LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Assets and Liabilities (Audited)
Year ended December 31, 1997
(With Independent Auditors' Report Thereon)
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Table of Contents
Year ended December 31, 1997
===================================================================
Page
Independent Auditors' Report...................................1
Financial Statements:
Statements of Assets and Liabilities.....................3
Statements of Operations.................................9
Statements of Changes in Net Assets.....................20
Notes to Financial Statements.................................31
=====================================================================
<PAGE>
1
Report of Independent Auditors
Policyholders
Life of Virginia Separate Account II
and Board of Directors
The Life Insurance Company of Virginia
We have audited the accompanying statements of assets and liabilities of Life of
Virginia Separate Account II (the Account) (comprising the GE Investments Funds,
Inc.--S&P 500 Index, Money Market, Total Return, International Equity, Real
Estate Securities, Global Income, Value Equity and Income Funds; the Oppenheimer
Variable Account Funds--Bond, Capital Appreciation, Growth, High Income and
Multiple Strategies Funds; the Variable Insurance Products Fund--Equity-Income,
Growth and Overseas Portfolios; the Variable Insurance Products Fund II--Asset
Manager and Contrafund Portfolios; Variable Insurance Products Fund III--Growth
& Income and Growth Opportunities Portfolios; the Federated Investors Insurance
Series--American Leaders, High Income Bond and Utility Funds II; the Alger
American--Small Cap and Growth Portfolios; the PBHG Insurance Series Fund--PBHG
Large Cap Growth and PBHG Growth II Portfolios; and the Janus Aspen
Series--Aggressive Growth, Growth, Worldwide Growth, Balanced, Flexible Income,
International Growth and Capital Appreciation Portfolios) as of December 31,
1997 and the related statements of operations and changes in net assets for the
aforementioned funds and the GE Investments Funds, Inc.--Government Securities
Fund; Oppenheimer Variable Account Funds--Money Fund; Variable Insurance
Products Fund--Money Market and High Income Portfolios; and Neuberger & Berman
Advisers Management Trust--Balanced, Bond and Growth Portfolios of Life of
Virginia Separate Account II for each of the two years or lesser periods then
ended. These financial statements are the responsibility of the Account's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. The accompanying statements of operations and
changes in net assets of Life of Virginia Separate Account II for the year or
period ended December 31, 1995, were audited by other auditors, whose report
thereon dated February 8, 1996 expressed an unqualified opinion on those
statements.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1997, by correspondence with
the underlying mutual funds or their transfer agent. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
<PAGE>
In our opinion, the 1997 and 1996 financial statements referred to above present
fairly, in all material respects, the financial position of each of the
respective portfolios constituting Life of Virginia Separate Account II as of
December 31, 1997 and the results of their operations and changes in their net
assets for each of the two years or lesser periods then ended in conformity with
generally accepted accounting principles.
Richmond, Virginia
February 13, 1998
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Assets and Liabilities
<TABLE>
<CAPTION>
December 31, 1997
- ----------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc. (formerly Life of Virginia Series Fund, Inc.)
-------------------------------------------------------
S&P 500 Money Total
Index Market Return
Assets Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in GE Investments
Funds, Inc., at fair value (note 2):
S&P 500 Index Fund (177,190 shares; cost - $3,199,555) $ 3,407,368 - -
Money Market Fund (2,394,566 shares; cost - $2,394,047) - 2,394,566 -
Total Return Fund (252,424 shares; cost - $3,888,937) - - 3,334,515
International Equity Fund (7,074 shares; cost - $81,487) - - -
Real Estate Securities Fund (13,085 shares; cost - $200,184) - - -
Global Income Fund (938 shares; cost - $9,564) - - -
Value Equity Fund (1,032 shares; cost - $13,530) - - -
Income Fund (31,553 shares; cost - $381,579) - - -
Receivable from affiliate 1,802 - 270,286
Receivable for units sold 99 22,746 87
- ----------------------------------------------------------------------------------------------------------------------------------
Total assets $ 3,409,269 2,417,312 3,604,888
- ----------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 1,280 155,396 1,220
Payable for units withdrawn - - -
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,280 155,396 1,220
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets attributable to variable life policyholders $ 3,407,989 2,261,916 3,603,668
- ----------------------------------------------------------------------------------------------------------------------------------
Outstanding units 82,478 139,024 117,921
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit $ 41.32 16.27 30.56
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
December 31, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc. (formerly Life of Virginia Series Fund, Inc.)
----------------------------------------------------------
International Real Estate Global
Equity Securities Income
Assets Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in GE Investments
Funds, Inc., at fair value (note 2):
S&P 500 Index Fund (177,190 shares; cost - $3,199,555) - - -
Money Market Fund (2,394,566 shares; cost - $2,394,047) - - -
Total Return Fund (252,424 shares; cost - $3,888,937) - - -
International Equity Fund (7,074 shares; cost - $81,487) 75,551 - -
Real Estate Securities Fund (13,085 shares; cost - $200,184) - 199,931 -
Global Income Fund (938 shares; cost - $9,564) - - 9,235
Value Equity Fund (1,032 shares; cost - $13,530) - - -
Income Fund (31,553 shares; cost - $381,579) - - -
Receivable from affiliate - 497 -
Receivable for units sold - 50 -
- ----------------------------------------------------------------------------------------------------------------------------------
Total assets 75,551 200,478 9,235
- ----------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 47 69 12
Payable for units withdrawn - - -
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 47 69 12
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets attributable to variable life policyholders 75,504 200,409 9,223
- ----------------------------------------------------------------------------------------------------------------------------------
Outstanding units 5,950 10,723 896
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit 12.69 18.69 10.29
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
December 31, 1997
- ----------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
(formerly Life of Virginia Series Fund, Inc.)
-----------------------------------------------------
Value
Equity Income
Assets Fund Fund
- ----------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in GE Investments
Funds, Inc., at fair value (note 2):
S&P 500 Index Fund (177,190 shares; cost - $3,199,555) - -
Money Market Fund (2,394,566 shares; cost - $2,394,047) - -
Total Return Fund (252,424 shares; cost - $3,888,937) - -
International Equity Fund (7,074 shares; cost - $81,487) - -
Real Estate Securities Fund (13,085 shares; cost - $200,184) - -
Global Income Fund (938 shares; cost - $9,564) - -
Value Equity Fund (1,032 shares; cost - $13,530) 13,531 -
Income Fund (31,553 shares; cost - $381,579) - 382,102
Receivable from affiliate 35 -
Receivable for units sold - 672
- ----------------------------------------------------------------------------------------------------------------
Total assets 13,566 382,774
- ----------------------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 5 4,723
Payable for units withdrawn 2 -
- ----------------------------------------------------------------------------------------------------------------
Total liabilities 7 4,723
- ----------------------------------------------------------------------------------------------------------------
Net assets attributable to variable life policyholders 13,559 378,051
- ----------------------------------------------------------------------------------------------------------------
Outstanding units 1,028 37,767
- ----------------------------------------------------------------------------------------------------------------
Net asset value per unit 13.19 10.01
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Assets and Liabilities, Continued
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds
--------------------------------------------------
Capital
Bond Appreciation Growth
Assets Fund Fund Fund
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in Oppenheimer Variable
Account Funds, at fair value (note 2):
Bond Fund (24,675 shares; cost - $285,798) $ 293,873 - -
Capital Appreciation Fund (75,642 shares; cost - $2,781,093) - 3,098,278 -
Growth Fund (70,077 shares; cost - $1,792,473) - - 2,273,298
High Income Fund (143,091 shares; cost - $1,583,597) - - -
Multiple Strategies Fund (38,927 shares; cost - $579,533) - - -
Receivable from affiliate - - 2,610
Receivable for units sold - 2,461 2,878
- -------------------------------------------------------------------------------------------------------------------------------
Total assets $ 293,873 3,100,739 2,278,786
- -------------------------------------------------------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 1,450 1,663 873
Payable for units withdrawn 10 - -
- -------------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,460 1,663 873
- -------------------------------------------------------------------------------------------------------------------------------
Net assets attributable to variable life policyholders $ 292,413 3,099,076 2,277,913
- -------------------------------------------------------------------------------------------------------------------------------
Outstanding units 13,037 76,126 54,030
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit $ 22.43 40.71 42.16
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds
----------------------------------------------
High Multiple
Income Strategies
Assets Fund Fund
- ----------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in Oppenheimer Variable
Account Funds, at fair value (note 2):
Bond Fund (24,675 shares; cost - $285,798) - -
Capital Appreciation Fund (75,642 shares; cost - $2,781,093) - -
Growth Fund (70,077 shares; cost - $1,792,473) - -
High Income Fund (143,091 shares; cost - $1,583,597) 1,648,403 -
Multiple Strategies Fund (38,927 shares; cost - $579,533) - 662,141
Receivable from affiliate 2,974 4,474
Receivable for units sold - 105
- ----------------------------------------------------------------------------------------------------------------
Total assets 1,651,377 666,720
- ---------------------------------------------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 626 254
Payable for units withdrawn - -
- ---------------------------------------------------------------------------------------------------------------
Total liabilities 626 254
- ---------------------------------------------------------------------------------------------------------------
Net assets attributable to variable life policyholders 1,650,751 666,466
- ---------------------------------------------------------------------------------------------------------------
Outstanding units 48,043 22,561
- ---------------------------------------------------------------------------------------------------------------
Net asset value per unit 34.36 29.54
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Assets and Liabilities, Continued
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund
------------------------------------------------
Equity-
Income Growth Overseas
Assets Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in Variable Insurance Products
Fund, at fair value (note 2):
Equity-Income Portfolio (220,390 shares; cost - $4,396,274) $ 5,351,063 - -
Growth Portfolio (133,529 shares; cost - $4,006,008) - 4,953,922 -
Overseas Portfolio (90,312 shares; cost - $1,566,587) - - 1,733,985
Receivable from affiliate 45,062 8,654 4,438
Receivable for units sold 3,537 1,075 1,424
- -----------------------------------------------------------------------------------------------------------------------
Total assets $ 5,399,662 4,963,651 1,739,847
- -----------------------------------------------------------------------------------------------------------------------
Liabilities
- -----------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 2,070 1,904 667
Payable for units withdrawn - - -
- -----------------------------------------------------------------------------------------------------------------------
Total liabilities 2,070 1,904 667
- -----------------------------------------------------------------------------------------------------------------------
Net assets attributable to variable life policyholders $ 5,397,592 4,961,747 1,739,180
- -----------------------------------------------------------------------------------------------------------------------
Outstanding units 134,168 115,551 72,315
- -----------------------------------------------------------------------------------------------------------------------
Net asset value per unit $ 40.23 42.94 24.05
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Assets and Liabilities, Continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Variable Insurance Variable Insurance
Products Fund II Products Fund III
------------------------- ---------------------------
Asset Growth & Growth
Manager Contrafund Income Opportunities
Assets Portfolio Portfolio Portfolio Portfolio
- ----------------------------------------------------------------------------------------------------- ---------------------------
<S> <C>
Investment in Variable Insurance Products Fund II,
at fair value (note 2):
Asset Manager Portfolio (231,056 shares; cost - $3,570,825) $4,161,312 - - -
Contrafund Portfolio (99,615 shares; cost - $1,718,112) - 1,986,321 - -
Investment in Variable Insurance Product Fund III,
at fair value (note 2):
Growth & Income Portfolio (3,792 shares; cost - $48,622) - - 47,520 -
Growth Opportunities Portfolio (3,671 shares; cost - $67,316) - - - 70,749
Receivable from affiliate 9,326 24,966 - 859
Receivable for units sold 371 2,807 - -
- --------------------------------------------------------------------------------------------------------------------------------
Total assets $4,171,009 2,014,094 47,520 71,608
- --------------------------------------------------------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 1,604 771 73 28
Payable for units withdrawn - - 88 3
- --------------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,604 771 161 31
- --------------------------------------------------------------------------------------------------------------------------------
Net assets attributable to variable life policyholders $4,169,405 2,013,323 47,359 71,577
- --------------------------------------------------------------------------------------------------------------------------------
Outstanding units 163,699 97,028 3,813 5,805
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit $ 25.47 20.75 12.42 12.33
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Assets and Liabilities, Continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Federated Investors
Insurance Series
-------------------------------------------
American High
Leaders Income Bond Utility
Assets Fund II Fund II Fund II
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investments in Federated Investors Insurance Series, at fair value (note 2):
American Leaders Fund II (2,354 shares; cost - $43,154) $ 46,208 - -
High Income Bond Fund II (8,592 shares; cost - $87,736) - 94,083 -
Utility Fund II (11,466 shares; cost - $133,879) - - 163,847
Investment in Alger American, at fair value (note 2):
Small Cap Portfolio (17,963 shares; cost - $812,937) - - -
Growth Portfolio (20,074 shares; cost - $760,160) - - -
Investment in PBHG Insurance Series Fund, at fair value (note 2):
PBHG Large Cap Growth Portfolio (2,210 shares; cost - $26,028) - - -
PBHG Growth Portfolio (1,829 shares; cost - $19,804) - - -
Receivable from affiliate 47 768 -
Receivable for units sold - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets $ 46,255 94,851 163,847
- -----------------------------------------------------------------------------------------------------------------------------------
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 18 37 568
Payable for units withdrawn 8 8 3
- -----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 26 45 571
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets attributable to variable life policyholders $ 46,229 94,806 163,276
- -----------------------------------------------------------------------------------------------------------------------------------
Outstanding units 3,169 6,188 9,543
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit $ 14.59 15.32 17.11
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PBHG Insurance
Alger American Series Fund
-------------------------- ------------------------
PBHG
Small Large Cap PBHG
Cap Growth Growth Growth II
Assets Portfolio Portfolio Portfolio Portfolio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investments in Federated Investors Insurance Series, at fair value (note 2):
American Leaders Fund II (2,354 shares; cost - $43,154) - - - -
High Income Bond Fund II (8,592 shares; cost - $87,736) - - - -
Utility Fund II (11,466 shares; cost - $133,879) - - - -
Investment in Alger American, at fair value (note 2):
Small Cap Portfolio (17,963 shares; cost - $812,937) 785,901 - - -
Growth Portfolio (20,074 shares; cost - $760,160) - 858,363 - -
Investment in PBHG Insurance Series Fund, at fair value (note 2):
PBHG Large Cap Growth Portfolio (2,210 shares; cost - $26,028) - - 26,120 -
PBHG Growth Portfolio (1,829 shares; cost - $19,804) - - - 19,662
Receivable from affiliate 34,258 7,119 400 -
Receivable for units sold - - - 1,471
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets 820,159 865,482 26,520 21,133
- -----------------------------------------------------------------------------------------------------------------------------------
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 314 333 10 33
Payable for units withdrawn 150 37 2 -
- -----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 464 370 12 33
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets attributable to variable life policyholders 819,695 865,112 26,508 21,100
- -----------------------------------------------------------------------------------------------------------------------------------
Outstanding units 76,251 63,799 2,254 1,972
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit 10.75 13.56 11.76 10.70
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Assets and Liabilities, Continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
___________________________________________
Aggressive Worldwide
Growth Growth Growth
Assets Portfolio Portfolio Portfolio
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in Janus Aspen Series, at fair value (note 2):
Aggressive Growth Portfolio (95,370 shares; cost - $1,908,924) $ 1,959,861 - -
Growth Portfolio (105,234 shares; cost - $1,689,937) - 1,944,717 -
Worldwide Growth Portfolio (131,053 shares; cost - $2,692,376) - - 3,065,339
Balanced Portfolio (36,099 shares; cost - $572,600) - - -
Flexible Income Portfolio (5,976 shares; cost - $70,239) - - -
International Growth Portfolio (17,080 shares; cost - $298,567) - - -
Capital Appreciation Portfolio (683 shares; cost - $7,921) - - -
Receivable from affiliate 65,297 16,839 16,400
Receivable for units sold 812 193 -
- ---------------------------------------------------------------------------------------------------------------------------------
Total assets $ 2,025,970 1,961,749 3,081,739
- ---------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 778 751 1,178
Payable for units withdrawn - - 1,742
- ---------------------------------------------------------------------------------------------------------------------------------
Total liabilities 778 751 2,920
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets attributable to variable life policyholders $ 2,025,192 1,960,998 3,078,819
- ---------------------------------------------------------------------------------------------------------------------------------
Outstanding units 116,793 108,163 161,110
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit $ 17.34 18.13 19.11
- ---------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
________________________________________________________
--------
Flexible International Capital
Balanced Income Growth Appreciation
Assets Portfolio Portfolio Portfolio Portfolio
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in Janus Aspen Series, at fair value (note 2):
Aggressive Growth Portfolio (95,370 shares; cost - $1,908,924) - - - -
Growth Portfolio (105,234 shares; cost - $1,689,937) - - - -
Worldwide Growth Portfolio (131,053 shares; cost - $2,692,376) - - - -
Balanced Portfolio (36,099 shares; cost - $572,600) 630,652 - - -
Flexible Income Portfolio (5,976 shares; cost - $70,239) - 70,394 - -
International Growth Portfolio (17,080 shares; cost - $298,567) - - 315,644 -
Capital Appreciation Portfolio (683 shares; cost - $7,921) - - - 8618
Receivable from affiliate 1,353 278 1,155 5
Receivable for units sold 295 - 4,131 -
- ---------------------------------------------------------------------------------------------------------------------------------
Total assets 632,300 70,672 320,930 8,623
- ---------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 236 22 122 3
Payable for units withdrawn - - - -
- ---------------------------------------------------------------------------------------------------------------------------------
Total liabilities 236 22 122 3
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets attributable to variable life policyholders 632,064 70,650 320,808 8,620
- ---------------------------------------------------------------------------------------------------------------------------------
Outstanding units 42,477 5,589 23,264 684
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit 14.88 12.64 13.79 12.60
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Operations
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc. (formerly Life of Virginia Series Fund, Inc.)
------------------------------------------------------------------------
S&P 500 Government
Index Securities
Fund Fund
---------------------------------- ------------------------------------
Year ended December 31, Year ended December 31,
1997 1996 1995 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 88,899 751,436 20,611 - 31,170 18,835
Expenses - Mortality and expense
risk charges (note 3) 17,405 9,854 5,975 2,085 2,175 1,930
- --------------------------------------------------------------------------------------------------------------------------
Net investment income 71,494 741,582 14,636 (2,085) 28,995 16,905
- --------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) 18,179 65,600 33,666 1,254 289 2,130
Unrealized appreciation
(depreciation) on investments 504,771 (498,697) 203,288 18,064 (28,379) 23,073
- --------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 522,950 (433,097) 236,954 19,318 (28,090) 25,203
- --------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations $ 594,444 308,485 251,590 17,233 905 42,108
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc. (formerly Life of Virginia Series Fund, Inc.)
------------------------------------------------------------------------------
Money Market Total Return
Fund Fund
----------------------------------- ------------------------------------------
Year ended December 31, Year ended December 31,
1997 1996 1995 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends 107,705 97,157 64,373 456,798 846,101 210,985
Expenses - Mortality and expense
risk charges (note 3) 13,717 15,476 12,610 24,218 20,200 9,371
- --------------------------------------------------------------------------------------------------------------------------
Net investment income 93,988 81,681 51,763 432,580 825,901 201,614
- --------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) 298,840 (325,593) 68,408 (54,073) 68,427 17,126
Unrealized appreciation
(depreciation) on investments (300,439) 345,223 (25,977) 123,159 (708,053) 18,487
- --------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (1,599) 19,630 42,431 69,086 (639,626) 35,613
- --------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 92,389 101,311 94,194 501,666 186,275 237,227
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Operations, Continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc. (formerly Life of Virginia Series Fund, Inc.) (continued)
------------------------------------------------------------------------------
International Real Estate
Equity Fund Securities Fund
------------------------------------------ -----------------------------------
Period from
August 25,
Year ended Year ended 1995 to Year ended Year ended
December 31, December 31, December 31, December 31, December 31,
1997 1996 1995 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 8,566 1,884 176 20,680 1,678
Expenses - Mortality and expense risk
charges (note 3) 399 152 11 814 57
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income 8,167 1,732 165 19,866 1,621
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized (loss) gain on
investments:
Net realized gain 654 510 4 2,800 381
Unrealized appreciation (depreciation)
on investments (5,290) (839) 193 (2,725) 2,468
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized (loss) gain on
investments (4,636) (329) 197 75 2,849
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $ 3,531 1,403 362 19,941 4,470
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
(formerly Life of Virginia Series Fund, Inc.) (continued)
-------------------------------------------------------------
Global Value
Real Estate Income Equity Income
Securities Fund Fund Fund Fund
----------------- -------------- -------------- --------------
Period from Period from Period from Period from
October 5, June 18, June 17, December 12,
1995 to 1997 to 1997 to 1997 to
December 31, December 31, December 31, December 31,
1995 1997 1997 1997
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends 22 461 115 992
Expenses - Mortality and expense risk
charges (note 3) - 30 17 116
- --------------------------------------------------------------------------------------------------------------------
Net investment income 22 431 98 876
- --------------------------------------------------------------------------------------------------------------------
Net realized and unrealized (loss) gain on
investments:
Net realized gain - 35 (9) (838)
Unrealized appreciation (depreciation)
on investments 4 (329) 1 523
- ---------------------------------------------------------------------------------------------------------------------
Net realized and unrealized (loss) gain on
investments 4 (294) (8) (315)
- ---------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 26 137 90 561
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Operations, Continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds
------------------------------------------------------------------------------------
Money Bond
Fund Fund
--------------------------------------- --------------------------------------------
Year ended December 31, Year ended December 31,
1997 1996 1995 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 27 224 662 17,586 16,705 8,365
Expenses - Mortality and expense
risk charges (note 3) 4 31 82 1,872 1,790 844
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 23 193 580 15,714 14,915 7,521
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) - - - 276 128 407
Unrealized appreciation
(depreciation) on investments - - - 5,965 (3,916) 9,889
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments - - - 6,241 (3,788) 10,296
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations $ 23 193 580 21,955 11,127 17,817
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds
--------------------------------------------------------------------------------------
Capital
Appreciation Growth
Fund Fund
------------------------------------------- ------------------------------------------
Year ended December 31, Year ended December 31,
1997 1996 1995 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends 119,431 99,449 5,317 94,465 72,782 10,459
Expenses - Mortality and expense
risk charges (note 3) 19,370 13,659 10,098 13,535 7,950 3,854
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 100,061 85,790 (4,781) 80,930 64,832 6,605
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) 264,595 128,677 57,411 112,639 59,611 22,586
Unrealized appreciation
(depreciation) on investments (89,502) 103,509 281,347 226,521 113,315 125,878
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 175,093 232,186 338,758 339,160 172,926 148,464
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 275,154 317,976 333,977 420,090 237,758 155,069
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Operations, Continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds (continued)
------------------------------------------
High
Income
Fund
-------------------------------------------
Year ended December 31,
1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 105,625 78,385 47,571
Expenses - Mortality and expense risk charges (note 3) 8,770 5,650 3,622
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 96,855 72,735 43,949
- ----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) 11,476 8,045 1,112
Unrealized appreciation (depreciation) on investments 28,520 28,139 30,017
- ----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 39,996 36,184 31,129
- ----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations $ 136,851 108,919 75,078
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds (continued)
--------------------------------------------------
Multiple
Strategies
Fund
--------------------------------------------------
Year ended December 31,
1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends 45,313 33,554 35,104
Expenses - Mortality and expense risk charges (note 3) 4,459 3,353 3,322
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 40,854 30,201 31,782
- ----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) 26,553 22,006 5,112
Unrealized appreciation (depreciation) on investments 27,703 14,047 48,453
- ----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 54,256 36,053 53,565
- ----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 95,110 66,254 85,347
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Operations, Continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund
---------------------------------------------------------------------------------
High
Money Market Income
Portfolio Portfolio
--------------------------------------- ------------------------------------------
Year ended December 31, Year ended December 31,
1997 1996 1995 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 31,897 17,813 34,581 16,812 24,435 12,908
Expenses - Mortality and expense
risk charges (note 3) 1,948 2,449 4,231 1,461 1,779 1,682
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 29,949 15,364 30,350 15,351 22,656 11,226
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) - - - 41,295 7,114 4,603
Unrealized appreciation
(depreciation) on investments - - - (23,320) 1,632 25,411
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments - - - 17,975 8,746 30,014
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations $ 29,949 15,364 30,350 33,326 31,402 41,240
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund
--------------------------------------------------------------------------------------
Equity-
Income Growth
Portfolio Portfolio
------------------------------------------- -------------------------------------------
Year ended December 31, Year ended December 31,
1997 1996 1995 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends 339,803 85,939 72,375 135,480 213,091 9,023
Expenses - Mortality and expense
risk charges (note 3) 30,384 17,180 8,801 30,276 25,014 16,541
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 309,419 68,759 63,574 105,204 188,077 (7,518)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) 125,398 98,124 44,633 193,439 342,839 237,960
Unrealized appreciation
(depreciation) on investments 539,549 149,934 255,114 566,792 (104,224) 415,406
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 664,947 248,058 299,747 760,231 238,615 653,366
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 974,366 316,817 363,321 865,435 426,692 645,848
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Operations, Continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Variable Insurance
Products Fund (continued) Variable Insurance Products Fund II
-------------------------------------- -------------------------------------------
Asset
Overseas Manager
Portfolio Portfolio
-------------------------------------- -------------------------------------------
Year ended December 31, Year ended December 31,
1997 1996 1995 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 155,793 36,638 6,739 417,972 183,395 38,074
Expenses - Mortality and expense
risk charges (note 3) 12,638 11,528 8,185 26,984 19,647 16,293
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 143,155 25,110 (1,446) 390,988 163,748 21,781
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) 95,087 39,291 6,569 68,861 105,006 25,753
Unrealized appreciation
(depreciation) on investments (45,710) 126,664 107,430 222,652 98,064 313,566
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 49,377 165,955 113,999 291,513 203,070 339,319
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations $ 192,532 191,065 112,553 682,501 366,818 361,100
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Variable Insurance
Variable Insurance Products Fund II Products Fund III
------------------------------------------- ------------------------------
Growth & Growth
Contrafund Income Opportunities
Portfolio Portfolio Portfolio
------------------------------------------- ------------------------------
Period from Period from Period from
February 7, May 30, May 30,
Year ended Year ended 1995 to 1997 to 1997 to
December 31, December 31, December 31, December 31, December 31,
1997 1996 1995 1997 1997
- --------------------------------------------------------------------------------------- ------------------------------
<S> <C>
Investment income:
Income - Dividends 33,739 2,964 3,470 - -
Expenses - Mortality and expense
risk charges (note 3) 11,153 4,608 700 45 148
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 22,586 (1,644) 2,770 (45) (148)
- ----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) 198,947 14,028 2,651 1,642 472
Unrealized appreciation
(depreciation) on investments 135,687 119,895 12,626 (1,102) 3,433
- ----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 334,634 133,923 15,277 540 3,905
- ----------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 357,220 132,279 18,047 495 3,757
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Operations, Continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Neuberger & Berman Advisers Management Trust
-------------------------------------------------------------------------------------
Balanced Bond
Portfolio Portfolio
---------------------------------------- --------------------------------------------
Year ended December 31, Year ended December 31,
1997 1996 1995 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 16,310 41,530 5,568 4,664 7,068 2,839
Expenses - Mortality and expense
risk charges (note 3) 1,723 1,799 1,863 462 581 491
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 14,587 39,731 3,705 4,202 6,487 2,348
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) 36,568 4,564 5,430 (162) 38 450
Unrealized appreciation
(depreciation) on investments (14,898) (28,989) 43,147 (48) (3,678) 3,567
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 21,670 (24,425) 48,577 (210) (3,640) 4,017
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations $ 36,257 15,306 52,282 3,992 2,847 6,365
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Neuberger & Berman Advisers Management Trust
---------------------------------------------
Growth
Portfolio
---------------------------------------------
Year ended December 31,
1997 1996 1995
- ------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends 11,458 13,580 4,462
Expenses - Mortality and expense
risk charges (note 3) 982 1,005 1,076
- ------------------------------------------------------------------------------------------
Net investment income (expense) 10,476 12,575 3,386
- ------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) 37,624 4,264 6,665
Unrealized appreciation
(depreciation) on investments (18,849) (6,024) 29,994
- ------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 18,775 (1,760) 36,659
- ------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 29,251 10,815 40,045
- ------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Operations, Continued
<TABLE>
<CAPTION>
Federated Investors
Insurance Series
- -----------------------------------------------------------------------------------------------------------------------------------
High
American Income
Leaders Bond Utility
Fund II Fund II Fund II
- -----------------------------------------------------------------------------------------------------------------------------------
Period from Period from
August 14, October 31,
Year ended 1996 to Year ended Year ended 1995 to Year ended
December 31, December 31, December 31, December 31, December 31, December 31,
1997 1996 1997 1996 1995 1997
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 148 9 3,619 1,592 7 4,929
Expenses - Mortality and expense
risk charges (note 3) 113 2 656 127 1 860
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 35 7 2,963 1,465 6 4,069
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) 598 4 836 51 - 1,782
Unrealized appreciation
(depreciation) on investments 3,025 29 5,274 1,038 35 25,287
Net realized and unrealized gain (loss)
on investments 3,623 33 6,110 1,089 35 27,069
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations $ 3,658 40 9,073 2,554 41 31,138
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Period from
March 22,
Year ended
Year ended 1995 to
December 31, December 31,
1996 1995
- ----------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends 2,283 862
Expenses - Mortality and expense
risk charges (note 3) 364 132
- ----------------------------------------------------------------------------
Net investment income (expense) 1,919 730
- ----------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) 2,332 167
Unrealized appreciation
(depreciation) on investments 700 3,982
Net realized and unrealized gain (loss)
on investments 3,032 4,149
- ----------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 4,951 4,879
- ----------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Alger American
- ---------------------------------------------------------------------------------------------------------------------------------
Small
Cap Growth
Portfolio Portfolio
-----------------------------------------------------------------------------------
Period from
October 11,
Year ended Year ended 1995 to Year ended Year ended
December 31, December 31, December 31, December 31, December 31,
1997 1996 1995 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 23,157 502 - 10,016 3,815
Expenses - Mortality and expense
risk charges (note 3) 5,518 1,659 24 7,350 2,350
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 17,639 (1,157) (24) 2,666 1,465
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) 109,665 4,156 (52) 103,893 1,107
Unrealized appreciation
(depreciation) on investments (21,855) (4,745) (436) 100,012 (1,956)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 87,810 (589) (488) 203,905 (849)
- ---------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations $ 105,449 (1,746) (512) 206,571 616
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
PBHG Insurance
Series Fund
- ------------------------------------------------------------------------------------------------
PBHG
Large Cap PBHG
Growth Growth II
Portfolio Portfolio
--------------------------------------------------
Period from Period from Period from
October 23, May 30, May 30,
1995 to 1997 to 1997 to
December 31, December 31, December 31,
1995 1997 1997
- ------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends - - -
Expenses - Mortality and expense
risk charges (note 3) 12 63 43
- ------------------------------------------------------------------------------------------------
Net investment income (expense) (12) (63) (43)
- ------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) 7 584 34
Unrealized appreciation
(depreciation) on investments 147 92 (142)
- ------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 154 676 (108)
- ------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 142 613 (151)
- ------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
(formerly Life of Virginia Series Fund, Inc.)
------------------------------------------------------------------
S&P 500 Government
Index Securities
Fund Fund
---------------------------------- ------------------------------
Year ended December 31, Year ended December 31,
1997 1996 1995 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income $ 71,494 741,582 14,636 (2,085) 28,995 16,905
Net realized gain (loss) 18,179 65,600 33,666 1,254 289 2,130
Unrealized appreciation (depreciation) on investments 504,771 (498,697) 203,288 18,064 (28,379) 23,073
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 594,444 308,485 251,590 17,233 905 42,108
- -----------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 496,133 308,147 205,386 36,517 37,229 37,525
Loan interest (2,663) (455) (592) 290 878 244
Transfers (to) from the general account of Life of Virginia:
Death benefits (146,232) (1,955) - - - -
Surrenders (28,437) (15,204) (35,272) (15,385) (3,155) -
Loans (12,720) (16,280) 33 (4,137) (2,302) -
Cost of insurance and administrative expense (note 3) (235,713) (158,228) (112,723) (23,090) (23,586) (22,993)
Transfer gain (loss) and transfer fees (793) 109 1,890 (675) (75) (368)
Interfund transfers 954,081 289,390 91,482 (322,397) (18,963) 21,812
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 1,023,656 405,524 150,204 (328,877) (9,974) 36,220
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 1,618,100 714,009 401,794 (311,644) (9,069) 78,328
Net assets at beginning of year 1,789,889 1,075,880 674,086 311,644 320,713 242,385
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 3,407,989 1,789,889 1,075,880 - 311,644 320,713
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
(formerly Life of Virginia Series Fund, Inc.)
-------------------------------------------------------------------
Money Market Total Return
Fund Fund
------------------------------------ -----------------------------
Year ended December 31, Year ended December 31,
1997 1996 1995 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income 93,988 81,681 51,763 432,580 825,901 201,614
Net realized gain (loss) 298,840 (325,593) 68,408 (54,073) 68,427 17,126
Unrealized appreciation (depreciation) on investments (300,439) 345,223 (25,977) 123,159 (708,053) 18,487
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 92,389 101,311 94,194 501,666 186,275 237,227
- ------------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 3,634,434 5,619,954 5,903,130 169,809 143,160 180,914
Loan interest (3,118) (1,840) (33) (299) (178) (130)
Transfers (to) from the general account of Life of Virginia:
Death benefits (15,944) (1,302) - (7,452) (25,232) -
Surrenders (10,646) (7,042) (25,025) (14,564) (14,027) (22,038)
Loans (5,231) (59,410) 215 (3,824) (6,948) (6,501)
Cost of insurance and administrative expense (note 3) (284,457) (257,113) (201,089) (357,384) (339,757) (173,014)
Transfer gain (loss) and transfer fees (233,325) (28,760) (164,726) 39,224 125,446 105,770
Interfund transfers (3,317,791) (4,363,145) (5,222,614) (2,809) 124,895 2,309,889
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (236,078) 901,342 289,858 (177,299) 7,359 2,394,890
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (143,689) 1,002,653 384,052 324,367 193,634 2,632,117
Net assets at beginning of year 2,405,605 1,402,952 1,018,900 3,279,301 3,085,667 453,550
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year 2,261,916 2,405,605 1,402,952 3,603,668 3,279,301 3,085,667
- ------------------------------------------------------------------------------------------------------------------------------------
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets, Continued
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
(formerly Life of Virginia Series Fund, Inc.) (continued)
--------------------------------------------------------------
International Real Estate
Equity Fund Securities Fund
-------------------------------------- -------------------
Period from
August 25,
Year ended Year ended 1995 to Year ended
December 31, December 31, December 31, December 31,
1997 1996 1995 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase in net assets
From operations:
Net investment income $ 8,167 1,732 165 19,866
Net realized gain 654 510 4 2,800
Unrealized appreciation (depreciation) on investments (5,290) (839) 193 (2,725)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 3,531 1,403 362 19,941
From capital transactions:
Net premiums 23,197 18,822 3,961 79,557
Loan interest 4 7 - 2
Transfers (to) from the general account of Life of Virginia:
Death benefits - - - -
Surrenders (904) (1,403) - (692)
Loans (289) (229) - (874)
Cost of insurance and administrative expense (note 3) (5,480) (3,119) (316) (17,806)
Transfer gain (loss) and transfer fees (1,837) 86 (5) 300
Interfund transfers 22,059 10,273 5,381 89,769
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 36,750 24,437 9,021 150,256
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 40,281 25,840 9,383 170,197
Net assets at beginning of period 35,223 9,383 - 30,212
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 75,504 35,223 9,383 200,409
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
(formerly Life of Virginia Series Fund, Inc.) (continued)
--------------------------------------------------------------------
Global Value
Real Estate Income Equity Income
Securities Fund Fund Fund Fund
----------------------- ---------- ----------- ------------
Period from Period from Period from Period from
October 5, June 18, June 17, December 12,
Year ended 1995 to 1997 to 1997 to 1997 to
December 31, December 31, December 31, December 31, December 31,
1996 1995 1997 1997 1997
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase in net assets
From operations:
Net investment income 1,621 22 431 98 876
Net realized gain 381 - 35 (9) (838)
Unrealized appreciation (depreciation) on investments 2,468 4 (329) 1 523
- -------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 4,470 26 137 90 561
From capital transactions:
Net premiums 15,327 143 1,293 5,797 735
Loan interest - - - 2 12
Transfers (to) from the general account of Life of
Virginia:
Death benefits - - - - -
Surrenders (347) - - - -
Loans - - (243) - -
Cost of insurance and administrative expense
(note 3) (1,892) (31) (373) (1,002) (1,655)
Transfer gain (loss) and transfer fees 190 2 (9) 35 (30)
Interfund transfers 12,060 264 8,418 8,637 378,428
- -------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 25,338 378 9,086 13,469 377,490
- -------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 29,808 404 9,223 13,559 378,051
Net assets at beginning of period 404 - - - -
- -------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period 30,212 404 9,223 13,559 378,051
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets, Continued
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds
------------------------------------------------------------------
Money Bond
Fund Fund
-------------------------------- ---------------------------------
Year ended December 31, Year ended December 31,
1997 1996 1995 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ 23 193 580 15,714 14,915 7,521
Net realized gain (loss) - - - 276 128 407
Unrealized appreciation (depreciation) on investments - - - 5,965 (3,916) 9,889
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 23 193 580 21,955 11,127 17,817
From capital transactions:
Net premiums 111 - 7,628 56,837 41,062 36,446
Loan interest - - - (13) (2) 1
Transfers (to) from the general account of Life of Virginia:
Death benefits - - - - - -
Surrenders - - (954) (17,569) (3,478) (1,208)
Loans - - - (2,018) - (134)
Cost of insurance and administrative expense (note 3) (205) (997) (1,976) (23,294) (21,145) (15,526)
Transfer gain (loss) and transfer fees 15 (8) (12) (1,279) 6 (54)
Interfund transfers (651) (10,491) (3,849) (12,046) 50,864 63,844
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (730) (11,496) 837 618 67,307 83,369
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (707) (11,303) 1,417 22,573 78,434 101,186
Net assets at beginning of year 707 12,010 10,593 269,840 191,406 90,220
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ - 707 12,010 292,413 269,840 191,406
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------
Oppenheimer Variable Account Funds
--------------------------------------------------------------------
Capital
Appreciation Growth
Fund Fund
----------------------------------- ------------------------------
Year ended December 31, Year ended December 31,
1997 1996 1995 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ 100,061 85,790 (4,781) 80,930 64,832 6,605
Net realized gain (loss) 264,595 128,677 57,411 112,639 59,611 22,586
Unrealized appreciation (depreciation) on investments (89,502) 103,509 281,347 226,521 113,315 125,878
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 275,154 317,976 333,977 420,090 237,758 155,069
From capital transactions:
Net premiums 794,773 615,934 394,900 460,957 310,615 175,911
Loan interest 305 (174) (114) (541) (155) 12
Transfers (to) from the general account of Life of Virginia:
Death benefits (313) - (2,168) - (3,934) (2,519)
Surrenders (41,954) (128,744) (58,441) (69,141) (18,216) (7,126)
Loans (38,517) (8,425) (9,348) (12,664) (21,680) (5,542)
Cost of insurance and administrative expense (note 3) (307,499) (242,592) (174,402) (176,831) (107,526) (61,493)
Transfer gain (loss) and transfer fees 13,531 6,908 (5,711) (4,635) (1,119) 2,839
Interfund transfers 61,532 270,794 151,112 180,805 266,465 216,857
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 481,858 513,701 295,828 377,950 424,450 318,939
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 757,012 831,677 629,805 798,040 662,208 474,008
Net assets at beginning of year 2,342,064 1,510,387 880,582 1,479,873 817,665 343,657
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $3,099,076 2,342,064 1,510,387 2,277,913 1,479,873 817,665
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets, Continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds (continued)
-----------------------------------------------------------------
High Multiple
Income Strategies
Fund Fund
------------------------------------ ----------------------------
Year ended December 31, Year ended December 31,
1997 1996 1995 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income $ 96,855 72,735 43,949 40,854 30,201 31,782
Net realized gain (loss) 11,476 8,045 1,112 26,553 22,006 5,112
Unrealized appreciation (depreciation) on investments 28,520 28,139 30,017 27,703 14,047 48,453
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 136,851 108,919 75,078 95,110 66,254 85,347
- -----------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 359,877 311,435 225,228 132,071 122,291 183,632
Loan interest (10) 16 179 (129) (18) (48)
Transfers (to) from the general account of Life of Virginia:
Death benefits - (18,532) (386) - (17,498) -
Surrenders (19,540) (7,723) (26,138) (51,445) (183,972) (11,026)
Loans (25,149) (133,614) (3,839) (4,961) (729) (617)
Cost of insurance and administrative expense (note 3) (162,386) 559 (106,764) (65,223) (50,034) (67,361)
Transfer gain (loss) and transfer fees 944 111,802 692 (84) 6,336 (572)
Interfund transfers 367,417 - 132,318 (13,534) 87,158 52,156
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 521,153 263,943 221,290 (3,305) (36,466) 156,164
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 658,004 372,862 296,368 91,805 29,788 241,511
Net assets at beginning of year 992,747 619,885 323,517 574,661 544,873 303,362
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 1,650,751 992,747 619,885 666,466 574,661 544,873
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets, Continued
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund
-------------------------------------------------------------------
High
Money Market Income
Portfolio Portfolio
------------------------------------- -----------------------------
Year ended December 31, Year ended December 31,
1997 1996 1995 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ 29,949 15,364 30,350 15,351 22,656 11,226
Net realized gain (loss) - - - 41,295 7,114 4,603
Unrealized appreciation (depreciation) on investments - - - (23,320) 1,632 25,411
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 29,949 15,364 30,350 33,326 31,402 41,240
- ------------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums - 1,850 96,485 208 - 91,883
Loan interest (34) (14) 102 (41) (22) 245
Transfers (to) from the general account of Life of Virginia:
Death benefits - - - - - (393)
Surrenders (2) (19,871) (2,975) (2,471) (36,177) (6,219)
Loans (1,093) (1,250) - (1,664) (2,449) -
Cost of insurance and administrative expense
(note 3) (18,137) (30,816) (65,636) (16,918) (30,421) (49,478)
Transfer gain (loss) and transfer fees (15,912) (5,041) (991) 1,294 (553) 373
Interfund transfers (310,424) (89,691) (162,335) (226,946) (34,288) 36,951
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (345,602) (144,833) (135,350) (246,538) (103,910) 73,362
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (315,653) (129,469) (105,000) (213,212) (72,508) 114,602
Net assets at beginning of year 315,653 445,122 550,122 213,212 285,720 171,118
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ - 315,653 445,122 - 213,212 285,720
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund
------------------------------------------------------------------
Equity-
Income Growth
Portfolio Portfolio
--------------------------------- --------------------------------
Year ended December 31, Year ended December 31,
1997 1996 1995 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ 309,419 68,759 63,574 105,204 188,077 (7,518)
Net realized gain (loss) 125,398 98,124 44,633 193,439 342,839 237,960
Unrealized appreciation (depreciation) on investments 539,549 149,934 255,114 566,792 (104,224) 415,406
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 974,366 316,817 363,321 865,435 426,692 645,848
- ------------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums ,111,418 923,240 487,170 1,063,353 928,744 621,255
Loan interest 623 (54) 34 (786) (476) (2,442)
Transfers (to) from the general account of Life of Virginia:
Death benefits (276) (22,109) - (12,511) (24,929) (2,486)
Surrenders (74,706) (120,408) (19,474) (119,903) (179,684) (78,450)
Loans (43,806) (12,984) (4,694) (102,452) (72,457) 5,101
Cost of insurance and administrative expense
(note 3) (475,456) (336,646) (199,167) (468,850) (419,528) (324,187)
Transfer gain (loss) and transfer fees 21,702 18,395 3,592 (321) 34,069 (20,621)
Interfund transfers 662,909 643,935 410,782 127,136 (78,376) 590,049
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 1,202,408 1,093,369 678,243 485,666 187,363 788,219
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 2,176,774 1,410,186 1,041,564 1,351,101 614,055 1,434,067
Net assets at beginning of year 3,220,818 1,810,632 769,068 3,610,646 2,996,591 1,562,524
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 5,397,592 3,220,818 1,810,632 4,961,747 3,610,646 2,996,591
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets, Continued
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Variable Insurance
Products Fund (continued)
-------------------------------------------------
Overseas
Portfolio
------------------------------------------------
Year ended December 31,
1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) $ 143,155 25,110 (1,446)
Net realized gain (loss) 95,087 39,291 6,569
Unrealized appreciation (depreciation) on investments (45,710) 126,664 107,430
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 192,532 191,065 112,553
- ------------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 366,213 455,202 445,508
Loan interest (656) (10) (29)
Transfers (to) from the general account of Life of Virginia:
Death benefits (264) (3,636) -
Surrenders (78,977) (76,054) (19,836)
Loans (29,580) (29,577) (7,544)
Cost of insurance and administrative expense
(note 3) (181,619) (199,651) (190,510)
Transfer gain (loss) and transfer fees 2,923 5,668 (13,025)
Interfund transfers (292,022) (2,943) 233,172
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (213,982) 148,999 447,736
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in net assets (21,450) 340,064 560,289
Net assets at beginning of period 1,760,630 1,420,566 860,277
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 1,739,180 1,760,630 1,420,566
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------
Asset
Manager
Portfolio
-------------------------------------------------------
Year ended December 31,
1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) 390,988 163,748 21,781
Net realized gain (loss) 68,861 105,006 25,753
Unrealized appreciation (depreciation) on investments 222,652 98,064 313,566
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 682,501 366,818 361,100
- -----------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 644,004 695,446 756,041
Loan interest (381) (44) 209
Transfers (to) from the general account of Life of Virginia:
Death benefits - (22,120) (1,919)
Surrenders (122,367) (107,389) (51,751)
Loans (29,206) 70 (20,572)
Cost of insurance and administrative expense
(note 3) (329,030) (341,676) (352,049)
Transfer gain (loss) and transfer fees 12,971 (36) (3,037)
Interfund transfers 430,161 (462,667) 294,547
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 606,152 (238,416) 621,469
- -----------------------------------------------------------------------------------------------------------------------------
Increase in net assets 1,288,653 128,402 982,569
Net assets at beginning of period 2,880,752 2,752,350 1,769,781
- -----------------------------------------------------------------------------------------------------------------------------
Net assets at end of period 4,169,405 2,880,752 2,752,350
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund II
-------------------------------------------------------
Contrafund
Portfolio
------------------------------------------------------
Period from
February 7,
Year ended Year ended 1995 to
December 31, December 31, December 31,
1997 1996 1995
- -------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) 22,586 (1,644) 2,770
Net realized gain (loss) 198,947 14,028 2,651
Unrealized appreciation (depreciation) on investments 135,687 119,895 12,626
- -------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 357,220 132,279 18,047
- -------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 617,546 331,802 104,232
Loan interest (140) 107 4
Transfers (to) from the general account of Life of Virginia:
Death benefits (5,439) - -
Surrenders (90,538) (8,625) -
Loans (13,250) (4,921) (396)
Cost of insurance and administrative expense
(note 3) (207,378) (91,674) (18,015)
Transfer gain (loss) and transfer fees 17,537 1,153 3,247
Interfund transfers 292,298 398,084 180,143
- -------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 610,636 625,926 269,215
- -------------------------------------------------------------------------------------------------------------------------
Increase in net assets 967,856 758,205 287,262
Net assets at beginning of period 1,045,467 287,262 -
- -------------------------------------------------------------------------------------------------------------------------
Net assets at end of period 2,013,323 1,045,467 287,262
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Variable Insurance
Products Fund III
-----------------------------------
Growth & Growth
Income Opportunities
Portfolio Portfolio
-----------------------------------
Period from Period from
May 30, May 30,
1997 to 1997 to
, December 31, December 31,
1997 1997
- -----------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) (45) (148)
Net realized gain (loss) 1,642 472
Unrealized appreciation (depreciation) on investments (1,102) 3,433
- -----------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 495 3,757
- -----------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 5,448 6,899
Loan interest - -
Transfers (to) from the general account of Life of Virginia:
Death benefits - -
Surrenders - -
Loans - -
Cost of insurance and administrative expense
(note 3) (1,504) (1,447)
Transfer gain (loss) and transfer fees 1,159 860
Interfund transfers 41,761 61,508
- -----------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 46,864 67,820
- -----------------------------------------------------------------------------------------------------
Increase in net assets 47,359 71,577
Net assets at beginning of period - -
- -----------------------------------------------------------------------------------------------------
Net assets at end of period 47,359 71,577
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets, Continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Neuberger & Berman Advisers Management Trust
------------------------------------------------------
Balanced
Portfolio
-----------------------------------------------------
Year ended December 31,
1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) $ 14,587 39,731 3,705
Net realized gain (loss) 36,568 4,564 5,430
Unrealized appreciation (depreciation) on investments (14,898) (28,989) 43,147
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 36,257 15,306 52,282
- -----------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 321 - 52,871
Loan interest (32) (7) 6
Transfers (to) from the general account of Life of Virginia:
Death benefits - (16,809) (1,989)
Surrenders (12,775) (3,543) (3,754)
Loans (1,513) - (305)
Cost of insurance and administrative expense
(note 3) (11,724) (16,515) (24,013)
Transfer gain (loss) and transfer fees (153) (143) 7
Interfund transfers (254,395) (26,358) 5,186
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (280,271) (63,375) 28,009
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (244,014) (48,069) 80,291
Net assets at beginning of year 244,014 292,083 211,792
- -----------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ - 244,014 292,083
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Neuberger & Berman Advisers Management Trust
--------------------------------------------------------
Bond
Portfolio
-------------------------------------------------------
Year ended December 31,
1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) 4,202 6,487 2,348
Net realized gain (loss) (162) 38 450
Unrealized appreciation (depreciation) on investments (48) (3,678) 3,567
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 3,992 2,847 6,365
- -----------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums - - 37,211
Loan interest - - -
Transfers (to) from the general account of Life of Virginia:
Death benefits - - -
Surrenders (61) - (3,175)
Loans - - -
Cost of insurance and administrative expense
(note 3) (1,655) (3,975) (6,373)
Transfer gain (loss) and transfer fees (1,438) (55) (170)
Interfund transfers (80,382) (11,128) 5,181
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (83,536) (15,158) 32,674
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (79,544) (12,311) 39,039
Net assets at beginning of year 79,544 91,855 52,816
- -----------------------------------------------------------------------------------------------------------------------------
Net assets at end of year - 79,544 91,855
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Neuberger & Berman Advisers Management Trust
------------------------------------------------------
Growth
Portfolio
------------------------------------------------------
Year ended December 31,
1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) 10,476 12,575 3,386
Net realized gain (loss) 37,624 4,264 6,665
Unrealized appreciation (depreciation) on investments (18,849) (6,024) 29,994
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 29,251 10,815 40,045
- ----------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 578 30 43,607
Loan interest (111) (118) 2
Transfers (to) from the general account of Life of Virginia:
Death benefits - - -
Surrenders (3,450) - (9,384)
Loans (1,168) (4,361) (1,132)
Cost of insurance and administrative expense
(note 3) (6,896) (8,829) (13,364)
Transfer gain (loss) and transfer fees 2,241 273 (357)
Interfund transfers (154,994) (24,783) (2,815)
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (163,800) (37,788) 16,557
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (134,549) (26,973) 56,602
Net assets at beginning of year 134,549 161,522 104,920
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year - 134,549 161,522
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets, Continued
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Federated Investors
Insurance Series
-----------------------------
American
Leaders
Fund II
----------------------------------
Year ended 1996 to
December 31, December 31,
1997 1996
- --------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) $ 35 7
Net realized gain (loss) 598 4
Unrealized appreciation (depreciation) on investments 3,025 29
- --------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 3,658 40
- --------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 26,104 941
Loan interest - -
Transfers (to) from the general account of Life of Virginia:
Surrenders - -
Loans - -
Cost of insurance (note 3) (3,533) (101)
Transfer gain (loss) and transfer fees 46 (1)
Interfund transfers 17,684 1,391
- --------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 40,301 2,230
- --------------------------------------------------------------------------------------------------------------
Increase in net assets 43,959 2,270
Net assets at beginning of period 2,270 -
- --------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 46,229 2,270
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Federated Investors
Insurance Series
-----------------------------------------------------
High
Income
Bond
Fund II
-----------------------------------------------------
Period from
August 14,
Year ended Year ended 1995
December 31, December 31, December 31
1997 1996 1995
- -------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) 2,963 1,465 6
Net realized gain (loss) 836 51 0
Unrealized appreciation (depreciation) on investments 5,274 1,038 35
- -------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 9,073 2,554 41
- -------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 41,464 18,547 8
Loan interest - - -
Transfers (to) from the general account of Life of Virginia:
Surrenders - - -
Loans (3,068) - -
Cost of insurance (note 3) (9,342) (3,746) (74)
Transfer gain (loss) and transfer fees 332 362 62
Interfund transfers 20,749 9,630 8,214
- -------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 50,135 24,793 8,210
- -------------------------------------------------------------------------------------------------------------------------
Increase in net assets 59,208 27,347 8,251
Net assets at beginning of period 35,598 8,251 -
- -------------------------------------------------------------------------------------------------------------------------
Net assets at end of period 94,806 35,598 8,251
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Federated Investors
Insurance Series
-------------------------------------------------------
Utility
Fund II
------------------------------------------------------
Period from Period from
October 31, March 22,
Year ended Year ended 1995 to
December 31, December 31, December 31,
1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) 4,069 1,919 730
Net realized gain (loss) 1,782 2,332 167
Unrealized appreciation (depreciation) on investments 25,287 700 3,982
- ------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 31,138 4,951 4,879
- ------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 43,641 27,264 39,132
Loan interest - - -
Transfers (to) from the general account of Life of Virginia:
Surrenders - (60) -
Loans - - -
Cost of insurance (note 3) (10,455) (6,249) (3,417)
Transfer gain (loss) and transfer fees (196) (372) 30
Interfund transfers 11,808 236 20,946
- ------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 44,798 20,819 56,691
- ------------------------------------------------------------------------------------------------------------------------
Increase in net assets 75,936 25,770 61,570
Net assets at beginning of period 87,340 61,570 -
- ------------------------------------------------------------------------------------------------------------------------
Net assets at end of period 163,276 87,340 61,570
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets, Continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Alger American
-------------------------------------
Small
Cap
Portfolio
-------------------------------------
Year ended Year ended
December 31, December 31,
1997 1996
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) $ 17,639 (1,157)
Net realized gain (loss) 109,665 4,156
Unrealized appreciation (depreciation) on investments (21,855) (4,745)
- ---------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 105,449 (1,746)
- ---------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 293,677 151,593
Loan interest 1,571 (3,345)
Transfers (to) from the general account of Life of Virginia:
Surrenders (3,177) (1,160)
Loans (3,833) (13,496)
Cost of insurance (note 3) (88,074) (37,209)
Transfer gain (loss) and transfer fees 22,932 9,170
Interfund transfers 69,375 281,412
- ---------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 292,471 386,965
- ---------------------------------------------------------------------------------------------------------------------
Increase in net assets 397,920 385,219
Net assets at beginning of period 421,775 36,556
- ---------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 819,695 421,775
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Alger American
-----------------------------------------------------------------
Growth
Portfolio
------------ --------------------------------------------------------
Period from Period from
October 11, October 23,
1995 to Year ended Year ended 1995 to
December 31, December 31, December 31, December 31,
1995 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) (24) 2,666 1,465 (12)
Net realized gain (loss) (52) 103,893 1,107 7
Unrealized appreciation (depreciation) on investments (436) 100,012 (1,956) 147
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations (512) 206,571 616 142
- -----------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 4,392 338,476 180,079 2,473
Loan interest - 578 31 2
Transfers (to) from the general account of
Life of Virginia:
Surrenders - (17,220) (1,243) -
Loans - (5,609) (956) -
Cost of insurance (note 3) (879) (109,328) (34,162) (500)
Transfer gain (loss) and transfer fees 208 (92,300) 6,248 170
Interfund transfers 33,347 (862,640) 1,232,717 20,967
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 37,068 (748,043) 1,382,714 23,112
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 36,556 (541,472) 1,383,330 23,254
Net assets at beginning of period - 1,406,584 23,254 -
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period 36,556 865,112 1,406,584 23,254
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
PBHG Insurance
Series Fund
--------------------------------------
Large Cap
Growth Growth II
Portfolio Portfolio
--------------------------------------
Period from Period from
May 30, May 30,
1997 to 1997 to
December 31, December 31,
1997 1997
- ------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) (63) (43)
Net realized gain (loss) 584 34
Unrealized appreciation (depreciation) on investments 92 (142)
- ------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 613 (151)
- ------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 4,425 10,354
Loan interest - -
Transfers (to) from the general account of Life of Virginia:
Surrenders (181) -
Loans - -
Cost of insurance (note 3) (1,384) (1,598)
Transfer gain (loss) and transfer fees 401 (24)
Interfund transfers 22,634 12,519
- ------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 25,895 21,251
- ------------------------------------------------------------------------------------------------------
Increase in net assets 26,508 21,100
Net assets at beginning of period - -
- ------------------------------------------------------------------------------------------------------
Net assets at end of period 26,508 21,100
- ------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets, Continued
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
-----------------------------------------------------------
Aggressive
Growth Portfolio
-----------------------------------------------------------
Year ended December 31,
1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) $ (10,376) 2,991 4,497
Net realized gain (loss) 202,593 49,684 24,104
Unrealized appreciation (depreciation) on investments (21,456) (6,584) 74,041
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 170,761 46,091 102,642
- ----------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 525,446 440,252 272,031
Loan interest (1,809) 50 101
Transfers (to) from the general account of Life of Virginia:
Death benefits - (155) -
Surrenders (39,796) (55,525) (6,433)
Loans (7,351) (9,797) (590)
Cost of insurance and administrative expense (note 3) (186,650) (128,435) (69,676)
Transfer gain (loss) and transfer fees 45,321 5,450 10,642
Interfund transfers 436,211 161,707 197,192
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 771,372 413,547 403,267
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 942,133 459,638 505,909
Net assets at beginning of period 1,083,059 623,421 117,512
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 2,025,192 1,083,059 623,421
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
--------------------------------------------------------------
Growth
Portfolio
------------------------------------------------------------
Year ended December 31,
1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) 35,936 16,388 5,871
Net realized gain (loss) 94,811 21,606 8,766
Unrealized appreciation (depreciation) on investments 155,268 67,602 33,088
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 286,015 105,596 47,725
- ----------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 531,252 350,437 130,419
Loan interest 514 59 -
Transfers (to) from the general account of Life of Virginia:
Death benefits - (151) -
Surrenders (19,282) (67,362) (364)
Loans (17,285) (5,035) (28)
Cost of insurance and administrative expense (note 3) (173,865) (88,814) (39,647)
Transfer gain (loss) and transfer fees 8,623 5,548 1,834
Interfund transfers 231,416 454,994 138,995
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 561,373 649,676 231,209
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 847,388 755,272 278,934
Net assets at beginning of period 1,113,610 358,338 79,404
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period 1,960,998 1,113,610 358,338
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
-------------------------------------------------------------
Worldwide
Growth
Portfolio
------------------------------------------------------------
Year ended December 31,
1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) 19,700 11,083 (641)
Net realized gain (loss) 89,852 102,324 8,523
Unrealized appreciation (depreciation) on investments 251,916 66,974 56,274
- --------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 361,468 180,381 64,156
- --------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 822,511 381,650 165,843
Loan interest 740 270 -
Transfers (to) from the general account of Life of Virginia:
Death benefits - - -
Surrenders (35,503) (40,322) (6,089)
Loans (11,414) (19,483) 5
Cost of insurance and administrative expense (note 3) (279,525) (115,529) (55,173)
Transfer gain (loss) and transfer fees 3,261 8,504 1,721
Interfund transfers 795,994 610,432 97,041
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 1,296,064 825,522 203,348
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 1,657,532 1,005,903 267,504
Net assets at beginning of period 1,421,287 415,384 147,880
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period 3,078,819 1,421,287 415,384
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statement of Changes in Net Assets, Continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series (continued)
---------------------------------------------------------
Balanced
Portfolio
---------------------------------------------------------
Period from
November 14,
Year ended Year ended 1995 to
December 31, December 31, December 31,
1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income $ 9,947 2,566 518
Net realized gain 8,229 2,098 395
Unrealized appreciation (depreciation) on investments 41,009 14,575 2,467
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 59,185 19,239 3,380
- --------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 73,161 19,054 336
Loan interest 6 - -
Transfers (to) from the general account of Life of Virginia:
Death benefits - - -
Surrenders (6,904) - -
Loans (577) - -
Cost of insurance (note 3) (31,146) (11,055) (792)
Transfer gain (loss) and transfer fees 305 1,193 (248)
Interfund transfers 369,258 63,919 73,750
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 404,103 73,111 73,046
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 463,288 92,350 76,426
Net assets at beginning of period 168,776 76,426 -
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 632,064 168,776 76,426
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series (continued)
--------------------------------------------------------------
Flexible
Income
Portfolio
-----------------------------------------------------------
Period from
December 20,
Year ended Year ended 1995 to
December 31, December 31, December 31,
1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income 3,252 507 1
Net realized gain 305 13 -
Unrealized appreciation (depreciation) on investments 72 83 (1)
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 3,629 603 -
- ----------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 40,176 3,048 13
Loan interest - - -
Transfers (to) from the general account of Life of Virginia:
Death benefits - - -
Surrenders - - -
Loans - - -
Cost of insurance (note 3) (10,448) (840) (4)
Transfer gain (loss) and transfer fees 271 1 1
Interfund transfers 28,139 6,026 35
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 58,138 8,235 45
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 61,767 8,838 45
Net assets at beginning of period 8,883 45 -
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period 70,650 8,883 45
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series (continued)
-------------------------------------------------------------
International Capital
Growth Appreciation
Portfolio Portfolio
--------------------------------------- --------------------
Period from Period from
July 9, May 21,
Year ended 1996 to 1997 to
December 31, December 31, December 31,
1997 1996 1997
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income 274 96 (7)
Net realized gain 5,037 152 106
Unrealized appreciation (depreciation) on investments 16,037 1,040 697
- -------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 21,348 1,288 796
- -------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 137,587 19,750 1,504
Loan interest 7 - -
Transfers (to) from the general account of Life of Virginia:
Death benefits - - -
Surrenders (3,539) - -
Loans (462) - -
Cost of insurance (note 3) (30,132) (1,705) (1,135)
Transfer gain (loss) and transfer fees 1,187 (43) 4
Interfund transfers 140,874 34,648 7,451
- -------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 245,522 52,650 7,824
- -------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 266,870 53,938 8,620
Net assets at beginning of period 53,938 - -
- -------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period 320,808 53,938 8,620
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Notes to Financial Statements
===========================================================================
(Continued)
1
(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 Financial
Assurance Holdings, Inc. General Electric Capital Assurance Corporation
and GE Financial Assurance Holdings, Inc. are indirectly, wholly-owned
subsidiaries of General Electric Capital Corporation ("GE Capital"). GE
Capital, a diversified financial services company, is a wholly-owned
subsidiary of General Electric Company (GE), a New York corporation.
Prior to April 1, 1996, Life of Virginia was an indirect wholly-owned
subsidiary of Aon Corporation (Aon).
In May 1997, seven new investment subdivisions were added to the
Account. The Growth & Income Portfolio and Growth Opportunities
Portfolio each invest solely in a designated portfolio of the Variable
Insurance Products Fund III. The Global Income Fund and the Value
Equity Fund each invest 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 invest solely in a
designated portfolio of the PBHG Insurance Series Fund. All designated
portfolios described above are series type mutual funds.
During 1997, the Life of Virginia Series Fund, Inc. changed its name to
the GE Investments Funds, Inc. As a result the Life of Virginia Series
Funds, Inc.--Common Stock Index, Government Securities, Money Market,
Total Return, International Equity and Real Estate Securities
Portfolios were renamed the GE Investments Funds, Inc.--S&P 500 Index,
Government Securities, Money Market, Total Return, International Equity
and Real Estate Securities Funds, respectively. On December 12, 1997,
the Account added the GE Investments Funds, Inc.--Income Fund as a new
investment subdivision and made the following substitutions of shares
held by the investment subdivisions:
<TABLE>
<S> <C>
Before the Substitution After the Substitution
Shares of Money Market Portfolio - Variable Shares of Money Market Fund -
Insurance Products Fund GE Investments Funds, Inc.
<PAGE>
(1) Continued
Before the Substitution After the Substitution
Shares of Money Fund - Shares of Money Market Fund -
Oppenheimer Variable Account Funds GE Investments Funds, Inc.
Shares of Government Securities Fund - Shares of Income Fund -
GE Investments Funds, Inc. GE Investments Funds, Inc.
Shares of Bond Portfolio - Shares of Income Fund -
Neuberger & Berman Advisers GE Investments Funds, Inc.
Management Trust
Shares of High Income Portfolio - Shares of High Income Fund -
Variable Insurance Products Fund Oppenheimer Variable Account Funds
Shares of Growth Portfolio - Shares of Growth Portfolio Fund -
Neuberger & Berman Advisers Management Trust Variable Insurance Products Fund
Shares of Balanced Portfolio - Shares of Balanced Portfolio -
Neuberger & Berman Advisers Management Trust Janus Aspen Series
</TABLE>
The foregoing substitutions were carried out pursuant to an order of
the Securities and Exchange Commission (Commission) issued on December
11, 1997, with the approval of any necessary department of insurance.
The effect of such a share substitution was to replace certain
portfolios of Variable Insurance Products Fund, Oppenheimer Variable
Account Funds, GE Investments Funds, Inc., and Neuberger & Berman
Advisers Management Trust with those of GE Investments Funds, Inc.,
Oppenheimer Variable Account Funds, Variable Insurance Products Fund,
and Janus Aspen Series as investment options.
In May 1996, two new investment subdivisions were added to the Account.
One of these subdivisions, the International Growth Portfolio, invests
solely in a designated portfolio of the Janus Aspen Series, a series
type mutual fund. The other new subdivision, the American Leaders Fund
II, invests solely in a designated portfolio of the Federated Investors
Insurance Series, a series type mutual fund.
During 1995, nine new investment subdivisions were added to the
Account. The Utility Fund II and High Income Bond Fund II each invest
solely in a designated portfolio of the Federated Investors Insurance
Series, a series type mutual fund. The Contrafund Portfolio invests
solely in a designated portfolio of the Variable Insurance Products
Fund II Portfolio, a series type mutual fund. The International Equity
Portfolio and the Real Estate Securities Portfolio each invest solely
in a designated portfolio of GE Investment
<PAGE>
(1) Continued
Funds, Inc., a series type mutual fund. The Balanced Portfolio and
Flexible Income Portfolio each invest solely in a designated portfolio
of the Janus Aspen Series, a series type mutual fund. The Growth
Portfolio and Small Cap Portfolio each invest solely in a designated
portfolio of the Alger American Fund, a series type mutual fund.
In November 1995, six subdivisions were closed to new money. Three of
these subdivisions, the Balanced Portfolio, Bond Portfolio, and Growth
Portfolio each invest solely in a designated portfolio of the Advisers
Management Trust, a series type mutual fund. The fourth and fifth
closed subdivisions, the Money Market Portfolio and High Income
Portfolio, each invest solely in a designated portfolio of the Variable
Insurance Products Fund, a series type mutual fund. The sixth closed
subdivision, the Money Fund invests solely in a designated portfolio of
the Oppenheimer Variable Account Fund, a series type mutual fund.
(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 and
income distributions are recorded on the ex-dividend 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.
<PAGE>
(2) Continued
The aggregate cost of the investments acquired and the aggregate
proceeds of investments sold, for the year or period ended December 31,
1997, were:
Cost of Proceeds
Shares from
Fund/Portfolio Acquired Shares Sold
- ----------------------------------------------------------------------------
GE Investments Funds, Inc.:
S&P 500 Index $ 2,421,588 571,889
Government Securities 410,712 711,146
Money Market 12,663,722 12,135,125
Total Return 1,505,900 444,003
International Equity 63,352 13,258
Real Estate Securities 214,996 40,188
Global Income 12,578 3,048
Value Equity 14,881 1,342
Income 761,837 379,420
Oppenheimer Variable Account Funds:
Money 1,813 2,492
Bond 127,847 110,136
Capital Appreciation 2,465,078 1,896,848
Growth 998,636 535,975
High Income 879,871 262,329
Multiple Strategies 262,282 224,756
Variable Insurance Products Fund:
Money Market 77,914 384,986
High Income 22,730 254,138
Equity-Income 2,606,594 1,084,415
Growth 1,850,462 1,260,670
Overseas 744,665 820,557
Variable Insurance Products Fund II:
Asset Manager 1,731,479 753,717
Contrafund 2,267,666 1,656,816
Growth Insurance Product Fund III: 75,900 28,920
Growth Opportunties 84,040 17,196
<PAGE>
(2) Continued
Cost of Proceeds
Shares from
Fund/Portfolio, Continued Acquired Shares Sold
- ---------------------------------------------------------------------------
Advisers Management Trust:
Balanced $ 17,148 283,936
Bond 61,870 141,290
Growth 20,097 172,844
Federated Investors Insurance Series:
American Leaders II 49,651 9,336
High Income Bond II 71,541 18,670
Utility II 74,818 25,430
Alger American:
Small Cap 4,515,733 4,229,406
Growth 3,338,095 4,049,014
PBHG Insurance Series Fund:
PBHG Large Cap Growth 44,351 18,907
PBHG Growth II 21,715 1,945
Janus Aspen Series:
Aggressive Growth 7,117,628 6,402,194
Growth 1,384,477 762,866
Worldwide Growth 1,955,465 639,065
Balanced 478,781 65,175
Flexible Income 142,813 81,679
International Growth 305,903 65,108
Capital Appreciation 9,058 1,243
- ---------------------------------------------------------------------------
Capital Transactions
The increase (decrease) in outstanding units from capital transactions
for the years or periods ended December 31, 1997, 1996 and 1995 are as
follows:
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Notes to Financial Statements
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
(2) Continued
GE Investments Funds, Inc.
-------------------------------------------------------------------------
Government International
S&P 500 Index Securities Money Market Total Return Equity
Fund Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1994 35,274 15,187 72,058 24,280
Net premiums 8,832 2,156 290,272 8,350 388
Loan interest (25) 14 (2) (6) -
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - - - -
Surrenders (1,517) - (1,231) (1,017) -
Loans 1 - 11 (300) -
Cost of insurance and administrative expenses (4,847) (1,321) (9,888) (7,985) (31)
Interfund transfers 3,934 1,253 (256,809) 106,601 527
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units from
capital transactions 6,378 2,102 22,353 105,643 884
- ----------------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1995 41,652 17,289 94,411 129,923 884
Net premiums 10,935 2,279 364,289 5,129 1,663
Loan interest (16) 54 (119) (6) 1
Transfers (to) from the
general account of Life of Virginia:
Death benefits (69) - (84) (904) -
Surrenders (540) (193) (456) (503) (124)
Loans (578) (141) (3,851) (249) (20)
Cost of insurance and administrative expenses (5,615) (1,444) (16,666) (12,173) (276)
Interfund transfers 10,270 (1,161) (282,823) 4,475 908
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units from
capital transactions 14,387 (606) 60,290 (4,231) 2,152
- ----------------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1996 56,039 16,683 154,701 125,692 3,036
Net premiums 12,804 1,856 229,013 6,095 1,752
Loan interest (69) 15 (196) (11) -
Transfers (to) from the
general account of Life of Virginia:
Death benefits (3,774) - (1,005) (267) -
Surrenders (734) (782) (671) (523) (68)
Loans (328) (210) (330) (137) (22)
Cost of insurance and administrative expenses (6,083) (1,174) (17,924) (12,827) (414)
Interfund transfers 24,623 (16,388) (224,564) (101) 1,666
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
from capital transactions 26,439 (16,683) (15,677) (7,771) 2,914
- ----------------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1997 82,478 - 139,024 117,921 5,950
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
(2) Continued
GE Investments Funds, Inc.
-----------------------------------------------------------
Real Estate
Securities Global Income Value Equity Income
Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1994
Net premiums 13 - - -
Loan interest - - - -
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - - -
Surrenders - - - -
Loans - - - -
Cost of insurance and administrative expenses (3) - - -
Interfund transfers 25 - - -
- --------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units from
capital transactions 35 - - -
- --------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1995 35 - - -
Net premiums 1,148 - - -
Loan interest - - - -
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - - -
Surrenders (26) - - -
Loans - - - -
Cost of insurance and administrative expenses (142) - - -
Interfund transfers 903 - - -
- --------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units from
capital transactions 1,883 - - -
- --------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1996 1,918 - - -
Net premiums 4,672 128 444 74
Loan interest - - - 1
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - - -
Surrenders (41) - - -
Loans (51) (24) - -
Cost of insurance and administrative expenses (1,046) (37) (77) (166)
Interfund transfers 5,271 829 661 37,858
- --------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
from capital transactions 8,805 896 1,028 37,767
- --------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1997 10,723 896 1,028 37,767
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
(2) Continued
Oppenheimer Variable Account Funds
---------------------------------------------------------------------------
Capital High Multiple
Money Bond Appreciation Growth Income Strategies
Fund Fund Fund Fund Fund Fund
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1994 746 5,276 37,680 17,304 14,353 16,523
Net premiums 539 4,449 4,997 17,058 4,813 9,487
Loan interest - 4 - (5) - (2)
Transfers (to) from the
general account of Life of Virginia:
Death benefits - (8) - (94) (69) -
Surrenders (67) (516) (166) (2,524) (195) (570)
Loans - (76) (18) (404) (152) (32)
Cost of insurance and administrative expenses (140) (2,109) (2,129) (7,533) (1,682) (3,480)
Interfund transfers (272) 2,613 8,754 6,527 5,933 2,695
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units from
capital transactions 60 4,357 11,438 13,025 8,648 8,098
- -------------------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1995 806 9,633 49,118 30,329 23,001 24,621
Net premiums - 4,046 8,958 16,813 6,706 5,628
Loan interest - - - (5) (3) (1)
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - - - (85) (805)
Surrenders - (241) (759) (3,514) (393) (8,467)
Loans - (100) - (230) (468) (34)
Cost of insurance and administrative expenses (66) (1,736) (4,613) (6,622) (2,322) (2,303)
Interfund transfers (695) 1,453 11,095 7,391 5,754 4,012
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units from
capital transactions (761) 3,422 14,681 13,833 9,189 (1,970)
- -------------------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1996 45 13,055 63,799 44,162 32,190 22,651
Net premiums 6 (539) 20,919 11,890 10,966 3,690
Loan interest - - 8 (14) - (4)
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - (8) - - -
Surrenders - 167 (1,104) (1,783) (595) (1,437)
Loans - 19 (1,014) (327) (766) (139)
Cost of insurance and administrative expenses (12) 221 (8,094) (4,561) (4,949) (1,822)
Interfund transfers (39) 114 1,620 4,663 11,197 (378)
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
from capital transactions (45) (18) 12,327 9,868 15,853 (90)
- -------------------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1997 - 13,037 76,126 54,030 48,043 22,561
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
(2) Continued
Variable Insurance Products
Variable Insurance Products Fund Fund II
----------------------------------------------------------------------------------
Money High Equity-
Market Income Income Growth Overseas Asset Manager
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1994 38,823 9,102 37,010 68,322 48,521 110,061
Net premiums 6,426 4,512 20,189 22,373 24,216 45,133
Loan interest 7 12 1 (88) (2) 12
Transfers (to) from the
general account of Life of Virginia:
Death benefits - (19) - (90) - (115)
Surrenders (198) (305) (807) (2,825) (1,078) (3,089)
Loans - - (195) 184 (410) (1,228)
Cost of insurance and administrative
expenses (4,372) (2,430) (8,253) (11,675) (10,355) (21,016)
Interfund transfers (10,812) 1,815 17,022 21,249 12,674 17,584
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units from
capital transactions (8,949) 3,585 27,957 29,128 25,045 37,281
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1995 29,874 12,687 64,967 97,450 73,566 147,342
Net premiums 127 - 31,658 34,244 23,922 34,545
Loan interest (1) (1) (2) (18) (1) (2)
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - (758) (919) (191) (1,099)
Surrenders (1,370) (1,514) (4,129) (6,625) (3,997) (5,334)
Loans (86) (103) (445) (2,672) (1,554) 3
Cost of insurance and administrative
expenses (2,125) (1,273) (11,544) (15,468) (10,492) (16,972)
Interfund transfers (6,185) (1,435) 22,081 (2,890) (155) (22,982)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units from
capital transactions (9,640) (4,326) 36,861 5,652 7,532 (11,841)
- -----------------------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1996 20,234 8,361 101,828 103,102 81,098 135,501
Net premiums - 6 30,443 27,236 14,830 30,613
Loan interest (2) (1) 17 (20) (27) (18)
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - (8) (320) (11) -
Surrenders - (83) (2,046) (3,071) (3,198) (5,817)
Loans (67) (56) (1,200) (2,624) (1,198) (1,388)
Cost of insurance and administrative
expenses (1,113) (571) (13,023) (12,010) (7,354) (15,641)
Interfund transfers (19,052) (7,656) 18,157 3,258 (11,825) 20,449
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
from capital transactions (20,234) (8,361) 32,340 12,449 (8,783) 28,198
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1997 - - 134,168 115,551 72,315 163,699
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
(2) Continued
Variable Insurance Variable Insurance
Products Fund II Products Fund III Advisers Management Trust
------------------------------------------------------------------------------
Growth & Growth
Contrafund Income Opportunities Balanced Bond Growth
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1994 - - - 16,155 4,819 9,495
Net premiums 8,054 - - 2,225 7,196 3,178
Loan interest - - - - - -
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - - - - (120)
Surrenders - - - (190) (1,548) (226)
Loans (31) - - - (187) (18)
Cost of insurance and administrative expenses (1,392) - - (381) (2,205) (1,443)
Interfund transfers 13,917 - - 310 (465) 312
- -------------------------------------------------------------------- --------------------------------------------------------------
Net increase (decrease) in units from
capital transactions 20,548 - - 1,964 2,791 1,683
- -------------------------------------------------------------------- --------------------------------------------------------------
Units outstanding at December 31, 1995 20,548 - - 18,119 7,610 11,178
Net premiums 22,057 - - - - -
Loan interest 7 - - - (4) -
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - - - - (687)
Surrenders (573) - - - - (145)
Loans (327) - - - (143) -
Cost of insurance and administrative expenses (6,094) - - (1,013) (290) (676)
Interfund transfers 26,464 - - (2,836) (815) (1,078)
- -------------------------------------------------------------------- --------------------------------------------------------------
Net increase (decrease) in units from
capital transactions 41,534 - - (3,849) (1,252) (2,586)
- -------------------------------------------------------------------- --------------------------------------------------------------
Units outstanding at December 31, 1996 62,082 14,270 6,358 8,592
Net premiums 36,387 454 598 17 - 30
Loan interest (8) - - (2) - (6)
Transfers (to) from the
general account of Life of Virginia:
Death benefits (320) - - - - -
Surrenders (5,335) - - (651) (5) (179)
Loans (781) - - (77) - (60)
Cost of insurance and administrative expenses (12,219) (125) (125) (597) (128) (357)
Interfund transfers 17,222 3,484 5,332 (12,960) (6,225) (8,020)
- -------------------------------------------------------------------- --------------------------------------------------------------
Net increase (decrease) in units
from capital transactions 34,946 3,813 5,805 (14,270) (6,358) (8,592)
- -------------------------------------------------------------------- --------------------------------------------------------------
Units outstanding at December 31, 1997 97,028 3,813 5,805 - - -
- -------------------------------------------------------------------- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
(2) Continued
Federated Investors
Insurance Series Alger American
--------------------------------------------------------
American
Leaders High Income Utility Small Cap Growth
Fund II Fund II Fund II Portfolio Portfolio
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1994 - - - - -
Net premiums - - 3,462 464 260
Loan interest - - - - -
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - - - -
Surrenders - - - - -
Loans - - - - -
Cost of insurance and administrative expenses - (6) (302) (93) (53)
Interfund transfers - 697 1,854 3,522 2,203
- --------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units from
capital transactions - 691 5,014 3,893 2,410
- --------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1995 - 691 5,014 3,893 2,410
Net premiums 86 1,470 1,811 15,849 16,630
Loan interest - - - (350) 3
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - - - -
Surrenders - - (4) (121) (115)
Loans - - - (1,411) (88)
Cost of insurance and administrative expenses (9) (297) (415) (3,890) (3,155)
Interfund transfers 128 763 16 29,422 113,835
- --------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units from
capital transactions 205 1,936 1,408 39,499 127,110
- --------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1996 205 2,627 6,422 43,392 129,520
Net premiums 1,922 2,964 3,027 35,801 33,924
Loan interest - - - 192 58
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - - - -
Surrenders - - - (387) (1,726)
Loans - (219) - (467) (562)
Cost of insurance and administrative expenses (260) (668) (725) (10,737) (10,957)
Interfund transfers 1,302 1,484 819 8,457 (86,458)
- --------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
from capital transactions 2,964 3,561 3,121 32,859 (65,721)
- --------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1997 3,169 6,188 9,543 76,251 63,799
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
(2) Continued
PBHG Insurance
Series Fund Janus Aspen Series
-------------------------- ------------------------
Large Cap Aggressive
Growth Growth II Growth Growth
Portfolio Portfolio Portfolio Portfolio
- -------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1994 - - 10,290 8,119
Net premiums - - 151 14,001
Loan interest - - - 5
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - - -
Surrenders - - - (331)
Loans - - - (30)
Cost of insurance and administrative expenses - - (355) (3,586)
Interfund transfers - - 33,027 10,149
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) in units from
capital transactions - - 32,823 20,208
- -------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1995 - - 43,113 28,327
Net premiums - - 7,091 50,232
Loan interest - - - 6
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - - (18)
Surrenders - - - (6,335)
Loans - - - (1,118)
Cost of insurance and administrative expenses - - (4,114) (14,654)
Interfund transfers - - 23,785 18,450
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) in units from
capital transactions - - 26,762 46,563
- -------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1996 - - 69,875 74,890
Net premiums 391 960 33,956 31,979
Loan interest - - (117) 31
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - - -
Surrenders (16) - (2,572) (1,161)
Loans - - (475) (1,040)
Cost of insurance and administrative expenses (122) (148) (12,062) (10,466)
Interfund transfers 2,001 1,160 28,188 13,930
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
from capital transactions 2,254 1,972 46,918 33,273
- -------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1997 2,254 1,972 116,793 108,163
- -------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
(2) Continued
Janus Aspen Series
------------------------------------------------------------------
Flexible International Capital
World Wide Balanced Income Growth Appreciation
Portfolio Portfolio Portfolio Portfolio Portfolio
- ----------------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1994 15,214 - - - -
Net premiums 10,566 5,909 1 - -
Loan interest - - - - -
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - - - -
Surrenders (29) (217) - - -
Loans (2) - - - -
Cost of insurance and administrative expenses (3,212) (1,966) - - -
Interfund transfers 11,262 3,457 3 - -
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units from
capital transactions 18,585 7,183 4 - -
- ---------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1995 33,799 7,183 4 - -
Net premiums 30,707 3,070 287 1,725 -
Loan interest 5 2 - - -
Transfers (to) from the
general account of Life of Virginia:
Death benefits (13) - - - -
Surrenders (5,903) (324) - - -
Loans (441) (157) - - -
Cost of insurance and administrative expenses (7,782) (929) (79) (149) -
Interfund transfers 39,868 4,910 568 3,026 -
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units from
capital transactions 56,441 6,572 776 4,602 -
- ---------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1996 90,240 13,755 780 4,602 -
Net premiums 45,089 5,204 3,339 10,507 131
Loan interest 41 - - 1 -
Transfers (to) from the
general account of Life of Virginia:
Death benefits - - - - -
Surrenders (1,946) (491) - (270) -
Loans (626) (41) - (35) -
Cost of insurance and administrative expenses (15,323) (2,215) (868) (2,301) (99)
Interfund transfers 43,635 26,265 2,338 10,760 652
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in units
from capital transactions 70,870 28,722 4,809 18,662 684
- ---------------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1997 161,110 42,477 5,589 23,264 684
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(2) Continued
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 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 and disclosures 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 is surrendered or lapses during the first nine years, a
charge is made by Life of Virginia to cover the expenses of 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.
<PAGE>
(3) Continued
GE Investments Funds, Inc. (the Fund) is an open-end diversified
management investment company.
Capital Brokerage Corporation, an affiliate of Life of Virginia, is a
Washington Corporation registered with the Commission under the
Securities Exchange Act of 1934 as a broker-dealer and is a member of
the National Association of Securities Dealers, Inc. Capital Brokerage
Corporation also serves as principal underwriter for variable life
insurance Policies issued by Life of Virginia.
GE Investment Management Incorporated (Investment Advisor), a
wholly-owned subsidiary of GE, currently serves as investment advisor
to GE Investments Funds, Inc. 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.
Prior to May 1, 1997, Aon Advisors, Inc. served as investment advisor
to the Fund and was subject to the same compensation arrangement as GE
Investment Management Incorporated.
Certain officers and directors of Life of Virginia are also officers
and directors of Capital Brokerage Corporation.
===============================================================================
