions themselves, are intended to reduce these risks to
the extent reasonably practicable, although they cannot eliminate the risks
entirely. Each Fund may enter into swaps only with parties that are deemed
creditworthy by the subadviser thereto. Consistent with current market
practices, the Funds will generally enter into swap transactions on a net basis,
and all swap transactions with the same party will be documented under a single
master agreement to provide for net payment upon default. In addition, the
Funds' obligations under an agreement will be accrued daily (offset against any
amounts owing to the Funds) and any accrued, but unpaid, net amounts owed to the
other party to a master agreement will be covered by the maintenance of a
segregated account consisting of cash or liquid securities.

Interest rate and total rate of return (fixed income or equity) swaps
generally do not involve the delivery of securities, other underlying assets,
or principal. In such case, if the other party to an interest rate or total
rate of return swap defaults, a Fund's risk of loss will consist of the
payments that the Fund is contractually entitled to receive from the other
party. This may not be true for currency swaps that require the delivery of
the entire notional amount of one designated currency in exchange for the
other. If there is a default by the other party, the Funds may have
contractual remedies under the agreements related to the transaction.

LIMITATIONS ON INVESTMENTS IN OPTIONS, FUTURES CONTRACTS AND FORWARD
CONTRACTS. Multisector Bond Series, Global Asset Allocation Series, Blue Chip
Stock Series II, International Stock Series, High Yield Series, Value Series,
Growth & Income Series, Global Growth Series and Aggressive Growth 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 a Fund would exceed 5% of the value of such Fund's total assets. In
addition, for High Yield Series, Value Series, Growth & Income Series, Global
Growth Series and Aggressive Growth Series, the aggregate value of a Fund's
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 Fund.
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 Fund intends to limit its investment
in futures during the coming year so that the aggregate value of the Fund's
assets subject to futures contracts will not exceed 5% of the value of its net
assets.

S&P 500 Index Series will not enter into futures contracts to the extent
that its outstanding obligations under these contracts would exceed 10% of the
Fund's total assets.

To the extent that any Fund enters into futures contracts and options on
futures contracts 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 Fund's net assets.

<PAGE> 81

RISKS OF TRANSACTIONS IN OPTIONS, FUTURES CONTRACTS AND FORWARD CONTRACTS.
The use of options, futures contracts and forward contracts involves 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 a Fund's hedging strategy
unsuccessful and could result in losses. The use of these transactions for
other than hedging purposes involves greater risk. In addition, there can be
no assurance that a liquid secondary market will exist for any contract
purchased or sold, and a Fund 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.

REPURCHASE AGREEMENTS. Each Fund 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. Fund investments in repurchase
agreements with a maturity of more than seven days are subject to the Funds'
limitations regarding restricted and illiquid securities. In investing in
repurchase agreements, a Fund's risk is limited to the ability of such bank or
securities dealer to pay the agreed upon amount at the maturity of the
repurchase agreement. In the opinion of management, such risk is not material;
if the other party defaults, the underlying security constitutes collateral for
the obligation to pay - although the Fund 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 Fund 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 Fund could suffer a loss. If the Fund owns
underlying securities following a default on the repurchase agreement, the Fund
will be subject to risk associated with changes in the market value of such
securities. The Funds' 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 a repurchase
agreement (including any accrued interest), the respective Fund will promptly
receive additional collateral (so the total collateral is in an amount at least
equal to the repurchase price plus accrued interest). U.S. Government
Securities Series will only execute repurchase agreements in which the
underlying security meets the criteria of such Fund's 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. Multisector Bond Series, American Leaders
Series, Capital Opportunities Series, S&P 500 Index Series, Blue Chip Stock
Series, Blue Chip Stock Series II, Mid Cap Stock Series, Global Equity Series
and Investors Growth Series each may enter into reverse repurchase agreements
to meet redemption requests where the liquidation of portfolio securities is
deemed to be inconvenient or disadvantageous, although Blue Chip Stock Series
does not currently intend to make such investments. Reverse repurchase
agreements are ordinary repurchase agreements in which a Fund is the seller of,
rather than the investor in, securities, and agrees to repurchase them at an
agreed upon time and

<PAGE> 82

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 a Fund.

DELAYED DELIVERY TRANSACTIONS. All Funds 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 a Fund enters into a transaction on a when-issued or forward
commitment basis, a segregated account consisting of cash or any security that
is not considered restricted or illiquid, 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
interest accrues to the purchaser from the transaction. If a Fund 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 Funds to hedge against
anticipated changes in interest rates and prices.

The purchase of securities on a when-issued, delayed delivery, or forward
commitment basis exposes the Funds 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 Fund's net asset value to the extent that the Fund
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 Fund 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 Fund, 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).

DOLLAR ROLLS. In connection with their ability to purchase securities on
a when-issued or forward commitment basis, each Fund other than Money Market
Series, Capital Opportunities Series, Global Equity Series, Investors Growth
Stock Series and Growth Stock Series may enter into "dollar rolls" in which a
Fund 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
Fund gives up the right to receive principal and interest paid on the
securities sold. However, each Fund 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 Fund compared with
what such performance would have been without the use of dollar rolls. Each
Fund will hold and maintain in a segregated account until the settlement date
cash or any security that is not considered restricted or illiquid 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 Adviser's (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 Fund while remaining
substantially fully invested increases the amount of the Fund's assets that are
subject to market risk to an

<PAGE> 83

amount that is greater than the Fund's net asset value, which could result in
increased volatility of the price of the Fund's shares.

LENDING OF PORTFOLIO SECURITIES. Consistent with applicable regulatory
requirements, all Series may lend their portfolio securities. Currently, U.S.
Government Securities Series, Diversified Income Series, Asset Allocation
Series, Value Series, Growth & Income Series, S&P 500 Index Series, Blue Chip
Stock Series, Global Growth Series, Growth Stock Series and Aggressive Growth
Series are doing so. Such loans, which will be made principally to
broker-dealers, 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 Funds will receive amounts equal to dividends or interest on the
securities loaned. These Funds will also earn income for having made the loan.
Currently applicable regulatory requirements limit such lending to not more
than 33 1/3% of the value of each such Fund's total assets (for each such Fund,
total assets include 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 Fund's
investment in the securities loaned.

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 Advisers (or the sub-adviser, if there is one for the Fund) 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.

RESTRICTED AND ILLIQUID SECURITIES. Each Fund may invest up to 15% of its
net assets in illiquid securities, except Money Market Series which can invest
10% of its net assets in such securities. A security is considered illiquid if
it cannot be sold in the ordinary course of business within seven days at
approximately the price at which it is valued. Illiquid securities may offer a
higher yield than securities which are more readily marketable, but they may
not always be marketable on advantageous terms.

The sale of illiquid securities often requires more time and results in
higher brokerage charges or dealer discounts and other selling expenses than
does the sale of securities eligible for trading on national securities
exchanges or in the over-the-counter markets. A Fund may be restricted in its
ability to sell such securities at a time when Advisers or a sub-adviser deems
it advisable to do so. In addition, in order to meet redemption requests, a
Fund may have to sell other assets, rather than such illiquid securities, at a
time which is not advantageous.

Restricted securities are securities which were originally sold in private
placements and which have not been registered under the Securities Act of 1933
(the "1933 Act"). Such securities generally have been considered illiquid,
since they may be resold only subject to statutory restrictions and delays or
if registered under the 1933 Act. In 1990, however, the SEC adopted Rule 144A
under the 1933 Act, which provides a safe harbor exemption from the
registration requirements of the 1933 Act for resales of restricted securities
to "qualified institutional buyers," as defined in the rule. The result of
this rule has been the development of a more liquid and efficient institutional
resale market for restricted securities. Thus, restricted securities are no
longer necessarily illiquid. The Funds may therefore invest in Rule 144A
securities and treat them as liquid when they have been determined to be liquid
by the Board of Directors or its delegate subject to the oversight of and
pursuant to procedures adopted by the Board of Directors. Under these
procedures, factors taken into account in determining the liquidity of a
security include: (a) the frequency of trades and

<PAGE> 84

quotes for the security; (b) the number of dealers willing to purchase or sell
the security and the number of other potential purchasers; (c) dealer
undertakings to make a market in the security; and (d) the nature of the
security and the nature of the marketplace trades (e.g., the time needed to
dispose of the security, the method of soliciting offers and the mechanics of
transfer). Similar determinations may be made with respect to commercial paper
issued in reliance on the so-called "private placement" exemption from
registration under Section 4(2) of the 1933 Act and interest-only and
principal-only classes of mortgage-related securities issued by the U.S.
government or its agencies or instrumentalities.

BORROWINGS. Each Fund may borrow money to the extent set forth below
under "Investment Restrictions." None of the Funds will borrow for leverage
purposes. Interest paid on borrowings will decrease the net earnings of a Fund
and will not be available for investment.

SEGREGATED ACCOUNTS. To comply with the 1940 Act, a Fund engaging in
certain transactions involving options, futures, reverse repurchase agreements,
delayed delivery 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, or any security that is not considered
restricted or illiquid.

SHORT SALES AGAINST THE BOX. Each Fund may sell a security short to the
extent such Fund 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." If a Fund
enters into a short sale against the box, it is required to segregate
securities equivalent in kind and amount to the securities sold short (or
securities convertible or exchangeable into such securities) and is required to
hold such securities while the short sale is outstanding. A Fund will incur
transaction costs, including interest, in connection with opening, maintaining,
and closing short sales against the box.

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

PORTFOLIO TURNOVER

A Fund's portfolio turnover rate is calculated by dividing the lesser of
purchases or sales of portfolio securities for the particular fiscal year by
the monthly average of the value of portfolio securities owned by the Fund
during the same fiscal year. "Portfolio securities" for purposes of this
calculation do not include securities with a maturity date of 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
portfolio securities for a particular year were equal to the average monthly
value of the portfolio securities owned during such year.

Multisector Bond Series (194%), Asset Allocation Series (178%), Value
Series (211%), Growth Stock Series (175%) and Aggressive Growth Series (264%)
had portfolio turnover rates in excess of 100% during the fiscal year ended
December 31, 1999. Factors contributing to the higher portfolio turnover rates
(rates in excess of 100%) included general market volatility; repositioning of
the Funds' portfolios by new management; for each Fund, except Multisector
Bond Series and Asset Allocation Series, attempts to maintain the median market
capitalization targets; and the need to sell holdings to meet redemption
activity in the Funds. While higher turnover rates (100% or more) may result
in increased transaction costs, the Funds' managers attempt to have the
benefits of these transactions outweigh the costs, although this cannot be
assured.

<PAGE> 85

INVESTMENT RESTRICTIONS

Each Fund is subject to certain investment restrictions, which are set
forth below. Any investment restriction which is denoted as "fundamental" may
be changed only by the approval of a majority of a Fund's shareholders. In
this situation, majority means the lesser of (i) 67% of the Fund's outstanding
shares present at a meeting of the holders if more than 50% of the outstanding
shares are present in person or by proxy or (ii) more than 50% of the Fund's
outstanding shares. The insurance laws and regulations of various states as
well as the Internal Revenue Code of 1986 and the regulations thereunder may
from time to time impose additional restrictions on the Funds' investments.

Any investment policy or restriction in the Prospectus or this Statement
of Additional Information which involves a maximum percentage of securities or
assets, except those dealing with borrowing, shall not be considered to be
violated unless an excess over the percentage occurs immediately after an
acquisition of securities or utilization of assets and results therefrom.

DIVERSIFICATION

As a fundamental policy, each Fund operates as a "diversified" investment
company as defined under the 1940 Act, which means that it must meet the
following requirements:

At least 75% of the value of the Fund's 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
Fund and to not more than 10% of the outstanding voting securities of such
issuer.

The insurance laws and regulations of various states impose additional
diversification requirements on the Funds. 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 each Fund 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 Fund's total assets. In addition, the Internal Revenue Code of
1986, as amended, imposes certain diversification requirements on the
investments of segregated asset accounts underlying variable annuity and life
insurance contracts.

FUNDAMENTAL INVESTMENT RESTRICTIONS - APPLICABLE TO EACH SERIES

The following investment restrictions are fundamental and may be changed
only by the approval of shareholders. No Fund will:

(1) Borrow money or issue senior securities, except as permitted under the
Investment Company Act of 1940, as amended, and as interpreted or modified from
time to time by any regulatory authority having jurisdiction.

(2) Concentrate its investments in a particular industry, as that term is
used in the Investment Company Act of 1940, as amended, and as interpreted or
modified from time to time by any regulatory authority having jurisdiction.
For purposes of this limitation, the U.S. Government, and state or municipal
governments and their political subdivisions are not considered members of any
industry. In addition, for Money Market Series only, this limitation does not
apply to investments in domestic banks.

<PAGE> 86

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

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

(5) Purchase physical commodities or contracts relating to physical
commodities.

(6) Make loans except as permitted under the Investment Company Act of
1940, as amended, and as interpreted or modified from time to time by any
regulatory authority having jurisdiction.

NONFUNDAMENTAL INVESTMENT RESTRICTIONS - APPLICABLE TO EACH SERIES UNLESS
OTHERWISE NOTED

The following investment restriction may be changed without shareholder
approval. No Fund will:

ILLIQUID SECURITIES

(1) Invest more than 15% of their net assets (10% for Money
Market Series) in illiquid securities.

OPTIONS, FUTURES AND FORWARD CONTRACTS

(2) High Yield Series, Value Series, Growth & Income Series, Aggressive
Growth Series and Global Growth Series will not 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 Fund would exceed
5% of the value of the total assets of the Fund or (b) the Fund's 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 Fund. (This
restriction does not apply to securities purchases on a when-issued, delayed
delivery, or forward commitment basis.)

(3) Global Asset Allocation Series and International Stock 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
Fund would exceed 5% of the value of the total assets of such Fund. (This
restriction does not apply to securities purchases on a when-issued, delayed
delivery or forward commitment basis.)

(4) S&P 500 Index Series and Mid Cap Stock 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 Fund's transactions
in futures contracts and related options.

(5) Large Cap Growth Series will not sell a call option written by it if,
as a result of the sale, the aggregate of the Fund's portfolio securities
subject to outstanding call options (valued at the lower of the option price or
market value of such securities) would exceed 15% of the value of the Fund's
total assets.

<PAGE> 87

(6) Large Cap Growth Series will not invest more than 10% of its total
assets in put and call options (including options on market indices).

(7) Large Cap Growth Series will not purchase or sell options on stock
index futures contracts.

(8) Large Cap Growth Series will not purchase or sell a stock index future
if, immediately thereafter, more than 30% of its total assets would be hedged
by stock index futures.

CONVERTIBLE SECURITIES

(9) Large Cap Growth Series will not invest more than 20% of the value of
its total assets in convertible securities.

RIGHTS AND WARRANTS

(10) Large Cap Growth Series will not invest more than 5% of the value of
its total assets in rights or warrants that entitle the holder to buy equity
securities.

FOREIGN SECURITIES

(11) Large Cap Growth Series will not invest more than 15% of the value of
its total assets in securities of foreign issuers.

MANAGEMENT OF THE FUNDS

Under Minnesota law, the Board of Directors of Fortis Series has overall
responsibility for managing Fortis Series in good faith, in a manner reasonably
believed to be in the best interests of the company and with the care an
ordinarily prudent person would exercise in similar circumstances. This
management may not be delegated. The Articles of Incorporation limit the
liability of directors to the fullest extent permitted by law.

The names, addresses, principal occupations and other affiliations of
directors and executive officers of Fortis Series are listed below. Unless
stated otherwise, all positions have been held at least five years. Each
director and officer also serves as a director or officer of all investment
companies managed by Advisers (the "Fund Complex"). The Fund Complex currently
consists of one closed-end and eight open-end investment companies.

<TABLE>
<CAPTION>
NAME AND ADDRESS AGE POSITION WITH PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
- ---------------- --- ------------- -----------------------------------------
THE FUNDS
---------
<S> <C> <C> <C>
Richard W. Cutting 68 Director Certified public accountant and financial consultant.
137 Chapin Parkway
Buffalo, New York

Allen R. Freedman * 59 Director Chairman of Fortis, Inc.; a Managing Director of
One Chase Manhattan Plaza Fortis International, N.V.; director of Systems and
New York, New York Computer Technology Corporation.
</TABLE>

<PAGE> 88

<TABLE>
<CAPTION>
NAME AND ADDRESS AGE POSITION WITH PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
- ---------------- --- ------------- -----------------------------------------
THE FUNDS
---------
<S> <C> <C> <C>
Dr. Robert M. Gavin 59 Director President, Cranbrook Education Community; prior
380 Lone Pine Road to July 1996, President, Macalester College, St.
Bloomfield, Michigan Paul, MN.

Jean L. King 55 Director President, Communi-King, a communications
12 Evergreen Lane consulting firm, St. Paul, MN.
St. Paul, Minnesota

Dean C. Kopperud* 47 President and Chief Executive Officer and a Director of Advisers;
500 Bielenberg Drive Director President and a Director of Investors; President of
Woodbury, Minnesota Fortis Financial Group; a Director of Fortis Benefits
Insurance Company and Senior Vice President of
Fortis Insurance Company.

Robb L. Prince 58 Director Financial and employee benefit consultant; prior to
5108 Duggan Plaza July 1995, Vice President and Treasurer, Jostens,
Edina, Minnesota Inc., a producer of products and services for youth,
education, sports award, and recognition markets;
director of Analysts International Corporation.

Leonard J. Santow 63 Director Principal, Griggs & Santow, Inc., economic and
One State Street 5th Floor financial consultants
New York, New York

Noel Schenker Shadko 45 Director Marketing consultant; prior to 1996, Senior Vice
1908 W. 49th Street President, Marketing and Strategic Planning,
Minneapolis, Minnesota Rollerblade, Inc.

Joseph M. Wikler 57 Director Investment consultant and private investor; prior to
12520 Davan Drive 1994, Director of Research, Chief Investment
Silver Spring, Maryland Officer, Principal and a Director, The Rothschild
Co., and investment adviser, Baltimore, MD.

Gary N. Yalen 57 Vice President President and Chief Investment Officer of Advisers
One Chase Manhattan Plaza (since 1995) and Senior Vice President,
New York, New York Investments, of Fortis, Inc.; prior to 1996, President
and Chief Investment Officer, Fortis Asset
Management, a former division of Fortis, Inc.

Howard G. Hudson 62 Vice President Executive Vice President and Head of Fixed
One Chase Manhattan Plaza Income Investments of Advisers since 1995; prior
New York, New York to 1996, Senior Vice President, Fixed Income,
Fortis Asset Management.
</TABLE>

<PAGE> 89

<TABLE>
<CAPTION>
NAME AND ADDRESS AGE POSITION WITH PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
- ---------------- --- ------------- -----------------------------------------
THE FUNDS
---------
<S> <C> <C> <C>
Lucinda S. Mezey 52 Vice President Executive Vice President and Head of Equity
One Chase Manhattan Plaza Investments of Advisers since October 1997; from
New York, New York 1995 to October 1997, Chief Investment Officer,
Alex Brown Capital Advisory and Trust Co.,
Baltimore, MD; prior to 1995, Senior Vice
President and Head of Equity Investments, PNC
Bank, Philadelphia, PA.

James S. Byrd 48 Vice President Executive Vice President of Advisers since 1995;
90 South 7th Street prior to 1995, Vice President of Advisers and of
Minneapolis, Minnesota Investors.

Nicholas L.M. de Peyster 33 Vice President Vice President of Advisers since 1995; prior to
One Chase Manhattan Plaza 1995, Vice President, Equities, Fortis Asset
New York, New York Management.

Diane M. Gotham 41 Vice President Vice President of Advisers since 1998; from 1994
90 South 7th Street to 1998, securities analyst for Advisers.
Minneapolis, Minnesota

Laura E. Granger 38 Vice President Vice President of Advisers since 1998; from 1993-
One Chase Manhattan Plaza 1998, portfolio manager, General Motors
New York, New York Investment Management, New York, NY.

Maroun M. Hayek 51 Vice President Vice President of Advisers since 1995; prior to
One Chase Manhattan Plaza 1996, Vice President, Fixed Income, Fortis Asset
New York, New York Management.

Robert C. Lindberg 43 Vice President Vice President of Advisers since 1993.
One Chase Manhattan Plaza
New York, New York

Charles L. Mehlhouse 57 Vice President Vice President of Advisers; prior to March 1996,
One Chase Manhattan Plaza portfolio manager, Marshall & Ilsley Bank
New York, New York Corporation, Milwaukee, WI.

Kevin J. Michels 48 Vice President Vice President of Advisers since 1995; prior to
One Chase Manhattan Plaza 1996, Vice President, Administration, Fortis Asset
New York, New York Management.

Christopher J. Pagano 36 Vice President Senior Vice President of Advisers since January
One Chase Manhattan Plaza 2000; from March 1996 until 2000, Vice President
New York, New York of Advisers; from 1995 to March 1996, government
strategist, Merrill Lynch, New York, NY.

Kendall C. Peterson 43 Vice President Vice President of Advisers since August 1999; from
One Chase Manhattan Plaza 1985 to July 1999, Vice President and portfolio
New York, New York manager at Prudential Insurance Company of
America, Newark, NJ.
</TABLE>

<PAGE> 90

Michael J. Romanowski 48 Vice President Vice President of Advisers since 1998; from
One Chase Manhattan Plaza October 1995 to March 1998, portfolio manager,
New York, New York Value Line, New York, NY; prior to October 1995,
securities analyst, Conning & Co., Hartford, CT.

Christopher J. Woods 39 Vice President Vice President of Advisers since 1995; prior to
One Chase Manhattan Plaza 1996 Vice President, Fixed Income, Fortis Asset
New York, New York Management.

Robert W. Beltz, Jr. 50 Vice President Vice President - Securities Operations of Advisers
500 Bielenberg Drive and of Investors.
Woodbury, Minnesota

Peggy L. Ettestad 42 Vice President Senior Vice President, Operations of Advisers since
500 Bielenberg Drive March 1997; prior to March 1997, Vice President,
Woodbury, Minnesota G.E. Capital Fleet Services, Minneapolis, MN.

Tamara L. Fagely 41 Vice President Vice President of Advisers and of Investors since
500 Bielenberg Drive and Treasurer 1998; prior to 1998, Second Vice President of
Woodbury, Minnesota Advisers and Investors.

Dickson W. Lewis 50 Vice President Senior Vice President, Marketing and Sales of
500 Bielenberg Drive Advisers and of Investors since July 1997; from
Woodbury, Minnesota 1993 to July 1997, President and Chief Executive
Officer, Hedstrom/Blessing, Inc., Minneapolis, MN.

David A. Peterson 57 Vice President Vice President and Assistant General Counsel,
500 Bielenberg Drive Fortis Benefits Insurance Company.
Woodbury, Minnesota

Scott R. Plummer 40 Vice President Vice President, Associate General Counsel and
500 Bielenberg Drive Assistant Secretary of Advisers.
Woodbury, Minnesota

Rhonda J. Schwartz 41 Vice President Since January 1996, Senior Vice President and
500 Bielenberg Drive General Counsel of Advisers, Vice President and
Woodbury, Minnesota General Counsel, Life and Investment Products of
Fortis Insurance Company and Senior Vice
President and General Counsel of Fortis Benefits
Insurance Company, FFG Division; from 1994 to
January 1996, Vice President, General Counsel and
Secretary of Fortis, Inc.

Melinda S. Urion 46 Vice President Senior Vice President and Chief
500 Bielenberg Drive Financial Officer of Advisers since
Woodbury, Minnesota 1997; from 1995 to 1997, Senior Vice
President of Finance and Chief Financial
Officer, American Express Financial
Corporation;
</TABLE>

<PAGE> 91

<TABLE>
<CAPTION>
POSITION WITH
NAME AND ADDRESS AGE THE FUNDS PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
- ---------------- --- --------- -----------------------------------------

<S> <C> <C> <C>
prior to March 1995, corporate controller,
American Express Financial Corporation and
prior to 1994, controller and treasurer,
IDS Life Insurance Company, Minneapolis, MN.

Michael J. Radmer 54 Secretary Partner, Dorsey & Whitney LLP, the
220 South Sixth Street Company's General Counsel.
Minneapolis, Minnesota
</TABLE>

- ----------------------
* Mr. Kopperud is an "interested person" (as defined under the 1940 Act) of
Advisers and Fortis Series because he holds certain positions including
serving as Chief Executive Officer and a director of Advisers. Mr.
Freedman is an "interested person" of Advisers and Fortis Series because
he holds certain positions including serving as Chairman and Chief
Executive Officer of Fortis, Inc., the parent company of Advisers.

Each director who is not affiliated with Advisers or Investors receives a
monthly fee of $700 from Fortis Series, $100 per meeting attended from Fortis
Series, and $100 per committee meeting attended from Fortis Series (and
reimbursement of travel expenses to attend meetings). Each such director also
receives a monthly fee, a meeting fee and a committee meeting fee from each fund
in the Fund Complex for which they are a director. The following table sets
forth the aggregate compensation received by each director from Fortis Series
during the fiscal year ended December 31, 1999, as well as the total
compensation received by each director from the Fund Complex during the calendar
year ended December 31, 1999. Mr. Freedman and Mr. Kopperud, who are affiliated
with Advisers and Investors, did not receive any compensation. No executive
officer receives any compensation from the Funds.

<TABLE>
<CAPTION>
Aggregate Compensation from Total Compensation from
Director Fortis Series Fund Complex*
- -------- ---------------------------- ------------------------
<S> <C> <C>
Richard W. Cutting $10,800 $31,250
Dr. Robert M. Gavin $10,800 $31,250
Jean L. King $10,600 $29,250
Edward M. Mahoney** $10,800 $31,250
Robb L. Prince $10,800 $31,250
Leonard J. Santow $14,212 $33,850
Noel Schenker Shadko $ 5,700 $26,150
Joseph M. Wikler $14,300 $34,750
</TABLE>

- ----------------------
* The Fund Complex consists of one closed-end and eight open-end investment
companies managed by Advisers.
** Mr. Mahoney retired from the Board effective January 1, 2000.

During the fiscal year ended December 31, 1999, Fortis Series paid
$202,586 in legal fees and expenses to a law firm of which the Funds' Secretary
is a partner.

<PAGE> 92

Directors Gavin, Kopperud, Prince and Noel Schenker Shadko 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 meet at least twice a
year.

PRINCIPAL HOLDERS OF SECURITIES

As of March 31, 2000, less than 1% of the outstanding shares of Fortis
Series were attributable to contracts owned of record or beneficially by the
directors and executive officers as a group. The directors and executive
officers otherwise do not own any of the outstanding shares of Fortis Series.

As of March 31, 2000, no person was a record holder or, to the knowledge of
Fortis Series, a beneficial owner of more than 5% of the outstanding shares of
any Fund, except as set forth below:

<TABLE>
<CAPTION>
Percent of
Fund Name and Address of Shareholder Number of Shares Outstanding Shares
- ----- ------------------------------------------------- -------------------
<S> <C> <C> <C>
Diversified Income Series Fortis Benefits Life Insurance 8,682,707 98.41%
Company 500 Bielenberg Drive
Woodbury, MN 55125 ("FBIC")
Growth Stock Series FBIC 22,860,507 99.66%
Asset Allocation Series FBIC 29,588,650 99.47%
Money Market Series FBIC 8,884,146 99.10%
U.S. Government Series FBIC 12,462,489 98.89%
Global Growth Series FBIC 14,046,373 99.46%
Aggressive Growth Series FBIC 10,822,785 98.93%
Growth & Income Series FBIC 13,298,570 96.89%
High Yield Series FBIC 6,932,420 97.43%
Global Asset Allocation Series FBIC 4,499,372 97.21%
International Stock Series FBIC 8,619,912 98.14%
Multisector Bond Series FBIC 1,895,563 97.91%
Value Series FBIC 5,637,200 96.90%
S&P 500 Index Series FBIC 18,097,226 96.80%
Blue Chip Stock Series FBIC 12,893,059 97.60%
Mid Cap Stock Series FBIC 2,542,635 98.13%
Large Cap Growth Series FBIC 6,596,868 96.28%
Small Cap Value Series FBIC 4,091,284 98.32%
</TABLE>

INVESTMENT ADVISORY AND OTHER SERVICES

GENERAL

Fortis Advisers, Inc. ("Advisers") has been the investment adviser and
manager of Fortis Series since its inception. Fortis Investors, Inc.
("Investors") acts as the Funds' underwriter. Each acts pursuant

<PAGE> 93

to written agreements periodically approved by the directors or shareholders.
The address of each is that of the Funds. As of December 31, 1999, Advisers
managed thirty-three investment company portfolios with combined net assets of
approximately $8.2 billion.

Each Fund pays Advisers a monthly fee for providing investment advisory
services. The services provided by Advisers include:

o General management of all Funds.
o Investment management for those Funds that do not have a sub-adviser.
o Ultimate responsibility (subject to oversight by Fortis Series' Board of
Directors) to oversee any sub-advisers hired to manage all or a portion of
any of the Funds and recommend the hiring, termination and replacement of
sub-advisers. In this role Advisers acts as a "Manager of Managers."

Fortis Series has received an exemptive order from the Securities and
Exchange Commission that permits Advisers to appoint new sub-advisers, with
approval by Fortis Series' Board of Directors and without obtaining approval
from those contract holder's that participate in the applicable Fund. Within 90
days after hiring any new sub-adviser, affected contract holders will receive
all information about the new sub-advisory relationship that would have been
included if a proxy statement had been required. Advisers will not enter into a
sub-advisory agreement with an affiliated sub-adviser unless contract holders
approve such agreement.

The specific conditions of the exemptive order are as follows:

1. Before Fortis Series may rely on the exemptive order, the operation of
Fortis Series under a Manager of Managers structure must be approved by a
majority of the outstanding voting securities. This approval was received
in a shareholder meeting held August 12, 1999.

2. Fortis Series must disclose in its prospectus the existence, substance and
effect of the exemptive order. In addition, Fortis Series must hold itself
out to the public as employing the Manager of Managers structure. The
prospectus will prominently disclose that Advisers has ultimate
responsibility (subject to oversight by the Board of Directors) to oversee
the sub-advisers and recommend their hiring, termination and replacement.

3. Within ninety (90) days of the hiring of any new sub-adviser, the
contract holders participating in the relevant Fund will be furnished all
information about the new sub-adviser that would be included in a proxy
statement, except as modified by the order to permit Aggregate Fee
Disclosure. This information will include Aggregate Fee Disclosure and
any change in such disclosure caused by the addition of a new sub-adviser.
Advisers will meet this condition by providing contract holders with an
information statement meeting the requirements of Regulation 14C, Schedule
14C, and Item 22 of Schedule 14A under the 1934 Act, except as modified by
the order to permit Aggregate Fee Disclosure.

4. Advisers will not enter into a sub-advisory agreement with any Affiliated
Sub-Adviser without that sub-advisory agreement, including the
compensation to be paid thereunder, being approved by contract holders.

5. At all times, a majority of the Board of Directors of Fortis Series will
be directors who are not "interested persons," as that term is defined in
Section 2(a)(19) of the 1940 Act, of the company ("Independent
Directors"), and the nomination of new or additional Independent Directors
will be at the discretion of the then-existing Independent Directors.

<PAGE> 94

6. When a sub-adviser change is proposed for a Fund with an Affiliated
Sub-Adviser, the Board of Directors, including a majority of the
Independent Directors, will make a separate finding, reflected in the
Board of Directors' minutes, that the change is in the best interests of
the Fund and the contract holders participating in that Fund and does not
involve a conflict of interest from which Advisers or the Affiliated
Sub-Adviser derives an inappropriate advantage.

7. Advisers will provide general management services to Fortis Series and
the Funds, including overall supervisory responsibility for the general
management and investment of each Fund's securities portfolio, and,
subject to review and approval by the Board of Directors, will: (a) set
each Fund's overall investment strategies; (b) evaluate, select and
recommend sub-advisers to manage all or a part of a Fund's assets; (c)
allocate and, when appropriate, reallocate a Fund's assets among multiple
sub-advisers; (d) monitor and evaluate the investment performance of
sub-advisers; and (e) implement procedures reasonably designed to ensure
that the sub-advisers comply with the relevant Fund's investment
objective, policies and restrictions.

8. No director or officer of Fortis Series or directors or officers of
Advisers will own directly or indirectly (other than through a pooled
investment vehicle that is not controlled by such person) any interest in
any Sub-Adviser except for (i) ownership of interests in Advisers or any
entity that controls, is controlled by or is under common control with
Advisers; or (ii) ownership of less than 1% of the outstanding securities
of any class of equity or debt of a publicly-traded company that is either
a sub-adviser or any entity that controls, is controlled by or is under
common control with a sub-adviser.

9. Fortis Series will include in its registration statement the Aggregate
Fee Disclosure.

10. Independent counsel knowledgeable about the 1940 Act and the duties of
Independent Directors will be engaged to represent the Independent
Directors of the Fund. The selection of such counsel will be within the
discretion of the then-existing Independent Directors.

11. Advisers will provide the Board of Directors, no less than often than
quarterly, with information about Advisers' profitability on a per-Fund
basis. Such information will reflect the impact on profitability of the
hiring or termination of any sub-adviser during the applicable quarter.

12. When a sub-adviser is hired or terminated, Advisers will provide the
Board of Directors with information showing the expected impact on
Advisers' profitability.

CONTROL AND MANAGEMENT OF ADVISERS AND INVESTORS

Fortis, Inc. ("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 financial services company
that provides specialty insurance and investment products to individuals,
businesses, associations and other financial services organizations in the
United States. Fortis is a part of a worldwide group of companies active in
the fields of insurance, banking and investments. Fortis is jointly owned by
Fortis (NL) N.V. of The Netherlands and Fortis (B) of Belgium.

Fortis (NL) N.V. is a diversified financial services company headquartered
in Utrecht, The Netherlands, where its insurance operations began in 1847.
Fortis (B) is a diversified financial services company headquartered in
Brussels, Belgium, where its insurance operations began in 1824. Fortis (NL)

<PAGE> 95

N.V. and Fortis (B) own a group of companies active in insurance, banking and
financial services, and real estate development in The Netherlands, Belgium,
the United States, Western Europe, and the Pacific Rim.

INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT

Advisers acts as investment adviser and manager of each Fund under
separate Investment Advisory and Management Agreements. These agreements are
individually referred to as an "Agreement" and collectively referred to as
"Agreements." 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 Fund, by
vote of a majority of the outstanding voting securities of such Fund, 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 Fund, by vote of a majority of
the outstanding voting securities of such Fund, 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 provide for the payment of investment advisory and
management fees by the Funds calculated as described in the following table.

<TABLE>
<CAPTION>
Investment
Advisory and
Fund Average Net Assets Management Fee
- --------------------------------- ---------------------------- --------------
<S> <C> <C>
Money Market Series For the first $500 million .30%
For assets over $500 million .25%
U.S. Government Securities Series For the first $50 million .50%
For assets over $50 million .45%
Diversified Income Series For the first $50 million .50%
For assets over $50 million .45%
Multisector Bond Series For the first $100 million .75%
For assets over $100 .65%
High Yield Series For the first $250 million .50%
For assets over $250 million .45%
Global Asset Allocation Series For the first $100 million .90%
For assets over $100 million .85%
Asset Allocation Series For the first $250 million .50%
For assets over $250 million .45%
American Leaders Series For the first $35 million .90%
$35 million - $100 million .75%
For assets over $100 million .65%
Value Series For the first $100 million .70%
For assets over $100 million .60%
Capital Opportunities Series For the first $200 million .90%
$200 million - $500 million .85%
For assets over $500 million .80%
Growth & Income Series For the first $100 million .70%
For assets over $100 million .60%
S&P 500 Index Series All levels of assets .40%
Blue Chip Stock Series For the first $100 million .90%
</TABLE>

<PAGE> 96

<TABLE>
<S> <C> <C>
For assets over $100 million .85%
Blue Chip Stock Series II For the first $200 million .95%
For assets over $200 million .90%
International Stock Series For the first $100 million .85%
For assets over $100 million .80%
Mid Cap Stock Series For the first $100 million .90%
For the next $150 million .85%
For assets over $250 million .80%
Small Cap Value Series For the first $50 million .90%
For assets over $50 million .85%
Global Growth Series For the first $500 million .70%
For assets over $500 million .60%
Global Equity Series For the first $200 million 1.00%
$200 million - $500 million .95%
For assets over $500 million .90%
Large Cap Growth Series For the first $100 million .90%
$100 million - $200 million .85%
For assets over $200 million .80%
Investors Growth Series For the first $200 million .90%
$200 million - $500 million .85%
For assets over $500 million .80%
Growth Stock Series For the first $100 million .70%
For assets over $100 million .60%
Aggressive Growth Series For the first $100 million .70%
For assets over $100 million .60%
</TABLE>

<PAGE> 97

During the fiscal years ended December 31, 1997, 1998 and 1999, the Funds
paid the following investment advisory and management fees to Advisers.

<TABLE>
<CAPTION>
Fund 1997 1998 1999
-------------------------- --------- --------- ---------

<S> <C> <C> <C>
Money Market $ 191,433 $ 194,182 $ 274,499
U.S. Government Securities 687,529 673,637 689,891
Diversified Income 488,855 521,184 518,738
Multisector Bond 149,694 163,906 191,654
High Yield 258,195 338,252 355,332
Global Asset Allocation 406,583 546,257 614,231
Asset Allocation 2,102,625 2,471,163 2,887,514
American Leaders * * *
Value 230,143 531,886 638,668
Capital Opportunities * * *
Growth & Income 1,250,461 1,816,200 1,971,921
S&P 500 Index 251,081 707,922 1,359,937
Blue Chip Stock 407,113 1,131,224 2,030,551
Blue Chip Stock II * * *
International Stock 571,117 782,792 979,010
Mid Cap Stock(1) * 49,482 162,691
Small Cap Value(1) * 61,548 248,146
Global Growth 2,416,410 2,487,275 2,486,130
Global Equity * * *
Large Cap Growth(1) * 63,457 443,837
Investors Growth * * *
Growth Stock 4,268,503 4,378,864 4,716,919
Aggressive Growth 735,430 871,318 1,209,725
</TABLE>

______________________
* Not in existence during this period.
(1) Inception date: May 1, 1998.

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.

<PAGE> 98

SUB-ADVISORY AGREEMENTS

Multisector Bond Series, Global Asset Allocation Series, American Leaders
Series, Capital Opportunities Series, S&P 500 Index Series, Blue Chip Stock
Series, Blue Chip Stock Series II, International Stock Series, Mid Cap Stock
Series, Small Cap Value Series, Global Equity Series, Large Cap Growth Series
and Investors Growth Series have retained sub-advisers under investment
sub-advisory agreements and for Small Cap Value Series the sub-adviser has
entered into a sub-management agreement with a manager (such agreements are
collectively referred to as the "Sub-Advisory Agreements"). Each Sub-Advisory
Agreement 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, by Advisers
or by a vote of the majority of the applicable Fund's outstanding voting
securities on 60 days' written notice to such Fund's 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 Fund,
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.

For their services, the sub-advisers receive a fee from Advisers (such
amounts are payable out of the advisory fees received by Advisers for the same
period and are not in addition to such amounts). From its advisory fee,
Advisers pays fees to each of the sub-advisers calculated as described below:

<TABLE>
<CAPTION>
Fund Sub-adviser Annual Average Net Assets Sub-Advisory Fee
- ---- -------------- ---------------------------- ----------------
<S> <C> <C> <C>
Multisector Bond Series AIM For the first $200 million .450%
For assets over $200 million .400%
Global Asset Allocation Series Morgan Stanley For the first $100 million .500%
For assets over $100 million .400%
American Leaders Series Federated For the first $35 million .500%
$35 million-$100 million .350%
For assets over $100 million .250%
Capital Opportunities Series MFS For the first $200 million .500%
$200-$500 million .450%
For assets over $500 million .400%
S&P 500 Index Series Dreyfus All levels of assets .170%
Blue Chip Stock Series T. Rowe Price For the first $100 million .500%
$100 million-$200 million .450%
Blue Chip Stock Series II AIM For the first $200 million .550%
For assets over $200 million .500%
International Stock Series Lazard For the first $100 million .450%
For assets over $100 million .375%
Mid Cap Stock Series Dreyfus For the first $100 million .500%
$200-$500 million .450%
For assets over $500 million .400%
Small Cap Value Series Berger For the first $50 million .500%
For assets over $50 million .450%
Global Equity Series MFS For the first $200 million .600%
$200-$500 million .550%
For assets over $500 million .500%
Large Cap Growth Series Alliance For the first $100 million .500%
</TABLE>

<PAGE> 99

<TABLE>
<S> <C> <C> <C>
For the next $100 million .450%
For assets over $200 million .400%
Investors Growth Series MFS For the first $200 million .500%
$200-$500 million .450%
For assets over $500 million .400%
</TABLE>

For the Small Cap Value Series, Berger LLC pays Perkins, Wolf, McDonnell
& Company (the "Manager") an amount equal to .25 of 1% of the Fund's first $50
million of average daily net assets and .225 of 1% of the Fund's net assets in
excess of $50 million.

During the fiscal years ended December 31, 1997, 1998 and 1999, Advisers
paid advisory fees to the sub-advisers of the following Funds in the amounts
set forth below. American Leaders Series, Capital Opportunities Series, Blue
Chip Stock Series II, Global Equity Series and Investors Growth Series were not
in existence during such periods.

<TABLE>
<CAPTION>
Fund 1997 1998 1999
- ----------------------- -------- -------- ---------

<S> <C> <C> <C>
Multisector Bond $ 69,898 $ 76,489 $ 89,438
Global Asset Allocation 225,590 303,415 341,160
S&P 500 Index 105,647 300,867 577,973
Blue Chip Stock 209,455 551,946 1,098,527
International Stock 302,356 414,873 510,475
Mid Cap Stock(1) * 26,668 90,384
Small Cap Value(1) * 34,193 137,859
Large Cap Growth(1) * 35,254 246,576
</TABLE>

______________________
* Not in existence during this period.
(1) Inception date: May 1, 1998.

EXPENSES

Expenses that relate exclusively to a particular Fund, such as custodian
charges and registration fees for shares, are charged to that Fund. Other
expenses of Fortis Series are allocated between the Funds 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. Out
of its advisory fee, but not in excess of those fees, Advisers will reimburse
Fortis Series for each Funds expenses from the date of the initial public
offering until the date a Fund's aggregate net assets first reach $10,000,000,
to the extent that the aggregate expenses of the Fund (including the investment
management and advisory fees for such Fund, but excluding interest, taxes,
brokerage fees and commissions) exceed an amount equal, on an annual basis, to
the percentage of the average daily net assets of the Fund.

Advisers bears the costs of acting as Fortis Series' transfer agent,
registrar, and dividend agent. Investors has agreed to pay all expenses of
distributing Fortis Series' shares, including, but not limited to, costs of
printing and distributing prospectuses to new contract owners. Pursuant to a
separate Distribution Agreement between Fortis Benefits and Investors, Fortis
Benefits reimburses Investors for these costs and expenses with respect to
variable life insurance policies issued by Fortis Benefits or pays them on
Investors' behalf.

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.

<PAGE> 100

BROKERAGE ALLOCATION AND OTHER PRACTICES

Advisers or, where applicable, a Fund's sub-adviser, selects and (where
applicable) negotiates commissions with broker-dealers who execute trades for
the Funds. In selecting a broker-dealer to execute an equity trade, Advisers
or the sub-adviser primarily considers whether the broker-dealer can provide
best execution on the trade including best price for a security. Other factors
that Advisers or the sub-adviser considers when selecting a broker-dealer for
an equity trade include:

o competitive commissions commensurate with the value of research
products and services provided to Advisers or the sub-adviser;
o consistently good service quality;
o adequate capital position;
o broad market coverage;
o continuous flow of information concerning bids and offers;
o the ability to complete, clear and settle trades in a timely and
efficient manner;
o capital usage;
o specialized expertise;
o access to new issues; and
o the ability to handle large blocks of stock discreetly.

For a Fund exclusively composed of debt, rather than equity securities,
portfolio transactions are effected with dealers without the payment of
brokerage commissions, but at net prices which usually include a spread or
markup. The volume of business done with a broker-dealer for fixed income
trades is based to a large extent on the availability and competitive price of
the fixed income securities that fit the strategy of the fixed income
portfolio. Best execution, the quality of research, making of secondary
markets and other services are also determining factors for the allocation of
business when buying and selling fixed income securities. If a broker-dealer
charging a higher commission or offering a larger spread is more reliable or
provides better execution than a broker-dealer charging a lower commission or
offering a smaller spread, then Advisers or the sub-adviser may select the
broker-dealer charging a higher commission or offering a larger spread for a
particular equity or fixed income trade.

Advisers or the sub-adviser may direct orders to broker-dealers who
furnish research products and services to Advisers or the sub-adviser as long
as the broker-dealers meet the selection criteria outlined above. The research
products and services supplement Advisers' or the sub-adviser's own research
and enable Advisers or the sub-adviser to obtain the views and information of
others prior to making investment decisions for the Funds. The following table
sets forth the amount and percentage of commissions paid by certain Funds
during the fiscal year ended December 31, 1999 to broker-dealers who provided
research products and services to Advisers or the Fund's sub-adviser. Funds
not listed did not pay any such commissions.

<TABLE>
<CAPTION>
Amount of Commissions
Paid to Broker-Dealers
Fund Providing Research
- ----------------------- ----------------------
<S> <C>
Asset Allocation Series $106,276
</TABLE>

<PAGE> 101

<TABLE>
<S> <C>
Value Series 73,824
Growth & Income Series 82,722
Global Growth Series 18,300
Growth Stock Series 206,903
Aggressive Growth Series 18,754
</TABLE>

Advisers and the sub-advisers believe that most research services obtained
by them generally benefit several or all of the investment companies, insurance
company accounts and private accounts which they manage, as opposed to solely
benefiting one specific managed fund or account. Receipt of these research
services reduces Advisers' and the subadvisers' expenses. Such research services
include advice, both directly and in writing, as to the value of the securities;
the advisability of investing in, purchasing, or selling securities; the
availability of securities, or purchasers or sellers of securities; and analysis
and reports concerning issues, industries, securities, economic factors and
trends, portfolio strategy, and the performance of accounts. Examples of some of
the research products and services that were furnished to Advisers in 1999
include:

o hard copy securities research services;
o securities research software database services;
o electronic securities trading networks; and
o statistical services useful to mutual fund directors and account
representatives in evaluating the relative performance of mutual fund
portfolios;
o computerized stock quotation systems and related feeds from stock
exchanges.

If a broker-dealer furnishes Advisers or a sub-adviser with non-research
products and services, Advisers or the sub-adviser will pay the broker-dealer
for such products and services. No client brokerage will be used to pay for
non-research products and services.

Advisers or the respective sub-adviser will authorize a Fund 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 such sub-adviser 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 Adviser's or the sub-adviser's overall responsibilities with
respect to the accounts to which Advisers or the sub-adviser exercises
investment discretion. In 1999, the Funds generally paid higher commissions
than those obtainable from other broker-dealers in return for research products
and services. Morgan Stanley has agreements in place with several
broker-dealers that relate to equity trades directed by Morgan Stanley. Berger
LLC has informal agreements in place with several broker-dealers that relate to
equity trades directed by Berger LLC. Under these agreements, the brokers pay
for services which assist the investment manager (Morgan Stanley and Berger LLC)
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. A Fund may
receive research in connection with selling concessions and designations in
fixed price offerings in which such Fund participates. Advisers and the
sub-advisers have not entered and will not enter into any agreement with a
broker-dealer that would prevent Advisers or the sub-advisers from obtaining
best execution on a trade.

<PAGE> 102

The Funds paid brokerage commissions during the periods and in the amounts
listed below:

<TABLE>
<CAPTION>
Fiscal year Fiscal year Fiscal year
Fund ended 12/31/97 ended 12/31/98 ended 12/31/99
- ----------------------- -------------- -------------- --------------
<S> <C> <C> <C>

Global Asset Allocation $ 47,973 $79,680 $63,766
Asset Allocation 311,739 688,253 1,416,313
American Leaders * * *
Value 119,158 490,162 458,252
Capital Opportunities * * *
Growth & Income 114,941 222,420 750,312
S&P 500 Index 60,463 61,675 48,561
Blue Chip Stock 46,609 99,364 161,581
Blue Chip Stock II * * *
International Stock 145,900 192,277 48,908
Mid Cap Stock * 17,763 (1) 32,971
Small Cap Value * 47,894 (1) 113,779
Global Growth 485,715 475,037 677,603
Global Equity * * *
Large Cap Growth * 16,464 (1) 78,878
Investors Growth * * *
Growth Stock 311,310 1,178,542 1,971,488
Aggressive Growth 47,456 130,650 277,929
</TABLE>

______________________________
* Not in existence during this period.
(1) Inception date: May 1, 1998.

Money Market Series, U.S. Government Securities Series, Diversified Income
Series, Multisector Bond Series and High Yield Series did not pay any brokerage
commissions for the fiscal years ended December 31, 1997, 1998 or 1999.

The Funds will not effect any brokerage transactions in their portfolio
securities with any broker-dealer affiliated directly or indirectly with
Advisers or any sub-adviser, unless such transactions, including the frequency
thereof, the receipt of commissions payable in connection therewith, and the
selection of the affiliated broker-dealer effecting such transactions are not
unfair or unreasonable to the shareholders of the Funds. Global Asset
Allocation Series paid an affiliate of the Fund's subadviser commissions in the
amount of $0, $3,266 and $1,698 for the fiscal years ended December 31, 1997,
1998 and 1999, respectively. No commissions were paid by any other Fund to any
other affiliate of Advisers or a sub-adviser during the fiscal years ended
December 31, 1997, 1998 and 1999.

From time to time, the Funds may acquire the securities of their regular
brokers or dealers or parent companies of such brokers or dealers. The Funds
acquired the following securities of their regular brokers or dealers or parent
companies of such brokers or dealers during the fiscal year ended December 31,
1999:

<TABLE>
<CAPTION>
Value of Value of
Securities Securities
Owned at Owned at
Name of Issuer Year End Name of Issuer Year End
- -------------- ---------- -------------- ----------
<S> <C> <C> <C>
MONEY MARKET SERIES GROWTH & INCOME SERIES
American Express Credit Corp. $4,481,375 U.S.Bank (N.A.) $13,656,663
American General Finance Corp. $4,449,688
Chevron Oil USA, Inc. $4,977,133 S&P 500 INDEX SERIES
</TABLE>

<PAGE> 103

<TABLE>
<S> <C> <C> <C>
CIT Group Holdings, Inc. $ 4,591,848 Bear Stearns & Co. $ 177,284
Ford Motor Credit Co. $ 4,285,101 Merrill Lynch & Co., Inc. $ 1,052,100
Household Finance Corp. $ 3,987,924 Morgan Stanley Dean Witter Corp. $ 2,700,116
IBM Credit Corp. $ 5,180,236 Paine Webber Group, Inc. $ 194,063
Merrill Lynch & Co., Inc. $ 4,580,266 U.S. Bank (N.A.) $ 4,953,224
U.S. Bank (N.A.) $ 6,019,020 U.S. Bancorp $ 592,241

U.S. GOVERNMENT SECURITIES
SERIES BLUE CHIP STOCK SERIES
U.S. Bank (N.A.) $ 5,635,738 Bank of America Corp. $ 998,731
Chase Manhattan Corp. $ 1,771,275
DIVERSIFIED INCOME SERIES Morgan Stanley Dean Witter Corp. $ 2,369,650
Bear Stearns & Co. $ 1,472,781
Donaldson, Lufkin & Jenrette
Securities $ 1,961,607 INTERNATIONAL STOCK SERIES
Merrill Lynch & Co., Inc. $ 1,763,986 U.S. Bank (N.A.) $ 3,562,400
Paine Webber Group, Inc. $ 487,102
U.S. Bank (N.A.) $ 606,186 MID CAP STOCK SERIES
Paine Webber Group, Inc. $ 58,219
MULTISECTOR BOND SERIES U.S. Bank (N.A.) $ 660,132
U.S. Bank (N.A.) $ 777
SMALL CAP VALUE SERIES
HIGH YIELD SERIES U.S. Bank (N.A.) $ 536,159
U.S. Bank (N.A.) $ 1,914,679
GLOBAL GROWTH SERIES
GLOBAL ASSET ALLOCATION SERIES U.S. Bank (N.A.) $14,236,894
ABN Bank $ 327,450
Merrill Lynch & Co., Inc. $ 108,682 LARGE CAP GROWTH SERIES
U.S. Bank (N.A.) $ 2,977,676 Ford Motor Co. $ 849,656
U.S. Bancorp $ 282,178 General Electric Co. $ 108,325
Westpac Banking Corp., Ltd. $ 468,585 Merrill Lynch & Co. $ 768,200
Morgan Stanley Dean Witter Corp. $ 3,054,850
ASSET ALLOCATION SERIES U.S. Bank (N.A.) $ 1,921,021
Bear Stearns & Co. $ 1,472,781 U.S. Bancorp $ 180,975
Merrill Lynch & Co., Inc. $ 2,478,077
Morgan Stanley Dean Witter Corp.$ 4,425,250 Growth Stock Series
Paine Webber Group, Inc. $ 974,205 U.S. Bank (N.A.) $ 8,739,703
U.S. Bank (N.A.) $21,088,289
AGGRESSIVE GROWTH SERIES
VALUE SERIES U.S. Bank (N.A.) $13,015,899
U.S. Bank (N.A.) $ 1,086,770
</TABLE>

Although investment decisions for each Fund are made independently from
those of the other Funds or those of other funds or private accounts managed by
Advisers, sometimes the same security is suitable for more than one fund or
private account. If and when two or more funds or private 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 fund or private account. The simultaneous purchase or sale of the same
securities by a Fund and another fund or account may have a detrimental effect
on the Fund, as this may affect the price paid or received by the Fund or the
size of the position obtainable by the Fund.

<PAGE> 104

Advisers has developed written trade allocation procedures for its
management of the securities trading activities of its clients. Advisers
manages multiple portfolios, both public (mutual funds) and private. The
purpose of the trade allocation procedures is to treat the portfolios fairly
and reasonably in situations where the amount of a security that is available
is insufficient to satisfy the volume or price requirements of each portfolio
that is interested in purchasing that security. Generally, when the amount of
securities available in a public offering or the secondary market is
insufficient to satisfy the requirements for the interested portfolios, the
procedures require a pro rata allocation based upon the amounts initially
requested by each portfolio manager. In allocating trades made on combined
basis, each participating portfolio will receive the same average price for the
securities purchased or sold.

Because a pro rata allocation may not always adequately accommodate all
facts and circumstances, the procedures provide for exceptions to allocate
trades on a basis other than pro rata. Adjustments may be made, for example, as
a result of: (i) the cash position of the portfolios involved in the
transaction; (ii) the relative importance of the security to a portfolio in
seeking to achieve its investment objective; or (iii) the size of the
portfolios.

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.

Fortis Series currently has twenty-three Funds, 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 Fund to
which the stock of that series relates and will have no interest in the assets
of any other Fund. In the event of liquidation, each share of a Fund would
have the same rights to dividends and assets as every other share of that Fund.

Each share of a Fund has one vote (with proportionate voting for
fractional shares) irrespective of the relative net asset value of the Funds'
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 Fund, the shares of the affected
Fund vote as a separate series. An example of such an issue would be a
fundamental investment restriction pertaining to only one Fund.

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.

<PAGE> 105

PRICING OF SHARES

On December 31, 1999, each Fund's net asset value per share was calculated
as shown below. Net asset values are not shown for American Leaders Series,
Capital Opportunities Series, Blue Chip Stock Series II, Global Equity Series
and Investors Growth Series, which had not yet commenced operations as of such
date.

<TABLE>
<S> <C> <C>
MONEY MARKET SERIES
Net Assets ($124,104,615) = Net Asset Value per Share ($11.20)
-------------------------------
Shares Outstanding (11,079,259)

U.S. GOVERNMENT SECURITIES SERIES
Net Assets ($138,657,928) = Net Asset Value per Share ($10.13)
-------------------------------
Shares Outstanding (13,692,934)

DIVERSIFIED INCOME SERIES
Net Assets ($101,153,150) = Net Asset Value per Share ($10.91)
-------------------------------
Shares Outstanding (9,273,517)

MULTISECTOR BOND SERIES
Net Assets ($24,925,576) = Net Asset Value per Share ($10.26)
-------------------------------
Shares Outstanding (2,428,631)

HIGH YIELD SERIES
Net Assets ($68,166,099 ) = Net Asset Value per Share ($9.09)
-------------------------------
Shares Outstanding (7,496,362)

GLOBAL ASSET ALLOCATION SERIES
Net Assets ($66,066,698) = Net Asset Value per Share ($13.17)
-------------------------------
Shares Outstanding (5,016,325)

ASSET ALLOCATION SERIES
Net Assets ($679,956,712) = Net Asset Value per Share ($22.78)
-------------------------------
Shares Outstanding (29,847,054)

VALUE SERIES
Net Assets ($94,583,132) = Net Asset Value per Share ($15.65)
-------------------------------
Shares Outstanding (6,043,086)

GROWTH & INCOME SERIES
Net Assets ($317,185,745) = Net Asset Value per Share ($21.94)
-------------------------------
Shares Outstanding (14,456,313)

S&P 500 INDEX SERIES
Net Assets ($424,773,389) = Net Asset Value per Share ($22.66)
-------------------------------
Shares Outstanding (18,744,635)

BLUE CHIP STOCK SERIES
Net Assets ($284,229,269) = Net Asset Value per Share ($21.93)
-------------------------------
</TABLE>

<PAGE> 106

<TABLE>
<S> <C> <C>
Shares Outstanding (12,958,021)

INTERNATIONAL STOCK SERIES
Net Assets ($143,969,027) = Net Asset Value per Share ($17.94)
-------------------------------
Shares Outstanding (8,027,243)

MID CAP STOCK SERIES
Net Assets ($24,799,507) = Net Asset Value per Share ($10.68)
-------------------------------
Shares Outstanding (2,321,799)

SMALL CAP VALUE SERIES
Net Assets ($39,170,590) = Net Asset Value per Share ($10.20)
-------------------------------
Shares Outstanding (3,838,536)

GLOBAL GROWTH SERIES
Net Assets ($474,180,301) = Net Asset Value per Share ($34.72)
-------------------------------
Shares Outstanding (13,656,496)

LARGE CAP GROWTH
Net Assets ($87,061,024) = Net Asset Value per Share ($15.05)
-------------------------------
Shares Outstanding (5,783,459)

GROWTH STOCK SERIES
Net Assets ($1,044,727,994) = Net Asset Value per Share ($45.14)
-------------------------------
Shares Outstanding (23,144,916)

AGGRESSIVE GROWTH SERIES
Net Assets ($333,157,939) = Net Asset Value per Share ($33.79)
-------------------------------
Shares Outstanding (9,859,699)
</TABLE>

The offering price for purchase orders received in the office of Fortis
Series after the beginning of each day the New York Stock Exchange (the
"Exchange") is open for trading is based on net asset value determined as of
the close of regular trading (currently 3:00 P.M. Central Time) on the Exchange
that day; the price in effect for orders received after such close is based on
the net asset value as of such close of the Exchange on the next day the
Exchange is open for trading. Generally, the net asset value of each Fund's
shares is determined on each day on which the Exchange is open for business.
The Exchange is not open for business on the following holidays (nor on the
nearest Monday or Friday if the holiday falls on a weekend): New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
Additionally, net asset value need not be determined for a Fund (i) on days on
which changes in the value of the Fund's portfolio securities will not
materially affect the current net asset value of the Fund's shares; or (ii) on
days during which no shares of the Fund are tendered for redemption and no
orders to purchase or sell shares of the Fund are received by Fortis Series.

Investments in securities traded on a national securities exchange or on
the NASDAQ National Market System are valued at the last reported sales price.
Securities for which the over-the-counter market quotations are readily
available are valued on the basis of the last current bid price. An outside
pricing service may be utilized to provide such valuations. For fixed income
securities, the pricing service may employ electronic data processing
techniques and/or a matrix system to determine valuations using methods

<PAGE> 107

which include consideration of yields or prices of bonds of comparable quality,
type of issue, coupon, maturity and rating indications as to value from
dealers, and general market conditions. Securities for which quotations are
not readily available are valued at fair value as determined in good faith by
management under supervision of the Board of Directors. Short-term
investments, with maturities of less than 60 days of maturity, are valued at
amortized cost, with the exception of Money Market Series. Pursuant to Rule
2a-7 under the Investment Company Act of 1040, Money Market Series' investments
are valued at amortized cost which assumes a constant amortization to maturity
of discount or premium.

REDEMPTION OF SHARES

Redemption of shares, or payment, may be suspended at times (a) when the
Exchange is closed for other than customary weekend or holiday closings, (b)
when trading on the Exchange is restricted, (c) when an emergency exists, as a
result of which disposal by Fortis Series of securities owned by it is not
reasonably practicable, or it is not reasonably practicable for Fortis Series
fairly to determine the value of its net assets, or during any other period
when the Securities and Exchange Commission, by order, so permits; provided
that applicable rules and regulations of the Securities and Exchange Commission
shall govern as to whether the conditions prescribed in (b) or (c) exist.

TAXATION

The Funds have qualified and intend to continue to qualify as regulated
investment companies under the Internal Revenue Code of 1986, as amended (the
"Code"). As long as each Fund so qualifies, it is not taxed on the income it
distributes to shareholders. Generally, in order to qualify as a regulated
investment company, a Fund must derive at least 90% of its gross income from
dividends, interest, and gains from the sale or other disposition of stock or
securities or other income derived with respect to its investing in such stock
or securities. Being qualified as a regulated investment company does not mean
that the Internal Revenue Service supervises Fortis Series or approves its
policies.

Under the Code, each Fund will generally be treated as a separate entity
for federal tax purposes. Therefore, each Fund will be treated separately in
determining whether it qualifies as a regulated investment company and in
determining the net ordinary income (or loss), net realized capital gains (or
losses) and distributions necessary to relieve the Fund of any federal income
tax liability.

Pursuant to the Code, each Fund will be subject to a nondeductible excise
tax for each calendar year equal to 4% of the excess, if any, of the amount
required to be distributed over the amount distributed. However, the excise
tax does not apply to any income on which a Fund pays income tax. In order to
avoid the imposition of this excise tax, each Fund generally must declare
dividends by the end of a calendar year representing 98% of the Fund's ordinary
income for the calendar year and 98% of its capital gain net income (both
long-term and short-term capital gains) for the twelve-month period ending
October 31 of the calendar year.

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

<PAGE> 108

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

If a Fund invests in zero coupon obligations upon their issuance, such
obligations will have original issue discount in the hands of such Fund.
Generally, original issue discount equals the difference between the "stated
redemption price at maturity" of the obligation and its "issue price" as those
terms are defined in the Code. If a Fund acquires an already issued zero
coupon bond from another holder, the bond will have original issue discount in
the Fund's hands, equal to the difference between the "adjusted issue price" of
the bond at the time the Fund acquires it (that is, the original issue price of
the bond plus the amount of original issue discount accrued to date) and its
stated redemption price at maturity. In each case, a Fund is required to
accrue as ordinary interest income a portion of such original issue discount
even though such Fund receives no cash currently as interest payments on the
obligation. Similarly, in the case of PIKs, the Funds are required to
recognize interest income in the amount of the fair market value of the
securities received as interest payments on the PIKs, even though they receive
no cash.

Because each Fund is required to distribute substantially all of its net
investment income (including accrued original issue discount and interest
income attributable to PIKs) in order to be taxed as a regulated investment
company, a Fund having such income may be required to distribute an amount
greater than the total cash income the Fund actually receives. Accordingly, in
order to make the required distribution, the Fund may be required to borrow or
liquidate securities.

For Federal income tax purposes the Funds had the following capital loss
carryovers at December 31, 1999, which, if not offset by subsequent capital
gains, will expire in 2000 through 2008. It is unlikely the Board of Directors
will authorize a distribution of any net realized gains until the available
capital loss carryovers have been offset or expired.

<TABLE>
<S> <C>
Money Market Series $ 56,052
U.S. Government Securities Series $19,603,587
Diversified Income Series $11,253,332
Multisector Bond Series $ 610,193
High Yield Series $10,900,636
</TABLE>

UNDERWRITER

Investors has entered into an Underwriting Agreement for the sale and
distribution of the Funds' shares. This Underwriting Agreement may be
terminated by Fortis Series or Investors at any time by the giving of 60 days'
written notice, and terminates automatically in the event of its assignment.
Unless sooner terminated, the Underwriting Agreement shall continue in effect
for more than two years after its execution only so long as such continuance is
also approved by the vote of a majority of the directors who are not parties to
such Underwriting Agreement, or interested persons of such parties, cast in
person at a meeting called for the purpose of voting on such approval.

<PAGE> 109

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

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

PERFORMANCE INFORMATION

The Funds may refer to or advertise average annual total returns and
cumulative returns, and may compare such figures to recognized indices.
Certain Funds may provide yield calculations. Any advertisement of a Fund's
performance will be accompanied by performance of the Separate Account being
advertised. All such yield and total return quotations are based on historical
earnings and are not intended to indicate future performance. The return on
and principal value of an investment in any Fund will fluctuate, so that shares
when redeemed may be worth more or less than their original cost.

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

ERV -- P
CTR = ( -------- ) 100
P

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

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

The following table sets forth the cumulative total return of each Fund
(other than American Leaders Series, Capital Opportunities Series, Blue Chip
Stock Series II, Global Equity Series and Investors Growth Series, which had
not commenced operations prior to the date of this Statement of Additional
Information) for the period from inception through December 31, 1999.

<TABLE>
<CAPTION>
Fund Cumulative
Total Return

<S> <C>
Money Market Series (1) 101.24%
U.S. Government Securities Series (1) 130.11%
Diversified Income Series (3) 135.02%
Multisector Bond Series (6) 29.37%
</TABLE>

<PAGE> 110

<TABLE>
<S> <C>
High Yield Series (5) 38.16%
Global Asset Allocation Series (6) 72.77%
Asset Allocation Series (2) 336.36%
Value Series (7) 66.80%

Growth & Income Series (5) 156.65%

S&P 500 Index Series (7) 133.14%
Blue Chip Stock Series (7) 126.64%
International Stock Series (6) 110.87%
Mid Cap Stock Series (8) 7.76%
Small Cap Value Series (8) 9.01%
Global Growth Series (4) 269.78%
Large Cap Growth Series (8) 50.90%
Growth Stock Series (1) 550.77%
Aggressive Growth Series (5) 252.77%
______________________
(1) Inception date: March 24, 1987.
(2) Inception date: May 1, 1987.
(3) Inception date: May 2, 1988.
(4) Inception date: May 1, 1992.
(5) Inception date: May 2, 1994.
(6) Inception date: January 3, 1995.
(7) Inception date: May 1, 1996.
(8) Inception date: May 1, 1998.
</TABLE>

Average annual total return is the average annual compounded rate of
return on a hypothetical $1,000 investment made at the beginning of the
advertised period. Average annual total return figures are computed according
to the following formula:

P(1+T) power of n = ERV

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

<PAGE> 111

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

The following table sets forth the average annual total returns for each
Fund (other than American Leaders Series, Capital Opportunities Series, Blue
Chip Stock Series II, Global Equity Series and Investors Growth Series, which
had not commenced operations prior to the date of this Statement of Additional
Information) for one year, five years and since inception (10 years with
respect to Money Market Series, U.S. Government Series, Diversified Income
Series, Asset Allocation Series and Growth Stock Series) for the period ending
December 31, 1999.

<TABLE>
<CAPTION>
Average Annual Total Returns
----------------------------
10 years/Since
Fund 1 year 5 years Inception
- ---- ------ ------- -------
<S> <C> <C> <C>
Money Market Series 4.96% 5.30% 5.02%
U.S. Government Securities Series -1.94% 7.17% 6.61%
Diversified Income Series -1.68% 7.11% 7.25%
Multisector Bond Series (3) -7.53% 5.28% 5.29%
High Yield Series (2) 1.17% 6.84% 5.87%
Global Asset Allocation Series (3) -0.87% 11.56% 11.58%
Asset Allocation Series 19.56% 18.80% 13.69%
Value Series (4) 8.96% * 14.97%
Growth & Income Series (2) 10.72% 20.33% 18.10%
S&P 500 Index Series (4) 20.34% * 25.97%
Blue Chip Stock Series (4) 19.88% * 25.00%
International Stock Series (3) 23.99% 16.09% 16.12%
Mid Cap Stock Series (5) 10.97% * 4.58%
Small Cap Value Series (5) 15.34% * 5.31%
Global Growth Series (1) 57.68% 23.86% 18.60%
Large Cap Growth Series (5) 27.22% * 27.97%
Growth Stock Series 55.17% 25.28% 17.45%
Aggressive Growth Series (2) 109.25% 29.17% 24.92%

- -------------------------
* Not applicable
(1) Inception date: May 1, 1992
(2) Inception date: May 2, 1994
(3) Inception date: January 3, 1995
(4) Inception date: May 1, 1996
(5) Inception date: May 1, 1998
</TABLE>

U.S. Government Securities Series, Diversified Income Series, Multisector
Bond Series, High Yield Series, Global Asset Allocation Series and Asset
Allocation Series may quote 30-day yield figures. A Fund's 30-day yield refers
to the income generated by an investment over a 30-day (or one month) period.
It is calculated by dividing the net investment income per share (as defined
under Securities and Exchange Commission rules) earned during the computation
period by the maximum offering price per share on the last day of the period,
according to the following formula. The result is then annualized using a
formula that provides for semiannual compounding of income.

<PAGE> 112

Yield = 2 [(a-b + 1) power of 6 - 1]
cd

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

The Funds' yields for the 30-day period ended December 31, 1999, were:

<TABLE>
<CAPTION>
Fund Yield
<S> <C>
U.S. Government Securities Series 6.01%
Diversified Income Series 7.53%
Multisector Bond Series 4.18%
High Yield Series 10.00%
</TABLE>

Money Market Series may quote its current and effective yields for a
seven-day period. Current yield (calculated over a seven-day period) is a
percentage computed by determining the net change, exclusive of capital
changes, in the value of a hypothetical preexisting account having a balance of
one share at the beginning of the period, subtracting a hypothetical charge
reflecting deductions from shareholder accounts, and dividing the difference by
the value of the account at the beginning of the base period to obtain the base
period return, and then multiplying the base period return by (365/7) with the
resulting figure carried to at least the nearest hundredth of one percent.

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

Effective Yield = [ (Base Period Return +1) power of 365/7 ] -1

Money Market Series' yield and effective yield for the seven days ended
December 31, 1999, were 5.53% and 5.68%, respectively.

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

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

Comparative performance information also may be used from time to time in
advertising. Advertisements may compare the Funds' performance to that of
various unmanaged market indices, or may

<PAGE> 113

include performance data compiled by outside organizations such as Lipper
Analytical Services, Inc., CDA/Wiesenberger, other entities or organizations or
publications which track the performance of investment companies.

OTHER SERVICE PROVIDERS

U.S. Bank National Association, 601 Second Avenue South, Minneapolis, MN
55480 acts as custodian of each Fund's assets and portfolio securities. Dorsey
& Whitney LLP, 220 South Sixth Street, Minneapolis, MN 55402, is the
independent General Counsel for the Funds.

LIMITATION OF DIRECTOR LIABILITY

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

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

ADDITIONAL INFORMATION

The Funds have filed with the Securities and Exchange Commission,
Washington, D.C. 20549, a Registration Statement under the Securities Act of
1933, as amended, with respect to the common stock offered hereby. The
Prospectus and this Statement of Additional Information do not contain all of
the information set forth in the Registration Statement, certain parts of which
are omitted in accordance with Rules and Regulations of the Commission. The
Registration Statement may be inspected at the principal

<PAGE> 114

office of the Commission at 450 Fifth Street, N.W., Washington, D.C., and
copies thereof may be obtained from the Commission at prescribed rates.

FINANCIAL STATEMENTS

The audited financial statements as of December 31, 1999, as set forth in
Fortis Series' 1999 Annual Report to Shareholders, are incorporated herein by
reference. The audited financial statements are provided in reliance on the
report of KPMG LLP, 4200 Norwest Center, Minneapolis, Minnesota 55402,
independent auditors of Fortis Series, and given on the authority of such firm
as experts in accounting and auditing.

<PAGE> 115

Appendix A

DESCRIPTION OF FUTURES, OPTIONS AND FORWARD CONTRACTS

OPTIONS ON SECURITIES

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

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

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

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

<PAGE> 116

OPTIONS ON STOCK INDEXES

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

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

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

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

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

The purchase or sale of a futures contract differs from the purchase or
sale of a security or the purchase of an option in that no purchase price is
paid or received. Instead, an amount of cash or cash equivalents, which varies
but maybe as low as 5% or less of the value of the contract, must be deposited
with the broker as "initial margin."? Subsequent payments to and from the
broker, referred to as "variation

<PAGE> 117

margin," are made on a daily basis as the value of the index or instrument
underlying the Futures contract fluctuates, making positions in the futures
contracts more or less valuable, a process known as "marking to the market."

U.S. futures contracts may be purchased or sold only on an exchange, known
as a "contract market," designated by the Commodities Futures Trading
Commission ("CFTC") for the trading of such contract, and only through a
registered futures commission merchant which is a member of such contract
market. A commission must be paid on each completed purchase and sale
transaction. The contract market clearing house guarantees the performance of
each party to a futures contract by in effect taking the opposite side of such
contract. At any time prior to the expiration of a futures contract, a trader
may elect to close out its position by taking an opposite position on the
contract market on which the position was entered into, subject to the
availability of a secondary market, which will operate to terminate the initial
position. At that time, a final determination of variation margin is made and
any loss experienced by the trader is required to be paid to the contract
market clearing house while any profit due to the trader must be delivered to
it. Futures contracts may also be traded on foreign exchanges.

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

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

OPTIONS ON FUTURES CONTRACTS

An option on a futures contract provides the holder with the right to
enter into a "long" position in the underlying futures contract, in the case of
a call option, or a "short" position in the underlying futures contract, in the
case of a put option, at a fixed exercise price up to a stated expiration date
or, in the case of certain options, on such date. Upon exercise of the option
by the holder, the contract market clearing house establishes a corresponding
short position for the writer of the option, in the case of a call option, or a
corresponding long position, in the case of a put option. In the event that an
option is exercised, the parties will be subject to all the risks associated
with the trading of futures contracts, such as payment of variation margin
deposits. In addition, the writer of an option on a futures contract, unlike
the holder, is subject to initial and variation margin requirements on the
option position. A position in an option on a futures contract may be
terminated by the purchaser or the seller prior to expiration by effecting a
closing purchase or sale transaction, subject to the availability of a liquid
secondary market, which is the purchase or sale of an option of the same series
(i.e., the same exercise price and expiration date) as the option previously
purchased or sold. The difference between the premiums paid and received
represents the trader's profit or loss on the transaction.

Options on futures contracts that are written or purchased by the Funds on
United States exchanges are traded on the same contract market as the
underlying futures contract and, like futures

<PAGE> 118

contracts, are subject to regulation by the CFTC and the performance guarantee
of the exchange clearing house. In addition, options on futures contracts may
be traded on foreign exchanges.

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

FOREIGN CURRENCY FORWARD EXCHANGE CONTRACTS

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

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

OPTIONS ON FOREIGN CURRENCIES

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

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

<PAGE> 119

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

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

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

<PAGE> 120

APPENDIX B

COMMERCIAL PAPER, CORPORATE BOND
AND PREFERRED STOCK RATINGS

COMMERCIAL PAPER RATINGS

Standard & Poor's Rating Services. 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 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

Note: Standard & Poor's Ratings Services ratings from "AA" to "CCC" may
be modified by the addition of a plus or minus sign to show relative standing
within the major rating categories. Moody's

<PAGE> 121

Investors Service, Inc. applies numerical modifiers 1, 2 and 3 in each generic
rating classification from "Aa" to "B." The modifier "1" indicates that the
applicable company ranks in the higher end of its generic rating category; the
modifier "2" indicates a mid-range ranking; and the modifier "3" indicates that
the applicable company ranks in the lower end of its generic rating category.

Standard & Poor's Ratings Services. 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.

<PAGE> 122

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.

"NO" 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.

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.

<PAGE> 123

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 RATINGS

Note: Standard & Poor's Corporation ratings from "AA" to "CCC" may be
modified by the addition of a plus or minus sign to show relative standing
within the major rating categories. Moody's Investors Service, Inc. applies
numerical modifiers 1, 2 and 3 in each generic rating classification from "Aa"
to "B." The modifier "1" indicates that the applicable company ranks in the
higher end of its generic rating category; the modifier "2" indicates a
mid-range ranking; and the modifier "3" indicates that the applicable company
ranks in the lower end of its generic rating category.

Standard & Poor's Ratings Services. 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.

<PAGE> 124

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.

<PAGE> 125

[KPMG Letterhead]

Independent Auditors' Report

The Shareholder and Board of Directors of
Fortis Series Fund, Inc.:

We have audited the accompanying statements of assets and liabilities of
Investors Growth Series, Capital Opportunities Series, Blue Chip Stock Series
II, Global Equity Series and American Leaders Series (portfolios within Fortis
Series Fund, Inc.) as of April 17, 2000 and the statements of operations for the
one-day period ended April 17, 2000. These financial statements are the
responsibility of the fund's management. Our responsibility is to express an
opinion on this financial statement based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Investors Growth Series,
Capital Opportunities Series, Blue Chip Stock Series II, Global Equity Series
and American Leaders Series as of April 17, 2000 and the results of their
operations for the one-day period ended April 17, 2000 in conformity with
generally accepted principles.

/s/ KPMG LLP

KPMG LLP

Minneapolis, Minnesota
April 17, 2000
<PAGE> 126

PART C

Fortis Series Fund, Inc.

OTHER INFORMATION

Item 23. Exhibits

The Fund Is Filing Or Incorporating By Reference The Following Exhibits:

(a).1 Amended and Restated Articles of Incorporation *
(a).2 Certification of Designation of Series G Common Shares,
Series H Common Shares and Series I dated 4/20/94 (1)
(a).3 Certification of Designation of Series J Common Shares,
Series K Common Shares and L Common Shares 10/3/94 (1)
(a).4 Certification of Designation of Series M Common Shares, Series N
Common
Shares and Series O Common Shares dated 4/11/96 (2)
(a).5 Certification of Designation of Series P Common Shares, Series Q
Common
Shares and Series R Common Shares dated 4/13/98 (3)
(a).6 Certification of Designation of Series S Common Shares, Series T
Common Shares, Series U Common Shares, Series V Common Shares and
Series W Common Shares dated 3/24/00*
(b) Amended and Restated Bylaws (amended 3/19/98) (3) (amendment
for Series S Common Shares, Series T Common Shares, Series U
Common Shares and Series V Common Shares dated 12/16/99 *)
(c) Instruments Defining Rights of Security Holders - not applicable
(d).1 Investment Advisory and Management Agreement between the
Registrant and Fortis Advisers, Inc. (on behalf of each Series)
dated 3/3/00 *
(d).2 Investment Sub-Advisory and Management Agreement between Fortis
Advisers, Inc. and Lazard Freres Asset Management (on behalf of
International Stock Series) dated 12/27/94 (6)
(d).3 Investment Sub-Advisory and Management Agreement between Fortis
Advisers, Inc. and Morgan Stanley Asset Management Limited (on
behalf of Global Asset Allocation Series) dated 12/29/94 (6)
(d).4 Investment Sub-Advisory and Management Agreement between Fortis
Advisers, Inc. and The Dreyfus Corporation (on behalf of S&P 500
Index Series) dated 3/22/96 (2)
(d).5 Investment Sub-Advisory and Management Agreement between Fortis
Advisers, Inc. and T. Rowe Price Associates, Inc. (on behalf of
Blue Chip Stock Series) dated 3/22/96 (2)
(d).6 Investment Sub-Advisory and Management Agreement between Fortis
Advisers, Inc. and The Dreyfus Corporation (on behalf of Mid Cap
Stock Series) dated 4/3/98 (3)
(d).7 Investment Sub-Advisory and Management Agreement between Fortis
Advisers, Inc. and Berger Associates, Inc. (on behalf of Small
Cap Value Series) dated 4/2/98 (3)
(d).8 Investment Sub-Advisory and Management Agreement between Fortis
Advisers, Inc. and Alliance Capital Management LP (on behalf of
Large Cap Growth Series) dated 4/2/98 (3)
(d).9 Sub-Management Agreement between Berger Associates, Inc. and
Perkins, Wolf, McDonnell & Company (on behalf of Small Cap Value
Series) dated 4/2/98 (3)

<PAGE> 127

(d).10 Investment Sub-Advisory and Management Agreement between Fortis
Advisers, Inc. and A I M Capital Management, Inc. (on behalf of
Multisector Bond Series and Blue Chip Stock Series II) dated
3/15/00 *
(d).11 Investment Sub-Advisory and Management Agreement between Fortis
Advisers, Inc. and Massachusetts Financial Services Company (on
behalf of Capital Opportunities Series, Global Equity Series and
Investors Growth Series) dated 4/13/00 *
(d).12 Investment Sub-Advisory and Management Agreement between Fortis
Advisers, Inc. and Federated Investment Management Company (on
behalf of American Leaders Series) dated 4/13/00 *
(e).1 Form of Underwriting and Distribution Agreement (1)
(e).2 Dealer Sales Agreement (5)
(f) Bonus or Profit Sharing Contracts - not applicable
(g).1 Custody Agreement dated 3/21/92 (2)
(g).2 Exhibit A amended 4/2/98 to Custody Agreement (3)
(g).3 Custody Agreement for Global Growth Series, International Stock
Series, Global Bond Series, Global Asset Allocation Series and
Blue Chip Stock Series dated 3/27/96 (2)
(g).4 Amendment to Custody Agreement for Multisector Bond Series,
American Leaders Series, Capital Opportunities Series, Blue Chip
Stock Series II, Global Equity Series and Investors Growth Series
dated 4/12/00 *
(h) Other Material Contracts - not applicable
(i).1 Opinion and Consent of Dorsey & Whitney LLP for Series J, Series
K and Series L Common Shares (5)
(i).2 Opinion and Consent of Dorsey & Whitney LLP for Series M, Series
N and Series O Common Shares (2)
(i).3 Opinion and Consent of Dorsey & Whitney LLP for Series P, Series
Q and Series R Common Shares (3)
(i).4 Opinion and Consent of Dorsey & Whitney LLP for Series S,
Series T, Series U, Series V and Series W Common Shares *
(j) Consent of KPMG LLP *
(k) Omitted Financial Statements - not applicable
(l) Initial Capital Agreements - not applicable
(m) Rule 12b-1 Plan - not applicable
(n) Financial Data Schedule - not applicable
(o) Rule 18f-3 Plan - not applicable

-------------
(1) Incorporated by reference to Post-Effective Amendment No. 18 to the
Registrant's Registration Statement on Form N-1A filed with the Commission
on February 16, 1996.
(2) Incorporated by reference to Post-Effective Amendment No. 19 to the
Registrant's Registration Statement on Form N-1A filed with the Commission
on April 30, 1996.
(3) Incorporated by reference to Post-Effective Amendment No. 23 to the
Registrant's Registration Statement on Form N-1A filed with the Commission
on May 1, 1998.
(4) Incorporated by reference to Post-Effective Amendment No. 45 to the
Registration Statement of Fortis Income Portfolios, Inc. on Form N-1A filed
with the Commission on December 1, 1998.
(5) Incorporated by reference to Post-Effective Amendment No. 14 to the
Registrant's Registration Statement on Form N-1A filed with the Commission
in October 1994.
(6) Incorporated by reference to Post-Effective Amendment No. 25 to the
Registrant's Registration Statement on Form N-1A filed with the Commission
on April 30, 1999.

<PAGE> 128

* Filed herewith

Item 24. Persons Controlled By Or Under Common Control With The Fund

The following is a list of all persons directly or indirectly controlled
by or under common control with the fund:

No person is directly or indirectly controlled by or under common control
with the Registrant.

Item 25. Indemnification

State the general effect of any contract, arrangements or statute under
which any director, officer, underwriter or affiliated person of the fund is
insured or indemnified against any liability incurred in their official
capacity, other than insurance provided by any director, officer, affiliated
person, or underwriter for their own protection.

Paragraph 8(d) of the Registrant's Articles of Incorporation provides that
the Registrant shall indemnify such person for such expenses and liabilities,
in such manner, under such circumstances, and to the full extent permitted by
Section 302A.521 of the Minnesota Statutes, as now enacted or hereafter
amended; provided, however, that no such indemnification may be made if it
would be in violation of Section 17(h) of the Investment Company Act of 1940,
as now enacted or hereinafter amended, and any rules, regulations, or releases
promulgated thereunder.

The Registrant may indemnify its officers and directors and other
"persons" acting in an "official capacity" (as such terms are defined in
Section 302A.521) pursuant to a determination by the board of directors or
shareholders of the Registrant as set forth in Section 302A.521, by special
legal counsel selected by the board or a committee thereof for the purpose of
making such a determination, or by a Minnesota court upon application of the
person seeking indemnification. If a director is seeking indemnification for
conduct in the capacity of director or officer of the Registrant, then such
director generally may not be counted for the purposes of determining either
the presence of a quorum or such director's eligibility to be indemnified.

In any case, indemnification is proper only if the eligibility determining
body decides that the person seeking indemnification:

(a) has not received indemnification for the same conduct from any other
party or organization;
(b) acted in good faith;
(c) received no improper personal benefit;
(d) in the case of criminal proceedings, has no reasonable cause to
believe the conduct was unlawful;
(e) reasonably believed that the conduct was in the best interest of the
Registrant, or in certain contexts, was not opposed to the best
interest of the Registrant; and
(f) had not otherwise engaged in conduct which precludes indemnification
under either Minnesota or Federal law (including, without limitation,
conduct constituting willful misfeasance, bad faith, gross negligence,
or reckless disregard of duties as set forth in Section 17(h) and (i)
of the Investment Company Act of 1940).

Advances. If a person is made or threatened to be made a party to a
proceeding, the person is entitled, upon written request to the Registrant, to
payment or reimbursement by the Registrant of

<PAGE> 129

reasonable expenses, including attorneys fees and disbursements, incurred by
the person in advance of the final disposition of the proceeding, (a) upon
receipt by the Registrant of a written affirmation by the person of a good
faith belief that the criteria for indemnification set forth in Section
302A.521 have been satisfied and a written undertaking by the person to repay
all amounts so paid or reimbursed by the Registrant, if it is ultimately
determined that the criteria for indemnification have been satisfied, and (b)
after a determination that the facts then known to those making the
determination would not preclude indemnification under 302A.521. The written
undertaking required by clause (a) is an unlimited general obligation of the
person making it, but need not be secured and shall be accepted without
reference to financial ability to make the repayment.

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

Item 26. Business and Other Connections of the Investment Adviser

Describe any other business, profession, vocation or employment of a
substantial nature that each investment adviser, and each director, officer or
partner of the adviser, is or has been engaged within the last two fiscal years
for his or her own account or in the capacity of director, officer, employee,
partner or trustee.

Information on the business of the Adviser, its directors and officers is
described in the Statement of Additional Information. The following officers
are not listed in the Statement of Additional Information:

<TABLE>
<CAPTION>
OTHER
BUSINESS/EMPLOYMENT
NAME POSITION WITH ADVISER DURING PAST TWO YEARS
- ------------------- --------------------- ---------------------

<S> <C> <C>
Michael D. O'Connor Qualified Plan Officer Qualified Plan
Officer of Fortis Benefits
Insurance Company

David C. Greenzang Money Market Portfolio Debt securities manager with
Officer Fortis, Inc.
</TABLE>

Item 27. Principal Underwriters

(a) State the name of each investment company (other than the fund) for which
each principal underwriter currently distributing the fund's securities also
acts as a principal underwriter, depositor, or investment adviser.

<PAGE> 130

Investors also acts as the principal underwriter for: Fortis Advantage
Portfolios, Inc., Fortis Equity Portfolios, Inc., Fortis Money Portfolios,
Inc., Fortis Income Portfolios, Inc., Fortis Securities, Inc., Fortis Tax-Free
Portfolios, Inc., Fortis Worldwide Portfolios, Fortis Growth Fund, Inc.,
Variable Account C of Fortis Benefits Insurance Company and Variable Account D
of Fortis Benefits Insurance Company.

(b) Provide the information required by the following table for each director,
Officer, or partner of each principal underwriter named in response to item 20.

In addition to those listed in the Statement of Additional Information
with respect to Investors, the following are also officers of Investors. The
principal business address of each individual is 500 Bielenberg Drive,
Woodbury, Minnesota 55125.

<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH FUND
- ------------------ -------------------------- ---------------------

<S> <C> <C>
Carol M. Houghtby Director, Vice President & None
Treasurer
Roger W. Arnold Senior Vice President None
John E. Hite Vice President & Secretary None
</TABLE>

(c) Provide the information required by the following table for all commissions
and other compensation received, directly or indirectly, from the fund during
The last fiscal year by each principal underwriter who is not an affiliated
Person of the fund or any affiliated person of an affiliated person.

Not applicable.

Item 28. Location of Accounts and Records

State the name and address of each person maintaining physical possession
of each account, book, or other document required to be maintained by section
31(a) and the rules under that section.

The physical possession of the accounts, books, and other documents
required to be maintained by Section 31(a) of the Investment Company Act of
1940 and Rules 31a-1 to 31a-3 promulgated thereunder is maintained by the
Registrant at Fortis Advisers, Inc., 500 Bielenberg Drive, Woodbury, MN 55125.

Item 29. Management Services

Provide A Summary Of The Substantive Provisions Of Any Management-Related
Service Contract Not Discussed In Part A Or B, Disclosing The Parties To The
Contract And The Total Amount Paid And By Whom For The Fund For The Last Three
Fiscal Years.

All contracts were discussed in Part A or B.

Item 30. Undertakings

(a) In initial registration statements filed under the securities act, provide
an undertaking to file an amendment to the registration statement with
certified financial statements showing the initial capital received before
accepting subscriptions from more than 25 persons if the fund intends to raise
its initial capital under section 14(a)(3).

<PAGE> 131

Not applicable.

<PAGE> 132

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement on Form N-1A
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Woodbury and State of Minnesota on
May 1, 2000.

FORTIS SERIES FUND, INC.
(Registrant)

By /s/ Dean C. Kopperud
--------------------------------
Dean C. Kopperud, President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:

<TABLE>
<S> <C> <C>
/s/ Dean C. Kopperud President (principal May 1, 2000
- --------------------------
Dean C. Kopperud executive officer)

/s/ Tamara L. Fagely Treasurer (principal May 1, 2000
- --------------------------
Tamara L. Fagely financial and
accounting officer)

Richard W. Cutting* Director

Allen R. Freedman* Director

Robert M. Gavin* Director

Jean L. King* Director

Robb L. Prince* Director

Leonard J. Santow* Director

Noel Schenker Shadko* Director

Joseph M. Wikler* Director
</TABLE>

*By /s/ Dean C. Kopperud May 1, 2000
- --------------------------
Dean C. Kopperud, Attorney-in-Fact
(Pursuant to a Power of Attorney dated October 1, 1998)

<PAGE> 1

EXHIBIT (a).1
Amended and Restated
Articles of Incorporation
of
FORTIS SERIES FUND, INC.
(FORMERLY AMEV SERIES FUNDS, INC.)

Pursuant to the provisions of Minnesota Statutes, Chapter 302A, the
following Articles of Incorporation are adopted:

1. The name of this corporation is Fortis Series Fund, Inc.

2. This corporation shall have general business purposes and shall have
unlimited power to engage in and do any lawful act concerning any and all lawful
businesses for which corporations may be organized under the Minnesota Statutes,
Chapter 302A. Without limiting the generality of the foregoing, this corporation
shall have specific power:

(a) To conduct, operate and carry on the business of a so-called
"open-end" management investment company pursuant to applicable state and
federal regulatory statutes, and exercise all the powers necessary and
appropriate to the conduct of such operations.

(b) To purchase, subscribe for, invest in or otherwise acquire, and
to own, hold, pledge, mortgage, hypothecate, sell, possess, transfer or
otherwise dispose of, or turn to account or realize upon, and generally
deal in, all forms of securities of every kind, nature, character, type and
form, and other financial instruments which may not be deemed to be
securities, including but not limited to futures contracts and options
thereon. Such securities and other financial instruments may include but
are not limited to shares, stocks, bonds, debentures, notes, scrip,
participation certificates, rights to subscribe, warrants, options,
certificates of deposit, bankers' acceptances, repurchase agreements,
commercial paper, chooses in action, evidences of indebtedness,
certificates of indebtedness and certificates of interest of any and every
kind and nature whatsoever, secured and unsecured, issued or to be issued,
by any corporation, company, partnership (limited or general), association,
trust, entity or person, public or private, whether organized under the
laws of the United States, or any state, commonwealth, territory or
possession thereof, or organized under the laws of any foreign country, or
any state, province, territory or possession thereof, or issued or to be
issued by the United States government or any agency or instrumentality
thereof, and futures contracts and options thereon.

(c) In the above provisions of this Article 2, purposes shall also be
construed as powers and powers shall also be construed as purposes, and the
enumeration of specific purposes or powers shall not be construed to limit
other statements of purposes or to limit purposes or powers which the
corporation may otherwise have under applicable law, all of the same being
separate and cumulative, and all of the same may be carried on, promoted
and pursued, transacted or exercised in any place whatsoever.

3. This corporation shall have perpetual existence.

4. The location and post office address of the registered office in
Minnesota is 500 Bielenberg Drive, Woodbury, Minnesota 55125.

<PAGE> 2

5. The total authorized number of shares of this corporation is
20,000,000,000, all of which shall be common shares of the par value of $.01
each. Of said common shares, 2,000,000,000 shares may be issued in the series
of common shares hereby designated "Series A Common Shares," 2,000,000,000
shares may be issued in the series of common shares hereby designated "Series B
Common Shares," 2,000,000,000 shares may be issued in the series of common
shares hereby designated "Series C Common Shares," 2,000,000,000 shares may be
issued in the series of common shares hereby designated "Series D Common
Shares," 500,000,000 shares may be issued in the series of common shares hereby
designated "Series E Common Shares," and 1,500,000,000 shares may be issued in
the series of common shares hereby designated "Series F Common Shares." The
balance of 10,000,000,000 shares may be issued in such series with such
designations, preferences and relative, participating, optional or other
special rights, or qualifications, limitations or restrictions thereof, as
shall be stated or expressed in a resolution or resolutions providing for the
issue of any series of common shares as may be adopted from time to time by the
Board of Directors of this corporation pursuant to the authority hereby vested
in said Board of Directors. The corporation may issue and sell any of its
shares in fractional denominations to the same extent as its whole shares, and
shares and fractional denominations shall have, in proportion to the relative
fractions represented thereby, all the rights of whole shares, including,
without limitation, the right to vote, the right to receive dividends and
distributions, and the right to participate upon liquidation of the
corporation. The Series A Common Shares, Series B Common Shares, Series C
Common Shares, Series D Common Shares, Series E Common Shares, and Series F
Common Shares each evidence, and each other series of common shares which the
Board of Directors may establish, as provided herein, may evidence, if the
Board of Directors shall so determine by resolution, an interest in a separate
and distinct portion of the corporation's assets, which shall take the form of
a separate portfolio of investment securities, cash and other assets.
Authority to establish such separate portfolios is hereby vested in the Board
of Directors of this corporation, and such separate portfolios may be
established by the Board of Directors without the authorization or approval of
the holders of any series of shares of this corporation.

6. The shareholders of each series of common shares of this corporation:

(a) shall not have the right to cumulate votes for the election of
directors; and

(b) shall have no preemptive right to subscribe to any issue of
shares of any class or series of this corporation now or hereafter made.

7. The shareholders of Series A Common Shares, Series B Common Shares,
Series C Common Shares, Series D Common Shares, Series E Common Shares, and
Series F Common Shares shall have the following rights and preferences:

(a) On any matter submitted to a vote of shareholders of this
corporation, all common shares of this corporation then issued and
outstanding and entitled to vote, irrespective of series, shall be voted
in the aggregate and not by series, except: (i) when otherwise required
by Minnesota Statutes, Chapter 302A, in which case shares will be voted
by individual series; (ii) when otherwise required by the Investment
Company Act of 1940, as amended, or the rules adopted thereunder, in
which case shares shall be voted by individual series; and (iii) when the
matter does not affect the interests of a particular series, in which
case only shareholders of the series affected shall be entitled to vote
thereon and shall vote by individual series.

(b) All consideration received by this corporation for the issue or
sale of shares of any series, together with all assets, income, earnings,
profits and proceeds derived therefrom (including all proceeds derived
from the sale, exchange or liquidation thereof and, if applicable, any
assets derived from any reinvestment of such proceeds in whatever form
the same may be) shall become

<PAGE> 3

part of the assets of the portfolio to which the shares of that series
relate, for all purposes, subject only to the rights of creditors, and
shall be so treated upon the books of account of this corporation. Such
assets, income, earnings, profits and proceeds (including any proceeds
derived from the sale, exchange or liquidation thereof and, if
applicable, any assets derived from any reinvestment of such proceeds in
whatever form the same may be) are herein referred to as "assets
belonging to" a series of the common shares of this corporation.

(c) Assets of this corporation not belonging to any particular
series are referred to herein as "General Assets." General Assets shall
be allocated to each series in proportion to the respective net assets
belonging to such series. The determination of the Board of Directors
shall be conclusive as to the amount of assets, as to the
characterization of assets as those belonging to a series or as General
Assets, and as to the allocation of General Assets.

(d) The assets belonging to a particular series of common shares
shall be charged with the liabilities incurred specifically on behalf of
such series of common shares ("Special Liabilities"). Such assets shall
also be charged with a share of the general liabilities of this
corporation ("General Liabilities") in proportion to the respective net
assets belonging to such series of common shares. The determination of
the Board of Directors shall be conclusive as to the amount of
liabilities, including accrued expenses and reserves, as to the
characterization of any liability as a Special Liability or General
Liability, and as to the allocation of General Liabilities.

(e) The Board of Directors may, to the extent permitted by
Minnesota Statutes, Chapter 302A, and in the manner provided herein,
declare and pay dividends or distributions in shares or cash on any or
all series of common shares, the amount of such dividends and the payment
thereof being wholly in the discretion of the Board of Directors.
Dividends or distributions on shares of any series of common shares shall
be paid only out of the earnings, surplus, or other lawfully available
assets belonging to such series (including, for this purpose, any General
Assets allocated to such series).

(f) In the event of the liquidation or dissolution of this
corporation, holders of the shares of any series shall have priority over
the holders of any other series with respect to, and shall be entitled to
receive, out of the assets of this corporation available for distribution
to holders of shares, the assets belonging to such series of common
shares and the General Assets allocated to such series of common shares,
and the assets so distributable to the holders of the shares of any
series shall be distributed among such holders in proportion to the
number of shares of such series held by them and recorded on the books of
this corporation.

(g) With the approval of a majority of the shareholders of each of
the affected series of common shares, the Board of Directors may transfer
the assets of any portfolio to any other portfolio. Upon such a
transfer, the corporation shall issue common shares representing
interests in the portfolio to which the assets were transferred in
exchange for all common shares representing interests in the portfolio
from which the assets were transferred. Such shares shall be exchanged
at their respective net asset values.

8. The following additional provisions, when consistent with law, are
hereby established for the management of the business, for the conduct of the
affairs of the corporation, and for the purpose of describing certain specific
powers of the corporation and of its directors and shareholders.

(a) In furtherance and not in limitation of the powers conferred by
statute and pursuant to these Articles of Incorporation, the Board of
Directors is expressly authorized to do the following:

<PAGE> 4

(1) to make, adopt, alter, amend and repeal Bylaws of the
corporation unless reserved to the shareholders by the Bylaws or by
the laws of the State of Minnesota, subject to the power of the
shareholders to change or repeal such Bylaws;

(2) to distribute, in its discretion, for any fiscal year (in
the year or in the next fiscal year) as ordinary dividends and as
capital gains distributions, respectively, amounts sufficient to
enable the corporation to qualify under the Internal Revenue Code
as a regulated investment company to avoid any liability for
federal income tax in respect of such year. Any distribution or
dividend paid to shareholders from any capital source shall be
accompanied by a written statement showing the source or sources of
such payment;

(3) to authorize, subject to such vote, consent, or approval
of shareholders and other conditions, if any, as may be required by
any applicable statute, rule or regulation, the execution and
performance by the corporation of any agreement or agreements with
any person, corporation, association, company, trust, partnership
(limited or general) or other organization whereby, subject to the
supervision and control of the Board of Directors, any such other
person, corporation, association, company, trust, partnership
(limited or general), or other organization shall render
managerial, investment advisory, distribution, transfer agent,
accounting and/or other services to the corporation (including, if
deemed advisable, the management or supervision of the investment
portfolios of the corporation) upon such terms and conditions as
may be provided in such agreement or agreements;

(4) to authorize any agreement of the character described in
subparagraph 3 of this paragraph (a) with any person, corporation,
association, company, trust, partnership (limited or general) or
other organization, although one or more of the members of the
Board of Directors or officers of the corporation may be the other
party to any such agreement or an officer, director, employee,
shareholder, or member of such other party, and no such agreement
shall be invalidated or rendered voidable by reason of the
existence of any such relationship;

(5) to allot and authorize the issuance of the authorized but
unissued shares of any class or series of this corporation;

(6) to accept or reject subscriptions for shares of any
series made after incorporation; and

(7) to fix the terms, conditions and provisions of and
authorize the issuance of options to purchase or subscribe for
shares of any series including the option price or prices at which
shares may be purchased or subscribed for.

(b) The determination as to any of the following matters made by or
pursuant to the direction of the Board of Directors consistent with these
Articles of Incorporation and in the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of duties, shall be final
and conclusive and shall be binding upon the corporation and every holder
of shares of its capital stock: namely, the amount of the assets,
obligations, liabilities and expenses of each portfolio of the
corporation; the amount of the net income of each portfolio of the
corporation from dividends and interest for any period and the amount of
assets at any time legally available for the payment of dividends in each
portfolio; the amount of paid-in surplus, other surplus, annual or

<PAGE> 5

other net profits, or net assets in excess of capital, undivided profits,
or excess of profits over losses on sales of securities of each
portfolio; the amount, purpose, time of creation, increase or decrease,
alteration or cancellation of any reserves or charges and the propriety
thereof (whether or not any obligation or liability for which such
reserves or charges shall have been created shall have been paid or
discharged); the market value, or any sale, bid or asked price to be
applied in determining the market value, of any security owned or held by
or in each portfolio of the corporation; the fair value of any other
asset owned by or in each portfolio of the corporation; the number of
shares of each series of the corporation issued or issuable; any matter
relating to the acquisition, holding and disposition of securities and
other assets by each portfolio of the corporation; and any question as to
whether any transaction constitutes a purchase of securities on margin, a
short sale of securities, or an underwriting of the sale of, or
participation in any underwriting or selling group in connection with the
public distribution of any securities.

(c) The Board of Directors or the shareholders of the corporation
may adopt, amend, affirm or reject investment policies and restrictions
upon investment or the use of assets of each portfolio of the corporation
and may designate some such policies as fundamental and not subject to
change other than by a vote of a majority of the outstanding voting
securities, as such phrase is defined in the Investment Company Act of
1940, of the affected portfolio or portfolios of the corporation.

(d) The corporation shall indemnify such persons for such expenses
and liabilities, in such manner, under such circumstances, and to the
full extent permitted by Section 302A.521 of the Minnesota Statutes, as
now enacted or hereafter amended, provided, however, that no such
indemnification may be made if it would be in violation of Section 17(h)
of the Investment Company Act of 1940, as now enacted or hereafter
amended.

(e) Any action which might be taken at a meeting of the Board of
Directors, or any duly constituted committee thereof, may be taken
without a meeting if done in writing and signed by a majority of the
directors or committee members.

9. To the fullest extent permitted by the Minnesota Statutes, Chapter
302A, as the same exists or may hereafter be amended (except as prohibited by
the Investment Company Act of 1940, as amended), a director of this corporation
shall not be liable to this corporation or its shareholders for monetary
damages for breach of fiduciary duty as a director.

<PAGE> 1

EXHIBIT (a).6
CERTIFICATE OF DESIGNATION
OF
SERIES S COMMON SHARES
SERIES T COMMON SHARES
SERIES U COMMON SHARES
SERIES V COMMON SHARES
SERIES W COMMON SHARES
OF
FORTIS SERIES FUND, INC.

The undersigned duly elected Secretary of Fortis Series Fund, Inc., a
Minnesota corporation (the "Corporation"), hereby certifies that the following
is a true, complete and correct copy of resolutions duly adopted by a majority
of the directors of the Board of Directors of the Corporation on December 16,
1999.

DESIGNATION OF SERIES S COMMON SHARES,
SERIES T COMMON SHARES,
SERIES U COMMON SHARES,
SERIES V COMMON SHARES,
SERIES W COMMON SHARES

WHEREAS, the total authorized number of shares of the Corporation is
20,000,000,000, all of which shares are common shares, $.01 par value per
shares, as set forth in the Corporation's Articles of Incorporation, as
amended; and

WHEREAS, of said total authorized shares, 2,000,000,000 shares have been
designated Series A Common Shares, 2,000,000,000 shares have been
designated Series B Common Shares, 2,000,000,000 shares have been
designated Series C Common Shares, 2,000,000,000 shares have been
designated Series D Common Shares, 500,000,000 shares have been
designated Series E Common Shares, 1,500,000,000 shares have been
designated Series F Common Shares, 1,000,000,000 shares have been
designated Series G Common Shares, 1,000,000,000 shares have been
designated Series H Common Shares, 1,000,000,000 shares have been
designated Series I Common Shares, 1,000,000,000 shares have been
designated J Common Shares, 1,000,000,000 shares have been designated
Series K Common Shares, 1,000,000,000 shares have been designated Series
L Common Shares, 500,000,000 shares have been designated Series M Common
Shares, 500,000,000 shares have been designated Series N Common Shares,
500,000,000 shares have been designated Series O Common Sharers,
500,000,000 shares have been designated as Series P Common Shares,
500,000,000 shares have been designated as Series Q Common Shares, and
500,000,000 shares have been designated as Series R Common Shares; and

WHEREAS, said Articles of Incorporation, as amended, set forth that the
balance of 1,000,000,000 authorized but unissued common shares may be
issued in such series with such designations, preferences and relative,
participating, optional or other special rights or qualifications,
limitations or restrictions thereof, as shall be stated or expressed in a

<PAGE> 2

resolution or resolutions providing for the issue of any series of common
shares as may be adopted from time to time by the Board of Directors of
the Corporation; now therefore

BE IT RESOLVED, that of the remaining 1,000,000,000 authorized but
unissued common shares of the Corporation 50,000,000 be, and hereby are,
designated as Series S Common Shares, 50,000,000 be, and hereby are,
designated as Series T Common Shares, 50,000,000 be, and hereby are,
designated as Series U Common Shares, 50,000,000 be, and hereby are,
designated as Series V Common Shares and 50,000,000 be, and hereby are,
designated as Series W Common Shares, and each of said Series S Common
Shares, Series T Common Shares, Series U Common Shares, Series V Common
Shares, and Series W Common Shares shall represent interests in a
separate and distinct portion of the Corporation's assets and liabilities
which shall take the form of a separate portfolio of investment
securities, cash, other assets and liabilities.

BE IT FURTHER RESOLVED, that Articles 5, 6 and 7 of the Articles of
Incorporation, as amended, of the Corporation setting forth the
preferences and relative, participating, optional or other special
rights, and qualifications, limitations and restrictions thereof, of and
among each series of common shares be, and they hereby are, adopted as
the preferences and relative, participating, optional and other rights,
and the qualifications, limitations and restrictions thereof, and among
the Series S Common Shares, Series T Common Shares, Series U Common
Shares, Series V Common Shares, and Series W Common Shares, and other
series of the Corporation designated previously by the Corporation.

BE IT FURTHER RESOLVED, that the officers of the Corporation are hereby
authorized and directed to file with the office of the Secretary of State
of Minnesota, a Certificate of Designation setting forth the relative
rights and preferences of the Series S Common Shares, Series T Common
Shares, Series U Common Shares, Series V Common Shares, and Series W
Common Shares, as required by Subd. 3(b) of Section 401 of the Minnesota
Business Corporation Act.

BE IT FURTHER RESOLVED, that there is hereby authorized the issuance of
each of said Series S Common Shares, Series T Common Shares, Series U
Common Shares, Series V Common Shares, and Series W Common Shares,
provided that such shares shall be issued at a price no less than their
net asset value per share.

BE IT FURTHER RESOLVED, that upon receipt of the issuance price for the
shares authorized to be issued hereinabove, either in connection with the
original issues of the shares or the issue following the redemption of
such shares by the Corporation (and after filing pursuant to Minnesota
Statues, Section 203A.401, Subd. 3(b), a statement with the Secretary of
State of the State of Minnesota setting forth the name of the Corporation
and the text of the relevant portions of these resolutions and certifying
the adoption of such portions of these resolutions and the date of
adoption), the officers of the Corporation are hereby authorized and
directed to issue certificates representing shares (or confirm purchases
to investors and credit such purchases to their accounts) of the Series S
Common Shares, Series T Common Shares, Series U Common Shares, Series V
Common

<PAGE> 3

Shares, and Series W Common Shares of the Corporation, and such shares
are hereby declared to be validly and legally issued, fully paidand
nonassessable.

IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Designation on behalf of the Corporation this 24th day of March, 2000.

Michael J. Radmer, Secretary

<PAGE> 1

EXHIBIT (b)
AMENDED AND RESTATED
BYLAWS
OF
FORTIS SERIES FUND, INC.
(as amended by the Board of Directors on December 16, 1999)

ARTICLE I
OFFICES, CORPORATE SEAL

Section 1.01. Name. The name of the corporation is "Fortis Series Fund,
Inc." the name of the series represented by the corporation's Series A Common
Shares shall be "Growth Stock Series"; the name of the series represented by
the corporation's Series B Common Shares shall be "U.S. Government Securities
Series"; the name of the series represented by the corporation's Series C
Common Shares shall be "Money Market Series"; the name of the series
represented by the corporation's Series D Common Shares shall be "Asset
Allocation Series"; the name of the series represented by the corporation's
Series E Common Shares shall be "Diversified Income Series"; the name of the
series represented by the corporation's Series F Common Shares shall be "Global
Growth Series"; the name of the series represented by the corporation's Series
G Common Shares shall be "High Yield Series"; the name of the series
represented by the corporation's Series H Common Shares shall be "Growth &
Income Series"; the name of the series represented by the corporation's Series
I Common Shares shall be "Aggressive Growth Series"; the name of the series
represented by the corporation's Series J Common Shares shall be "International
Stock Series"; the name of the series represented by the corporation's Series K
Common Shares shall be "Multisector Bond Series"; the name of the series
represented by the corporation's Series L Common Shares shall be "Global Asset
Allocation Series"; the name of the series represented by the corporation's
Series M Common Shares shall be "Value Series"; the name of the series
represented by the corporation's Series N Common Shares shall be "S&P 500 Index
Series"; the name of the series represented by the corporation's O Common
Shares shall be the "Blue Chip Stock Series"; the name of the series
represented by the corporation's Series P Common Shares shall be "Small Cap
Value Series"; the name of the series represented by the corporation's Series Q
Common Shares shall be "Mid Cap Stock Series"; the name of the series
represented by the corporation's Series R Common Shares shall be the "Large Cap
Growth Series"; the name of the series represented by the corporation's Series
S Common Shares shall be "Blue Chip Stock Series II"; the name of the series
represented by the corporation's Series T Common Shares shall be "American
Leaders Value Series"; the name of the series represented by the corporation's
Series U Common Shares shall be "Capital Opportunities Series"; the name of the
series represented by the corporations Series V Common Shares shall be "Global
Equity Series"; and the name of the series represented by the corporation's
Series W Common Shares shall be "Investors Growth Stock Series."

Section 1.02. Registered Office. The registered office of the
corporation in Minnesota shall be that set forth in the Articles of
Incorporation or in the most recent amendment of the Articles of Incorporation
or resolution of the directors filed with the Secretary of State of Minnesota
changing the registered office.

<PAGE> 2

Section 1.03. Other Offices. The corporation may have such other offices
and places of business, within or without the State of Minnesota, as the
directors shall, from time to time, determine.

Section 1.04. Corporate Seal. The corporate seal shall be circular in
form and shall have inscribed thereon the name of the corporation and the word
"Minnesota" and the words "Corporate Seal." The form of the seal shall be
subject to alteration by the Board of Directors and the seal may be used by
causing it or a facsimile to be impressed or affixed or printed or otherwise
reproduced. Any officer or director of the corporation shall have authority to
affix the corporate seal of the corporation to any document requiring the same.

ARTICLE II
MEETINGS OF SHAREHOLDERS

Section 2.01. Place and Time of Meetings. Except as provided otherwise
by Minnesota Statutes Chapter 302A, meetings of the shareholders may be held at
any place, within or without the State of Minnesota, designated by the
directors and, in the absence of such designation, shall be held at the
registered office of the corporation in the State of Minnesota. The directors
shall designate the time of day for each meeting and, in the absence of such
designation, every meeting of shareholders shall be held at ten o'clock a.m.

Section 2.02. Regular Meetings. Annual meetings of shareholders are not
required by these Bylaws. Regular meetings shall be held only with such
frequency and at such times and places as provided in and required by law.

Section 2.03. Special Meetings. Special meetings of the shareholders may
be held at any time and for any purpose and may be called by the Chairman of
the Board, the President, and two or more directors, or by one or more
shareholders holding ten percent (10%) or more of the shares entitled to vote
on the matters to be presented to the meeting, except that a special meeting
for the purpose of considering any action directly or indirectly to facilitate
or effect a business combination, including any action to change or otherwise
affect the composition of the Board of Directors for that purpose, must be
called by 25% of the voting power of all shares entitled to vote.

Section 2.04. Quorum; Adjourned Meetings. The holders of ten percent
(10%) of the shares outstanding and entitled to vote at the meeting shall
constitute a quorum for the transaction of business at any regular or special
shareholders' meeting. In case a quorum shall not be present at a meeting,
those present in person or by proxy shall adjourn to such day as they shall, by
majority vote, agree upon without further notice other than by announcement at
the meeting at which such adjournment is taken. If a quorum is present, a
meeting may be adjourned from time to time without notice other than
announcement at the meeting. At adjourned meetings at which a quorum is
present, any business may be transacted which might have been transacted at the
meeting as originally noticed. If a quorum is present, the shareholders may
continue to transact business until adjournment notwithstanding the withdrawal
of enough shareholders to leave less than a quorum.

<PAGE> 3

Section 2.05. Voting. At each meeting of the shareholders, every
shareholder shall have the right to vote in person or by proxy. Each
shareholder, unless the Articles of Incorporation or applicable laws provide
otherwise, shall have one vote for each share having voting power registered in
his name on the books of the corporation. Upon the demand of any shareholder,
the vote upon any question before the meeting shall be by written ballot.
Except as otherwise specifically provided by these Bylaws or as required by
provisions of the Investment Company Act of 1940 or other applicable laws, all
questions shall be decided by a majority vote of the number of shares entitled
to vote and represented at the meeting at the time of the vote. If the
matter(s) to be presented at a regular or special meeting relates only to a
particular portfolio or portfolios of the corporation, then only the
shareholders of the series of stock issued by such portfolio or portfolios are
entitled to vote on such matter(s).

Section 2.06. Voting - Proxies. The right to vote by proxy shall exist
only if the instrument authorizing such proxy to act shall have been executed
in writing by the shareholder himself or by his attorney thereunto duly
authorized in writing. No proxy shall be voted after three years from its date
unless it provides for a longer period.

Section 2.07. Closing of Books. The Board of Directors may fix a time,
not exceeding sixty (60) days preceding the date of any meeting of
shareholders, as a record date for the determination of the shareholders
entitled to notice of, and to vote at, such meeting, notwithstanding any
transfer of shares on the books of the corporation after any record date so
fixed. If the Board of Directors fails to fix a record date for determination
of the shareholders entitled to notice of, and to vote at, any meeting of
shareholders, the record date shall be the thirtieth (30th) day preceding the
date of such meeting.

Section 2.08. Notice of Meetings. The Secretary or an Assistant
Secretary shall mail to each shareholder, shown by the books of the corporation
to be a holder of record of voting shares, at his address as shown by the books
of the corporation, a notice setting out the time and date and place of each
regular meeting and each special meeting, which notice shall be mailed at least
ten (10) days prior thereto; except that notice of a meeting at which an
agreement of merger or consolidation is to be considered shall be mailed to all
shareholders of record, whether entitled to vote or not, at least two (2) weeks
prior thereto; and except that notice of a meeting at which a proposal to
dispose of all, or substantially all, of the property and assets of the
corporation is to be considered shall be mailed to all shareholders of record,
whether entitled to vote or not, at least ten (10) days prior thereto; and
except that notice of a meeting at which a proposal to dissolve the corporation
or to amend the Articles of Incorporation is to be considered shall be mailed
to all shareholders of record, whether entitled to vote or not, at least ten
(10) days prior thereto. Every notice of any special meeting shall state the
purpose or purposes for which the meeting has been called, pursuant to Section
2.03, and the business transacted at all special meetings shall be confined to
the purpose stated in the call.

Section 2.09. Waiver of Notice. Notice of any regular or special meeting
may be waived either before, at or after such meeting in writing signed by each
shareholder or representative thereof entitled to vote the shares so
represented.

ARTICLE III
DIRECTORS

<PAGE> 4

Section 3.01. Number, Qualifications and Term of Office. Until the first
meeting of shareholders, or until the directors increase their number by
resolution, the number of directors shall be the number named in the Articles
of Incorporation. Thereafter, the number of directors shall be established by
resolution of the shareholders (subject to the authority of the Board of
Directors to increase the number of directors as permitted by law), but shall
not be less than the lesser of (i) the number of shareholders of record and
beneficially, or (ii) three (3). In the absence of such resolution, the number
of directors shall be the number last fixed by the shareholders or the Board of
Directors, or the Articles of Incorporation. Directors may but need not be
shareholders. Each of the directors shall hold office until the regular
meeting of shareholders next held after his election and until his successor
shall have been elected and shall qualify, or until he shall resign, or shall
have been removed as hereinafter provided.

Section 3.02. Election of Directors. Except as otherwise provided in
Section 3.11 and 3.12 hereof, the directors shall be elected at all regular
shareholders' meeting. Directors may be elected at a special shareholders'
meeting, provided that the notice of such meeting shall contain mention of such
purpose. At each shareholders' meeting for the election of directors, the
directors shall be elected by a plurality of the votes validly cast at such
election. The shareholders of each series of stock of the corporation shall be
entitled to vote for directors and shall have equal voting power.

Section 3.03. General Powers.

(a) The property, affairs and business of the corporation shall be managed
by the Board of Directors, which may exercise all the powers of the corporation
except those powers vested solely in the shareholders of the corporation by
statute, the Articles of Incorporation, or these Bylaws, as amended.

(b) All acts done by any meeting of the Directors or by any person acting
as a director, so long as his successor shall not have been duly elected or
appointed, shall, notwithstanding that it be afterwards discovered that there
was some defect in the election of the directors or such person acting as
aforesaid or that they or any of them were disqualified, be as valid as if the
directors or such other person, as the case may be, had been duly elected and
were or was qualified to be directors or a director of the corporation.

Section 3.04. Power to Declare Dividends.

(a) The Board of Directors, from time to time as they may deem advisable,
may declare and pay dividends in cash or other property of the corporation, out
of any source available for dividends, to the shareholders of each series of
stock of the corporation according to their respective rights and interests in
the investment portfolio of the corporation issuing such series of stock.

(b) The Board of Directors shall cause to be accompanied by a written
statement any dividend payment wholly or partly from any source other than

<PAGE> 5

(i) each investment portfolio's accumulated and accrued
undistributed net income (determined in accordance with generally
accepted accounting practice and the rules and regulations of the
Securities and Exchange Commission then in effect) and not
including profits or losses realized upon the sale of securities or
other properties; or

(ii) each investment portfolio's net income so determined for the
current or preceding fiscal year.

Such statement shall adequately disclose the source or sources of such payment
and the basis of calculation, and shall be in such form as the Commission may
prescribe.

(c) Notwithstanding the above provisions of this Section 3.04, the Board
of Directors may at any time declare and distribute pro rata among the
shareholders of each series of stock a "stock dividend" out of each portfolio's
authorized but unissued shares of stock, including any shares previously
purchased by a portfolio of the corporation.

Section 3.05. Annual Meeting. The Board of Directors shall meet annually
at the registered office of the corporation, or at such other place within or
without the State of Minnesota as may be designated by the Board of Directors,
for the purpose of electing the officers of the corporation and for the
transaction of such other business as shall come before the meeting.

Section 3.06. Regular Meetings. Regular meetings of the Board of
Directors shall be held from time to time at such time and place within or
without the State of Minnesota as may be fixed by resolution adopted by a
majority of the whole Board of Directors.

Section 3.07. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President, or by any
two of the directors and shall be held from time to time at such time and place
as may be designated in the notice of such meeting.

Section 3.08. Notice of Meetings. Unless otherwise required by Statute,
no notice need be given of any annual or regular meeting of the Board of
Directors. Notice of each special meeting of the Board of Directors shall be
given by the Secretary who shall give at least twenty-four (24) hours' notice
thereof to each director by mail, telephone, telegram or in person.

Section 3.09. Waiver of Notice. Notice of any meeting of the Board of
Directors may be waived either before, at, or after such meeting in writing
signed by each director. A director, by his attendance and participation in
the action taken at any meeting of the Board of Directors, shall be deemed to
have waived notice of such meeting.

Section 3.10. Quorum. A majority of the whole Board of Directors shall
constitute a quorum for the transaction of business except that, when a vacancy
or vacancies exist, a majority of the remaining directors (provided such
majority consists of not less than the lesser of (i) the number of directors
required by Section 3.02, or (ii) two (2) directors) shall constitute a quorum.

<PAGE> 6

Section 3.11. Vacancies; Newly Created Directorships. Vacancies in the
Board of Directors of this corporation occurring by reason of death,
resignation or increase in the number of directors by the shareholders to the
minimum number required by Section 3.01 or by the Board pursuant to Section
3.01, shall be filled for the unexpired term by a majority of the remaining
directors of the Board although less than a quorum; newly created directorships
resulting from an increase in the authorized number of directors by action of
the Board of Directors as permitted by Section 3.01 may be filled by a
two-thirds (2/3) vote of the directors serving at the time of such increase;
and each person so elected shall be a director until his successor is elected
by the shareholders, who may make such election at their next regular meeting
or at any meeting duly called for that purpose; provided, however, that no
vacancy can be filled as provided above if prohibited by the provisions of the
Investment Company Act of 1940.

Section 3.12. Removal. Removal of directors shall be governed by the
provisions of Section 302A.233 of the Minnesota Statutes or other applicable
provisions of the Minnesota Statutes or successors thereto.

Section 3.13. Executive Committee. The Board of Directors, by unanimous
affirmative action of the entire Board, may establish an Executive Committee
consisting of two (2) or more directors. Such Committee may meet at stated
times or on notice of all given by any of their own number. During the
intervals between meetings of the Board of Directors, such Committee shall
advise and aid the officers of the corporation in all matters concerning the
business and affairs of the corporation and, generally, perform such duties and
exercise such powers as may be directed or delegated by the Board of Directors
from time to time. The Board of Directors may, by unanimous affirmative action
of the entire Board, delegate to such Committee authority to exercise all the
powers of the Board of Directors, except the power to amend the Bylaws and to
take action on matters reserved to the entire Board by the Investment Company
Act of 1940, while the Board of Directors is not in session. Vacancies in the
membership of the Committee shall be filled by the Board of Directors at a
regular meeting or at a special meeting called for that purpose.

Section 3.14. Other Committees. The Board of Directors may establish
other committees from time to time making such regulations as it deems
advisable with respect to the membership, authority and procedures of such
committees.

Section 3.15. Written Action. Any action which might be taken at a
meeting of the Board of Directors, or any duly constituted committee thereof,
may be taken without a meeting if done in writing and signed by a majority of
the directors or committee members.

Section 3.16. Compensation. Directors who are not salaried officers of
this corporation shall receive such fixed sum per meeting attended or such
fixed annual sum as shall be determined, from time to time, by resolution of
the Board of Directors. All directors may receive their expenses, if any, of
attendance at meetings of the Board of Directors or any committee thereof.
Nothing herein contained shall be construed to preclude any director from
serving this corporation in any other capacity and receiving proper
compensation therefor.

ARTICLE IV
OFFICERS

<PAGE> 7

Section 4.01. Number. The officers of the corporation shall consist of a
Chairman of the Board (if one is elected by the Board), the President, one or
more Vice Presidents (if desired by the Board), a Secretary and one or more
Assistant Secretaries, a Treasurer and one or more Assistant Treasurers, and
such other officers and agents as may, from time to time, be elected by the
Board of Directors.

Section 4.02. Election, Term of Office and Qualifications. At each
annual meeting of the Board of Directors, the Board shall elect, from within or
without their number, the President, the Secretary, the Treasurer and such
other officers as may be deemed advisable. Such officers shall hold office
until the next annual meeting of the directors or until their successors are
elected and qualified. The President and all other officers who may be
directors shall continue to hold office until the election and qualification of
their successors, notwithstanding an earlier termination of their directorship.

Section 4.03. Resignation. Any officer may resign his office at any time
by delivering a written resignation to the Board of Directors, the President,
the Secretary, or any Assistant Secretary. Unless otherwise specified therein,
such resignation shall take effect upon delivery.

Section 4.04. Removal and Vacancies. Any officer may be removed from his
office by a majority of the whole Board of Directors, with or without cause.
Such removal, however, shall be without prejudice to the contract rights of the
person so removed. If there be a vacancy among the officers of the corporation
by reason of death, resignation or otherwise, such vacancy shall be filled for
the unexpired term by the Board of Directors.

Section 4.05. Chairman of the Board. The Chairman of the Board, if one
is elected, shall preside at all meetings of the shareholders and directors and
shall have such other duties as may be prescribed, from time to time, by the
Board of Directors.

Section 4.06. President. The President shall have general active
management of the business of the corporation. In the absence of the Chairman
of the Board, he shall preside at all meetings of the shareholders and
directors. He shall be the chief executive officer of the corporation and
shall see that all orders and resolutions of the Board of Directors are carried
into effect. He shall be ex officio a member of all standing committees. He
may execute and deliver, in the name of the corporation, any deeds, mortgages,
bonds, contracts or other instruments pertaining to the business of the
corporation and, in general, shall perform all duties usually incident to the
office of President. He shall have such other duties as may, from time to
time, be prescribed by the Board of Directors.

Section 4.07. Vice President. Each Vice President shall have such powers
and shall perform such duties as may be specified in the Bylaws or prescribed
by the Board of Directors or by the President. In the event of absence or
disability of the President, Vice Presidents shall succeed to his power and
duties in the order designated by the Board of Directors.

<PAGE> 8

Section 4.08. Secretary. The Secretary shall be secretary of, and shall
attend all, meetings of the shareholders and Board of Directors and shall
record all proceedings of such meetings in the minute book of the corporation.
He shall give proper notice of meetings of shareholders and directors. He
shall keep the seal of the corporation and shall affix the same to any
instrument requiring it and may, when necessary, attest the seal by his
signature. He shall perform such other duties as may, from time to time, be
prescribed by the Board of Directors or by the President.

Section 4.09. Treasurer. The Treasurer shall keep accurate accounts of
all moneys of the corporation received or disbursed. He shall deposit all
moneys, drafts and checks in the name of, and to the credit of, the corporation
in such banks and depositories as a majority of the whole Board of Directors
shall, from time to time, designate. He shall have power to endorse, for
deposit, all notes, checks and drafts received by the corporation. He shall
disburse the funds of the corporation, as ordered by the Board of Directors,
making proper vouchers therefor. He shall render to the President and the
directors, whenever required, an account of all his transactions as Treasurer
and of the financial condition of the corporation, and shall perform such other
duties as may, from time to time, be prescribed by the Board of Directors or by
the President.

Section 4.10. Assistant Secretaries. At the request of the Secretary, or
in his absence or disability, any Assistant Secretary shall have power to
perform all the duties of the Secretary and, when so acting, shall have all the
powers of, and be subject to all restrictions upon, the Secretary. The
Assistant Secretaries shall perform such other duties as from time to time may
be assigned to them by the Board of Directors or the President.

Section 4.11. Assistant Treasurers. At the request of the Treasurer, or
in his absence or disability, any Assistant Treasurer shall have power to
perform all the duties of the Treasurer, and when so acting, shall have all the
powers of, and be subject to all the restrictions upon, the Treasurer. The
Assistant Treasurers shall perform such other duties as from time to time may
be assigned to them by the Board of Directors or the President.

Section 4.12. Compensation. The officers of this corporation shall
receive such compensation for their services as may be determined, from time to
time, by resolution of the Board of Directors.

Section 4.13. Surety Bonds. The Board of Directors may require any
officer or agent of the corporation to execute a bond (including, without
limitation, any bond required by the Investment Company Act of 1940 and the
rules and regulations of the Securities and Exchange Commission) to the
corporation in such sum and with such surety or sureties as the Board of
Directors may determine, conditioned upon the faithful performance of his
duties to the corporation, including responsibility for negligence and for the
accounting of any of the corporation's property, funds or securities that may
come into his hands. In any such case, a new bond of like character shall be
given at least every six years, so that the date of the new bond shall not be
more than six years subsequent to the date of the bond immediately preceding.

ARTICLE V
SHARES AND THEIR TRANSFER AND REDEMPTION

<PAGE> 9

Section 5.01. Certificates for Shares.

(a) Every owner of shares of the corporation shall be entitled to a
certificate, to be in such form as shall be prescribed by the Board of
Directors, certifying the number of shares of the corporation owned by him.
The certificates for such shares shall be numbered in the order in which they
shall be issued and shall be signed, in the name of the corporation, by the
President or a Vice President and by the Treasurer, or by such officers as the
Board of Directors may designate. Such signatures may be facsimile if
authorized by the Board of Directors. Every certificate surrendered to the
corporation for exchange or transfer shall he canceled, and no new certificate
or certificates shall be issued in exchange for any existing certificate until
such existing certificate shall have been so canceled, except in cases provided
for in Section 5.08.

(b) In case any officer, transfer agent or registrar who shall have signed
any such certificate, or whose facsimile signature has been placed thereon,
shall cease to be such an officer (because of death, resignation or otherwise)
before such certificate is issued, such certificate may be issued and delivered
by the corporation with the same effect as if he were such officer, transfer
agent or registrar at the date of issue.

Section 5.02. Issuance of Shares. The Board of Directors is authorized
to cause to be issued shares of the corporation to the full amount authorized
by the Articles of Incorporation in such series and in such amounts as may be
determined by the Board of Directors and as may be permitted by law. No shares
shall be allotted except in consideration of cash or of an amount transferred
from surplus to stated capital upon a share dividend. At the time of such
allotment of shares, the Board of Directors making such allotments shall state,
by resolution, their determination of the fair value to the corporation in
monetary terms of any consideration other than cash for which shares are
allotted. The amount of consideration to be received in cash, or otherwise,
shall not be less than the par value of the shares so allotted. No shares of
stock issued by the corporation shall be issued, sold, or exchanged by or on
behalf of the corporation for any amount less than the net asset value per
share of the shares outstanding as determined pursuant to Article XI hereunder.

Section 5.03. Redemption of Shares. Upon the demand of any shareholder
this corporation shall redeem any share of stock issued by it held and owned by
such shareholder at the net asset value thereof as determined pursuant to
Article XI hereunder. The Board of Directors may suspend the right of
redemption or postpone the date of payment during any period when: (a) trading
on the New York Stock Exchange is restricted or such Exchange is closed for
other than weekends or holidays; (b) the Securities and Exchange Commission has
by order permitted such suspension or (c) an emergency as defined by rules of
the Securities and Exchange Commission exists, making disposal of portfolio
securities or valuation of net assets of the corporation not reasonably
practicable.

Section 5.04. Transfer of Shares. Transfer of shares on the books of the
corporation may be authorized only by the shareholder named in the certificate,
or the shareholder's legal representative, or the shareholder's duly authorized
attorney-in-fact, and upon surrender of the certificate or the certificates for
such shares or a duly executed assignment covering shares held in unissued
form. The corporation may treat, as the absolute owner of

<PAGE> 10

shares of the corporation, the person or persons in whose name shares are
registered on the books of the corporation.

Section 5.05. Registered Shareholders. The corporation shall be entitled
to treat the holder of record of any share or shares of stock as the holder in
fact thereof and accordingly shall not be bound to recognize any equitable or
other claim to or interest in such share on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise expressly provided by the laws of Minnesota.

Section 5.06. Transfer Agents and Registrars. The Board of Directors may
from time to time appoint or remove transfer agents and/or registrars of
transfers of shares of stock of the corporation, and it may appoint the same
person as both transfer agent and registrar. Upon any such appointment being
made all certificates representing shares of capital stock thereafter issued
shall be countersigned by one of such transfer agents or by one of such
registrars of transfers or by both and shall not be valid unless so
countersigned. If the same person shall be both transfer agent and registrar,
only one countersignature by such person shall be required.

Section 5.07. Transfer Regulations. The shares of stock of the
corporation may be freely transferred, and the Board of Directors may from time
to time adopt rules and regulations with reference to the method of transfer of
the shares of stock of the corporation.

Section 5.08. Lost, Stolen, Destroyed and Mutilated Certificates. The
holder of any stock of the corporation shall immediately notify the corporation
of any loss, theft, destruction or mutilation of any certificate therefor, and
the Board of Directors may, in its discretion, cause to be issued to him a new
certificate or certificates of stock upon the surrender of the mutilated
certificate or in case of loss, theft or destruction of the certificate, upon
satisfactory proof of such loss, theft or destruction, after the owner of the
lost, stolen or destroyed certificate, or his legal representatives, gives to
the corporation and to such registrar or transfer agent as may be authorized or
required to countersign such new certificate or certificates a bond, in such
sum as they may direct, and with such surety or sureties, as they may direct,
as indemnity against any claim that may be made against them or any of them on
account of or in connection with the alleged loss, theft, or destruction of any
such certificate.

ARTICLE VI
DIVIDENDS, SURPLUS, ETC.

Section 6.01. The corporation's net investment income will be determined,
and its dividends shall be declared and made payable at such time(s) as the
Board of Directors shall determine; dividends shall be payable to shareholders
of record as of the date of declaration

It shall be the policy of the corporation to qualify for and elect the tax
treatment applicable to regulated investment companies under the Internal
Revenue Code, so that the corporation will not be subjected to Federal income
tax on such part of its income or capital gains as it distributes to
shareholders.

ARTICLE VII
BOOKS AND RECORDS, AUDIT, FISCAL YEAR

<PAGE> 11

Section 7.01. Books and Records. The Board of Directors of the
corporation shall cause to be kept:

(1) a share register, giving the names and addresses
of the shareholders, the number and classes held by each, and
the dates on which the certificates therefor were issued;

(2) records of all proceedings of shareholders and
directors; and

(3) such other records and books of account as shall
be necessary and appropriate to the conduct of the corporate
business.

Section 7.02. Documents Kept at Registered Office. The Board of
Directors shall cause to be kept at the registered office of the corporation
originals or copies of:

(1) records of all proceedings of shareholders and
directors

(2) Bylaws of the corporation and all amendments
thereto; and

(3) reports made to any or all of the shareholders
within the last preceding three (3) years.

Section 7.03. Audit, Accountant.

(a) The Board of Directors shall cause the records and books of account of
the corporation to be audited at least once in each fiscal year and at such
other times as it may deem necessary or appropriate.

(b) The corporation shall employ an independent certified public
accountant or firm of independent certified public accountants as its
Accountant to examine the accounts of the corporation and to sign and certify
financial statements filed by the corporation. The Accountant's certificates
and reports shall be addressed both to the Board of Directors and to the
shareholders.

(c) Any vacancy occurring between regular meetings, due to the death,
resignation or otherwise of the Accountant, may be filled by the Board of
Directors.

Section 7.04. Fiscal Year. The fiscal year of the corporation shall be
determined by the Board of Directors.

ARTICLE VIII
INSPECTION OF BOOKS

Section 8.01. Every shareholder of the corporation and every holder of a
voting trust certificate shall have a right to examine, in person or by agent
or attorney, at any reasonable time or times, for any proper purpose, and at
the place or places where usually kept, the share

<PAGE> 12

register, books of account and records of the proceedings of the shareholders
and directors and to make extracts therefrom.

ARTICLE IX
VOTING OF STOCK HELD

Section 9.01. Unless otherwise provided by resolution of the Board of
Directors, the President, any Vice President, the Secretary or the Treasurer,
may from time to time appoint an attorney or attorneys or agent or agents of
the corporation, in the name and on behalf of the corporation, to cast the
votes which the corporation may be entitled to cast as a stockholder or
otherwise in any other corporation or association, any of whose stock or
securities may be held by the corporation, at meetings of the holders of the
stock or other securities of any such other corporation or association, or to
consent in writing to any action by any such other corporation or association,
and may instruct the person or persons so appointed as to the manner of casting
such votes or giving such consent, and may execute or cause to be executed on
behalf of the corporation and under its corporate seal, or otherwise, such
written proxies, consents, waivers, or other instruments as it may deem
necessary or proper in the circumstances; or any of such officers may
themselves attend any meeting of the holders of stock or other securities of
any such corporation or association and thereat vote or exercise any or all
other powers of the corporation as the holder of such stock or other securities
of such other corporation or association, or consent in writing to any action
by any such other corporation or association.

ARTICLE X
VALUATION OF NET ASSET VALUE

Section 10.01. The net asset value per share of each series of stock
issued by the portfolios of the corporation shall be determined in good faith
by or under supervision of the officers of the corporation as authorized by the
Board of Directors as often and on such days and at such time(s) as the Board
of Directors shall determine.

ARTICLE XI
CUSTODY OF ASSETS

Section 11.01. All securities and cash owned by this corporation shall,
as hereinafter provided, be held by or deposited with a bank or trust company
having (according to its last published report) not less than two million
dollars ($2,000,000) aggregate capital, surplus and undivided profits (the
"Custodian").

This corporation shall enter into a written contract with the Custodian
regarding the powers, duties and compensation of the Custodian with respect to
the cash and securities of this corporation held by the Custodian. Said
contract and all amendments thereto shall be approved by the Board of Directors
of this corporation. In the event of the Custodian's resignation or
termination, the corporation shall use its best efforts promptly to obtain a
successor Custodian and shall require that the cash and securities owned by
this corporation held by the Custodian be delivered directly to such successor
Custodian.

<PAGE> 13

ARTICLE XII
AMENDMENTS

Section 12.01. These Bylaws may be amended or altered by a vote of the
majority of the whole Board of Directors at any meeting provided that notice of
such proposed amendment shall have been given in the notice given to the
directors of such meeting. Such authority in the Board of Directors is subject
to the power of the shareholders to change or repeal such Bylaws by a majority
vote of the shareholders present or represented at any annual or special
meeting of shareholders called for such purpose. The Board of Directors shall
not make or alter any Bylaws fixing their qualifications, classifications, term
of office, or number, except that the Board of Directors may make or alter any
Bylaw to increase their number.

ARTICLE XIII
MISCELLANEOUS

Section 13.01. Interpretation. When the context in which words are used
in these Bylaws indicates that such is the intent, singular words will include
the plural and vice versa, and masculine words will include the feminine and
neuter genders and vice versa.

Section 13.02. Article and Section Titles. The titles of Sections and
Articles in these Bylaws are for descriptive purposes only and will not control
or alter the meaning of any of these Bylaws as set forth in the text.

<PAGE> 1

EXHIBIT (d).1
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT

THIS AGREEMENT, made this 3rd day of March 2000, by and between Fortis
Series Fund, Inc., a Minnesota corporation (the "Fund") and Fortis Advisers,
Inc., a Minnesota corporation ("Advisers").

1. INVESTMENT ADVISORY AND MANAGEMENT SERVICES. The Fund hereby engages
Advisers, and Advisers hereby agrees to act, as investment adviser for, and to
manage the affairs, business and the investment of the assets of the Series of
the Fund identified in Exhibit A. Each such Series is herein individually
referred to as a "Series," and the Series are herein collectively referred to as
the "Series."

The investment of the assets of the Series shall at all times be subject
to the applicable provisions of the Articles of Incorporation and Bylaws of the
Fund and the current Registration Statement (including the Prospectus and
Statement of Additional Information) of the Series and shall conform to the
policies and restrictions of the Series as set forth in such Registration
Statement and any additional limitations as may be adopted from time to time by
the Board of Directors of the Fund and communicated to Advisers. Within the
framework of the investment policies, restrictions and limitations of the
Series, Advisers shall have the sole and exclusive responsibility for the
management of the Series and the making and execution of all investment
decisions for the Series, provided:

Advisers may, at its option and expense, with respect to each Series,
appoint a sub-adviser or sub-advisers, which shall assume such
responsibilities and obligations of Advisers pursuant to this Investment
Advisory and Management Agreement as shall be delegated to the
sub-adviser or sub-advisers; provided, however, that any discretionary
investment decisions made by a sub-adviser on behalf of any of the Series
shall be subject to approval or ratification by Advisers, and, not
withstanding any delegation of responsibilities and obligations to a
sub-adviser, Advisers shall retain the right, in its discretion, to make
investment decisions for the Series. Any appointment of a sub-adviser
and assumption of responsibilities and obligations of Advisers by such
sub-adviser

<PAGE> 2

shall be subject to approval by the Board of Directors of the Fund and,
to the extent (if any) required by law, by the shareholders of the
Series. Any appointment of a sub-adviser for a Series pursuant hereto
shall in no way limit or diminish Advisers' obligations and
responsibilities under this Investment Advisory and Management Agreement,
and Advisers shall be responsible for monitoring compliance by the
sub-adviser(s) with the investment policies, restrictions, and
limitations on the Series, and will also be responsible for ensuring that
the Series are managed in a way so that: (1) they meet the requirements
of Subchapter M of the Internal Revenue Code to be taxed as a regulated
investment company; and (2) they comply with the provisions of Section
817(h) of the Internal Revenue Code, and the regulations promulgated
thereunder.

Advisers shall report to the Board of Directors regularly at such times and in
such detail as the Board may from time to time determine to be appropriate, in
order to permit the Board to determine the adherence of Advisers to the
investment policies, restrictions and limitations of such Series.

Advisers shall, at its own expense, furnish the Fund suitable office
space, and all necessary office facilities, equipment and personnel for
servicing the investments of the Fund. Advisers shall arrange, if required by
the Fund, for officers, employees, or other affiliates of Advisers to serve
without compensation from the Fund as directors, officers, or employees of the
Fund if duly elected to such positions by the shareholders or directors of the
Fund.

Advisers shall create and maintain all reports, books and records relating
to its activities and obligations under this Agreement in such a manner as will
meet the obligations of the Fund under the Investment Company Act of 1940,
applicable federal and state tax and insurance laws and regulations and any
other law or regulation which may be or become applicable to the Fund. All
such reports, books and records shall be the property of the Fund.
Furthermore, such reports, books and records shall at all times be available
for copying and otherwise open to inspection and audit by the Securities and
Exchange Commission, banking and insurance regulators and other authorities and
regulators having authority over the Fund, and by officers and employees of,
and auditors employed by, the Fund. Advisers hereby further

<PAGE> 3

agrees that, upon the termination of this Agreement, all reports, books and
records pertaining to Adviser's activities under this Agreement shall be
promptly segregated and returned to the Fund free from any claim or retention
of rights by Advisers.

2. COMPENSATION FOR SERVICES. In payment for all services, facilities,
equipment and personnel, and for other costs of Advisers hereunder, the Fund
shall pay to Advisers a monthly fee for each Series, which fee shall be paid to
Advisers not later than the fifth business day of the month following the month
in which such services are rendered. Each such monthly fee shall be at the
rate or rates set forth below and shall be based on the average of the net
asset values of all of the issued and outstanding shares of the respective
Series as determined as of the close of each business day of the month pursuant
to the Articles of Incorporation, By-Laws and currently effective Prospectus
and Statement of Additional Information of the Series. Exhibit A sets forth
the fee on an annual basis.

A Series' monthly fee is one-twelfth (1/12) of its annual fee. The fee
shall be prorated for any fraction of a month at the commencement or
termination of this Agreement.

3. ALLOCATION OF EXPENSES.

(a) In addition to the fee described in Section 2 hereof, the Fund shall
pay all its expenses which are not assumed by Advisers, Fortis Investors, Inc.
("Investors") or any other person. These Fund expenses include, by way of
example, but not by way of limitation, the fees and expenses of directors and
officers of the Fund who are not "affiliated persons" of Advisers, interest
expenses, taxes, brokerage fees and commissions, fees and expenses of
registering and qualifying the Fund and its shares for distribution under
federal and state securities laws, expenses of preparing Prospectuses and of
printing and distributing Prospectuses and Statements of Additional Information
annually to existing shareholders and existing insurance contract owners,
custodian charges, auditing and legal expenses, insurance expenses, association
membership dues, and the expense of reports to shareholders, shareholders'
meetings, and proxy solicitations. Advisers shall bear the costs of acting as
the Fund's transfer agent, registrar, and dividend disbursing agent.

<PAGE> 4

(b) Advisers (or Investors or Fortis Benefits Insurance Company or First
Fortis Life Insurance Company) shall bear all promotion expenses in
connection with the distribution of the Fund's shares, including
paying for prospectuses and shareholder reports for new shareholders
and new insurance contract owners, and the costs of sales literature.

4. LIMIT ON EXPENSES.

Out of its advisory fee, but not in excess thereof, Advisers shall
reimburse the Fund for each Series' expenses from the date of the initial
public offering until the date a Series' aggregate net assets first reach
$10,000,000, to the extent that the aggregate expenses of the Series (including
the investment advisory and management fees for such Series under paragraph 2
of this Agreement, but excluding interest, taxes, brokerage fees and
commissions) exceed an amount equal, on an annual basis, to the percentage of
the average daily net assets of the Series set forth in Exhibit B.

5. FREEDOM TO DEAL WITH THIRD PARTIES.

Advisers shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to be rendered or the duties to be assumed
hereunder.

6. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT.

The effective date of this Agreement shall be March 3, 2000. Wherever
referred to in this Agreement, the vote or approval of the holders of a
majority of the outstanding voting securities of the Fund shall mean the vote
of 67% or more of such securities if the holders of more than 50% of such
securities are present in person or by proxy or the vote of more than 50% of
such securities, whichever is less.

Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect only so long as such continuance is specifically approved at
least annually (a) by the Board of Directors of the Fund, or, with respect to a
particular Series, by the vote of the holders of a majority of the outstanding

<PAGE> 5

voting securities of such Series, and (b) by a majority of the directors who
are not interested persons of Advisers or of the Fund cast in person at a
meeting called for the purpose of voting on such approval; provided that, if a
majority of the outstanding voting securities of any of the Series approves
this Agreement, this Agreement shall remain in effect with respect to such
approving Series whether or not the shareholders of any other Series of the
Fund approve this Agreement.

This Agreement may be terminated at any time without the payment of any
penalty by the vote of the Board of Directors of the Fund, or by Advisers, upon
sixty (60) days written notice to the other party. This Agreement may
terminated with respect to a particular Series at any time without the payment
of any penalty by the vote of the holders of a majority of the outstanding
voting securities of such Series, upon sixty (60) days' written notice to
Advisers. Any termination may be made effective with respect to both the
investment advisory and management services provided for in this Agreement or
with respect to either of such kinds of services. This Agreement shall
automatically terminate in the event of its assignment.

7. AMENDMENTS TO AGREEMENT.

No material amendment to this Agreement shall be effective until approved
by vote of the holders of a majority of the outstanding voting securities of
the Series that have approved and are subject to this Agreement. In addition,
if a majority of the outstanding voting securities of any Series of the Fund
votes to amend this Agreement, such amendment shall be effective with respect
to such Series whether or not the shareholders of any other Series vote to
adopt such amendment.

8. NOTICES.

Any notice under this Agreement shall be in writing, addressed, delivered
or mailed, postage prepaid, to the other party at such address as such other
party may designate in writing for receipt of such notice.

<PAGE> 6

IN WITNESS WHEREOF, The Fund and Advisers have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.

FORTIS SERIES FUND, INC.

By /s/ Dean C. Kopperud
-------------------------
Dean C. Kopperud
Its President

FORTIS ADVISERS, INC.

By /s/ Dean C. Kopperud
-------------------------
Dean C. Kopperud
Its Chief Executive Officer

<PAGE> 7

EXHIBIT A

<TABLE>
<CAPTION>
Investment
Advisory and
Series Average Net Assets Management Fee
- --------------------------------- ---------------------------- --------------
<S> <C> <C>

Money Market Series For the first $500 million .30%
For assets over $500 million .25%
U.S. Government Securities Series For the first $50 million .50%
For assets over $50 million .45%
Diversified Income Series For the first $50 million .50%
For assets over $50 million .45%
Multisector Bond Series For the first $100 million .75%
For assets over $100 .65%
High Yield Series For the first $250 million .50%
For assets over $250 million .45%
Global Asset Allocation Series For the first $100 million .90%
For assets over $100 million .85%
Asset Allocation Series For the first $250 million .50%
For assets over $250 million .45%
American Leaders Series For the first $35 million .90%
$35 million - $100 million .75%
For assets over $100 million .65%
Value Series For the first $100 million .70%
For assets over $100 million .60%
Capital Opportunities Series For the first $200 million .90%
$200 million - $500 million .85%
For assets over $500 million .80%
Growth & Income Series For the first $100 million .70%
For assets over $100 million .60%
S&P 500 Index Series All levels of assets .40%
Blue Chip Stock Series For the first $100 million .90%
For assets over $100 million .85%
Blue Chip Stock Series II For the first $200 million .95%
For assets over $200 million .90%
International Stock Series For the first $100 million .85%
For assets over $100 million .80%
Mid Cap Stock Series For the first $100 million .90%
For the next $150 million .85%
For assets over $250 million .80%
Small Cap Value Series For the first $50 million .90%
For assets over $50 million .85%
Global Growth Series For the first $500 million .70%
For assets over $500 million .60%
Global Equity Series For the first $200 million 1.00%
$200 million - $500 million .95%
For assets over $500 million .90%
</TABLE>

<PAGE> 8

EXHIBIT A - CONTINUED

<TABLE>
<CAPTION>
Investment
Advisory and
Series Average Net Assets Management Fee
- --------------------------------- ---------------------------- --------------
<S> <C> <C>

Large Cap Growth Series For the first $100 million .90%
$100 million - $200 million .85%
For assets over $200 million .80%
Investors Growth Series For the first $200 million .90%
$200 million - $500 million .85%
For assets over $500 million .80%
Growth Stock Series For the first $100 million .70%
For assets over $100 million .60%
Aggressive Growth Series For the first $100 million .70%
For assets over $100 million .60%
</TABLE>

<PAGE> 9

EXHIBIT B

<TABLE>
<CAPTION>
Series Average Daily Net Assets
- ---------------------------- --------------------------

<S> <C>
American Leaders Series 1.25%
Capital Opportunities Series 1.25%
Blue Chip Stock Series II 1.30%
Global Equity Series 1.35%
Investors Growth Series 1.25%
</TABLE>

<PAGE> 1

EXHIBIT (d).10
SUBADVISORY AGREEMENT

FORTIS SERIES FUND, INC.

THIS AGREEMENT is made this 15 day of March, 2000, between Fortis
Advisers, Inc. (the "Manager"), a Minnesota Corporation, and A I M Capital
Management, Inc. (the "Sub-Adviser"), a Texas corporation.

WHEREAS, Fortis Series Fund, Inc. (the "Company") represents that it is
registered under the Investment Company Act of 1940, as amended (the "1940
Act") as an open-end, diversified management investment company, consisting of
multiple series of investment portfolios;

WHEREAS, the Manager represents that it is registered under the Investment
Advisers Act of 1940, as amended (the "Advisers Act") as an investment adviser
and engages in the business of acting as an investment adviser;

WHEREAS, the Sub-Adviser represents that it is registered under the
Advisers Act as an investment adviser and engages in the business of acting as
an investment adviser;

WHEREAS, the Company represents that the Board of Directors of the Company
is authorized to classify or reclassify authorized but unissued shares of the
Company, and as of the date of this Agreement the Company's Board of Directors
has authorized the issuance of series of shares representing interests in
investment portfolios; and

WHEREAS, the Manager represents that it has entered into a management
agreement dated as of March 3, 2000 with the Company (the "Management
Agreement"), pursuant to which the Manager shall act as manager with respect to
the portfolios listed on Schedule A hereto (each, a "Portfolio");

NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:

1. INVESTMENT DESCRIPTION; APPOINTMENT

The Company desires to employ its capital relating to each Portfolio by
investing and reinvesting in investments of the kind and in accordance with the
investment objective(s), policies and limitations specified in the prospectuses
(the "Prospectus") and the statements of additional information (the
"Statement") filed with the Securities and Exchange Commission as part of the
Company's Registration Statement on Form N-1A, as amended or supplemented from
time to time, and in the manner and to the extent as may from time to time be
approved by the Board of Directors of the Company (the "Board"). Copies of the
Registration Statement, Prospectus and the Statement have been or will be
provided to the Sub-Adviser. The Manager agrees promptly to provide copies of
all amendments and supplements to the current Registration Statement,
Prospectus and the Statement to the Sub-Adviser on or before the effective date
thereof on an on-going basis. Until the Manager delivers any such amendment or
supplement to the Sub-Adviser, the Sub-Adviser shall be fully protected in
relying on the Prospectus and Statement as previously furnished to the
Sub-Adviser. The Company employs the Manager as the manager to each Portfolio
pursuant to the Management Agreement, and the Company and the Manager desire to
employ and hereby appoint the Sub-Adviser to act as the sub-investment adviser
to each Portfolio. The Sub-Adviser accepts the appointment and agrees to
furnish the services for the compensation set forth below.

<PAGE> 2

2. SERVICES AS SUB-ADVISER

Subject to the supervision, direction and approval of the Board and the
Manager, the Sub-Adviser shall conduct a continual program of investment,
evaluation and, if appropriate in the view of the Sub-Adviser, sale and
reinvestment of each Portfolio's assets. The Sub-Adviser is authorized, in its
sole discretion and without prior consultation with the Manager, to: (a) manage
each Portfolio's assets in accordance with such Portfolio's investment
objective(s) and policies as stated in the Prospectus and the Statement; (b)
make investment decisions for each Portfolio; (c) place purchase and sale
orders for portfolio transactions on behalf of each Portfolio; and (d) employ
professional portfolio managers and securities analysts who provide research
services to each Portfolio.

The Manager agrees that the Sub-Adviser shall not be liable for any
failure to recommend the purchase or sale of any security on behalf of any
Portfolio on the basis of any information which might, in the Sub-Adviser's
opinion, constitute a violation of any federal or state laws, rules or
regulations.

In addition, (i) the Sub-Adviser shall furnish the Manager daily
information concerning portfolio transactions and quarterly and annual reports
concerning transactions and performance of each Portfolio in such form as may
be mutually agreed by the Manager and the Sub-Adviser, and the Sub-Adviser
agrees to review such Portfolio and discuss the management thereof with the
Manager and the Board.

(ii) Unless the Manager gives the Sub-Adviser written instructions to the
contrary, the Sub-Adviser shall use its good faith judgment in a manner which
it reasonably believes best serves the interests of each Portfolio's
shareholders to vote or abstain from voting all proxies solicited by or with
respect to the issuers of securities in which assets of each Portfolio may be
invested.

(iii) The Sub-Adviser shall maintain and preserve such records related to
each Portfolio's transactions as required under the 1940 Act. The Manager
shall maintain and preserve all books and other records not related to the
Portfolio transactions as required under the 1940 Act. The Sub-Adviser shall
timely furnish to the Manager all information relating to the Sub-Adviser's
services hereunder reasonably requested by the Manager. The Sub-Adviser agrees
that all records which it maintains for a Portfolio are the property of the
Company and the Sub-Adviser will surrender promptly to the Company copies of
any of such records.

(iv) The Sub-Adviser shall maintain compliance procedures for each
Portfolio that it reasonably believes are adequate to ensure each Portfolio's
compliance with (A) the 1940 Act and the rules and regulations promulgated
thereunder and (B) such Portfolio's investment objective(s) and policies as
stated in the Prospectus and Statement. The Sub-Adviser shall maintain
compliance procedures that it reasonably believes are adequate to ensure its
compliance with the Advisers Act.

(v) In furnishing the services under this Agreement, the Sub-Advisor will
comply with the requirements of the 1940 Act and will use its best efforts to
cause each Portfolio to comply with the adequate diversification requirements
of Section 817(h)(2) and the Subchapter M qualification requirements of Section
851(b)(2) and (3) of the Internal Revenue Code, applicable to each Portfolio,
and the regulations promulgated thereunder, to the extent such compliance is
within the Sub-Advisor's control.

(vi) The Sub-Adviser has adopted a written code of ethics that it
reasonably believes complies with the current requirements of Rule 17j-1 under
the 1940 Act, which it will provide to the Company. The Sub-Adviser has
policies and procedures regarding the detection and prevention and the misuse
of material,

<PAGE> 3

nonpublic information by the Sub-Adviser and its employees as required by the
Insider Trading and Securities Fraud Enforcement Act of 1988.

3. BROKERAGE

The Sub-Adviser is responsible for decisions to buy and sell securities
for each Portfolio, broker-dealer selection, and negotiation of brokerage
commission rates. It is the Sub-Adviser's general policy in selecting a broker
to effect a particular transaction to seek to obtain "best execution," which
means prompt and efficient execution of the transaction at the best obtainable
price with payment of commissions which are reasonable in relation to the value
of the brokerage services provided by the broker.

Consistent with this policy, the Sub-Adviser, in selecting broker-dealers
and negotiating brokerage commission rates, will take all relevant factors into
consideration, including, but not limited to: the best price available; the
reliability, integrity and financial condition of the broker-dealer; the size
of and difficulty in executing the order; and the value of the expected
contribution of the broker-dealer to the investment performance of the
applicable Portfolio on a continuing basis. Subject to such policies and
procedures as the Board may determine, the Sub-Adviser shall have discretion to
effect investment transactions for each Portfolio through broker-dealers
(including, to the extent permissible under applicable law, broker-dealers
affiliated with the Sub-Adviser) who provide brokerage and/or research
services, as such services are defined in section 28(e) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and to cause such Portfolio
to pay any such broker-dealers an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker-dealer would have charged for effecting that transaction, if the
Sub-Adviser determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage or research services
provided by such broker-dealer, viewed in terms of either that particular
investment transaction or the Sub-Adviser's overall responsibilities with
respect to such Portfolio and other accounts as to which the Sub-Adviser
exercises investment discretion (as such term is defined in section 3(a)(35) of
the 1934 Act). Allocation of orders placed by the Sub-Adviser on behalf of a
Portfolio to such broker-dealers shall be in such amounts and proportions as
the Sub-Adviser shall determine in good faith in conformity with its
responsibilities under applicable laws, rules and regulations. The Sub-Adviser
will submit reports on such allocations to the Manager regularly as requested
by the Manager, in such form as may be mutually agreed to by the parties
hereto, indicating the broker-dealers to whom such allocations have been made
and the basis therefor.

4. INFORMATION PROVIDED TO THE COMPANY AND THE MANAGER

The Sub-Adviser shall keep the Company and the Manager informed of
developments materially affecting each Portfolio's holdings, and shall, on its
own initiative, furnish the Company and the Manager from time to time with
whatever information the Sub-Adviser believes is appropriate for this purpose.

5. COMPENSATION

In consideration of the services rendered pursuant to this Agreement, the
Manager will pay the Sub-Adviser an annual fee calculated at the rate specified
in Schedule B hereto. The fee is calculated daily and paid monthly. The fee
for the period from the Effective Date (defined below) of the Agreement to the
end of the month during which the Effective Date occurs shall be prorated
according to the proportion that such period bears to the full monthly period.
Upon any termination of this Agreement before the end of a month, the fee for
such part of that month shall be prorated according to the proportion that such
period bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees payable to
the Sub-Adviser, the value of each Portfolio's net assets shall be computed at
the times and in the manner specified in the Prospectus and/or the Statement.

<PAGE> 4

6. EXPENSES

The Sub-Adviser shall bear all expenses incurred by it in connection with
the performance of its services under this Agreement. Each Portfolio will bear
certain other expenses to be incurred in its operation, including, but not
limited to, investment advisory fees, sub-advisory fees (other than
sub-advisory fees paid pursuant to this Agreement) and administration fees;
fees for necessary professional and brokerage services; costs relating to local
administration of securities; fees for any pricing service; the costs of
regulatory compliance; and pro rata costs associated with maintaining the
Company's legal existence and shareholder relations. All other expenses not
specifically assumed by the Sub-Adviser hereunder or by the Manager under the
Management Agreement are borne by the applicable Portfolio or the Company.

7. STANDARD OF CARE

The Sub-Adviser shall exercise its best judgment and shall act in good
faith in rendering the services listed in paragraphs 2 and 3 above. The
Sub-Adviser, its officers, directors and employees shall not be liable for any
error of judgment or mistake of law or for any loss suffered by any Portfolio,
any shareholder of any Portfolio or the Manager in connection with the matters
to which this Agreement relates, provided that nothing in this Agreement shall
be deemed to protect or purport to protect the Sub-Adviser against any
liability to the Manager, the Company or to the shareholders of any Portfolio
to which the Sub-Adviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence on its part in the performance of
its duties or by reason of the Sub-Adviser's reckless disregard of its
obligations and duties under this Agreement.

8. TERM OF AGREEMENT

This Agreement shall become effective as of March 15, 2000 (the "Effective
Date") and shall continue for an initial two-year term and shall continue
thereafter so long as such continuance is specifically approved at least
annually as required by the 1940 Act. This Agreement is terminable with
respect to any Portfolio, without penalty, on 60 days' written notice, by the
Board or by vote of holders of a majority (as defined in the 1940 Act and the
rules thereunder) of the outstanding voting securities of such Portfolio, or
upon 60 days' written notice, by the Sub-Adviser. This Agreement will also
terminate automatically in the event of its assignment (the term "assignment"
having the meaning defined in Section 2(a)(4) of the 1940 Act and the rules
thereunder).

9. SERVICES TO OTHER COMPANIES OR ACCOUNTS

It is understood that the Sub-Adviser now acts, will continue to act and
may act in the future as investment manager or adviser to fiduciary and other
managed accounts, and as investment manager or adviser to other investment
companies, including any offshore entities, or accounts, and the Company has no
objection to the Sub-Adviser's so acting, provided that whenever a Portfolio
and one or more other investment companies or accounts managed or advised by
the Sub-Adviser have available funds for investment, investments suitable and
appropriate for each will be allocated in accordance with a formula believed to
be equitable to each company and account. The Company and the Manager
recognize that in some cases this procedure may adversely affect the size of
the position obtainable for such Portfolio. In addition, it is understood that
the persons employed by the Sub-Adviser to assist in the performance of the
Sub-Adviser's duties under this Agreement will not devote their full time to
such service and nothing contained in this Agreement shall be deemed to limit
or restrict the right of the Sub-Adviser or any affiliate of the Sub-Adviser to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.

<PAGE> 5

10. NOTICES

Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other parties at such address as such
other parties may designate for the receipt of such notice. Until further
notice to the other parties, it is agreed that the address of each party is as
follows:

(a) To the Manager:

Fortis Advisers, Inc.
Attn: Legal Department
500 Bielenberg Drive
St. Paul, MN 55125

(b) To the Sub-Adviser:

A I M Capital Management, Inc.
President
11 Greenway Plaza, Suite 100
Houston, TX 77046

cc: General Counsel

11. REPRESENTATIONS

The Company represents that a copy of the Agreement and Articles of
Incorporation together with all amendments thereto, is on file with the
Secretary of State of Minnesota.

Each of the parties hereto represents that the Agreement has been duly
authorized, executed and delivered by all required action.

12. USE OF NAME

The names "A I M Capital Management, Inc.", "AIM Capital Management", or
"AIM Capital" (collectively the "AIM Names") may be used only for so long as
this Agreement or any extension, renewal, or amendment hereof remains in
effect. At such times as this Agreement shall no longer be in effect, the
Company and Manager shall cease to use such names or any other name indicating
that it is advised by or otherwise connected with the Sub-Adviser and shall
promptly change its name accordingly. The Company and Manager each acknowledge
that it has authority to use the AIM Names through permission of the
Sub-Adviser, and agrees that the Sub-Adviser reserves to itself and any
successor to its business the right to grant the non-exclusive right to use the
aforementioned names or any similar names to any other corporation or entity,
including but not limited to any investment company of which the Sub-Adviser or
any subsidiary or affiliate thereof or any successor to the business of any
thereof shall be the investment adviser.

13. SEVERABILITY

If any provision of this Agreement is found to be unenforceable, then this
Agreement shall be deemed to be amended by modifying such provision to the
extent necessary to make it legal and enforceable while preserving its intent.
The remainder of this Agreement shall not be affected by such modification.

<PAGE> 6

14. QUESTIONS OF INTERPRETATION

Any question of interpretation of any term or provision of this Agreement
having a counterpart in or otherwise derived from a term or provision of the
1940 Act or the Advisers Act shall be resolved by reference to such term or
provision of the 1940 Act or the Advisers Act and to interpretations thereof,
if any, by the United States Courts or in the absence of any controlling
decision of any such court, by rules, regulations or orders of the Securities
and Exchange Commission issued pursuant to said Acts. In addition, where the
effect of a requirement of the 1940 Act or the Advisers Act reflected in any
provision of this Agreement is revised by rule, regulation or order of the
Securities and Exchange Commission, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers on the day and year first written above.

FORTIS ADVISERS, INC.
Attest: /s/ Scott R. Plummer By: /s/ Tamara L. Fagely
-------------------- --------------------
Name: Tamara L. Fagely
--------------------
Title: Vice President
--------------------

A I M CAPITAL MANAGEMENT, INC.
Attest: /s/ Ofelia M. Mayo By: /s/ Robert G. Alley
------------------ ---------------------
Name: Robert G. Alley
---------------------
Title: Senior Vice President
---------------------

<PAGE> 7

SCHEDULE A

Portfolios

Multi-Sector Bond Series

Blue Chip Stock Series II

<PAGE> 8

SCHEDULE B

Fee Schedule

Pursuant to Section 5 of the Sub-Advisory Agreement between Fortis Advisers,
Inc. and A I M Capital Management, Inc. (the "Sub-Advisor"), the fees payable
to the Sub-Adviser shall be calculated by applying the following rates to the
average daily net assets of each Portfolio as indicated below:

Multi-Sector Bond Series

<TABLE>
<CAPTION>
Net Assets Annual Rate
----------- -----------
<S> <C> <C>
first $200 million .. .45 bps
over $200 million ... .40 bps

BLUE CHIP STOCK SERIES II

Net Assets Annual Rate
----------- -----------
first $200 million .. .55 bps
over $200 million ... .50 bps
</TABLE>

<PAGE> 1

EXHIBIT (d).11
INVESTMENT SUB-ADVISORY AGREEMENT

Agreement dated April 13, 2000 by and between Fortis Advisers, Inc., a
Minnesota Corporation (the "Manager") and Massachusetts Financial Services
Company, a corporation organized under the laws of Delaware (the "Sub-Adviser")
whose principal office is located at 500 Boylston Street, Boston, Massachusetts
02116.

WHEREAS, the Manager serves as the investment adviser, manager, registrar,
transfer agent and dividend disbursing agent for Fortis Series Fund, Inc. (the
"Company"), an open-end, management investment company registered with the
Securities and Exchange Commission ("SEC") pursuant to the Investment Company
Act of 1940, as amended ("1940 Act"), that is comprised of a number of separate
series of investments that act as funding vehicles for various variable annuity
contracts and variable universal life insurance policies issued by Fortis
Benefits Insurance Company ("FBIC") and/or First Fortis Life Insurance Company
("First Fortis");

WHEREAS, the Manager desires to retain the Sub-Adviser to assist the
Manager in furnishing an investment program to the series of the Company
identified in Exhibit A attached hereto (the "Portfolios");

NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Manager and the Sub-Adviser agree as follows:

1. APPOINTMENT AND EXPENSES OF THE SUB-ADVISER. The Manager hereby
appoints the Sub-Adviser to serve as sub-adviser with respect to the assets of
the Portfolios and to perform the services hereinafter set forth and the
Sub-Adviser hereby accepts such appointment. The Sub-Adviser agrees, for the
compensation herein provided, to assume all obligations herein provided and
bear all its personnel and other expenses associated with the performance of
its services hereunder. The Company shall be responsible for the Portfolios'
administrative and other direct expenses, including, but not limited to: (a)
fees pursuant to any plan of distribution that the Portfolios may adopt; (b)
the Portfolios' brokerage and commission expenses, including all ordinary and
reasonable transaction costs; (c) fees and expenses of pricing services used by
the Company to determine the value of the Portfolios' holdings; (d) Federal,
state, local and foreign taxes, including issue and transfer taxes incurred by
or levied on the Portfolios; (e) interest charges on any Portfolio borrowings;
(f) the Company's organizational and offering expenses; (g) the cost of the
Company's personnel providing services to the Company; (h) fees and expenses of
registering the Company's shares under the appropriate Federal securities laws
and of qualifying the Company's shares under applicable state securities laws
and pursuant to any foreign laws; (i) expenses of printing and distributing
reports to the Company's shareholders, proxy materials, prospectuses and
distribution of dividends; (j) costs of the Company's shareholders' meetings
and proxy solicitation; (k) charges and expenses of the Company's custodian and
registrar, transfer agent and dividend disbursing agent; (l) compensation of
the Company's officers, directors and employees that are not "affiliated
persons" or "interested persons" [as defined in Section 2(a) of the 1940 Act
and the rules, regulations and releases relating thereto] of the Sub-Adviser;
(m) the Company's legal and auditing expenses; (n) cost of certificates
representing shares of the Portfolios; (o) the Company's costs of stationery
and supplies; (p) the Company's insurance expenses; (q) the Company's
association membership dues; (r) travel expenses of officers and employees of
the Sub-Adviser to the extent such expenses relate to the attendance of such
persons at meetings at the request of the Board of Directors of the Company
(except that a representative of the Sub-Adviser will attend one Board meeting
per year, at the Sub-Adviser's own expense); and (s) travel expenses for
attendance at Board of Directors meetings by members of the Board of Directors
of the Company who are not "interested persons" or "affiliated persons" of the
Sub-Adviser. The Sub-Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, except as expressly provided or

<PAGE> 2

authorized (whether herein or otherwise), have no authority to act for or on
behalf of the Company in any way or otherwise be deemed an agent of the
Company.

2. DUTIES OF THE SUB-ADVISER.

2.1 The Sub-Adviser shall formulate and implement a continuing program for
the management of the assets of the Portfolios. The Sub-Adviser shall amend
and update such program from time to time as financial and other economic
conditions warrant. The Sub-Adviser shall make all determinations with respect
to the investment of the assets of the Portfolios and shall take such steps as
may be necessary to implement the same, including the placement of purchase and
sale orders on behalf of the Portfolios. The Manager shall be responsible for
the administration of the investment activities of the Company and the
Portfolios, including compliance with the requirements of the 1940 Act, except
for the investment management activities specifically delegated to the
Sub-Adviser pursuant to this Agreement.

2.2 The Manager acknowledges that the Sub-Adviser is not the compliance
agent for the Portfolios or for the Manager, and does not have all of the
Portfolios' books and records necessary to perform certain compliance testing.
The Sub-Adviser shall perform such compliance testing as it deems reasonable
based upon its books and records with respect to the Portfolios and shall
certify compliance to the Manager accordingly.

3. POWERS OF THE SUB-ADVISER.

3.1 The Sub-Adviser's power to direct the investment and reinvestment of
the assets of the Portfolios shall be exercised in accordance with applicable
law, the Company's Articles of Incorporation and the investment objectives,
policies and restrictions set forth in the then-current Prospectus and
Statement of Additional Information (collectively the "Prospectus") relating to
the Portfolios contained in the Company's Registration Statement under the 1940
Act and the Securities Act of 1933, as amended. The Company and/or the Manager
may also place additional limitations on the Sub-Adviser's investment decisions
by written notice to the Sub-Adviser. The Manager agrees to provide promptly
to the Sub-Adviser a copy of the documents mentioned above and all changes made
to such documents, together with a list of companies the securities of which
are not to be bought or sold for the Portfolios (such list shall include each
security name, cusip, sedol and/or applicable ticker) and a list of affiliated
brokers and underwriters for reporting transactions under applicable provisions
of the 1940 Act. These documents and any amendments thereto shall not be
deemed effective with respect to the Sub-Adviser until three business days
after its receipt thereof.

3.2 While the Sub-Adviser will have day-to-day responsibility for the
discretionary investment decisions to be made on behalf of the Portfolios, the
Sub-Adviser will be subject to oversight by the Manager. Such oversight,
however, shall not require prior approval of discretionary investment decisions
made by the Sub-Adviser except as may be required by applicable law, the
Portfolios' investment policies and restrictions and/or any limitations imposed
on the Sub-Adviser by the Company and/or the Manager pursuant to the preceding
paragraph. The Manager shall retain the right to instruct the Sub-Adviser to
effect any transactions necessary to ensure compliance with the Portfolios'
investment policies and restrictions as well as the requirements of Subchapter
M of the Internal Revenue Code and the provisions of Section 817(h) of the
Internal Revenue Code and the regulations promulgated thereunder.

3.3 Further, and except as may be qualified elsewhere in this Agreement,
the Sub-Adviser is hereby authorized, for and on behalf of the Company, with
respect to the Portfolios, in its discretion to:

<PAGE> 3

(a) exercise any conversion and/or subscription rights available in
connection with any securities or other investments held in the Portfolios;

(b) maintain all or part of the Portfolios' assets uninvested in
short-term income-producing instruments for such periods of time as shall be
deemed reasonable and prudent by the Sub-Adviser;

(c) instruct the Custodian, in accordance with the Custodian Agreement,
to deliver for cash received, securities or other cash and/or securities
instruments sold, exchanged, redeemed or otherwise disposed of from the
Portfolios, and to pay cash for securities or other cash and/or securities
instruments delivered to the Custodian and/or credited to the Portfolios upon
acquisition of the same for the Portfolios;

(d) determine how to vote all proxies received with respect to securities
held in the Portfolios and direct the Custodian as to the voting of such
proxies; and

(e) generally, perform any other act necessary to enable the Sub-Adviser
to carry out its obligations under this Agreement.

4. SELECTION OF BROKER-DEALERS. The Sub-Adviser shall select the brokers
and dealers through whom transactions on behalf of the Portfolios will be
executed and the markets on or in which such transactions will be executed and
shall place, in the name of the Portfolio or its nominee (or appropriate
foreign equivalent), all such orders. In selecting brokers and dealers to
execute such transactions, and in negotiating brokerage commissions, and in
obtaining research, statistical and other information from brokers and dealers
in connection with Portfolio transactions, the Sub-Adviser shall comply with
applicable law.

(a) It is understood that certain other clients (including other funds,
portfolios and accounts) of the Sub-Adviser may have investment objectives and
policies similar to those of the Portfolios and that the Sub-Adviser may, from
time to time, make recommendations that result in the purchase (or sale) of a
particular security by its other clients and the Portfolios during the same
period of time. If transactions on behalf of more than one client during the
same period increase the demand for securities being purchased or the supply of
securities being sold, there may be an adverse effect on price or quantity. In
such event, the Sub-Adviser shall allocate the securities or investments to be
purchased or sold, as well as the expenses incurred in the transactions
(including price) in a manner the Sub-Adviser considers equitable and
consistent with its obligations to the Portfolios and the Sub-Adviser's other
clients.

(b) The Sub-Adviser agrees that it will only enter into transactions that
are covered by Section 10(f), Section 17(a) or Section 17(e) of the 1940 Act if
it has (i) complied with Rule 10f-3, Rule 17a-7 or Rule 17e-1 thereunder,
respectively, or the terms of an appropriate exemptive order issued to the
Company by the SEC, and (ii) has complied with the procedures adopted
thereunder by the Board of Directors of the Company which may, pursuant to
authority granted by the Company, be supplemented by interpretive guidelines of
the Manager.

5. REPORTS AND INFORMATION TO BE PROVIDED BY THE SUB-ADVISER. The
Sub-Adviser shall furnish such information and reports relating to the
Portfolios, its holdings and transactions involving Portfolio securities as the
Manager and/or the Company may reasonably require to fulfill its or their legal
responsibilities or to meet regulatory requirements or discharge other duties
they may have. Among the subjects of the reports and information to be
provided by the Sub-Adviser are the following:

<PAGE> 4

(a) Information set forth in Exhibit B, attached hereto;

(b) Information required by the Manager to satisfy its reporting
obligations to the Company arising from the Investment Advisory and Management
Agreement between the Manager and the Company;

(c) Information required by the Manager to determine the Sub-Adviser's
compliance with Rule 17j-1 under the 1940 Act with respect to the Sub-Adviser's
activities on behalf of the Portfolios;

(d) Information required by the Manager to determine compliance with
Rules 10f-3, 17a-7 and 17e-1 under the 1940 Act with respect to the
Sub-Adviser's (or its affiliates') activities on behalf of the Portfolios; and

(e) Information reasonably necessary to respond to specific inquiries
from the Company's management and/or Board of Directors.

6. NON-EXCLUSIVE SERVICES, CONFLICTS OF INTEREST AND MATERIAL NONPUBLIC
INFORMATION. The Manager understands that the Sub-Adviser and its affiliates
may furnish investment management and advisory services to others, and that the
Sub-Adviser and its affiliates shall be at all times free, in their discretion,
to make recommendations to, and investments for, others which may or may not
correspond to investments made for the Portfolios. The Manager further
understands that the Sub-Adviser, its affiliates, and any officer, director,
stockholder, employee or any member of their families may or may not have an
interest in the securities whose purchase and sale the Sub-Adviser effects for
the Portfolios. Actions taken by the Sub-Adviser on behalf of the Portfolios
may be the same as, or different from, actions taken by the Sub-Adviser on its
own behalf or for others or from actions taken by the Sub-Adviser's affiliates,
officers, directors, partners, employees of the Sub-Adviser or its affiliates,
or the family members of such persons or other investors. The Sub-Adviser
represents that it has in effect a code of ethics that complies with Rule 17j-1
under the 1940 Act and has procedures in place that, taken together, provide
reasonable enforcement of the code's provisions. Similarly, the Sub-Adviser
represents that, with respect to the use of nonmaterial nonpublic information,
it has complied, and will continue to comply, with Section 204A of the
Investment Advisers Act of 1940, as amended ("Advisers Act") and any rules
thereunder.

7. DISCLOSURE OF INFORMATION AND CONFIDENTIALITY.

7.1 The Sub-Adviser, the Company and the Manager, either during or after
the termination of this Agreement, are authorized with respect to matters
arising out of this Agreement to make any disclosures and/or participate in any
conduct required by any applicable law, rule, regulation, self-regulating
organization, investment exchange or any other body having regulatory or
enforcement responsibility with respect to any investment business conducted by
the Sub-Adviser on behalf of the Portfolios.

7.2 Subject to the preceding paragraph, the Sub-Adviser agrees that all
information which has or will come into its possession or knowledge concerning
the Portfolios or their investments in connection with this Agreement shall be
held by the Sub-Adviser in confidence. The Sub-Adviser shall make no use of
such information other than for the performance of this Agreement, shall
disclose such information only to the directors, officers or employees of the
Sub-Adviser or its affiliated firms or of any third party appointed pursuant to
this Agreement requiring such information and shall not disclose such
information to any other person without the written consent of the Company;
provided, however, that to the extent the investments for the Portfolios are
similar to investments for other clients of the Sub-Adviser, the Sub-Adviser
may

<PAGE> 5

disclose such investments without direct reference to the Portfolios. The
Sub-Adviser may also include the names of the Portfolios in a representative
client list and disclose their performance and the sub-advisory fees paid
hereunder.

7.3 Subject to the preceding paragraph, the Company and the Manager agree
that all information which has or will come into their possession or knowledge
concerning the operations and procedures of the Sub-Adviser shall be held by
the Company and the Manager in confidence. The Company and the Manager shall
make no use of such information other than for the performance of this
Agreement, shall disclose such information only to their directors, officers or
employees or those of its affiliated firms and shall not disclose such
information to any other person without the written consent of the Sub-Adviser.

7.4 The Manager and the Company agree not to refer to any designation
comprised in whole or in part of the names or marks "Massachusetts Financial
Services Company," "MFS Investment Management" or "MFS" or any other trademark
relating to MFS in any advertisement or other document without prior consent of
the Sub-Adviser. Similarly, the Sub-Adviser and its affiliates shall not refer
to the Manager, the Company, the Portfolios, or other Fortis affiliates in any
advertisement or other document without the Manager's prior consent. Upon
termination of this Agreement, each party shall cease all use of any such name
or mark as soon as reasonably practicable.

8. DEALINGS WITH THE CUSTODIAN. The Manager shall notify the Sub-Adviser
of the appointment of the custodian(s) ("Custodian") for all or any portion of
the Portfolios' assets, shall provide the Sub-Adviser with a true and complete
copy of each agreement with the Custodian that deals with the Portfolios'
assets ("Custodian Agreements"), and shall provide the Sub-Adviser with the
names of persons authorized to act on behalf of the Custodian and such other
information as the Sub-Adviser shall reasonably require. The Sub-Adviser
agrees to give instructions in accordance with the terms of the applicable
Custodian Agreements. The Company agrees to provide promptly to the
Sub-Adviser a copy of all relevant Custodian Agreements, and all changes made
to such documents.

9. DELEGATION OF THE SUB-ADVISER'S RESPONSIBILITIES. The Sub-Adviser may
not delegate its investment advisory responsibilities as Sub-Adviser to the
Portfolios. However, the Sub-Adviser may employ, retain or otherwise avail
itself of the services and facilities of persons and entities within its own
organization or any other organization for the purpose of providing the
Sub-Adviser, the Manager or the Portfolios with such information, advice or
assistance, including but not limited to advice regarding economic factors and
trends and advice as to transactions in specific securities, as the Sub-Adviser
may deem necessary, appropriate or convenient for the discharge of its
obligations hereunder or as may otherwise be helpful to the Manager or the
Portfolios, or in the discharge of the Sub-Adviser's overall responsibilities
with respect to the other accounts for which it serves as investment manager or
investment adviser. The Sub-Adviser's acquisition of information, advice or
assistance pursuant to this paragraph shall be at the Sub-Adviser's own expense
and shall not relieve the Sub-Adviser of any of its obligations under this
Agreement.

10. COMPENSATION. For the services to be rendered under this Agreement
and the facilities to be furnished, the Manager shall pay to the Sub-Adviser
for each fiscal year of the Company, a monthly management fee at the annual
rate for each Portfolio set out in Exhibit A. The monthly management fee shall
be paid to the Sub-Adviser not later than the tenth business day of the month
following the month in which such services were rendered and shall be based
upon the average net asset values of all the issued and outstanding shares of
the Portfolios as determined as of the close of each business day of the month
pursuant to the Articles of Incorporation, Bylaws and currently effective
Prospectus of the Portfolio.

<PAGE> 6

Payments of the monthly management fee will be accompanied by documentation
that verifies the calculation of such fee. If the management of the Portfolios
by the Sub-Adviser commences or terminates at any time other than the beginning
or end of a month, the management fee shall be prorated for that portion of
such month during which this Agreement was in force.

11. REPRESENTATIONS OF THE SUB-ADVISER. The Sub-Adviser represents and
agrees that:

(a) The Sub-Adviser is registered as an "investment adviser" under the
Advisers Act and is currently in compliance in all material respects and shall
at all times continue to comply in all material respects with the requirements
imposed upon it by the Advisers Act, the 1940 Act, state securities laws and
all applicable rules and regulations thereunder as they relate to the services
provided under this Agreement. The Sub-Adviser will immediately notify the
Manager if it becomes aware of the occurrence of any event that would
disqualify the Sub-Adviser from serving as an investment adviser of an
investment company pursuant to Section 9 of the 1940 Act or any other
applicable law or regulation.

(b) The Sub-Adviser will maintain, keep current and accurate, and
preserve all records with respect to the Portfolios as are required of it under
the Advisers Act and the 1940 Act, in the manner provided by such Acts and the
rules thereunder. The Sub-Adviser agrees that such records are the property of
the Company, and following termination of this Agreement will be surrendered to
the Company promptly upon request except to the extent that they are required
to be retained by the Sub-Adviser under applicable law and provided that the
Sub-Adviser may keep copies of these records. Further, such records shall be
open to inspection by the Company. The Sub-Adviser will also assure that the
Company will have the same access as the Sub-Adviser has to records relating to
the Portfolios that are held by relevant third parties. Such inspections will
be at reasonable times during business hours and only upon reasonable notice of
the Company's desire to make an inspection.

(c) The Sub-Adviser agrees to advise the Manager of any developments,
such as the reassignment of a portfolio manager, that would require Prospectus
disclosure and to provide any necessary information related to such
developments.

(d) The Sub-Adviser has provided the Manager and the Company with a copy
of its most recent and complete Form ADV and will promptly furnish them with
copies of any material amendments to the Form.

(e) If the Sub-Adviser's performance of its obligations under this
Agreement takes place in the United Kingdom, the Sub-Adviser shall be and shall
remain during the effectiveness of this Agreement, a member of the Investment
Management Regulatory Organisation, Ltd. ("IMRO") and thereby regulated in the
conduct of Investment Business (as defined in IMRO's rules) by the IMRO. The
Company and the Manager will be treated as a Non-Private Customer (as defined
in IMRO's rules) of the Sub-Adviser.

(f) The Sub-Adviser shall furnish the Manager with a certificate, signed
by a duly authorized officer of the Sub-Adviser that designates the officers or
employees of the Sub-Adviser having authority to act for and on behalf of the
Sub-Adviser in connection with this Agreement. The Sub-Adviser agrees that,
until such time as the Manager is otherwise informed in writing by a duly
authorized officer of the Sub-Adviser, the Manager shall be authorized and
entitled to rely on any notice, instruction, request, order or other
communication, given either in writing or orally, and reasonably believed by
the Manager in good faith to be given by an authorized representative of the
Sub-Adviser.

12. REPRESENTATIONS OF THE MANAGER. The Manager represents and agrees
that:

<PAGE> 7

(a) The Manager is registered as an "investment adviser" under the
Advisers Act and has provided to the Sub-Adviser a copy of its most recent and
complete Form ADV, along with a copy of the Investment Advisory and Management
Agreement between the Manager and the Company and the current Company
Prospectus regarding the Portfolios. After any amendment to the documents
referenced in this paragraph, the Manager will promptly furnish a copy of such
amended document to the Sub-Adviser. In addition, the Manager will provide the
Sub-Adviser with notice of proposed changes in the Prospectus and the
opportunity to review and comment upon such changes before they are finalized,
wherever possible.

(b) The Manager and the Company are currently in material compliance and
shall at all times continue to be in material compliance with the relevant
requirements of the Advisers Act, the 1940 Act, all applicable state securities
and insurance laws, and the rules thereunder, as they pertain to the
Portfolios.

(c) The Manager shall furnish the Sub-Adviser with a certificate, signed
by a duly authorized officer of the Manager that designates the officers or
employees of the Manager having authority to act for and on behalf of the
Manager in connection with this Agreement. The Manager agrees that, until such
time as the Sub-Adviser is otherwise informed in writing by a duly authorized
officer of the Manager, the Sub-Adviser shall be authorized and entitled to
rely on any notice, instruction, request, order or other communication, given
either in writing or orally, and reasonably believed by the Sub-Adviser in good
faith to be given by an authorized representative of the Manager.

13. LIABILITY, INDEMNIFICATION AND FORCE MAJEURE.

13.1 The Sub-Adviser, its affiliated firms or its or their employees,
officers, or directors will not be liable for any error of judgment or mistake
of law or for any loss suffered by the Portfolios, its shareholders, FBIC
contract owners or First Fortis contract owners in connection with the
performance of their duties under this Agreement, except for loss resulting
from willful misfeasance, bad faith or gross negligence on their part in the
performance of their duties or from reckless disregard by them of their duties
under this Agreement.

13.2 The Manager shall indemnify the Sub-Adviser against all claims which
may be made against the Sub-Adviser in connection with the exercise of the
powers and discretions conferred upon it pursuant to this Agreement, except
insofar as such claims allege or are the result of the willful misfeasance, bad
faith or gross negligence of the Sub-Adviser or any of its affiliated firms or
its or their employees, officers or directors or its or their breach of this
Agreement or violation of applicable law. Conversely, the Sub-Adviser shall
indemnify the Manager and the Company against all claims alleging or resulting
from the willful misfeasance, bad faith or gross negligence of the Sub-Adviser
or any of its affiliated firms or its or their employees, officers or directors
or its or their breach of this Agreement or violation of applicable law.

13.3 Neither party shall be held responsible for their non-performance of
any of their obligations under this Agreement by reason of any cause beyond
their control, including any breakdown or failure of transmission,
communication or computer facilities, postal or other strikes or similar
industrial action and the failure of any relevant exchange, clearing house
and/or broker for any reason to perform its obligations.

13.4 Promptly after receipt by an indemnified party under this Section 9
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made

<PAGE> 8

against the indemnifying party under this Section 9, notify the indemnifying
party of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from liability which it may have to any
indemnified party otherwise than under this Section 9. In case any such action
is brought against any indemnified party, and it notified the indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish and unless the
indemnified party releases the indemnifying party from any further obligations
under this Section 9 in connection with that action, assume the defense
thereof, with counsel satisfactory to such indemnified party. After notice
from the indemnifying party of its intention to assume the defense of an
action, the indemnified party shall bear the expenses of any additional counsel
obtained by it, and the indemnifying party shall not be liable to such
indemnified party under this section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation.

14. TERM, RENEWAL AND TERMINATION.

14.1 This Agreement shall, with respect to the Portfolios, become
effective as of the date first above written and shall remain in force for two
years thereafter, and for successive annual periods thereafter but only so long
as each such continuance is specifically approved at least annually by (1) a
majority of the Directors of the Company who are not parties to this Agreement
or interested persons of any such parties (other than as Directors of the
Company), by vote cast in person at a meeting called for the purpose of voting
on such approval; or (2) a vote of the holders of a majority of the outstanding
voting securities (as defined in the 1940 Act) of such Portfolios. It shall be
the duty of the Directors of the Company to request and evaluate, and the duty
of the Manager and Sub-Adviser to furnish, such information as may be
reasonably necessary to evaluate the terms of this Agreement and any renewal
hereof.

14.2 This Agreement may be terminated with respect to the Portfolios at
any time without the payment of any penalty by the Portfolios (1) by a vote of
a majority of the entire Board of Directors of the Company on sixty (60) days'
written notice to the Manager and the Sub-Adviser; (2) by vote of the holders
of a majority of the outstanding voting securities of such Portfolio (as
defined in the 1940 Act); or (3) by the Sub-Adviser on 60 days' written notice
to the Manager and the Company.

14.3 This Agreement shall automatically terminate in the event of its
assignment, as that term is defined in Section 2(a)(4) of the 1940 Act and the
rules thereunder.

14.4 Upon the Manager's receipt or service of any notice given by or to
the Company concerning the termination of the Manager's appointment as the
investment adviser to the Company, the Manager shall immediately forward a copy
of such notice to the Sub-Adviser and the Sub-Adviser's appointment under this
Agreement shall terminate on the same date as the termination of the Manager's
appointment.

15. AMENDMENT. No amendment to or modification of this Agreement shall
be effective unless and until it is set forth in a written amendment signed by
the Manager and the Sub-Adviser and approved by the vote of a majority of the
outstanding shares of the Portfolios, as defined in the 1940 Act.

16. AUTHORITY AND ENFORCEABILITY.

16.1 Each of the parties to this Agreement hereby represents that it is
duly authorized and empowered to execute, deliver, and perform this Agreement
and that such actions do not conflict with or

<PAGE> 9

violate any provision of law, rule, regulation, other legal requirement,
contract or other instrument to which it is a party or to which it is subject
and that this Agreement constitutes a valid and binding obligation, inuring to
the benefit of the Manager and the Sub-Adviser and their respective successors,
enforceable in accordance with its terms.

16.2 If any provision of this Agreement shall be held or made invalid or
unenforceable by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby and any such invalid or
unenforceable provision shall be deemed to be replaced with a valid and
enforceable provision that most closely reflects the intention of the parties.

17. APPLICABLE LAW. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter enacted, as
the same may be amended from time to time, this Agreement shall be
administered, construed and enforced according to the laws of The Commonwealth
of Massachusetts.

18. NOTICES. All notices hereunder shall be in writing and shall be
delivered in person or by facsimile (followed by delivery in person) to the
parties at the addresses set forth below:

If to the Manager: Fortis Advisers, Inc.
500 Bielenberg Drive
St. Paul, MN 55125
Fax #: 612-738-5262
Attn: Legal Department

If to the Sub-Adviser: Massachusetts Financial Services Company
500 Boylston Street
Boston, MA 02116
Fax # (617) 954-6624
Attn: Legal Department

or such other name or address as may be given in writing to the other party.

Unless specifically provided elsewhere, notice given as provided above
shall be deemed to have been given, if by personal delivery, on the day of such
delivery, and if by facsimile and mail, on the date on which such facsimile is
sent.

<PAGE> 10

19. EXECUTION. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers.

FORTIS ADVISERS, INC.

By: /s/ Tamara L. Fagely
--------------------
Attest:

_____________________________

MASSACHUSETTS FINANCIAL SERVICES COMPANY

By: /s/ Arnold D. Scott
-----------------------
Attest: Senior Executive Vice President

___________________________

<PAGE> 11

EXHIBIT A

SERIES OF FORTIS SERIES FUND, INC. TO BE MANAGED BY THE SUB-ADVISER
AND APPLICABLE SUB-ADVISORY FEES

<TABLE>
<CAPTION>
SERIES: SUB-ADVISORY FEES AS A % OF
- ---------------------------- AVERAGE DAILY NET ASSETS:

<S> <C> <C>
Capital Opportunities Series For the first $200 million .500%
$200 - $500 million .450%
For assets over $500 million .400%

Global Equity Series For the first $200 million .600%
$200 - $500 million .550%
For assets over $500 million .500%

Investors Growth Series For the first $200 million .500%
$200 - $500 million .450%
For assets over $500 million .400%
</TABLE>

<PAGE> 12

EXHIBIT B

EXAMPLES OF THE ROUTINE ACCOUNTING AND OPERATIONAL INFORMATION AND
DOCUMENTATION REQUIREMENTS OF EACH PORTFOLIO TO BE SATISFIED BY THE SUB-ADVISER

The following information is to be provided to:

Fortis Series Fund, Inc.
ATTN: Fund Accounting
P.O. Box 64284
St. Paul, MN 55164
FAX: (612) 738-0996
PHONE: (612) 738-4510

1. DOCUMENTATION OF TRADES. On a daily basis, via facsimile, a listing
of that day's executed trades and copies of the trade tickets for those trades.
The signature or initials of the portfolio manager or duly authorized officer
or employee of the Sub-Adviser should be placed on the trade tickets to
validate the authenticity of the trading information.

2. PORTFOLIO HOLDINGS. On a weekly basis, via facsimile, a list of the
Portfolio's holdings. The list should include the following information, for
each of the Portfolio's holdings, where applicable: long description,
cusip/sedol number, maturity date, par/principal amounts, market value, market
price, coupon rate and bond rating.

3. SECURITY PRICING. In any instance where the pricing services utilized
by the Department do not provide a price for a security held by the Portfolio,
provide the Department with reasonable assistance in determining a price for
such security.

mfssubak

<PAGE> 1

EXHIBIT (d).12
SUBADVISORY AGREEMENT

This Subadvisory Agreement (this "Agreement") is entered into as of the
13th day of April, 2000, by and between Fortis Advisers, Inc., a corporation
(the "Adviser") and Federated Investment Management Company, a Delaware
business trust ("FIM").

RECITALS:

A. The Adviser has entered into an advisory agreement dated March 3, 2000,
(the "Advisory Agreement") with Fortis Series Fund, Inc., a Minnesota
corporation (the "Company"), pursuant to which the Adviser provides
portfolio management services to the series of the Company set forth on
Schedule 1 to this Agreement (each a "Fund" and collectively the "Funds");

B. The Advisory Agreement provides that the Adviser may delegate any or all
of its portfolio management responsibilities under the Advisory Agreement
to one or more subadvisers; and

C. The Adviser and the Board of Directors (the "Board") of the Company
desire to retain FIM to render portfolio management services in the manner
and on the terms set forth in this Agreement.

AGREEMENT:

NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, the Adviser and FIM agree as follows:

SECTION 1. APPOINTMENT OF SUBADVISER.

The Adviser hereby appoints FIM as subadviser for each Fund and authorizes
FIM, in its discretion and without prior consultation with the Adviser, to
invest and manage each Fund's portfolio of Securities in accordance with such
Fund's stated investment objective to the fullest extent permitted by:

(a) the Fund's investment policies, limitations, procedures and
guidelines set forth in the documents listed on Schedules 2 and 3 to
this Agreement;
(b) any additional objectives, policies or guidelines established
by the Adviser or by the Board that have been furnished in writing
to FIM;
(c) the provisions of the Investment Company Act of 1940 (the
"1940 Act") and the rules and regulations thereunder applicable to
the Fund; and
(d) the provisions of Subchapter M of the Internal Revenue Code
("IRC") applicable to "regulated investment companies."

For purposes of this Agreement, "Securities" include any investment
permitted under the foregoing policies, limitations, procedures, guidelines,
laws or regulations. Subject to the supervision of the Adviser and the Board,
the Adviser authorizes FIM to determine the structure and composition of the
Fund's portfolio, including the purchase, retention and disposition of, and
exercise of all rights pertaining to, the Securities comprising the portfolio.

SECTION 2. REPRESENTATIONS AND WARRANTIES.

SECTION 2.1. REPRESENTATIONS AND WARRANTIES OF FIM

<PAGE> 2

FIM represents and warrants to Adviser as follows:

(a) FIM is a business trust duly organized, validly existing, and in good
standing under the laws of the State of Delaware.

(b) This Agreement constitutes the legal, valid, and binding obligation of FIM,
enforceable against FIM in accordance with its terms. FIM has the absolute
and unrestricted right, power, and authority to execute and deliver this
and to perform its obligations under this Agreement.

(c) Neither the execution and delivery of this Agreement by FIM nor the
performance of any of its obligations hereunder will give any person the
right to prevent, delay, or otherwise interfere with the performance of
such obligations pursuant to:

(i) any provision of FIM's Declaration of Trust or By-Laws;

(ii) any resolution adopted by the board of trustees or the shareholders of
FIM;

(iii) any law, regulation or administrative or court order to which FIM may
be subject; or

(iv) any contract to which FIM is a party or by which FIM may be bound.

FIM is not and will not be required to obtain any consent from any person
in connection with the execution and delivery of this Agreement or the
performance of any obligations hereunder.

(d) FIM is registered with the Securities and Exchange Commission ("SEC") as
an investment adviser under the Investment Advisers Act of 1940 (the
"Advisers Act") and is registered or licensed as an investment adviser
under the laws of all jurisdictions in which its activities require it to
be so registered or licensed, except where the failure to be so licensed
would not have a material adverse effect on its business.

(e) FIM has furnished to the Adviser true and complete copies of all the
documents listed on Schedule 3 to this Agreement.

SECTION 2.2. REPRESENTATIONS AND WARRANTIES OF THE ADVISER

The Adviser represents and warrants to FIM as follows:

(a) The Adviser is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Minnesota.

(b) This Agreement constitutes the legal, valid, and binding obligation of
the Adviser, enforceable against the Adviser in accordance with its terms.
the Adviser has the absolute and unrestricted right, power, and authority
to execute and deliver this and to perform its obligations under this
Agreement.

(c) Neither the execution and delivery of this Agreement by the Adviser nor
the performance of any of its obligations hereunder will give any person
the right to prevent, delay, or otherwise interfere with the performance
of such obligations pursuant to:

<PAGE> 3

(i) any provision of the Adviser's Articles of Incorporation or By-Laws;

(ii) any resolution adopted by the board of directors or the shareholders
of the Adviser;

(iii) any law, regulation or administrative or court order to which the
Adviser may be subject; or

(iv) any contract to which the Adviser is a party or by which the Adviser
may be bound.

Except for the approval of the Board and of each Fund's shareholders as
required by Section 15 of the 1940 Act, the Adviser is not and will not
be required to obtain any consent from any person in connection with the
execution and delivery of this Agreement or the performance of any
obligations hereunder.

(d) The Adviser is registered with the SEC as an investment adviser under the
Advisers Act and is registered or licensed as an investment adviser under
the laws of all jurisdictions in which its activities require it to be so
registered or licensed, except where the failure to be so licensed would
not have a material adverse effect on its business.

(e) The Adviser has furnished to FIM true and complete copies of all the
documents listed on Schedule 2 to this Agreement.

SECTION 3. CONDITIONS TO AGREEMENT.

FIM's and the Adviser's obligations under this Agreement are subject to
the satisfaction of the following conditions precedent:

(a) Receipt by FIM of a certificate of an officer of Company stating that (i)
this Agreement and the Advisory Agreement have been approved by the vote
of a majority of the directors, who are not interested persons of FIM or
the Adviser, cast in person at a meeting of the Board call for the purpose
of voting on such approval, and (ii) this Agreement and the Advisory
Agreement have been approved by the vote of a majority of the outstanding
voting securities of the Company;

(b) Receipt by FIM of certified copies of instructions from the Fund to its
custodian designating the persons specified by FIM as "Authorized Persons"
under the Fund's custody agreement;

(c) The Fund's execution and delivery of a limited power of attorney in favor
of FIM, in a form mutually agreeable to FIM, the Adviser and the Board;

(d) Receipt by FIM of Board resolutions, certified by an officer of the
Company, adopting all procedures and guidelines listed on Schedule 3 to
this Agreement and identified as required by Rule 2a-7 or any other
exemptive rule or order that is or will become applicable to any Fund;

(e) Receipt by FIM of complete copies, certified by an officer of the
Company, of all other policies procedures, guidelines, and codes listed on
Schedule 2 to this Agreement; and

(f) Any other documents, certificates or other instruments that FIM or the
Adviser may reasonable request from the Fund.

SECTION 4. COMPENSATION.

<PAGE> 4

For the services provided under this Agreement, the Adviser will pay to
FIM a fee at the annual rate set forth opposite each Fund's name on Schedule 1
multiplied times such Fund's average daily net assets. Such fee will accrue
daily and will be paid monthly to FIM on or before the last business day of the
next succeeding calendar month. If this Agreement is effective for only a
portion of a month, the fee will be prorated for the portion of such month
during which this Agreement is in effect.

SECTION 5. INFORMATION AND REPORTS.

(a) The Adviser will promptly notify FIM of any material change in any of the
documents listed on Schedule 2 to this Agreement and will provide FIM with
copies of any such modified document. The Adviser will also provide FIM
with a list, to the best of the Adviser's knowledge, of all affiliated
persons of Adviser (and any affiliated person of such an affiliated
person) and will promptly update the list whenever the Adviser becomes
aware of any additional affiliated persons.

(b) FIM will maintain books and records relating to its management of the
Fund under its customary procedures and in compliance with applicable
regulations under the 1940 Act and the Advisers Act. FIM will permit the
Adviser to inspect such books and records at all reasonable times during
normal business hours, upon reasonable notice. Prior to each Board
meeting, FIM will provide the Adviser and the Board with reports regarding
its management of the Fund during the interim period, in such form as may
be mutually agreed upon by FIM and the Adviser. FIM will also provide the
Adviser with any information regarding its management of the Fund required
for any shareholder report, amended registration statement or prospectus
supplement filed by the Fund with the SEC.

(c) The Adviser and the Company agree not to refer to any designation
comprised in whole or in part of the names or marks of FIM or any other
trademark relating to FIM in any advertisement or other document without
the prior consent of FIM. Similarly, FIM and its affiliates shall not
refer to the Adviser, the Company, the Fund or other Fortis affiliates in
any advertisement or other document without the Adviser's prior consent.
Upon termination of this Agreement, each party shall cease all use of any
such name or mark as soon as reasonably practicable.

SECTION 6. NONEXCLUSIVE AGREEMENT; ALLOCATION OF TRANSACTIONS.

(a) The investment management services provided by FIM hereunder are not to
be deemed to be exclusive, and FIM shall be free to render similar
services to other advisers, investment companies, and other types of
clients.

(b) To the extent consistent with applicable law, FIM may aggregate purchase
or sell orders for the Fund with contemporaneous purchase or sell orders
of other clients of FIM or its affiliated persons. In such event,
allocation of the Securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by FIM in the manner FIM
considers to be the most equitable and consistent with its and its
affiliates' fiduciary obligations to the Fund and to such other clients.
The Adviser hereby acknowledges that such aggregation of orders may not
result in a more favorable price or lower brokerage commissions in all
instances.

(c) FIM will place purchase and sell orders for the Fund with or through such
banks, brokers, dealers, futures commission merchants or other firms
dealing in Securities ("Brokers") as it determines, which may include
Brokers that are affiliated persons of FIM, provided such orders are
exempt from the provisions of Section 17(a), (d) and (e) of the 1940 Act.
FIM will use its best efforts to obtain execution of transactions for the
Fund at prices which are advantageous to the Fund and at commission rates
that are reasonable in relation to the services received. FIM may,
however, select Brokers on the basis that they provide brokerage, research
or other services or products to the Fund and/or other

<PAGE> 5

clients of FIM and its affiliated persons. In selecting Brokers in such a
manner, FIM will comply with the provisions of Section 28(e) of the
Securities and Exchange Act of 1934, as amended, and may also consider the
reliability, integrity and financial condition of the Broker, and the size
of and difficulty in executing the order.

SECTION 7. FUND EXPENSES.

Each Fund shall pay or cause to be paid all of its own expenses and its
allocable share of Corporation expenses incurred in managing its portfolio of
Securities, including all commissions, mark-ups, transfer fees, registration
fees, ticket charges, transfer taxes, custodian fees and similar expenses. Each
Fund will also pay its allocable share of such extraordinary expenses as may
arise including expenses incurred in connection with litigation, proceedings,
and claims and the legal obligations of the Corporation to indemnify its
officers and Directors and agents with respect thereto. Each Fund will promptly
reimburse FIM for any such expense to the extent advanced by FIM. In no event
will FIM have any obligation to pay any of the Funds' expenses, including
without limitation, the expenses of organizing the Corporation and continuing
its existence; fees and expenses of Directors and officers of the Corporation;
fees for administrative personnel and services; expenses incurred in the
distribution of its shares ("Shares"), including expenses of administrative
support services; fees and expenses of preparing and printing its Registration
Statements under the Securities Act of 1933 and the 1940 Act; expenses of
registering and qualifying the Corporation, the Funds, and Shares of the Funds
under federal and state laws and regulations; expenses of preparing, printing,
and distributing prospectuses (and any amendments thereto) to shareholders;
interest expense, taxes, fees, and commissions of every kind; expenses of issue
(including cost of Share certificates), purchase, repurchase, and redemption of
Shares; charges and expenses of custodians, transfer agents, dividend
disbursing agents, shareholder servicing agents, and registrars; printing and
mailing costs, auditing, accounting, and legal expenses; reports to
shareholders and governmental officers and commissions; expenses of meetings of
Directors and shareholders and proxy solicitations therefor; insurance
expenses; association membership dues and such nonrecurring items as may arise,
including all losses and liabilities incurred in administering the Corporation
and the Funds.

SECTION 8. LIMITATION OF LIABILITY.

(a) In the absence of willful misfeasance, bad faith or gross negligence on
the part of FIM, or of reckless disregard by FIM of its obligations and
duties hereunder, FIM shall not be subject to any liability to the
Adviser, the Fund, the Company, any shareholder of the Fund, or to any
person, firm or organization. Without limiting the foregoing, FIM shall
not have any liability whatsoever for any investment losses incurred by a
Fund, or arising from transactions by a Fund, prior to the date on which
FIM assumes responsibility for the management of the Fund's portfolio.

(b) The Adviser, the Company, and the Fund are hereby expressly put on notice
of the limitation of liability as set forth in the Declaration of Trust of
FIM and agree that the obligations assumed by FIM pursuant to this
Agreement will be limited in any case to FIM and its assets and the
Adviser, the Company, and the Fund shall not seek satisfaction of any such
obligation from the shareholders of FIM, the trustees of FIM, officers,
employees or agents of FIM, or any of them.

SECTION 9. PRICING.

The Adviser, the Company and the Fund hereby acknowledge that FIM is not
responsible for pricing portfolio Securities, and that the Adviser, the
Company, the Fund, and FIM will rely on the pricing agent chosen by the Board
of the Company for prices of Securities, for any purposes. However, in any
instance where the pricing services utilized by the Fund do not provide an
appropriate price for a security

<PAGE> 6

held by the Fund, FIM will provide the Adviser with reasonable assistance in
determining a price for such security.

SECTION 10. TERM.

This Agreement shall begin as of the date of its execution and shall
continue in effect for a period of two years from the date hereof and
thereafter for successive periods of one year, subject to the provisions for
termination and all of the other terms and conditions hereof if such
continuance is specifically approved at least annually in conformity with the
requirements of the 1940 Act; provided, however, that this Agreement may be
terminated by the Fund at any time, without the payment of any penalty, by the
Board or by vote of a majority of the outstanding voting securities (as defined
in the 1940 Act) of the Fund, or by the Adviser or FIM at any time, without the
payment of any penalty, on not more than 60 days' nor less than 30 days'
written notice to the other party. This Agreement will terminate automatically
in the event of its assignment (as defined in the 1940 Act) or upon the
termination of the Adviser's management agreement with the Fund.

SECTION 11. LIMITED POWER OF ATTORNEY.

Subject to any other written instructions of the Adviser or the Company,
FIM is hereby appointed the Fund's agent and attorney-in-fact for the limited
purposes of executing account documentation, agreements, contracts and other
documents as FIM shall be requested by brokers, dealers, counter parties and
other persons in connection with its management of the Fund's assets. The
Adviser and the Company hereby ratify and confirm as good and effectual, at law
or in equity, all that FIM and its officers and employees, may do in its
capacity as attorney-in-fact. However, nothing herein shall be construed as
imposing a duty on FIM to act or assume responsibility for any matters in its
capacity as attorney-in-fact for the Fund. Any person, partnership, corporation
or other legal entity dealing with FIM in its capacity as attorney-in-fact
hereunder for the Fund is hereby expressly put on notice that FIM is acting
solely in the capacity as an agent of the Fund and that any such person,
partnership, corporation or other legal entity must look solely to the Fund for
enforcement of any claim against Fund, as FIM assumes no personal liability
whatsoever for obligations of the Fund entered into by FIM in its capacity as
attorney-in-fact for the Fund.

SECTION 12. GENERAL PROVISIONS
SECTION 12.1. Notices

All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when
(a) delivered by hand (with written confirmation of receipt), (b) sent by
telecopier (with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):

FIM: Federated Investment Management Company
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Attention: Carol Kayworth
Facsimile No.: (412) 288-7747

Adviser: Fortis Advisers, Inc.
500 Bielenberg Drive

<PAGE> 7

Woodbury, MN 55125
Attention: Legal Department
Facsimile No.: (651) 738-5262

SECTION 12.2. Further Assurances

The parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents, and
(c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this Agreement and the
documents referred to in this Agreement.

SECTION 12.3. Waiver

The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by any party in
exercising any right, power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out
of this Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of
the claim or right unless in writing signed by the other party; (b) no waiver
that may be given by a party will be applicable except in the specific instance
for which it is given; and (c) no notice to or demand on one party will be
deemed to be a waiver of any obligation of such party or of the right of the
party giving such notice or demand to take further action without notice or
demand as provided in this Agreement or the documents referred to in this
Agreement.

SECTION 12.4. Entire Agreement and Modification

This Agreement supersedes all prior agreements between the parties with
respect to its subject matter and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement executed by the
party to be charged with the amendment.

SECTION 12.5. Assignments, Successors, and No Third-Party Rights

Neither party may assign any of its rights under this Agreement without
the prior consent of the other parties. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the parties. Nothing
expressed or referred to in this Agreement will be construed to give any person
other than the parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.

SECTION 12.6. Severability

If any provision of this Agreement is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid
or unenforceable only in part or degree will remain in full force and effect to
the extent not held invalid or unenforceable.

<PAGE> 8

SECTION 12.7. Section Headings, Construction

The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.

SECTION 12.8. Governing Law

To the extent that state law is not preempted by the provisions of any law
of the United States, heretofore or hereafter enacted, as the same may be
amended from time to time, this Agreement will be governed by the laws of the
State of Pennsylvania without regard to conflicts of laws principles.

SECTION 12.9. Counterparts

This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
signed on their behalf by their duly authorized officers as of the date first
above written.

FEDERATED INVESTMENT MANAGEMENT COMPANY

By: J. Christopher Donahue
----------------------
Name: J. Christopher Donahue
Title: President

FORTIS ADVISERS, INC.

By: Tamara L. Fagely
----------------
Name: Tamara L. Fagely
Title: Vice President

<PAGE> 9

SCHEDULE 1 - FUNDS AND SUBADVISORY FEES

<TABLE>
<CAPTION>
Name of Series Subadvisory Fee
- -------------- ---------------
<S> <C>
American Leaders Series For the first $35 million .50%
$35 million - $100 million .35%
For assets over $100 million .25%
</TABLE>

<PAGE> 10

SCHEDULE 2 - FUND DOCUMENTATION

1. Company's Articles of Incorporation and Bylaws.

2. Currently effective registration statement for each class of each Fund's
shares and any pending amendments to such registration statement.

3. Any supplements to any prospectus or statement of additional information
for any class of any Fund's shares.

4. Custody Agreement between the Trust and U.S. Bank National Association,
as Custodian for the Portfolio's securities, including information as to:

o the Portfolio's nominee,
o the Federal tax identification numbers of the Portfolio and its
nominee,
o all routing, bank, participant and account numbers and other
information necessary to provide proper instructions for transfer and
delivery of Securities to the Portfolio's accounts at the Custodian,
o the name, address, phone and fax number of the Custodian's employees
responsible for the Portfolio's accounts, and
o the Portfolio's pricing service and contact persons.

5. All policies, procedures, guidelines and codes adopted by the Board under
the 1940 Act or any regulation thereunder, including:
o Rule 2a-7 (if the Portfolio holds itself out as a "money market
fund"),
o Rule 10f-3 (relating to affiliated underwriting syndicates),
o Rule 17a-7 (relating to interfund transactions),
o Rule 17e-1 (relating to transactions with affiliated Brokers),
o Rule 17f-4 (relating to securities held in securities depositories),
o Rule 17j-1 (relating to a code of ethics), and
o Rule 17f-5 (relating to foreign custody).

6. All SEC exemptive orders applicable to the Portfolio, and all procedures
and guidelines adopted by the Board under the terms of such orders.

7. All procedures and guidelines adopted by the Board or the Manager
regarding:
o Repurchase agreements,
o Evaluating the liquidity of securities, include restricted securities,
municipal leases and stripped U.S. government securities,
o Segregation of liquid assets in connection with reverse repurchase
agreements, firm commitments, standby commitments, short sales,
options and futures agreements,
o Derivative contracts and securities, and
o Affiliated bank procedures.

8. Any master agreements that the Trust has entered into on behalf of the
Portfolio, including:
o Master Repurchase Agreement,
o Master Futures and Options Agreements,
o Master Foreign Exchange Netting Agreements, and

<PAGE> 11

o Master Swap Agreements.

9. Blue Sky undertakings.

10. CFTC Rule 4.5 letter.

11. Schedule of the current year's Board meetings, and the reports needed by
the Board.

12. Pricing and performance calculation entities and contact persons.

<PAGE> 12

SCHEDULE 3 - SUBADVISER DOCUMENTATION

1. Part II of FIM's Form ADV most recently filed with the SEC.

2. Procedures and checklists required by the following exemptive rules and
orders under under the 1940 Act:
o Rule 10f-3 (relating to affiliated underwriting syndicates),
o Rule 17a-7 (relating to interfund transactions),
o Rule 17e-1 (relating to transactions with affiliated Brokers),
o Rule 17f-4 (relating to securities held in securities depositories),
o Rule 17j-1 (relating to a code of ethics),
o Release No. IC-22903 (granting an exemption for the use of "core
funds"),
o Release No. IC-22313 (granting an exemption for the purchase of
affiliated money market funds)
o Release Nos. IC-16602 and IC-19816 (granting an exemption for
certain transactions with affiliated banks), and
o Release No. IC-15243 (granting an exemption permitting the purchase
of insurance from an affiliate and the settlement of claims
therefrom).

3. Procedures and checklist required

4. All exemptive orders granted by the SEC that will become applicable to
the Portfolio, and the procedures and guidelines followed by FIM in
accordance therewith.

<PAGE> 1

EXHIBIT (g).4
EXHIBIT A
(AS AMENDED THROUGH APRIL 12, 2000)
TO THE
OCTOBER 6, 1994
CUSTODY AGREEMENT
BETWEEN
FORTIS SERIES FUND, INC.
AND
FIRST BANK NATIONAL ASSOCIATION

<TABLE>
<CAPTION>
Name of Series Effective Date
- --------------------------------------------------------- ---------------

<S> <C>
Series F - Global Growth Series October 6, 1994
Series J - International Stock Series October 6, 1994
Series K - Global Bond Series October 6, 1994
(renamed Multisector Bond Series effective 3/15/00)
Series L - Global Asset Allocation Series October 6, 1994
Series O - Blue Chip Stock Series March 27, 1996
Series P - Small Cap Value Series April 2, 1998
Series Q - Mid Cap Stock Series April 2, 1998
Series R - Large Cap Growth Series April 2, 1998
Series S - Blue Chip Stock Series II April 12, 2000
Series T - American Leaders Value Series April 12, 2000
Series U - Capital Opportunities Series April 12, 2000
Series V - Global Equity Series April 12, 2000
Series W - Investors Growth Series April 12, 2000
</TABLE>

Dated this twelfth day of April, 2000.

FORTIS SERIES FUND, INC. U.S. BANK NATIONAL ASSOCIATION
(FORMERLY FIRST BANK NATIONAL
ASSOCIATION)

/s/ Tamara L. Fagely /s/ Judy O'Hagan
- ------------------------------------------- -------------------------------
Name: Tamara L. Fagely Name: Judy O'Hagan
Title: Vice President & Treasurer Title: Assistant Vice President

ATTEST: ATTEST:

/s/ Scott R. Plummer /s/ Sheldon D. Solbro
- ------------------------------------------- -------------------------------
Name: Scott R. Plummer Name: Sheldon D. Solbro
Title: Vice President & Assistant Secretary Title: Trust Officer

<PAGE> 1
Exhibit (i).4

DORSEY & WHITNEY LLP

Fortis Series Fund, Inc.
500 Bielenberg Drive
P.O. Box 64284
St. Paul, MN 55164

Dear Sir/Madam:

Reference is made to the Registration Statement on Form N-1A which you will
file with the Securities and Exchange Commission pursuant to the Securities Act
of 1933 for the purpose of the registration for sale by the twenty-three
separate portfolios of Fortis Series Fund, Inc. (the "Fund") of an indefinite
number of shares of the Fund's Common Stock, par value $.01 per share.

We are familiar with the proceedings to date with respect to the proposed
sale by the Fund, and have examined such records, documents and matters of law
and have satisfied ourselves as to such matters of fact as we consider relevant
for the purposes of this opinion. We have assumed, with your concurrence, that
no portfolio has issued or will issue shares in excess of the number authorized
in the Fund's articles of incorporation.

We are of the opinion that:

(a) the Fund is a legally organized corporation under Minnesota law; and

(b) the shares of Common Stock to be sold by the twenty-three separate
portfolios of the Fund will be legally issued, fully paid and
nonassessable when issued and sold upon the terms and in the manner
set forth in said Registration Statement of the Fund.

We consent to the reference to this firm under the caption "Other Service
Providers" in the Statement of Additional Information, and to the use of this
opinion as an exhibit to the Registration Statement.

Dated: May 1, 2000

Very truly yours,

/s/ Dorsey & Whitney LLP

DORSEY & WHITNEY LLP

MJR

<PAGE> 1

EXHIBIT (j)

[KPMG letterhead]

Independent Auditors' Consent

The Board of Directors
Fortis Series Fund, Inc.

We consent to the use of our report incorporated herein by reference and the
references to our Firm under the headings "Financial Highlights" in Part A and
"Financial Statements" in Part B of the Registration Statement.

/s/ KPMG LLP

KPMG LLP

Minneapolis, Minnesota
April 28, 2000