<PAGE>
STATEMENTS OF ASSETS
& LIABILITIES
(Unaudited)
June 30, 1997
AGE Services Company
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Table of Contents
For the six months ended June 30, 1997
- --------------------------------------------------------------------------------
Page
Financial Statements:
Statement of Assets and Liabilities...................................1
Statement of Operations...............................................7
Statement of Changes in Net Assets...................................13
Notes to Financial Statements..............................................19
- --------------------------------------------------------------------------------
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Assets and Liabilities
As of June 30, 1997
<TABLE>
<CAPTION>
====================================================================================================================================
GE Investments Funds, Inc.
---------------------------------------------------------------------------------------
S&P 500 Government Money Total International Real Estate Globa Value
Index Securities Market Return Equity Securities Income Equity
Assets Fund Fund Fund Fund Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment in GE Investments Funds, Inc., at
fair value (note 2):
S&P 500 Index Fund (134,435
shares; cost - $2,332,160) $2,403,690 0 0 0 0 0 0 0
Government Securities Fund (32,617
shares; cost - $327,659) 0 315,408 0 0 0 0 0 0
Money Market Fund (2,453,454 shares;
cost - $3,409,557) 0 0 2,453,454 0 0 0 0 0
Total Return Portolio (230,055 shares;
cost - $3,562,949) 0 0 0 3,232,266 0 0 0 0
International Equity Fund (4,935 shares;
cost - $55,260) 0 0 0 0 62,817 0 0 0
Real Estate Securities Fund
(7,690 shares; cost - $109,846) 0 0 0 0 0 117,817 0 0
Global Income Fund
(599 shares; cost - $6,081) 0 0 0 0 0 0 6,099 0
Value Equity Fund (4 shares; cost $46) 0 0 0 0 0 0 0 46
Receivable from affiliate (note 3) 1,587 0 0 252,838 0 372 0 0
Receivable for units sold 8,104 28 0 0 7 716 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $2,413,381 315,436 2,453,454 3,485,104 62,824 118,905 6,099 46
====================================================================================================================================
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate
(note 3) 556 1,048 141,637 805 37 27 1 0
Payable for units withdrawn 0 0 9,941 318 0 0 0 4
Total liabilities 556 1,048 151,578 1,123 37 27 1 4
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets $2,412,825 314,388 2,301,876 3,483,981 62,787 118,878 6,098 42
====================================================================================================================================
Outstanding units 64,205 16,705 144,681 121,435 4,620 6,976 599 4
====================================================================================================================================
Net asset value per unit $ 37.58 18.82 15.91 28.69 13.59 17.04 10.18 11.44
====================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
1
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Assets and Liabilities, Continued
As of June 30, 1997
<TABLE>
<CAPTION>
==============================================================================================================================
Oppenheimer Variable Account Funds
-----------------------------------------------------------------------
Capital High Multiple
Money Bond Appreciation Growth Income Strategies
Assets Fund Fund Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment in Oppenheimer Variable
Account Funds, at fair value (note 2):
Money Fund (555 shares; cost - $555) $ 555 0 0 0 0 0
Bond Fund (23,086 shares; cost - $266,233) 0 266,639 0 0 0 0
Capital Appreciation Fund
(70,005 shares; cost - $2,321,507) 0 0 2,732,988 0 0 0
Growth Fund (64,495 shares; cost - $1,529,406) 0 0 0 1,896,152 0 0
High Income Fund (111,595 shares;
cost - $1,210,320) 0 0 0 0 1,243,172 0
Multiple Strategies Fund (39,969 shares;
cost - $576,099) 0 0 0 0 0 644,705
Receivable from affiliate (note 3) 41 0 9,327 285 2,948 4,811
Receivable for units sold 0 0 6,096 0 1,180 47
- ------------------------------------------------------------------------------------------------------------------------------
Total assets $ 596 266,639 2,748,411 1,896,437 1,247,300 649,563
==============================================================================================================================
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 0 1,321 633 437 287 150
Payable for units withdrawn 0 275 0 622 0 0
Total liabilities 0 1,596 633 1,059 287 150
- ------------------------------------------------------------------------------------------------------------------------------
Net assets $ 596 265,043 2,747,778 1,895,378 1,247,013 649,413
==============================================================================================================================
Outstanding units 37 12,502 70,564 49,436 38,751 23,529
==============================================================================================================================
Net asset value per unit $ 15.90 21.20 38.94 38.34 32.18 27.60
==============================================================================================================================
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Assets and Liabilities, Continued
As of June 30, 1997
<TABLE>
<CAPTION>
==========================================================================================================
Variable Insurance Products Fund
------------------------------------------------------------
Money High Equity
Market Income Income Growth Overseas
Assets Portfolio Portfolio Portfolio Portfolio Portfolio
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment in Variable Insurance Products
Fund, at fair value (note 2):
Money Market Portfolio (285,520 shares;
cost - $285,520) $ 285,520 0 0 0 0
High Income Portfolio (17,568 shares;
cost - $196,943) 0 218,376 0 0 0
Equity-Income Portfolio (189,156 shares;
cost - $3,590,708) 0 0 4,172,789 0 0
Growth Portfolio (127,806 shares;
cost - $3,665,201) 0 0 0 4,370,978 0
Overseas Portfolio (92,812 shares;
cost - $1,574,442) 0 0 0 0 1,859,959
Accrued investment income 1,357 0 0 0 0
Receivable from affiliate (note 3) 8,402 1,174 33,305 5,985 2,193
Receivable for units sold 0 0 8,854 1,833 667
- ----------------------------------------------------------------------------------------------------------
Total assets $ 295,279 219,550 4,214,948 4,378,796 1,862,819
==========================================================================================================
Liabilities
Accrued expenses payable to affiliate (note 3) 68 51 968 1,009 432
Payable for units withdrawn 0 167 0 0 0
Total liabilities 68 218 968 1,009 433
- ----------------------------------------------------------------------------------------------------------
Net assets $ 295,211 219,332 4,213,980 4,377,787 1,862,386
==========================================================================================================
Outstanding units 18,509 8,017 114,885 110,216 73,934
==========================================================================================================
Net asset value per unit $ 15.95 27.36 36.68 39.72 25.19
==========================================================================================================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Assets and Liabilities, Continued
As of June 30, 1997
<TABLE>
<CAPTION>
====================================================================================================================================
Variable Insurance Products Variable Insurance Product Advisers Management Trust
Fund II Fund III
-------------------------- ------------------------- -------------------------------
Asset Growth & Growth
Manager Contrafund Income Opportunities Balanced Bond Growth
Assets Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment in Variable Insurance Products
Fund II, at fair value (note 2):
Asset Manager Portfolio (238,062 shares;
cost - $3,636,708) $3,951,826 0 0 0 0 0 0
Contrafund Portfolio (105,221 shares;
cost - $1,662,154) 0 1,886,606 0 0 0 0 0
Investment in Variable Insurance Products
Fund III, at fair value (note 2):
Growth & Income Portfolio (434 shares;
cost - $4,797) 0 0 4,986 0 0 0 0
Growth Opportunities Portfolio
(57 shares; cost - $936) 0 0 0 968 0 0 0
Investment in Advisers Management Trust,
at fair value (note 2):
Balanced Portfolio (15,796 shares;
cost - $236,918) 0 0 0 0 261,901 0 0
Bond Portfolio (6,289 shares;
cost - $87,892) 0 0 0 0 0 85,650 0
Growth Portfolio (5,498 shares;
cost - $123,885) 0 0 0 0 0 0 152,501
Receivable from affiliate (note 3) 9,783 24,803 0 0 0 104 2,338
Receivable for units sold 0 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $3,961,609 1,911,409 4,986 968 261,901 85,754 154,839
====================================================================================================================================
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 914 439 1 0 1,190 19 36
Payable for units withdrawn 431 773 0 0 27 1,228 28
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,345 1,212 1 0 1,217 1,247 64
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets $3,960,264 1,910,197 4,985 968 260,684 84,507 154,775
====================================================================================================================================
Outstanding units 168,093 101,986 448 88 13,749 6,587 8,462
====================================================================================================================================
Net asset value per unit $ 23.56 18.73 11.12 11.00 18.96 12.83 18.29
====================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Assets and Liabilities, Continued
As of June 30, 1997
<TABLE>
<CAPTION>
====================================================================================================================================
Federated Investors Insurance Alger American Fund PBHG Insurance
Series Series Fund
-------------------------------- --------------------- --------------------
American High Small PBHG PBHG
Leaders Income Bond Utility Cap Growth Large Cap Growth II
Assets Fund II Fund II Fund II Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments in Federated Investors Insurance Series,
at fair value (note 2):
American Leaders Fund II (619 shares;
cost - $10,226) $ 10,835 0 0 0 0 0 0
High Income Bond Fund II (7,168 shares;
cost - $72,104) 0 74,192 0 0 0 0 0
Utility Fund II (10,105 shares; cost - $115, 343) 0 0 124,993 0 0 0 0
Investment in Alger American, at fair value (note 2):
Small Cap Portfolio (15,263 shares;
cost - $614,136) 0 0 0 603,335 0 0 0
Growth Portfolio (28,800 shares;
cost - $1,037,881) 0 0 0 0 1,138,454 0 0
Investment in PBHG Insurance Series
Fund Inc., at fair value (note 2):
PBHG Large Cap Portfolio
(344 shares; cost - $3,605) 0 0 0 0 0 3,706 0
PBHG Growth II Portfolio
(368 shares; cost - $3,710) 0 0 0 0 0 0 3,848
Receivable from affiliate (note 3) 40 559 0 11,496 6,897 0 0
Receivable for units sold 0 0 96 638 260 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $ 10,875 74,751 125,089 615,469 1,145,611 3,706 3,848
====================================================================================================================================
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 3 17 444 141 263 7 31
Payable for units withdrawn 12 70 0 0 0 9 9
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 15 87 444 141 263 16 40
====================================================================================================================================
Net assets $ 10,860 74,664 124,645 615,328 1,145,348 3,690 3,808
====================================================================================================================================
Oustanding units 832 5,210 8,439 63,175 91,045 343 365
====================================================================================================================================
Net asset value per unit $ 13.05 14.33 14.77 9.74 12.58 10.77 10.44
====================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
LIFE OF VIRGINIA SEPARATE ACCOUNT II
5
<PAGE>
Statement of Assets and Liabilities, Continued
As of June 30, 1997
<TABLE>
<CAPTION>
===================================================================================================================================
Janus Aspen Series
-------------------------------------------------------------------------------------
Aggressive Worldwide Flexible International Capital
Growth Growth Growth Balanced Income Growth Appreciation
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment in Janus Aspen Series,
at fair value (note 2):
Aggressive Growth Portfolio
(67,470 shares; cost - $1,142,989) $1,263,033 0 0 0 0 0 0
Growth Portfolio (91,972 shares;
shares; cost - $1,373,870) 0 1,572,725 0 0 0 0 0
Worldwide Growth Portfolio
(98,986 shares; cost - $ 1,891,476) 0 0 2,258,860 0 0 0 0
Balanced Portfolio (18,168 shares;
cost - $258,712) 0 0 0 294,509 0 0 0
Flexible Income Portfolio
(3,919 shares; cost - $44,846) 0 0 0 0 44,207 0 0
International Growth Portfolio
(10,731 shares; cost - $175,775) 0 0 0 0 0 198,202 0
Capital Appreciation Portfolio
(640 shares; cost - $7,282) 0 0 0 0 0 0 7,526
Receivable from affiliate (note 3) 18,856 14,696 10,052 1,382 96 117 3
Receivable for units sold 112 8,612 6,275 62 0 457 0
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets $1,282,001 1,596,033 2,275,187 295,953 44,303 198,776 7,529
===================================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 295 359 517 67 10 45 2
Payable for units withdrawn 0 0 0 0 13 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 295 359 517 67 23 45 2
===================================================================================================================================
Net assets $1,281,706 1,595,674 2,274,670 295,886 44,280 198,731 7,527
===================================================================================================================================
Outstanding units 80,865 95,037 121,836 21,535 3,737 14,380 641
===================================================================================================================================
Net asset value per unit $ 15.85 16.79 18.67 13.74 11.85 13.82 11.74
===================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Operations
<TABLE>
<CAPTION>
==============================================================================================================================
GE Investments Funds, Inc.
------------------------------------------------------------------------
S&P 500 Government Money Total International
Index Securities Market Return Equity
Fund Fund Fund Fund Fund
------------------------------------------------------------------------
Six Months Six Months Six Months Six Months Six Months
Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Income - Dividends $ 0 0 2,007,199 0 0
Expenses - Mortality and expense risk
charges (note 3) 7,183 1,054 6,764 11,654 160
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income (7,183) (1,054) 2,000,435 (11,654) (160)
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) (12,454) (2,258) (696,449) (40,186) 140
Unrealized appreciation (depreciation)
on investments 368,487 5,812 (1,257,061) 346,898 8,202
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments 356,033 3,554 (1,953,510) 306,712 8,342
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations $ 348,850 2,500 46,925 295,058 8,182
==============================================================================================================================
<CAPTION>
==================================================================================================================
GE Investments Funds, Inc.
------------------------------------------------
Real Estate Global Value
Securities Income Equity
Fund Fund Fund
------------------------------------------------
Six Months Period from Period from
Ended 6/30/97 6/18-6/30/97 6/17-6/30/97
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment income:
Income - Dividends 0 0 0
Expenses - Mortality and expense risk
charges (note 3) 264 2 0
- ---------------------------------------------------------------------------------------------------------
Net investment income (264) (2) 0
- ---------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) 732 0 0
Unrealized appreciation (depreciation)
on investments 5,497 19 1
- ---------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments 6,229 19 1
- ---------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 5,965 17 1
==================================================================================================================
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Operations, Continued
<TABLE>
<CAPTION>
====================================================================================================================================
Oppenheimer Variable Account Funds
------------------------------------------------------------------------------------------
Capital High Multiple
Money Bond Appreciation Growth Income Strategies
Fund Fund Fund Fund Fund Fund
------------------------------------------------------------------------------------------
Six Months Six Months Six Months Six Months Six Months Six Months
Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Income - Dividends $ 15 9,213 119,431 94,465 52,619 33,409
Expenses - Mortality and expense
risk charges (note 3) 2 894 8,443 5,748 3,928 2,118
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 13 8,319 110,988 88,717 48,691 31,291
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized (loss)
gain on investments:
Net realized gain (loss) 0 (321) 50,237 25,035 4,106 5,699
Unrealized appreciation (depreciation)
on investments 0 (1,704) 4,795 115,923 (3,434) 13,701
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 0 (2,025) 55,032 140,958 672 19,400
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in net assets
from operations $ 13 6,294 166,020 229,675 49,363 50,691
===================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Operations, Continued
<TABLE>
<CAPTION>
==================================================================================================================================
Variable Insurance Products Fund
------------------------------------------------------------------------
Money High Equity
Market Income Income Growth Overseas
Portfolio Portfolio Portfolio Portfolio Portfolio
----------------------------------------------------------------------
Six Months Six Months Six Months Six Months Six Months
Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Income - Dividends $ 7,679 16,812 339,803 135,480 155,793
Expenses - Mortality and expense risk
charges (note 3) 1,016 748 12,827 13,613 6,253
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 6,663 16,064 326,976 121,867 149,540
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) 0 1,071 49,890 62,975 52,874
Unrealized appreciation (depreciation)
on investments 0 (1,886) 166,841 324,655 72,409
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (815) 216,731 387,630 125,283
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations $ 6,663 15,249 543,707 509,497 274,823
==================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Operations, Continued
<TABLE>
<CAPTION>
================================================================================================================
Variable Insurance Products Variable Insurance Product
Fund II Fund III
----------------------------- ---------------------------------
Asset Growth & Growth
Manager Contrafund Income Opportunities
Portfolio Portfolio Portfolio Portfolio
----------------------------------------------------------------
Six Months Six Months Period from Period from
Ended 6/30/97 Ended 6/30/97 5/30-6/30/97 5/30-6/30/97
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income:
Income - Dividends $ 417,972 33,739 0 0
Expenses - Mortality and expense risk
charges (note 3) 12,468 4,758 2 1
- ---------------------------------------------------------------------------------------------------------------
Net investment income (expense) 405,504 28,981 (2) (1)
- ---------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) 13,487 59,754 1 1
Unrealized appreciation (depreciation)
on investments (52,715) 91,929 188 33
- ---------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (39,228) 151,683 189 34
- ---------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations $ 366,276 180,664 187 33
================================================================================================================
<CAPTION>
==================================================================================================
Advisers Management Trust
-------------------------------------------------
Balanced Bond Growth
Portfolio Portfolio Portfolio
-----------------------------------------------
Six Months Six Months Six Months
Ended 6/30/97 Ended 6/30/97 Ended 6/30/97
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment income:
Income - Dividends 16,310 4,664 11,458
Expenses - Mortality and expense risk
charges (note 3) 877 277 499
- --------------------------------------------------------------------------------------------------
Net investment income (expense) 15,433 4,387 10,959
- --------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) 676 (54) 1,525
Unrealized appreciation (depreciation)
on investments 10,085 (2,291) 9,767
- --------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 10,761 (2,345) 11,292
---------
Increase (decrease) in net assets from operations 26,194 2,042 22,251
==================================================================================================
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Operations, Continued
<TABLE>
<CAPTION>
================================================================================================================================
Federated Investors Insurance Series
------------------------------------------- ----------------------------
American High Small
Leaders Income Bond Utility Cap Growth
Fund II Fund II Fund II Portfolio Portfolio
------------------------------------------------------------------------
Six Months Six Months Six Months Six Months Six Months
Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Income - Dividends $ 148 2,412 4,167 23,157 10,016
Expenses - Mortality and expense risk charges
(note 3) 18 175 369 1,813 4,416
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 130 2,237 3,798 21,344 5,600
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) 216 120 530 (10,739) 34,520
Unrealized appreciation (depreciation)
on investments 579 1,015 4,968 (5,621) 102,382
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 795 1,135 5,498 (16,360) 136,902
- --------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
operations $ 925 3,372 9,296 4,984 142,502
================================================================================================================================
<CAPTION>
==================================================================================================
PBHG Insurance SeriesAFundcan Fund
-------------------------------------
PBHG PBHG
Large Cap Growth II
Portfolio Portfolio
-------------------------------------
Period from Period from
5/21-6/30/97 5/21-6/30/97
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment income:
Income - Dividends 0 0
Expenses - Mortality and expense risk charges
(note 3) 2 2
- -------------------------------------------------------------------------------------------------
Net investment income (expense) (2) (2)
- -------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) 2 1
Unrealized appreciation (depreciation)
on investments 101 138
- -------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 103 139
- -------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
operations 101 137
==================================================================================================
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Operations, Continued
<TABLE>
<CAPTION>
========================================================================================================================
Janus Aspen Series
--------------------------------------------------------------------------
Aggressive Worldwide Flexible
Growth Growth Growth Balanced Income
Portfolio Portfolio Portfolio Portfolio Portfolio
--------------------------------------------------------------------------
Six Months Six Months Six Months Six Months Six Months
Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Income - Dividends $ 0 42,092 29,312 6,733 1,695
Expenses - Mortality and expense risk
charges (note 3) 3,878 4,830 6,256 847 73
- ------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) (3,878) 37,262 23,056 5,886 1,622
- ------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) (9,351) 21,590 43,604 2,958 126
Unrealized appreciation (depreciation)
on investments 47,651 99,342 246,337 18,755 (721)
- ------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 38,300 120,932 289,941 21,713 (595)
- ------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations $ 34,422 158,194 312,997 27,599 1,027
========================================================================================================================
<CAPTION>
========================================================================================
Janus Aspen Series
---------------------------------------
International Capital
Growth Appreciation
Portfolio Portfolio
---------------------------------------
Period from Period from
5/21-6/30/97 5/21-6/30/97
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Investment income:
Income - Dividends 1,376 0
Expenses - Mortality and expense risk
charges (note 3) 472 4
- -----------------------------------------------------------------------------------------
Net investment income (expense) 904 (4)
- -----------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) 1,311 1
Unrealized appreciation (depreciation)
on investments 21,388 244
- -----------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 22,699 245
- -----------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 23,603 241
========================================================================================
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
====================================================================================================================================
GE Investments Funds, Inc.
----------------------------------------------------------------------------
S&P 500 Government Money Total International
Index Securities Market Return Equity
Fund Fund Fund Fund Fund
----------------------------------------------------------------------------
Six Months Six Months Six Months Six Months Six Months
Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in net assets From operations:
Net investment income $ (7,183) (1,054) 2,000,435 (11,654) (160)
Net realized gain (loss) (12,454) (2,258) (696,449) (40,186) 140
Unrealized appreciation (depreciation)
on investments 368,487 5,812 (1,257,061) 346,898 8,202
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 348,850 2,500 46,925 295,058 8,182
- ------------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 231,001 22,423 2,187,734 78,449 7,560
Loan interest (411) 214 (575) (81) 0
Transfers (to) from the general account of
Life of Virginia:
Death benefits 0 0 0 0 0
Surrenders (12,609) (13,897) (9,381) (13,601) (384)
Loans (3,420) (3,773) (2,250) (1,252) 0
Cost of insurance and administrative
expense (note 3) (101,884) (12,047) (134,784) (175,256) (2,405)
Transfer gain (loss) and transfer fees
(note 3) (1,480) (285) (227,197) 21,306 (1,857)
Interfund transfers 162,889 7,609 (1,964,201) 57 16,468
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital
transactions 274,086 244 (150,654) (90,378) 19,382
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 622,936 2,744 (103,729) 204,680 27,564
Net assets at beginning of year 1,789,889 311,644 2,405,605 3,279,301 35,223
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 2,412,825 314,388 2,301,876 3,483,981 62,787
====================================================================================================================================
<CAPTION>
=====================================================================================================================
GE Investments Funds, Inc.
--------------------------------------------------------------
Real Estate Global Value
Securities Income Equity
Fund Fund Fund
--------------------------------------------------------------
Six Months Period from Period from
Ended 6/30/97 6/17-6/30/97 6/17-6/30/97
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets
From operations:
Net investment income (264) (2) 0
Net realized gain (loss) 732 0 0
Unrealized appreciation (depreciation)
on investments 5,497 19 1
- ---------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 5,965 17 1
- ---------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 32,891 0 32
Loan interest 0 0 0
Transfers (to) from the general account of
Life of Virginia:
Death benefits 0 0 0
Surrenders 0 0 0
Loans (766) 0 0
Cost of insurance and administrative
expense (note 3) (4,972) (17) (12)
Transfer gain (loss) and transfer
fees (note 3) 182 0 0
Interfund transfers 55,366 6,098 21
- ---------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
capital transactions 82,701 6,081 41
- ---------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 88,666 6,098 42
Net assets at beginning of year 30,212 0 0
- ---------------------------------------------------------------------------------------------------------------------
Net assets at end of year 118,878 6,098 42
=====================================================================================================================
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets, Continued
<TABLE>
<CAPTION>
============================================================================================================================
Oppenheimer Variable Account Funds
-------------------------------------------------------------------------
Capital High
Money Bond Appreciation Growth Income
Fund Fund Fund Fund Fund
-------------------------------------------------------------------------
Six Months Six Months Six Months Six Months Six Months
Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Increase in net assets From operations:
Net investment income $ 13 8,319 110,988 88,717 48,691
Net realized gain 0 (321) 50,237 25,035 4,106
Unrealized appreciation (depreciation)
on investments 0 (1,704) 4,795 115,923 (3,434)
- ----------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 13 6,294 166,020 229,675 49,363
- ----------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 111 28,981 408,200 189,678 191,854
Loan interest 0 16 (9) 571 83
Transfers (to) from the general
account of Life of Virginia:
Death benefits 0 0 0 0 0
Surrenders 0 (14,631) (27,385) (13,396) (13,470)
Loans 0 (1,075) (14,259) (6,518) (9,628)
Cost of insurance and administrative
expense (note 3) (130) (11,102) (145,954) (77,267) (79,972)
Transfer gain (loss) and transfer
fees (note 3) (1,743) (1,178) 23,074 (6,884) 1,887
Interfund transfers 1,638 (12,102) (3,973) 99,646 114,149
- ----------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions (124) (11,091) 239,694 185,830 204,903
- ----------------------------------------------------------------------------------------------------------------------------
Increase in net assets (111) (4,797) 405,714 415,505 254,266
Net assets at beginning of period 707 269,840 2,342,064 1,479,873 992,747
- ----------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 596 265,043 2,747,778 1,895,378 1,247,013
============================================================================================================================
<CAPTION>
================================================================
Oppenheimer Variable Account Funds
---------------
Multiple
Strategies
Fund
---------------
Six Months
Ended 6/30/97
- ----------------------------------------------------------------
<S> <C>
Increase in net assets From operations:
Net investment income 31,291
Net realized gain 5,699
Unrealized appreciation (depreciation)
on investments 13,701
- ----------------------------------------------------------------
Increase in net assets from operations 50,691
- ----------------------------------------------------------------
From capital transactions:
Net premiums 65,805
Loan interest (80)
Transfers (to) from the general
account of Life of Virginia:
Death benefits 0
Surrenders (16,343)
Loans (4,981)
Cost of insurance and administrative
expense (note 3) (31,652)
Transfer gain (loss) and transfer
fees (note 3) 249
Interfund transfers 11,063
- ----------------------------------------------------------------
Increase in net assets from capital transactions 24,061
- ----------------------------------------------------------------
Increase in net assets 74,752
Net assets at beginning of period 574,661
- ----------------------------------------------------------------
Net assets at end of period 649,413
================================================================
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets, Continued
<TABLE>
<CAPTION>
=============================================================================================================================
Variable Insurance Products Fund
---------------------------------------------------------------------------
Money High Equity
Market Income Income Growth Overseas
Portfolio Portfolio Portfolio Portfolio Portfolio
---------------------------------------------------------------------------
Six Months Six Months Six Months Six Months Six Months
Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ 6,663 16,064 326,976 121,867 149,540
Net realized gain (loss) 0 1,071 49,890 62,975 52,874
Unrealized appreciation (depreciation)
on investments 0 (1,886) 166,841 324,655 72,409
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 6,663 15,249 543,707 509,497 274,823
- -----------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 0 208 523,638 535,529 203,801
Loan interest 0 (6) 224 1,017 349
Transfers (to) from the general account of
Life of Virginia:
Death benefits 0 0 (276) (7,486) (264)
Surrenders 0 (2,291) (45,304) (34,533) (29,742)
Loans (1,093) (138) (21,503) (29,344) (14,990)
Cost of insurance and administrative
expense (note 3) (11,705) (9,238) (219,216) (227,001) (98,753)
Transfer gain (loss) and transfer
fees (note 3) 1,221 1,297 9,686 (3,122) 650
Interfund transfers (15,528) 1,039 202,206 22,584 (234,118)
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
capital transactions (27,105) (9,129) 449,455 257,644 (173,067)
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (20,442) 6,120 993,162 767,141 101,756
Net assets at beginning of year 315,653 213,212 3,220,818 3,610,646 1,760,630
- -----------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 295,211 219,332 4,213,980 4,377,787 1,862,386
=============================================================================================================================
</TABLE>
See accompanying notes to financial statements.
15
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets, Continued
<TABLE>
<CAPTION>
======================================================================================================================
Variable Insurance Products Variable Insurance Product
Fund II Fund III
------------------------------ -------------------------------
Asset Growth & Growth
Manager Contrafund Income Opportunities
Portfolio Portfolio Portfolio Portfolio
----------------------------------------------------------------
Six Months Six Months Period from Period from
Ended 6/30/97 Ended 6/30/97 5/30-6/30/97 5/30-6/30/97
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets From operations:
Net investment income $ 405,504 28,981 (2) (1)
Net realized gain (loss) 13,487 59,754 1 1
Unrealized appreciation (depreciation)
on investments (52,715) 91,929 188 33
- -----------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 366,276 180,664 187 33
- -----------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 372,633 273,736 193 193
Loan interest 135 (90) 0 0
Transfers (to) from the general account of
Life of Virginia:
Death benefits 0 (5,439) 0 0
Surrenders (22,011) (82,662) 0 0
Loans (17,120) (5,271) 0 0
Cost of insurance and administrative
expense (note 3) (171,308) (90,123) (26) (26)
Transfer gain (loss) and transfer
fees (note 3) 13,443 17,522 1 0
Interfund transfers 537,464 576,393 4,630 768
- -----------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
capital transactions 713,236 684,066 4,798 935
- -----------------------------------------------------------------------------------------------------------------------
Increase in net assets 1,079,512 864,730 4,985 968
Net assets at beginning of year 2,880,752 1,045,467 0 0
- -----------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 3,960,264 1,910,197 4,985 968
=======================================================================================================================
<CAPTION>
=======================================================================================================================
Advisers Management Trust
-------------------------------------------------------------------
Balanced Bond Growth
Portfolio Portfolio Portfolio
-------------------------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/97 Ended 6/30/97 Ended 6/30/97
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets From operations:
Net investment income 15,433 4,387 10,959
Net realized gain (loss) 676 (54) 1,525
Unrealized appreciation (depreciation)
on investments 10,085 (2,291) 9,767
- ----------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 26,194 2,042 22,251
- ----------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 321 0 0
Loan interest (18) 0 (45)
Transfers (to) from the general account of
Life of Virginia:
Death benefits 0 0 0
Surrenders (1,844) (61) (2,997)
Loans (1,293) 0 0
Cost of insurance and administrative
expense (note 3) (6,572) 3,802 (3,936)
Transfer gain (loss) and transfer
fees (note 3) (88) 181 1,706
Interfund transfers (30) (1,001) 3,247
- ----------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
capital transactions (9,524) 2,921 (2,025)
- ----------------------------------------------------------------------------------------------------------------------
Increase in net assets 16,670 4,963 20,226
Net assets at beginning of year 244,014 79,544 134,549
- ----------------------------------------------------------------------------------------------------------------------
Net assets at end of year 260,684 84,507 154,775
======================================================================================================================
</TABLE>
See accompanying notes to financial statements.
16
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets, Continued
<TABLE>
<CAPTION>
==================================================================================================================
Federated Investors Insurance Series Alger American Fund
---------------------------------------------- --------------
American High Small
Leaders Income Bond Utility Cap
Fund II Fund II Fund II Portfolio
-------------------------------------------------------------
Six Months Six Months Six Months Six Months
Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ 130 2,237 3,798 21,344
Net realized gain (loss) 216 120 530 (10,739)
Unrealized appreciation (depreciation)
on investments 579 1,015 4,968 (5,621)
- ------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 925 3,372 9,296 4,984
- ------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 4,071 21,159 25 141,467
Loan interest 0 0 0 1,472
Transfers (to) from the general account of
Life of Virginia:
Death benefits 0 0 0 0
Surrenders 0 0 0 (1,499)
Loans 0 0 0 (2,900)
Cost of insurance and administrative
expense (note 3) (590) (3,528) (4,779) (37,163)
Transfer gain (loss) and transfer
fees (note 3) 39 133 25,153 212
Interfund transfers 4,145 17,930 7,610 86,980
- ------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
capital transactions 7,665 35,694 28,009 188,569
- ------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 8,590 39,066 37,305 193,553
Net assets at beginning of year 2,270 35,598 87,340 421,775
- ------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 10,860 74,664 124,645 615,328
==================================================================================================================
<CAPTION>
====================================================================================================
PBHG Insurance Series Fund
-------------------------------------------------
PBHG PBHG
Growth Large Cap Growth II
Portfolio Portfolio Portfolio
-------------------------------------------------
Six Months Period from Period from
Ended 6/30/97 5/21-6/30/97 5/21-6/30/97
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) 5,600 (2) (2)
Net realized gain (loss) 34,520 2 1
Unrealized appreciation (depreciation)
on investments 102,382 101 138
- ---------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 142,502 101 137
- ---------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 163,320 297 411
Loan interest 328 0 0
Transfers (to) from the general account of
Life of Virginia:
Death benefits 0 0 0
Surrenders (9,356) 0 0
Loans (152) 0 0
Cost of insurance and administrative
expense (note 3) (56,947) (136) (130)
Transfer gain (loss) and transfer
fees (note 3) (92,349) (6) (31)
Interfund transfers (408,582) 3,434 3,421
- ---------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
capital transactions (403,738) 3,589 3,671
- ---------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (261,236) 3,690 3,808
Net assets at beginning of year 1,406,584 0 0
- ---------------------------------------------------------------------------------------------------
Net assets at end of year 1,145,348 3,690 3,808
===================================================================================================
</TABLE>
See accompanying notes to financial statements.
17
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets, Continued
<TABLE>
<CAPTION>
===================================================================================================================================
Janus Aspen Series
------------------------------------------------------------------------------
Aggressive Worldwide Flexible
Growth Growth Growth Balanced Income
Portfolio Portfolio Portfolio Portfolio Portfolio
------------------------------------------------------------------------------
Six Months Six Months Six Months Six Months Six Months
Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97 Ended 6/30/97
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ (3,878) 37,262 23,056 5,886 1,622
Net realized gain (loss) (9,351) 21,590 43,604 2,958 126
Unrealized appreciation (depreciation)
on investments 47,651 99,342 246,337 18,755 (721)
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 34,422 158,194 312,997 27,599 1,027
- -----------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 266,083 249,990 341,621 32,270 13,127
Loan interest 127 349 96 0 0
Transfers (to) from the general account of
Life of Virginia:
Death benefits 0 0 0 0 0
Surrenders (30,296) (7,486) (7,118) (5,949) 0
Loans (1,033) (4,111) (12,623) 0 0
Cost of insurance and administrative
expense (note 3) (82,822) (77,047) (111,027) (12,861) (2,887)
Transfer gain (loss) and transfer
fees (note 3) (899) 6,533 (3,296) 357 93
Interfund transfers 13,065 155,642 332,733 85,694 24,037
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
capital transactions 164,225 323,870 540,386 99,511 34,370
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 198,647 482,064 853,383 127,110 35,397
Net assets at beginning of period 1,083,059 1,113,610 1,421,287 168,776 8,883
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 1,281,706 1,595,674 2,274,670 295,886 44,280
===================================================================================================================================
<CAPTION>
==============================================================================
Janus Aspen Series
------------------------------
International Capital
Growth Appreciation
Portfolio Portfolio
------------------------------
Period from Period from
5/21-6/30/97 5/21-6/30/97
- ------------------------------------------------------------------------------
<S> <C> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) 904 (4)
Net realized gain (loss) 1,311 1
Unrealized appreciation (depreciation)
on investments 21,388 244
- ------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 23,603 241
- ------------------------------------------------------------------------------
From capital transactions:
Net premiums 57,200 44
Loan interest 0 0
Transfers (to) from the general account of
Life of Virginia:
Death benefits 0 0
Surrenders (828) 0
Loans 0 0
Cost of insurance and administrative
expense (note 3) (9,474) (98)
Transfer gain (loss) and transfer
fees (note 3) 124 3
Interfund transfers 74,168 7,337
- ------------------------------------------------------------------------------
Increase (decrease) in net assets from
capital transactions 121,190 7,286
- ------------------------------------------------------------------------------
Increase in net assets 144,793 7,527
Net assets at beginning of period 53,938 0
- ------------------------------------------------------------------------------
Net assets at end of period 198,731 7,527
==============================================================================
</TABLE>
See accompanying notes to financial statements.
18
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Notes to Financial Statements
June 30, 1997
- --------------------------------------------------------------------------------
(Continued)
(1) Description of Entity
Life of Virginia Separate Account II (the Account) is a separate
investment account established in 1986 by The Life Insurance Company of
Virginia (Life of Virginia) under the laws of the Commonwealth of
Virginia. The Account operates as a unit investment trust under the
Investment Company Act of 1940. The Account is used to fund certain
benefits for flexible premium variable life insurance policies issued
by Life of Virginia. The Life Insurance Company of Virginia is a stock
life insurance company operating under a charter granted by the
Commonwealth of Virginia on March 21, 1871. Eighty percent of the
capital stock of Life of Virginia is owned by General Electric Capital
Assurance Corporation. The remaining 20% is owned by GE Life Insurance
Group, Inc. General Electric Capital Assurance Corporation and GE Life
Insurance Group, Inc. are indirectly, wholly-owned subsidiaries of
General Electric Capital Corporation ("GE Capital"). GE Capital, a New
York corporation, is a diversified financial services company.
In May 1997, seven new investment subdivisions were added to the
Account. The Growth & Income Portfolio and Growth Opportunities
Portfolio each invests solely in a designated portfolio of the Variable
Insurance Products Fund III. The Global Income Fund and the Value
Equity Fund each invests solely in a designated portfolio of the GE
Investments Funds, Inc. The Capital Appreciation Portfolio invests
solely in a designated portfolio of the Janus Aspen Series. The Growth
II Portfolio and the Large Cap Growth Portfolio each invests solely in
a designated portfolio of the PBHG Insurance Series Fund. All
designated portfolios described above are series type mutual funds.
(2) Summary of Significant Accounting Policies
Investments
Investments are stated at fair value which is based on the underlying
net asset value per share of the respective portfolios or funds.
Purchases and sales of investments are recorded on the trade date.
Realized gains and losses on investments are determined on the average
cost basis. The units and unit values are disclosed as of the last
business day in the applicable year or period.
19 (Continued)
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Notes to Financial Statements
June 30, 1997
- --------------------------------------------------------------------------------
(2) Continued
[GRAPHIC OMITTED]
The aggregate cost of the investments acquired and the aggregate
proceeds of investments sold, for the six months ended June 30, 1997
was:
Cost of Proceeds
Shares from
Fund/Portfolio Acquired Shares Sold
- -------------------------------------------------------------------------------
GE Investment Funds, Inc.:
S&P 500 Index $ 1,190,769 $ 177,832
Government Securities 69,703 38,966
Money Market 7,990,877 5,451,481
Total Return 946,613 224,591
International Equity 30,686 6,304
Real Estate Securities 105,716 19,176
Global Income 6,098 17
Value Equity 53 7
Oppenheimer Variable Account Funds:
Money 1,758 1,883
Bond 82,260 83,517
Capital Appreciation 783,978 460,977
Growth 441,002 157,285
High Income 369,621 117,986
Multiple Strategies 124,682 69,736
Variable Insurance Products Fund:
Money Market 52,336 73,888
High Income 20,293 14,535
Equity-Income 1,416,787 624,666
Growth 969,935 590,486
Overseas 484,791 510,615
Variable Insurance Products Fund II:
Asset Manager 1,390,621 291,603
Contrafund 1,410,455 716,370
Variable Insurance Products Fund III:
Growth & Income 4,823 27
Growth Opportunties 961 27
20
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Notes to Financial Statements
June 30, 1997
- --------------------------------------------------------------------------------
(2) Continued
Cost of Proceeds
Shares from
Fund/Portfolio Acquired Shares Sold
- -------------------------------------------------------------------------------
GE Investment Funds, Inc.:
S&P 500 Index $ 1,190,769 $ 177,832
Government Securities 69,703 38,966
Money Market 7,990,877 5,451,481
Total Return 946,613 224,591
International Equity 30,686 6,304
Real Estate Securities 105,716 19,176
Global Income 6,098 17
Value Equity 53 7
Oppenheimer Variable Account Funds:
Money 1,758 1,883
Bond 82,260 83,517
Capital Appreciation 783,978 460,977
Growth 441,002 157,285
High Income 369,621 117,986
Multiple Strategies 124,682 69,736
Variable Insurance Products Fund:
Money Market 52,336 73,888
High Income 20,293 14,535
Equity-Income 1,416,787 624,666
Growth 969,935 590,486
Overseas 484,791 510,615
Variable Insurance Products Fund II:
Asset Manager 1,390,621 291,603
Contrafund 1,410,455 716,370
Variable Insurance Products Fund III:
Growth & Income 4,823 27
Growth Opportunties 961 27
Advisers Management Trust:
Bond $ 10,462 $ 2,097
Growth 16,039 8,802
Balanced 17,104 11,082
Janus Aspen Series:
Balanced 133,811 28,823
Aggressive Growth 578,657 417,213
Growth 626,954 248,188
Worldwide 886,833 325,085
Flexible Income 40,421 4,501
International Growth 143,358 21,628
Capital Appreciation 7,382 101
Federated Insurance Series:
American Leaders Fund II 11,464 3,695
Utility Fund II 45,018 12,913
High Income Bond Fund II 42,764 4,809
The Alger American Fund
Small Cap 386,944 179,013
Growth 3,094,423 3,458,248
PBHG Insurance Series Fund, Inc.
PBHG Large Cap Growth 3,732 128
PBHG Growth II 3,832 123
Federal Income Taxes
The Account is not taxed separately because the operations of the
Account are part of the total operations of Life of Virginia. Life of
Virginia is taxed as a life insurance company under the Internal
Revenue Code (the Code). Life of Virginia is included in the
21 (Continued)
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Notes to Financial Statements
June 30, 1997
- --------------------------------------------------------------------------------
(2) Continued
General Electric Capital Assurance Company consolidated federal income
tax return. The Account will not be taxed as a regulated investment
company under subchapter M of the Code. Under existing federal income
tax law, no taxes are payable on the investment income or on the
capital gains of the Account.
Use of Estimates
Financial statements prepared in conformity with generally accepted
accounting principles require management to make estimates and
assumptions that affect amounts reported therein. Actual results could
differ from those estimates.
(3) Related Party Transactions
Net premiums transferred from Life of Virginia to the Account represent
gross premiums recorded by Life of Virginia on its flexible premium
variable life insurance policies, less deductions of 7.5% retained as
compensation for certain distribution expenses and premium taxes. In
addition, there is a deferred sales charge of up to 45% of the first
year's premiums. This charge will be deducted from the policy's cash
value in equal installments at the beginning of each of the policy
years two through ten with any remaining installments deducted at
policy lapse or surrender.
If a policy surrenders or lapses during the first nine years, a charge
is made by Life of Virginia to cover the expenses of underwriting and
issuing the policy.
The charge is a stated percentage of the insurance amount and varies by
the age of the policyholder when issued and period of time that the
policy has been in force. A charge equal to the lesser of $25 or 2% of
the amount paid on a partial surrender will be made to compensate Life
of Virginia for the costs incurred in connection with the partial
surrender.
A charge based on the policy specified amount of insurance, death
benefit option, cash values, duration, the insured's sex, issue age and
risk class is deducted from the policy cash values each month to
compensate Life of Virginia for the cost of insurance and any benefits
added by rider. In addition, Life of Virginia charges the Account for
the mortality and expense risk that Life of Virginia assumes. This
charge is deducted daily at an effective annual rate of .70% of the net
assets of the Account. For policies issued on or after May 1, 1993,
Life of Virginia will deduct a monthly administrative charge of $6 from
the policy cash value and for policies issued prior to May 1, 1993,
Life of Virginia will deduct a monthly administrative charge of $5 from
the policy cash value.
22 (Continued)
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Notes to Financial Statements
June 30, 1997
- --------------------------------------------------------------------------------
(3) Continued
Gains or losses resulting from the processing time between the
crediting of an initial net premium and the investment of that premium
are charged to Life of Virginia. In addition, any such gain or loss
resulting from the processing time between a request for policy
surrender and the sale of the underlying shares is also charged to Life
of Virginia.
GE Investment Funds, Inc. (the Fund) is an open-end diversified
management investment company whose shares are sold to Life of
Virginia's Separate Accounts.
Forth Financial Securities Corporation (FFSC), an affiliate of Life of
Virginia, acts as principal underwriter (as defined in The Investment
Company Act of 1940) of the Account's policies pursuant to an agreement
with Life of Virginia.
GE Investment Management Incorporated currently serves as investment
adviser to GE Investment Funds, Inc. (formerly Life of Virginia Series
Fund, Inc.). Prior to May 1, 1997, Aon Advisors, Inc. served as
investment advisor to the Fund and had agreed to reimburse the Fund for
certain expenses of each of the Fund's portfolios. As compensation for
its services, the Investment Advisor is paid an investment advisory fee
by the Fund based on the average daily net assets at an effective
annual rate of .35% for the S&P 500 Index Fund, .10% for the Government
Securities Fund, .50% for the Money Market and Total Return Funds,
1.00% for the International Equity Fund and .85% for the Real Estate
Securities Fund.
Certain officers and directors of Life of Virginia are also officers
and directors of FFSC and the Fund.
- --------------------------------------------------------------------------------
23
<PAGE>
