SUPPLEMENT DATED MAY 15, 1996
TO PROSPECTUS DATED MAY 1, 1996
LIFE OF VIRGINIA SEPARATE ACCOUNTS II AND III
Prior to November 23, 1995, Policyowners could allocate premiums (or net
premiums, as applicable) and cash values to six Investment Subdivisions which
are now closed to new investment (the "Closed Investment Subdivisions").
Although no new allocations can be made to these Closed Investment Subdivisions,
existing allocations of cash value will be permitted to remain there.
Alternatively, Policyowners may transfer amounts from the Closed Investment
Subdivisions to the other Investment Subdivisions currently available under the
Policy.
This supplement contains information regarding the investment objectives and
advisory fees of the portfolios in which the Closed Investment Subdivisions
invest. It is being provided for the benefit of Policyowners who have cash value
allocated to one or more of those Closed Investment Subdivisions.
THE FUNDS
Oppenheimer Variable Account Funds ("OVAF")
Oppenheimer Money Fund seeks the maximum current income from investments in
"money market" securities consistent with low capital risk and the maintenance
of liquidity.
Oppenheimer Funds, Inc. ("OFI") serves as investment adviser to the OVAF. The
OVAF pays OFI a monthly management fee. Effective September 1, 1994, the monthly
fee payable to OFI is computed separately on the net assets of each portfolio as
of the close of business each day. The management fee rate for the Oppenheimer
Money Fund is 0.450% of the first $500 million of net assets, 0.425% of the next
$500 million, 0.400% of the next $500 million, and 0.375% of net assets over
$1.5 billion.
Variable Insurance Products Fund ("VIPF")
Money Market Portfolio seeks high current income while maintaining a stable
share price by investing in a broad range of money market securities.
High Income Portfolio seeks high current income by investing mainly in
high-yielding, high-risk debt securities, with an emphasis on lower-quality
securities.
Fidelity Management & Research Company ("FMR") serves as investment advisor to
the VIPF. For managing each portfolio's investments and business affairs, each
portfolio pays FMR a monthly fee.
VIPF Money Market and High Income Portfolios' fee rates are each made up of two
components: (1) a group fee rate based on the monthly average net assets of all
the mutual funds advised by FMR; and (2) an individual portfolio fee rate of
.03% for the Money Market Portfolio and .45% for the High Income Portfolio. The
group fee rate cannot rise above .52% and it drops as total assets in all mutual
funds rise. Therefore, the maximum total management fees that can be charged is
.97% of the average net assets of these Portfolios. One-twelfth of the sum of
the group fee rate and the individual fee rate is applied to each portfolio's
net assets averaged over the most recent month, giving a dollar amount which is
the management fee for that month.
Neuberger & Berman Advisers Management Trust
Each portfolio of the Advisers Management Trust invests all of its net
investable assets in its corresponding series of Advisers Managers Trust.
Balanced Portfolio has the investment objective of providing long-term capital
growth and reasonable current income without undue risk to principal. Its
corresponding series, AMT Balanced Investments, has the same investment
objective.
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Limited Maturity Bond Portfolio has the investment objective of providing the
highest current income consistent with low risk to principal and liquidity; and
secondarily, total return. Its corresponding series, AMT Limited Maturity Bond
Investments, has the same investment objective.
Growth Portfolio has the investment objective of seeking capital appreciation
without regard to income. Its corresponding series, AMT Growth Investments, has
the same investment objective.
Neuberger & Berman Management Incorporated provides investment management
services to AMT Limited Maturity Bond Investments, AMT Growth Investments and
AMT Balanced Investments that include, among other things, making and
implementing investment decisions and providing facilities and personnel
necessary to operate the corresponding series of Advisers Managers Trust. N&B
Management provides administrative services to the three Portfolios that include
furnishing similar facilities and personnel for the portfolios. With the consent
of each of the Portfolios, N&B Management is authorized to subcontract some of
its responsibilities under its administration agreement with the Portfolios to
third parties. For such administrative and investment services, N&B Management
is paid the following fees (as a percentage of average daily net assets):
<TABLE>
<CAPTION>
Management Administration
(Series) (Portfolio)
<S> <C> <C>
Limited Maturity Bond 0.25% of first $500 million 0.40%
0.225% of next $500 million
0.20% of next $500 million
0.175% of next $500 million
0.15% of over $2 billion
Balanced 0.55% of first $250 million 0.30%
0.525% of next $250 million
0.50% of next $250 million
0.475% of next $250 million
0.45% of next $500 million
0.425% of over $1.5 billion
Growth 0.55% of first $250 million 0.30%
0.525% of next $250 million
0.50% of next $250 million
0.475% of next $250 million
0.45% of next $500 million
0.425% of over $1.5 billion
</TABLE>
THERE IS NO ASSURANCE THAT THE STATED OBJECTIVES AND POLICIES OF ANY OF THE
FUNDS WILL BE ACHIEVED.
More detailed information concerning the investment objectives and policies of
the Funds and the investment advisory services and charges can be found in the
current prospectuses for the Funds. A prospectus for each Fund can be obtained
by writing or calling Life of Virginia's Home Office. The prospectus for each
Fund should be read carefully before any decision is made concerning the
allocation of premium payments or transfers among the investment subdivisions.
The Life Insurance Company of Virginia
6610 West Broad Street
Richmond, Virginia 23230
(804) 281-6000
