LIFE OF VIRGINIA SEPARATE ACCOUNT III
Financial Statements
For the six months ended June 30, 1998
(Unaudited)
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
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 III
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
As of June 30, 1998
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
---------------------------------------------
S&P 500 Money Total
Index Market Return
Assets Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in GE Investments Funds, Inc., at fair value (note 2):
S&P 500 Index Fund (218,946 shares;
cost - $4,749,091) $ 4,948,189 - -
Money Market Fund (10,777,694 shares;
cost - $10,777,694) - 10,777,694 -
Total Return Portolio (118,115 shares;
cost - $1,668,587) - - 1,731,562
International Equity Fund (29,305 shares;
cost - $378,824) - - -
Real Estate Securities Fund (70,481 shares;
cost - $1,122,917) - - -
Global Income Fund (2,300 shares;
cost - $23,469) - - -
Value Equity Fund (41,742 shares;
cost - $617,290) - - -
Income Fund (108,653 shares; cost $1,316,538) - - -
U.S. Equity Fund (130 shares; cost $4,123) - - -
Receivable from affiliate (note 3) 167,617 - -
Receivable for units sold 38,508 - 257
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $ 5,154,314 10,777,694 1,731,819
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 13,737 606,535 5,084
Payable for units withdrawn - 157,023 -
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 13,737 763,558 5,084
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets $ 5,140,577 10,014,136 1,726,735
- ------------------------------------------------------------------------------------------------------------------------------------
Outstanding units 128,707 651,962 60,396
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit 39.94 15.36 28.59
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
As of June 30, 1998
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
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 (218,946 shares;
cost - $4,749,091) - - - - - -
Money Market Fund (10,777,694 shares;
cost - $10,777,694) - - - - - -
Total Return Portolio (118,115 shares;
cost - $1,668,587) - - - - - -
International Equity Fund (29,305 shares;
cost - $378,824) 375,686 - - - - -
Real Estate Securities Fund (70,481 shares;
cost - $1,122,917) - 1,018,454 - - - -
Global Income Fund (2,300 shares;
cost - $23,469) - - 23,507 - - -
Value Equity Fund (41,742 shares;
cost - $617,290) - - - 618,198 - -
Income Fund (108,653 shares; cost $1,316,538) - - - - 1,367,938 -
U.S. Equity Fund (130 shares; cost $4,123) - - - - - 4,161
Receivable from affiliate (note 3) - - - 1,518 4,190 -
Receivable for units sold - 2,286 - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 375,686 1,020,740 23,507 619,716 1,372,128 4,161
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 20,309 8,054 64 1,905 3,733 8
Payable for units withdrawn 4 - - 14 263 -
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 20,313 8,054 64 1,919 3,996 8
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets 355,373 1,012,686 23,443 617,797 1,368,132 4,153
- ------------------------------------------------------------------------------------------------------------------------------------
Outstanding units 23,867 58,605 2,218 41,885 132,315 417
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit 14.89 17.28 10.57 14.75 10.34 9.97
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
Statements of Assets and Liabilities, Continued
As of June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Oppenheimer Variable Account Funds Variable Insurance
Trust
----------------------------------------------------------------------------
Capital High Multiple Mid Cap
Bond Appreciation Growth Income Strategies Equity
Assets Fund Fund Fund Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in Oppenheimer
Variable Account Funds,
at fair value (note 2):
Bond Fund (186,977 shares;
cost - $2,210,075) $ 2,241,852 - - - - -
Capital Appreciation Fund
(220,678 shares;
cost - $9,905,039) - 10,336,552 - - - -
Growth Fund (133,188 shares;
cost - $4,414,678) - - 4,609,653 - - -
High Income Fund (564,794 shares;
cost - $6,525,141) - - - 6,500,778 - -
Multiple Strategies Fund
(192,711 shares;
cost - $3,154,428) - - - - 3,299,204 -
Investment in Goldmans Sachs Variable
Insurance Trust, at fair value (note 2):
Mid Cap Equity Fund (1,510 shares;
cost - $14,000) - - - - - 14,196
Receivable from affiliate (note 3) 6,446 - - 12,332 5,443 -
Receivable for units sold 136 - - 194 - -
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $ 2,248,434 10,336,552 4,609,653 6,513,304 3,304,647 14,196
- ---------------------------------------------------------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 8,320 25,901 20,938 16,055 9,631 3
Payable for units withdrawn - 68 17 - 346 -
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities 8,320 25,969 20,955 16,055 9,977 3
- ---------------------------------------------------------------------------------------------------------------------------
Net assets $ 2,240,114 10,310,583 4,588,698 6,497,249 3,294,670 14,193
- ---------------------------------------------------------------------------------------------------------------------------
Outstanding units 98,770 265,874 129,514 193,601 118,684 1,515
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value per unit 22.68 38.78 35.43 33.56 22.76 9.37
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
Statements of Assets and Liabilities, Continued
As of June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund Variable Insurance
Products Fund II
------------------------------------------------------------
Equity Asset
Income Growth Overseas Manager Contrafund
Assets Portfolio Portfolio Portfolio Portfolio Portfolio
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in Variable Insurance Products Fund,
at fair value (note 2):
Equity-Income Portfolio (726,100 shares;
cost - $15,060,196) $ 18,275,946 - - - -
Growth Portfolio (314,787 shares;
cost - $11,400,186) - 12,062,645 - - -
Overseas Portfolio (273,824 shares;
cost - $5,579,967) - - 5,646,243 - -
Investment in Variable Insurance Products
Fund II, at fair value (note 2):
Asset Manager Portfolio (621,021 shares;
cost - $9,420,540) - - - 10,712,618 -
Contrafund Portfolio (378,466 shares;
cost - $7,051,202) - - - - 8,307,320
Investment in Variable Insurance Products
Fund III, at fair value (note 2):
Growth & Income Portfolio (125,865 shares;
cost - $1,764,876) - - - - -
Growth Opportunities Portfolio
(21,827 shares; cost - $391,506) - - - - -
Receivable from affiliate (note 3) 192,632 171,277 - - 121,549
Receivable for units sold 19,884 - 171 18 -
- -------------------------------------------------------------------------------------------------------------------
Total assets $ 18,488,462 12,233,922 5,646,414 10,712,636 8,428,869
- -------------------------------------------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to
affiliate (note 3) 47,975 33,431 44,077 48,952 23,649
Payable for units withdrawn - 602 - - 794
- -------------------------------------------------------------------------------------------------------------------
Total liabilities 47,975 34,033 44,077 48,952 24,443
- -------------------------------------------------------------------------------------------------------------------
Net assets $ 18,440,487 12,199,889 5,602,337 10,663,684 8,404,426
- -------------------------------------------------------------------------------------------------------------------
Outstanding units 512,663 307,457 259,488 405,309 355,517
- -------------------------------------------------------------------------------------------------------------------
Net asset value per unit 35.97 39.68 21.59 26.31 23.64
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
Variable Insurance Product Fund III
-------------------------------
Growth & Growth
Income Opportunities
Assets Portfolio Portfolio
- ----------------------------------------------------------------------------
<S> <C>
Investment in Variable Insurance Products Fund,
at fair value (note 2):
Equity-Income Portfolio (726,100 shares;
cost - $15,060,196) - -
Growth Portfolio (314,787 shares;
cost - $11,400,186) - -
Overseas Portfolio (273,824 shares;
cost - $5,579,967) - -
Investment in Variable Insurance Products
Fund II, at fair value (note 2):
Asset Manager Portfolio (621,021 shares;
cost - $9,420,540) - -
Contrafund Portfolio (378,466 shares;
cost - $7,051,202) - -
Investment in Variable Insurance Products
Fund III, at fair value (note 2):
Growth & Income Portfolio (125,865 shares;
cost - $1,764,876) 1,833,853 -
Growth Opportunities Portfolio
(21,827 shares; cost - $391,506) - 446,146
Receivable from affiliate (note 3) 3,774 64
Receivable for units sold 7 2,727
- ----------------------------------------------------------------------------
Total assets 1,837,634 448,937
- ----------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------
Accrued expenses payable to
affiliate (note 3) 2,289 1,220
Payable for units withdrawn - -
- ----------------------------------------------------------------------------
Total liabilities 2,289 1,220
- ----------------------------------------------------------------------------
Net assets 1,835,345 447,717
- ----------------------------------------------------------------------------
Outstanding units 127,721 32,945
- ----------------------------------------------------------------------------
Net asset value per unit 14.37 13.59
- ----------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
Statements of Assets and Liabilities, Continued
As of June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Federated Investors Insurance Series
--------------------------------------------------------
American High
Leaders Income Bond Utility
Assets Fund II Fund II Fund II
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investments in Federated Investors Insurance Series,
at fair value (note 2):
American Leaders Fund II (47,860 shares;
cost - $915,978) $ 1,014,146 - -
High Income Bond Fund II (117,937 shares;
cost - $1,299,650) - 1,304,388 -
Utility Fund II (34,441 shares;
cost - $438,060) - - 484,244
Investment in Alger American,
at fair value (note 2):
Small Capitalization Portfolio (39,783 shares;
cost - $1,770,177) - - -
Growth Portfolio (62,116 shares;
cost - $2,560,274) - - -
Investment in PBHG Insurance Series
Fund Inc., at fair value (note 2):
PBHG Large Cap Portfolio (3,249 shares;
cost - $42,936) - - -
PBHG Growth II Portfolio (5,344 shares;
cost - $58,863) - - -
Receivable from affiliate (note 3) 1,673 13 2,929
Receivable for units sold 19,822 - 19,663
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $ 1,035,641 1,304,401 506,836
- ---------------------------------------------------------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate
(note 3) 2,569 4,230 1,308
Payable for units withdrawn - 4 -
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities 2,569 4,234 1,308
- ---------------------------------------------------------------------------------------------------------------------------
Net assets $ 1,033,072 1,300,167 505,528
- ---------------------------------------------------------------------------------------------------------------------------
Outstanding units 62,648 83,612 28,871
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value per unit 16.49 15.55 17.51
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Alger American Fund PBHG Insurance Series Fund
------------------------------------ ------------------------------------
Small PBHG PBHG
Capitalization Growth Large Cap Growth II
Assets Portfolio Portfolio Portfolio Portfolio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investments in Federated Investors Insurance Series,
at fair value (note 2):
American Leaders Fund II (47,860 shares;
cost - $915,978) - - - -
High Income Bond Fund II (117,937 shares;
cost - $1,299,650) - - - -
Utility Fund II (34,441 shares;
cost - $438,060) - - - -
Investment in Alger American,
at fair value (note 2):
Small Capitalization Portfolio (39,783 shares;
cost - $1,770,177) 1,715,841 - - -
Growth Portfolio (62,116 shares;
cost - $2,560,274) - 2,836,215 - -
Investment in PBHG Insurance Series
Fund Inc., at fair value (note 2):
PBHG Large Cap Portfolio (3,249 shares;
cost - $42,936) - - 45,846 -
PBHG Growth II Portfolio (5,344 shares;
cost - $58,863) - - - 63,279
Receivable from affiliate (note 3) 5,112 20,642 - 1,602
Receivable for units sold - 3,411 - 2,755
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 1,720,953 2,860,268 45,846 67,636
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate
(note 3) 4,322 6,305 15,290 283
Payable for units withdrawn 43 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 4,365 6,305 15,290 283
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets 1,716,588 2,853,963 30,556 67,353
- ------------------------------------------------------------------------------------------------------------------------------------
Outstanding units 143,768 169,074 2,198 5,776
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit 11.94 16.88 13.90 11.66
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
Statements of Assets and Liabilities, Continued
As of June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
-----------------------------------------------------------
Aggressive Worldwide
Growth Growth Growth
Portfolio Portfolio Portfolio
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in Janus Aspen Series, at fair value (note 2):
Aggressive Growth Portfolio (89,766 shares;
cost - $1,849,422) $ 2,163,351 - -
Growth Portfolio (266,761 shares;
cost - $4,800,042) - 5,521,957 -
Worldwide Growth Portfolio (394,356 shares;
cost - $9,263,561) - - 11,318,015
Balanced Portfolio (213,200 shares;
cost - $3,567,599) - - -
Flexible Income Portfolio (27,910 shares;
cost - $327,374) - - -
International Growth Portfolio (154,572 shares;
cost - $3,302,391) - - -
Capital Appreciation Portfolio (33,010 shares;
cost - $535,648) - - -
Receivable from affiliate (note 3) 144,337 12,343 36,817
Receivable for units sold - 209 21,551
- ----------------------------------------------------------------------------------------------------------------------------
Total assets $ 2,307,688 5,534,509 11,376,383
- ----------------------------------------------------------------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 6,428 14,230 30,597
Payable for units withdrawn 26 - -
- ----------------------------------------------------------------------------------------------------------------------------
Total liabilities 6,454 14,230 30,597
- ----------------------------------------------------------------------------------------------------------------------------
Net assets $ 2,301,234 5,520,279 11,345,786
- ----------------------------------------------------------------------------------------------------------------------------
Outstanding units 116,518 262,996 481,366
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value per unit 19.75 20.99 23.57
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
--------------------------------------------------------------------------
Flexible International Capital
Balanced Income Growth Appreciation
Portfolio Portfolio Portfolio Portfolio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment in Janus Aspen Series, at fair value (note 2):
Aggressive Growth Portfolio (89,766 shares;
cost - $1,849,422) - - - -
Growth Portfolio (266,761 shares;
cost - $4,800,042) - - - -
Worldwide Growth Portfolio (394,356 shares;
cost - $9,263,561) - - - -
Balanced Portfolio (213,200 shares;
cost - $3,567,599) 4,242,687 - - -
Flexible Income Portfolio (27,910 shares;
cost - $327,374) - 333,802 - -
International Growth Portfolio (154,572 shares;
cost - $3,302,391) - - 3,429,952 -
Capital Appreciation Portfolio (33,010 shares;
cost - $535,648) - - - 545,992
Receivable from affiliate (note 3) 45 - 17,316 415
Receivable for units sold 42,842 - - 39,336
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets 4,285,574 333,802 3,447,268 585,743
- -----------------------------------------------------------------------------------------------------------------------------------
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Accrued expenses payable to affiliate (note 3) 11,268 1,505 7,014 1,650
Payable for units withdrawn - 1 24 -
- -----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 11,268 1,506 7,038 1,650
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets 4,274,306 332,296 3,440,230 584,093
- -----------------------------------------------------------------------------------------------------------------------------------
Outstanding units 249,522 25,405 207,493 35,724
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value per unit 17.13 13.08 16.58 16.35
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
Statements of Operations
For the period ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
------------------------------------------------------------------------------
S&P 500 Money Total International
Index Market Return 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 $ - 306,150 - -
Expenses - Mortality and expense
risk charges (note 3) 29,375 78,354 11,290 2,191
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) (29,375) 227,796 (11,290) (2,191)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) 396,352 (2,104) 1,115 7,639
Unrealized appreciation (depreciation)
on investments 234,219 2,104 183,481 28,452
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 630,571 - 184,596 36,091
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations $ 601,196 227,796 173,306 33,900
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
-----------------------------------------------------------------------------------
Real Estate Global Value U.S.
Securities Income Equity Income Equity
Fund Fund Fund Fund Fund
-----------------------------------------------------------------------------------
Six Months Six Months Six Months Six Months Period from
Ended 6/30/98 Ended 6/30/98 Ended 6/30/98 Ended 6/30/98 5/05-6/30/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends - - - - -
Expenses - Mortality and expense
risk charges (note 3) 6,783 126 3,842 8,689 8
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) (6,783) (126) (3,842) (8,689) (8)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) (24,326) (3) 91,810 2,003 (15)
Unrealized appreciation (depreciation)
on investments (36,301) 707 (1,070) 49,946 37
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (60,627) 704 90,740 51,949 22
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from operations (67,410) 578 86,898 43,260 14
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
Statements of Operations, Continued
For the period ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds
-------------------------------------------------------------------------------
Capital High
Bond Appreciation Growth Income
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 $ 58,921 188,573 381,828 268,182
Expenses - Mortality and expense
risk charges (note 3) 17,192 50,036 28,298 39,523
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 41,729 138,537 353,530 228,659
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) 55,229 1,594,241 774,018 74,419
Unrealized appreciation (depreciation)
on investments (12,122) (572,536) (461,144) (49,185)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 43,107 1,021,705 312,874 25,234
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $ 84,836 1,160,242 666,404 253,893
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Oppenheimer Variable Goldman Sachs
Account Funds Variable Insurance Trust
------------------------------------------------------
Multiple Mid Cap
Strategies Equity
Fund Fund
----------------------------------------------------
Six Months Period from
Ended 6/30/98 06/25-6/30/98
- -------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Income - Dividends 196,071 -
Expenses - Mortality and expense
risk charges (note 3) 22,078 3
- -------------------------------------------------------------------------------------------------------
Net investment income (expense) 173,993 (3)
- -------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) 351,424 -
Unrealized appreciation (depreciation)
on investments (359,839) 196
- -------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (8,415) 196
- -------------------------------------------------------------------------------------------------------
Increase in net assets from operations 165,578 193
- -------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
<TABLE>
<CAPTION>
Statements of Operations, Continued
For the period ended June 30, 1998
(Unaudited)
- -----------------------------------------------------------------------------------------------------------------
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>
Investment income:
Income - Dividends $ 1,007,037 1,413,289 351,924
Expenses - Mortality and expense
risk charges (note 3) 110,715 74,859 33,197
- -----------------------------------------------------------------------------------------------------------------
Net investment income (expense) 896,322 1,338,430 318,727
- -----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain 638,159 780,527 240,169
Unrealized appreciation (depreciation)
on investments 62,489 (334,500) 156,370
- -----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 700,648 446,027 396,539
- -----------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $ 1,596,970 1,784,457 715,266
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Statements of Operations, Continued
For the period ended June 30, 1998
(Unaudited)
- -----------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund II Variable Insurance 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>
Investment income:
Income - Dividends 1,219,238 458,019 1,681 18,246
Expenses - Mortality and expense
risk charges (note 3) 66,223 54,984 4,632 2,739
- -----------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 1,153,015 403,035 (2,951) 15,507
- -----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments:
Net realized gain 149,464 920,023 84,183 10,447
Unrealized appreciation (depreciation)
on investments (472,142) (107,549) 57,663 15,404
- -----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (322,678) 812,474 141,846 25,851
- -----------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 830,337 1,215,509 138,895 41,358
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
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 $ 42,271 62,046 28,948
Expenses - Mortality and expense
risk charges (note 3) 4,814 10,212 2,904
- ----------------------------------------------------------------------------------------------------------------
Net investment income (expense) 37,457 51,834 26,044
- ----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain 2,660 94,371 14,674
Unrealized appreciation (depreciation)
on investments 42,164 (79,814) (21,656)
- ----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments 44,824 14,557 (6,982)
- ----------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $ 82,281 66,391 19,062
- ----------------------------------------------------------------------------------------------------------------
</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 207,517 360,690 - -
Expenses - Mortality and expense
risk charges (note 3) 10,292 13,942 993 604
- ------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) 197,225 346,748 (993) (604)
- ------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments:
Net realized gain 8,632 115,460 44,442 562
Unrealized appreciation (depreciation)
on investments (17,868) 50,537 2,253 5,262
- ------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments (9,236) 165,997 46,695 5,824
- ------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 187,989 512,745 45,702 5,220
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
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 $ - 333,664 382,917 127,204
Expenses - Mortality and expense
risk charges (note 3) 16,415 33,040 66,462 25,512
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (expense) (16,415) 300,624 316,455 101,692
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain 188,151 507,226 1,257,556 37,540
Unrealized appreciation on investments 204,053 19,188 687,919 462,234
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
on investments 392,204 526,414 1,945,475 499,774
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations $ 375,789 827,038 2,261,930 601,466
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Janus Aspen Series
---------------------------------------------------
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 12,769 59,934 92
Expenses - Mortality and expense
risk charges (note 3) 1,780 15,582 2,330
- ----------------------------------------------------------------------------------------------------
Net investment income (expense) 10,989 44,352 (2,238)
- ----------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments:
Net realized gain 719 376,988 64,006
Unrealized appreciation on investments 1,327 64,218 10,926
- ----------------------------------------------------------------------------------------------------
Net realized and unrealized gain
on investments 2,046 441,206 74,932
- ----------------------------------------------------------------------------------------------------
Increase in net assets from operations 13,035 485,558 72,694
- ----------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
Statements of Changes in Net Assets
For the period ended June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
---------------------------------------------------------
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) $ (29,375) 227,796 (11,290)
Net realized gain (loss) 396,352 (2,104) 1,115
Unrealized appreciation (depreciation)
on investments 234,219 2,104 183,481
- ----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 601,196 227,796 173,306
- ----------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 53,983 6,559,090 -
Loan interest (596) 17,588 (74)
Transfers (to) from the general account of Life of Virginia:
Death benefits - (9,663) -
Surrenders (93,902) (69,345) (160,734)
Loans 73,850 (512,739) (9,416)
Cost of insurance and administrative expense (note 3) (26,513) (73,147) (8,791)
Transfer gain (loss) and transfer fees 170,199 21,790 (866)
Transfers (to) from the Guarantee Account (note 1) 111,145 (14,637) 6,500
Interfund transfers 1,050,076 (7,386,921) 58,186
- ----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 1,338,242 (1,467,984) (115,195)
- ----------------------------------------------------------------------------------------------------------------------------
Increase in net assets 1,939,438 (1,240,188) 58,111
Net assets at beginning of year 3,201,139 11,254,324 1,668,624
- ----------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 5,140,577 10,014,136 1,726,735
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
-----------------------------------------------------------
International Real Estate Global
Equity Securities Income
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) (2,191) (6,783) (126)
Net realized gain (loss) 7,639 (24,326) (3)
Unrealized appreciation (depreciation)
on investments 28,452 (36,301) 707
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 33,900 (67,410) 578
- -----------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums - 23,574 -
Loan interest (6) (102) -
Transfers (to) from the general account of Life of Virginia:
Death benefits - - -
Surrenders - - -
Loans - (1,026) -
Cost of insurance and administrative expense (note 3) (2,048) (6,171) (107)
Transfer gain (loss) and transfer fees 26,003 374 -
Transfers (to) from the Guarantee Account (note 1) 25,276 - -
Interfund transfers 15,007 (6,880) 9,273
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 64,232 9,769 9,166
- -----------------------------------------------------------------------------------------------------------------------------
Increase in net assets 98,132 (57,641) 9,744
Net assets at beginning of year 257,241 1,070,327 13,699
- -----------------------------------------------------------------------------------------------------------------------------
Net assets at end of year 355,373 1,012,686 23,443
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
---------------------------------------------------
Value U.S.
Equity Income Equity
Fund Fund Fund
---------------------------------------------------
Six Months Six Months Period from
Ended 6/30/98 Ended 6/30/98 5/05-6/30/98
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets From operations:
Net investment income (expense) (3,842) (8,689) (8)
Net realized gain (loss) 91,810 2,003 (15)
Unrealized appreciation (depreciation)
on investments (1,070) 49,946 37
- --------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 86,898 43,260 14
- --------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums - - -
Loan interest (1,009) (1,100) -
Transfers (to) from the general account of Life of Virginia:
Death benefits - - -
Surrenders - (2,594) -
Loans (608) (13,669) -
Cost of insurance and administrative expense (note 3) (2,431) (7,240) (7)
Transfer gain (loss) and transfer fees (42,956) (699) (27)
Transfers (to) from the Guarantee Account (note 1) - - -
Interfund transfers 326,197 129,977 4,173
- --------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 279,193 104,675 4,139
- --------------------------------------------------------------------------------------------------------------------
Increase in net assets 366,091 147,935 4,153
Net assets at beginning of year 251,706 1,220,197 -
- --------------------------------------------------------------------------------------------------------------------
Net assets at end of year 617,797 1,368,132 4,153
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
Statements of Changes in Net Assets, 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>
Increase (decrease) in net assets
From operations:
Net investment income $ 41,729 138,537 353,530 228,659 173,993
Net realized gain 55,229 1,594,241 774,018 74,419 351,424
Unrealized appreciation
(depreciation) on investments (12,122) (572,536) (461,144) (49,185) (359,839)
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 84,836 1,160,242 666,404 253,893 165,578
- --------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 42,311 36,628 112,270 6,563 -
Loan interest 931 (952) (1,273) (695) 80
Transfers (to) from the general
account of Life of Virginia:
Death benefits - - - - -
Surrenders - (75,652) (87,118) (58,526) (127,337)
Loans (8,943) (165,589) (108,355) (24,299) (33,759)
Cost of insurance and
administrative expense (note 3) (13,288) (44,325) (22,928) (30,742) (16,370)
Transfer gain (loss) and transfer fees 13,791 59,236 (639) (36,522) 5,257
Transfers (to) from the
Guarantee Account (note 1) 421 20,749 36,636 28,017 15,833
Interfund transfers (1,407,841) 2,475,521 97,179 (318,161) 74,363
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions (1,372,618) 2,305,616 25,772 (434,365) (81,933)
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets (1,287,782) 3,465,858 692,176 (180,472) 83,645
Net assets at beginning of period 3,527,896 6,844,725 3,896,522 6,677,721 3,211,025
- --------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 2,240,114 10,310,583 4,588,698 6,497,249 3,294,670
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Goldman Sachs Variable Insurance Trust
--------------------------------------
Mid Cap
Equity
Fund
-------------------------------------
Period from
05/08-6/30/98
- -------------------------------------------------------------------------------------
<S> <C>
Increase (decrease) in net assets
From operations:
Net investment income (3)
Net realized gain -
Unrealized appreciation
(depreciation) on investments 196
- -------------------------------------------------------------------------------------
Increase in net assets from operations 193
- -------------------------------------------------------------------------------------
From capital transactions:
Net premiums -
Loan interest -
Transfers (to) from the general
account of Life of Virginia:
Death benefits -
Surrenders -
Loans -
Cost of insurance and
administrative expense (note 3) -
Transfer gain (loss) and transfer fees -
Transfers (to) from the
Guarantee Account (note 1) -
Interfund transfers 14,000
- -------------------------------------------------------------------------------------
Increase in net assets from capital transactions 14,000
- -------------------------------------------------------------------------------------
Increase in net assets 14,193
Net assets at beginning of period -
- -------------------------------------------------------------------------------------
Net assets at end of period 14,193
- -------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
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) $ 896,322 1,338,430 318,727
Net realized gain 638,159 780,527 240,169
Unrealized appreciation (depreciation) on investments 62,489 (334,500) 156,370
- --------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 1,596,970 1,784,457 715,266
- --------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 48,008 29,921 6,405
Loan interest (9,597) (4,554) (1,978)
Transfers (to) from the general account of Life of Virginia:
Death benefits - - -
Surrenders (185,184) (249,379) (138,118)
Loans (153,528) (253,443) (22,298)
Cost of insurance and administrative expense (note 3) (84,723) (59,489) (25,128)
Transfer gain (loss) and transfer fees 18,513 154,241 45,412
Transfers (to) from the Guarantee Account (note 1) 69,411 96,112 2,641
Interfund transfers 1,110,938 309,471 457,563
- --------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 813,838 22,880 324,499
- --------------------------------------------------------------------------------------------------------------------------
Increase in net assets 2,410,808 1,807,337 1,039,765
Net assets at beginning of year 16,029,679 10,392,552 4,562,572
- --------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 18,440,487 12,199,889 5,602,337
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund II Variable Insurance 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) 1,153,015 403,035 (2,951) 15,507
Net realized gain 149,464 920,023 84,183 10,447
Unrealized appreciation (depreciation) on investments (472,142) (107,549) 57,663 15,404
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 830,337 1,215,509 138,895 41,358
- ----------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums - 113,968 5,795 34,535
Loan interest (4,005) (3,922) (390) -
Transfers (to) from the general account of
Life of Virginia:
Death benefits (11,964) - - -
Surrenders (27,200) (9,206) - -
Loans (32,748) (24,301) - -
Cost of insurance and administrative expense (note 3) (51,837) (46,270) (3,549) (2,320)
Transfer gain (loss) and transfer fees (4,827) 18,847 22,287 105
Transfers (to) from the Guarantee Account (note 1) 37,284 55,920 13,857 5,927
Interfund transfers 352,511 (765,922) 1,248,005 16,665
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 257,214 (660,886) 1,286,005 54,912
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 1,087,551 554,623 1,424,900 96,270
Net assets at beginning of year 9,576,133 7,849,803 410,445 351,447
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year 10,663,684 8,404,426 1,835,345 447,717
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
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) $ 37,457 51,834 26,044
Net realized gain (loss) 2,660 94,371 14,674
Unrealized appreciation (depreciation) on investments 42,164 (79,814) (21,656)
- ---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 82,281 66,391 19,062
- ---------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 74,397 10,401 8,421
Loan interest (218) (272) (515)
Transfers (to) from the general account of Life of Virginia:
Death benefits - - -
Surrenders - - -
Loans - (9,296) (3,980)
Cost of insurance and administrative expense (note 3) (4,877) (7,288) (2,579)
Transfer gain (loss) and transfer fees (note 3) 599 1,251 719
Transfers (to) from the Guarantee Account (note 1) 6,921 127 -
Interfund transfers 356,209 (994,761) 91,060
- ---------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 433,031 (999,838) 93,126
- ---------------------------------------------------------------------------------------------------------------------------
Increase in net assets 515,312 (933,447) 112,188
Net assets at beginning of year 517,760 2,233,614 393,340
- ---------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 1,033,072 1,300,167 505,528
- ---------------------------------------------------------------------------------------------------------------------------
</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) 197,225 346,748 (993) (604)
Net realized gain (loss) 8,632 115,460 44,442 562
Unrealized appreciation (depreciation) on investments (17,868) 50,537 2,253 5,262
- -------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 187,989 512,745 45,702 5,220
- -------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 26,910 12,994 - 3,717
Loan interest (381) (392) - -
Transfers (to) from the general account of Life of Virginia
Death benefits - - - -
Surrenders (70,773) (43,795) - -
Loans (5,042) (450) (100) -
Cost of insurance and administrative expense (note 3) (9,558) (12,083) (1,124) (542)
Transfer gain (loss) and transfer fees (note 3) 160 7,500 (30,423) 297
Transfers (to) from the Guarantee Account (note 1) 20,623 29,496 - 25,138
Interfund transfers 106,503 591,172 (15,353) (58,583)
- -------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from capital transactions 68,442 584,442 (47,000) (29,973)
- -------------------------------------------------------------------------------------------------------------------------------
Increase in net assets 256,431 1,097,187 (1,298) (24,753)
Net assets at beginning of year 1,460,157 1,756,776 31,854 92,106
- -------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year 1,716,588 2,853,963 30,556 67,353
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
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) $ (16,415) 300,624 316,455
Net realized gain (loss) 188,151 507,226 1,257,556
Unrealized appreciation (depreciation) on investments 204,053 19,188 687,919
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 375,789 827,038 2,261,930
- ------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 20,233 61,397 133,901
Loan interest (1,841) (2,592) (1,043)
Transfers (to) from the general account of Life of Virginia:
Death benefits - - -
Surrenders (3,123) (75,459) (88,347)
Loans (19,944) (58,324) (69,681)
Cost of insurance and administrative expense (note 3) (13,537) (27,054) (54,723)
Transfer gain (loss) and transfer fees 20,952 12,445 3,665
Transfers (to) from the Guarantee Account (note 1) 8,345 11,177 36,964
Interfund transfers (874,112) 167,445 896,730
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions (863,027) 89,035 857,466
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (487,238) 916,073 3,119,396
Net assets at beginning of period 2,788,472 4,604,206 8,226,390
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 2,301,234 5,520,279 11,345,786
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
-------------------------------------------------------------
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) 101,692 10,989 44,352 (2,238)
Net realized gain (loss) 37,540 719 376,988 64,006
Unrealized appreciation (depreciation) on investments 462,234 1,327 64,218 10,926
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations 601,466 13,035 485,558 72,694
- ------------------------------------------------------------------------------------------------------------------------------
From capital transactions:
Net premiums 8,000 - 20,578 5,489
Loan interest (2,994) (229) (551) -
Transfers (to) from the general account of Life of Virginia:
Death benefits - - - -
Surrenders - - (22,489) -
Loans (29,543) (12,725) 8,682 (4,911)
Cost of insurance and administrative expense (note 3) (20,506) (1,507) (11,400) (3,777)
Transfer gain (loss) and transfer fees (620) (73) 23,184 31,343
Transfers (to) from the Guarantee Account (note 1) 30,662 85 53,899 -
Interfund transfers 142,323 161,706 1,094,951 471,330
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital transactions 127,322 147,257 1,166,854 499,474
- ------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets 728,788 160,292 1,652,412 572,168
Net assets at beginning of period 3,545,518 172,004 1,787,818 11,925
- ------------------------------------------------------------------------------------------------------------------------------
Net assets at end of period 4,274,306 332,296 3,440,230 584,093
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to unaudited financial statements.
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
Notes to Financial Statements
June 30, 1998
(Unaudited)
- -------------------------------------------------------------------------------
(1) Description of Entity
Life of Virginia Separate Account III (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 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 ("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. 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
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.
(continued)
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
Notes to Financial Statements
June 30, 1998
(Unaudited)
- -------------------------------------------------------------------------------
(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 $ 24,113,078 $ 22,994,362
Money Market 145,303,859 146,398,818
Total Return 216,470 338,875
International Equity 1,037,633 971,458
Real Estate Securities 289,089 286,560
Global Income 9,284 190
Value Equity 5,632,848 5,356,916
Income 148,392 114,311
U.S. Equity 12,528 8,389
Oppenheimer Variable Account Funds:
Bond 3,578,387 4,901,335
Capital Appreciation 30,414,021 27,938,497
Growth 10,932,018 10,523,878
High Income 10,613,347 10,812,921
Multiple Strategies 4,643,973 4,542,077
Variable Insurance Products Fund:
Equity-Income 5,323,947 3,605,388
Growth 45,428,231 44,165,098
Overseas 9,200,396 8,535,481
Variable Insurance Products Fund II:
Asset Manager 2,387,482 946,326
Contrafund 5,718,313 5,970,830
Variable Insurance Products Fund III:
Growth & Income 3,210,914 1,929,875
Growth Opportunties 159,819 91,242
(Continued)
<PAGE>
LIFE OF VIRGINIA SEPARATE ACCOUNT III
Notes to Financial Statements
June 30, 1998
(Unaudited)
- -------------------------------------------------------------------------------
(2) Continued
Cost of Proceeds
Shares from
Fund/Portfolio Acquired Shares Sold
- -----------------------------------------------------------------------------
Goldman Sachs Variable Insurance Trust
Mid Cap Equity 14,000 0
Janus Aspen Series:
Aggressive Growth 1,363,026 2,259,253
Growth 3,410,890 3,014,594
Worldwide Growth 7,150,789 5,978,662
Balanced 504,090 271,555
Flexible Income 178,394 19,306
International Growth 7,231,944 6,016,913
Capital Appreciation 9,276,627 8,817,524
Federated Insurance Series:
Utility Fund II 215,356 115,522
High Income Bond Fund II 3,068,171 4,013,678
American Leaders Fund II 474,001 21,079
The Alger American Fund
Small Capitalization 474,403 202,654
Growth 1,964,832 1,039,373
PBHG Insurance Series Fund, Inc.
PBHG Large Cap Growth 2,941,375 2,974,094
PBHG Growth II 42,354 75,735
Capital Transactions
The increase (decrease) of outstanding units from capital transactions for
the six months ended June 30, 1988 are as follows:
(Continued)
<PAGE>
Life of Virginia Separate Account III
Notes to Financial Statements
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
GE Investments Funds, Inc.
----------------------------------------------------------------
S&P 500 Money Total International Real Estate
Index Market Return Equity Securites
Fund Fund Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1997 93,601 747,796 64,351 20,612 58,202
From capital transactions:
Net premiums 1,622 421,933 - (1) 1,011
Loan Interest (18) 1,131 (3) - (4)
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits - (622) - - -
Surrenders (2,822) (4,461) (5,560) - -
Loans 2,220 (32,983) (326) - (44)
Cost of insurance (797) (4,705) (304) (174) (265)
Fixed Transfers 3,341 (942) 225 2,152 -
Interfund transfers 31,560 (475,185) 2,013 1,278 (295)
---------- ---------- ----- ------ -----
Net increase (decrease) in units resulting
from capital transactions 35,106 (95,834) (3,955) 3,255 403
---------- ---------- ----- ------ -----
Units outstanding at June 30, 1998 128,707 651,962 60,396 23,867 58,605
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
GE Investments Funds, Inc.
------------------------------------------
Global Value U.S.
Income Equity Income Equity
Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1997 1,336 19,156 121,898
From capital transactions:
Net premiums - (1) - -
Loan Interest - (71) (109) -
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits - - - -
Surrenders - - (256) -
Loans - (43) (1,351) -
Cost of insurance (10) (171) (716) (1)
Fixed Transfers - - - -
Interfund transfers 892 23,015 12,849 418
----- ------- -------- ---
Net increase (decrease) in units resulting
from capital transactions 882 22,729 10,417 417
----- ------- -------- ---
Units outstanding at June 30, 1998 2,218 41,885 132,315 417
- -----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Life of Virginia Separate Account III
Notes to Financial Statements
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds
- -----------------------------------------------------------------------------------------
Capital High Multiple
Bond Appreciation Growth Income Strategies
Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1997 160,651 205,918 127,881 207,125 123,075
From capital transactions:
Net premiums 1,888 977 6,943 223 -
Loan Interest 42 (25) (79) (24) 4
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits - - - - -
Surrenders - (2,019) (5,387) (1,989) (6,413)
Loans (399) (4,420) (6,700) (826) (1,700)
Cost of insurance (593) (1,183) (1,418) (1,045) (824)
Fixed Transfers 19 554 2,265 952 797
Interfund transfers (62,838) 66,072 6,009 (10,815) 3,745
------- ------ ----- ------- -----
Net increase (decrease) in units resulting
from capital transactions (61,881) 59,956 1,633 (13,524) (4,391)
------- ------ ----- ------- ------
Units outstanding at June 30, 1998 98,770 265,874 129,514 193,601 118,684
- ----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Variable Income Products Fund Variable Insurance Products Fund II
-----------------------------------------------------------------------------------
Equity Asset
Income Growth Overseas Manager Contrafund
Portfolio Portfolio Portfolio Portfolio Portfolio
- --------------------------------------------------------------------------------------------- ------------------------------------
<S> <C>
Units outstanding at December 31, 1997 489,456 310,040 243,467 395,218 385,172
From capital transactions:
Net premiums 1,402 590 368 (1) 4,972
Loan Interest (280) (90) (114) (154) (171)
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits - - - (461) -
Surrenders (5,404) (4,904) (7,929) (1,047) (402)
Loans (4,480) (4,984) (1,280) (1,261) (1,060)
Cost of insurance (2,472) (1,170) (1,442) (1,996) (2,019)
Fixed Transfers 2,025 1,890 152 1,436 2,440
Interfund transfers 32,416 6,085 26,266 13,575 (33,415)
------- ----- ------ ------ -------
Net increase (decrease) in units resulting
from capital transactions 23,207 (2,583) 16,021 10,091 (29,655)
------- ----- ------ ------ -------
Units outstanding at June 30, 1998 512,663 307,457 259,488 405,309 355,517
- ------------------------------------------------------------------------------------------- ------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Variable Insurance Products Fund III Federated Insurance Series
-------------------------------------- -----------------------------------------------
Growth & Growth American High
Income Opportunities Leaders Income Bond Utility
Portfolio Portfolio Fund II Fund II Fund II
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1997 33,181 28,619 35,856 148,413 23,413
From capital transactions:
Net premiums 433 2,726 4,609 674 497
Loan Interest (29) - (13) (18) (30)
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits - - - - -
Surrenders - - - - -
Loans - - - (602) (235)
Cost of insurance (265) (183) (302) (472) (152)
Fixed Transfers 1,037 468 429 8 -
Interfund transfers 93,364 1,315 22,069 (64,391) 5,378
------- ------ ------ -------- -------
Net increase (decrease) in units resulting
from capital transactions 94,540 4,326 26,792 (64,801) 5,458
------- ------ ------ -------- -------
Units outstanding at June 30, 1998 127,721 32,945 62,648 83,612 28,871
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Alger American Janus Aspen Series
---------------------------------------------------------
Small Aggressive
Capitalization Growth Growth
Portfolio Portfolio Portfolio
- -------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1997 137,751 131,397 164,512
From capital transactions:
Net premiums 2,372 849 1,099
Loan Interest (34) (26) (100)
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits - - -
Surrenders (6,237) (2,860) (170)
Loans (444) (29) (1,083)
Cost of insurance (842) (789) (735)
Fixed Transfers 1,817 1,926 453
Interfund transfers 9,385 38,606 (47,458)
------- ------- --------
Net increase (decrease) in units resulting
from capital transactions 6,017 37,677 (47,994)
------- ------- --------
Units outstanding at June 30, 1998 143,768 169,074 116,518
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series
- -----------------------------------------------------------------------------------------------------------------------------------
Worldwide Flexible International
Growth Growth Balanced Income Growth
Portfolio Portfolio Portfolio Portfolio Portfolio
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1997 259,831 440,385 241,520 13,793 130,880
From capital transactions:
Net premiums 2,536 6,428 500 - 1,379
Loan Interest (107) (50) (187) (18) (37)
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits - - - - -
Surrenders (3,118) (4,241) - - (1,507)
Loans (2,410) (3,345) (1,848) (1,003) 582
Cost of insurance (1,118) (2,627) (1,283) (119) (764)
Fixed Transfers 462 1,774 1,918 7 3,611
Interfund transfers 6,920 43,042 8,902 12,745 73,349
------- ------ ------- ------- -------
Net increase (decrease) in units resulting
from capital transactions 3,165 40,981 8,002 11,612 76,613
------- ------ ------- ------- -------
Units outstanding at June 30, 1998 262,996 481,366 249,522 25,405 207,493
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Janus Aspen Series PBHG Insurance Series Fund, Inc. Goldman Sachs Variable
Insurance Trust
- --------------------------------------------------------------------------------------------------------------------------------
Capital PBHG PBHG Mid Cap
Appreciation Large Cap Growth II Equity
Portfolio Portfolio Portfolio Fund
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Units outstanding at December 31, 1997 950 2,718 8,640 -
From capital transactions:
Net premiums 408 - 352 -
Loan Interest - - - -
Tranfers (to) from the
general acct. of Life of Virginia:
Death benefits - - - -
Surrenders - - - -
Loans (365) (3) - -
Cost of insurance (281) (35) (51) -
Fixed Transfers - - 2,378 -
Interfund transfers 35,012 (482) (5,543) 1,515
------ ------ ------- -----
Net increase (decrease) in units resulting
from capital transactions 34,774 (520) (2,864) 1,515
------ ----- ------ -----
Units outstanding at June 30, 1998 35,724 2,198 5,776 1,515
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Life of Virginia Separate Account III
Notes to Financial Statements
June 30, 1998
(Unaudited)
(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
The premiums transferred from Life of Virginia to the Account represent
gross premiums recorded by Life of Virginia on its variable life insurance
policies. During the first ten years following a premium payment, a charge
is deducted monthly at an effective annual rate of .50% of the premium
payment from the policy cash value to cover distribution expenses and
premiums taxes. 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. Subject to certain limitations, the charge generally
equals 6% of the premium withdrawn in the first four years, and this
charge decreases 1% per year for every year thereafter. 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. In addition, Life of Virginia charges
the Account for the mortality and expense risk that Life of Virginia
assumes. This charge is deducted daily and equals the effective annual
rate of .90% of the net assets of the Account. Life of Virginia also
charges the Account for
(continued)
<PAGE>
Life of Virginia Separate Account III
Notes to Financial Statements
June 30, 1998
(Unaudited)
(3) Continued
certain administrative charges which are deducted daily and equal the
effective annual rate of .40% of the net assets of the Account.
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.
- ------------------------------------------------------------------------------
