LIFE OF VIRGINIA SEPARATE ACCOUNT II
Financial Statements
For the six months ended June 30, 1998
(Unaudited)
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Table of Contents
For the six months ended June 30, 1998
- ------------------------------------------------------------------------------
Page
Financial Statements:
(Unaudited)
Statements of Assets and Liabilities..................................1
Statements of Operations..............................................6
Statements of Changes in Net Assets..................................11
Notes to Financial Statements............................................16
(Unaudited)
- ------------------------------------------------------------------------------
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Assets and Liabilities
As of June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------
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 (170,022 shares;
cost - $3,194,884) $ 3,842,487 - -
Money Market Fund (2,941,697 shares;
cost - $2,941,697) - 2,941,726 -
Total Return Portolio (244,197 shares;
cost - $3,752,788) - - 3,579,932
International Equity Fund (7,643 shares;
cost - $89,024) - - -
Real Estate Securities Fund (19,394 shares;
cost - $291,204) - - -
Global Income Fund (7,367 shares;
cost - $74,572) - - -
Value Equity Fund (2,702 shares;
cost - $37,751) - - -
Income Fund (33,509 shares; cost $407,231) - - -
U.S. Equity Fund (0.3 shares; cost $10) - - -
Receivable from affiliate (note 3) 7,347 18 298,753
Receivable for units sold 68 52,058 -
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $ 3,849,902 2,993,802 3,878,685
- ---------------------------------------------------------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 5,403 176,366 5,661
Payable for units withdrawn 815 364 164
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities 6,218 176,730 5,825
- ---------------------------------------------------------------------------------------------------------------------------
Net assets $ 3,843,684 2,817,072 3,872,860
- ---------------------------------------------------------------------------------------------------------------------------
Outstanding units: Type I (note 2) 78,282 167,719 113,686
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value per unit: Type I 48.40 16.65 33.80
- ---------------------------------------------------------------------------------------------------------------------------
Outstanding units: Type II (note 2) 1,137 1,514 889
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value per unit: Type II 48.40 16.65 33.80
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
---------------------------------------------------------------------------------
International Real Estate Global Value U.S.
Equity Securities Income Equity Income Equity
Assets Fund Fund Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in GE Investments Funds, Inc.,
at fair value (note 2):
S&P 500 Index Fund (170,022 shares;
cost - $3,194,884) - - - - - -
Money Market Fund (2,941,697 shares;
cost - $2,941,697) - - - - - -
Total Return Portolio (244,197 shares;
cost - $3,752,788) - - - - - -
International Equity Fund (7,643 shares;
cost - $89,024) 97,987 - - - - -
Real Estate Securities Fund (19,394 shares;
cost - $291,204) - 280,243 - - - -
Global Income Fund (7,367 shares;
cost - $74,572) - - 75,294 - - -
Value Equity Fund (2,702 shares;
cost - $37,751) - - - 40,023 - -
Income Fund (33,509 shares; cost $407,231) - - - - 421,875 -
U.S. Equity Fund (0.3 shares; cost $10) - - - - - 10
Receivable from affiliate (note 3) 61 1,787 133 205 - -
Receivable for units sold - - 74 - - -
- ----------------------------------------------------------------------------------------------------------------------------------
Total assets 98,048 282,030 75,501 40,228 421,875 10
- ----------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 138 382 83 45 4,357 -
Payable for units withdrawn 50 184 - 125 8 -
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 188 566 83 170 4,365 -
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets 97,860 281,464 75,418 40,058 417,510 10
- ----------------------------------------------------------------------------------------------------------------------------------
Outstanding units: Type I (note 2) 6,446 15,980 7,085 2,416 40,243 1
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit: Type I 15.18 17.61 10.64 14.85 10.37 9.98
- ----------------------------------------------------------------------------------------------------------------------------------
Outstanding units: Type II (note 2) 1 2 2 281 - -
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit: Type II 15.18 17.61 10.64 14.85 - -
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Assets and Liabilities, Continued
As of June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds
-------------------------------------------------------------------
Capital High Multiple
Bond Appreciation Growth Income Strategies
Assets Fund Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------------------
<S><C>
Investment in Oppenheimer Variable Account Funds,
at fair value (note 2):
Bond Fund (31,224 shares; cost - $364,016) $374,370 - - - -
Capital Appreciation Fund
(80,569 shares; cost - $3,060,395) - 3,773,854 - - -
Growth Fund (82,438 shares; cost - $2,263,537) - - 2,853,179 - -
High Income Fund (162,566 shares;
cost - $1,815,322) - - - 1,871,131 -
Multiple Strategies Fund (45,014 shares;
cost - $691,727) - - - - 770,638
Receivable from affiliate (note 3) - - 4,841 4,734 4,665
Receivable for units sold - 2,292 11,128 1,360 817
- ----------------------------------------------------------------------------------------------------------------------------------
Total assets $374,370 3,776,146 2,869,148 1,877,225 776,120
- ----------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 1,777 7,270 4,087 2,695 1,116
Payable for units withdrawn 25 - 19 - -
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,802 7,270 4,106 2,695 1,116
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets $372,568 3,768,876 2,865,042 1,874,530 775,004
- ----------------------------------------------------------------------------------------------------------------------------------
Outstanding units: Type I (note 2) 16,036 78,436 57,285 51,929 24,493
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit: Type I 23.23 47.62 49.17 35.88 31.52
- ----------------------------------------------------------------------------------------------------------------------------------
Outstanding units: Type II (note 2) 1 703 988 322 94
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit: Type II 23.23 47.62 49.17 35.88 31.52
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Assets and Liabilities, Continued
As of June 30, 1998
(Unaudited)
<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 (242,848 shares;
cost - $5,078,273) $ 6,112,474 - -
Growth Portfolio (167,526 shares;
cost - $5,298,171) - 6,419,596 -
Overseas Portfolio (101,958 shares;
cost - $1,874,145) - - 2,102,364
Investment in Variable Insurance Products
Fund II, at fair value (note 2):
Asset Manager Portfolio (259,550 shares;
cost - $4,058,823) - - -
Contrafund Portfolio (128,177 shares;
cost - $2,363,784) - - -
Investment in Variable Insurance Products
Fund III, at fair value (note 2):
Growth & Income Portfolio (14,357 shares;
cost - $192,562) - - -
Growth Opportunities Portfolio
(8,218 shares; cost - $159,534) - - -
Receivable from affiliate (note 3) 52,971 18,756 4,646
Receivable for units sold 6,596 3,963 1,212
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $ 6,172,041 6,442,315 2,108,222
- ---------------------------------------------------------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 9,029 8,887 3,135
Payable for units withdrawn - 35 -
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities 9,029 8,922 3,135
- ---------------------------------------------------------------------------------------------------------------------------
Net assets $ 6,163,012 6,433,393 2,105,087
- ---------------------------------------------------------------------------------------------------------------------------
Outstanding units: Type I (note 2) 138,027 126,085 75,720
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value per unit: Type I 44.31 50.98 27.79
- ---------------------------------------------------------------------------------------------------------------------------
Outstanding units: Type II (note 2) 1,048 119 42
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value per unit: Type II 44.31 50.98 27.79
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund II Variable Insurance Product Fund III
---------------------------------------------------------------------------
Asset Growth & Growth
Manager Contrafund Income Opportunities
Assets Portfolio Portfolio Portfolio Portfolio
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in Variable Insurance Products Fund,
at fair value (note 2):
Equity-Income Portfolio (242,848 shares;
cost - $5,078,273) - - - -
Growth Portfolio (167,526 shares;
cost - $5,298,171) - - - -
Overseas Portfolio (101,958 shares;
cost - $1,874,145) - - - -
Investment in Variable Insurance Products
Fund II, at fair value (note 2):
Asset Manager Portfolio (259,550 shares;
cost - $4,058,823) 4,477,231 - - -
Contrafund Portfolio (128,177 shares;
cost - $2,363,784) - 2,813,485 - -
Investment in Variable Insurance Products
Fund III, at fair value (note 2):
Growth & Income Portfolio (14,357 shares;
cost - $192,562) - - 209,178 -
Growth Opportunities Portfolio
(8,218 shares; cost - $159,534) - - - 167,969
Receivable from affiliate (note 3) 9,141 40,638 138 2,037
Receivable for units sold - 1,844 17 8,165
- ---------------------------------------------------------------------------------------------------------------------------
Total assets 4,486,372 2,855,967 209,333 178,171
- ---------------------------------------------------------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 6,643 3,782 256 245
Payable for units withdrawn 632 24 - -
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities 7,275 3,806 256 245
- ---------------------------------------------------------------------------------------------------------------------------
Net assets 4,479,097 2,852,161 209,077 177,926
- ---------------------------------------------------------------------------------------------------------------------------
Outstanding units: Type I (note 2) 161,490 117,767 12,426 12,956
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value per unit: Type I 27.73 24.14 14.47 13.68
- ---------------------------------------------------------------------------------------------------------------------------
Outstanding units: Type II (note 2) 15 364 2,021 48
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value per unit: Type II 27.73 24.14 14.47 13.68
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Assets and Liabilities, Continued
As of June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Federated Investors
Insurance Series Alger American Fund PBHG Insurance Series Fund
--------------------------------- ------------------------ --------------------------
American High Small PBHG PBHG
Leaders Income Bond Utility Capitalization Growth Large Cap Growth II
Assets Fund II Fund II Fund II Portfolio Portfolio Portfolio Portfolio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investments in Federated Investors Insurance
Series, at fair value (note 2):
American Leaders Fund II (8,198 shares;
cost - $164,761) $173,721 - - - - - -
High Income Bond Fund II (11,866 shares;
cost - $126,293) - 131,239 - - - - -
Utility Fund II (13,812 shares;
cost - $171,057) - - 194,196 - - - -
Investment in Alger American, at fair value
(note 2):
Small Capitalization Portfolio (22,553
shares; cost - $966,574) - - - 972,708 - - -
Growth Portfolio (24,461 shares;
cost - $985,228) - - - - 1,116,879 - -
Investment in PBHG Insurance Series
Fund Inc., at fair value (note 2):
PBHG Large Cap Portfolio (2,582 shares;
cost - $32,129) - - - - - 36,433 -
PBHG Growth II Portfolio (2,573 shares;
cost - $28,566) - - - - - - 30,462
Receivable from affiliate (note 3) 219 795 - 44,735 9,572 447 13
Receivable for units sold - - - 3,075 20 8,496 -
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets $173,940 132,034 194,196 1,020,518 1,126,471 45,376 30,475
- -----------------------------------------------------------------------------------------------------------------------------------
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate
(note 3) 246 210 799 1,380 1,511 49 39
Payable for units withdrawn 151 21 143 18 83 - 18
- -----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 397 231 942 1,398 1,594 49 57
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets $173,543 131,803 193,254 1,019,120 1,124,877 45,327 30,418
- -----------------------------------------------------------------------------------------------------------------------------------
Outstanding units: Type I (note 2) 10,075 8,270 10,805 83,902 65,339 3,191 2,590
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit: Type I 16.71 15.88 17.89 12.14 17.16 14.00 11.74
- -----------------------------------------------------------------------------------------------------------------------------------
Outstanding units: Type II (note 2) 311 29 - 72 208 48 -
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit: Type II 16.71 15.88 - 12.14 17.16 14.00 -
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Assets and Liabilities, Continued
As of June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
-----------------------------------------------------------------------------------------
Aggressive Worldwide Flexible International Capital
Growth Growth Growth Balanced Income Growth Appreciation
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S><C>
Investment in Janus Aspen Series,
at fair value (note 2):
Aggressive Growth Portfolio
(76,053 shares; cost - $1,608,466) $1,832,885 - - - - - -
Growth Portfolio (116,090 shares;
cost - $1,972,327) - 2,403,073 - - - - -
Worldwide Growth Portfolio
(150,179 shares; cost - $3,367,429) - - 4,310,131 - - - -
Balanced Portfolio (47,486 shares;
cost - $809,273) - - - 944,970 - - -
Flexible Income Portfolio
(4,562 shares; cost - $53,926) - - - - 54,561 - -
International Growth Portfolio
(30,312 shares; cost - $620,833) - - - - - 672,626 -
Capital Appreciation Portfolio
(4,596 shares; cost - $70,208) - - - - - - 76,021
Receivable from affiliate (note 3) 76,155 19,887 31,334 1,484 299 1,079 -
Receivable for units sold 1,080 10 97 67 - 1,690 -
- -------------------------------------------------------------------------------------------------------------------------------
Total assets $1,910,120 2,422,970 4,341,562 946,521 54,860 675,395 76,021
- -------------------------------------------------------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate
(note 3) 2,778 3,308 6,098 1,246 80 695 4,964
Payable for units withdrawn - 304 375 173 30 - 46
- -------------------------------------------------------------------------------------------------------------------------------
Total liabilities 2,778 3,612 6,473 1,419 110 695 5,010
- -------------------------------------------------------------------------------------------------------------------------------
Net assets $1,907,342 2,419,358 4,335,089 945,102 54,750 674,700 71,011
- -------------------------------------------------------------------------------------------------------------------------------
Outstanding units: Type I (note 2) 93,942 112,059 178,555 51,682 4,033 39,770 4,135
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit: Type I 20.27 21.54 24.19 17.42 13.30 16.80 16.46
- -------------------------------------------------------------------------------------------------------------------------------
Outstanding units: Type II (note 2) 174 252 685 2,574 83 392 179
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit: Type II 20.27 21.54 24.19 17.42 13.30 16.80 16.46
- -------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Operations
For the period ended June 30, 1998
(Unaudited)
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------
S&P 500 Money Total
Index Market Return
Fund Fund Fund
-------------------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ - 73,289 -
Expenses - Mortality and expense
risk charges (note 3) 12,249 9,012 13,030
- ------------------------------------------------------------------------------------------------------------------
Net investment income (expense) (12,249) 64,277 (13,030)
- ------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) 128,793 490 (23,378)
Unrealized appreciation (depreciation)
on investments 439,790 (490) 381,566
- ------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 568,583 - 358,188
- ------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations $ 556,334 64,277 345,158
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
--------------------------------------------------------------------------
International Real Estate Global Value
Equity Securities Income Equity
Fund Fund Fund Fund
--------------------------------------------------------------------------
Six Months Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends - - - -
Expenses - Mortality and expense
risk charges (note 3) 302 847 121 83
- ------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) (302) (847) (121) (83)
- ------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) (230) (2,507) (4) 326
Unrealized appreciation (depreciation)
on investments 14,899 (10,709) 1,051 2,271
- ------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 14,669 (13,216) 1,047 2,597
- ------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 14,367 (14,063) 926 2,514
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
------------------------------
U.S.
Income Equity
Fund Fund
------------------------------
Six Months Period from
Ended 6/30/98 6/10-6/30/98
- ----------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends - -
Expenses - Mortality and expense
risk charges (note 3) 1,400 -
- ----------------------------------------------------------------------------
Net investment income (expense) (1,400) -
- ----------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) 1,846 -
Unrealized appreciation (depreciation)
on investments 14,121 -
- ----------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 15,967 -
- ----------------------------------------------------------------------------
Increase (decrease) in net assets
from operations 14,567 -
- ----------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Operations, Continued
For the period ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds
------------------------------------------------------------------------------
Capital High Multiple
Bond Appreciation Growth Income Strategies
Fund Fund Fund Fund Fund
------------------------------------------------------------------------------
Six Months Six Months Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 10,101 91,445 230,257 82,820 44,673
Expenses - Mortality and expense
risk charges (note 3) 1,159 11,863 8,944 6,206 2,540
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income 8,942 79,582 221,313 76,614 42,133
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain 806 73,707 61,092 7,328 7,191
Unrealized appreciation (depreciation)
on investments 2,279 396,274 108,817 (8,996) (3,696)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 3,085 469,981 169,909 (1,668) 3,495
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $ 12,027 549,563 391,222 74,946 45,628
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Operations, Continued
For the period ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund Variable Insurance Products Fund II
------------------------------------------ ---------------------------------------
Equity Asset
Income Growth Overseas Manager Contrafund
Portfolio Portfolio Portfolio Portfolio Portfolio
------------------------------------------------------------------------------------
Six Months Six Months Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $353,139 703,742 138,226 527,602 122,810
Expenses - Mortality and expense
risk charges (note 3) 20,728 19,341 7,033 15,318 8,194
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 332,411 684,401 131,193 512,284 114,616
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments:
Net realized gain 154,040 94,877 77,791 32,290 70,386
Unrealized appreciation (depreciation)
on investments 79,413 173,510 60,820 (172,078) 181,493
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 233,453 268,387 138,611 (139,788) 251,879
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $565,864 952,788 269,804 372,496 366,495
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
Variable Insurance Product Fund III
-----------------------------------
Growth & Growth
Income Opportunities
Portfolio Portfolio
--------------------------------
Six Months Six Months
Ended 6/30/98 Ended 6/30/98
- ------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends 337 3,673
Expenses - Mortality and expense
risk charges (note 3) 425 454
- -----------------------------------------------------------------------------
Net investment income (expense) (88) 3,219
- -----------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments:
Net realized gain 661 2,607
Unrealized appreciation (depreciation)
on investments 17,718 5,002
- -----------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 18,379 7,609
- -----------------------------------------------------------------------------
Increase in net assets from operations 18,291 10,828
- -----------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Operations, Continued
For the period ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Federated Investors Insurance Series
------------------------------------------------------------
American High
Leaders Income Bond Utility
Fund II Fund II Fund II
------------------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- -----------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends $ 8,939 4,007 11,781
Expenses - Mortality and expense
risk charges (note 3) 450 451 637
- -----------------------------------------------------------------------------------------------------------------
Net investment income (expense) 8,489 3,556 11,144
- -----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) 1,272 1,860 3,743
Unrealized appreciation (depreciation)
on investments 5,906 (1,402) (6,830)
- -----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 7,178 458 (3,087)
- -----------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $ 15,667 4,014 8,057
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Alger American PBHG Insurance Series Fund
----------------------------------------------------------------------
Small PBHG PBHG
Capitalization Growth Large Cap Growth II
Portfolio Portfolio Portfolio Portfolio
----------------------------------------------------------------------
Six Months Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends 119,910 159,255 - -
Expenses - Mortality and expense
risk charges (note 3) 3,275 3,572 119 78
- --------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 116,635 155,683 (119) (78)
- --------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain (loss) (38,748) 48,795 2,403 (20)
Unrealized appreciation (depreciation)
on investments 33,170 33,447 4,212 2,038
- --------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (5,578) 82,242 6,615 2,018
- --------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 111,057 237,925 6,496 1,940
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Operations, Continued
For the period ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
------------------------------------------------------------------------------
Aggressive Worldwide
Growth Growth Growth Balanced
Portfolio Portfolio Portfolio Portfolio
------------------------------------------------------------------------------
Six Months Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S><C>
Investment income:
Income - Dividends $ - 145,143 146,051 28,429
Expenses - Mortality and expense
risk charges (note 3) 6,870 7,731 13,307 2,626
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) (6,870) 137,412 132,744 25,803
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain 137,522 67,147 166,870 14,475
Unrealized appreciation on investments 173,483 175,966 569,739 77,645
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
on investments 311,005 243,113 736,609 92,120
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $ 304,135 380,525 869,353 117,923
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
----------------------------------------------------
Flexible International Capital
Income Growth Appreciation
Portfolio Portfolio Portfolio
----------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- --------------------------------------------------------------------------------------------------
<S><C>
Investment income:
Income - Dividends 2,081 11,753 13
Expenses - Mortality and expense
risk charges (note 3) 221 1,415 962
- --------------------------------------------------------------------------------------------------
Net investment income (expense) 1,860 10,338 (949)
- --------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments:
Net realized gain 866 31,083 22,761
Unrealized appreciation on investments 480 34,716 5,116
- --------------------------------------------------------------------------------------------------
Net realized and unrealized gain
on investments 1,346 65,799 27,877
- --------------------------------------------------------------------------------------------------
Increase in net assets from operations 3,206 76,137 26,928
- --------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Changes in Net Assets
For the period ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------
S&P 500 Money Total
Index Market Return
Fund Fund Fund
-----------------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) $ (12,249) 64,277 (13,030)
Net realized gain (loss) 128,793 490 (23,378)
Unrealized appreciation (depreciation)
on investments 439,790 (490) 381,566
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 556,334 64,277 345,158
- ------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 571,224 1,643,566 122,659
Loan interest (13) (342) (143)
Transfers (to) from the general account of
Life of Virginia:
Death benefits (897) (1,231) (21,333)
Surrenders (28,184) (117,111) (3,315)
Loans (26,304) (83,007) (2,031)
Cost of insurance and administrative
expense (note 3) (188,165) (163,868) (187,462)
Transfer gain (loss) and transfer fees 6,607 (20,203) 28,073
Interfund transfers (454,907) (766,925) (12,414)
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital
transactions (120,639) 490,879 (75,966)
- ------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 435,695 555,156 269,192
Net assets at beginning of year 3,407,989 2,261,916 3,603,668
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 3,843,684 2,817,072 3,872,860
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
---------------------------------------------------------------------------
International Real Estate Global Value
Equity Securities Income Equity
Fund Fund Fund Fund
---------------------------------------------------------------------------
Six Months Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) (302) (847) (121) (83)
Net realized gain (loss) (230) (2,507) (4) 326
Unrealized appreciation (depreciation)
on investments 14,899 (10,709) 1,051 2,271
- ----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 14,367 (14,063) 926 2,514
- ----------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 4,317 97,323 12,492 14,912
Loan interest (8) (18) - 1
Transfers (to) from the general account of
Life of Virginia:
Death benefits - - - -
Surrenders - (2,428) - (2,773)
Loans - (334) - (686)
Cost of insurance and administrative
expense (note 3) (4,451) (23,741) (2,034) (3,091)
Transfer gain (loss) and transfer fees 97 (2,321) 134 108
Interfund transfers 8,034 26,637 54,677 15,514
- ----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital
transactions 7,989 95,118 65,269 23,985
- ----------------------------------------------------------------------------------------------------------------------------
Increase in net assets 22,356 81,055 66,195 26,499
Net assets at beginning of year 75,504 200,409 9,223 13,559
- ----------------------------------------------------------------------------------------------------------------------------
Net assets at end of year 97,860 281,464 75,418 40,058
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
--------------------------------
U.S.
Income Equity
Fund Fund
--------------------------------
Six Months Period from
Ended 6/30/98 6/10-6/30/98
- ---------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (expense) (1,400) -
Net realized gain (loss) 1,846 -
Unrealized appreciation (depreciation)
on investments 14,121 -
- ---------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 14,567 -
- ---------------------------------------------------------------------------------
From capital transactions:
Net premiums 36,786 4
Loan interest (105) -
Transfers (to) from the general account of
Life of Virginia:
Death benefits - -
Surrenders (28,025) -
Loans (665) -
Cost of insurance and administrative
expense (note 3) (14,693) (1)
Transfer gain (loss) and transfer fees (242) -
Interfund transfers 31,836 7
- ---------------------------------------------------------------------------------
Increase (decrease) in net assets from capital
transactions 24,892 10
- ---------------------------------------------------------------------------------
Increase in net assets 39,459 10
Net assets at beginning of year 378,051 -
- ---------------------------------------------------------------------------------
Net assets at end of year 417,510 10
- ---------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Changes in Net Assets, Continued
for the period ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds
------------------------------------------------------------
Capital
Bond Appreciation Growth
Fund Fund Fund
------------------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income $ 8,942 79,582 221,313
Net realized gain 806 73,707 61,092
Unrealized appreciation (depreciation) on investments 2,279 396,274 108,817
- -------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 12,027 549,563 391,222
- -------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 70,908 409,369 355,109
Loan interest 64 (199) 990
Transfers (to) from the general account of Life of Virginia:
Death benefits - - -
Surrenders (2,605) (81,107) (90,193)
Loans (1,078) (46,444) (9,253)
Cost of insurance and administrative expense (note 3) (14,478) (169,098) (123,902)
Transfer gain (loss) and transfer fees 77 (310) (1,140)
Interfund transfers 15,240 8,026 64,296
- -------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 68,128 120,237 195,907
- -------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 80,155 669,800 587,129
Net assets at beginning of period 292,413 3,099,076 2,277,913
- -------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 372,568 3,768,876 2,865,042
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
---------------------------
High Multiple
Income Strategies
Fund Fund
---------------------------
Six Months Six Months
Ended 6/30/98 Ended 6/30/98
- --------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income 76,614 42,133
Net realized gain 7,328 7,191
Unrealized appreciation (depreciation) on investments (8,996) (3,696)
- --------------------------------------------------------------------------------------------
Increase in net assets from operations 74,946 45,628
- --------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 247,575 112,005
Loan interest (283) (9)
Transfers (to) from the general account of Life of Virginia:
Death benefits (710) -
Surrenders (25,653) (6,395)
Loans (11,304) (948)
Cost of insurance and administrative expense (note 3) (96,063) (32,914)
Transfer gain (loss) and transfer fees 3,034 141
Interfund transfers 32,237 (8,970)
- --------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 148,833 62,910
- --------------------------------------------------------------------------------------------
Increase in net assets 223,779 108,538
Net assets at beginning of period 1,650,751 666,466
- --------------------------------------------------------------------------------------------
Net assets at end of period 1,874,530 775,004
- --------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Changes in Net Assets, Continued
For the period ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund
---------------------------------------------------------
Equity
Income Growth Overseas
Portfolio Portfolio Portfolio
---------------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) $ 332,411 684,401 131,193
Net realized gain 154,040 94,877 77,791
Unrealized appreciation (depreciation) on investments 79,413 173,510 60,820
- ----------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 565,864 952,788 269,804
- ----------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 775,337 518,423 199,987
Loan interest (584) (218) 145
Transfers (to) from the general account of
Life of Virginia:
Death benefits (2,379) - -
Surrenders (141,731) (173,310) (29,991)
Loans (21,986) (43,339) (12,000)
Cost of insurance and administrative expense (note 3) (305,157) (262,215) (86,244)
Transfer gain (loss) and transfer fees 4,664 13,577 1,637
Interfund transfers (108,608) 465,940 22,569
- ----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 199,556 518,858 96,103
- ----------------------------------------------------------------------------------------------------------------------------
Increase in net assets 765,420 1,471,646 365,907
Net assets at beginning of year 5,397,592 4,961,747 1,739,180
- ----------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 6,163,012 6,433,393 2,105,087
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Variable Insurance Variable Insurance
Products Fund II Product Fund III
----------------------------------------------------------------------
Asset Growth & Growth
Manager Contrafund Income Opportunities
Portfolio Portfolio Portfolio Portfolio
----------------------------------------------------------------------
Six Months Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) 512,284 114,616 (88) 3,219
Net realized gain 32,290 70,386 661 2,607
Unrealized appreciation (depreciation) on investments (172,078) 181,493 17,718 5,002
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 372,496 366,495 18,291 10,828
- -----------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 262,712 402,411 82,785 22,701
Loan interest (130) (22) - 97
Transfers (to) from the general account of
Life of Virginia:
Death benefits (4,354) (2,361) - -
Surrenders (88,069) (81,029) (57) -
Loans (11,600) (31,009) - (6,240)
Cost of insurance and administrative expense (note 3) (159,077) (145,921) (8,466) (9,230)
Transfer gain (loss) and transfer fees 518 10,789 288 1,104
Interfund transfers (62,804) 319,485 68,877 87,089
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (62,804) 472,343 143,427 95,521
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 309,692 838,838 161,718 106,349
Net assets at beginning of year 4,169,405 2,013,323 47,359 71,577
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year 4,479,097 2,852,161 209,077 177,926
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Changes in Net Assets, Continued
For the period ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Federated Investors Insurance Series
----------------------------------------------------------
American High
Leaders Income Bond Utility
Fund II Fund II Fund II
----------------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) $ 8,489 3,556 11,144
Net realized gain (loss) 1,272 1,860 3,743
Unrealized appreciation (depreciation) on investments 5,906 (1,402) (6,830)
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 15,667 4,014 8,057
- -----------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 51,908 39,120 34,340
Loan interest - (31) 1
Transfers (to) from the general account of Life of Virginia:
Death benefits - - -
Surrenders (6,132) (1,903) (2,005)
Loans (1,072) (2,262) (315)
Cost of insurance and administrative expense (note 3) (10,960) (10,439) (8,646)
Transfer gain (loss) and transfer fees (note 3) 79 24 13
Interfund transfers 77,824 8,474 (1,467)
- -----------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 111,647 32,983 21,921
- -----------------------------------------------------------------------------------------------------------------------------
Increase in net assets 127,314 36,997 29,978
Net assets at beginning of year 46,229 94,806 163,276
- -----------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 173,543 131,803 193,254
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Alger American PBHG Insurance Series Fund
------------------------------------------------------------------
Small PBHG PBHG
Capitalization Growth Large Cap Growth II
Portfolio Portfolio Portfolio Portfolio
------------------------------------------------------------------
Six Months Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) 116,635 155,683 (119) (78)
Net realized gain (loss) (38,748) 48,795 2,403 (20)
Unrealized appreciation (depreciation) on investments 33,170 33,447 4,212 2,038
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 111,057 237,925 6,496 1,940
- -----------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 180,852 127,525 19,006 9,984
Loan interest (39) 137 100 -
Transfers (to) from the general account of Life of Virginia:
Death benefits (743) (828) - -
Surrenders (21,644) (117,724) (291) -
Loans (21,011) 14,049 (6,899) -
Cost of insurance and administrative expense (note 3) (54,302) (57,319) (3,212) (3,273)
Transfer gain (loss) and transfer fees (note 3) 14,114 6,509 139 (1,485)
Interfund transfers (8,859) 49,491 3,480 2,152
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 88,368 21,840 12,323 7,378
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 199,425 259,765 18,819 9,318
Net assets at beginning of year 819,695 865,112 26,508 21,100
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year 1,019,120 1,124,877 45,327 30,418
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Statements of Changes in Net Assets, Continued
For the period ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
--------------------------------------------------------------
Aggressive Worldwide
Growth Growth Growth
Portfolio Portfolio Portfolio
--------------------------------------------------------------
Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) $ (6,870) 137,412 132,744
Net realized gain (loss) 137,522 67,147 166,870
Unrealized appreciation (depreciation) on investments 173,483 175,966 569,739
- ---------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 304,135 380,525 869,353
- ---------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 247,561 293,097 580,665
Loan interest 507 (24) (62)
Transfers (to) from the general account of
Life of Virginia:
Death benefits - - (817)
Surrenders (96,911) (86,679) (123,462)
Loans (29,574) 1,998 (43,002)
Cost of insurance and administrative
expense (note 3) (106,554) (113,234) (220,406)
Transfer gain (loss) and transfer fees 11,576 1,231 5,444
Interfund transfers (448,590) (18,554) 188,557
- ---------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital
transactions (421,985) 77,835 386,917
- ---------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (117,850) 458,360 1,256,270
Net assets at beginning of period 2,025,192 1,960,998 3,078,819
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 1,907,342 2,419,358 4,335,089
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------
Flexible International Capital
Balanced Income Growth Appreciation
Portfolio Portfolio Portfolio Portfolio
-------------------------------------------------------------------
Six Months Six Months Six Months Six Months
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98 Ended 6/30/98
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) 25,803 1,860 10,338 (949)
Net realized gain (loss) 14,475 866 31,083 22,761
Unrealized appreciation (depreciation) on investments 77,645 480 34,716 5,116
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 117,923 3,206 76,137 26,928
- -----------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 169,572 6,664 81,623 17,940
Loan interest (12) - (13) 259
Transfers (to) from the general account of
Life of Virginia:
Death benefits - - - -
Surrenders (7,353) (796) (17,487) -
Loans (14,967) - - -
Cost of insurance and administrative
expense (note 3) (39,231) (8,070) (29,028) (6,220)
Transfer gain (loss) and transfer fees 3,144 20 (2,864) (5,610)
Interfund transfers 83,962 (16,924) 245,524 29,094
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital
transactions 195,115 (19,106) 277,755 35,463
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 313,038 (15,900) 353,892 62,391
Net assets at beginning of period 632,064 70,650 320,808 8,620
- -----------------------------------------------------------------------------------------------------------------------------
Net assets at end of period 945,102 54,750 674,700 71,011
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Notes to Financial Statements
June 30, 1998
(Unaudited)
- ------------------------------------------------------------------------------
(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 1998, three new investment subdivisions were added to the Account,
for both Type I and Type II policies. The U.S. Equity Portfolio invests
solely in a designated portfolio of the GE Investments Funds, Inc. The Mid
Cap Equity Portfolio and Growth & Income Portfolio each invest solely in a
designated portfolio of the Goldman Sachs Variable Insurance Trust. All
designated portfolios described above are series type mutual funds.
(2) Summary of Significant Accounting Policies
Unit Classes
There are two unit classes included in the Account. Type I units are sold
under policy forms P1096. Type II units are sold under policy form P1250.
Type II unit sales began in the first half of 1998.
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>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Notes to Financial Statements
June 30, 1998
(2) Continued
The aggregate cost of the investments acquired and the aggregate proceeds
of investments sold, for the six months ended June 30, 1998, were:
Cost of Proceeds
Shares from
Fund/Portfolio Acquired Shares Sold
- -----------------------------------------------------------------------------
GE Investment Funds, Inc.:
S&P 500 Index $ 971,334 $ 1,104,797
Money Market 8,586,009 8,038,848
Total Return 128,108 240,879
International Equity 18,640 10,874
Real Estate Securities 161,112 67,585
Global Income 68,360 3,348
Value Equity 37,911 14,016
Income 90,715 66,908
U.S. Equity 10 1
Oppenheimer Variable Account Funds:
Bond 105,554 28,142
Capital Appreciation 703,588 497,994
Growth 708,965 298,992
High Income 415,544 191,148
Multiple Strategies 162,348 57,346
Variable Insurance Products Fund:
Equity-Income 1,419,984 892,025
Growth 1,841,106 643,820
Overseas 859,802 630,034
Variable Insurance Products Fund II:
Asset Manager 823,031 367,324
Contrafund 1,060,531 485,246
Variable Insurance Products Fund III:
Growth & Income 155,215 11,936
Growth Opportunties 146,501 56,890
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Notes to Financial Statements
June 30, 1998
(2) Continued
Cost of Proceeds
Shares from
Fund/Portfolio Acquired Shares Sold
- -----------------------------------------------------------------------------
Janus Aspen Series:
Aggressive Growth 1,645,176 2,083,156
Growth 557,491 342,248
Worldwide Growth 1,287,967 779,784
Balanced 323,327 101,130
Flexible Income 10,631 27,811
International Growth 574,597 283,414
Capital Appreciation 4,097,831 4,058,305
Federated Insurance Series:
Utility Fund II 60,935 27,500
High Income Bond Fund II 78,537 41,838
American Leaders Fund II 151,078 30,744
The Alger American Fund
Small Capitalization 416,613 224,228
Growth 457,738 281,464
PBHG Insurance Series Fund, Inc.
PBHG Large Cap Growth 25,251 21,552
PBHG Growth II 25,743 16,962
Capital Transactions
The increase (decrease) in outstanding units from capital transactions for
the six months ended June 30, 1998 is as follows:
<PAGE>
Life of Virginia Separate Account II
Notes to Financial Statements
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
GE Investments Funds, Inc.
-------------------------------------------------------------------------------------------
Inter- Real
S&P 500 Money Total national Estate Global Value U.S.
Index Market Return Equity Securites Income Equity Income Equity
Type I Units Fund Fund Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1997 82,478 139,024 117,921 5,950 10,723 896 1,028 37,767 --
From capital transactions:
Net premiums 12,011 89,534 2,867 269 5,252 1,184 745 3,623 --
Loan Interest -- (20) (5) (1) (1) -- -- (10) --
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits (21) (73) (676) -- -- -- -- -- --
Surrenders (656) (6,913) (105) -- (131) -- (194) (2,761) --
Loans (612) (4,900) (64) -- (18) -- (48) (65) --
Cost of insurance (4,292) (9,461) (5,859) (278) (1,281) (192) (203) (1,447) --
Fixed Transfers -- -- -- -- -- -- -- -- --
Interfund transfers (10,626) (39,472) (393) 506 1,436 5,197 1,088 3,136 1
-------- -------- ------- ----- ------- ------ ------ ------ --
Net increase (decrease) in units resulting
from capital transactions (4,196) 28,695 (4,235) 496 5,257 6,189 1,388 2,476 1
-------- -------- ------- ----- ------- ------ ------ ------ --
Units outstanding at June 30, 1998 78,282 167,719 113,686 6,446 15,980 7,085 2,416 40,243 1
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Life of Virginia Separate Account II
Notes to Financial Statements
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Oppenheimer Variable Account Funds
---------------------------------------------------------------
Capital High Multiple
Bond Appreciation Growth Income Strategies
Type I Units Fund Fund Fund Fund Fund
- -------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1997 13,037 76,126 54,030 48,043 22,561
From capital transactions:
Net premiums 3,125 10,402 6,647 6,851 3,520
Loan Interest 3 (5) 21 (8) --
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits -- -- -- (21) --
Surrenders (115) (2,090) (1,945) (743) (207)
Loans (48) (1,197) (200) (327) (31)
Cost of insurance (638) (4,334) (2,607) (2,776) (1,061)
Fixed Transfers -- -- -- -- --
Interfund transfers 672 (467) 1,339 909 (290)
------ -------- ------- ------- -------
Net increase (decrease) in units resulting
from capital transactions 2,999 2,310 3,255 3,886 1,932
------ -------- ------- ------- -------
Units outstanding at June 30, 1998 16,036 78,436 57,285 51,929 24,493
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Variable Insurance Products Fund
----------------------------------
Equity
Income Growth Overseas
Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------
Units outstanding at December 31, 1997 134,168 115,551 72,315
From capital transactions:
Net premiums 18,828 10,795 7,287
Loan Interest (15) (5) 5
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits (62) -- --
Surrenders (3,667) (3,655) (1,094)
Loans (569) (914) (438)
Cost of insurance (7,816) (5,506) (3,146)
Fixed Transfers -- -- --
Interfund transfers (2,840) 9,817 793
--------- ------- -------
Net increase (decrease) in units resulting
from capital transactions 3,859 10,534 3,405
--------- ------- -------
Units outstanding at June 30, 1998 138,027 126,085 75,720
- ------------------------------------------------------------------------------
<PAGE>
Life of Virginia Separate Account II
Notes to Financial Statements
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Variable Insurance Products Variable Insurance Products Fund
Fund II Fund III
------------------------------- --------------------------------
Asset Growth & Growth
Manager Contrafund Income Opportunities
Type I Units Portfolio Portfolio Portfolio Portfolio
- -----------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1997 163,699 97,028 3,813 5,805
From capital transactions:
Net premiums 9,088 18,076 5,968 1,712
Loan Interest (5) (1) -- 7
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits (151) (108) -- --
Surrenders (3,052) (3,709) (4) --
Loans (402) (1,419) -- (476)
Cost of insurance (5,511) (6,641) (602) (690)
Fixed Transfers -- -- -- --
Interfund transfers (2,177) 14,543 3,251 6,598
--------- ------- -------- --------
Net increase (decrease) in units resulting
from capital transactions (2,209) 20,739 8,613 7,151
--------- ------- -------- --------
Units outstanding at June 30, 1998 161,490 117,767 12,426 12,956
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
Federated Insurance Series Alger American
--------------------------------- --------------------------
American High Small
Leaders Income Bond Utility Capitalization Growth
Fund II Fund II Fund II Portfolio Portfolio
- ---------------------------------------------------------------------------------------------------------------
Units outstanding at December 31, 1997 3,169 6,188 9,543 76,251 63,799
From capital transactions:
Net premiums 3,124 2,478 1,978 18,739 15,956
Loan Interest -- (2) -- (4) 18
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits -- -- -- (77) (107)
Surrenders (398) (122) (115) (2,255) (15,209)
Loans (70) (145) (18) (2,190) 1,815
Cost of insurance (696) (665) (498) (5,640) (7,327)
Fixed Transfers -- -- -- -- --
Interfund transfers 4,946 537 (85) (923) 6,394
Net increase (decrease) in units resulting
from capital transactions 6,906 2,082 1,262 7,651 1,540
Units outstanding at June 30, 1998 10,075 8,270 10,805 83,902 65,339
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Life of Virginia Separate Account II
Notes to Financial Statements
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Janus Aspen Series
-------------------------------------------------------------------------------------
Inter-
Aggressive Worldwide Flexible national Capital
Growth Growth Growth Balanced Income Growth Appreciation
Type I Units Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1997 116,793 108,163 161,110 42,477 5,589 23,264 684
From capital transactions:
Net premiums 12,766 15,839 27,109 9,353 427 4,499 1,598
Loan Interest 26 (1) (3) (1) -- (1) 23
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits -- -- (39) -- -- -- --
Surrenders (5,067) (4,732) (5,897) (452) (61) (1,053) --
Loans (1,546) 109 (2,054) (920) -- -- --
Cost of insurance (5,565) (6,156) (10,479) (2,376) (620) (1,728) (540)
Fixed Transfers -- -- -- -- -- -- --
Interfund transfers (23,463) (1,163) 8,808 3,601 (1,302) 14,787 2,369
-------- -------- --------- ------- ------- ------ -----
Net increase (decrease) in units resulting
from capital transactions (22,851) 3,896 17,445 9,205 (1,556) 16,506 3,451
-------- -------- --------- ------- ------- ------ -----
Units outstanding at June 30, 1998 93,942 112,059 178,555 51,682 4,033 39,770 4,135
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PBHG Insurance Series Fund, Inc.
--------------------------------
PBHG PBHG
Large Cap Growth II
Portfolio Portfolio
- -------------------------------------------------------------------------
Units outstanding at December 31, 1997 2,254 1,972
From capital transactions:
Net premiums 1,479 696
Loan Interest 8 --
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits -- --
Surrenders (24) --
Loans (560) --
Cost of insurance (249) (228)
Fixed Transfers -- --
Interfund transfers 282 150
------ ------
Net increase (decrease) in units resulting
from capital transactions 937 618
------ ------
Units outstanding at June 30, 1998 3,191 2,590
- -------------------------------------------------------------------------
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
GE Investments Funds, Inc.
---------------------------------------------------------------------------
S&P 500 Money Total International Real Estate Global Value
Index Market Return Equity Securites Income Equity
TYPE II UNITS Fund Fund Fund Fund Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1997 - - - - - - -
From capital transactions:
Net premiums 1,177 7,694 964 3 - 3 294
Loan Interest - - - - - - -
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits - - - - - - -
Surrenders - - - - - - -
Loans - - - - - - -
Cost of insurance (79) (218) (75) (2) - (1) (13)
Fixed Transfers - - - - - - -
Interfund transfers 39 (5,962) - - 2 - -
------ ------- ---- --- --- --- ---
Net increase (decrease) in units resulting
from capital transactions 1,137 1,514 889 1 2 2 281
------ ------- ---- --- --- --- ---
Units outstanding at June 30, 1998 1,137 1,514 889 1 2 2 281
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Variable Insurance Products
Oppenheimer Variable Account Funds Fund
------------------------------------------------------ ------------------------------
Capital High Multiple Equity
Bond Appreciation Growth Income Strategies Income Growth Overseas
TYPE II UNITS Fund Fund Fund Fund Fund Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1997 - - - - - - - -
From capital transactions:
Net premiums 1 128 1,006 302 96 1,092 131 13
Loan Interest - - - - - - - -
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits - - - - - - - -
Surrenders - - - - - - - -
Loans - - - - - - - -
Cost of insurance - (21) (65) (5) (2) (69) (24) (1)
Fixed Transfers - - - - - - - -
Interfund transfers - 595 47 24 - 27 9 31
--- ---- ---- ---- --- ------ ---- --
Net increase (decrease) in units resulting 1 703 988 322 94 1,048 119 42
from capital transactions --- ---- ---- ---- --- ------ ---- --
Units outstanding at June 30, 1998 1 703 988 322 94 1,048 119 42
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Variable Insurance Products Variable Insurance Products
Fund II Fund III Federated Insurance Series
--------------------------- ------------------------- ----------------------------
Asset Growth & Growth American High
Manager Contrafund Income Opportunities Leaders Income Bond
TYPE II UNITS Portfolio Portfolio Portfolio Portfolio Fund II Fund II
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1997 -- -- -- -- -- --
From capital transactions:
Net premiums 17 325 215 19 228 26
Loan Interest -- -- -- -- -- --
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits -- -- -- -- -- --
Surrenders -- -- -- -- -- --
Loans -- -- -- -- -- --
Cost of insurance (3) (36) (30) (14) (14) (4)
Fixed Transfers -- -- -- -- -- --
Interfund transfers -- 76 1,836 43 97 5
---- ---- ------ --- ---- ---
Net increase (decrease) in units resulting 15 364 2,021 48 311 29
---- ---- ------ --- ---- ---
Units outstanding at June 30, 1998 15 364 2,021 48 311 29
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Alger American
--------------------------
Small
Capitalization Growth
Portfolio Portfolio
- ------------------------------------------------------------------
Units outstanding at December 31, 1997 -- --
From capital transactions:
Net premiums 87 245
Loan Interest -- --
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits -- --
Surrenders -- --
Loans -- --
Cost of insurance (16) (37)
Fixed Transfers -- --
Interfund transfers -- --
--- ----
Net increase (decrease) in units resulting 72 208
from capital transactions --- ---
Units outstanding at June 30, 1998 72 208
- ------------------------------------------------------------------
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Janus Aspen Series
-----------------------------------------------------------------------------------------
Aggressive Worldwide Flexible International Capital
Growth Growth Growth Balanced Income Growth Appreciation
TYPE II UNITS Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1997 -- -- -- -- -- -- --
From capital transactions:
Net premiums 175 143 553 1,063 84 410 11
Loan Interest -- -- -- -- -- -- --
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits -- -- -- -- -- -- --
Surrenders -- -- -- -- -- -- --
Loans -- -- -- -- -- -- --
Cost of insurance (6) (23) (44) (36) (1) (20) (14)
Fixed Transfers -- -- -- -- -- -- --
Interfund transfers 6 132 176 1,547 -- -- 182
---- ---- ---- ------ --- ---- ----
Net increase (decrease) in units resulting
from capital transactions 174 252 685 2,574 83 392 179
---- ---- ---- ------ --- ---- ----
Units outstanding at June 30, 1998 174 252 685 2,574 83 392 179
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PBHG Insurance
Series Fund,
Inc.
-------------
PBHG
Large Cap
Portfolio
- ---------------------------------------------------------
Units outstanding at December 31, 1997 --
From capital transactions:
Net premiums 59
Loan Interest --
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits --
Surrenders --
Loans --
Cost of insurance (11)
Fixed Transfers --
Interfund transfers --
---
Net increase (decrease) in units resulting
from capital transactions 48
---
Units outstanding at June 30, 1998 48
- ---------------------------------------------------------
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT II
Notes to Financial Statements
June 30, 1998
(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% (Type I), 3%
(Type II - Commonwealth VUL) or 8% (Type II - Commonwealth 4) retained as
compensation for certain distribution expenses and premium taxes. In
addition, for Type I policies 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.
For Type I policies, 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
For Type II policies, during the first 15 years or up to age 95 if
earlier, a surrender charge will be made by Life of Virginia if the policy
surrenders or lapses. The charge is calculated by multiplying a factor
times the lowest specified amount of insurance in effect prior to the
surrender, divided by 1000. The factor varies by the age of the insured
when the policy is issued, the length of time that the policy has been in
force, sex (there appropriate) and risk class of the insured. A charge for
partial surrenders equal to the lesser of $25 or 2% of the amount
surrendered will be made to compensate Life of Virginia for the costs
incurred in connection with the partial surrender. A charge is deducted
from the policy account value each month to compensate Life of Virginia
for the cost of insurance and any benefits provided by the rider. The
charge is based on the policy specified amount of insurance, death benefit
option, policy account values, policy duration, the insured's sex (where
appropriate), issue age and risk class. 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. Life of Virginia deducts a
monthly policy charge from the policy account value that currently is $12
per month for Commonwealth VUL and $15 per month for Commonwealth 4 during
the first policy year and $6 per month thereafter for both products.
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,
.50% for the Money Market, Income Fund and Total Return Funds, 1.00% for
the International Equity Fund, .85% for the Real Estate Securities Fund,
.60% for the Global Income Fund, .65% for the Value Equity Fund and .55%
for the U.S. Equity Fund.
Certain officers and directors of Life of Virginia are also officers and
directors of Capital Brokerage Corporation.
