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RUSSELL INSURANCE FUNDS
SUPPLEMENT DATED NOVEMBER 20, 1998 TO
PROSPECTUSES DATED MAY 1, 1998
The following information supplements the Prospectus of the Russell
Insurance Funds (the "Company") dated May 1, 1998.
NEW MANAGEMENT AGREEMENT AND CHANGE OF CONTROL--The following information
supplements the section of the prospectus entitled "GENERAL MANAGEMENT OF THE
FUNDS."
On November 19, 1998, shareholders of each of the Funds approved a new
investment management agreement (the "Management Agreement") with Frank Russell
Investment Management Company ("FRIMCo"). The new management agreement will
become effective upon the termination of the present management agreement, which
will result from a change of control of FRIMCo's parent, the Frank Russell
Company ("FRC"). FRC has approved an Agreement and Plan of Merger (the "Plan")
with The Northwestern Mutual Life Insurance Company ("Northwestern") pursuant to
which Northwestern will acquire FRC, the sole shareholder of FRIMCo, effective
January 1, 1999. Under the Investment Company Act of 1940, the present
management agreement will terminate automatically upon the acquisition of FRC by
The Northwestern Under the Plan, FRC will retain its identity and operating
independence, and will continue to operate globally as a separate company.
In anticipation of the acquisition and the resulting termination, the Board
and the shareholders of the Company approved the execution of another Management
Agreement between the Company and FRIMCo to permit FRIMCo to continue to provide
advisory services to the Funds. Except as to the date, the terms of the new
Management Agreement are identical to the present management agreement. The new
Management Agreement is expected to be implemented immediately following the
acquisition.
CHANGE TO INVESTMENT RESTRICTION ON BORROWING--ALL FUNDS
On November 19, 1998, shareholders of all Funds approved a change to the
fundamental investment restriction which limits the amount which the Funds may
borrow. The revised restriction allows a higher borrowing level for the purpose
of meeting shareholder redemption requests. Previously, each Fund's restriction
limited all borrowings to not more than 5%, and permitted borrowing only for
temporary or emergency purposes. Each Fund's restriction has been revised to
permit additional borrowings, up to 33 1/3% of the current value of the Fund's
assets taken at market value, less liabilities other than borrowings, to pay
redemptions by shareholders.
