FORTIS SERIES FUND INC, 497, 2000-09-01

FORTIS SERIES FUND INC
497, 2000-09-01

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<PAGE> 1

FORTIS SERIES FUND, INC.
SEPTEMBER 1, 2000
SUPPLEMENT TO FORTIS SERIES FUND PROSPECTUS DATED MAY 1, 2000

- THE FOLLOWING INFORMATION REPLACES ALL OF THE INFORMATION ON PAGES 6 AND 7
OF THE PROSPECTUS, EXCEPT THE SECTION ON SERIES PERFORMANCE:

INTERNATIONAL STOCK SERIES II (formerly Global Asset Allocation Series)

From its inception on January 3, 1995 through August 31, 2000, this Series was
managed by a different sub-adviser and was named the Global Asset Allocation
Series. As the Global Asset Allocation Series, the Series invested in equity and
fixed-income securities of issuers located throughout the world, including the
United States. As of September 1, 2000, the Series will be sub-advised by T.
Rowe Price International, Inc. in the manner described below.

OBJECTIVE

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

PRINCIPAL INVESTMENT STRATEGIES

International Stock Series II pursues its objective by investing primarily in
common stocks of well-established, non-U.S. companies and diversifies broadly
among developed and emerging countries throughout the world. The Series may
purchase the stocks of companies of any size, but the focus will typically be on
large and, to a lesser extent, medium-sized companies. The Series' sub-adviser,
T. Rowe Price International, Inc. ("Price International"), employs in-depth
fundamental research in an effort to identify companies capable of achieving and
sustaining above-average, long-term earnings growth. Price International seeks
to purchase such stocks at reasonable prices in relation to present or
anticipated earnings, cash flow, or book value, and valuation factors often
influence the allocation among large-, mid-, or small-cap stocks. Price
International uses "bottom-up" stock selection, looking for companies with
leading market positions, attractive business niches, a strong franchise or
natural monopoly, technological leadership or proprietary advantages, seasoned
management, earnings growth and cash flow sufficient to support growing
dividends, or healthy balance sheets with relatively low debt. Country
allocation is driven largely by stock selection, though Price International may
limit investments in markets that appear to have poor overall prospects.

The Series may also invest its assets in other securities, including preferred
stocks, warrants, convertibles and/or debt securities when they are considered
consistent with the Series' investment objective. The Series may also purchase
futures and options, as well as foreign currency and foreign currency forward
contracts. This may be done to hedge the value of the Series' portfolio against
potential adverse movements in securities prices or currencies, 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.

PRINCIPAL RISKS

International 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. As you consider an
investment in the Series, you should take into account your personal
tolerance for daily fluctuations of the stock market.

<PAGE> 2

- RISKS OF FOREIGN INVESTING. The 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 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. The overall impact on the Series'
holdings can be significant and long-lasting depending on the
currencies represented in the portfolio, how each one appreciates or
depreciates in relation to the U.S. dollar, and whether currency
positions are hedged. 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. Also, risks result
from the varying stages of economic and political development, the
differing regulatory environments, trading days, accounting standards
and higher transaction costs of non-U.S. markets.

- 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. These economies may rely heavily
on particular industries and be more vulnerable to the ebb and flow of
international trade, trade barriers and other protectionist or
retaliatory measures.

- RISKS OF FUTURES, OPTIONS AND FOREIGN CURRENCY TRANSACTIONS. If the
Series uses options, futures contracts or foreign currency hedging
transactions, it will be exposed to additional risks and transaction
costs. Successful use of these derivative instruments depends on the
subadviser's ability to forecast correctly the direction of market
movements. If the subadviser's judgment proves incorrect, the Series'
performance could be worse than if the Series had not used these
instruments. In addition, even if the subadviser's forecast is correct,
there may be an imperfect correlation between the price of derivative
instruments and movements in the prices of the securities or currencies
being hedged. Exchange rate movements are unpredictable and it is not
possible to effectively hedge the currency risks of many developing
countries.

- THE FOLLOWING INFORMATION MODIFIES THE PARAGRAPH UNDER THE HEADING "SERIES
PERFORMANCE" ON PAGE 7.

The first sentence is amended to read as follows:

The bar chart and table below provide you with information on
International Stock Series II's (formerly Global Asset Allocation
Series) volatility and performance.

The following is added as the last sentence in the paragraph:

The following information reflects the Series' performance when it was
managed as the Global Asset Allocation Series.

- THE FOLLOWING INFORMATION IS INSERTED AS THE PORTFOLIO MANAGEMENT
INFORMATION FOR INTERNATIONAL STOCK SERIES II ON PAGE 29. THE INFORMATION
PERTAINING TO GLOBAL ASSET ALLOCATION SERIES ON PAGE 28 IS DELETED.

INTERNATIONAL STOCK SERIES II. T. Rowe Price International, Inc. ("Price
International"), 100 East Pratt Street, Baltimore, MD 21202, is the subadviser
of the International Stock Series II. Price International, previously known as
Rowe Price-Fleming International, Inc., was incorporated in 1979 as a joint
venture between T. Rowe Price and Robert Fleming Holdings Limited. T. Rowe Price
acquired Fleming's joint venture interest in August 2000, and now Price
International is a wholly-owned subsidiary of T. Rowe Price. Price International
managed over $39.2 billion as of June 30, 2000. Some of Price International's
accounts have investment policies similar to those of the Series.

<PAGE> 3

James B.M. Seddon, Mark C.J. Bickford-Smith and David J.L. Warren. Mr. Ford has
been with Price International in research and portfolio management since 1982.
Mr. Seddon joined Price International in 1987 and has 13 years of portfolio
management experience. Mr. Bickford-Smith joined Price International in 1995 and
has 15 years experience in portfolio management. Mr. Warren joined Price
International in 1983 and has 19 years experience in equity research, fixed
income research and portfolio management.

- THE FOLLOWING CHANGES APPLY TO THE DISCLOSURE ON SERIES INVESTMENT
STRATEGIES AND RISKS ON PAGES 30-33.

- References made to Global Asset Allocation Series are deleted.

- Under the heading "Temporary defensive measures" on page 30,
International Stock Series II is added to the language explaining the
potential defensive measures that may be employed by the Blue Chip Stock
Series. International Stock Series II may employ the same defensive
measures.

- The definition of "Equity Series", as used under the heading
"Principal risks", is modified to include International Stock Series II.

- The following risks, explained under the heading "Principal
risks", also apply to International Stock Series II:

Risks of growth stocks;
Risks of mid cap companies;
Risks of foreign investing;
Risks of emerging markets; and
Risks of forward currency exchange contracts, futures and
options transactions.

- THE FOLLOWING INFORMATION MODIFIES THE PORTFOLIO MANAGEMENT INFORMATION
UNDER THE HEADING "MULTISECTOR BOND SERIES AND BLUE CHIP STOCK SERIES II" ON
PAGE 29.

Mr. Joel E. Dobberpuhl no longer serves as portfolio manager for Blue Chip Stock
Series II.

- THE FOLLOWING SENTENCE IS INSERTED AS THE SECOND SENTENCE ON PAGES 32 AND
33 UNDER THE HEADING "RISKS OF FORWARD CURRENCY EXCHANGE CONTRACTS, FUTURES AND
OPTIONS TRANSACTIONS.

Asset Allocation Series, Value Series, Growth & Income Series, Global Growth
Series, Growth Stock Series and Aggressive Growth Series may also invest a
portion of their assets in options.

<PAGE> 4

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

Fortis Series Fund Prospectus

May 1, 2000
as supplemented
September 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> 5

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
Asset Allocation Series................................... 6
American Leaders Series................................... 8
Value Series.............................................. 9
Capital Opportunities Series.............................. 10
Growth & Income Series.................................... 11
S&P 500 Index Series...................................... 12
Blue Chip Stock Series.................................... 13
Blue Chip Stock Series II................................. 14
International Stock Series................................ 15
International Stock Series II............................. 16
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> 6

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, 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, International Stock
Series II, 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> 7

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> 8

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> 9

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> 10

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:
- 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 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*
[BAR GRAPH]

<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> 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.

6
<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*
[BAR GRAPH]

<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.

7
<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.

8
<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*
[BAR GRAPH]

<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.

9
<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 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.

10
<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*
[BAR GRAPH]

<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.

11
<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*
[BAR GRAPH]

<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.

12
<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*
[BAR GRAPH]

<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.

13
<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.

14
<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 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 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*
[BAR GRAPH]

<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.

15
<PAGE> 21

INTERNATIONAL STOCK SERIES II

OBJECTIVE

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

PRINCIPAL INVESTMENT STRATEGIES

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

PRINCIPAL RISKS

- 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. 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 FOREIGN INVESTING. The 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 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. The overall
impact on the Series' holdings can be significant and long-lasting depending
on the currencies represented in the portfolio, how each one appreciates or
depreciates in relation to the U.S. dollar, and whether currency positions
are hedged. 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. Also, risks result from the varying stages of economic and
political development, the differing regulatory environments, trading days,
accounting standards and higher transaction costs of non-U.S. markets.

- 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. These economies may rely heavily on particular industries
and be more vulnerable to the ebb and flow of international trade, trade
barriers and other protectionist or retaliatory measures.

- RISKS OF FUTURES, OPTIONS AND FOREIGN CURRENCY TRANSACTIONS. If the Series
uses options, futures contracts or foreign currency hedging transactions, it
will be exposed to additional risks and transaction costs. Successful use of
these derivative instruments depends on the subadviser's ability to forecast
correctly the direction of market movements. If the subadviser's judgment
proves incorrect, the Series' performance could be worse than if the Series
had not used these instruments. In addition, even if the subadviser's
forecast is correct, there may be an imperfect correlation between the price
of derivative instruments and movements in the prices of the securities or
currencies being hedged. Exchange rate movements are unpredictable and it is
not possible to effectively hedge the currency risks of many developing
countries.

16
<PAGE> 22

SERIES PERFORMANCE

The bar chart and table below provide you with information on International
Stock Series II's (formerly 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. The following information reflects the Series' performance when it
was managed as the Global Asset Allocation Series.

ANNUAL TOTAL RETURN as of December 31 each year*

[BAR GRAPH]

<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>
International Stock Series
II........................ -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.

17
<PAGE> 23

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*
[BAR GRAPH]

<TABLE>
<CAPTION>
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> 24

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*
[BAR GRAPH]

<TABLE>
<CAPTION>
CAP STOCK 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> 25

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*
[BAR GRAPH]

<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> 26

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> 27

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*
[BAR GRAPH]

<TABLE>
<CAPTION>
CAP STOCK 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> 28

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> 29

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*
[BAR GRAPH]

<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> 30

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*

[BAR GRAPH]

<TABLE>
<CAPTION>
INTERNATIONAL STOCK SERIES
--------------------------
<S> <C>
1995 28.89
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> 31

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> 32

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, American Leaders Series, Capital Opportunities Series,
International Stock Series, International Stock Series II, 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%
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%
International Stock Series II............ .90%
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> 33

- 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

Multisector Bond Series, American Leaders Series, Capital Opportunities Series,
S&P 500 Index Series, Blue Chip Stock Series, Blue Chip Stock Series II,
International Stock Series, International Stock Series II, Mid Cap Stock Series,
Small Cap Value Series, Global Equity Series, Large Cap Growth Series and
Investors Growth Series each has a sub-adviser. The sub-advisers provide
investment research, advice and supervision and furnish and conduct the
management investment programs for the Series, subject to the general control of
Advisers and the Series' Board of Directors. The sub-adviser of each Series is
also responsible for the selection of brokers and dealers to effect securities
transactions and the negotiation of brokerage commissions, if any.

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.

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.

The Series has an Investment Advisory Group that has day-to-day responsibility
for managing the portfolio and developing and executing the Series' investment
program. The members of the advisory group are: John R. Ford, James B.M. Seddon,
Mark C.J. Bickford-Smith and David J.L. Warren. Mr. Ford has been with Price
International in research and portfolio management since 1982. Mr. Seddon joined
Price International in 1987 and has 13 years of portfolio management experience.
Mr. Bickford-Smith joined Price International in 1995 and has 15 years
experience in portfolio management. Mr. Warren joined Price International in
1983 and has 19 years experience in equity research, fixed income research and
portfolio management.

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,

28
<PAGE> 34

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 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. 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> 35

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, 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 and International Stock Series II 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, each Series may invest in shares
of the Reserve Investment Fund, a money market fund managed by T. Rowe
Price, the Blue Chip Stock 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, International Stock Series II, 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 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> 36

- CREDIT OR DEFAULT RISK. The Fixed Income 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 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 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 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, International
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. 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. 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

31
<PAGE> 37

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, International Stock Series II,
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 it
invests in mid-sized companies, Blue Chip Stock 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 and 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 and 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 and 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, Asset Allocation Series,
American Leaders Series, Capital Opportunities Series, Blue Chip Stock
Series, Blue Chip Stock Series II, International Stock Series, International
Stock Series II, 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, International Stock Series II, 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, Capital Opportunities Series, S&P
500 Index Series, Blue Chip Stock Series, Blue Chip Stock Series II,
International Stock Series, International Stock Series II, 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. Asset Allocation
Series, Value Series, Growth & Income Series, Global Growth Series, Growth
Stock Series and Aggressive Growth Series may also invest a portion of their
assets in options. 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 fluctuation limits,
either of which may make it difficult or impossible to close out a
position when desired;

32
<PAGE> 38

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> 39

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> 40

<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> 41

<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,
------------------------------------------------------------------------
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.

36
<PAGE> 42

<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.

<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.

37
<PAGE> 43

<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.

<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.

38
<PAGE> 44

<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>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------------------------
-----------------------------------
INTERNATIONAL STOCK SERIES II (FORMERLY GLOBAL ASSET ALLOCATION SERIES) 1999 1998 1997
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of year................................ $ 14.32 $13.29 $12.34
------------------------------------------------------------------------------------------------------------
Operations:
Investment income - net......................................... 22 .28 .28
Net realized and unrealized gain (loss) on investments and foreign
currency transactions......................................... (.34) 1.81 1.39
------------------------------------------------------------------------------------------------------------
Total from operations............................................. (.12) 2.09 1.67
------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.................................... (.24) (.31) (.26)
From net realized gains......................................... (.79) (.75) (.46)
------------------------------------------------------------------------------------------------------------
Total distributions to shareholders............................... (1.03) (1.06) (.72)
------------------------------------------------------------------------------------------------------------
Net asset value, end of year...................................... $13.17 $14.32 $13.29
------------------------------------------------------------------------------------------------------------
Total return@..................................................... (.87%) 15.96% 13.51%
Net assets end of year (000s omitted)............................. $66,067 $69,086 $52,482
Ratio of expenses to average daily net assets..................... 1.02% 1.01% 1.16%
Ratio of net investment income to average daily net assets........ 2.26% 2.13% 2.42%
Portfolio turnover rate........................................... 59% 69% 51%
------------------------------------------------------------------------------------------------------------

<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------- -------------------------
-------------------------
INTERNATIONAL STOCK SERIES II (FORMERLY GLOBAL ASSET ALLOCATION SERIES) 1996 1995+
----------------------------------------------------------------------- -------------------------
<S> <C> <C> <C>
Net asset value, beginning of year................................ $11.42 $10.00
-----------------------------------------------------------------------
Operations:
Investment income - net......................................... .36 .35
Net realized and unrealized gain (loss) on investments and foreign
currency transactions......................................... 1.19 1.55
-----------------------------------------------------------------------
Total from operations............................................ 1.55 1.90
-----------------------------------------------------------------------
Distributions to shareholders:
From investment income - net.................................... (.38) (.34)
From net realized gains......................................... (.25) (.14)
-----------------------------------------------------------------------
Total distributions to shareholders................................ (.63) (.48)
-----------------------------------------------------------------------
Net asset value, end of year....................................... $12.34 $11.42
-----------------------------------------------------------------------
Total return@...................................................... 12.72% 17.47 %
Net assets end of year (000s omitted).............................. $37,307 $20,080
Ratio of expenses to average daily net assets...................... 1.20% 1.28 %*
Ratio of net investment income to average daily net assets......... 3.01% 3.26 %*
Portfolio turnover rate............................................ 46% 44%
-----------------------------------------------------------------------
</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.

39
<PAGE> 45

<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> 46

<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>

* 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
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> 47

<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> 48

[FORTIS(SM) LOGO]

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

Prospectus
May 1, 2000
as supplemented September 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).