CIGNA VARIABLE PRODUCTS GROUP, 485BPOS, 2000-04-28

CIGNA VARIABLE PRODUCTS GROUP
485BPOS, 2000-04-28

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<PAGE>

As filed with the Securities and Exchange Commission April 28, 2000.

Securities Act File No. 33-20333
Investment Company Act File No. 811-5480
________________________________________________________________________________

================================================================================
- -----------------------
OMB Number: U.S. SECURITIES AND EXCHANGE COMMISSION
3235-0307 WASHINGTON, D.C. 20549
Expires: 05/31/00 _______________
Estimated average
Burden hours per FORM N-1A
response 212.80
- -----------------------

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [_]

Pre-Effective Amendment No. _____ [_]

Post-Effective Amendment No. 19 [X]
----
and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [_]

Amendment No. 19 [X]
----
(Check appropriate box or boxes.)

CIGNA Variable Products Group
(Exact Name of Registrant as Specified in Charter)

100 Front Street, Suite 300, Worcester, Massachusetts 01601
(Address of Principal Executive Offices) (Zip Code)

(860) 726-3700
Registrant's Telephone Number, including Area Code

Linda R. Johnson, 100 Front Street, Suite 300
Worcester, Massachusetts 01601
(Name and Address of Agent for Service)

Continuous
(Approximate Date of Proposed Public Offering)
_______________

It is proposed that this filing will become effective (check appropriate box):

[_] Immediately upon filing pursuant to paragraph (b)
[X] on April 28, 2000 pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)(1)
[_] on (date) pursuant to paragraph (a)(1)
[_] 75 days after filing pursuant to paragraph (a)(2)
[_] on (date) pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:

[_] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

___________________________
Please send communications to: Jeffrey S. Winer, Esq.
c/o TimesSquare Investment Management, Inc.
900 Cottage Grove Road, S-215, Hartford CT 06152-2215
(860) 726-5576
<PAGE>

CIGNA VARIABLE PRODUCTS GROUP

================================================================================

Prospectus
May 1, 2000

CIGNA Variable Products S&P 500 Index Fund

The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.
<PAGE>

Table of Contents

<TABLE>
<CAPTION>
Page Number
<S> <C>
Summary......................................................... 1
Bar Chart and Performance Table................................. 1
Fees and Expenses of the Fund................................... 2
Investment Information.......................................... 4
Management of the Fund.......................................... 5
Pricing of Shares............................................... 6
Purchase and Redemption of Shares............................... 6
Distributions and Federal Income Tax Considerations............. 7
Financial Highlights............................................ 8
</TABLE>

<PAGE>

Shares of the fund offered by this prospectus are available and are being
marketed exclusively as pooled funding vehicles for life insurance companies
writing variable annuity contracts and variable life insurance contracts
("Variable Contracts") and for qualified retirement and pension plans
("Qualified Plans").

<TABLE>
<S> <C>
Fund investment objective:
- -------------------------

S&P 500 Index Fund: To provide long-term growth of capital by investing principally
in common stocks.

Principal investment strategy
- -----------------------------

S&P 500 Index Fund: Attempts to replicate the composition and total return, reduced
by fund expenses, of the Standard & Poor's 500 Composite Stock
Price Index (S&P 500) by investing in common stocks of companies
which make up the S&P 500.

Principal risks of investing in the Fund
- ----------------------------------------

S&P 500 Index Fund: The fund is subject to market risk, which is the possibility that
common stock prices will decline, sometimes substantially, over
short or extended periods. The stock market tends to be
cyclical, with periods when stock prices generally rise and
periods when stock prices generally decline.

The fund is subject to tracking risk, which is the
risk that the fund's returns will be less than the
returns of the S&P 500.
</TABLE>

Loss of money is a risk of investing in the fund.

Bar Chart and Performance Table:

The bar chart and table shown below provide some indication of the risks of
investing in the fund. The bar charts show changes in the performance of the
fund's shares from year to year over the life of the fund. Performance data
shown in the bar charts and tables does not reflect Variable Contract or
Qualified Plan charges. If it did, performance would be lower

The table shows how the fund's average annual returns for one, five and ten
years compare to those of a broad measure of relevant market performance. A
fund's past performance does not necessarily indicate how the fund will perform
in the future.

-1-
<PAGE>

S&P 500 Index Fund - Annual Total Returns

- -3.09% 37.48% 3.59% 2.97% 0.67% 36.82% 22.48% 33.35% 28.60% 20.77%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

During the ten-year period shown in the bar chart, the highest quarterly return
was 21.47% (for the quarter ended 12/31/98) and the lowest quarterly return was
- -18.73% (for the quarter ended 9/30/90).

S&P 500 Index Fund Average - Annual Total Returns for the periods ended December
31, 1999

<TABLE>
<CAPTION>
Past 1 year Past 5 years Past 10 years*
----------- ------------ --------------
<S> <C> <C> <C>
S&P 500 Index Fund 20.77% 28.26% 17.27%
S&P 500 Index 21.04% 28.55% 18.21%
</TABLE>

*Prior to November 1993 the S&P 500 Index Fund was actively managed.

Fees and Expenses of the Funds
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Funds.

The table does not reflect charges and deductions which are or may be imposed
under Variable Contracts or Qualified Plans. Please refer to the applicable
Variable Contract prospectus or Qualified Plan documents for any additional
charges.

-2-
<PAGE>

<TABLE>
<CAPTION>
S&P 500
Index
Shareholder fees Fund
------
(fees paid directly from your investments)
<S> <C>
Maximum sales charge (load) imposed on
purchases (as a percentage of offering price) None
Maximum deferred sales charge (load)
(as a percentage of offering price) None
Redemption fee (as a percentage
of amount redeemed) None
Exchange fee None

Annual Fund operating expenses
(expenses that are deducted from Fund assets)

Management fees 0.25%
Distribution (12b-1) fees None
Other expenses (before waivers) 0.13%
Total Annual Fund Operating Expenses 0.38%
Waiver of Fund Expenses/(1)/ (0.13%)
Total Actual Fund Operating Expenses 0.25%
</TABLE>

(1) TimesSquare Capital Management, Inc., the fund's adviser, has
contractually agreed, until April 30, 2001, to waive management fees and
reimburse the fund if and to the extent total annual fund operating
expenses exceed 0.25%. TimesSquare may agree to continue to waive
management fees and reimburse expenses after April 30, 2001.
Reimbursement arrangements can decrease a fund's expenses and boost its
performance.

Example

This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
fund's operating expenses reflect contractual expense limitations for the first
year and after that are not limited and remain the same. The Example does not
reflect charges and deductions which are or may be imposed under Variable
Contracts or Qualified Plans. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:

S&P 500 Index Fund
1 year 3 years 5 years 10 years
$26 $109 $201 $470

INVESTMENT INFORMATION

3
<PAGE>

S&P 500 Index Fund
Investment Objective, Principal Strategies and Related Risks

The primary objective of the fund is long-term growth of capital by investing
principally in common stocks. The fund will seek to fulfill this objective by
attempting to replicate the composition and total return, reduced by fund
expenses, of the S&P 500. Under normal conditions, the fund will invest at
least 80% of its total assets in equity securities of companies which compose
the S&P 500.

The S&P 500 includes 500 selected common stocks, most of which are listed on the
New York Stock Exchange. Each stock in the S&P 500 has a unique weighting,
depending on the number of shares outstanding and its current price. The 500
stocks in the S&P 500 are chosen by Standard & Poor's based on industry
representation, liquidity and stability. The stocks in the S&P 500 are not the
500 largest companies. Rather, the S&P 500 is designed to capture the returns
of many different sectors of the U.S. economy.

The fund is subject to market risk -- i.e., the possibility that common stock
prices will decline over short or even extended periods. The U.S. stock market
tends to be cyclical, with periods when stock prices generally rise and periods
when prices generally decline.

While the fund seeks to match the performance of the S&P 500, its stock
portfolio performance may not match that of the S&P 500 exactly. For example,
the fund's performance will reflect deductions for advisory fees and other
expenses that are not deducted from the performance figures reported for the S&P
500. In addition, while TimesSquare generally will seek to match the
composition of the S&P 500 as closely as possible, it may not always invest the
fund's stock portfolio to mirror the S&P 500 exactly. For instance, the fund
may at times have its portfolio weighted differently from the S&P 500 because of
the difficulty and expense of executing relatively small stock transactions.
Under normal conditions, the fund anticipates holding at least 480 of the S&P
500 issues at all times.

The fund may also invest in stock index futures contracts and related options
and in certain short-term fixed income securities (including variable and
floating rate instruments or demand instruments) such as Money Market Fund
shares, certificates of deposit, commercial paper, commercial loan
participations, bankers' acceptances, U.S. Government obligations and repurchase
agreements, pending investment in common stocks of companies in the S&P 500 or
to meet anticipated short-term cash needs such as dividend payments or
redemptions of shares. The percentage of the fund's assets invested in various
types of securities will vary in light of existing economic conditions and other
factors as determined by TimesSquare. Except in extraordinary circumstances,
the fund will not invest in short-term fixed income securities or hold assets in
cash for temporary, defensive purposes.

The fund is not sponsored, endorsed, sold or promoted by Standard & Poor's
Corporation ("S&P"). S&P makes no representation or warranty, express or
implied, to the record or beneficial owners of shares of the fund or any member
of the public regarding the advisability of investing in securities generally,
or in the fund particularly, or the ability of the S&P 500 to track general
stock market performance. S&P's only relationship to TimesSquare or the fund is
the licensing of certain trademarks and trade names of S&P and of the S&P 500
which is determined, composed and calculated by S&P without regard to
TimesSquare or the fund. S&P has no obligation to take the needs of TimesSquare
or the fund or the record or beneficial owners of the fund into consideration in
determining, composing or calculating the S&P 500. S&P is not responsible for
and has not participated in the valuation of the fund or the pricing of the
fund's shares or in the determination or calculation of the equation by which
the fund's portfolio investments are to be converted into cash.

4
<PAGE>

S&P has no obligation or liability in connection with the administration,
marketing or trading of the fund.

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500 OR
ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS,
OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY TIMESSQUARE, RECORD OR BENEFICIAL OWNERS OF THE
FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 OR ANY DATA
INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY
DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR USE WITH RESPECT TO THE S&P 500 OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY
SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS),
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

Temporary, Defensive Positions. The S&P 500 Index Fund may, from time to time,
take temporary defensive positions that are inconsistent with its principal
investment strategies by investing in short-term fixed income securities in
attempting to respond to adverse market, economic, political or other
conditions. If the fund takes a temporary defensive position it may not achieve
its investment objective.

Changes in Policies. The fund's Trustees may change the fund's investment
strategies and other policies without shareholder approval. The fund may not
change its investment objective or certain restrictions identified as
fundamental in the Statement of Additional Information without shareholder
approval.

MANAGEMENT OF THE FUND

The investment adviser to the fund is TimesSquare Capital Management, Inc.
TimesSquare also serves as investment adviser for other investment companies,
and for a number of pension, advisory, corporate and other accounts. As of
December 31, 1999, TimesSquare managed assets of approximately $38.9 billion.
TimesSquare's mailing address is Four Times Square, 25/th/ Floor, New York, NY
10036.

Pursuant to a Master Investment Advisory Agreement, TimesSquare manages the
investment and reinvestment of the assets of the fund.

Subject to the control and periodic review of the Board of Trustees, TimesSquare
determines what investments shall be purchased, held, sold or exchanged by the
fund. TimesSquare is also responsible for overall management of the business
affairs of the fund.

As full compensation for the investment management and all other services
rendered by TimesSquare, the fund paid TimesSquare $608,323 for calendar year
1999. TimesSquare's fee for managing the fund, as a percentage of the fund's
average daily net assets, is 0.25%:

5
<PAGE>

PRICING OF SHARES

The price of fund shares is based on each fund's net asset value. The funds'
custodian, State Street Bank and Trust Company ("State Street") calculates the
net asset value of the fund by dividing the number of outstanding shares of the
fund into the net assets of the fund. Net assets are the excess of a fund's
assets over its liabilities. Net asset value is determined as of the close of
regular trading (normally, 4:00 p.m. Eastern Time) on each day the New York
Stock Exchange ("NYSE") is open for trading.

The S&P 500 Index Fund values its investments for which market quotations are
readily available at market value. It values short-term investments that will
mature within 60 days at amortized cost, which approximates market value. It
values all other investments and assets at their fair value. The fund
translates prices for its investments quoted in foreign currencies into U.S.
dollars at current exchange rates. As a result, changes in the value of those
currencies in relation to the U.S. dollar may affect a fund's NAV. Because
foreign markets may be open at different times than the New York Stock Exchange,
the value of a fund's shares may change on days when shareholders are not able
to buy or sell them. If events materially affecting the values of a fund's
foreign investments occur between the close of foreign markets and the close of
regular trading on the New York Stock Exchange, these investments may be valued
at their fair value.

PURCHASE AND REDEMPTION OF SHARES

Shares may be purchased only by Eligible Purchasers. Eligible Purchasers are
limited to: (1) those separate accounts established by life insurance companies
that serve as the underlying investment vehicles for Variable Contracts; and (2)
Qualified Plans. Shares may not be purchased by individuals or by the general
public. The Board of Trustees of CIGNA Variable Products Group may broaden or
limit the definition of Eligible Purchasers. Purchase of shares is subject to
acceptance by the fund. Fund shares are sold exclusively to and redeemed by
Eligible Purchasers on a continuous basis.

Purchase and redemption orders received by life insurance companies and
Qualified Plans on a given business day from their Variable Contract owners or
Qualified Plan participants, as the case may be, will be effected at the net
asset value of the fund on that business day if the orders are received by the
fund in proper form and in accordance with applicable requirements on the next
business day. It is each Eligible Purchaser's responsibility to properly
transmit purchase and redemption orders and payments in accordance with
applicable requirements. Individuals may not place orders directly with the
fund. The fund does not issue share certificates. Please refer to the
prospectus of your life insurance company's Variable Contract or Qualified Plan
documents for information on how to invest in a fund.

Investments by Eligible Purchasers in the fund are expressed in terms of full
and fractional shares of a fund. All investments in the fund are credited to an
Eligible Purchaser's account immediately upon acceptance of the investment by
the fund.

The offering of shares of the fund may be suspended for a period of time and the
fund reserves the right to reject any specific purchase order. Purchase orders
may be refused if, in TimesSquare's opinion, they would disrupt the management
of the fund.

6
<PAGE>

The fund normally pays for shares redeemed within seven days after the life
insurance company that issued the Variable Contract or the Qualified Plan
receives the redemption request. However, a fund may suspend redemption or
postpone payment for any period when:

- - the NYSE closes for other than weekends and holidays
- - the SEC restricts trading on the NYSE;
- - the SEC determines that an emergency exists, so that a fund's (1) disposal of
investment securities, or (2) determination of net asset value, is not
reasonably practicable; or
- - the SEC permits, by order, for the protection of fund shareholders.

CIGNA Variable Products Group does not foresee any disadvantage to Variable
Contract owners arising out of the fact that the Trust offers its shares for
products offered by life insurance companies which may or may not be affiliated
with each other or that it offers its shares to Qualified Plans. Nevertheless,
the CIGNA Variable Products Group Board of Trustees intends to monitor events in
order to identify any material irreconcilable conflicts which may possibly arise
between Variable Contract owners and participants under Qualified Plans and to
determine what action, if any, should be taken in response. If a conflict were
to occur, one or more life insurance company separate accounts or Qualified
Plans might withdraw its investment in a fund. This might force the fund to
sell portfolio securities at disadvantageous prices.

DISTRIBUTIONS AND FEDERAL INCOME TAX CONSIDERATIONS

The fund's policy is to distribute substantially all of its net investment
income and net realized capital gains each year. Generally, a fund may
distribute net realized capital gains only once a year. The fund pays these
distributions to the life insurance company issuing the Variable Contract or the
Qualified Plan, which automatically reinvest the distributions in additional
fund shares at no charge.

The fund has elected to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). The
Code relieves a regulated investment company from certain Federal income tax and
excise tax, if the company distributes substantially all of its net investment
income and net realized capital gains. See the SAI for a more complete
discussion.

The fund must meet asset diversification requirements under Section 817(h) of
the Code and the related regulation of the United States Treasury Department.
The fund intends to comply with these diversification requirements.

The sole shareholders of the fund are life insurance companies issuing Variable
Contracts and Qualified Plans. Consequently, this prospectus does not discuss
the federal income tax consequences at the shareholder level. For information
concerning the federal income tax consequences to owners of Variable Contracts
and Qualified Plan participants, including the failure of a fund to meet the
diversification requirements discussed above, see the Prospectus for the
Variable Contract or your Qualified Plan documents.

7
<PAGE>

Financial Highlights

The financial highlights table is intended to help you understand the fund's
financial performance for the past 5 years. Certain information reflects
financial results for a single fund share. The total returns in the table
represents the rate that an investor would have earned (or lost) on an
investment in the fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers
LLP, whose reports, along with the fund's financial statements, are included in
the annual report, which is available upon request.

S&P 500 Index Fund

<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:

Net asset value, beginning of period $ 19.73 $ 15.83 $ 12.40 $ 10.75 $ 8.19
-------- -------- -------- ------- -------
Income from investment operations

Net investment income (a) 0.32 0.34 0.25 0.22 0.21
Net realized and unrealized gains (loss) 3.75 4.14 3.86 2.17 2.80
-------- -------- -------- ------- -------
Total from investment operations 4.07 4.48 4.11 2.39 3.01
-------- -------- -------- ------- -------

Less distributions
From net investment income (0.51) (0.40) (0.32) (0.29) (0.27)
From capital gains (0.46) (0.18) (0.36) (0.45) (0.18)
-------- -------- -------- ------- -------
Total distributions (0.97) (0.58) (0.68) (0.74) (0.45)
-------- -------- -------- ------- -------
Net asset value, end of period $ 22.83 $ 19.73 $ 15.83 $ 12.40 $ 10.75
======== ======== ======== ======= =======

Total Investment Return (b) 20.77% 28.60% 33.35% 22.48% 36.82%
Ratios to Average Net Assets
Net expenses 0.25% 0.25% 0.25% 0.60% 0.73%
Net investment income 1.57% 2.14% 1.93% 1.78% 2.05%
Fees and expenses waived or borne by the Adviser 0.13% 0.19% 0.30% 0.04% --
Portfolio turnover 3% 2% 4% 4% 4%
Net assets, end of period (000 omitted) $282,781 $206,475 $116,308 $71,513 $66,283
</TABLE>

(a) Net investment income per share has been calculated in accordance with SEC
requirements, with the exception that end of year accumulated
undistributed/(overdistributed) net investment income has not been adjusted
to reflect current year permanent difference between financial and tax
accounting.

(b) Had the Adviser not waived or reimbursed a portion of expenses, total
return would have been reduced.

8
<PAGE>

For investors who want more information about the fund, the following documents
are available free upon request:

Annual/Semi-annual Reports: Additional information about the fund's investments
is available in the fund's annual and semi-annual reports to shareholders. In
the fund's annual report, you will find a discussion of the market conditions
and investment strategies that significantly affected the fund's performance
during its last fiscal year.

Statement of Additional Information (SAI): The SAI provides more detailed
information about the fund and is incorporated into this prospectus by
reference.

Information about the fund (including the SAI) can be reviewed and copied at the
Commission's Public Reference Room in Washington, D.C. You can get free copies
of reports and SAIs, request other information and discuss your questions about
the fund by contacting the fund at:

CIGNA Variable Products Group
900 Cottage Grove Road
Hartford, CT 06152-2210
Telephone: 1-800-528-6718

Reports and other information about the fund are available on the EDGAR Database
on the Commissions's Internet site at http://www.sec.gov. Copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following E-mail address: [email protected], or by writing the
Commission's Public Reference Section, Washington, D.C. 20549-0102.

Information on the operation of the public reference room may be obtained by
calling the Commission at 1.202.942.8090.

CIGNA Variable Products Group

CIGNA Variable Products S&P 500 Index Fund

(Investment
Company Act
file no. 811-1646)
<PAGE>

CIGNA VARIABLE PRODUCTS GROUP

================================================================================

Prospectus
May 1, 2000

CIGNA Variable Products Money Market Fund
CIGNA Variable Products Investment Grade Bond Fund
CIGNA Variable Products S&P 500 Index Fund

Table of Contents

<TABLE>
<CAPTION>
Page Number
<S> <C>
Summary...................................................... 1

Bar Charts and Performance Tables............................ 2

Fees and Expenses of the Funds............................... 4

Investment Information....................................... 5

Management of the Funds...................................... 11

Pricing of Shares............................................ 12

Purchase and Redemption of Shares............................ 12

Distributions and Federal Income Tax Considerations.......... 13

Financial Highlights......................................... 15
</TABLE>

<PAGE>

Shares of the funds offered by this prospectus are available and are being
marketed exclusively as pooled funding vehicles for life insurance companies
writing variable annuity contracts and variable life insurance contracts
("Variable Contracts") and for qualified retirement and pension plans
("Qualified Plans").

Fund investment objectives:
- --------------------------

Money Market Fund: To provide as high a level of
current income as is consistent
with the preservation of capital
and liquidity and the maintenance
of a stable $1.00 per share net
asset value.

Investment Grade Bond Fund: To provide as high a level of
current income as possible
consistent with reasonable concern
for safety of principal.

S&P 500 Index Fund: To provide long-term growth of
capital by investing principally in
common stocks.

Principal investment strategies
- -------------------------------

Money Market Fund: Invests exclusively in U.S. dollar
denominated high-quality short-term
money market instruments.

Investment Grade Bond Fund: Invests primarily in fixed income
securities that, at the time of
purchase, are rated investment
grade by either Moody's Investors
Service or Standard & Poor's
Corporation or a similar rating
agency or, if unrated, are judged
by the fund's investment adviser,
TimesSquare Capital Management,
Inc. ("TimesSquare") to be of
comparable quality. Normally, the
fund will invest at least 75% of
its assets in these securities.
TimesSquare may allocate fund
assets across different market
sectors and durations. Duration is
a measure of the expected life of a
fixed income security that is used
to determine the sensitivity of the
security's price to changes in
interest rates. The average
portfolio duration of the fund
normally varies between 85% and
115% of the duration of the Lehman
Brothers Aggregate Bond Index.

S&P 500 Index Fund: Attempts to replicate the
composition and total return,
reduced by fund expenses, of the
Standard & Poor's 500 Composite
Stock Price Index (S&P 500) by
investing in common stocks of
companies which make up the S&P
500.

Principal risks of investing in the Funds
- -----------------------------------------

Money Market Fund: A major change in interest rates or
a default on the fund's investments
could cause the value of your
investment in the fund to change.

-1-
<PAGE>

An investment in the Money Market Fund is
not insured or guaranteed by the Federal
Deposit Insurance Corporation or any
other government agency. Although the
fund seeks to preserve the value of your
investment at $1.00 per share, it is
possible to lose money by investing in
the fund.

Investment Grade Bond Fund: This fund's principal risk factor is
market risk.

Market risk associated with bonds is
related to the level of interest rates.
Generally, as interest rates rise, the
market price of a bond falls. (A 7% bond
is less valuable once interest rates have
risen to 8% and an investor can get a
higher return elsewhere.) As interest
rates fall, however, the market price of
a bond rises. This "inverse" relationship
is magnified for bonds with longer
durations.

The fund is also subject to credit risk.
Defaults on the fund's investments could
cause the value of your investment to
decrease.

S&P 500 Index Fund: The fund is subject to market risk, which
is the possibility that common stock
prices will decline, sometimes
substantially, over short or extended
periods. The stock market tends to be
cyclical, with periods when stock prices
generally rise and periods when stock
prices generally decline.

The fund is subject to tracking risk,
which is the risk that the fund's returns
will be less than the returns of the S&P
500.

Loss of money is a risk of investing in any of the funds.

Bar Charts and Performance Tables
The bar charts and tables shown below provide some indication of the risks of
investing in the funds. The bar charts show changes in the performance of the
funds' shares from year to year over the life of the funds. There is no bar
chart or table for the Investment Grade Bond Fund because this fund does not
have performance information for a full year. Performance data shown in the bar
charts and tables does not reflect Variable Contract or Qualified Plan charges.
If it did, performance would be lower.

The tables show how the funds' average annual returns for one, five and ten
years compare to those of a broad measure of relevant market performance. A
fund's past performance does not necessarily indicate how the fund will perform
in the future.

-2-

<PAGE>

Money Market Fund - Annual Total Returns

1997 1998 1999

5.19% 5.14% 4.83%

During the period shown in the bar chart, the highest quarterly return was
1.31% (for the quarter ended 12/31/97) and the lowest quarterly return was
1.11% (for the quarter ended 06/30/99).

Money Market Fund - Average Annual Total Returns for the periods ended December
31, 1999

<TABLE>
<CAPTION>
Past 1 year Since Inception (Commenced Operations March 1, 1996)
----------- ---------------
<S> <C> <C>
Money Market Fund 4.83% 5.05%
3-Month U.S. Treasury bills 4.74% 5.10%
</TABLE>

The Money Market Fund's 7-day annualized yield as of December 31, 1999 was
5.39%.

S&P 500 Index Fund - Annual Total Returns

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
- -3.09% 37.48% 3.59% 2.97% 0.67% 36.82% 22.48% 33.35% 28.60% 20.77%

-3-
<PAGE>

S&P 500 Index Fund - Average Annual Total Returns for the periods ended December
31, 1999

Past 1 year Past 5 years Past 10 years*
------------ ------------- --------------
S&P 500 Index Fund 20.77% 28.26% 17.27%
S&P 500 Index 21.04% 28.55% 18.21%

*Prior to November 1993 the S&P 500 Index Fund was actively managed.

Fees and Expenses of the Funds
This table describes the fees and expenses that you may pay if you buy and
hold shares of the Funds.

The table does not reflect charges and deductions which are or may be
imposed under Variable Contracts or Qualified Plans. Please refer to the
applicable Variable Contract prospectus or Qualified Plan documents for any
additional charges.

<TABLE>
<CAPTION>
Investment
Money Grade S&P 500
Market Bond Index
Fund Fund Fund
-------- ------- --------
<S> <C> <C> <C>
Shareholder fees
(fees paid directly from your investments)

Maximum sales charge (load) imposed on
purchases (as a percentage of offering price) None None None
Maximum deferred sales charge (load)
(as a percentage of offering price) None None None
Redemption fee (as a percentage
of amount redeemed) None None None
Exchange fee None None None

Annual Fund operating expenses
(expenses that are deducted from Fund assets)

Management fees 0.35% 0.50% 0.25%
Distribution (12b-1) fees None None None
Other expenses (before waivers) 0.29% 0.29% 0.13%
Total Annual Fund Operating Expenses 0.64% 0.79% 0.38%
Waiver of Fund Expenses /(1)/ (0.14%) (0.29%) (0.13%)
Total Actual Fund Operating Expenses 0.50% 0.50% 0.25%
</TABLE>

/(1)/ TimesSquare has contractually agreed, until April 30, 2001, to waive
management fees and reimburse the funds if and to the extent total
annual fund operating expenses exceed 0.50% of average daily net
assets for the Money Market Fund and the Investment Grade Bond Fund,
and 0.25% for the S&P 500 Index Fund. TimesSquare may agree to
continue to waive management fees and reimburse expenses after April
30, 2001. Reimbursement arrangements can decrease a fund's expenses
and boost its performance.

-4-
<PAGE>

Example

This Example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the funds for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
funds' operating expenses reflect contractual expense limitations for the first
year and after that are not limited and remain the same. The Example does not
reflect charges and deductions which are or may be imposed under Variable
Contracts or Qualified Plans. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:

Money Market Fund
1 year 3 years 5 years 10 years
$51 $191 $344 $790

Investment Grade Bond Fund
1 year 3 years 5 years 10 years
$51 $224 $412 $963

S&P 500 Index Fund
1 year 3 years 5 years 10 years
$26 $109 $201 $470

INVESTMENT INFORMATION

Money Market Fund
Investment Objective and Policies

The fund's objective is to provide as high a level of current income as is
consistent with the preservation of capital and liquidity and the maintenance of
a stable $1.00 per share net asset value by investing in short-term high quality
money market instruments. The fund invests in U.S. dollar denominated money
market instruments such as commercial paper and U.S. Government direct
obligations and U.S. Government agencies' securities. In addition, the fund may
invest in other money market instruments such as asset-backed securities,
bankers' acceptances, certificates of deposit, commercial loan participations,
repurchase agreements and time deposits, all of which will be denominated in
U.S. dollars. Bankers' acceptances, certificates of deposit and time deposits
may be purchased from U.S. or foreign banks. The fund purchases commercial
paper primarily from U.S. issuers but may purchase this type of security from
foreign issuers so long as it is denominated in U.S. dollars.

5
<PAGE>

Operational Policies

The fund may follow policies that are more restrictive than the investment
limitations set forth in this prospectus and the Statement of Additional
Information in order to comply with applicable laws and regulations governing
money market funds, including the provisions of and regulations under the
Investment Company Act of 1940 (the 1940 Act). In particular, the fund intends
to comply with the various requirements of Rule 2a-7 of the 1940 Act, which
regulates portfolio maturity, quality and diversification. For example, the
fund will limit its investments to securities with effective remaining
maturities of 397 days or less and will maintain a dollar-weighted average
maturity of 90 days or less. The fund will determine the effective remaining
maturity of its investments according to Rule 2a-7.

Pursuant to procedures adopted by the fund's Board of Trustees, the fund may
purchase only high quality securities that TimesSquare believes present minimal
credit risks. To be considered high quality, a security must be a U.S.
Government security or must be rated in accordance with applicable rules in one
of the two highest categories for short-term securities by at least two
nationally recognized rating services (or by one, if only one rating service has
rated the security) or, if unrated, judged to be of equivalent quality by
TimesSquare.

High quality securities are divided into "first tier" and "second tier"
securities. First tier securities have received the highest rating (e.g.
Standard & Poor's Corporation's ("S&P") A-1 rating) from at least two rating
services (or one, if only one has rated the security). Second tier securities
have received ratings within the two highest categories (e.g., S&P's A-1 or A-2)
from at least two rating services (or one, if only one has rated the security),
but do not qualify as first tier securities. If a security has been assigned
different ratings by different rating services, at least two rating services
must have assigned the highest of the ratings in order for TimesSquare to
determine eligibility on the basis of that highest rating. Based on procedures
adopted by the Board of Trustees, TimesSquare may determine that an unrated
security is of equivalent quality to a rated first or second tier security.

The fund may not invest more than 5% of its total assets in second tier
securities. In addition, the fund may not invest more than 1% of its total
assets or $1 million (whichever is greater) in the second tier securities of a
single issuer.

The fund may change these operational policies to reflect changes in the laws
and regulations without the approval of shareholders.

Investment Grade Bond Fund
Investment Objective and Principal Strategies, Decision-Making Process and
Related Risks

The fund's objective is to provide as high a level of current income as possible
consistent with reasonable concern for safety of principal. The fund intends to
achieve this objective by investing primarily in fixed income investment grade
debt securities. Under normal market conditions, the fund will invest at least
75% of its assets in fixed income investment grade securities, including
government and agency securities, corporate bonds, and securitized bonds such as
mortgage backed and asset backed securities.

The Investment Grade Bond Fund also may invest up to 20% of its assets in other
fixed income securities, including convertible bonds and preferred stocks, and
in common stocks and similar equity securities when they are acquired as parts
of units with fixed income securities (including warrants or

6
<PAGE>

rights to purchase equity investments) or upon exercise of such warrants or
rights or upon the conversion of convertible bonds.

The fund may invest up to 40% of its assets in fixed income and other securities
issued by foreign entities of which up to 25% may be payable in foreign
currencies and traded abroad. Purchases of foreign securities payable in
foreign currencies will be affected either favorably or unfavorably by changes
in the value of the foreign currencies against the U.S. dollar. Investing in
foreign securities payable in foreign currencies carries increased risk to the
fund.

The fund's assets may include securities that have been purchased on a when-
issued or delayed-delivery basis. Delivery and payment for these securities
could take place a month or more after the date of the transaction, during which
time the value of the purchase commitment will fluctuate with the market for
comparable securities. However, both the payment and interest terms of the
securities are fixed at the time the fund makes a commitment to purchase the
securities. The fund makes these commitments only with the intention of
actually acquiring the securities, but may sell the securities before settlement
date if it is deemed advisable for investment reasons.

The fund may invest up to 20% of its assets in debt securities of less than
investment grade (i.e., securities rated Ba/BB or below by Moody's Investors
Service and S&P). These securities are commonly referred to as junk bonds.

The fund may invest in derivative instruments, such as options, futures
contracts or swap agreements. The fund typically uses derivatives as a
substitute for taking a position in the underlying asset and/or as a part of a
strategy designed to reduce exposure to other risks, such as interest rate or
currency risk.

Decision-Making Process

Investment decisions for the fund follow a three-stage process.

First, the portfolio managers and the strategy team identify key global and
macroeconomic themes they anticipate will drive the fixed income markets. For
example, the team analyzes liquidity trends, monetary and fiscal policy, capital
flows, business cycles, and global indicators such as yield curves and currency
dynamics.

Next, the market themes are translated into portfolio strategies and sector
allocations that are designed to add value and diversify risk. Various
strategies are analyzed and the investment team selects the appropriate
allocation within the risk/reward tolerances for the fund.

Finally, sector specialists buy or sell securities to implement the sector
allocations. The specific investment choices are based on fundamental industry
analysis (such as company business prospects, earnings, credit risk and
evaluation of management), independent research, and assesment of credit
spreads, liquidity and risk associated with ratings changes.

Related Risks of Investing in the Fund

The Investment Grade Bond Fund pursues its goals by investing primarily in fixed
rate investment grade debt securities, and to a lesser degree, in convertible
bonds and preferred stocks. These investments are commonly known as fixed
income investments.

7
<PAGE>

FIXED INCOME INVESTMENTS - RISKS IN GENERAL. The value of a fixed income
investment may fall as a result of factors directly relating to the company
issuing the investment, such as decisions made by its management or a reduction
in its credit rating. An investment's value may also fall because of factors
affecting many companies, such as increased production costs. The value of an
investment may also be affected by general changes in financial market
conditions, such as changing interest rates or currency exchange rates.

In addition to market risk described under "Principal Risks of Investing in the
Funds," the fund is also subject to the following risks:

PREPAYMENT RISK. Many types of debt securities, including mortgage securities
and asset-backed securities, are subject to prepayment risk. Prepayment risk
occurs when the issuer of a security can prepay principal prior to the
security's maturity. If an investment were to be prepaid during a time of
declining interest rates, a fund might have to reinvest the proceeds in an
investment offering a lower yield, and therefore might not benefit from any
increase in value as a result of declining interest rates. In addition, the
potential impact of prepayment features on the price of a debt security may be
difficult to predict and result in greater volatility.

CREDIT RISK. Investors normally expect to be compensated in proportion to the
risk they assume. Fixed-income investments of companies with poor credit usually
offer higher yields than those of companies with better credit. Higher-rated
investments generally offer lower credit risk, but not necessarily lower
interest rate risk. The value of a higher-rated investment still fluctuates in
response to changes in interest rates. The fund may at times invest in "zero
coupon" bonds and "payment-in-kind" bonds. Zero coupon bonds are issued at less
than face value and make payments of interest only at maturity rather than at
intervals during the life of the bond. Payment-in-kind bonds give the issuing
company the option to make interest payments in additional bonds rather than in
cash. Both kinds of bonds allow a company to avoid generating cash to make
current interest payments. These bonds therefore involve greater credit risk
and are typically subject to greater price fluctuations than bonds that pay
current interest in cash.

Up to 20% of the Investment Grade Bond Fund's investments may be in below
investment grade securities. The lower ratings of these investments reflect a
greater possibility that the issuing companies may be unable to make timely
payments of interest and principal and thus default. There may be an increased
risk of default in adverse economic conditions. If this happens, or is
perceived as likely to happen, the values of those investments will usually
drop. A default or expected default could also make it difficult for a fund to
sell the investments at prices approximating the values the fund had previously
placed on them. Because junk bonds are traded mainly by institutions, they
usually have a limited market, which may at times make it difficult for the fund
to establish their fair value. Credit ratings are based largely on the issuing
company's historical financial condition and the rating agencies' investment
analysis at the time of purchase. The rating assigned to any particular
investment does not necessarily reflect the issuing company's current financial
condition and does not reflect an assessment of an investment's volatility or
liquidity.

NON-U.S.INVESTMENTS. Non-U.S. investments involve certain special risks. For
example, their values may drop in response to changes in currency exchange
rates, unfavorable political and legal developments, unreliable or untimely
information, or economic and financial instability. In addition, the liquidity
of these investments may be more limited than domestic investments, which means
a fund may at times be unable to sell them at desirable prices. Non-U.S.
settlement procedures may also involve additional risks. These risks are
generally greater in the case of "emerging markets" that

8
<PAGE>

typically have less developed legal and financial systems. Certain of these
risks may also apply to some extent to domestic investments that are denominated
in foreign currencies or that are traded in foreign markets, or to investments
in U.S. companies that have significant foreign operations.

SMALLER COMPANIES. The Investment Grade Bond Fund may invest in small and
relatively less well-known companies with market capitalizations of less than $1
billion. These companies are more likely than larger companies to have limited
product lines, markets or financial resources, or to depend on a small, less
experienced management group. Investments in smaller companies may trade less
frequently and in limited volume, and their prices may fluctuate more than
investments in other companies. These investments may therefore be more
vulnerable to adverse developments.

ILLIQUID INVESTMENTS. TimesSquare believes that opportunities to earn high
yields may exist in investments that are not liquid and that may be considered
speculative. The sale of these investments is usually restricted or limited by
law, which may mean that the fund will not be able to sell them when TimesSquare
considers it is desirable to do so or may be able to sell them only at less than
their market value. The Investment Grade Bond Fund may invest up to 15% of its
assets in illiquid investments.

FREQUENT TRADING. The fund may buy and sell investments relatively often, which
involves higher expenses, including brokerage commissions, and may increase the
amount of taxes payable by shareholders.

S&P 500 Index Fund
Investment Objective, Principal Strategies and Related Risks

The primary objective of the fund is long-term growth of capital by investing
principally in common stocks. The fund will seek to fulfill this objective by
attempting to replicate the composition and total return, reduced by fund
expenses, of the S&P 500. Under normal conditions, the fund will invest at least
80% of its total assets in equity securities of companies which compose the S&P
500.

While the fund seeks to match the performance of the S&P 500, its stock
portfolio performance may not match that of the S&P 500 exactly. For example,
the fund's performance will reflect deductions for advisory fees and other
expenses that are not deducted from the performance figures reported for the S&P
500. In addition, while TimesSquare generally will seek to match the composition
of the S&P 500 as closely as possible, it may not always invest the fund's stock
portfolio to mirror the S&P 500 exactly. For instance, the fund may at times
have its portfolio weighted differently from the S&P 500 because of the
difficulty and expense of executing relatively small stock transactions. Under
normal conditions, the fund anticipates holding at least 480 of the S&P 500
issues at all times.

9
<PAGE>

The fund may also invest in stock index futures contracts and related options
and in certain short-term fixed income securities (including variable and
floating rate instruments or demand instruments) such as Money Market Fund
shares, certificates of deposit, commercial paper, commercial loan
participations, bankers' acceptances, U.S. Government obligations and repurchase
agreements, pending investment in common stocks of companies in the S&P 500 or
to meet anticipated short-term cash needs such as dividend payments or
redemptions of shares. The percentage of the fund's assets invested in various
types of securities will vary in light of existing economic conditions and other
factors as determined by TimesSquare. Except in extraordinary circumstances, the
fund will not invest in short-term fixed income securities or hold assets in
cash for temporary, defensive purposes.

Temporary, Defensive Positions. The Investment Grade Bond Fund and S&P 500 Index
Fund may, from time to time, take temporary defensive positions that are
inconsistent with their principal investment strategies by investing in short-
term fixed income securities in attempting to respond to adverse market,
economic, political or other conditions. If a fund takes a temporary defensive
position it may not achieve its investment objective.

Changes in Policies. The funds' Trustees may change the funds' investment
strategies and other policies without shareholder approval. A fund may not
change its investment objective or certain restrictions identified as
fundamental in the Statement of Additional Information without shareholder
approval.

10
<PAGE>

MANAGEMENT OF THE FUNDS

The investment adviser to the funds is TimesSquare Capital Management, Inc.
TimesSquare also serves as investment adviser for other investment companies,
and for a number of pension, advisory, corporate and other accounts. As of
December 31, 1999, TimesSquare managed assets of approximately $38.9 billion.
TimesSquare's mailing address is Four Times Square, 25/th/ Floor, New York, NY
10036.

Pursuant to a Master Investment Advisory Agreement, TimesSquare manages the
investment and reinvestment of the assets of the funds.

Subject to the control and periodic review of the Board of Trustees, TimesSquare
determines what investments shall be purchased, held, sold or exchanged by the
funds. TimesSquare is also responsible for overall management of the business
affairs of the funds.

As full compensation for the investment management and all other services
rendered by TimesSquare, the funds paid TimesSquare the following amounts for
calendar year 1999: $109,847 for the Money Market Fund; $108,182 for the
Investment Grade Bond Fund, and $608,323 for the S&P 500 Index Fund.
TimesSquare's fee for managing the funds, as a percentage of each fund's average
daily net assets, is as follows:

Money Market Fund - 0.35%
Investment Grade Bond Fund - 0.50%
S&P 500 Index Fund - 0.25%

These are the individuals primarily responsible for management of the Investment
Grade Bond Fund

Robert J. Moore. Mr. Moore is Chief Investment Officer of TimesSquare. He
previously had been co-head of global fixed income at Credit Suisse Asset
Management where he oversaw the U.S. fixed income team and chaired its
sector allocation committees. Prior to joining Credit Suisse in 1987, he
was head of a fixed income sales research group at Salomon Brothers. Mr.
Moore holds a B.S. in Finance from Lehigh University and is a member of
the Advisory Council for the Lehigh University Business School.

Robert W. Justich. Mr. Justich is Managing Director and senior member of the
Global Fixed Income portfolio management team of TimesSquare. Previously,
Mr. Justich was a Managing Director at Credit Suisse Asset Management,
where he led the organization's global fixed income credit function and
was directly responsible for approximately $6 billion in fixed income
assets. Prior to joining Credit Suisse in 1995, he spent seven years as
Director, Corporate Bond Trading at Merrill Lynch, focusing on credit
research and leading the development of Merrill's first proprietary
corporate bond trading desk. Mr. Justich holds a B.A. degree and M.B.A. in
Finance from Rutgers University.

Ira Edelblum. Mr. Edelblum is Managing Director and Core Fixed Income Portfolio
Manager of TimesSquare. Previously, Mr. Edelblum was with Credit Suisse
Asset Management where he was a portfolio manager specializing in
corporate bonds. Mr. Edelblum is a graduate of the State University of New
York (Albany) and holds an M.B.A. from New York University.

11
<PAGE>

Kevin D. Barry, CFA. Mr. Barry is Managing Director and Core Fixed Income
Portfolio Manager of TimesSquare. His responsibilities include managing
public mortgage and asset-backed securities. Previously, Mr. Barry was
with 1838 Investment Advisers. Mr. Barry received his bachelor's degree in
Finance, Summa cum laude, from LaSalle College in 1981.

Messrs. Moore, Justich and Edelblum joined TimesSquare in 1999. Mr. Barry
joined TimesSquare in 1997.

PRICING OF SHARES

The price of fund shares is based on each fund's net asset value. The funds'
custodian, State Street Bank and Trust Company ("State Street") calculates the
net asset value of each fund by dividing the number of outstanding shares of the
fund into the net assets of the fund. Net assets are the excess of a fund's
assets over its liabilities. Net asset value is determined as of the close of
regular trading (normally, 4:00 p.m. Eastern Time) on each day the New York
Stock Exchange ("NYSE") is open for trading.

The Investment Grade Bond and S&P 500 Index Funds value their investments for
which market quotations are readily available at market value. They value short-
term investments that will mature within 60 days at amortized cost, which
approximates market value. They value all other investments and assets at their
fair value. The funds translate prices for their investments quoted in foreign
currencies into U.S. dollars at current exchange rates. As a result, changes in
the value of those currencies in relation to the U.S. dollar may affect a fund's
NAV. Because foreign markets may be open at different times than the New York
Stock Exchange, the value of a fund's shares may change on days when
shareholders are not able to buy or sell them. If events materially affecting
the values of a fund's foreign investments occur between the close of foreign
markets and the close of regular trading on the New York Stock Exchange, these
investments may be valued at their fair value.

The Money Market Fund's investments are valued at amortized cost, which
approximates market value, in accordance with rules adopted by the Securities
and Exchange Commission. Using the amortized cost valuation method allows the
Money Market Fund to maintain its net asset value at $1.00 per share. There is
no assurance that this method will always be used, or if used, that the net
asset value under certain conditions will not deviate from $1.00 per share. If
the Board of Trustees deems it inadvisable to continue the practice of
maintaining the net asset value of $1.00 per share it may alter this procedure.
The fund will notify shareholders prior to any change, unless the change is only
temporary, in which case the shareholders will be notified after the change.

PURCHASE AND REDEMPTION OF SHARES

Shares may be purchased only by Eligible Purchasers. Eligible Purchasers are
limited to: (1) those separate accounts established by life insurance companies
that serve as the underlying investment vehicles for Variable Contracts; and (2)
Qualified Plans. Shares may not be purchased by individuals or by the general
public. The Board of Trustees of CIGNA Variable Products Group may broaden or
limit the definition of Eligible Purchasers. Purchase of shares is subject to
acceptance by each fund. Fund shares are sold exclusively to and redeemed by
Eligible Purchasers on a continuous basis.

Purchase and redemption orders received by life insurance companies and
Qualified Plans on a given business day from their Variable Contract owners or
Qualified Plan participants, as the case may be,

12
<PAGE>

will be effected at the net asset value of the applicable fund on that business
day if the orders are received by a fund in proper form and in accordance with
applicable requirements on the next business day. It is each Eligible
Purchaser's responsibility to properly transmit purchase and redemption orders
and payments in accordance with applicable requirements. Individuals may not
place orders directly with a fund. The funds do not issue share certificates.
Please refer to the prospectus of your life insurance company's Variable
Contract or Qualified Plan documents for information on how to invest in a fund.

Investments by Eligible Purchasers in a fund are expressed in terms of full and
fractional shares of a fund. All investments in a fund are credited to an
Eligible Purchaser's account immediately upon acceptance of the investment by
the fund.

The offering of shares of any fund may be suspended for a period of time and
each fund reserves the right to reject any specific purchase order. Purchase
orders may be refused if, in TimesSquare's opinion, they would disrupt the
management of a fund.

Each fund normally pays for shares redeemed within seven days after the life
insurance company that issued the Variable Contract or the Qualified Plan
receives the redemption request. However, a fund may suspend redemption or
postpone payment for any period when:

CIGNA Variable Products Group does not foresee any disadvantage to Variable
Contract owners arising out of the fact that the Trust offers its shares for
products offered by life insurance companies which may or may not be affiliated
with each other or that it offers its shares to Qualified Plans. Nevertheless,
the CIGNA Variable Products Group Board of Trustees intends to monitor events in
order to identify any material irreconcilable conflicts which may possibly arise
between Variable Contract owners and participants under Qualified Plans and to
determine what action, if any, should be taken in response. If a conflict were
to occur, one or more life insurance company separate accounts or Qualified
Plans might withdraw its investment in a fund. This might force the fund to sell
portfolio securities at disadvantageous prices.

DISTRIBUTIONS AND FEDERAL INCOME TAX CONSIDERATIONS

Each fund's policy is to distribute substantially all of its net investment
income and net realized capital gains each year. Generally, a fund may
distribute net realized capital gains only once a year. Each fund pays these
distributions to the life insurance company issuing the Variable Contract or the
Qualified Plan, which automatically reinvest the distributions in additional
fund shares at no charge.

Each fund has elected to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). The
Code relieves a regulated investment company from certain Federal income tax and
excise tax, if the company distributes substantially all of its net investment
income and net realized capital gains. See the SAI for a more complete
discussion.

13
<PAGE>

Each fund must meet asset diversification requirements under Section 817(h) of
the Code and the related regulation of the United States Treasury Department.
Each fund intends to comply with these diversification requirements.

The sole shareholders of the funds are life insurance companies issuing Variable
Contracts and Qualified Plans. Consequently, this prospectus does not discuss
the federal income tax consequences at the shareholder level. For information
concerning the federal income tax consequences to owners of Variable Contracts
and Qualified Plan participants, including the failure of a fund to meet the
diversification requirements discussed above, see the Prospectus for the
Variable Contract or your Qualified Plan documents.

14
<PAGE>

Financial Highlights

The financial highlights tables are intended to help you understand
the funds' financial performance for the past 5 years or since a
fund's commencement of operations. Certain information reflects
financial results for a single fund share. The total returns in the
tables represent the rate that an investor would have earned (or lost)
on an investment in a fund (assuming reinvestment of all dividends and
distributions). This information has been audited by
PricewaterhouseCoopers LLP, whose reports, along with the funds'
financial statements, are included in the annual reports, which are
available upon request.

Money Market Fund

<TABLE>
<CAPTION>
March 1,
1996 + to
Years Ended December 31, December 31,
1999 1998 1997 1996
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income (a) 0.05 0.05 0.05 0.04
Net realized and unrealized gain on securities -- -- -- --
------- ------- ------- -------
Total from investment operations 0.05 0.05 0.05 0.04
------- ------- ------- -------

Less distributions:
Dividends from net investment income (0.05) (0.05) (0.05) (0.04)
Distributions from capital gains -- -- -- --
------- ------- ------- -------
Total distributions (0.05) (0.05) (0.05) (0.04)
------- ------- ------- -------

Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= =======

Total Return (b) 4.83% 5.14% 5.19% 4.18% (c)
Ratios to Average Net Assets:
Net expenses 0.50% 0.50% 0.50% 0.58% (d)
Net investment income 4.72% 4.98% 5.07% 4.92% (d)
Fees and expenses waived by the Adviser 0.14% 0.23% 0.61% 1.03% (d)
Net assets, end of period (000 omitted) $31,345 $28,612 $14,540 $ 6,003
</TABLE>

(a) Per share data was calculated using average shares outstanding during the
period.
(b) Had the Adviser not waived or reimbursed a portion of expenses, total
return would have been reduced.
(c) Not annualized.
(d) Annualized.

+ Commencement of operations.

15
<PAGE>

Investment Grade Bond Fund

From May 3,
1999* to
December 31,
1999
- --------------------------------------------------------------
Per Share Operating Performance:
Net asset value, beginning of period $ 10.00
Income from investment operations
Net investment income 0.33
Net realized and unrealized gains (losses) (0.48)
-------
Total from investment operations (0.15)
-------

Less distributions:
From net investment income (0.32)
From capital gains --
-------

Total distributions (0.32)
-------

Net asset value, end of period $ 9.53
=======

Total Investment Return (a) (c) -1.48%
Ratios to Average Net Assets:
Net expenses 0.50% (b)
Net investment income 6.09% (b)
Fees and expenses waived or borne by the Adviser 0.29% (b)
Portfolio turnover 303%
Net assets, end of period (000 omitted) $39,261

(a) Had the Adviser not waived or reimbursed a portion of expenses, total
return would have been reduced.
(b) Annualized.
(c) Not annualized.
* Commencement of operations.

16
<PAGE>

S&P 500 Index Fund

<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 19.73 $ 15.83 $ 12.40 $ 10.75 $ 8.19
-------- -------- -------- ------- -------
Income from investment operations
Net investment income (a) 0.32 0.34 0.25 0.22 0.21
Net realized and unrealized gains (loss) 3.75 4.14 3.86 2.17 2.80
-------- -------- -------- ------- -------

Total from investment operations 4.07 4.48 4.11 2.39 3.01
-------- -------- -------- ------- -------

Less distributions
From net investment income (0.51) (0.40) (0.32) (0.29) (0.27)
From capital gains (0.46) (0.18) (0.36) (0.45) (0.18)
-------- -------- -------- ------- -------

Total distributions (0.97) (0.58) (0.68) (0.74) (0.45)
-------- -------- -------- ------- -------

Net asset value, end of period $ 22.83 $ 19.73 $ 15.83 $ 12.40 $ 10.75
======== ======== ======== ======= =======

Total Investment Return (b) 20.77% 28.60% 33.35% 22.48% 36.82%

Ratios to Average Net Assets
Net expenses 0.25% 0.25% 0.25% 0.60% 0.73%
Net investment income 1.57% 2.14% 1.93% 1.78% 2.05%
Fees and expenses waived or borne by the Adviser 0.13% 0.19% 0.30% 0.04% --
Portfolio turnover 3% 2% 4% 4% 4%
Net assets, end of period (000 omitted) $282,781 $206,475 $116,308 $71,513 $66,283
</TABLE>

(b) Had the Adviser not waived or reimbursed a portion of expenses, total return
would have been reduced.

17
<PAGE>

For investors who want more information about the funds, the following documents
are available free upon request:

Annual/Semi-annual Reports: Additional information about the funds' investments
is available in each fund's annual and semi-annual reports to shareholders. In
the funds' annual reports, you will find a discussion of the market conditions
and investment strategies that significantly affected the funds' performance
during their last fiscal year.

Statement of Additional Information (SAI): The SAI provides more detailed
information about the funds and is incorporated into this prospectus by
reference.

Information about the funds (including the SAI) can be reviewed and copied at
the Commission's Public Reference Room in Washington, D.C. You can get free
copies of reports and SAIs, request other information and discuss your questions
about the funds by contacting the funds at:

CIGNA Variable Products Group
900 Cottage Grove Road
Hartford, CT 06152-2210
Telephone: 1-800-528-6718

Reports and other information about the funds are available on the EDGAR
Database on the Commissions's Internet site at http://www.sec.gov. Copies of
this information may be obtained, after paying a duplicating fee, by electronic
request at the following E-mail address: [email protected], or by writing the
Commission's Public Reference Section, Washington, D.C. 20549-0102.

Information on the operation of the public reference room may be obtained by
calling the Commission at 1.202.942.8090.

CIGNA Variable Products Group

CIGNA Variable Products Money Market Fund
CIGNA Variable Products Investment Grade Bond Fund
CIGNA Variable Products S&P 500 Index Fund

(Investment Company
Act file no. 811-1646)
<PAGE>

CIGNA VARIABLE PRODUCTS GROUP

================================================================================

Prospectus
May 1, 2000

CIGNA Variable Products Money Market Fund
CIGNA Variable Products S&P 500 Index Fund

Table of Contents

<TABLE>
<CAPTION>
Page Number
<S> <C>
Summary.............................................. 1
Bar Charts and Performance Tables.................... 2
Fees and Expenses of the Funds....................... 4
Investment Information............................... 5
Management of the Funds.............................. 7
Pricing of Shares.................................... 8
Purchase and Redemption of Shares.................... 8
Distributions and Federal Income Tax Considerations.. 9
Financial Highlights................................. 11
</TABLE>

<PAGE>

Fund investment objectives:
- --------------------------
Money Market Fund: To provide as high a level of current
income as is consistent with the
preservation of capital and liquidity and
the maintenance of a stable $1.00 per
share net asset value.

S&P 500 Index Fund: To provide long-term growth of capital by
investing principally in common stocks.

Principal investment strategies
- -------------------------------

Money Market Fund: Invests exclusively in U.S. dollar
denominated high-quality short-term money
market instruments.

S&P 500 Index Fund: Attempts to replicate the composition and
total return, reduced by fund expenses,
of the Standard & Poor's 500 Composite
Stock Price Index (S&P 500) by investing
in common stocks of companies which make
up the S&P 500.

Principal risks of investing in the
- -----------------------------------
Funds
- -----

Money Market Fund: A major change in interest rates or a
default on the fund's investments could
cause the value of your investment in the
fund to change.

S&P 500 Index Fund: The fund is subject to market risk, which
is the possibility that common stock
prices will decline, sometimes
substantially, over short or extended
periods. The stock market tends to be
cyclical, with periods when stock prices
generally rise and periods when stock
prices generally decline.

The fund is subject to tracking risk,
which is the risk that the fund's returns
will be less than the returns of the S&P
500.

Loss of money is a risk of investing in any of the funds.

-1-
<PAGE>

Bar Charts and Performance Tables:
The bar charts and tables shown below provide some indication of the risks
of investing in the funds. The bar charts show changes in the performance
of the funds' shares from year to year over the life of the funds.
Performance data shown in the bar charts and tables does not reflect
Variable Contract or Qualified Plan charges. If it did, performance would
be lower

Money Market Fund - Annual Total Returns

During the period shown in the bar chart, the highest quarterly return was
1.31% (for the quarter ended 12/31/97) and the lowest quarterly return was
1.11% (for the quarter ended 06/30/99).

Money Market Fund - Average Annual Total Returns for the periods ended December
31, 1999

The Money Market Fund's 7-day annualized yield as of December 31, 1999 was
5.39%.

-2-
<PAGE>

S&P 500 Index Fund - Annual Total Returns

S&P 500 Index Fund Average - Annual Total Returns for the periods ended December
31, 1999

<TABLE>
<CAPTION>
Past 1 year Past 5 years Past 10 years*
----------- ------------ --------------
<S> <C> <C> <C>
S&P 500 Index Fund 20.77% 28.26% 17.27%
S&P 500 Index 21.04% 28.55% 18.21%
</TABLE>

*Prior to November 1993 the S&P 500 Index Fund was actively managed.

-3-
<PAGE>

Fees and Expenses of the Funds
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Funds.

<TABLE>
<CAPTION>
Money S&P 500
Market Index
Fund Fund
------ -------
<S> <C> <C>
Shareholder fees
(fees paid directly from your investments)

Maximum sales charge (load) imposed on
purchases (as a percentage of offering price) None None
Maximum deferred sales charge (load)
(as a percentage of offering price) None None
Redemption fee (as a percentage
of amount redeemed) None None
Exchange fee None None

Annual Fund operating expenses
(expenses that are deducted from Fund assets)

Management fees 0.35% 0.25%
Distribution (12b-1) fees None None
Other expenses (before waivers) 0.29% 0.13%
Total Annual Fund Operating Expenses 0.64% 0.38%
Waiver of Fund Expenses/(1)/ (0.14%) (0.13%)
Total Actual Fund Operating Expenses 0.50% 0.25%
</TABLE>

/(1)/ TimesSquare Capital Management, Inc., the funds' adviser, has
contractually agreed, until April 30, 2001, to waive management fees and
reimburse the funds if and to the extent total annual fund operating
expenses exceed 0.50% of average daily net assets for the Money Market
Fund and 0.25% for the S&P 500 Index Fund. TimesSquare may agree to
continue to waive management fees and reimburse expenses after April 30,
2001. Reimbursement arrangements can decrease a fund's expenses and boost
its performance.

Example

This Example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds.

4
<PAGE>

Plans. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:

Money Market Fund
1 year 3 years 5 years 10 years
$51 $191 $344 $790

S&P 500 Index Fund
1 year 3 years 5 years 10 years
$26 $109 $201 $470

INVESTMENT INFORMATION

Money Market Fund
Investment Objective and Policies

Operational Policies

5
<PAGE>

The fund may change these operational policies to reflect changes in the laws
and regulations without the approval of shareholders.

S&P 500 Index Fund
Investment Objective, Principal Strategies and Related Risks

6
<PAGE>

pending investment in common stocks of companies in the S&P 500 or to meet
anticipated short-term cash needs such as dividend payments or redemptions of
shares. The percentage of the fund's assets invested in various types of
securities will vary in light of existing economic conditions and other factors
as determined by TimesSquare. Except in extraordinary circumstances, the fund
will not invest in short-term fixed income securities or hold assets in cash for
temporary, defensive purposes.

Temporary, Defensive Positions. The Investment Grade Bond Fund and S&P 500
Index Fund may, from time to time, take temporary defensive positions that are
inconsistent with their principal investment strategies by investing in short-
term fixed income securities in attempting to respond to adverse market,
economic, political or other conditions. If a fund takes a temporary defensive
position it may not achieve its investment objective.

MANAGEMENT OF THE FUNDS

7
<PAGE>

approximately $38.9 billion. TimesSquare's mailing address is Four Times Square,
25/th/ Floor, New York, NY 10036.

Pursuant to a Master Investment Advisory Agreement, TimesSquare manages the
investment and reinvestment of the assets of the funds.

As full compensation for the investment management and all other services
rendered by TimesSquare, the funds paid TimesSquare the following amounts for
calendar year 1999: $109,847 for the Money Market Fund; $608,323 for the S&P
500 Index Fund. TimesSquare's fee for managing the funds, as a percentage of
each fund's average daily net assets, is as follows:

Money Market Fund - 0.35%
S&P 500 Index Fund - 0.25%

PRICING OF SHARES

The S&P 500 Index Fund values its investments for which market quotations are
readily available at market value. It values short-term investments that will
mature within 60 days at amortized cost, which approximates market value. They
value all other investments and assets at their fair value. The funds translate
prices for their investments quoted in foreign currencies into U.S. dollars at
current exchange rates. As a result, changes in the value of those currencies
in relation to the U.S. dollar may affect a fund's NAV. Because foreign markets
may be open at different times than the New York Stock Exchange, the value of a
fund's shares may change on days when shareholders are not able to buy or sell
them. If events materially affecting the values of a fund's foreign
investments occur between the close of foreign markets and the close of regular
trading on the New York Stock Exchange, these investments may be valued at their
fair value.

8
<PAGE>

PURCHASE AND REDEMPTION OF SHARES

Shares may be purchased only by Eligible Purchasers. Eligible Purchasers are
limited to: (1) those separate accounts established by life insurance companies
that serve as the underlying investment vehicles for Variable Contracts; and (2)
Qualified Plans. Shares may not be purchased by individuals or by the general
public. The Board of Trustees of CIGNA Variable Products Group may broaden or
limit the definition of Eligible Purchasers. Purchase of shares is subject to
acceptance by each fund. Fund shares are sold exclusively to and redeemed by
Eligible Purchasers on a continuous basis.

Purchase and redemption orders received by life insurance companies and
Qualified Plans on a given business day from their Variable Contract owners or
Qualified Plan participants, as the case may be, will be effected at the net
asset value of the applicable fund on that business day if the orders are
received by a fund in proper form and in accordance with applicable requirements
on the next business day. It is each Eligible Purchaser's responsibility to
properly transmit purchase and redemption orders and payments in accordance with
applicable requirements. Individuals may not place orders directly with a fund.
The funds do not issue share certificates. Please refer to the prospectus of
your life insurance company's Variable Contract or Qualified Plan documents for
information on how to invest in a fund.

9
<PAGE>

DISTRIBUTIONS AND FEDERAL INCOME TAX CONSIDERATIONS

10
<PAGE>

Financial Highlights

The financial highlights tables are intended to help you understand the
funds' financial performance for the past 5 years or since a fund's
commencement of operations. Certain information reflects financial results
for a single fund share. The total returns in the tables represent the rate
that an investor would have earned (or lost) on an investment in a fund
(assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, whose reports,
along with the funds' financial statements, are included in the annual
reports, which are available upon request.

Money Market Fund

<TABLE>
<CAPTION>
March 1,
1996 + to
Years Ended December 31, December 31,
1999 1998 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income (a) 0.05 0.05 0.05 0.04
Net realized and unrealized gain on securities -- -- -- --
------- ------- ------- -------
Total from investment operations 0.05 0.05 0.05 0.04
------- ------- ------- -------

Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= =======

11
<PAGE>

S&P 500 Index Fund

Income from investment operations
Net investment income (a) 0.32 0.34 0.25 0.22 0.21
Net realized and unrealized gains (loss) 3.75 4.14 3.86 2.17 2.80
-------- -------- -------- ------- -------
Total from investment operations 4.07 4.48 4.11 2.39 3.01
-------- -------- -------- ------- -------
Less distributions
From net investment income (0.51) (0.40) (0.32) (0.29) (0.27)
From capital gains (0.46) (0.18) (0.36) (0.45) (0.18)
-------- -------- -------- ------- -------

Total distributions (0.97) (0.58) (0.68) (0.74) (0.45)
-------- -------- -------- ------- -------

Net asset value, end of period $ 22.83 $ 19.73 $ 15.83 $ 12.40 $ 10.75
======== ======== ======== ======= =======

Total Investment Return (b) 20.77% 28.60% 33.35% 22.48% 36.82%

(b) Had the Adviser not waived or reimbursed a portion of expenses, total
return would have been reduced.

12
<PAGE>

For investors who want more information about the funds, the following documents
are available free upon request:

Statement of Additional Information (SAI): The SAI provides more detailed
information about the funds and is incorporated into this prospectus by
reference.

CIGNA Variable Products Group
900 Cottage Grove Road
Hartford, CT 06152-2210
Telephone: 1-800-528-6718

Information on the operation of the public reference room may be obtained by
calling the Commission at 1.202.942.8090.

CIGNA Variable Products Group

CIGNA Variable Products Money Market Fund
CIGNA Variable Products S&P 500 Index Fund

(Investment
Company Act
file no. 811-1646)
<PAGE>

CIGNA VARIABLE PRODUCTS GROUP

================================================================================

Prospectus
May 1, 2000

CIGNA Variable Products Money Market Fund

Table of Contents

Page Number
<S> <C>
Summary.............................................. 1
Bar Chart and Performance Table...................... 1
Fees and Expenses of the Fund........................ 3
Investment Information............................... 4
Management of the Fund............................... 5
Pricing of Shares.................................... 5
Purchase and Redemption of Shares.................... 6
Distributions and Federal Income Tax Considerations.. 7
Financial Highlights................................. 8
</TABLE>

<PAGE>

Fund investment objective:
- -------------------------
To provide as high a level of current income as is consistent
with the preservation of capital and liquidity and the
maintenance of a stable $1.00 per share net asset value.

Principal investment strategies:
- -------------------------------
The Money Market Fund invests exclusively in U.S. dollar
denominated high-quality short-term money market instruments.

Principal risks of investing in the Fund:
- ----------------------------------------
A major change in interest rates or a default on the fund's
investments could cause the value of your investment in the
fund to change.

An investment in the Money Market Fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. Although the fund seeks to preserve
the value of your investment at $1.00 per share, it is
possible to lose money by investing in the fund.

Loss of money is a risk of investing in the fund.

Bar Chart and Performance Table:

The bar chart and table shown below provide some indication of the risks of
investing in the fund. The bar chart shows changes in the performance of the
fund's shares from year to year over the life of the fund. Performance data
shown in the bar chart and table does not reflect Variable Contract or Qualified
Plan charges. If it did, performance would be lower

-1-
<PAGE>

Money Market Fund - Annual Total Returns
[GRAPH]

During the period shown in the bar chart, the highest quarterly return was 1.31%
(for the quarter ended12/31/97) and the lowest quarterly return was 1.11% (for
the quarter ended 06/30/99).

Money Market Fund
Average Annual Total Returns
for the periods ended December 31, 1999

<TABLE>
<CAPTION>
Past 1 year Since Inception (Commenced Operations March 1, 1996)
----------- ----------------
<S> <C> <C>
Money Market Fund 4.83% 5.05%

3-Month U.S. Treasury bills 4.74% 5.10%
</TABLE>

The Money Market Fund's 7-day annualized yield as of December 31, 1999 was
5.39%.

-2-
<PAGE>

Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

Shareholder fees
(fees paid directly from your investments)

Maximum sales charge (load) imposed on
purchases (as a percentage of offering price) None
Maximum deferred sales charge (load)
(as a percentage of offering price) None
Redemption fee (as a percentage
of amount redeemed) None
Exchange fee None

Annual Fund operating expenses
(expenses that are deducted from Fund assets)

Management fees 0.35%
Distribution (12b-1) fees None
Other expenses (before waivers) 0.29%
Total Annual Fund Operating Expenses 0.64%
Waiver of Fund Expenses/ (1)/ (0.14%)
Total Actual Fund Operating Expenses 0.50%

/(1)/ TimesSquare Capital Management, Inc., the fund's adviser, has
contractually agreed, until April 30, 2001, to waive management fees
and reimburse the funds if and to the extent total annual fund
operating expenses exceed 0.50% of average daily net assets for the
Money Market Fund. TimesSquare may agree to continue to waive
management fees and reimburse expenses after April 30, 2001.
Reimbursement arrangements can decrease a fund's expenses and boost
its performance.

Example

This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

1 year 3 years 5 years 10 years
$51 $191 $344 $790

3
<PAGE>

INVESTMENT INFORMATION

Investment Objective and Policies

Operational Policies

Pursuant to procedures adopted by the fund's Board of Trustees, the fund may
purchase only high quality securities that TimesSquare Capital Management, Inc.,
the fund's investment adviser ("TimesSquare") believes present minimal credit
risks. To be considered high quality, a security must be a U.S. Government
security or must be rated in accordance with applicable rules in one of the two
highest categories for short-term securities by at least two nationally
recognized rating services (or by one, if only one rating service has rated the
security) or, if unrated, judged to be of equivalent quality by TimesSquare.

4
<PAGE>

The fund may change these operational policies to reflect changes in the laws
and regulations without the approval of shareholders.

MANAGEMENT OF THE FUNDS

Pursuant to a Master Investment Advisory Agreement, TimesSquare manages the
investment and reinvestment of the assets of the fund.

As full compensation for the investment management and all other services
rendered by TimesSquare, the fund paid TimesSquare $109,847 for calendar year
1999. TimesSquare's fee for managing the fund, as a percentage of the fund's
average daily net assets, is 0.35%.

PRICING OF SHARES

The price of fund shares is based on the fund's net asset value. The fund's
custodian, State Street Bank and Trust Company ("State Street") calculates the
net asset value of the fund by dividing the number of outstanding shares of the
fund into the net assets of the fund. Net assets are the excess of a fund's
assets over its liabilities. Net asset value is determined as of the close of
regular trading (normally, 4:00 p.m. Eastern Time) on each day the New York
Stock Exchange ("NYSE") is open for trading.

5
<PAGE>

PURCHASE AND REDEMPTION OF SHARES

Shares may be purchased only by Eligible Purchasers. Eligible Purchasers are
limited to: (1) those separate accounts established by life insurance companies
that serve as the underlying investment vehicles for Variable Contracts; and (2)
Qualified Plans. Shares may not be purchased by individuals or by the general
public. The Board of Trustees of CIGNA Variable Products Group may broaden or
limit the definition of Eligible Purchasers. Purchase of shares is subject to
acceptance by each fund. Fund shares are sold exclusively to and redeemed by
Eligible Purchasers on a continuous basis.

Investments by Eligible Purchasers in the fund are expressed in terms of full
and fractional shares of the fund. All investments in the fund are credited to
an Eligible Purchaser's account immediately upon acceptance of the investment by
the fund.

The offering of shares of any fund may be suspended for a period of time and the
fund reserves the right to reject any specific purchase order. Purchase orders
may be refused if, in TimesSquare's opinion, they would disrupt the management
of a fund.

The fund normally pays for shares redeemed within seven days after the life
insurance company that issued the Variable Contract or the Qualified Plan
receives the redemption request. However, the fund may suspend redemption or
postpone payment for any period when:

CIGNA Variable Products Group does not foresee any disadvantage to Variable
Contract owners arising out of the fact that the Trust offers its shares for
products offered by life insurance companies which may or may not be affiliated
with each other or that it offers its shares to Qualified Plans. Nevertheless,
the CIGNA Variable Products Group Board of Trustees intends to monitor events in
order to identify any material irreconcilable conflicts which may possibly arise
between Variable Contract owners and participants under Qualified Plans and to
determine what action, if any, should be taken in response. If a conflict were
to occur, one or more life insurance company separate accounts or Qualified
Plans might withdraw its investment in the fund. This might force the fund to
sell portfolio securities at disadvantageous prices.

6
<PAGE>

DISTRIBUTIONS AND FEDERAL INCOME TAX CONSIDERATIONS

7
<PAGE>

Financial Highlights

The financial highlights table is intended to help you understand the
fund's financial performance since the fund's commencement of operations.
Certain information reflects financial results for a single fund share. The
total returns in the table represent the rate that an investor would have
earned on an investment in the fund (assuming reinvestment of all dividends
and distributions). This information has been audited by
PricewaterhouseCoopers LLP, whose reports, along with the fund's financial
statements, are included in the annual report, which is available upon
request.

Money Market Fund

<TABLE>
<CAPTION>
March 1,
1996 + to
Years Ended December 31, December 31,
1999 1998 1997 1996
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income (a) 0.05 0.05 0.05 0.04
Net realized and unrealized gain on securities -- -- -- --
------- ------- ------- -------
Total from investment operations 0.05 0.05 0.05 0.04
------- ------- ------- -------

Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= =======

8
<PAGE>

For investors who want more information about the fund, the following documents
are available free upon request:

Annual/Semi-annual Reports: Additional information about the fund's investments
is available in the fund's annual and semi-annual reports to shareholders. In
the fund's annual reports, you will find a discussion of the market conditions
and investment strategies that significantly affected the fund's performance
during its last fiscal year.

Statement of Additional Information (SAI): The SAI provides more detailed
information about the fund and is incorporated into this prospectus by
reference.

CIGNA Variable Products Group
900 Cottage Grove Road
Hartford, CT 06152-2210
Telephone: 1-800-528-6718

Information on the operation of the public reference room may be obtained by
calling the Commission at 1.202.942.8090.

CIGNA Variable Products Group

CIGNA Variable Products Money Market Fund

(Investment
Company Act
file no. 811-1646)
<PAGE>

C I G N A V A R I A B L E P R O D U C T S G R O U P
------------------------------------------------------
CIGNA Variable Products Money Market Fund
CIGNA Variable Products Investment Grade Bond Fund
CIGNA Variable Products S&P 500 Index Fund

S T A T E M E N T O F A D D I T I O N A L I N F O R M A T I O N

M A Y 1, 2 0 0 0

==============================================================================

This Statement of Additional Information is not a prospectus, but should be read
in conjunction with the prospectus for CIGNA Variable Products Group, (the
series of CIGNA Variable Products Group are referred to as the "Funds" and each
separately as a "Fund"), having the same date as the date of this Statement of
Additional Information. Much of the information contained in this Statement of
Additional Information expands upon subjects discussed in the prospectus. No
investment in shares of any of the Funds should be made without first reading
the prospectus for the Funds. A copy of the prospectus for the Funds may be
obtained from CIGNA Variable Products Group c/o TimesSquare Capital Management,
Inc., 900 Cottage Grove Road, S-210, Hartford, CT 06152-2210.

The financial statements for each of the Funds of CIGNA Variable Products Group
for fiscal year ended December 31, 1999 as contained in the Annual Reports to
Shareholders dated December 31, 1999, are hereby incorporated by reference into
this Statement of Additional Information. The financial statements for the
fiscal year ended December 31, 1999 have been examined by PricewaterhouseCoopers
LLP, independent accountants, whose report thereon also is incorporated herein
by reference. The Shareholder Reports are available, without charge, upon
request, by calling 1-800-528-6718.

The financial statements of the Funds will be delivered with this Statement of
Additional Information.

Page 1

<PAGE>

<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
PAGE
----
<S> <C>
General Information About the Funds............................... 3
-----------------------------------

The Funds, Their Investment Objectives and Policies............... 4
---------------------------------------------------

Money Market Fund........... ..................................... 4
-----------------

Investment Grade Bond Fund........................................ 6
--------------------------

S&P 500 Index Fund................................................ 18
------------------

Matters Relating to All Funds..................................... 18
-----------------------------

Investment Restrictions........................................... 27
-----------------------

Tax Matters....................................................... 29
-----------

Activities Of Affiliated Companies................................ 31
----------------------------------

Control Persons and Principal Holders of Securities............... 31
---------------------------------------------------

Management of the Funds........................................... 32
-----------------------

Investment Advisory and Other Services............................ 34
--------------------------------------

Portfolio Turnover and Brokerage Allocation....................... 37
-------------------------------------------

Capital Stock..................................................... 39
-------------

Performance Information........................................... 40
-----------------------

Purchase, Redemption and Pricing of Securities.................... 42
----------------------------------------------

Dividends......................................................... 44
---------

Limitation on Transfers........................................... 44
-----------------------

Ratings of Securities............................................. 44
---------------------
</TABLE>

Page 2

<PAGE>

GENERAL INFORMATION ABOUT THE FUNDS
- -----------------------------------

The Trust offers three series portfolios or Funds for sale:

Money Market Fund
Investment Grade Bond Fund
S&P 500 Index Fund
__________________

Prior to January 2, 1996 the sole series of the Trust was the S&P 500 Index
Fund, which was formerly known as Companion Fund. The Money Market Fund was
added to the Trust on January 2, 1996 and the Investment Grade Bond Fund was
added and commenced operation in April 1999.

Prior to November 9, 1993, Companion Fund sought to fulfill its investment
objective through an active management strategy, investing primarily in common
stocks of established medium to large-size companies selected by TimesSquare
Capital Management, Inc. ("TimesSquare"), its investment adviser, as having
prospects for above-average earnings growth. On that date, at the request of
Connecticut General Life Insurance Company ("CG Life") (which on its own behalf
and through its separate accounts was the Fund's sole shareholder), the Board of
Trustees of the Trust authorized TimesSquare to change Companion Fund's
investment strategy to the indexation approach described in the prospectus.

CIGNA Variable Products Group is registered under the Investment Company Act of
1940, as amended, as a diversified, open-end management investment company, and
was organized as a Massachusetts business trust pursuant to a Master Trust
Agreement dated February 4, 1988. On April 26, 1988, the Trust acquired the
assets and liabilities of Companion Fund, a series of shares of CIGNA Annuity
Funds Group (n/k/a CIGNA Funds Group). As mentioned above, Companion Fund is
now known as the S&P 500 Index Fund. Under the Master Trust Agreement, the
Board of Trustees is authorized to create new series of shares without the
necessity of a vote of shareholders of the Trust.

Each Fund is a separate series of the Trust. The assets received by the Trust
from the issue or sale of shares of each of the Funds, and all income,
earnings, profits and proceeds thereof, are specifically allocated to the
appropriate Fund, subject only to the rights of creditors. They constitute the
underlying assets of each of Fund, are required to be segregated on the books
of account, and are to be charged with the expenses in respect to such Fund.
Any general expenses of the Trust not readily identifiable as belonging to a
particular Fund shall be allocated by or under the direction of the Board of
Trustees in such manner as the Board determines to be fair and equitable.

Each share of each Fund represents an equal, proportionate interest in that
Fund with each other share and is entitled to such dividends and distributions
out of the income belonging to such Fund as are declared by the Board. Upon any
liquidation of the Trust, shareholders of a Fund are entitled to share pro rata
in the net assets belonging to such Fund available for distribution.

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THE FUNDS, THEIR INVESTMENT OBJECTIVES AND POLICIES
- ---------------------------------------------------

Classification
- --------------

The Funds are diversified, open-end management investment companies.

Investment Strategies and Risks
- -------------------------------

Money Market Fund
- -----------------

The types of money market instruments in which the Money Market Fund presently
invests are listed in the prospectus and in this Statement of Additional
Information. If the Trustees determine that it may be advantageous to invest in
other types of money market instruments, the Money Market Fund may invest in
such instruments, if it is permitted to do so by its investment objective,
policies and restrictions.

Obligations of Depository Institutions and Commercial Paper of Foreign Issuers.
As discussed in the Prospectus, the Money Market Fund may invest in U.S. dollar-
denominated obligations of U.S. and foreign depository institutions, including
commercial and savings banks and savings and loan associations. The obligations
may be issued by U.S. or foreign depository institutions, foreign branches or
subsidiaries of U.S. depository institutions ("Eurodollar" obligations), U.S.
branches or subsidiaries of foreign depository institutions ("Yankeedollar"
obligations) or foreign branches or subsidiaries of foreign depository
institutions. Obligations of foreign depository institutions, their branches
and subsidiaries, and Eurodollar and Yankeedollar obligations may involve
additional investment risks compared to the risks of obligations of U.S.
institutions. Such investment risks include adverse political and economic
developments, the possible imposition of withholding taxes on interest income
payable on such obligations, the possible seizure or nationalization of foreign
deposits and the possible establishment of exchange controls or other foreign
governmental laws or restrictions which might adversely affect the payment of
principal and interest. Generally, the issuers of such obligations are subject
to fewer regulatory requirements than are applicable to U.S. banks. Foreign
depository institutions, their branches or subsidiaries, and foreign branches or
subsidiaries of U.S. banks may be subject to less stringent reserve requirements
than U.S. banks. U.S. branches or subsidiaries of foreign banks are subject to
the reserve requirements of the state in which they are located. There may be
less publicly available information about a foreign bank or a branch or
subsidiary of a foreign bank than about a U.S. institution, and such branches or
subsidiaries may not be subject to the same accounting, auditing and financial
record keeping standards and requirements as U.S. banks. Evidence of ownership
of foreign depository and Eurodollar obligations may be held outside of the
United States and the Fund may be subject to the risks associated with the
holding of such property overseas. Foreign depository and Eurodollar
obligations of the Fund held overseas will be held by foreign branches of the
custodian for the Fund's portfolio securities or by other U.S. or foreign banks
under subcustodian arrangements complying with the requirements of the
Investment Company Act of 1940, as amended (the "1940

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Act"). TimesSquare will consider the above factors in making investments in
foreign depository, Eurodollar and Yankeedollar obligations and will not
knowingly purchase obligations which, at the time of purchase, are subject to
exchange controls or withholding taxes. Generally, the Fund will limit its
foreign depository and Yankeedollar investments to obligations of banks
organized in Canada, France, Germany, Japan, the Netherlands, Switzerland, the
United Kingdom and other western industrialized nations. As discussed in the
prospectus, the Fund may also invest in U.S. dollar-denominated commercial paper
and other short-term obligations issued by foreign entities. These investments
are subject to quality standards similar to those applicable to investments in
comparable obligations of domestic issuers. Investments in foreign entities in
general involve the same risks as those described above in connection with
investments in Eurodollar and Yankeedollar obligations and obligations of
foreign depository institutions and their foreign branches and subsidiaries.

Rating Agencies. The Money Market Fund's investments in short-term corporate
debt and bank money instruments will be rated, or will be issued by issuers who
have been rated, in one of the two highest rating categories for short-term debt
obligations by a nationally recognized statistical rating organization (a
"NRSRO") or, if not rated, will be of comparable quality as determined by the
Trustees of the Trust. The Money Market Fund's investments in corporate bonds
and debentures (which must have maturities at the date of purchase of 397 days
(13 months) or less) will be in issuers who have received from an NRSRO a rating
with respect to a class of short-term debt obligations that is comparable in
priority and security with the investment in one of the two highest rating
categories for short-term obligations or if not rated, will be of comparable
quality as determined by the Trustees of the Trust. Currently, there are six
NRSROs: Duff and Phelps Inc., Fitch Investors Services, Inc., IBCA Limited and
its affiliate IBCA Inc., Thompson BankWatch, Inc., Moody's Investors Service
Inc. and Standard & Poor's Rating Group.

The rating applied to a security at the time the security is purchased by the
Fund may be changed while the Fund holds such security in its portfolio. This
change may affect, but will not necessarily compel, a decision to dispose of a
security. If the major rating services used by the Fund were to alter their
standards or systems for rating, the Fund would then employ ratings under the
revised standards or systems that would be comparable to those specified in its
current investment objective, policies and restrictions.

Rule 2a-7. The Board of Trustees has established procedures in compliance with
Rule 2a-7 under the 1940 Act that include reviews of portfolio holdings by the
Trustees at such intervals as they may deem appropriate to determine whether net
asset value of the Money Market Funds, calculated by using available market
quotations, deviates from $1.00 per share and, if so, whether this deviation may
result in material dilution or is otherwise unfair to existing shareholders. In
the event the Trustees determine that a deviation having this result exists,
they intend to take such corrective action as they deem necessary and
appropriate, including the sale of portfolio instruments prior to maturity in
order to realize capital gains or losses or to shorten average portfolio
maturity; withholding dividends; or establishing a net asset value

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per share by using available market quotations; in which case, the net asset
value could possibly be greater or less than $1.00 per share. If the Trustees
deem it inadvisable to continue the practice of maintaining the net asset value
at $1.00 per share, they may alter this procedure. The shareholders of the Fund
will be notified promptly after any such change.

Any increase in the value of a shareholder's investment in the Money Market Fund
resulting from the reinvestment of dividend income is reflected by an increase
in the number of shares in the shareholder's account.

Investment Grade Bond Fund
- --------------------------

In pursuing its investment objective, the Investment Grade Bond Fund will
principally invest in the following types of interest-bearing securities:

(1) Marketable debt securities that are rated at the time of purchase within
the four highest grades assigned by Moody's Investors Service (Aaa, Aa, A
or Baa) or Standard & Poor's Corporation (AAA, AA, A or BBB).

(2) U.S. Government securities, as described below.

(3) Obligations of, or guaranteed by, U.S. banks or bank holding companies,
which obligations are considered by TimesSquare to have investment
qualities comparable to securities which may be purchased under Item (1)
above, although there can be no assurance that these obligations shall
have such qualities.

(4) Money market instruments eligible for purchase by the Money Market Fund,
which instruments are considered by TimesSquare to have investment
qualities comparable to securities which may be purchased under Item (1)
above, although there can be no assurance that said obligations shall
have such qualities.

(5) Marketable securities (payable in U.S. dollars) of, or guaranteed by, the
Government of Canada or of a Province of Canada or any instrumentality or
political subdivision thereof.

The balance of the Investment Grade Bond Fund's assets may be invested in other
fixed-income securities, including straight debt and convertible debt securities
and preferred stock. Investment positions may be held in common stock and
similar equity securities (including warrants or rights to purchase equity
investments as described below) when they are acquired as parts of units with
fixed-income securities or upon exercise of such warrants or rights or upon the
conversion of such securities. The Investment Grade Bond Fund also may purchase
and sell interest rate futures contracts and purchase options on futures
contracts as described under "Futures Contracts" and "Options on Futures
Contracts."

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U.S. Government securities include a variety of securities that are issued or
guaranteed by the U.S. Treasury, by various agencies of the U.S. Treasury, by
various agencies of the U.S. Government or by various instrumentalities that
have been established or sponsored by the U.S. Government. Treasury securities
include Treasury bills, Treasury notes and Treasury bonds. Treasury bills have
a maturity of one year or less; Treasury notes have maturities of one to ten
years; Treasury bonds generally have a maturity of greater than ten years. The
Federal agencies established as instrumentalities of the U.S. Government to
supervise and finance certain types of activities include the Federal Home Loan
Banks, the Government National Mortgage Association, the Federal National
Mortgage Association, the Federal Land Banks, the Small Business Administration,
the Export-Import Bank, the Federal Intermediate Credit Banks and the Bank for
Cooperatives.

U.S. Government securities may take the form of participation interests in, and
may be evidenced by, deposit or safekeeping receipts. Participation interests
are pro rata interests in U.S. Government securities such as interests in pools
of mortgages sold by the Government National Mortgage Association; instruments
evidencing deposit or safekeeping are documentary receipts for such original
securities held in custody by others.

U.S. Government obligations, including those that are guaranteed by Federal
agencies or instrumentalities, may or may not be backed by the "full faith and
credit" of the United States. Some securities issued by Federal agencies or
instrumentalities are only supported by the credit of the agency or
instrumentality (such as the Federal Home Loan Banks) while others have an
additional line of credit with the U.S. Treasury (such as the Federal National
Mortgage Association). Certain securities issued by Federal agencies or
instrumentalities backed by the full faith and credit of the U.S. Government
include those issued by the Government National Mortgage Association and the
Small Business Administration. In the case of securities not backed by the full
faith and credit of the United States, the Fund must look principally to the
agency issuing or guaranteeing the obligation for ultimate repayment and may not
be able to assert a claim against the United States itself in the event the
agency or instrumentality does not meet its commitments.

Warrants are, in effect, longer term call options. They give the holder the
right to purchase a given number of shares of a particular company at specified
prices within certain periods of time. The purchaser of a warrant expects that
the market price of the security will exceed the purchase price of the warrant
plus its exercise price, thus resulting in a profit. However, since the market
price may never exceed the exercise price before the expiration date of the
warrant, the purchaser of the warrant risks the loss of the entire purchase
price of the warrant.

Warrants generally trade in the open market and may be sold rather than
exercised. Warrants are sometimes sold in unit form with other securities of an
issuer. Units of warrants and common stock may be employed in financing
unseasoned companies. The purchase price varies with the security, the life of
the warrant and various other investment factors.

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Investments in warrants, valued at the lower of cost or market, may not exceed
5% of the value of the Fund's net assets.

Considerations of liquidity and preservation of capital mean that the Investment
Grade Bond Fund may not necessarily invest in instruments paying the highest
available yield at a particular time. This Fund may, consistent with its
investment objective, attempt to maximize yields by buying and selling portfolio
investments in anticipation of or in response to changing economic and money
market conditions and trends. This Fund will also invest to take advantage of
what are believed to be temporary disparities in the yields of the different
segments of the market or among particular instruments within the same segment
of the market. These policies, as well as the relatively short maturity of
obligations to be held by this Fund, may result in frequent changes in portfolio
holdings. There usually are no brokerage commissions as such paid in connection
with the purchase of securities of the type in which this Fund may invest. See
"Brokerage Allocation" for a discussion of underwriters' commissions and
dealers' spreads involved in the purchase and sale of portfolio securities.

The Investment Grade Bond Fund may also invest in:

SWAP AGREEMENTS. The Investment Grade Bond Fund may enter into swap agreements
such as interest rate, index and currency exchange rate swaps. These
transactions would be entered into in an attempt to obtain a particular return
when it is considered desirable to do so, possibly at a lower cost to the Fund
than if the Fund had invested directly in the asset that yielded the desired
return. Swap agreements are two-party contracts entered into primarily by
institutional investors for periods ranging from a few weeks to more than one
year. In a standard swap transaction, two parties agree to exchange the returns
(or differentials in rates of return) earned or realized on particular
predetermined investments or instruments, which may be adjusted for an interest
factor. The gross returns to be exchanged or "swapped" between the parties are
generally calculated with respect to a "notional amount," i.e., the return on or
increase in value of a particular dollar amount invested at a particular
interest rate, in a particular foreign currency, or in a "basket" of securities
representing a particular index.

Most swap agreements entered into by a Fund calculate the obligations of the
parties to the agreement on a "net basis." Consequently, a Fund's current
obligations (or rights) under a swap agreement will generally be equal only to
the net amount to be paid or received under the agreement based on the relative
values of the positions held by each party to the agreement (the "net amount").
A Fund's current obligations under a swap agreement will be accrued daily
(offset against amounts owed to the Fund), and any accrued but unpaid net
amounts owed to a swap counterparty will be covered by the segregation of assets
determined to be liquid by TimesSquare, to limit any potential leveraging of the
Fund's portfolio. Obligations under swap agreements so covered will not be
construed to be "senior securities" for purposes of the Funds' investment
restriction concerning senior securities. A Fund will not enter into a swap
agreement with any single party if the net

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amount owed or to be received under existing contracts with that party would
exceed 5% of the Fund's assets.

Whether a Fund's use of swap agreements will be successful in furthering its
investment objective will depend on TimesSquare's ability to predict correctly
whether certain types of investments are likely to produce greater returns than
other investments. Because they are two-party contracts and because they may
have terms of greater than seven days, swap agreements may be considered to be
illiquid investments. Moreover, a Fund bears the risk of loss of the amount
expected to be received under a swap agreement in the event of the default or
bankruptcy of a swap agreement counterparty. A Fund will enter into swap
agreements only with counterparties that meet certain standards for
creditworthiness (generally, such counterparties would have to be eligible
counterparties under the terms of the Funds' repurchase agreement guidelines).
Certain restrictions imposed on the Funds by the Internal Revenue Code may limit
a Fund's ability to use swap agreements. The swaps market is a relatively new
market and is largely unregulated. It is possible that developments in the swaps
market, including potential government regulation, could adversely affect a
Fund's ability to terminate existing swap agreements or to realize amounts to be
received under such agreements.

FOREIGN DEBT SECURITIES. The returns on foreign debt securities reflect
interest rates and other market conditions prevailing in those countries and the
effect of gains and losses in the denominated currencies against the U.S.
dollar, which have had a substantial impact on investment in foreign fixed-
income securities. The relative performance of various countries' fixed-income
markets historically has reflected wide variations relating to the unique
characteristics of each country's economy. Year-to-year fluctuations in certain
markets have been significant, and negative returns have been experienced in
various markets from time to time.

The foreign government securities in which the Fund may invest generally consist
of obligations issued or backed by national, state or provincial governments or
similar political subdivisions or central banks in foreign countries. Foreign
government securities also include debt obligations of supranational entities,
which include international organizations designated, or backed by governmental
entities to promote economic reconstruction or development, international
banking institutions and related government agencies. Examples include the
International Bank for Reconstruction and Development (the "World Bank"), the
European Coal and Steel Community, the Asian Development Bank and the
InterAmerican Development Bank.

Foreign government securities also include debt securities of "quasi-
governmental agencies" and debt securities denominated in multinational currency
units of an issuer (including supranational issuers). Debt securities of quasi-
governmental agencies are issued by entities owned by either a national, state
or equivalent government or are obligations of a political unit that is not
backed by the national government's full faith and credit and general taxing
powers. An example of a multinational currency

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unit is the European Currency Unit ("ECU"). An ECU represents specified amounts
of the currencies of certain member states of the European Economic Community.
The specific amounts of currencies comprising the ECU may be adjusted by the
Council of Ministers of the European Community to reflect changes in relative
values of the underlying currencies.

BRADY BONDS. The Fund may invest in so-called "Brady Bonds," which are
securities created through the exchange of existing commercial bank loans to
Latin American public and private entities for new bonds in connection with debt
restructurings under a debt restructuring plan announced by former U.S.
Secretary of the Treasury Nicholas F. Brady (the "Brady Plan"). Brady Bonds may
be collateralized or uncollateralized, are issued in various currencies
(primarily the U.S. dollar) and are currently actively traded in the over-the-
counter secondary market for Latin American debt instruments.

Dollar-denominated, collateralized Brady Bonds, which may be fixed rate par
bonds or floating rate discount bonds, are collateralized in full as to
principal by U.S. Treasury zero coupon bonds having the same maturity as the
bonds. Interest payments on these Brady Bonds generally are collateralized by
cash or securities in an amount that, in the case of fixed rate bonds, is equal
to at least one year of rolling interest payments or, in the case of floating
rate bonds, initially is equal to at least one year's rolling interest payments
based on the applicable interest rate at that time and is adjusted at regular
intervals thereafter.

All Mexican Brady Bonds issued to date, except New Money Bonds, have principal
repayments at final maturity fully collateralized by U.S. Treasury zero coupon
bonds (or comparable collateral in other currencies) and interest coupon
payments collateralized on an 18-month rolling-forward basis by funds held in
escrow by an agent for the bondholders. Approximately half of the Venezuelan
Brady Bonds issued to date have principal repayments at final maturity
collateralized by U.S. Treasury zero coupon bonds (or comparable collateral in
other currencies), while slightly more than half have interest coupon payments
collateralized on a 14-month rolling-forward basis by securities held by the
Federal Reserve Bank of New York as collateral agent.

Brady Bonds are often viewed as having three or four valuation components: the
collateralized repayment of principal at final maturity; the collateralized
interest payments; the uncollateralized interest payments; and any
uncollateralized repayment of principal at maturity (these uncollateralized
amounts constituting the "residual risk").

LOAN PARTICIPATIONS AND ASSIGNMENTS. The Fund may invest in fixed and floating
rate loans ("Loans") arranged through private negotiations between a foreign
government and one or more financial institutions ("Lenders"). The majority of
the Fund's investments in Loans in Latin America are expected to be in the form
of participations in Loans ("Participations") and assignments of portions of
Loans from third parties ("Assignments"). Participations typically will result
in the Fund having a contractual relationship only with the Lender, not with the
borrower. A participating fund will have the right to receive payments of
principal, interest and any fees to which it is

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entitled only from the Lender selling the Participation and only upon receipt by
the Lender of the payments from the borrower. In connection with purchasing
Participations, the Fund generally will have no right to enforce compliance by
the borrower with the terms of the loan agreement relating to the Loan ("Loan
Agreement"), nor any rights of set-off against the borrower, and the Fund may
not directly benefit from any collateral supporting the Loan in which it has
purchased the Participation. As a result, the Fund will assume the credit risk
of both the borrower and the Lender that is selling the Participation. In the
event of the insolvency of the Lender selling a Participation, the Fund may be
treated as a general creditor of the Lender and may not benefit from any set-off
between the Lender and the borrower. The Fund will acquire Participations only
if the Lender interpositioned between the Funds and the borrower is determined
by the Adviser to be creditworthy. The Fund currently anticipates that it will
not invest more than 5% of its net assets in Loan Participations and
Assignments.

CONVERTIBLE SECURITIES. A convertible security is a bond, debenture, note,
preferred stock or other security that may be converted into or exchanged for a
prescribed amount of common stock of the same or a different issuer within a
particular period of time at a specified price or formula. A convertible
security entitles the holder to receive interest paid or accrued on debt or the
dividend paid on preferred stock until the convertible security matures or is
redeemed, converted or exchanged. Before conversion, convertible securities have
characteristics similar to nonconvertible debt securities in that they
ordinarily provide a stable stream of income with generally higher yields than
those of common stocks of the same or similar issuers. Convertible securities
rank senior to common stock in a corporation's capital structure but are usually
subordinated to comparable nonconvertible securities. While no securities
investment is completely without risk, investments in convertible securities
generally entail less risk than the corporation's common stock, although the
extent to which such risk is reduced depends in large measure upon the degree to
which the convertible security sells above its value as a fixed-income security.
Convertible securities have unique investment characteristics in that they
generally (1) have higher yields than common stocks, but lower yields than
comparable non-convertible securities, (2) are less subject to fluctuation in
value than the underlying stock since they have fixed-income characteristics and
(3) provide the potential for capital appreciation if the market price of the
underlying common stock increases. Most convertible securities currently are
issued by U.S. companies, although a substantial Eurodollar convertible
securities market has developed, and the markets for convertible securities
denominated in local currencies are increasing.

The value of a convertible security is a function of its "investment value"
(determined by its yield in comparison with the yields of other securities of
comparable maturity and quality that do not have a conversion privilege) and its
"conversion value" (the security's worth, at market value, if converted into the
underlying common stock). The investment value of a convertible security is
influenced by changes in interest rates, with investment value declining as
interest rates increase and increasing as interest rates decline. The credit
standing of the issuer and other factors

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also may have an effect on the convertible security's investment value. The
conversion value of a convertible security is determined by the market price of
the underlying common stock. If the conversion value is low relative to the
investment value, the price of the convertible security is governed principally
by its investment value. Generally the conversion value decreases as the
convertible security approaches maturity. To the extent the market price of the
underlying common stock approaches or exceeds the conversion price, the price of
the convertible security will be increasingly influenced by its conversion
value. A convertible security generally will sell at a premium over its
conversion value by the extent to which investors place value on the right to
acquire the underlying common stock while holding a fixed-income security.

The Fund has no current intention of converting any convertible securities they
may own into equity securities or holding them as equity securities upon
conversion, although they may do so for temporary purposes. A convertible
security might be subject to redemption at the option of the issuer at a price
established in the convertible security's governing instrument. If a convertible
security held by a fund is called for redemption, the fund will be required to
permit the issuer to redeem the security, convert it into the underlying common
stock or sell it to a third party. The Fund will invest in convertible
securities without regard to their credit rating.

MORTGAGE-BACKED SECURITIES. The Fund may invest in mortgage-backed securities,
such as those issued by the Government National Mortgage Association ("GNMA"),
the Federal National Mortgage Association ("FNMA"), the Federal Home Loan
Mortgage Corporation ("FHLMC") or certain foreign issuers, as well as by private
issuers such as commercial investment banks, savings and loan institutions,
mortgage bankers and private mortgage insurance companies. Mortgage-backed
securities represent direct or indirect participations in, or are secured by and
payable from, mortgage loans secured by real property. The mortgages backing
these securities include, among other mortgage instruments, conventional 30-year
fixed rate mortgages, 15-year fixed rate mortgages, graduated payment mortgages
and adjustable rate mortgages. The government or the issuing agency typically
guarantees the payment of interest and principal of these securities. However,
the guarantees do not extend to the securities' yield or value, which are likely
to vary inversely with fluctuations in interest rates, nor do the guarantees
extend to the yield or value of the Fund's shares. These securities generally
are "pass-through" instruments, through which the holders receive a share of all
interest and principal payments from the mortgages underlying the securities,
net of certain fees.

Yields on pass-through securities are typically quoted by investment dealers and
vendors based on the maturity of the underlying instruments and the associated
average life assumption. The average life of pass-through pools varies with the
maturities of the underlying mortgage loans. A pool's term may be shortened by
unscheduled or early payments of principal on the underlying mortgages. The
occurrence of mortgage prepayments is affected by various factors, including the
level of interest rates, general economic conditions, the location, scheduled
maturity and age of the mortgage and

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other social and demographic conditions. Because prepayment rates of individual
pools vary widely, it is not possible to predict accurately the average life of
a particular pool. For pools of fixed rate 30-year mortgages, a common industry
practice in the U.S. has been to assume that prepayments will result in a 12-
year average life. At present, pools, particularly those with loans with other
maturities or different characteristics, are priced on an assumption of average
life determined for each pool.

Although certain mortgage-related securities are guaranteed by a third party or
are otherwise similarly secured, the market value of the security, which may
fluctuate, is not so secured. If the Fund purchases a mortgage-related security
at a premium, that portion may be lost if there is a decline in the market value
of the security whether resulting from increases in interest rates or prepayment
of the underlying mortgage collateral. As with other interest-bearing
securities, the prices of such securities are inversely affected by changes in
interest rates. However, though the value of a mortgage-related security may
decline when interest rates rise, the converse is not necessarily true because
in periods of declining interest rates mortgages underlying securities are prone
to prepayment. In periods of falling interest rates, the rate of prepayment
tends to increase, thereby shortening the actual average life of a pool of
mortgage-related securities. Conversely, in periods of rising rates the rate of
prepayment tends to decrease, thereby lengthening the actual average life of the
pool. However, these effects may not be present, or may differ in degree, if the
mortgage loans in the pools have adjustable interest rates or other special
payment terms, such as a prepayment charge. Actual prepayment experience may
cause the yield of mortgage-backed securities to differ from the assumed average
life yield. Reinvestment of prepayments may occur at higher or lower interest
rates than the original investment, thus affecting the Fund's yield. For this
and other reasons, a mortgage-related security's stated maturity may be
shortened by an unscheduled prepayment on underlying mortgages and, therefore,
it is not possible to predict accurately the security's return to the Fund.
Mortgage-related securities provide regular payments consisting of interest and
principal. No assurance can be given as to the return a Fund will receive when
these amounts are reinvested.

The rate of interest on mortgage-backed securities is lower than the interest
rates paid on the mortgages included in the underlying pool due to the annual
fees paid to the servicer of the mortgage pool for passing through monthly
payments to certificate holders and to any guarantor, such as GNMA, and due to
any yield retained by the issuer. Actual yield to the holder may vary from the
coupon rate, even if adjustable, if the mortgage-backed securities are purchased
or traded in the secondary market at a premium or discount. In addition, there
is normally some delay between the time the issuer receives mortgage payments
from the servicer and the time the issuer makes the payments on the mortgage-
backed securities, and this delay reduces the effective yield to the holder of
such securities.

COLLATERALIZED MORTGAGE OBLIGATIONS. The Fund may also purchase collateralized
mortgage obligations ("CMOs") issued by a U.S. Government instrumentality which
are backed by a portfolio of mortgages or mortgage-

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backed securities. The issuer's obligations to make interest and principal
payments is secured by the underlying portfolio of mortgages or mortgage-backed
securities. Generally, CMOs are partitioned into several classes with a ranked
priority by which the classes of obligations are redeemed. These securities may
be considered mortgage derivatives. The Funds may only invest in CMOs issued by
FHLMC, FNMA or other agencies of the U.S. Government or instrumentalities
established or sponsored by the U.S. Government.

CMOs provide an investor with a specified interest in the cash flow of a pool of
underlying mortgages or other mortgage-related securities. Issuers of CMOs
frequently elect to be taxed as pass-through entities known as real estate
mortgage investment conduits ("REMICs"). CMOs are issued in multiple classes,
each with a specified fixed or floating interest rate and a final distribution
date. Coupons can be fixed or variable. If variable, they can move with or in
the reverse direction of interest rates. The coupon changes could be a multiple
of the actual rate change and there may be limitations on what the coupon can
be. Cash flows of pools can also be divided into a principal only class and an
interest only class. In this case the principal only class will only receive
principal cash flows from the pool. All interest cash flows go to the interest
only class. The relative payment rights of the various CMO classes may be
structured in many ways, either sequentially or by other rules of priority.
Generally, payments of principal are applied to the CMO classes in the order of
their respective stated maturities, so that no principal payments will be made
on a CMO class until all other classes having an earlier stated maturity date
are paid in full. Sometimes, however, CMO classes are "parallel pay," i.e.
payments of principal are made to two or more classes concurrently. CMOs may
exhibit more or less price volatility and interest rate risk than other types of
mortgage-related obligations.

The CMO structure returns principal to investors sequentially, rather than
according to the pro rata method of a pass-through. In the traditional CMO
structure, all classes (called tranches) receive interest at a stated rate, but
only one class at a time receives principal. All principal payments received on
the underlying mortgages or securities are first paid to the "fastest pay"
tranche. After this tranche is retired, the next tranche in the sequence becomes
the exclusive recipient of principal payments. This sequential process continues
until the last tranche is retired. In the event of sufficient early repayments
on the underlying mortgages, the "fastest-pay" tranche generally will be retired
prior to its maturity. Thus the early retirement of a particular tranche of a
CMO held by a Fund would have the same effect as the prepayment of mortgages
underlying a mortgage-backed pass-through security as described above.

ASSET-BACKED SECURITIES. The Fund may invest in asset-backed securities, which
represent participations in, or are secured by and payable from, assets such as
motor vehicle installment sales, installment loan contracts, leases of various
types of real and personal property and receivables from revolving credit
(credit card) agreements. The Funds may also invest in other types of asset-
backed securities that may be available in the future. Such assets are
securitized through the use of trusts and special purpose corporations. Payments
or distributions of principal and interest may be

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guaranteed up to certain amounts and for a certain time period by a letter of
credit or a pool insurance policy issued by a financial institution unaffiliated
with the trust or corporation. The estimated life of an asset-backed security
varies with the prepayment experience with respect to the underlying debt
instruments. The rate of such prepayments, and hence the life of the asset-
backed security, will be primarily a function of current market rates, although
other economic and demographic factors will be involved. In certain
circumstances, asset-backed securities may be considered illiquid securities
subject to the percentage limitations described above. Asset-backed securities
are considered an industry for industry concentration purposes, and the Fund
will therefore not purchase any asset-backed securities which would cause 25% or
more of the Fund's net assets at the time of purchase to be invested in asset-
backed securities.

Asset-backed securities present certain risks that are not presented by other
securities in which the Fund may invest. Automobile receivables generally are
secured by automobiles. Most issuers of automobile receivables permit the loan
servicers to retain possession of the underlying obligations. If the servicer
were to sell these obligations to another party, there is a risk that the
purchaser would acquire an interest superior to that of the holders of the
asset-backed securities. In addition, because of the large number of vehicles
involved in a typical issuance and technical requirements under state laws, the
trustee for the holders of the automobile receivables may not have a proper
security interest in the underlying automobiles. Therefore, there is the
possibility that recoveries on repossessed collateral may not, in some cases, be
available to support payments on these securities. Credit card receivables are
generally unsecured, and the debtors are entitled to the protection of a number
of state and federal consumer credit laws, many of which give such debtors the
right to set off certain amounts owed on the credit cards, thereby reducing the
balance due.

ZERO COUPONS, PAY-IN-KIND SECURITIES AND DEFERRED PAYMENT SECURITIES. The Fund
may invest in Zero Coupon, Pay-In-Kind and Deferred Payment Securities. These
securities are all types of fixed income securities on which the holder does not
receive periodic cash payments of interest or principal. Generally, these
securities are subject to greater price volatility and lesser liquidity in the
event of adverse market conditions than comparably rated securities paying cash
interest at regular intervals. Although the Fund will not receive cash periodic
coupon payments on these securities, the Fund may be deemed to have received
interest income, or "phantom income" during the life of the obligation. The
Fund may have to pay taxes on this phantom income, although it has not received
any cash payment.

Zero Coupons are fixed income securities that do not make regular interest
payments. Instead, Zero Coupons are sold at a discount from their face value.
The difference between a Zero Coupon's issue or purchase price and its face
value represents the imputed interest an investor will earn if the obligation is
held until maturity. Zero Coupons may offer investors the opportunity to earn a
higher yield than that available on ordinary interest-paying obligations of
similar credit quality and maturity.

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Pay-In-Kind Securities are securities that have interest payable by delivery of
additional securities. Upon maturity, the holder is entitled to receive the
aggregate par value of the securities.

Deferred Payment Securities are securities that remain Zero Coupons until a
predetermined date, at which time the stated coupon rate becomes effective and
interest becomes payable at regular intervals.

STRUCTURED NOTES. The Fund may invest in Structured Notes. Structured Notes
are derivative securities for which the amount of principal repayment and/or
interest payments is based upon the movement of one or more "factors." These
factors include, but are not limited to, currency exchange rates, interest rates
(such as the prime lending rate and LIBOR) and stock indices, such as the S&P
500. In some cases, the impact of the movements of these factors may increase
or decrease through the use of multipliers or deflators. Structured Notes may
be designed to have particular quality and maturity characteristics and may vary
from money market quality to below investment grade. Depending on the factor
used and the use of multipliers or deflators, however, changes in interest rates
and movement of the factor may cause significant price fluctuations or may cause
particular Structured Notes to be come illiquid. The Fund will use Structured
notes to tailor its investments to the specific risks and returns the Adviser
wishes to accept while avoiding or reducing certain other risks.

PREFERRED STOCKS, COMMON STOCKS, WARRANTS. The Fund may also invest in
preferred stocks with yields that are attractive, provided that such investments
are otherwise consistent with the investment objectives and policies of the
Fund. A preferred stock is an equity security that entitles the holders to a
priority in liquidation over holders of the issuer's common stock. In
liquidation, the holders of preferred stock are subordinate to the holders of
the issuer's debt obligations. Typically, preferred stocks include the right to
receive regular dividend payments and may also include conversion rights, put
and call obligations and other features. In determining whether to invest in
any particular stock, TimesSquare will consider all relevant factors, including
the dividend yield, its conversion features, if any, its liquidity, and the
overall financial condition of the issuer. Under normal circumstances, a Fund
will not invest more than 10% of its assets in preferred stock.

The Fund will not acquire common stocks, except when (i) attached to or included
in a unit with income-generating securities that otherwise would be attractive
to the Fund; (ii) acquired through the exercise of equity features accompanying
convertible securities held by the Fund, such as conversion or exchange
privileges or warrants for the acquisition of stock or equity interest of the
same or different issuer; or (iii) in the case of an exchange offering whereby
the equity security would be acquired with the intention of exchanging it for a
debt security issued on a "when-issued" basis.

JUNK BONDS. As noted in the prospectus, the Fund may purchase debt securities
rated below investment grade, i.e., securities that are rated Ba

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or lower by Moody's Investors Services or BB or lower by Standard & Poor's
Corporation.

Included among the below investment-grade, high risk securities in which the
Fund may invest are securities issued in connection with corporate
restructurings such as takeovers or leveraged buyouts. Securities issued to
finance corporate restructurings may have special credit risks due to the highly
leveraged conditions of the issuer. In addition, such issuers may lose
experienced management as a result of the restructuring. Also, the market price
of such securities may be more volatile to the extent that expected benefits
from the restructuring do not materialize.

Because investors generally perceive that there are greater risks associated
with the medium to lower rated securities of the type constituting high-yield,
high risk securities, the yields and prices of these securities may tend to
fluctuate more than those for higher rated securities. In the lower quality
segments of the fixed income securities market, changes in perceptions of an
issuer's creditworthiness tend to occur more frequently and in a more pronounced
manner than do such changes with respect to higher quality segments of the fixed
income securities market, causing greater yield and price volatility.
Commissions and underwriting spreads associated with the purchase of below
investment-grade bonds are typically higher than those associated with the
purchase of high grade bonds.

Below investment-grade securities are often referred to as high yield or junk
bonds and are typically considered "high risk" securities. High yield bonds may
be subject to certain risk factors to which other securities are not subject to
the same degree. An economic downturn tends to disrupt the market for below
investment-grade bonds and adversely effect their values. Such an economic
downturn may be expected to result in increased price volatility of below
investment-grade bonds and of the value of the Fund's shares, and an increase in
issuers' defaults on such bonds.

Also, issuers of below investment-grade bonds are substantially leveraged, which
may impair their ability to meet their obligations. In some cases, the high
yield securities in which a Fund invests are subordinated to the prior payment
of senior indebtedness, thus potentially limiting the Fund's ability to recover
full principal or to receive payments when senior securities are in default.
When the secondary market for below investment-grade bonds becomes increasingly
illiquid, or in the absence of readily available market quotations for high
yield bonds, the relative lack of reliable, objective data makes the
responsibility of the Trustees to value the Fund's securities more difficult,
and judgement plays a greater role in the valuation of portfolio securities.
Also, increased illiquidity of the below investment-grade bond market may affect
the Fund's ability to dispose of portfolio securities at a desirable price.

The credit rating of a security does not necessarily address its market value
risk. Also, ratings may from time to time, be changed to reflect developments
in the issuer's financial condition. Below investment-grade bonds have
speculative characteristics which are apt to increase in number and significance
with each lower rating category. Also, prices of below

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investment-grade bonds have been found to be less sensitive to interest rate
changes and more sensitive to adverse economic changes and individual corporate
developments than more highly rated investments.

Certain laws or regulations may have a material effect on the Fund's net asset
value and investment practices. For example, legislation requiring federally-
insured savings and loan associations to divest their investments in below
investment-grade bonds may further adversely affect the market for such bonds.

S&P 500 Index Fund
- ------------------

The S&P 500 Index Fund seeks long-term growth of capital by investing primarily
in common stocks. Realization of current income is an incidental consideration,
although it is hoped that growth in income will accompany growth in capital.
The portfolio of the Fund normally will consist primarily of equity securities
of companies which compose the S&P 500.

The Fund also may invest in certain short-term fixed income securities, stock
index futures and options on futures, as more fully described in the prospectus.

Matters relating to all Funds
- -----------------------------

Except as described under "Fund Policies," the foregoing investment policies are
not fundamental and the Board of Trustees may change such policies without
shareholder approval. The Board will not change a Fund's investment objectives
without the required shareholder vote as set forth in "Fund Policies" below.
There is risk inherent in any investment, and there is no assurance that any of
the strategies and methods of investment available to any Fund will result in
the achievement of its objectives.

Each Fund's investments must be consistent with its investment objective and
policies. Accordingly, not all of the security types and investment techniques
discussed below are eligible investments for each of the Funds.

Securities Issued on a When-Issued or Delayed Delivery Basis. Each Fund may
purchase securities on a "when-issued" basis, that is, delivery of and placement
for the securities is not fixed at the date of purchase, but is set after the
securities are issued (normally within forty-five days after the date of the
transaction). A Fund also may purchase or sell securities on a delayed delivery
basis. The payment obligation and the interest rate that will be received on
the delayed delivery securities are fixed at the time the buyer enters into the
commitment. A Fund will only make commitments to purchase when-issued or
delayed delivery securities with the intention of actually acquiring such
securities, but a Fund may sell these securities before the settlement date if
it is deemed advisable.

Investment in securities on a when-issued or delayed delivery basis may increase
a Fund's exposure to market fluctuation and may increase the possibility that
the Fund will incur short-term gains subject to Federal

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taxation or short-term losses if the Fund must engage in portfolio transactions
in order to honor a when-issued or delayed delivery commitment. In a delayed
delivery transaction, the Fund relies on the other party to complete the
transaction. If the transaction is not completed, the Fund may miss a price or
yield considered to be advantageous. A Fund will employ techniques designed to
reduce such risks. If the Fund purchases a when-issued security, the Fund's
custodian bank will segregate cash or high grade securities in an amount equal
to the when-issued commitment. If the market value of the segregated securities
declines, additional cash or securities will be segregated on a daily basis so
that the market value of the segregated assets will equal the amount of the
Fund's when-issued commitments. To the extent cash and securities are
segregated, they will not be available for new investments or to meet
redemptions. Securities purchased on a delayed delivery basis may require a
similar segregation of cash or other high grade securities. For a more complete
description of when-issued securities and delayed delivery transactions see the
Statement of Additional Information.

Illiquid Securities. Each Fund may invest up to 15% (10% for the Money Market
Fund) of its net assets in securities that are illiquid. Illiquid securities
include securities that have no readily available market quotations and cannot
be disposed of promptly (within seven days) in the normal course of business at
approximately the price at which they are valued. Illiquid securities may
include securities that are subject to restrictions on resale because they have
not been registered under the Securities Act of 1933 (the "1933 Act").
Restricted securities may, in certain circumstances, be resold pursuant to Rule
144A under the 1933 Act, and thus may or may not constitute illiquid securities.
To the extent that qualified institutional buyers become uninterested in
purchasing these restricted securities the level of illiquidity in a Fund may
increase. TimesSquare determines the liquidity of the Fund's investments.
Limitations on the resale of restricted securities may have an adverse effect on
their marketability, which may prevent the Fund from disposing of them promptly
at reasonable prices. The Fund may have to bear the expense of registering such
securities for resale, and the risk of substantial delays in effecting such
registrations.

Borrowing. Each Fund may borrow from banks or through reverse repurchase
agreements to the extent permitted by the 1940 Act. If a Fund borrows money,
its share price may be subject to greater fluctuation until the borrowing is
paid off. Under the 1940 Act as currently in effect, a fund may borrow from any
lender only for temporary purposes in an amount not exceeding 5% of its total
assets, and may borrow from a bank in an amount not exceeding 33 1/3% of its
total assets.

Futures Contracts. A stock index assigns relative values to the common stocks
included in the index and the index fluctuates with changes in the market values
of the common stocks so included. A stock index futures contract is a bilateral
agreement pursuant to which two parties agree to take or make delivery of an
amount of cash equal to a specified dollar

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amount times the difference between the stock index value at the close of the
last trading day of the contract and the price at which the futures contract is
originally struck. There is no physical delivery of the underlying stocks in
the index.

Generally, a fund will only enter into stock index futures contracts as a hedge
against changes resulting from market conditions in the values of the securities
held or which the fund intends to purchase. When the fund anticipates a
significant market or market sector advance, the purchase of a stock index
futures contract affords a hedge against not participating in such advance.
Conversely, in anticipation of or in a general market or market sector decline
that adversely affects the market values of the fund's portfolio of securities,
the fund may sell stock index futures contracts. The S&P 500 Index Fund"s use
of stock index futures is discussed in the prospectus, and includes using
available cash to purchase S&P 500 futures contracts pending investment in the
S&P 500 or to meet anticipated short-term cash needs.

An interest rate futures contract is an agreement between two parties to buy and
sell a debt security for a set price on a future date. A fund generally may
enter into interest rate futures contracts for the purpose of hedging debt
securities in their portfolios or the value of debt securities which the Funds
intend to purchase. For example, if a fund owned long-term debt securities and
interest rates were expected to increase, it might sell interest rate futures
contracts. If, on the other hand, a fund held cash reserves and interest rates
were expected to decline, it might purchase interest rate futures contracts.

In cases of purchases of futures contracts, an amount of cash and cash
equivalents, equal to the market value of the futures contracts (less any
related margin deposits), will be deposited in a segregated account with the
Fund's custodian to collateralize the position and ensure that the use of such
futures contracts is unleveraged. Unlike when a Fund purchases or sells a
security, no price is paid or received by a Fund upon the purchase or sale of a
futures contract. Initially, a Fund will be required to deposit with the
custodian for the Fund for the account of the broker a stated amount, as called
for by a particular contract, of cash or U.S. Treasury bills. This amount is
known as "initial margin." The nature of initial margin in futures transactions
is different from that of margin in securities transactions in that futures
contract margin does not involve the borrowing of funds by the customer to
finance the transactions.

Rather, the initial margin is in the nature of a performance bond or good faith
deposit on the contract which is returned to the applicable Fund upon
termination of the futures contract, assuming all contractual obligations have
been satisfied. Subsequent payments, called "variation margin," to and from the
broker will be made on a daily basis as the price of the futures contract
fluctuates making the long and short positions in the futures contract more or
less valuable, a process known as "marking-to-market." For example, when a Fund
has purchased a stock index futures contract and the price of the underlying
stock index has risen, that position will have

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increased in value and the Fund will receive from the broker a variation margin
payment with respect to that increase in value. Conversely, where a Fund
purchases a stock index futures contract and the price of the underlying stock
index has declined, the position would be less valuable and the Fund would be
required to make a variation margin payment to the broker. Variation margin
payments would be made in a similar fashion when a Fund purchases an interest
rate futures contract. At any time prior to expiration of the futures contract,
a Fund may elect to close the position by taking an opposite position which will
operate to terminate the Fund's position in the futures contract. A final
determination of variation margin is then made, additional cash is required to
be paid by or released to the Fund and the Fund realizes a loss or a gain.

Options on Futures Contracts. An option on a futures contract gives the
purchaser (the Fund) the right, in return for the premium paid, to assume a
position in a futures contract (a long position if the option is a call and a
short position if the option is a put) at a specified exercise price at any time
during the option exercise period. The writer of the option is required upon
exercise to assume an offsetting futures position (a short position if the
option is a call and a long position if the option is a put) at a specified
exercise price at any time during the period of the option. Upon exercise of
the option, the assumption of offsetting futures positions by the writer and
holder of the option will be accompanied by delivery of the accumulated cash
balance in the writer's futures margin account which represents the amount by
which the market price of the futures contract, at exercise, exceeds, in the
case of a call, or is less than, in the case of a put, the exercise price of the
option on the futures contract. If an option on a futures contract is exercised
on the last trading date prior to the expiration date of the option, the
settlement will be made entirely in cash equal to the difference between the
exercise price of the option and the closing price of the futures contract on
the expiration date.

The Funds may purchase put options on futures contracts to hedge against the
risk of falling prices for their portfolio securities, and may purchase call
options on futures contracts as a hedge against a rise in the price of
securities which they intend to purchase. Options on futures contracts may also
be used to hedge the risks of changes in the exchange rate of foreign
currencies. The purchase of a put option on a futures contract is similar to
the purchase of protective put options on portfolio securities or a foreign
currency. The purchase of a call option on a futures contract is similar in
some respects to the purchase of a call option on an individual security or a
foreign currency. Depending on the pricing of the option compared to either the
price of the futures contract upon which it is based or the price of the
underlying securities or currency, it may or may not be less risky than
ownership of the futures contract or underlying securities or currency.

Risks as to Futures Contracts And Related Options. There are several risks in
connection with the use of futures contracts and related options as hedging
devices. One risk arises because of the imperfect correlation between movements
in the price of hedging instruments and movements in the

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price of the stock, debt securities or foreign currency which are the subject of
the hedge. If the price of a hedging instrument moves less than the price of the
stocks, debt securities or foreign currency which are the subject of the hedge,
the hedge will not be fully effective. If the price of a hedging instrument
moves more than the price of the stock, debt securities or foreign currency, a
Fund will experience either a loss or a gain on the hedging instrument which
will not be completely offset by movements in the price of the stock, debt
securities or foreign currency which are the subject of the hedge. The use of
options on futures contracts involves the additional risk that changes in the
value of the underlying futures contract will not be fully reflected in the
value of the option.

Successful use of hedging instruments by a Fund is also subject to TimesSquare's
ability to predict correctly movements in the direction of the stock market, of
interest rates or of foreign exchange rates (foreign currencies). Because of
possible price distortions in the futures and options markets and because of the
imperfect correlation between movements in the prices of hedging instruments and
the investments being hedged, even a correct forecast by TimesSquare of general
market trends may not result in a completely successful hedging transaction.

It is also possible that where a Fund has sold futures contracts to hedge its
portfolio against a decline in the market, the market may advance and the value
of stocks or debt securities held in a Fund's portfolio may decline. If this
occurred, a Fund would lose money on the futures contracts and also experience a
decline in the value of its portfolio securities. Similar risks exist with
respect to foreign currency hedges.

Positions in futures contracts or options may be closed out only on an exchange
on which such contracts are traded. Although the Funds intend to purchase or
sell futures contracts or purchase options only on exchanges or boards of trade
where there appears to be an active market, there is no assurance that a liquid
market on an exchange or board of trade will exist for any particular contract
or at any particular time. If there is not a liquid market at a particular
time, it may not be possible to close a futures position or purchase an option
at such time. In the event of adverse price movements under those
circumstances, a Fund would continue to be required to make daily cash payments
of maintenance margin on its futures positions. The extent to which the Fund
may engage in futures contracts or related options will be limited by Internal
Revenue Code requirements for qualification as a regulated investment company
and the Fund's intent to continue to qualify as such. The result of a hedging
program cannot be foreseen and may cause the portfolio of the Fund to suffer
losses which it would not otherwise sustain.

Foreign Currency Transactions. Although they generally will not do so, a Fund
holding securities denominated in currency other than U.S. dollars may engage in
currency exchange transactions to protect against uncertainty in the level of
future currency exchange rates.

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Generally, Funds may engage in both "transaction hedging" and "position
hedging". When a Fund engages in transaction hedging, the Fund enters into
foreign currency transactions with respect to specific receivables or payables,
generally arising in connection with the purchase or sale of portfolio
securities. A Fund will engage in transaction hedging when it desires to "lock
in" the U.S. dollar price of a security it has agreed to purchase or sell, or
the U.S. dollar equivalent of a dividend or interest payment in a foreign
currency. By transaction hedging, a Fund will attempt to protect itself against
a possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the applicable foreign currency during the period between the
date on which the security is purchased or sold or on which the dividend or
interest payment is declared, and the date on which such payments are made or
received.

A Fund may purchase or sell a foreign currency on a spot (or cash) basis at the
prevailing spot rate in connection with the settlement of transactions in
portfolio securities denominated in that foreign currency. A Fund may also
enter into contracts to purchase or sell foreign currencies at a future date
("forward contracts") and purchase and sell foreign currency futures contracts.

For transaction hedging purposes a Fund may also purchase exchange-listed call
and put options on foreign currencies. A put option on currency gives the Fund
the right to sell a currency at a specific exercise price. A call option on
currency gives a Fund the right to purchase a currency at a specific exercise
price. The time when call and put options are exercisable depends on whether
the options are American options or European options. American options are
exercisable at anytime during the option period. European options are
exercisable only on a designated date.

When it engages in position hedging, a Fund enters into foreign currency
exchange transactions to protect against a decline in the values of the foreign
currencies in which its portfolio securities are denominated or an increase in
the value of currency for securities which the Fund expects to purchase, when
the Fund holds cash or short-term investments. In connection with position
hedging, a Fund may purchase put or call options on foreign currency and foreign
currency futures contracts and buy or sell forward contracts and foreign
currency futures contracts. The Funds may also purchase or sell foreign
currency on a spot basis.

The precise matching of the amounts of foreign currency exchange transactions
and the value of the portfolio securities involved will not generally be
possible since the future value of such securities in foreign currencies will
change as a consequence of market movements in the value of those securities
between the dates the currency exchange transactions are entered into and the
dates they mature. For example, it may be necessary for a Fund to purchase
additional foreign currency on the spot market (and bear the expense of such
purchase) if the market value of the security or securities being hedged is less
than the amount of foreign currency a Fund is obligated to deliver and a
decision is made to sell the security or securities and make delivery of the
foreign currency. Conversely, it may be

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necessary to sell on the spot market some of the foreign currency received upon
the sale of the portfolio security or securities if the market value of such
security or securities exceeds the amount of foreign currency a Fund is
obligated to deliver.

Transaction and position hedging do not eliminate fluctuations in the underlying
prices of the securities which a Fund owns or intends to purchase or sell. They
simply establish a rate of exchange which one can achieve at some future point
in time. Additionally, although these techniques tend to minimize the risk of
loss due to a decline in the value of the hedged currency, they tend to limit
any potential gain which might result from the increase in value of such
currency.

Regardless of whether TimesSquare determines that it is advisable to hedge a
Fund's currency risk, the Funds will have to convert their holdings of foreign
currencies into U.S. dollars from time to time. Although foreign exchange
dealers generally do not charge a fee for conversion, they do realize a profit
based on the difference (the "spread") between the prices at which they are
buying and selling various currencies.

Forward Currency Contracts. A forward currency contract is an agreement between
two parties to purchase and sell a specific quantity of a currency at a price
specified at the time of the contract, with delivery and settlement at a
specified future date. In the case of purchases of forward currency contracts,
an amount of cash and cash equivalents, equal to the market value of the
portfolio security sold, will be deposited in a segregated account with the
Trust's Custodian to collateralize the position and ensure that the use of such
contracts is unleveraged.

In the case of a cancelable forward contract, the holder has the unilateral
right to cancel the contract at maturity by paying a specified fee. The
contracts are traded in the interbank market conducted directly between currency
traders (usually large commercial banks and their customers). A forward
contract generally has no deposit requirements, and no commissions are charged
at any stage for trades.

Forward currency contracts are less liquid than currency futures contracts, and
there is an increased risk of default by the counterparty as compared to futures
contracts. Forward currency contracts differ from currency futures contracts in
certain other respects as well. For example, the maturity date of a forward
contract may be any fixed number of days from the date in a given month.
Forward contracts may be in any amounts agreed upon by the parties rather than
predetermined amounts. Also, forward currency contracts are traded directly
between currency traders so no intermediary is required. A forward contract
generally requires no margin or other deposit.

At the maturity of a forward contract, a Fund may either accept or make delivery
of the currency specified in the contract, or at or prior to maturity enter into
a closing transaction involving the purchase or sale of an offsetting contract.
Closing transactions with respect to forward contracts are usually effected with
the currency trader who is a party to

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the original forward contract. There is no assurance that the Fund will be able
to close a forward contract prior to maturity and, under such circumstances, the
Fund may have exposure to adverse changes in exchange rates.

Loans and Other Direct Debt Instruments. Direct debt instruments are interests
in amounts owed by a corporate, governmental, or other borrower to lenders or
lending syndicates (loans and loan participations), to suppliers of goods or
services (trade claims or other receivables), or to other parties. Direct debt
instruments are subject to each Fund's policies regarding the quality of debt
securities.

Purchasers of loans and other forms of direct indebtedness depend primarily upon
the creditworthiness of the borrower for payment of principal and interest.
Direct debt instruments may not be rated by any NRSRO. If a Fund does not
receive scheduled interest or principal payments on such indebtedness, the
Fund's share price and yield could be adversely affected. Loans that are fully
secured offer a Fund more protections than an unsecured loan in the event of
non-payment of scheduled interest or principal. However, there is no assurance
that the liquidation of collateral from a secured loan would satisfy the
borrower's obligation, or that the collateral could be liquidated. Indebtedness
of borrowers whose creditworthiness is poor involves substantially greater risks
and may be highly speculative. Borrowers that are in bankruptcy or
restructuring may never pay off their indebtedness, or may pay only a small
fraction of the amount owed. Direct indebtedness of developing countries also
involves a risk that the government entities responsible for the repayment of
the debt may be unable, or unwilling, to pay interest and repay principal when
due.

Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks to a Fund. For
example, if a loan is foreclosed, the Fund could become part owner of any
collateral, and would bear the costs and liabilities associated with owing and
disposing of the collateral. In addition, it is conceivable that under emerging
legal theories of lender liability, the Fund could be held liable as a co-
lender. Direct debt instruments may also involve a risk of insolvency of the
lending bank or other intermediary. Direct debt instruments that are not in the
form of securities may offer less legal protection to a Fund in the event of
fraud or misrepresentation. In the absence of definitive regulatory guidance,
each Fund relies on TimesSquare' research in an attempt to avoid situations
where fraud or misrepresentation could adversely affect the Fund.

A loan is often administered by a bank or other financial institution that acts
as agent for all holders. The agent administers the terms of the loan, as
specified in the loan agreement. Unless, under the terms of the loan or other
indebtedness, each Fund has direct recourse against the borrower, it may have to
rely on the agent to apply appropriate credit remedies against a borrower. If
assets held by the agent for the benefit of a Fund were determined to be subject
to the claims of the agent's general creditors, the

Page 25
<PAGE>

Fund might incur certain costs and delays in realizing payment on the loan or
loan participation and could suffer a loss of principal or interest.

Each Fund (except the Money Market Fund, to a limited degree) limits the amount
of total assets that it will invest in any one issuer or in issues within the
same industry. For purposes of these limitations, each Fund generally will
treat the borrower as the "issuer" of indebtedness held by the Fund. In the
case of loan participations where a bank or other lending institution serves as
financial intermediary between each Fund and the borrower, if the participation
does not shift to the Fund the direct debtor-creditor relationship with the
borrower, SEC interpretations requires the Fund, in appropriate circumstances,
to treat both the lending bank or other lending institution and the borrower as
"issuers" for these purposes. Treating a financial intermediary as an issuer of
indebtedness may restrict a Fund's ability to invest in indebtedness related to
a single financial intermediary, or a group of intermediaries engaged in the
same industry, even if the underlying borrowers represent many different
companies and industries.

Securities Lending. A Fund may lend securities to parties such as broker-
dealers or institutional investors.

Securities lending allows a Fund to retain ownership of the securities loaned
and, at the same time, to earn additional income. Since there may be delays in
the recovery of loaned securities, or even a loss of rights in collateral
supplied should the borrower fail financially, loans will be made only to
parties deemed by TimesSquare to be of good standing. Furthermore, they will
only be made if, in TimesSquare's judgment, the consideration to be earned from
such loans would justify the risk.

TimesSquare understands that it is the current view of the SEC Staff that a fund
may engage in loan transactions only under the following conditions: (1) the
Fund must receive 100% collateral in the form of cash or cash equivalents (e.g.
U.S. Treasury bills or notes) from the borrower; (2) the borrower must increase
the collateral whenever the market value of the securities loaned (determined on
a daily basis) rises above the value of the collateral; (3) after giving notice,
the fund must be able to terminate the loan at any time; (4) the Fund must
receive reasonable interest on the loan or a flat fee from the borrower, as well
as amounts equivalent to any dividends, interest, or other distributions on the
securities loaned and to any increase in market value; (5) the Fund may pay only
reasonable custodian fees in connection with the loan; and (6) the Board of
Trustees must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with the
borrower.

Cash received through loan transactions may be invested in any security in which
a Fund is authorized to invest. Investing this cash subjects that investment,
as well as the security loaned, to market forces (i.e., capital appreciation or
depreciation).

Page 26
<PAGE>

Sovereign Debt Obligations. A Fund may purchase sovereign debt instruments
issued or guaranteed by foreign governments or their agencies, including debt of
Latin American nations or other developing countries. Sovereign debt may be in
the form of conventional securities or other types of debt instruments such as
loans or loan participations. Sovereign debt of developing countries may
involve a high degree of risk, and may be in default or present the risk of
default. Governmental entities responsible for repayment of the debt may be
unable or unwilling to repay principal and interest when due, and may require
renegotiation or rescheduling of debt payments. In addition, prospects for
repayment of principal and interest may depend on political as well as economic
factors.

INVESTMENT RESTRICTIONS
- -----------------------

Each Fund is subject to the following investment restrictions, unless otherwise
noted, which may not be changed without the approval of the lesser of (i) more
than 50% of the outstanding shares of a Fund or (ii) 67% or more of the shares
of that Fund present at a meeting if more than 50% of the outstanding shares of
that Fund are represented at the meeting in person or by proxy (see "Ownership
of Fund Shares" in the Funds' prospectus for a description of the individual's
rights with respect to giving voting instructions to Life Companies).

Any investment restriction that involves a maximum or minimum percentage of
securities or assets shall not be considered to be violated unless an excess
over or a deficiency under the percentage occurs immediately after, and is
caused by, an acquisition or disposition of securities or utilization of assets
by a Fund.

A Fund may not:

1. As to the S&P 500 Index Fund and the Money Market Fund, invest in the
securities of any issuer if, immediately after such investment, more than 5% of
the total assets of the Fund taken at current value would be invested in the
securities of such issuer (for the Investment Grade Bond Fund, this restriction
applies only as to 75% of its assets), except (a) bank certificates of deposit
and obligations issued or guaranteed as to interest and principal by the U.S.
Government or its agencies or instrumentalities, and (b) up to 25% of the Money
Market Fund's total assets taken at current value may be invested without regard
to such 5% limitation in bankers' acceptances in which the Fund may invest
consistent with its investment policies.

2. Acquire more than 10% of the voting securities of any issuer or more than
10% of any class of securities of any issuer. (For these purposes, all
preferred stocks of any issuer are regarded as a single class, and all debt
securities of an issuer are regarded as a single class.)

3. Concentrate more than 25% of its assets in any one industry, except that the
Money Market Fund may invest up to 100% of its assets in the domestic banking
industry.

Page 27
<PAGE>

4. Invest in securities of businesses less than three years old (including
predecessors), if, as a result, more than 5% of the Fund's total assets (taken
at current value) would then be invested in such securities.

5. Make investments for the purpose of gaining control of a company's
management.

6. Make short sales of securities or maintain a short position for the account
of the Fund unless at all times when a short position is open it owns an equal
amount of such securities or owns securities convertible into or exchangeable
for securities of the same issuer as, and equal in amount to, the securities
sold short.

7. Purchase securities on margin, except such short-term credits as may be
necessary for the clearance of purchases and sales of securities. For purposes
of this restriction, the deposit or payment of initial or variation margin
payments in connection with transactions in stock index futures contracts,
financial futures contracts and related options thereon will not be deemed to be
a purchase of securities on margin by a Fund.

8. Underwrite securities issued by other persons except to the extent that, in
connection with the disposition of its portfolio investments, it may be deemed
to be an underwriter under Federal securities laws.

9. Invest in securities of any issuer if, to the knowledge of the Fund,
officers and trustees of the Trust or officers and directors of TimesSquare who
beneficially own more than 1/2 of 1% of the securities of that issuer, together
own more than 5%.

10. Make loans, except (a) by purchase of debt obligations and through
repurchase agreements, provided, however, that repurchase agreements maturing in
more than seven days will not exceed 10% of a Fund's total assets (taken at
current value) and (b) through the lending of its portfolio securities with
respect to not more than 25% of its total assets. (As a matter of policy,
securities loans would be made to broker-dealers pursuant to agreements
requiring that loans be continuously secured by collateral in cash or cash
equivalents at least equal at all times to the value of the securities lent.
The borrower pays to the Fund an amount equal to any dividends or interest
received on the securities lent. The Fund may invest the cash collateral
received in interest-bearing short-term securities or receive a fee from the
borrower. The Fund may call such loans in order to sell the securities involved
or to exercise voting or other rights available to it as beneficial owner of the
securities involved.)

11. Borrow money in excess of one-third of the value (taken at the lower of cost
or current value) of its total assets (not including the amount borrowed) at the
time the borrowing is made, and then only as a temporary measure to facilitate
the meeting of redemption requests (not for leverage) which might otherwise
require the untimely disposition of portfolio investments or for extraordinary
or emergency purposes, except that the Funds may enter into stock index futures
contracts and financial futures

Page 28
<PAGE>

contracts and the Investment Grade Bond Fund may enter into swap agreements.
Such borrowings will be repaid before any additional investments are made.
Interest paid on such borrowings would reduce the yield on the Fund's
investments. (The Board of Trustees regards this restriction as setting forth
the Trust's policy with respect to the issuance of senior securities.)

12. Pledge, hypothecate, mortgage or otherwise encumber its assets in excess of
one-third of the value of its total assets (taken at the lower of cost or
current value) and then only to secure borrowings permitted by Restriction No.
11 above. (For the purpose of this restriction, collateral arrangements with
respect to margin for a financial futures contract or stock index futures
contract are not deemed to be a pledge of assets.)

13. Purchase or sell mortgages or real estate, although it may purchase
securities of issuers that deal in real estate and may purchase securities that
are secured by interests in real estate.

14. Purchase or sell commodities or commodity contracts, except, however, that a
Fund may purchase and sell stock index futures and options thereon and financial
futures contracts and options thereon and the Investment Grade Bond Fund may
also enter into foreign currency forward contracts, foreign currency options and
swap agreements.

15. Purchase options or puts, calls, straddles, spreads or combinations thereof
except, however, a Fund may purchase and sell options on stock index futures
contracts and on stock indices and options on financial futures contracts; in
connection with the purchase of fixed income securities, however, a Fund may
acquire warrants or other rights to subscribe for securities of companies
issuing such fixed-income securities or securities of parents or subsidiaries of
such companies. (See "Investment Grade Bond Fund" for a description of the
policy of this Fund with respect to such warrants or other rights.)

16. Buy or sell oil, gas or other mineral leases, rights or royalty contracts.

TAX MATTERS
- -----------

Each series of shares of the Trust is treated as a separate association taxable
as a corporation.

Each Fund intends to qualify under the Internal Revenue Code of 1986 (the
"Code"), as amended, as a regulated investment company ("RIC") for each taxable
year. As of the date hereof, each Fund must, among other things, meet the
following requirements: A. Each Fund must derive at least 90% of its gross
income from dividends, interest, payments with respect to securities loans,
gains from the sale or other disposition of stock, securities, foreign
currencies, or other income including but not limited to gains from options,
futures or forward contracts derived with respect to its business of investing
in such stock, securities or currencies. B. Each

Page 29
<PAGE>

Fund must diversify its holdings so that, at the end of each fiscal quarter: i)
at least 50% of the market value of the Fund's assets is represented by cash,
U.S. Government securities and other securities, with such other securities
limited, with respect to any one issuer, to an amount not greater than 5% of the
Fund's assets and not more than 10% of the outstanding voting securities of such
issuer, and ii) not more than 25% of the value of its assets is invested in the
securities of any one issuer (other than U.S. Government securities).

As a RIC, each Fund will not be subject to Federal income tax ("FIT") on its
income and gains distributed to shareholders if it distributes at least 90% of
its investment company taxable income for the taxable year. Under the
provisions of Section 817(h) of the Code, a variable annuity contract - other
than a contract issued in connection with certain tax qualified retirement plans
or retirement plans maintained by certain government employers - will not be
treated as an annuity contract for any period for which the investments of the
separate account, such as the separate accounts that are eligible to purchase
shares of the Fund, are not "adequately diversified". In general, the
regulations issued under Section 817(h) provide that a separate account shall be
considered adequately diversified if the assets of such separate account are
invested so that no more than 55% of the value of such assets is represented by
any one investment, no more than 70% of such value is represented by any two
investments, no more than 80% of such value is represented by any three
investments and no more than 90% is represented by any four investments. The
Code allows a separate account to look through to the assets of a regulated
investment company for purposes of the "adequately diversified" requirement.
Each Fund intends that the investments in its portfolio shall be "adequately
diversified". For these purposes, all securities of the same issuer are treated
as a single investment. However, in the case of government securities each
government agency or instrumentality is treated as a separate issuer. The
regulations include a specific definition of "government security" which
includes any security issued, guaranteed or insured by the United States or any
instrumentalities of the United States. In addition, a certificate of deposit
for any of the foregoing securities is included within the definition of a
"government security." Accordingly, certain Fund investments may be treated as
"government securities" for the purpose of Section 817(h) of the Code, even
though such investments may not be treated as a government security when such
phrase is used elsewhere in the prospectus or Statement of Additional
Information.

All Funds except the Money Market Fund:
- --------------------------------------

Section 1092 of the Code affects the taxation of certain transactions involving
futures or options contracts. If a futures or options contract is part of a
"straddle" (which could include another futures contract or underlying stock or
securities), as defined in Section 1092 of the Code, then, generally, losses are
deferred first to the extent that the modified wash sale rules of the Section
1092 regulations apply, and second to the extent of unrecognized gains on
offsetting positions. Further, a Fund may be required to capitalize, rather than
deduct currently, any interest expense on indebtedness incurred or continued to
purchase or carry any

Page 30
<PAGE>

positions that are part of a straddle. Sections 1092 and 246 of the Code and the
regulations thereunder also suspend the holding periods for straddle positions
with possible adverse effects regarding long-term capital gain treatment and the
corporate dividends-received deduction. In certain cases, the wash sale rules of
Section 1091 of the Code may operate to defer deductions for losses. Section
1256 of the Code generally requires that futures contracts and options on future
contracts be "marked-to-market" at the end of each year for Federal income tax
purposes. Section 1256 further characterizes 60% of any gain or loss with
respect to a futures contract as long-term capital gain or loss and 40% as
short-term capital gain or loss. If a futures contract is held as an offsetting
position and can be considered a straddle under Section 1092 of the Code, such a
straddle will constitute a mixed straddle. A mixed straddle will be subject to
both Section 1256 and Section 1092 unless certain elections are made by the
Fund.

ACTIVITIES OF AFFILIATED COMPANIES
- ----------------------------------

From time to time, as purchases of securities are made for the portfolios of
companies affiliated with CIGNA Corporation, it is possible that two or more
portfolios may simultaneously purchase or sell the same security. To the extent
that two or more such portfolios, buying or selling the same security, increase
the total demand or supply, there may be an adverse effect on the price of such
security or on the amount which the Fund can purchase or sell.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
- ---------------------------------------------------

As of the date of this statement of additional information, all of the
outstanding shares of each Fund are owned by CG Life, which is considered an
"affiliate" of the Trust. CG Life is a stock life insurance company domiciled in
the state of Connecticut. The offices of CG Life are located at 900 Cottage
Grove Road, Bloomfield, CT 06002. CG Life is an indirect, wholly-owned
subsidiary of CIGNA Corporation. CG Life owns Fund shares on behalf of separate
accounts registered as unit investment trusts under the 1940 Act, on behalf of
separate accounts exempt from registration under the 1940 Act, and on behalf of
a pension plan for certain CG Life employees. Under the 1940 Act, unit
investment trust variable contractowners are afforded pass through voting
privileges for most matters concerning Fund shares owned by the unit investment
trust. This means that although CG Life is the shareholder of the Fund, variable
contractowners of separate accounts registered as unit investment trusts will
actually be voting on Fund matters.

Page 31
<PAGE>

MANAGEMENT OF THE FUNDS
- -----------------------

The Trustees and the executive officers of the Trust are listed below, together
with information as to their principal occupations during the past five years
and other principal business affiliations. Currently each holds the equivalent
position as Trustee and/or officer of CIGNA Funds Group and CIGNA High Income
Shares, and holds a similar position as Director and/or executive officer of
CIGNA Investment Securities, Inc. Correspondence with any Trustee or officer
may be addressed to the Trust, c/o TimesSquare Capital Managemenet, Inc., 900
Cottage Grove Road, S-210, Hartford, CT 06152-2210.

HUGH R. BEATH, 68, Trustee; Advisory Director, AdMedia Corporate Advisors, Inc.
(investment banking); previously Managing Director, AdMedia Corporate Advisors,
Inc.; Chairman of the Board of Directors, Beath Advisors, Inc. (investment
adviser).

RUSSELL H. JONES, 55, Trustee; Vice President and Treasurer, Kaman Corporation
(helicopters and aircraft components, industrial products and services);
Corporator, Hartford Seminary; Trustee and Senior Fellow, American Leadership
Forum; previsously Vice President, Kaman Corporation.

THOMAS C. JONES*, 53, Trustee; President, CIGNA Investment Management, a
division of CIGNA ; Mr. Jones is also an officer or director of various other
entities which are subsidiaries or affiliates of CIGNA. Previously President,
CIGNA Individual Insurance, previously a division of CIGNA; President, CIGNA
Reinsurance--Property & Casualty, a division of CIGNA.

PAUL J. MCDONALD, 56, Trustee; Special Adviser to the Board of Directors,
Friendly Ice Cream Corporation (family restaurants/dairy products); Chairman,
Dean's Advisory Council, University of Massachusetts School of Management;
Director, Springfield YMCA; Trustee, Basketball Hall of Fame; Director, Western
Massachusetts Electric Company. Previously, Senior Executive Vice President &
Chief Administrative Officer, Friendly Ice Cream Corporation.

ALFRED A. BINGHAM III, 55, Vice President and Treasurer, CIGNA Funds Group,
CIGNA Variable Products Group, CIGNA High Income Shares and CIGNA Investment
Securities, Inc.; Assistant Vice President, TimesSquare.

RICHARD H. FORDE*, 46, President, CIGNA Variable Products Group; Director,
Senior Managing Director and President of CIGNA International Investment
Advisors, Ltd.; Chairman of the Board, Trustee and President, CIGNA Funds Group,
CIGNA High Income Shares and CIGNA Investment Securities, Inc. Mr. Forde is
also an officer or director of various other entities which are subsidiaries or
affiliates of CIGNA.

Page 32
<PAGE>

JEFFREY S. WINER, 42, Senior Counsel, CIGNA; Vice President and Secretary, CIGNA
Funds Group, CIGNA Variable Products Group, CIGNA High Income Shares and CIGNA
Investment Securities, Inc.; previously Counsel, CIGNA.

*Trustees identified with an asterisk are considered interested persons within
the meaning of the Investment Company Act of 1940, as amended, because of their
affiliation with CIGNA Corporation or its affiliates.

The Board has created an Audit Committee from among its members which meets
periodically with representatives of PricewaterhouseCoopers LLP, independent
accountants for the Trust, a Contracts Committee which, as part of its duties,
considers the terms and the renewal of the Master Investment Advisory Agreement
with TimesSquare, and a Nominating Committee which considers the identification
of new members of the Board and the compensation of Trustees. The Nominating
Committee, Audit Committee and Contracts Committee consist of Trustees who are
not affiliated with CIGNA Corporation or any of its subsidiaries.

The Trust and its adviser have adopted codes of ethics under rule 17j-1 of the
1940 Act. These codes permit personnel subject to the codes to invest in
securities, including securities that may be purchased or held by the Funds.

The Trust pays no compensation to any of its officers, other than the
reimbursement of the costs of the Office of the Treasurer and the Office of the
Secretary, or to any of its Trustees who are officers or employees of CIGNA
Corporation or its affiliates. The following table shows compensation paid by
the Trust and other investment companies in the CIGNA fund complex to the
Trust's Trustees in 1999:

<TABLE>
<CAPTION>
Aggregate Total Compensation from Trust
Name of Person, Compensation and CIGNA Fund Complex Paid to
Position with Trust from Trust Trustees(c)
- ------------------------------------------------------------------------------------------------------------

<S> <C> <C>
Hugh R. Beath, Trustee (a) 4,000 26,800
Russell H. Jones, Trustee 4,000 26,800
Thomas C. Jones, Trustee 0 0
Paul J. McDonald, Trustee (b) 4,000 26,800
------- -------
$12,000 $80,400
======= =======
</TABLE>

(a) All but $1,231 of Mr. Beath's 1999 compensation was deferred under a plan
for all CIGNA funds in which he had an aggregate balance of $215,952 as of
December 31, 1999.
(b) All but $1,231 of Mr. McDonald's 1999 compensation was deferred under a
plan for all CIGNA funds in which he had an aggregate balance of $188,470
as of December 31, 1999.
(c) There were four (4) investment companies besides the Trust in the CIGNA
fund complex.

Page 33
<PAGE>

INVESTMENT ADVISORY AND OTHER SERVICES
- --------------------------------------

The investment adviser to each of the Funds is TimesSquare Capital Management,
Inc., an indirect, wholly-owned subsidiary of CIGNA Corporation. TimesSquare
also serves as investment adviser for investment companies sponsored by
affiliates of CIGNA Corporation, and for a number of pension, advisory,
corporate and other accounts. AS of December 31, 1999 TimesSquare managed
assets of approximately $38.9 billion. TimesSquare's mailing address is Four
Times Square, 25th Floor, New York, New York 10036.

Pursuant to a Master Investment Advisory Agreement between the Trust and
TimesSquare, TimesSquare manages the investment and reinvestment of the assets
of the Funds.

Subject to the control and periodic review of the Board of Trustees of the
Trust, TimesSquare determines what investments shall be purchased, held, sold or
exchanged for the account of the Funds, and what portion, if any, of the assets
of the Funds shall be held in cash and other temporary investments. Accordingly,
the role of the Trustees is not to approve specific investments, but rather to
exercise a control and review function.

The Trust pays all expenses not specifically assumed by TimesSquare including
compensation and expenses of Trustees who are not Directors, officers or
employees of TimesSquare or any other affiliates of CIGNA Corporation;
registration, filing and other fees in connection with filings with regulatory
authorities; the fees and expenses of independent accountants; costs of printing
and mailing registration statements, prospectuses, proxy statements, and annual
and periodic reports to shareholders; custodian and transfer agent fees;
brokerage commissions and securities transactions costs incurred by the Trust;
taxes and corporate fees; legal fees incurred in connection with the affairs of
the Trust; and expenses of meetings of the shareholders and Trustees.

TimesSquare, at its own expense, furnishes to the Trust office space and
facilities and, except with respect to the Office of the Treasurer and Office of
the Secretary as provided in the Master Investment Advisory Agreement, all
personnel for managing the affairs of the Trust and each of the Funds. The
Trust and other registered investment companies advised by TimesSquare have
agreed to reimburse TimesSquare for its costs of maintaining the Office of the
Treasurer and the Office of the Secretary as provided in their respective
investment advisory agreements. TimesSquare has estimated that in 2000 the
total expenses of the Office of the Treasurer will not exceed $580,000 and the
expenses of the Office of the Secretary are not expected to exceed $215,000.
The portion of these expenses allocated to each Fund for calendar year 2000 are
not expected to exceed the following amounts:

Page 34
<PAGE>

Office of Office of
the Treasurer the Secretary
------------- -------------

S&P 500 $90,505 $33,594
Index Fund

Money Market Fund $19,241 $ 7,133

Investment Grade
Bond Fund $21,485 $ 7,964

In 1999 the costs incurred by the Trust for the Office of the Treasurer and the
Office of the Secretary were $109,847 and $65,130, respectively.

The Board of Trustees of the Trust has approved the method under which this cost
will be allocated to the Trust, and then to each Fund.

As full compensation for the investment management and all other services
rendered by TimesSquare and any sub-adviser, each Fund pays TimesSquare a
separate fee computed daily and paid monthly at annual rates based on a
percentage of the value of the relevant Fund's average daily net assets, as
follows: Money Market Fund - 0.35%, Investment Grade Bond Fund - 0.50%, and S&P
500 Index Fund - 0.25%.

Trust-wide expenses not identifiable to any particular Fund will be allocated
among the Funds. TimesSquare has voluntarily agreed to reimburse the Funds to
the extent that the annual operating expenses (excluding interest, taxes,
amortized organizational expense, transaction costs in acquiring and disposing
of portfolio securities and extraordinary expenses) of a Fund exceed a
percentage of the value of the relevant Fund's average daily net assets, as
follows: Money Market Fund and Investment Grade Bond Fund - 0.50% and S&P 500
Index Fund - 0.25%.

The S&P 500 Index Fund incurred a management fee payable to TimesSquare of
$608,323, $395,006 and $224,054 for fiscal years 1999, 1998 and 1997,
respectively. The amount payable for 1999 was reduced to $280,170 due to the
then applicable expense limitation. The amount payable for 1998 was reduced to
$97,275 due to the then applicable expense limitation. The amount payable for
1997 was waived and TimesSquare reimbursed the Fund and additional $46,603 due
to the then applicable expense limitation. The Money Market Fund incurred a
management fee payable to TimesSquare of $109,847, $73,471 and $33,579 for
fiscal years 1999, 1998 and 1997, respectively. The amount payable for 1999 was
reduced to $65,130 due to the then applicable expense limitation. The amount
payable for 1998 was reduced to $26,047 due to the expense limitation. For
1997, this amount was waived and TimesSquare reimbursed the Fund an additional
$25,787 due to the then applicable expense limitation. The Investment Grade
Bond Fund incurred a management fee of $108,182 for 1999. Due to the expense
limitation, this amount was reduced to $47,011.

Page 35
<PAGE>

The Master Investment Advisory Agreement provides that it will continue from
year to year as to a Fund provided that such continuance is specifically
approved at least annually: (a) by a vote of the "majority of the outstanding
voting securities" (as such term is defined in the 1940 Act) of that Fund or by
the Board of Trustees of the Trust, and (b) by a vote of a majority of the
Trustees who are not parties to the agreement or "interested persons" (as
defined in the 1940 Act) of any party thereto, cast in person at a meeting
called for the purpose of voting on such approval. The Master Investment
Advisory Agreement provides that it (i) may be terminated at any time without
penalty (a) upon 60 days' written notice by vote of the Trustees of the Trust,
or with respect to any Fund, by vote of a majority of the then outstanding
voting securities of such Fund, or (b) by TimesSquare upon 90 days' written
notice to the Trust in the case of the Master Investment Advisory Agreement and
(ii) will automatically terminate in the event of its "assignment" (as such term
is defined in the 1940 Act).

The Master Trust Agreement acknowledges CIGNA Corporation's control over the
name "CIGNA." The Trust and the Fund would be obliged to change their names to
eliminate the word "CIGNA" (to the extent they could lawfully do so) in the
event CIGNA Corporation were to withdraw its permission for use of such name.

CIGNA Corporation has agreed not to withdraw such permission from the Trust or a
series of the Trust so long as an affiliate of CIGNA Corporation shall be the
investment adviser for such series.

Custodian and Transfer Agent
- ----------------------------

The Trust's Custodian and Transfer Agent is State Street Bank and Trust Company
("State Street"), Boston, Massachusetts 02107. Under its Custodian Agreement,
State Street maintains the portfolio securities of each Fund, administers the
purchases and sales of portfolio securities, collects interest and dividends and
other distributions made on the securities held in the portfolio, determines the
net asset value of shares of each Fund on a daily basis and performs such other
ministerial duties as are included in the Custodian Agreement and Agency
Agreement, copies of which are on file with the Securities and Exchange
Commission.

Independent Accountants
- -----------------------

PricewaterhouseCoopers LLP acts as independent accountants for the Trust. Its
offices are at 160 Federal Street, Boston, Massachusetts 02110.
PricewaterhouseCoopers LLP representatives annually perform an audit of the
financial statements of the Funds and provide accounting advice and services
throughout the year. PricewaterhouseCoopers LLP reports its activities and the
results of its audit to the Audit Committee of the Board of Trustees.
PricewaterhouseCoopers LLP also provides certain tax advice to the Trust.

Page 36
<PAGE>

PORTFOLIO TURNOVER AND BROKERAGE ALLOCATION
- -------------------------------------------

It is anticipated that each Fund's annual portfolio turnover will not exceed
100%. With respect to the Money Market Fund and Investment Grade Bond Fund,
purchases and sales of portfolio securities are generally transacted with the
issuer or a primary market maker of these securities on a net basis, without any
brokerage commission being paid by the Funds for such purchases. Purchases from
dealers serving as primary market makers reflect the spread between the bid and
asked prices. Purchases and sales for the other Funds generally involve a
broker.

Transactions on U.S. stock exchanges, commodities markets and futures markets
and other agency transactions involve the payment of negotiated brokerage
commissions. Such commissions vary among different brokers. A particular
broker may charge different commissions according to such factors as the
difficulty and size of the transaction. Transactions in foreign investments
often involve the payment of fixed brokerage commissions, which may be higher
than those in the over-the-counter markets, but the price paid usually includes
an undisclosed dealer commission or mark-up as well as a disclosed, fixed
commission or discount retained by the underwriter or dealer.

It is the policy of TimesSquare on behalf of its clients, including the Funds,
to have purchases and sales of portfolio securities executed at the most
favorable prices, considering all costs of the transaction, including brokerage
commissions and spreads, and research services received, consistent with
obtaining best execution.

In seeking best execution, TimesSquare selects broker/dealers on the basis of
their professional capability and the value and quality of their brokerage
services. Brokerage services include the ability to execute most effectively
large orders without adversely affecting markets and the positioning of
securities in order to effect orderly sales for clients.

The officers of TimesSquare determine, generally without limitation, the
broker/dealers through whom, and the commission rates or spreads at which,
securities transactions for client accounts are executed. The officers of
TimesSquare may select a broker/dealer who may receive a commission for
portfolio transactions exceeding the amount another broker/dealer would have
charged for the same transaction if they determine that such amount of
commission is reasonable in relation to the value of the brokerage or research
services performed or provided by the broker/dealer, viewed in terms of either
that particular transaction or TimesSquare's overall responsibilities to the
client for whose account such portfolio transaction is executed and other
accounts advised by TimesSquare or accounts advised by other investment advisers
which are related persons of TimesSquare.

If two or more broker/dealers are considered able to offer the same favorable
price with the equivalent likelihood of best execution, the officers of
TimesSquare may prefer the broker/dealer who has furnished research services.
Research services include market information, analysis of specific issues,

Page 37
<PAGE>

presentation of special situations and trading opportunities on a timely basis,
advice concerning industries, economic factors and trends, portfolio strategy
and performance of accounts.

Research services are used in advising all accounts, including accounts advised
by related persons of TimesSquare, and not all such services are necessarily
used by TimesSquare in connection with the specific account that paid
commissions to the broker/dealer providing such services.

The overall reasonableness of brokerage commissions paid is evaluated
continually. Such evaluation includes review of what competing broker/dealers
are willing to charge for similar types of services and what discounts are being
granted by brokerage firms. The evaluation also considers the timeliness and
accuracy of the research received.

In addition, TimesSquare may, if permitted by applicable law, pay for products
or services other than brokerage and research services with brokerage
commissions as interpreted in SEC Release 34-23170 dated April 23, 1986.
Pursuant to that release, products and services which provide lawful and
appropriate assistance to TimesSquare's investment decision-making process may
be paid for with brokerage commissions to the extent such products and services
are used in that process.

Where the research service product has a mixed use, that is, the product may
serve a number of functions certain of which are not related to the making of
investment decisions, TimesSquare allocates the cost of the product on a basis
which they deem reasonable, according to the various uses of the product, and
maintain records documenting the allocation process followed. Only that portion
of the cost of the product allocable to research services is paid from the Fund.
The Fund does not acquire research services through the generation of credits
with respect to principal transactions or transactions in financial futures,
except in new issue fixed price underwritings.

The Trust does not presently allocate brokerage commissions to, or place orders
for portfolio transactions with, either directly or indirectly, brokers based on
their sales of shares of the Funds. Except as noted, the Trust does not utilize
an affiliated broker in effecting portfolio transactions and does not recapture
commissions paid in such transactions. Brokerage commissions paid by the S&P
500 Index Fund for 1999, 1998 and 1997 totaled $8,846, $2,808 and $4,338
respectively, substantially all of which were paid to firms which provided
research services to TimesSquare. Neither the Money Market Fund nor the
Investment Grade Bond Fund paid brokerage commissions in 1999.

CIGNA advises that Sanford C. Bernstein & Co., Inc. ("Sanford Bernstein"), 767
Fifth Avenue, New York, NY 10153, reported that as of December 31, 1999 it held
14,483,049 shares, or 7.8%, of the outstanding common stock of CIGNA. Sanford
Bernstein also reported sole voting power as to 6,817,757, shared voting power
as to 1,941,439, and sole dispositive power as to all 14,483,049 of these
shares. Wellington Management Company, LLP ("Wellington"), 75 State Street,
Boston, MA 02109, reported that as of December 31, 1999 it held 9,603,380
shares, or 5.16%, of the outstanding common stock of CIGNA. Wellington also
reported sole voting power as to none, shared voting power as to 1,236,080, and

Page 38
<PAGE>

shared dispositive power as to all of these shares. FMR Corp. ("FMR"), 82
Devonshire Street, Boston, MA 02109, reported that as of December 31, 1999 it
held 15,849,564 shares, or 8.523% of the outstanding common stock of CIGNA. FMR
also reported sole power to vote or to direct the vote of 2,168,854 shares and
sole power to dispose or to direct the disposition of all 15,849,564 of these
shares.

CAPITAL STOCK
- -------------

The capitalization of the Trust consists solely of an unlimited number of shares
of beneficial interest with a par value of $0.001 each.

Under Massachusetts law, the Trust's shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Trust's Master Trust Agreement disclaims liability of the
shareholders, Trustees or officers of the Trust for acts or obligations of the
Trust, which are binding only on the assets and property of the Trust, and
requires that notice of the disclaimer be given in each contract or obligation
entered into or executed by the Trust or the Trustees. The Master Trust
Agreement provides for indemnification out of Trust property for all losses and
expenses of any shareholder held personally liable for the obligations of the
Trust. The risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the Trust itself
would be unable to meet its obligations and thus should be considered remote.
Shares of each Fund will entitle their holders to one vote per share (with
proportionate voting for fractional shares), irrespective of the relative net
asset value of the shares of any other series of the Trust. On any matter
submitted to a vote of shareholders of the Trust, all shares of the Trust then
issued and outstanding shall be voted in the aggregate. However, on matters
affecting an individual series or class of shares, a separate vote of
shareholders of that series or class would be required. Shareholders of a
series or class would not be entitled to vote on any matter which does not
affect that series or class but which would require a separate vote of another
series or class.

When issued, shares of the Funds are fully paid and nonassessable, and have no
preemptive or subscription rights. There are no conversion rights. Shares do
not have cumulative voting rights, which means that in situations in which
shareholders elect Trustees, holders of more than 50% of the shares voting for
the election of Trustees can elect 100% of the Trustees of the Trust and the
holders of less than 50% of the shares voting for the election of Trustees will
not be able to elect any Trustees.

Page 39
<PAGE>

PERFORMANCE INFORMATION
- -----------------------

Total return and yield figures for the Funds are neither fixed nor guaranteed,
and no Fund's principal is insured. Performance quotations reflect historical
information and should not be considered representative of a Fund's performance
for any period in the future. Performance is a function of a number of factors
which can be expected to fluctuate. The Funds may provide performance
information in reports, sales literature and advertisements if accompanied by
performance of your life company's separate account. The Funds may also, from
time to time, quote information about the Funds published or aired by
publications or other media entities which contain articles or segments relating
to investment results or other data about one or more of the Funds. The
following is a list of such publications or media entities:

Advertising Age Financial Times Kiplinger
Barron's Financial Weekly Money
Barron's/Nelson's Financial World Mutual Fund Forecaster
Best's Review Forbes Nation's Business
Broker World Fortune New York Times
Business Week Global Investor Pensions World
Changing Times Hartford Courant Pensions & Investments
Christian Science Monitor Institutional Investor Personal Investor
Consumer Reports Insurance Forum Philadelphia Inquirer
Economist Insurance Weekly The Times (London)
Equity International International Business USA Today
FACS of the Week Week U.S. News & World
Report
Far Eastern Investing Wall Street Journal
Economic Review Investor's Chronicle Washington Post
Financial Adviser Investor's Daily CNN
Financial Planning Journal of the American CNBC
Financial Product News Society of CLU & ChFC PBS
Financial Services Week

Each Fund may also compare its performance to performance data of similar mutual
funds as published by the following services:

Lipper Analytical Services Stanger Report
CDA Investment Technologies, Inc. Weisenberger
Frank Russell Co. Micropal, Ltd.
InterSec Research

Although performance data may be useful to prospective investors in comparing
with other funds and other potential investments, investors should note that the
methods of computing performance of other potential investments are not
necessarily comparable to the methods employed by a Fund.

Yield and Total Return Quotations
- ---------------------------------

The standard formula for calculating total return, as described in the
prospectus, is as follows:

P(1+T)/n/=ERV

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<PAGE>

Where P = A hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at the end
of the 1, 5, or 10 year periods (or fractional portion of such
period).

Cumulative total return across a stated period may be calculated as follows:

P(1+V)=ERV

Where P = A hypothetical initial payment of $1,000.
V = cumulative total return.
ERV = ending redeemable value of a hypothetical $1,000 payment at the end
of the stated period.

The average annual total returns for the Funds for the one, five and ten year
periods (or since inception, if shorter) ended December 31, 1999 were as
follows:

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years Inception
------ ------- -------- ---------
<S> <C> <C> <C> <C>
S&P 500 Index Fund 20.77% 28.26% 17.27% N/A
Money Market Fund 4.83% N/A N/A 5.05%
(Commenced operations
March 1, 1996)

Investment Grade N/A N/A N/A -1.48%
Bond Fund (not annualized)
(Commenced operations
May 3, 1999)
</TABLE>

Yield Quotations
- ----------------

The standard formula for calculating yield for each Fund except Money Market
Fund, as described in the prospectus, is as follows:

YIELD = 2[((a-b)/(c x d) + 1)/6/-1]

Where a = dividends and interest earned during a stated 30 day period. For
purposes of this calculation, dividends are accrued rather than
recorded on the ex-dividend date. Interest earned under this
formula must generally be calculated based on the yield to maturity
of each obligation (or, if more appropriate, based on yield to call
date).
b = expense accrued during period (net of reimbursement).
c = the average daily number of shares outstanding during the period.

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<PAGE>

d = the maximum offering price per share on the last day of the period.

The standard formula for calculating annualized yield for the Money Market Fund,
as described in the prospectus, is as follows:

Y = V/1/ - V(degrees) x 365
----------------- ---
V(degrees) 7

Where Y = annualized yield.
V(degrees) = the value of a hypothetical pre-existing account in the Fund
having a balance of one share at the beginning of a stated
seven-day period.
V/1/ = the value of such an account at the end of the stated
period.

The annualized yield for the Money Market Fund for the 7 days ended December 31,
1999 was 5.39%.

The standard formula for calculating effective annualized yield for the Money
Market Fund, as described in the prospectus, is as follows:

EY = [(Y+1)/365/7/] -1

Where EY = effective annualized yield.
Y = annualized yield, as determined above.

The effective annualized yield for the Money Market Fund for the 7 days ended
December 31, 1999 was 5.53%.

For the purpose of the annualized yield and effective annualized yield, the net
change in the value of the hypothetical CIGNA Variable Products Money Market
Fund account reflects the value of additional shares purchased with dividends
from the original share and any such additional shares, and all fees charged to
all shareholder accounts in proportion to the length of the base period and the
Fund's average account size, but does not include realized gains and losses or
unrealized appreciation and depreciation.

PURCHASE, REDEMPTION AND PRICING OF SECURITIES
- ----------------------------------------------

The Funds may suspend redemptions or postpone the date of payment during any
period when: (a) the New York Stock Exchange is closed for other than customary
weekend and holiday closings or trading on such Exchange is restricted; (b) the
Securities and Exchange Commission has by order permitted such suspension for
the protection of the Fund's shareholders; or (c) an emergency exists as
determined by the Securities and Exchange Commission making disposal of
portfolio securities or valuation of net assets of the Fund not reasonably
practicable.

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<PAGE>

A Fund's net asset value is calculated by dividing the number of outstanding
shares into the net assets of the Fund. Net assets are the excess of a Fund's
assets over its liabilities. Additional information concerning purchase and
redemption of securities may be found in the current prospectus for the Funds.

The Money Market Fund.
- ---------------------

The investments of the Money Market Fund are valued at amortized cost. The
amortized cost of an instrument is determined by valuing it at cost originally
and thereafter amortizing any discount or premium from its face value at a
constant rate until maturity, regardless of the effect of fluctuating interest
rates on the market value of the instrument. The amortized cost method may
result at times in determinations of value that are higher or lower than the
price the Fund would receive if the instruments were sold. During periods of
declining interest rates, use by the Fund of the amortized cost method of
valuing its portfolio may result in a lower value than the market value of the
portfolio, which could be an advantage to new investors relative to existing
shareholders. The converse would apply in a period of rising interest rates.

The valuation of the investments of CIGNA Variable Products Money Market Fund at
amortized cost is permitted by the Securities and Exchange Commission, and the
Fund is required to adhere to certain conditions so long as it uses this
valuation method. The Money Market Fund will maintain a dollar-weighted average
portfolio maturity of 90 days or less, will purchase only instruments having
remaining maturities of one year or less (except as otherwise noted under
"Variable and Floating Note Instruments" under "Description of Money Market
Instruments" in this Statement of Additional Information) and will invest only
in securities determined by the Board of Trustees to be of high quality with
minimal credit risks. The Board of Trustees has also established procedures
reasonably designed, taking into account current market conditions and the
Fund's investment objective, to stabilize the Fund's price per share as computed
for the purpose of distribution, redemption and repurchase at $1.00. Such
procedures include a review of the Fund's portfolio holdings by the Board of
Trustees, at such intervals as they may deem appropriate, to determine whether
the Fund's net asset value, calculated by using readily available market
quotations, deviates from $1.00 per share, and, if so, whether such deviation
may result in material dilution or is otherwise unfair to existing shareholders.
In the event the Board of Trustees determines that such a deviation exists, it
will take such corrective action as it deems necessary and appropriate,
including selling portfolio instruments prior to maturity to realize capital
gains or losses or to shorten average portfolio maturity; withholding dividends;
redeeming shares in kind; or establishing a net asset value per share by using
readily available market quotations in which case, the net asset value could
possibly be greater or less than $1.00 per share.

All Other Funds
- ---------------

Information describing the valuation of securities held in these Funds is found
in the prospectus under "Computation of Net Asset Value."

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<PAGE>

DIVIDENDS
- ---------

Information concerning dividends is found in the current prospectus for the
Funds.

LIMITATION ON TRANSFERS
- -----------------------

Whenever the Trust or its duly appointed transfer agent is requested to transfer
Fund shares to other than an Eligible Purchaser, the Trust has the right at its
election to purchase such shares at their net asset value next effective
following the time at which the request for transfer is presented; provided,
however, that the Trust must notify the transferee or transferee of such shares
in writing of its election to purchase such shares within seven (7) days
following the date of such request and settlement for such shares shall be made
within such seven-day period.

RATINGS OF SECURITIES
- ---------------------

Description of Standard & Poor's Corporation ("Standard & Poor's") and Moody's
Investors Service, Inc. ("Moody's") commercial paper and bond ratings:

COMMERCIAL PAPER RATINGS--

A-1 An obligor rated A-1 has strong capacity to meet its financial
commitments. It is rated in the highest category by Standard & Poor's. Within
this category, certain obligers are designated with a plus sign (+). This
indicates that the obligor's capacity to meet its financial commitments is
extremely strong.

A-2 An obligor rated A-2 has satisfactory capacity to meet its financial
commitments. However, it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligers in the highest
rating category.

A-3 An obligor rated A-3 has adequate capacity to meet its financial
obligations. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitments.

B An obligor rated B is regarded as vulnerable and has significant
speculative characteristics. The obligor currently has the capacity to meet its
financial commitments; however, it faces major ongoing uncertainties which could
lead to the obligor's inadequate capacity to meet its financial commitments.

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<PAGE>

C An obligor rated C is currently vulnerable to nonpayment and is dependent
upon favorable business, financial, and economic conditions for it to meet its
financial commitments.

An Issuer Credit Rating is withdrawn upon the first occurences of any of the
following: 1) a payment default on any financial obligation, rated or unrated,
other than a financial obligation subject to a bona fide commercial dispute; 2)
a voluntary bankruptcy filing by the issuer or similar action; or, 3) in the
case of banks, upon seizure of the bank by a regulator, or in the case of
insurance companies, upon placement of the insurer under regulatory supervision
due to its financial condition.

"A-1" This designation indicates that the degree of safety regarding timely
payment is very strong. Those issues determined to possess overwhelming
safety characteristics will be denoted with a plus (+) sign designation.

"A-2" Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for
issues designated "A-1."

Moody's employs three designations, all judged to be investment grade, to
indicate the relative repayment capacity of rated issuers. The two highest
designations are as follows:

Issuers rated Prime-1 (or supporting institutions) have a superior capacity for
repayment of senior short-term debt obligations. Prime-1 repayment capacity
will normally be evidenced by the following characteristics:

. Leading market positions in well-established industries.

. High rates of return on funds employed.

. Conservative capitalization structures with moderate reliance on debt and
ample asset protection.

. Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.

. Well-established access to a range of financial markets and assured
sources of alternate liquidity.

Issuers rated Prime-2 (or supporting institutions) have a strong capacity for
repayment of senior short-term debt obligations. This will normally be
evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

Page 45
<PAGE>

Moody's Investors Service, Inc.

Aaa: Bonds that are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin, and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.

Aa: Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.

A: Bonds that are rated A possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present that suggest a susceptibility to impairment sometime in the future.

Baa: Bonds that are rated Baa are considered as medium grade obligations
(i.e, they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba: Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate, and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

B: Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

Caa: Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.

Ca: Bonds which are rated Ca represent obligations that are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.

C: Bonds which are rated C are the lowest-rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

Page 46
<PAGE>

Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of that generic rating category.

Standard & Poor's Corporation

AAA: An obligation rated `AAA' has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment is EXTREMELY STRONG.

AA: An obligation rated `AA' differs from the highest rated obligations
only in small degree. The obligor's capacity to meet its financial commitment on
the obligation is VERY STRONG.

A: An obligation rated `A' is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations in
higher rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still STRONG.

BBB: An obligation rated `BBB' exhibits ADEQUATE protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.

Obligations rated `BB', `B', `CCC', `CC' and `C' are regarded as having
significant speculative characteristics. `BB' indicates the least degree of
speculation and `C' the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major risk exposures to adverse conditions.

BB: An obligation rated `BB' is LESS VULNERABLE to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.

B: An obligation rated `B' is MORE VULNERABLE to nonpayment than
obligations rated `BB' but the obligor currently has the capacity to meet its
financial commitment on the obligation. Adverse business, financial or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.

CCC: An obligation rated `CCC' is CURRENTLY VULNERABLE to nonpayment and is
dependent upon favorable business, financial and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial or economic conditions, the obligor is not likely to
have the capacity to meet its financial commitment on the obligation.

CC: An obligation rated `CC' is CURRENTLY HIGHLY VULNERABLE to nonpayment.

C: The `C' rating may be used to cover a situation where a bankruptcy
petition has been filed or similar action has been taken, but payments on this
obligation are being continued.

D: An obligation rated `D' is in payment default. The `D' rating category
is used when payments on an obligation are not made on the date due even if the

Page 47
<PAGE>

applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The `D' rating also will be used upon
the filing of a bankruptcy petition or the taking of similar action if payments
on an obligation are jeopardized.

Plus (+) or Minus (-): The ratings from `AA' to `CCC' may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

r: This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk - such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.

MUNICIPAL BOND RATINGS - U.S. TAX-EXEMPT MUNICIPALS

Moody's Investors Service, Inc.

There are nine basic rating categories for long-term obligations. They range
from Aaa (highest quality) to C (lowest quality). Moody's applies numerical
modifiers 1, 2, and 3 in each generic rating classification from As to Caa. The
Modifier 1 indicates that the issue ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic category.
Advance refunded issues that are secured by escrowed funds held in cash, held in
trust, reinvested in direct non-callable united States government obligations or
non-callable obligations unconditionally guaranteed by the U.S. government are
identified with a # (hatchmark) symbol, e.g. # Aaa.

Aaa Bonds that are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
`gilt edge.' Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.

Aa Bonds are rated As are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present that make the
long-term risks appear somewhat larger than in Aaa securities.

A Bonds that are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
that suggest a susceptibility to impairment some time in the future.

Baa Bonds that are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Page 48
<PAGE>

Ba Bonds that are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and based times over the future. Uncertainty of position
characterizes bonds in this class.

B Bonds that are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or maintenance of
other terms of the contract over any long period of time may be small.

Caa Bonds that are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca Bonds that are rated Ca represent obligations that are speculative in a
high degree. Such issues are often default or have other marked shortcomings.

C Bonds that are rated C are the lowest rated class of bonds, and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.

Con. (...) Bonds for which the security depends upon the completion of some
act or the fulfillment of some condition are rated conditionally. These are
bonds secured by: (a) earnings of projects under construction, (b) earnings of
projects unseasoned in operating experience, (c) rentals that begin when
facilities are completed, or (d) payments to which some other limiting condition
attaches. Parenthetical rating denotes probable credit stature upon completion
of construction or elimination of basis of condition.

Page 49
<PAGE>

REGISTRATION STATEMENT
on
FORM N-1A

PART C: OTHER INFORMATION

Item 23. Exhibits.
- -----------------

a. The Second Amended and Restated Master Trust Agreement of Registrant
dated July 28, 1998, incorporated by reference to Post-Effective
Amendment No. 17 to Registrant's Registration Statement filed
electronically February 12, 1999.

b. The Amended And Restated By-Laws of Registrant dated April 29, 1997,
incorporated by reference to Post-Effective Amendment No. 16 to
Registrant?s Registration Statement filed electronically April 30,
1998.

c. Relative to the rights of shareholders, Article IV and Article V of
Registrant's First Amended and Restated Master Trust Agreement dated
as of March 1, 1996, incorporated by reference to Post-Effective
Amendment No. 11 to Registrant's Registration Statement filed
electronically March 7, 1996.

c. (i) Relative to the rights of shareholders, Article 9 of the Amended and
Restated By-Laws of Registrant dated April 29, 1997 as hereinbefore
incorporated by reference as Exhibit b.

c. (ii) Relative to the rights of shareholders, the Participation Agreement,
as amended, among CIGNA Variable Products Group, CIGNA Financial
Services, Inc. and Connecticut General Life Insurance Company dated as
of December 1, 1997, as hereinafter incorporated by reference or filed
in Exhibits h (v), h(vi) and h(vii).

c. (iii) Relative to the rights of shareholders, the Participation Agreement
among CIGNA Variable Products Group, CIGNA Financial Services, Inc.
and CIGNA Life Insurance Company dated as of December 1, 1997, as
hereinafter incorporated by reference in Exhibit h (vii).

d. The Master Investment Advisory Agreement dated as of April 26, 1988
between CIGNA Variable Products Group and CIGNA Investments, Inc.
(n/k/a TimesSquare Investment Management, Inc.), incorporated by
reference to Post-Effective Amendment No. 16 to Registrant?s
Registration Statement filed electronically April 30, 1998.

d. (i) The Side Letter to the Master Investment Advisory Agreement dated as
of November 9, 1995 between CIGNA Variable Products Group and CIGNA
Investments, Inc., (n/k/a TimesSquare Investment Management, Inc.),
incorporated by reference to Post-Effective Amendment No. 11 to
Registrant's Registration Statement filed electronically March 7,
1996.

d. (ii) The Side Letter to the Master Investment Advisory Agreement dated
April 30, 1996 between CIGNA Variable Products Group and CIGNA
Investments, Inc., (n/k/a TimesSquare Investment Management, Inc.),
incorporated by reference to Post-Effective Amendment No. 14 to
Registrant's Registration Statement filed electronically January 28,
1997.

d. (iii) The Side Letter to the Master Investment Advisory Agreement dated
February 25, 1997 between CIGNA Variable Products Group and CIGNA
Investments, Inc., (n/k/a TimesSquare Investment Management, Inc.),
incorporated by reference to Post-Effective Amendment No. 15 to
Registrant?s Registration Statement filed electronically April 10,
1997.

e. None.

f. None.
<PAGE>

g. The Custodian Contract dated as of April 15, 1988 between CIGNA
Variable Products Group and State Street Bank and Trust Company,
incorporated by reference to Post-Effective Amendment No. 17 to
Registrant's Registration Statement filed electronically February
12, 1999.

g. (i) The Custodian Fee Schedule Effective January 1, 2000 relative to
the Custodian Contract hereinbefore filed as Exhibit g to be
filed by amendment.

* g. (ii) Amendment to the Custodian Contract by and between CIGNA Variable
Products Group and State Street Bank and Trust Company, made as
of February 22, 2000.

g. (iii) The Side Letter to the Custodian Contract dated as of February
15, 1996 between CIGNA Variable Products Group and State Street
Bank and Trust Company, incorporated by reference to Post-
Effective Amendment No. 11 to Registrant's Registration Statement
filed electronically March 7, 1996.

g. (iv) The Side Letter to the Custodian Contract dated as of February
25, 1997 between CIGNA Variable Products Group and State Street
Bank and Trust Company, incorporated by reference to Post-
Effective Amendment No. 15 to Registrant's Registration Statement
filed electronically April 10, 1997.

* g. (v) The Side Letter to the Custodian Contract dated as of May 4, 1999
between CIGNA Variable Products Group and State Street Bank and
Trust Company.

* g. (vi) The Price Source Authorization Agreement pursuant to the
Custodian Contract among State Street Bank and Trust Company and
CIGNA Funds, made as of January, 2000.

* g. (vii) Data Access Services Addendum to Custodian Agreement between
State Street Bank and Trust Company and CIGNA Funds, dated as of
August 18, 1997.

h. The Transfer Agency and Service Agreement dated as of April 15,
1988 between CIGNA Variable Products Group and State Street Bank
and Trust Company, incorporated by reference to Post-Effective
Amendment No. 16 to Registrant's Registration Statement filed
electronically April 30, 1998.

h. (i) The Side Letter to the Transfer Agency and Service Agreement
dated as of February 15, 1996 between CIGNA Variable Products
Group and State Street Bank and Trust Company, incorporated by
reference to Post-Effective Amendment No. 11 to Registrant's
Registration Statement filed electronically March 7, 1996.

h. (ii) The Side Letter to the Transfer Agency and Service Agreement
dated as of February 25, 1997 between CIGNA Variable Products
Group and State Street Bank and Trust Company, incorporated by
reference to Post-Effective Amendment No. 15 to Registrant's
Registration Statement filed electronically April 10, 1997.

h. (iii) The Agreement For Use Of The Term "CIGNA" dated February 4, 1988
between CIGNA Variable Products Group and CIGNA Corporation,
incorporated by reference to Post-Effective Amendment No. 15 to
Registrant's Registration Statement filed electronically April
10, 1997.

h. (iv) Form of Trustees' Deferred Fee Agreement, incorporated by
reference to Post-Effective Amendment No. 9 to Registrant's
Registration Statement filed electronically October 16, 1995.

h. (v) The Participation Agreement dated as of December 1, 1997 among
CIGNA Variable Products Group, CIGNA Financial Services, Inc. and
Connecticut General Life Insurance Company, incorporated by
reference to Post-Effective Amendment No. 16 to Registrant's
Registration Statement filed electronically April 30, 1998.

C-2
<PAGE>

h. (vi) Amendment No. 1 to the Participation Agreement dated as of
December 1, 1998 among CIGNA Variable Products Group, CIGNA
Financial Services, Inc. and Connecticut General Life Insurance
Company, incorporated by reference to Post-Effective Amendment
No. 17 to Registrant's Registration Statement filed
electronically February 12, 1999.

* h. (vii) Amendment No. 2 to the Participation Agreement made as of March
17, 2000 among CIGNA Variable Products Group, CIGNA Financial
Services, Inc. and Connecticut General Life Insurance Company.

* h. (viii) Power of Attorney.

* i. Consent of Counsel.

* j. Consent of PricewaterhouseCoopers LLP.

k. None.

l. None.

m. None.

n. None.

* p. Business Ethics - CIGNA Investment Management Associates and
Restricted Persons, dated February, 1999.

* p. (i) Code of Ethics of CIGNA Variable Products Group, made as of
February, 1988.

Item 24. Persons Controlled by or Under Common Control with the Fund.
- --------------------------------------------------------------------

As of the date hereof, no person is directly or indirectly controlled by or
under common control with CIGNA Variable Products Group.

Item 25. Indemnification.
- ------------------------

The Second Amended and Restated Master Trust Agreement, dated July 28, 1998 (the
"Master Trust Agreement"), provides, among other things, for the indemnification
out of Registrant's assets (or the assets of a series of Registrant where
applicable) of the Trustees and officers of Registrant against all liabilities
incurred by them in such capacity, except for liability by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of their duties.
Trustees may consult counsel or other experts concerning the meaning and
operation of the Master Trust Agreement, and may rely upon the books and records
of Registrant. Trustees are not liable for errors of judgment, mistakes of fact
or law, or for the negligence of other Trustees or Registrant's officers or
agents.

Trustees are not required to give a bond or other security for the performance
of their duties. Payments in compromise of any action brought against a Trustee
or officer may be paid by Registrant if approved by either a majority of
disinterested Trustees or by independent legal counsel. The right of
indemnification under the Master Trust Agreement is not exclusive of any other
rights to which the Trustees or officers may be entitled.

_______________________
*Filed Herewith

C-3
<PAGE>

The Master Trust Agreement also provides that shareholders shall be indemnified
and held harmless by the applicable series of Registrant with respect to actions
brought against them in their capacity as shareholders. Also, the Master Trust
Agreement provides that creditors of a series of Registrant may look only to the
assets of that series for payment; and neither shareholders nor Trustees shall
be personally liable therefor. All instruments executed on behalf of Registrant
are required to contain a statement to the effect of the foregoing.

TimesSquare Investment Management, Inc., Registrant and other investment
companies managed by TimesSquare Investment Management, Inc., their officers,
trustees, directors and employees (the "Insured Parties") are insured under an
Investment Management Errors and Omissions Insurance Policy in the amount of
$10,000,000 offered by Lloyd's Insurance Company, an affiliate of Lloyd's of
London, on a joint policy basis with TimesSquare Investment Management, Inc. and
CIGNA International Investment Advisors, Ltd.

In addition, Registrant and other investment companies managed by TimesSquare
Investment Management, Inc. and CIGNA International Investment Advisors, Ltd.
are insured under a Lloyd's Insurance Company Investment Company Blanket Bond
with a stated maximum coverage of $10,000,000. Premiums and policy benefits are
allocated among participating companies pursuant to Rule 17g-1(d) under the
Investment Company Act of 1940, as amended.

Item 26. Business and Other Connections of the Investment Adviser.
- -----------------------------------------------------------------

As of the date hereof, TimesSquare Investment Management, Inc. ("TimesSquare")
serves as investment adviser to CIGNA Funds Group, CIGNA Institutional Funds
Group, CIGNA Variable Products Group and their series of shares and to CIGNA
High Income Shares (CIGNA Funds Group, CIGNA Institutional Funds Group, CIGNA
Variable Products Group and CIGNA High Income Shares known collectively as the
"Trusts") and to CIGNA Investment Securities, Inc. ("CIS"), all of which (except
for CIS and CIGNA High Income Shares) are open-end investment companies, and to
certain other clients, most of which are affiliated with CIGNA Corporation. For
a description of the business of TimesSquare, see its most recent Form ADV (File
No. 801-18094) filed with the Securities and Exchange Commission. The principal
business address of each of the foregoing companies is as follows:

TimesSquare - Four Times Square, New York, NY 10036 and 900 Cottage Grove
Road, Bloomfield, Connecticut 06002 [mailing address]

The Trusts and each of their series of shares - 100 Front Street, Suite
300, Worcester, Massachusetts 01601

CIS - Two Liberty Place, 1601 Chestnut Street, Philadelphia, Pennsylvania
19192

Substantial business and other connections of the Directors and officers of
TimesSquare during the past two fiscal years are listed below:

Names of Officers and Directors Positions with the Adviser and
of the Investment Adviser Other Substantial Business Connections
- ------------------------------- -----------------------------------------

Thomas C. Jones Director and Chairman of the Board,
TimesSquare; President, CIGNA Investment
Management, a division of CIGNA Corporation*;
President and Director, CIGNA Investments,
Inc.* (f/k/a CIGNA Investment Advisory
Company, Inc.) and CIGNA Investment Group,
Inc.*; President, CIGNA Investments, Inc.*
(f/k/a CIGNA Investment Advisory Company,
Inc.); Director, CIGNA International
Investment Advisors, Ltd.**, CIGNA Financial
Futures, Inc.* and Global Portfolio
Strategies, Inc.*; Trustee, the Trusts;
Director, CIGNA Investment Securities, Inc.
(f/k/a INA Investment Securities, Inc.);
Director, President and Chairman of
Investment Committee, Connecticut General
Life Insurance Company; previously, President
TimesSquare.

C-4
<PAGE>

Robert J. Moore Director and President, TimesSquare; Senior
Managing Director, CIGNA Investments, Inc.*,
(f/k/a CIGNA Investment Advisory Company,
Inc.) and CIGNA International Investment
Advisors, Ltd.**; Chief Investment Officer,
CIGNA Investment Management-Retirement
Services, a division of CIGNA Corporation*;
previously Managing Director, Head of Fixed
Income Portfolio Management and Research,
Credit Suisse Asset Management, NY, NY.

Daniel H. Sigg Director, Managing Director, Chief Operating
Officer, TimesSquare; Managing Director,
Business Operations, CIGNA Investment
Management; previously Senior Managing
Director and Global Head of Institutional
Asset Management, Union Bank of Switzerland;
Executive Director and CFO, Credit Suisse
Asset Management, NY, NY.

Jean H. Walker Director and Senior Vice President-Finance,
TimesSquare; Chief Financial Officer, CIGNA
Investment Management, a division of CIGNA
Corporation*; Director, CIGNA International
Investment Advisors, Ltd.**, CIGNA Investment
Group, Inc.*; Global Portfolio Strategies,
Inc.*; Director, Vice President, Member of
Investment Committee and Actuary, Connecticut
General Life Insurance Company*; previously
Chief Financial Officer, Group Insurance
division, CIGNA Corporation.*

Mary Louise Casey Senior Managing Director, TimesSquare;
Director and Senior Managing Director, CIGNA
Investments, Inc.*, (f/k/a CIGNA Investment
Advisory Company, Inc.); Director Global
Portfolio Strategies, Inc.*; Vice President,
Connecticut General Life Insurance Company.*

Richard H. Forde Senior Managing Director, TimesSquare; Senior
Managing Director, CIGNA Investments, Inc.*
(f/k/a CIGNA Investment Advisory Company,
Inc.); Member of Investment Committee,
President, Senior Managing Director and
Director, CIGNA International Investment
Advisors, Ltd.**; Director and President,
Global Portfolio Strategies, Inc.*; Chairman
of the Board, President and Trustee CIGNA
Funds Group, CIGNA High Income Shares, CIGNA
Institutional Funds Group and CIGNA
Investment Securities, Inc. (f/k/a INA
Investment Securities, Inc.); President CIGNA
Variable Products Group.

Philip J. Ward Senior Managing Director, TimesSquare;
Director and Senior Managing Director, CIGNA
Investments, Inc.* (f/k/a CIGNA Investment
Advisory Company, Inc.); Vice President,
Connecticut General Life Insurance Company.*

Kevin D. Barry Managing Director, TimesSquare.

Marguerite A. Boslaugh Managing Director, TimesSquare.

Susan B. Bosworth Managing Director, TimesSquare.

William C. Carlson Managing Director, TimesSquare; previously
Vice President, TimesSquare.

C-5
<PAGE>

Rosemary C. Clarke Managing Director, TimesSquare and CIGNA
Investments, Inc.* (f/k/a CIGNA Investment
Advisory Company, Inc.)

Rosemary S. Cleaves Managing Director, TimesSquare; previously
President and Director, Global Portfolio
Strategies, Inc.*

Robert F. DeLucia Managing Director, TimesSquare and CIGNA
Investments, Inc.* (f/k/a CIGNA Investment
Advisory Company, Inc.); Director, Global
Portfolio Strategies, Inc.*

Ira Edelblum Managing Director, TimesSquare; previously
Portfolio Manager, Credit Suisse Asset
Management, NY, NY.

Robert Fair Managing Director, TimesSquare.

Keith A. Gollenberg Managing Director, TimesSquare; previously
Vice President, TimesSquare.

William J. Grady Managing Director, TimesSquare.

Dennis P. Hannigan Managing Director, TimesSquare.

Debra J. Height Managing Director, TimesSquare and CIGNA
Investments, Inc.* (f/k/a CIGNA Investment
Advisory Company, Inc.)

William H. Jefferis Managing Director, TimesSquare; previously
Vice President, TimesSquare.

David R. Johnson Managing Director, TimesSquare and CIGNA
Investments, Inc.* (f/k/a CIGNA Investment
Advisory Company, Inc.)

Robert W. Justich Managing Director, TimesSquare; previously
Managing Director, Credit Suisse Asset
Management, NY, NY.

Richard H. Kupchunos Managing Director, TimesSquare and CIGNA
Investments, Inc.* (f/k/a CIGNA Investment
Advisory Company, Inc.)

Edward Lewis Managing Director, TimesSquare.

Timothy J. Lord Managing Director, TimesSquare; Vice
President, CIGNA Financial Futures, Inc.*

Patrick J. McNelis Managing Director, TimesSquare.

Stephen J. Olstein Managing Director, TimesSquare.

Alan C. Petersen Managing Director, TimesSquare; Vice
President, CIGNA High Income Shares.

Anthony J. Pierson Managing Director, TimesSquare.

Donald F. Rieger, Jr. Managing Director, TimesSquare.

C-6
<PAGE>

Frank Sataline, Jr. Managing Director, TimesSquare; previously
Vice President, TimesSquare.

John A. Shaw Managing Director, TimesSquare.

Joseph W. Springman Managing Director, TimesSquare and CIGNA
Investments, Inc.* (f/k/a CIGNA Investment
Advisory Company, Inc.)

William A. Taylor Managing Director, TimesSquare.

George Varga Managing Director, TimesSquare.

Victor J. Visockis, Jr. Managing Director, TimesSquare; previously
Vice President, TimesSquare.

Henry C. Wagner, III Managing Director, TimesSquare; Managing
Director and Vice President, CIGNA
Investments, Inc.* (f/k/a CIGNA Investment
Advisory Company, Inc.); President, CIGNA
Financial Futures, Inc.*; previously Vice
President, CIGNA Investments, Inc.* (f/k/a
CIGNA Investment Advisory Company, Inc.)

Deborah B. Wiacek Managing Director, TimesSquare; previously
Vice President, TimesSquare.

Stephen H. Wilson Managing Director, TimesSquare.

Mary C. LaBelle Senior Vice President, TimesSquare; Human
Resources Head, CIGNA Investment Management,
a division of CIGNA Corporation*; previously
Human Resources, Aeltus Investment
Management, a division of Aetna Corporation,
Hartford, CT.

Victor E. Saliterman Senior Vice President, TimesSquare.

Thomas P. Au Vice President, TimesSquare.

Andrew Brown Vice President, TimesSquare.

Timothy C. Burns Vice president, TimesSquare and Global
Portfolio Strategies, Inc.*

Maryanne P. dePreaux Vice President, TimesSquare.

Kim L. DiPietro Vice President, TimesSquare.

Robert W. Eccles Vice President, Finance & Risk Management,
TimesSquare; previously Assistant Vice
President and Controller, TimesSquare.

Mark W. Everette Vice President, TimesSquare.

Susan M. Grayson Vice President, TimesSquare and Global
Portfolio Strategies, Inc.*; previously Vice
President, Global Portfolio Strategies, Inc.*

Amy F. Hatfield Vice President, TimesSquare.

C-7
<PAGE>

John Hurley Vice President, TimesSquare.

Joseph R. Kennedy Vice President, TimesSquare.

Paul T. Martin Vice President, TimesSquare.

Daniel McDonough Vice President, TimesSquare, CIGNA
International Investment Advisors, Ltd.** and
Global Portfolio Strategies, Inc.*

Dean M. Molinaro Vice President, TimesSquare.

Alpha O. Nicholson, III Vice President, TimesSquare; Senior Counsel,
CIGNA companies*.

Thomas J. Podgorski Vice President, TimesSquare.

Timothy F. Roberts Vice President and Compliance Officer,
TimesSquare; Vice President, International
Finance/Global Compliance, CIGNA Investment
Management, a division of CIGNA Corporation*;
Vice President - Finance and Chief Compliance
Officer, CIGNA International Investment
Advisors, Ltd.**; Compliance Officer, CIGNA
Investments, Inc.* (f/k/a CIGNA Investment
Advisory Company, Inc.); Director and
Compliance Officer, Global Portfolio
Strategies, Inc.*

John R. Schumann Vice President, TimesSquare.

Philip Spak Vice President, TimesSquare.

Marie E. Swartzwelder Vice President, TimesSquare; previously Vice
President, Global Portfolio Strategies, Inc.*

Carlton C. Taylor Vice President, TimesSquare.

Michael J. Walker Vice President, TimesSquare.

Alfred A. Bingham III Assistant Vice President, TimesSquare; Vice
President and Treasurer, the Trusts and CIGNA
Investment Securities, Inc. (f/k/a INA
Investment Securities, Inc.)

Susan L. Cooper Secretary, TimesSquare, CIGNA Investments,
Inc.* (f/k/a CIGNA Investment Advisory
Company, Inc.), CIGNA International
Investment Advisors, Ltd.**, CIGNA Investment
Group, Inc.*, CG Trust Company*, Global
Portfolio Strategies, Inc.*, CIGNA Financial
Services, Inc.***, CIGNA Financial Futures,
Inc.*, Connecticut General Life Insurance
Company*; Assistant Corporate Secretary,
CIGNA Corporation****; previously Associate,
Robinson Donovan Madden & Barry, P.C.,
Springfield, MA (Law Firm).

_____________________
* Four Times Square, New York, NY and 900 Cottage Grove Road, Bloomfield, CT
** Park House, 16 Finsbury Circus, London, England
*** 280 Trumbull Street, One Commercial Plaza, Hartford, CT
**** One Liberty Place, 1650 Market Street, Philadelphia, PA

C-8
<PAGE>

Item 27. Principal Underwriters.
- -------------------------------

Registrant has no principal underwriter. CIGNA Financial Services, Inc., an
indirect, wholly-owned subsidiary of CIGNA Corporation, is the distributor of
variable annuity and variable life insurance contracts, the assets of which are
invested in part in series of CIGNA Variable Products Group.

Item 28. Location of Accounts and Records.
- -----------------------------------------

Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, as amended, (15 U.S.C. 80a-30(a)) and the Rules
(17 CFR 270.31a-1 to 31a-3) promulgated thereunder and records relating to
shareholders are maintained by State Street Bank and Trust Company, Boston,
Massachusetts. Registrant's corporate records and financial records are
maintained c/o TimesSquare Capital Management, Inc., 900 Cottage Grove Road,
Bloomfield, CT 06002.

Item 29. Management Services.
- ----------------------------

Not Applicable

Item 30. Undertakings.
- ---------------------

Not Applicable.

C-9
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, Registrant, CIGNA Variable
Products Group, certifies that it meets all of the requirements for
effectiveness of this registration statement under Rule 485(b) under the
Securities Act of 1933, as amended, and has duly caused this Amendment No. 19 to
the Registration Statement to be signed on its behalf by the undersigned, duly
authorized, in the City of Bloomfield, and State of Connecticut on the 28th day
of April, 2000.

CIGNA VARIABLE PRODUCTS GROUP

Richard H. Forde
President

By: /s/ Jeffrey S. Winer
-------------------------------------
Jeffrey S. Winer
Attorney-in-Fact

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 19 to the Registration Statement has been signed below by the
following persons in the capacities and on the date indicated.

Signature Title Date
--------- ----- ----

Richard H. Forde April 28, 2000.

President
(principal executive
By: /s/ Jeffrey S. Winer officer)
----------------------------
Jeffrey S. Winer
Attorney-in-Fact

Treasurer
(principal
financial officer
and principal
/s/ Alfred A. Bingham III accounting officer) April 28, 2000.
-------------------------------
Alfred A. Bingham III

This Amendment No. 19 to the Registration Statement has also been signed
below by Jeffrey S. Winer, Attorney-in-Fact, on behalf of the following Trustees
on the date indicated, such Trustees being all of the Trustees currently holding
the office of Trustee of Registrant.

Hugh R. Beath Thomas C. Jones
Russell H. Jones Paul J. McDonald

By: /s/ Jeffrey S. Winer April 28, 2000.
---------------------------
Jeffrey S. Winer

C-10
<PAGE>

SECURITIES ACT FILE NO. 33-20333
INVESTMENT COMPANY ACT FILE NO. 811-5480

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [_]

Pre-Effective Amendment [_]
Post-Effective Amendment No. 19 [X]

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [_]
Amendment No. 19 [X]

CIGNA Variable Products Group
(Exact Name of Registrant as Specified in Charter)

100 Front Street, Suite 300, Worcester, MA 01601
(Address of Principal Executive Office)

EXHIBITS
<PAGE>

EXHIBIT INDEX

g. (ii) Amendment to the Custodian Contract by and between CIGNA Variable
Products Group and State Street Bank and Trust Company, made as of
February 22, 2000.

g. (v) The Side Letter to the Custodian Contract dated as of May 4, 1999
between CIGNA Variable Products Group and State Street Bank and Trust
Company.

g. (vi) The Price Source Authorization Agreement pursuant to the Custodian
Contract among State Street Bank and Trust Company and CIGNA Funds,
made as of January, 2000.

g. (vii) Data Access Services Addendum to Custodian Agreement between State
Street Bank and Trust Company and CIGNA Funds, dated as of August 18,
1997.

h. (vii) Amendment No. 2 to the Participation Agreement made as of March 17,
2000 among CIGNA Variable Products Group, CIGNA Financial Services,
Inc. and Connecticut General Life Insurance Company.

h. (viii) Power of Attorney.

i. Consent of Counsel.

j. Consent of PricewaterhouseCoopers LLP.

p. Business Ethics - CIGNA Investment Management Associates and
Restricted Persons, dated February, 1999.

p. (i) Code of Ethics of CIGNA Variable Products Group, made as of February,
1988.

<PAGE>

Exhibit g(ii)

AMENDMENT TO CUSTODIAN CONTRACT

This Amendment to the Custodian Contract is made as of February 22, 2000 by
and between CIGNA Variable Products Group (the "Fund") and State Street Bank and
Trust Company (the "Custodian"). Capitalized terms used in this Amendment
without definition shall have the respective meanings given to such terms in the
Custodian Contract referred to below.

WHEREAS, the Fund and the Custodian entered into a Custodian Contract dated
as of April 15, 1988 (as amended and in effect from time to time, the
"Contract"); and

WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets, and the Fund has made the following operational series subject
to the Contract: CIGNA Variable Products S&P 500 Index Fund, CIGNA Variable
Products High Yield Fund, CIGNA Variable Products Income Fund, CIGNA Variable
Products International Stock Fund, CIGNA Variable Products Money Market Fund and
CIGNA Variable Products Investment Grade Bond Fund (each such series, together
with all other series subsequently established by the Fund and made subject to
the Contract in accordance with the terms thereof, shall be referred to as a
"Portfolio", and, collectively, the "Portfolios"); and

WHEREAS, the Fund and the Custodian desire to amend certain provisions of
the Contract to reflect revisions to Rule 17f-5 ("Rule 17f-5") promulgated under
the Investment Company Act of 1940, as amended (the "1940 Act"); and

WHEREAS, the Fund and the Custodian desire to amend and restate certain
other provisions of the Contract relating to the custody of assets of each of
the Portfolios held outside of the United States.

NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements hereinafter contained, the parties hereby agree to amend the
Contract, pursuant to the terms thereof, as follows:

I. Articles 3 through 15 of the Contract are hereby renumbered, as of the
effective date of this Amendment, as Articles 5 through 17, respectively.

II. New Articles 3 and 4 of the Contract are hereby added, as of the effective
date of this Amendment, as set forth below.

3. The Custodian as Foreign Custody Manager.
----------------------------------------

3.1. Definitions.
-----------
<PAGE>

Capitalized terms in this Article 3 shall have the following meanings:

"Country Risk" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's political environment; economic and financial infrastructure
(including any Mandatory Securities Depositories operating in the country);
prevailing or developing custody and settlement practices; and laws and
regulations applicable to the safekeeping and recovery of Foreign Assets held in
custody in that country.

"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule
17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as
defined in Rule 17f-5), a bank holding company meeting the requirements of an
Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate
action of the U.S. Securities and Exchange Commission (the "SEC")), or a foreign
branch of a Bank (as defined in Section 2(a)(5) of the 1940 Act) meeting the
requirements of a custodian under Section 17(f) of the 1940 Act, except that the
term does not include Mandatory Securities Depositories.

"Foreign Assets" means any of the Portfolios" investments (including foreign
currencies) for which the primary market is outside the United States and such
cash and cash equivalents as are reasonably necessary to effect the Portfolios"
transactions in such investments.

"Foreign Custody Manager" has the meaning set forth in section (a)(2) of Rule
17f-5.

"Mandatory Securities Depository" means a foreign securities depository or
clearing agency that, either as a legal or practical matter, must be used if the
Fund, on the Portfolio's behalf, determines to place Foreign Assets in a country
outside the United States (i) because required by law or regulation; (ii)
because securities cannot be withdrawn from such foreign securities depository
or clearing agency; or (iii) because maintaining or effecting trades in
securities outside the foreign securities depository or clearing agency is not
consistent with prevailing or developing custodial or market practices.

3.2. Delegation to the Custodian as Foreign Custody Manager.
------------------------------------------------------

The Fund, by resolution adopted by its Board of Trustees (the "Board"), hereby
delegates to the Custodian, with respect to the Portfolios, subject to Section
(b) of Rule 17f-5, the responsibilities set forth in this Article 3 with respect
to Foreign Assets of the Portfolios held outside the United States, and the
Custodian hereby accepts such delegation, as Foreign Custody Manager with
respect to the Portfolios.

3.3. Countries Covered.
-----------------

2.
<PAGE>

The Foreign Custody Manager shall be responsible for performing the delegated
responsibilities defined below only with respect to the countries and custody
arrangements for each such country listed on Schedule A to this Contract, which
list of countries may be amended from time to time by the Fund with the
agreement of the Foreign Custody Manager. The Foreign Custody Manager shall
list on Schedule A the Eligible Foreign Custodians selected by the Foreign
Custody Manager to maintain the assets of the Portfolios which list of Eligible
Foreign Custodians may be amended from time to time in the sole discretion of
the Foreign Custody Manager. Mandatory Securities Depositories are listed on
Schedule B to this Contract, which Schedule B may be amended from time to time
by the Foreign Custody Manager. The Foreign Custody Manager will provide
amended versions of Schedules A and B in accordance with Section 3.7 of this
Article 3.

Upon the receipt by the Foreign Custody Manager of Proper Instructions to open
an account or to place or maintain Foreign Assets in a country listed on
Schedule A, and the fulfillment by the Fund on behalf of the Portfolios of the
applicable account opening requirements for such country, the Foreign Custody
Manager shall be deemed to have been delegated by the Board on behalf of the
Portfolios responsibility as Foreign Custody Manager with respect to that
country and to have accepted such delegation. Execution of this Amendment by
the Fund shall be deemed to be a Proper Instruction to open an account, or to
place or maintain Foreign Assets, in each country listed on Schedule A in which
the Custodian has previously placed or currently maintains Foreign Assets
pursuant to the terms of the Contract. Following the receipt of Proper
Instructions directing the Foreign Custody Manager to close the account of a
Portfolio with the Eligible Foreign Custodian selected by the Foreign Custody
Manager in a designated country, the delegation by the Board on behalf of the
Portfolios to the Custodian as Foreign Custody Manager for that country shall be
deemed to have been withdrawn and the Custodian shall immediately cease to be
the Foreign Custody Manager of the Portfolios with respect to that country.

The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to the
Fund. Thirty days (or such longer period as to which the parties agree in
writing) after receipt of any such notice by the Fund, the Custodian shall have
no further responsibility as Foreign Custody Manager to the Fund with respect to
the country as to which the Custodian's acceptance of delegation is withdrawn.

3.4. Scope of Delegated Responsibilities.
-----------------------------------

3.4.1. Selection of Eligible Foreign Custodians.
----------------------------------------

Subject to the provisions of this Article 3, the Portfolio's Foreign Custody
Manager may place and maintain the Foreign Assets in the care of the Eligible
Foreign Custodian

3.
<PAGE>

selected by the Foreign Custody Manager in each country listed on Schedule A, as
amended from time to time.

In performing its delegated responsibilities as Foreign Custody Manager to place
or maintain Foreign Assets with an Eligible Foreign Custodian, the Foreign
Custody Manager shall determine that the Foreign Assets will be subject to
reasonable care, based on the standards applicable to custodians in the country
in which the Foreign Assets will be held by that Eligible Foreign Custodian,
after considering all factors relevant to the safekeeping of such assets,
including, without limitation the factors specified in Rule 17f-5(c)(1).

3.4.2. Contracts With Eligible Foreign Custodians.
------------------------------------------

The Foreign Custody Manager shall determine that the contract (or the rules or
established practices or procedures in the case of an Eligible Foreign Custodian
that is a foreign securities depository or clearing agency) governing the
foreign custody arrangements with each Eligible Foreign Custodian selected by
the Foreign Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).

3.4.3. Monitoring.
----------

In each case in which the Foreign Custody Manager maintains Foreign Assets with
an Eligible Foreign Custodian selected by the Foreign Custody Manager, the
Foreign Custody Manager shall establish a system to monitor (i) the
appropriateness of maintaining the Foreign Assets with such Eligible Foreign
Custodian and (ii) the contract governing the custody arrangements established
by the Foreign Custody Manager with the Eligible Foreign Custodian (or the rules
or established practices and procedures in the case of an Eligible Foreign
Custodian selected by the Foreign Custody Manager which is a foreign securities
depository or clearing agency that is not a Mandatory Securities Depository).
In the event the Foreign Custody Manager determines that the custody
arrangements with an Eligible Foreign Custodian it has selected are no longer
appropriate, the Foreign Custody Manager shall notify the Board in accordance
with Section 3.7 hereunder.

3.5. Guidelines for the Exercise of Delegated Authority.
--------------------------------------------------

For purposes of this Article 3, the Board shall be deemed to have considered and
determined to accept such Country Risk as is incurred by placing and maintaining
the Foreign Assets in each country for which the Custodian is serving as Foreign
Custody Manager of the Portfolios. The Fund, on behalf of the Portfolios, and
the Board shall be deemed to be monitoring on a continuing basis such Country
Risk to the extent that the Board considers necessary or appropriate. The Fund
and the Custodian each expressly acknowledge that the Foreign Custody Manager
shall not be delegated any responsibilities under this Article 3 with respect to
Mandatory Securities Depositories.

4.
<PAGE>

3.6. Standard of Care as Foreign Custody Manager of a Portfolio.
----------------------------------------------------------

In performing the responsibilities delegated to it, the Foreign Custody Manager
agrees to exercise reasonable care, prudence and diligence such as a person
having responsibility for the safekeeping of assets of management investment
companies registered under the 1940 Act would exercise.

3.7. Reporting Requirements.
----------------------

The Foreign Custody Manager shall report the withdrawal of the Foreign Assets
from an Eligible Foreign Custodian and the placement of such Foreign Assets with
another Eligible Foreign Custodian by providing to the Board amended Schedules A
or B at the end of the calendar quarter in which an amendment to either Schedule
has occurred. The Foreign Custody Manager shall make written reports notifying
the Board of any other material change in the foreign custody arrangements of
the Portfolios described in this Article 3 within a reasonable period of time
after the occurrence of the material change.

3.8. Representations with Respect to Rule 17f-5.
------------------------------------------

The Foreign Custody Manager represents to the Fund that it is a U.S. Bank as
defined in section (a)(7) of Rule 17f-5.

The Fund represents to the Custodian that the Board has determined that it is
reasonable for the Board to rely on the Custodian to perform the
responsibilities delegated pursuant to this Contract to the Custodian as the
Foreign Custody Manager of the Portfolios.

3.9. Effective Date and Termination of the Custodian as Foreign Custody Manager.
--------------------------------------------------------------------------

The Board's delegation to the Custodian as Foreign Custody Manager of the
Portfolios shall be effective as of the date hereof and shall remain in effect
until terminated at any time, without penalty, by written notice from the
terminating party to the non-terminating party. Termination will become
effective thirty (30) days after receipt by the non-terminating party of such
notice. The provisions of Section 3.3 hereof shall govern the delegation to and
termination of the Custodian as Foreign Custody Manager of the Portfolios with
respect to designated countries.

4. Duties of the Custodian with Respect to Property of the Portfolios Held
-----------------------------------------------------------------------
Outside the United States.
-------------------------

4.1 Definitions.
-----------
Capitalized terms in this Article 4 shall have the following meanings:

5.
<PAGE>

"Foreign Securities System" means either a clearing agency or a securities
depository listed on Schedule A hereto or a Mandatory Securities Depository
listed on Schedule B hereto.

"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian.

4.2. Holding Securities.
------------------

The Custodian shall identify on its books as belonging to the Portfolios the
foreign securities held by each Foreign Sub-Custodian or Foreign Securities
System. The Custodian may hold foreign securities for all of its customers,
including the Portfolios, with any Foreign Sub-Custodian in an account that is
identified as belonging to the Custodian for the benefit of its customers,

provided however, that (i) the records of the Custodian with respect to foreign
- ----------------
securities of the Portfolios which are maintained in such account shall identify
those securities as belonging to the Portfolios and (ii), to the extent
permitted and customary in the market in which the account is maintained, the
Custodian shall require that securities so held by the Foreign Sub-Custodian be
held separately from any assets of such Foreign Sub-Custodian or of other
customers of such Foreign Sub-Custodian.

4.3. Foreign Securities Systems.
--------------------------

Foreign securities shall be maintained in a Foreign Securities System in a
designated country only through arrangements implemented by the Foreign Sub-
Custodian in such country pursuant to the terms of this Contract.

4.4. Transactions in Foreign Custody Account.
---------------------------------------

4.4.1. Delivery of Foreign Assets.
--------------------------

The Custodian or a Foreign Sub-Custodian shall release and deliver foreign
securities of the Portfolios held by such Foreign Sub-Custodian, or in a Foreign
Securities System account, only upon receipt of Proper Instructions, which may
be continuing instructions when deemed appropriate by the parties, and only in
the following cases:

(i) upon the sale of such foreign securities for the Portfolio in
accordance with commercially reasonable market practice in the country
where such foreign securities are held or traded, including, without
limitation: (A) delivery against expectation of receiving later
payment; or (B) in the case of a sale effected through a Foreign
Securities System, in accordance with the rules governing the
operation of the Foreign Securities System;

(ii) in connection with any repurchase agreement related to foreign
securities;

6.
<PAGE>

(iii) to the depository agent in connection with tender or other similar
offers for foreign securities of the Portfolios;

(iv) to the issuer thereof or its agent when such foreign securities are
called, redeemed, retired or otherwise become payable;

(v) to the issuer thereof, or its agent, for transfer into the name of
the Custodian (or the name of the respective Foreign Sub-Custodian
or of any nominee of the Custodian or such Foreign Sub-Custodian) or
for exchange for a different number of bonds, certificates or other
evidence representing the same aggregate face amount or number of
units;

(vi) to brokers, clearing banks or other clearing agents for examination
or trade execution in accordance with market custom; provided that
--------
in any such case the Foreign Sub-Custodian shall have no
responsibility or liability for any loss arising from the delivery
of such securities prior to receiving payment for such securities
except as may arise from the Foreign Sub-Custodian's own negligence
or willful misconduct;

(vii) for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or pursuant
to any deposit agreement;

(viii) in the case of warrants, rights or similar foreign securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or temporary
securities for definitive securities;

(ix) for delivery as security in connection with any borrowing by the
Portfolios requiring a pledge of assets by the Portfolios;

(x) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;

(xi) in connection with the lending of foreign securities; and

(xii) for any other proper purpose, but only upon receipt of Proper
--- ----
Instructions specifying the foreign securities to be delivered,
setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper trust purpose, and naming the
person or persons to whom delivery of such securities shall be made.

7.
<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]

8.
<PAGE>

4.4.2. Payment of Portfolio Monies.
---------------------------

Upon receipt of Proper Instructions, which may be continuing instructions when
deemed appropriate by the parties, the Custodian shall pay out, or direct the
respective Foreign Sub-Custodian or the respective Foreign Securities System to
pay out, monies of a Portfolio in the following cases only:

(i) upon the purchase of foreign securities for the Portfolio, unless
otherwise directed by Proper Instructions, by (A) delivering money to
the seller thereof or to a dealer therefor (or an agent for such
seller or dealer) against expectation of receiving later delivery of
such foreign securities; or (B) in the case of a purchase effected
through a Foreign Securities System, in accordance with the rules
governing the operation of such Foreign Securities System;

(ii) in connection with the conversion, exchange or surrender of foreign
securities of the Portfolio;

(iii) for the payment of any expense or liability of the Portfolio,
including but not limited to the following payments: interest, taxes,
investment advisory fees, transfer agency fees, fees under this
Contract, legal fees, accounting fees, and other operating expenses;

(iv) for the purchase or sale of foreign exchange or foreign exchange
contracts for the Portfolio, including transactions executed with or
through the Custodian or its Foreign Sub-Custodians;

(v) in connection with trading in options and futures contracts, including
delivery as original margin and variation margin;

(vi) for payment of part or all of the dividends received in respect of
securities sold short;

(vii) in connection with the borrowing or lending of foreign securities;
and

(viii) for any other proper purpose, but only upon receipt of Proper
--- ----
Instructions specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such purpose
to be a proper trust purpose, and naming the person or persons to whom
such payment is to be made.

4.4.3. Market Conditions; Market Information.
-------------------------------------

9.
<PAGE>

Notwithstanding any provision of this Contract to the contrary, settlement and
payment for Foreign Assets received for the account of the Portfolios and
delivery of Foreign Assets maintained for the account of the Portfolios may be
effected in accordance with the customary established securities trading or
processing practices and procedures in the country or market in which the
transaction occurs, including, without limitation, delivering Foreign Assets to
the purchaser thereof or to a dealer therefor (or an agent for such purchaser or
dealer) with the expectation of receiving later payment for such Foreign Assets
from such purchaser or dealer.

The Custodian shall provide to the Board the information with respect to custody
and settlement practices in countries in which the Custodian employs a Foreign
Sub-Custodian, including without limitation information relating to Foreign
Securities Systems, described on Schedule C hereto at the time or times set
forth on such Schedule. The Custodian may revise Schedule C from time to time,
provided that no such revision shall result in the Board being provided with
substantively less information than had been previously provided hereunder.

4.5. Registration of Foreign Securities.
----------------------------------

The foreign securities maintained in the custody of a Foreign Sub-Custodian
(other than bearer securities) shall be registered in the name of the applicable
Portfolio or in the name of the Custodian or in the name of any Foreign Sub-
Custodian or in the name of any nominee of the foregoing, and the Fund on behalf
of such Portfolio agrees to hold any such nominee harmless from any liability as
a holder of record of such foreign securities. The Custodian or a Foreign Sub-
Custodian shall not be obligated to accept securities on behalf of a Portfolio
under the terms of this Contract unless the form of such securities and the
manner in which they are delivered are in accordance with reasonable market
practice.

4.6. Bank Accounts.
-------------

The Custodian shall identify on its books as belonging to the Fund cash
(including cash denominated in foreign currencies) deposited with the Custodian.
Where the Custodian is unable to maintain, or market practice does not
facilitate the maintenance of, cash on the books of the Custodian, a bank
account or bank accounts opened and maintained outside the United States on
behalf of a Portfolio with a Foreign Sub-Custodian shall be subject only to
draft or order by the Custodian or such Foreign Sub-Custodian, acting pursuant
to the terms of this Contract to hold cash received by or from or for the
account of the Portfolio.

4.7. Collection of Income.
--------------------

The Custodian shall use reasonable commercial efforts to collect all income and
other payments with respect to the Foreign Assets held hereunder to which the
Portfolios shall

10.
<PAGE>

be entitled and shall credit such income, as collected, to the applicable
Portfolio In the event that extraordinary measures are required to collect such
income, the Fund and the Custodian shall consult as to such measures and as to
the compensation and expenses of the Custodian relating to such measures.

4.8. Shareholder Rights.
------------------

With respect to the foreign securities held pursuant to this Article 4, the
Custodian will use reasonable commercial efforts to facilitate the exercise of
voting and other shareholder rights, subject always to the laws, regulations and
practical constraints that may exist in the country where such securities are
issued. The Fund acknowledges that local conditions, including lack of
regulation, onerous procedural obligations, lack of notice and other factors may
have the effect of severely limiting the ability of the Fund to exercise
shareholder rights.

4.9. Communications Relating to Foreign Securities.
---------------------------------------------

The Custodian shall transmit promptly to the Fund written information
(including, without limitation, pendency of calls and maturities of foreign
securities and expirations of rights in connection therewith) received by the
Custodian via the Foreign Sub-Custodians from issuers of the foreign securities
being held for the account of the Portfolios. With respect to tender or
exchange offers, the Custodian shall transmit promptly to the Fund written
information so received by the Custodian from issuers of the foreign securities
whose tender or exchange is sought or from the party (or its agents) making the
tender or exchange offer. The Custodian shall not be liable for any untimely
exercise of any tender, exchange or other right or power in connection with
foreign securities or other property of the Portfolios at any time held by it
unless (i) the Custodian or the respective Foreign Sub-Custodian is in actual
possession of such foreign securities or property and (ii) the Custodian
receives Proper Instructions with regard to the exercise of any such right or
power, and both (i) and (ii) occur at least three business days prior to the
date on which the Custodian is to take action to exercise such right or power.

4.10. Liability of Foreign Sub-Custodians and Foreign Securities Systems.
------------------------------------------------------------------

Each agreement pursuant to which the Custodian employs a Foreign Sub-Custodian
shall, to the extent possible, require the Foreign Sub-Custodian to exercise
reasonable care in the performance of its duties and, to the extent possible, to
indemnify, and hold harmless, the Custodian from and against any loss, damage,
cost, expense, liability or claim arising out of or in connection with the
Foreign Sub-Custodian's performance of such obligations. At the Fund's
election, the Portfolios shall be entitled to be subrogated to the rights of the
Custodian with respect to any claims against a Foreign Sub-Custodian as a
consequence of any such loss, damage, cost, expense, liability or claim if and
to the extent that the Portfolios have not been made whole for any such loss,
damage, cost, expense, liability or claim.

11.
<PAGE>

4.11. Tax Law.
-------

The Custodian shall have no responsibility or liability for any obligations now
or hereafter imposed on the Fund, the Portfolios or the Custodian as custodian
of the Portfolios by the tax law of the United States or of any state or
political subdivision thereof. It shall be the responsibility of the Fund to
notify the Custodian of the obligations imposed on the Fund with respect to the
Portfolios or the Custodian as custodian of the Portfolios by the tax law of
countries other than those mentioned in the above sentence, including
responsibility for withholding and other taxes, assessments or other
governmental charges, certifications and governmental reporting. The sole
responsibility of the Custodian with regard to such tax law shall be to use
reasonable efforts to assist the Fund with respect to any claim for exemption or
refund under the tax law of countries for which the Fund has provided such
information.

4.12. Liability of Custodian.
----------------------

Except as may arise from the Custodian's own negligence or willful misconduct or
the negligence or willful misconduct of a Sub-Custodian, the Custodian shall be
without liability to the Fund for any loss, liability, claim or expense
resulting from or caused by anything which is (A) part of Country Risk or (B)
part of the "prevailing country risk" of the Fund and the Portfolios, as such
term is used in SEC Release Nos. IC-22658; IS-1080 (May 12, 1997) or as such
term or other similar terms are now or in the future interpreted by the SEC or
by the staff of the Division of Investment Management of the SEC.

The Custodian shall be liable for the acts or omissions of a Foreign Sub-
Custodian to the same extent as set forth with respect to sub-custodians
generally in the Contract and, regardless of whether assets are maintained in
the custody of a Foreign Sub-Custodian or a Foreign Securities Depository, the
Custodian shall not be liable for any loss, damage, cost, expense, liability or
claim resulting from nationalization, expropriation, currency restrictions, or
acts of war or terrorism, or any other loss where the Sub-Custodian has
otherwise acted with reasonable care.

III. Except as specifically superseded or modified herein, the terms and
provisions of the Contract shall continue to apply with full force and
effect. In the event of any conflict between the terms of the Contract
prior to this Amendment and this Amendment, the terms of this Amendment
shall prevail. If the Custodian is delegated the responsibilities of
Foreign Custody Manager pursuant to the terms of Article 3 hereof, in the
event of any conflict between the provisions of Articles 3 and 4 hereof,
the provisions of Article 3 shall prevail.

12.
<PAGE>

IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed in its name and behalf by its duly authorized representative as of the
date first above written.

Witnessed By: STATE STREET BANK AND TRUST COMPANY

/s/ Jean S. Carr /s/ Rondald E. Logue
- ----------------------- By: ----------------------
Jean S. Carr Name: Ronald E. Logue
Associate Counsel Title: Vice Chairman

Witnessed By: CIGNA VARIABLE PRODUCTS GROUP

/s/ Jeffrey s. Winer Alfred A. Bingham III
- ----------------------- By: ------------------------
Name: Jeffrey S. Winer Name: Alfred A. Bingham III
Title: Vice President and Title: Vice President & Treasurer
Secretary

<PAGE>

STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES

<TABLE>
<CAPTION>
Country Subcustodian Non-Mandatory Depositories
<S> <C> <C>
Argentina Citibank, N.A. --

Australia Westpac Banking Corporation --

Austria Erste Bank der Oesterreichischen --
Sparkassen AG

Bahrain HSBC Bank Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)

Bangladesh Standard Chartered Bank --

Belgium Fortis Bank NV/as. --

Bermuda The Bank of Bermuda Limited --

Bolivia Citibank, N.A. --

Botswana Barclays Bank of Botswana Limited --

Brazil Citibank, N.A. --

Bulgaria ING Bank N.V. --

Canada State Street Trust Company Canada --

Chile Citibank, N.A. --

People's Republic The Hongkong and Shanghai --
of China Banking Corporation Limited,
Shanghai and Shenzhen branches

Colombia Cititrust Colombia S.A. --
Sociedad Fiduciaria
</TABLE>

1
<PAGE>

STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES

<TABLE>
<CAPTION>
Country Subcustodian Non-Mandatory Depositories
<S> <C> <C>
Costa Rica Banco BCT S.A. --

Croatia Privredna Banka Zagreb d.d. --

Cyprus The Cyprus Popular Bank Ltd. --

Czech Republic Ceskoslovenska Obchodni --
Banka, A.S.

Denmark Den Danske Bank --

Ecuador Citibank, N.A. --

Egypt Egyptian British Bank --
(as delegate of The Hongkong
and Shanghai Banking Corporation
Limited)

Estonia Hansabank --

Finland Merita Bank Plc. --

France Paribas, S.A. --

Germany Dresdner Bank AG --

Ghana Barclays Bank of Ghana Limited --

Greece National Bank of Greece S.A. Bank of Greece,
System for Monitoring Transactions in
Securities in Book-Entry Form

Hong Kong Standard Chartered Bank --

Hungary Citibank Rt. --
</TABLE>

2
<PAGE>

STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES

<TABLE>
<CAPTION>
Country Subcustodian Non-Mandatory Depositories
<S> <C> <C>
Iceland Icebank Ltd.

India Deutsche Bank A.G. --
The Hongkong and Shanghai
Banking Corporation Limited

Indonesia Standard Chartered Bank --

Ireland Bank of Ireland --

Israel Bank Hapoalim B.M. --

Italy Paribas, S.A. --

Ivory Coast Societe Generale de Banques --
en Cote d'Ivoire

Jamaica Scotiabank Jamaica Trust and Merchant --
Bank Limited

Japan The Fuji Bank, Limited Japan Securities Depository
Center (JASDEC)

The Sumitomo Bank, Limited

Jordan HSBC Bank Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)

Kenya Barclays Bank of Kenya Limited --

Republic of Korea The Hongkong and Shanghai Banking
Corporation Limited

Latvia A/s Hansabank --
</TABLE>

3
<PAGE>

STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES

<TABLE>
<CAPTION>
Country Subcustodian Non-Mandatory Depositories
<S> <C> <C>
Lebanon HSBC Bank Middle East
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)

Lithuania Vilniaus Bankas AB --

Malaysia Standard Chartered Bank --
Malaysia Berhad

Mauritius The Hongkong and Shanghai --
Banking Corporation Limited

Mexico Citibank Mexico, S.A. --

Morocco Banque Commerciale du Maroc --

Namibia (via) Standard Bank of South Africa -

The Netherlands MeesPierson N.V. --

New Zealand ANZ Banking Group --
(New Zealand) Limited

Norway Christiania Bank og --
Kreditkasse ASA

Oman HSBC Bank Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)

Pakistan Deutsche Bank A.G. --

Palestine HSBC Bank Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)

Peru Citibank, N.A. --
</TABLE>

4
<PAGE>

STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES

<TABLE>
<CAPTION>
Country Subcustodian Non-Mandatory Depositories
<S> <C> <C>
Philippines Standard Chartered Bank --

Poland Citibank (Poland) S.A. --

Portugal Banco Comercial Portugues --

Qatar HSBC Bank Middle East --

Romania ING Bank N.V. --

Russia Credit Suisse First Boston AO, Moscow --
(as delegate of Credit Suisse
First Boston, Zurich)

Singapore The Development Bank --
of Singapore Limited

Slovak Republic Ceskoslovenska Obchodni Banka, A.S. --

Slovenia Bank Austria Creditanstalt d.d. Ljubljana --

South Africa Standard Bank of South Africa Limited --

Spain Banco Santander Central Hispano, S.A. --

Sri Lanka The Hongkong and Shanghai --
Banking Corporation Limited

Swaziland Standard Bank Swaziland Limited --

Sweden Skandinaviska Enskilda Banken --

Switzerland UBS AG --
</TABLE>

5
<PAGE>

STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES

<TABLE>
<CAPTION>
Country Subcustodian Non-Mandatory Depositories
<S> <C> <C>
Taiwan - R.O.C. Central Trust of China --

Thailand Standard Chartered Bank --

Trinidad & Tobago Republic Bank Limited --

Tunisia Banque Internationale Arabe de Tunisie --

Turkey Citibank, N.A. --

Ukraine ING Bank Ukraine --

United Kingdom State Street Bank and Trust Company, --
London Branch

Uruguay BankBoston N.A. --

Venezuela Citibank, N.A. --

Vietnam The Hongkong and Shanghai --
Banking Corporation Limited

Zambia Barclays Bank of Zambia Limited --

Zimbabwe Barclays Bank of Zimbabwe Limited --
</TABLE>

Euroclear (The Euroclear System)/State Street London Limited

Cedelbank S.A. (Cedel Bank, societe anonyme)/State Street London Limited

INTERSETTLE (for EASDAQ Securities)

6
<PAGE>

SCHEDULE B

STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES

Country Mandatory Depositories

Argentina Caja de Valores S.A.

Australia Austraclear Limited

Reserve Bank Information and
Transfer System

Austria Oesterreichische Kontrollbank AG
(Wertpapiersammelbank Division)

Belgium Caisse Interprofessionnelle de Depots et
de Virements de Titres S.A.

Banque Nationale de Belgique

Brazil Companhia Brasileira de Liquidacao e
Custodia

Bulgaria Central Depository AD

Bulgarian National Bank

Canada Canadian Depository
for Securities Limited

Chile Deposito Central de Valores S.A.

People's Republic Shanghai Securities Central Clearing &
of China Registration Corporation

Shenzhen Securities Clearing Co., Ltd.

Colombia Deposito Centralizado de Valores

Costa Rica Central de Valores S.A.

* Mandatory depositories include entities for which use is mandatory 1
as a matter of law or effectively mandatory as a matter of market practice.
<PAGE>

SCHEDULE B

STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES

Country Mandatory Depositories

Croatia Ministry of Finance

National Bank of Croatia

Sredisnja Depozitarna Agencija

Czech Republic Stredisko cennych papiru

Czech National Bank

Denmark Vaerdipapircentralen (Danish
Securities Center)

Egypt Misr Company for Clearing, Settlement,
and Depository

Estonia Eesti Vaartpaberite Keskdepositoorium

Finland Finnish Central Securities
Depository

France Societe Interprofessionnelle
pour la Compensation des
Valeurs Mobilieres

Germany Deutsche Borse Clearing AG

Greece Central Securities Depository
(Apothetirion Titlon AE)

Hong Kong Central Clearing and
Settlement System

Central Moneymarkets Unit

Hungary Kozponti Elszamolohaz es Ertektar
(Budapest) Rt. (KELER)
[Mandatory for Gov't Bonds and
dematerialized equities only; SSB does not
use for other securities]

* Mandatory depositories include entities for which use is mandatory 2
as a matter of law or effectively mandatory as a matter of market practice.
<PAGE>

SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES

Country Mandatory Depositories

India The National Securities Depository Limited

Central Depository Services India Limited

Reserve Bank of India

Indonesia Bank Indonesia

PT Kustodian Sentral Efek Indonesia

Ireland Central Bank of Ireland
Securities Settlement Office

Israel Tel Aviv Stock Exchange Clearing
House Ltd. (TASE Clearinghouse)

Bank of Israel
(As part of the TASE Clearinghouse system)

Italy Monte Titoli S.p.A.

Banca d'Italia

Ivory Coast Depositaire Central - Banque de Reglement

Jamaica Jamaica Central Securities Depository

Japan Bank of Japan Net System

Kenya Central Bank of Kenya

Republic of Korea Korea Securities Depository Corporation

Latvia Latvian Central Depository

* Mandatory depositories include entities for which use is mandatory 3
as a matter of law or effectively mandatory as a matter of market practice.
<PAGE>

SCHEDULE B

STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES

Country Mandatory Depositories

Lebanon Custodian and Clearing Center of Financial
Instruments for Lebanon and the Middle East
(MIDCLEAR) S.A.L.

The Central Bank of Lebanon

Lithuania Central Securities Depository of Lithuania

Malaysia Malaysian Central Depository Sdn. Bhd.

Bank Negara Malaysia,
Scripless Securities Trading and Safekeeping
System

Mauritius Central Depository & Settlement
Co. Ltd.

Mexico S.D. INDEVAL
(Instituto para el Deposito de
Valores)

Morocco Maroclear

The Netherlands Nederlands Centraal Instituut voor
Giraal Effectenverkeer B.V. (NECIGEF)

New Zealand New Zealand Central Securities
Depository Limited

Norway Verdipapirsentralen (the Norwegian Central
Registry of Securities)

* Mandatory depositories include entities for which use is mandatory 4
as a matter of law or effectively mandatory as a matter of market practice.
<PAGE>

STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES

Country Mandatory Depositories

Oman Muscat Securities Market Depository &
Securities
Registration Company

Pakistan Central Depository Company of Pakistan
Limited

State Bank of Pakistan

Palestine The Palestine Stock Exchange

Peru Caja de Valores y Liquidaciones
CAVALI ICLV S.A.

Philippines Philippines Central Depository, Inc.

Registry of Scripless Securities
(ROSS) of the Bureau of Treasury

Poland National Depository of Securities
(Krajowy Depozyt Papierow Wartosciowych SA)

Central Treasury Bills Registrar

Portugal Central de Valores Mobiliarios

Qatar Doha Securities Market

Romania National Securities Clearing, Settlement and
Depository Company

Bucharest Stock Exchange Registry Division

National Bank of Romania

Singapore Central Depository (Pte)
Limited

Monetary Authority of Singapore

* Mandatory depositories include entities for which use is mandatory 5
as a matter of law or effectively mandatory as a matter of market practice.
<PAGE>

SCHEDULE B

STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES

Country Mandatory Depositories

Slovak Republic Stredisko cennych papierov SR
Bratislava, a.s.

National Bank of Slovakia

Slovenia Klirinsko Depotna Druzba d.d.

South Africa The Central Depository Limited

Strate Ltd.

Spain Servicio de Compensacion y
Liquidacion de Valores, S.A.

Banco de Espana,
Central de Anotaciones en Cuenta

Sri Lanka Central Depository System
(Pvt) Limited

Sweden Vardepapperscentralen VPC AB
(the Swedish Central Securities Depository)

Switzerland SIS - SegaIntersettle

Taiwan - R.O.C. Taiwan Securities Central
Depository Co., Ltd.

Thailand Thailand Securities Depository
Company Limited

Tunisia Societe Tunisienne Interprofessionelle pour
la Compensation et de Depots de Valeurs
Mobilieres

* Mandatory depositories include entities for which use is mandatory 6
as a matter of law or effectively mandatory as a matter of market practice.
<PAGE>

STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES

Country Mandatory Depositories

Turkey Takas ve Saklama Bankasi A..
(TAKASBANK)

Central Bank of Turkey

Ukraine National Bank of Ukraine

United Kingdom The Bank of England,
The Central Gilts Office and
The Central Moneymarkets Office

Venezuela Central Bank of Venezuela

Zambia LuSE Central Shares Depository Limited

Bank of Zambia

* Mandatory depositories include entities for which use is mandatory 7
as a matter of law or effectively mandatory as a matter of market practice.
<PAGE>

SCHEDULE C

MARKET INFORMATION

Publication/Type of Information Brief Description
- ------------------------------- -----------------
(Frequency)

The
- ---
Guide to Custody in World Markets An overview of safekeeping and settlement
- --------------------------------- practices and procedures in each
(annually) market in which State Street Bank and Trust
Company offers custodial services.

Global Custody Network Review Information relating to the operating
- ----------------------------- history and structure of depositories and
(annually) subcustodians located in the markets in
which State Street Bank and Trust Company
offers custodial services, including
transnational depositories.

Global Legal Survey With respect to each market in which State
- ------------------- Street Bank and Trust Company offers
(annually) custodial services, opinions relating to
whether local law restricts (i) access of a
fund's independent public accountants to
books and records of a Foreign Sub-Custodian
or Foreign Securities System, (ii) the
Fund's ability to recover in the event of
bankruptcy or insolvency of a Foreign Sub-
Custodian or Foreign Securities System,
(iii) the Fund's ability to recover in the
event of a loss by a Foreign Sub-Custodian
or Foreign Securities System, and (iv) the
ability of a foreign investor to convert
cash and cash equivalents to U.S. dollars.

Subcustodian Agreements Copies of the subcustodian contracts State
- ----------------------- Street Bank and Trust Company has entered
(annually) into with each subcustodian in the markets
in which State Street Bank and Trust Company
offers subcustody services to its US mutual
fund clients.

Network Bulletins (weekly): Developments of interest to investors in
the markets in which State Street Bank and
Trust Company offers custodial services.

Foreign Custody Advisories (as With respect to markets in which State
necessary): Street Bank and Trust Company offers
custodial services which exhibit special
custody risks, developments which may impact
State Street's ability to deliver expected
levels of service.

<PAGE>

Exhibit g(v)

[LETTERHEAD OF CIGNA FUNDS]

May 4, 1999

State Street Bank and Trust Company
1 Heritage Drive
North Quincy, MA 02171

Re: Custodian Contract Dated as of April 15, 1988 Between CIGNA Variable
Products Group (the "Trust") and State Street Bank and Trust Company (the
"Custodian")

Gentlemen:

This is to advise you that the Trust has established a new series of shares to
be known as CIGNA Variable Products Investment Grade Bond Fund (SSB Fund 8723).
In accordance with the Additional Funds provision of Section 12 of the Custodian
Contract dated April 15, 1988 between the Trust and State Street Bank and Trust
Company, the Trust hereby requests that you act as Custodian and Transfer Agent
for the new series under the terms of the respective contracts.

Please indicate your acceptance of the foregoing by executing two copies of this
Letter Agreement, returning one to the Trust and retaining one copy for your
records.

CIGNA Variable Products Group

By: /s/ Alfred A. Bingham III
-------------------------

Title: Vice President and Treasurer
----------------------------

Agreed to this 6th day of May , 1999.
--- -------- -

State Street Bank and Trust Company

By: /s/ Ronald Logue
-----------------

Title: Vice Chairman
---------------

<PAGE>

Exhibit g(vi)

Alfred A. Bingham III
CIGNA Funds
900 Cottage Grove Road, S-210
Bloomfield, CT 06002

Re: PRICE SOURCE AUTHORIZATION

Reference is made to the Custodian Agreements listed on the attached "Schedule
A" (the "Fund") and State Street Bank and Trust Company ("State Street").
Pursuant to the Custodian Agreement, the Fund has directed State Street to
calculate the net asset value of the Fund in accordance with the terms of the
Fund's currently effective prospectus.

The Fund hereby authorizes State Street to use the pricing sources specified on
the attached forms(s) as sources for securities' prices in calculating the net
asset value of the Fund. The Fund further agrees that State Street shall have
no liability for the incorrect data provided by the Fund's choice of pricing
sources, except as may arise from State Street's lack of reasonable care in:

. performing agreed upon tolerance checks as to the data furnished,

. calculating the net asset value of the Fund in accordance with the data
furnished to State Street, and

. State Street's performance of the agreed upon tolerance checks.

Kindly acknowledge the Fund's acceptance of the terms of this letter in the
space provided below.

Sincerely,

STATE STREET BANK AND TRUST COMPANY

By: /s/ James M. Curran
------------------------------------
Vice President

Date: 1-13-2000
----------------------------------

The foregoing terms are hereby accepted.

Cigna Variable Products Group
Cigna High Income Shares
Cigna Investment Securities, Inc. f/k/a INA Investment
Securities, Inc.
Cigna Institutional Funds Group
Cigna Funds Group

By: /s/ Alfred a. Bingham III
-----------------------------------

Title: Vice President and Treasurer
---------------------------------

Date: 1/11/2000
---------------------------------
<PAGE>

STATE STREET BANK - MUTUAL FUNDS

PRICE SOURCE AUTHORIZATION
--------------------------

FUND: CIGNA SIGNATURE:_________________________
------------------------------------

_______________________________________________________________________________

<TABLE>
<CAPTION>
============================================================================================================
BRIDGE BRIDGE OPTIONS PRICE (3) (2) (1)
SECURITY NYSE NASDAQ REPORTING AUTHORITY MANUAL BACK-UP (1) TOLERANCE
TYPE AMEX BID MEAN LS/BID LS/MEAN BRIDGE LS BID LS/MEAN QUOTES SOURCE INDEX PERCENTAGE
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Bridge X Client Bloomberg S&P 500 5%
I. LISTED EQUITIES
------------------------------------------------------------------------------------------------------------
Bridge X Client Bloomberg S&P 500 5%
II. OTC EQUITIES
------------------------------------------------------------------------------------------------------------
Bridge X Client Reuters E.A.F.E 5%
III. FOREIGN EQUITIES
------------------------------------------------------------------------------------------------------------

IV. EQUITY OPTIONS
------------------------------------------------------------------------------------------------------------
X Broker Bloomberg S & P500 5%
V. FUTURES
============================================================================================================
</TABLE>

________________________________________________________________________________

INSTRUCTIONS: For each security type, allowed by the Fund prospectus, please
-------
indicate the primary price source and a back-up source to be used in calculating
Net Asset Value for the Fund identified above. Also, please indicate a
published market index and tolerance range (in terms of percent) to be used for
reasonability testing. If you do not wish to use a published index please
indicate N/A but do not leave blank.

(1) * INDEX/TOLERANCE CHECK: The price movement for a particular security is
compared to the index movement. If the security price movement exceeds the index
movement by more than the percentage authorized on this form, then the security
price will be verified using the back-up source authorized. The index and
tolerance information authorized here will be the basis for this reasonability
test.

(2) BACK-UP SOURCE: The following sources are available for back-up, price
verification and historical price and yield information: Bloomberg, Reuters, and
Telerate. Please do not leave blank.

(3) MANUAL QUOTES AND PRIVATE PLACEMENTS: Please specify the source for private
placements or manual quotes as necessary.

See page 3 to list additional information if needed.

Page 1 of 3
<PAGE>

STATE STREET BANK - MUTUAL FUNDS

PRICE SOURCE AUTHORIZATION
--------------------------

________________________________________________________________________________

<TABLE>
<CAPTION>
==============================================================================================================
MERRILL
LYNCH
SECURITIES INTERACTIVE (3) (2) (1) (1)
PRICING BRIDGE FIXED DATA FRI MANUAL BACK-UP TOLERANCE
SECURITY TYPE SERVICE INCOME BID JJ Kenny BID CORP MEAN BID CORP. QUOTES QUOTES INDEX PERCENTAGE
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
VI. LISTED BONDS
IS LAST SALE
REQUIRED
WHEN X X X Client Bridge Fixed USTB 3%
AVAILABLE Income/ IDC/
YES_____ Client
NO X
------
--------------------------------------------------------------------------------------------------------------
VII. CORPORATE BONDS Bridge Fixed
X X X Client Income/ IDC/ USTB 3%
Client
--------------------------------------------------------------------------------------------------------------
VIII U.S. GOVERNMENT Bridge Fixed
. OBLIGATIONS X X Client Income/ USTB 3%
Client
--------------------------------------------------------------------------------------------------------------
IX. MORTGAGE - Bridge Fixed
BACKED X X X Client Income/ IDC/ USTB 3%
SECURITIES Client
--------------------------------------------------------------------------------------------------------------
X. MUNICIPAL BONDS Bridge Fixed
X X X Client Income/ JJ USTB 3%
Kenny/Client
--------------------------------------------------------------------------------------------------------------
XI. FIXED INCOME Bridge Fixed
OPTIONS X Client Income/ USTB 3%
Client
--------------------------------------------------------------------------------------------------------------
XII. FOREIGN BONDS Bridge Fixed
X X X Client Income/IDC/ USTB 3%
Client
--------------------------------------------------------------------------------------------------------------
</TABLE>

________________________________________________________________________________

Page 2 of 3
<PAGE>

STATE STREET BANK - MUTUAL FUNDS

PRICE SOURCE AUTHORIZATION
--------------------------

XIII. Private Placements and Other Manual Quotes Information

<TABLE>
<CAPTION>
======================================================================================================================
ADDITIONAL INFORMATION:
SECURITY TYPE ADVISOR BROKER OTHER CONTACT NAME, TELEPHONE NUMBER
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

INSTRUCTIONS: For all securities types which require manual quotes, please list
the source of the quotes and any additional information needed to obtain these
quotes.

Page 3 of 3
<PAGE>

SCHEDULE "A"

CONTRACT DATE
- -------- ----
<S> <C>
Cigna Variable Products Group Apr. 15, 1988

Cigna High Income Shares Mar. 31, 1988

Cigna Investment Securities, Inc. f/k/a INA Investment Securities, Inc. Feb. 22, 1988

Cigna Institutional Funds Group Jan. 5, 1993

Cigna Funds Group Feb. 22, 1988
</TABLE>

<PAGE>

Exhibit h(vii)

AMENDMENT NO. 2 TO PARTICIPATION AGREEMENT
------------------------------------------

Among

CIGNA VARIABLE PRODUCTS GROUP,
-----------------------------

CIGNA FINANCIAL SERVICES, INC.
------------------------------

and

CONNECTICUT GENERAL LIFE INSURANCE COMPANY
------------------------------------------

AMENDMENT NO. 2 TO PARTICIPATION AGREEMENT, made as of March 17, 2000
by and among CONNECTICUT GENERAL LIFE INSURANCE COMPANY (the "Company"), a
Connecticut corporation, on its own behalf and on behalf of each segregated
asset account of the Company set forth on Schedule A hereto as may be amended
from time to time (each such account hereinafter referred to as the "Account"),
CIGNA VARIABLE PRODUCTS GROUP, an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts (the "Fund") and CIGNA Financial
Services, Inc. (the "Underwriter"), a Connecticut corporation.

W I T N E S S E T H:

WHEREAS, the Company, the Fund and the Underwriter entered into a
participation agreement dated as of December 1, 1997 (the "Agreement"); and

WHEREAS, the Company, the Fund and the Underwriter desire to amend the
Agreement by adding Connecticut General Life Insurance Company Private Placement
Flexible Premium Universal Life Insurance Separate Account HG, Connecticut
General Life Insurance Company Private Placement Variable Life Insurance
Separate Account LM, Connecticut General Life Insurance Company Private
Placement Gerber Taylor Separate Account GT and Connecticut General Life
Insurance Company Private Placement Multiple Hedge Fund Strategies Separate
Account MHS to those Accounts set forth on Schedule A to the Agreement;

NOW, THEREFORE, the Company, the Fund and the Underwriter hereby amend
the Agreement by deleting Schedule A and replacing it with Schedule A attached
hereto.

IN WITNESS WHEREOF each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
as of the date specified above.

CONNECTICUT GENERAL LIFE INSURANCE COMPANY

By: /s/ Jeffrey S. Winer
-----------------------------------

Name: Jeffrey S. Winer
-----------------------------------

Title: Vice President
-----------------------------------

-1-
<PAGE>

CIGNA VARIABLE PRODUCTS GROUP

By: /s/ Jeffrey S. Winer
___________________________________

Name: Jeffrey S. Winer
-----------------------------------

Title: Vice President and Secretary
----------------------------------

CIGNA FINANCIAL SERVICES, INC.

By: /s/ Russell W. Anderson
___________________________________

Name: Russell W. Anderson
-----------------------------------

Title: President
----------------------------------

-2-
<PAGE>

Schedule A
----------

The following is a list of separate accounts and contract forms for which one or
more portfolios of CIGNA Variable Products Group are to be made available by
Connecticut General Life Insurance Company:

Policy Form Numbers of Contracts
Name of Separate Account Funded By Separate Account
- ------------------------ --------------------------

CG Variable Life Insurance XX605481 - Group Flexible Premium
Separate Account A Variable Life Insurance Policy, -
established May 22, 1995 Nonpar

CG Variable Life Insurance LN605, LN615 and state variations
Separate Account II, thereof
established July 6, 1994

CG Corporate Insurance LN620, together with riders, and
Variable Life Insurance state variation thereof
Account 02, established
February 23, 1996

CG Variable Life Insurance LN601, together with riders, and
Separate Account FE, state variation thereof
established March 21, 1997

CG Variable Annuity Separate AN425, AN426, together with riders,
Account II, established and state variation thereof
January 25, 1994

CG Variable Annuity Account I
established March 12, 1968

CG Variable Annuity Account II
established March 12, 1968

Connecticut General Life Insurance LN604, together with riders, and
Company Private Variable Universal state variation thereof
Life Separate Account PG
established November 25, 1998

Connecticut General Life Insurance LN613 and LN601, together with
Company Private Placement Flexible riders, and state variation thereof
Premium Universal Life Insurance
Separate Account HG
established May 22, 1997

Connecticut General Life Insurance LN601NJ-98, together with riders
Company Private Placement Variable and state variation thereof
Life Insurance Separate Account LM
established May 28, 1998

-3-
<PAGE>

Connecticut General Life Insurance LN604, LN613 and LN601, together
Company Private Placement Gerber with riders, and state variation
Taylor Separate Account GT thereof

Connecticut General Life Insurance LN604, LN613 and LN601, together
Company Private Placement Multiple with riders, and state variation
Hedge Fund Strategies Separate thereof
Account MHS

-4-

<PAGE>

Exhibit h(viii)

CIGNA FUNDS GROUP
CIGNA INSTITUTIONAL FUNDS GROUP
CIGNA VARIABLE PRODUCTS GROUP

POWER OF ATTORNEY

The undersigned hereby appoint Alfred A. Bingham III and Jeffrey S. Winer, each
of them singly and with full power of substitution, attorney-in-fact and agent
for me and in my name and on my behalf in any and all capacities to sign any
Registration Statement under the Securities Act of 1933, as amended, any
Registration Statement under the Investment Company Act of 1940, as amended, or
any filing under the securities laws of any of the states of the United States
of America or of any jurisdiction ("Blue Sky Law") for CIGNA Funds Group, CIGNA
Institutional Funds Group and CIGNA Variable Products Group and any amendment to
any such Registration Statement or any Blue Sky Law filing with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, and under
the Investment Company Act of 1940, as amended, or with the appropriate state
agency under the applicable Blue Sky Laws, to file such Registration Statements,
amendments and filings and generally to do and perform all things necessary to
be done in that connection, hereby ratifying and confirming my signature as it
may be signed by said attorney-in-fact and agent to any and all Registration
Statements and amendments thereto and to any and all Blue Sky Law filings and
amendments thereto and ratifying and confirming all other acts that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue of this
appointment.

Signed this 27th day of April, 1999.
/s/ Richard H. Forde
----------------------------------------
Richard H. Forde
President
CIGNA Variable Products Group
CIGNA Funds Group
CIGNA Institutional Funds Group

/s/ Richard H. Forde
----------------------------------------
Richard H. Forde
Chairman of the Board, President
and Trustee

/s/ Hugh R. Beath
----------------------------------------
Hugh R. Beath, Trustee

/s/ Russell H. Jones
----------------------------------------
Russell H. Jones, Trustee

/s/ Thomas C. Jones
----------------------------------------
Thomas C. Jones, Trustee

/s/ Paul J. McDonald
----------------------------------------
Paul J. McDonald, Trustee

<PAGE>

Exhibit i

April 27, 2000

CIGNA Variable Products Group
100 Front Street
Suite 300
Worcester, MA 01601

Ladies and Gentlemen:

Reference is made to Post-Effective Amendment No. 19 to the Registration
Statement of CIGNA Variable Products Group (the "Trust") on Form N-1A
(Registration No. 33-20333) filed with the Securities and Exchange Commission
with respect to CIGNA Variable Products Group Money Market Fund, CIGNA Variable
Products Group Investment Grade Bond Fund (formerly CIGNA Variable Products
Group Income Fund) and CIGNA Variable Products Group S&P 500 Index Fund, each a
series of the Trust, and specifically to Item 24(b) thereof. We hereby consent
to the incorporation by reference therein of (a) our opinion dated December 26,
1995 filed as an Exhibit to Post-Effective Amendment No. 10 to such Registration
Statement and (b) our opinion dated April 10, 1997 filed as an Exhibit to Post-
Effective Amendment No. 15 to such Registration Statement.

Very truly yours,

/S/ GOODWIN, PROCTER & HOAR LLP

GOODWIN, PROCTER & HOAR LLP

<PAGE>

Exhibit j

CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------

We hereby consent to the incorporation by reference in this Post-Effective
Amendment No. 19 to the registration statement on Form N-1A of CIGNA Variable
Products Group (the "Registration Statement") of our reports dated February 11,
2000, relating to the financial statements and financial highlights which appear
in the December 31, 1999 Annual Reports to Shareholders of the Variable Products
Investment Grade Bond Fund, Variable Products S&P 500 Index Fund and Variable
Products Money Market Fund, which are also incorporated by reference into the
Registration Statement. We also consent to the references to us under the
heading "Financial Highlights" in the Prospectus and on the cover of, and under
the heading "Independent Accountants" in the Statement of Additional
Information.

PricewaterhouseCoopers LLP
Boston, Massachusetts
April 27, 2000

<PAGE>

Exhibit p

BUSINESS ETHICS

CIGNA INVESTMENT MANAGEMENT

ASSOCIATES AND RESTRICTED PERSONS

FEBRUARY 1999

<PAGE>

Exhibit p(i)

CODE OF ETHICS

CIGNA VARIABLE PRODUCTS GROUP
<PAGE>

Section 1
=========

Statement of Policy
===================

This Code of Ethics is being adopted by CIGNA Variable Products Group (the
"Trust") on behalf of itself and those series of its shares (the "Funds") which
need to adopt the Code of Ethics in compliance with Rule 17j-1 promulgated by
the Securities and Exchange Commission pursuant to Section 17(j) of the
Investment Company Act of 1940. This Code of Ethics is designed to ensure that
those individuals who have access to information regarding the portfolio
securities activities of the Funds do not intentionally use information
concerning those portfolio securities activities for their personal benefit and
to the detriment of the Funds.

This Code of Ethics is intended to cover all Access Persons (as hereinafter
defined) of the Funds, and all Access Persons are subject to and bound by the
terms of this Code of Ethics.

It is not the intention of this Code of Ethics to prohibit personal
securities transactions by Access Persons of the Funds, but rather to prescribe
rules designed to prevent actual and apparent conflicts of interest. While it is
not possible to specifically define and prescribe rules addressing all possible
situations in which conflicts may arise, this Code of Ethics sets forth the
policy regarding conduct in those situations in which conflicts are most likely
to develop.

Every Access Person should keep the following general principles in mind in
discharging his or her obligations under this Code of Ethics:

(i) No Access Person shall knowingly place his or her own interests
ahead of those of the Funds.

(ii) No Access Person should use knowledge of transactions of the Funds
to his or her profit or advantage.
<PAGE>

Section 2
=========

Definitions
===========

Access Person means any trustee, officer, or Advisory Person of the Trust.
- ------ ------

Advisory Person means (i) any employee of the Trust (or of any company in a
- -------- ------
control relationship to the Trust) who, in connection with his regular functions
or duties, makes, participates in, or obtains information regarding the Purchase
or Sale of a Security by the Trust, or whose functions relate to the making of
any recommendations with respect to such Purchases or Sales; and (ii) any
natural person in a control relationship to the Trust who obtains information
concerning recommendations made to the Trust with regard to the Purchase or Sale
of a Security.

Being Considered for Purchase or Sale means that a recommendation to Purchase or
- ----- ---------- --- -------- -- ----
Sell a Security has been made and communicated, as evidenced by, for example,
the placement of an order to Purchase or Sell a Security or the preparation of a
written report regarding the recommended Purchase or Sale of a Security.

Beneficial Ownership shall be interpreted in the same manner as it would be in
- ---------- ---------
determining whether a person is subject to the provisions of Section 16 of the
Securities Exchange Act of 1934 and the rules and regulations thereunder, except
that the determination of direct or indirect Beneficial Ownership shall apply to
all Securities which an Access Person has or acquires. (See attached Exhibit A -
Examples of Beneficial Ownership.)

Compliance Officer means the person so designated by the Trust to administer
- ---------- -------
this Code of Ethics.

Control shall have the same meaning as that set forth in Section 2(a)(9) of the
- -------
Investment Company Act of 1940.

Disinterested Trustee means a trustee of the Trust who is not an "interested
- ------------- -------
person" of the Trust within the meaning of Section 2(a)(19) of the Investment
Company Act of 1940.

Fund means each series of shares of the Trust which is registered as an
- ----
investment company under the Investment Company Act of 1940.

Purchase or Sale of a Security includes the writing of an option to Purchase or
- -------- -- ----
Sell a Security.

Security shall have the meaning set forth in Section 2(a)(36) of the Investment
- --------
Company Act of 1940, except that it shall not include securities issued by the
Government of the United
<PAGE>

States or any agency or instrumentality thereof, bankers' acceptances, bank
certificates of deposit, commercial paper and shares of registered open-end
investment companies.

Trust means CIGNA Variable Products Group, a business trust organized under the
- -----
Laws of the Commonwealth of Massachusetts.
<PAGE>

Section 3
=========

Prohibitions
============

Purchases and Sales of Securities
- --------- --- ----- -- ----------

No Access Person shall Purchase or Sell, directly or indirectly, any Security in
which he has, or by reason of such transaction acquires, any direct or indirect
Beneficial Ownership and which to his actual knowledge at the time of such
Purchase or Sale:

(i) is being Considered for Purchase or Sale by a Fund; or

(ii) is being Purchased or Sold by a Fund.
<PAGE>

Section 4
=========

Exemptions
==========

The prohibitions of Section 3 of this Code of Ethics shall not
apply to:

(i) Purchases or Sales effected in any account over which the Access Person
has no direct or indirect influence or control;

(ii) Purchases or Sales of Securities which are not eligible for Purchase or
Sale by a Fund;

(iii) Purchases or Sales which are non-volitional on the part of either the
Access Person or a Fund;

(iv) Purchases which are part of an automatic dividend reinvestment plan;

(v) Purchases effected upon the exercise of rights issued by an issuer pro
---
rata to all holders of a class its Securities, to the extent such
----
rights were acquired from such issuer, and Sales of such rights so
acquired;

(vi) Purchases or Sales which receive the prior approval of the Compliance
Officer because they are only remotely potentially harmful to a Fund
because they would be very unlikely to affect a highly institutional
market, or because they clearly are not related economically to the
Securities to be Purchased, Sold, or held by a Fund.
<PAGE>

Section 5
=========

Reporting Requirements
======================

In General
- ----------

Every Access Person shall report to the Compliance Officer the information
described in the paragraph below ("Contents") with respect to transactions in
any Security in which such Access Person has, or by reason of such transaction
acquires, any direct or indirect Beneficial Ownership in the Security; provided,
however, that an Access Person shall not be required to make a report with
respect to transactions effected for any account over which such Access Person
does not have any direct or indirect influence or control.

A Disinterested Trustee of the Trust need only report a transaction in a
Security if such Trustee, at the time of that transaction, knew or, in the
ordinary course of fulfilling his official duties as a Trustee of the Trust,
should have known that, during the 15-day period immediately preceding or after
the date of the transaction in a Security by the Trustee, such Security was
Purchased or Sold by a Fund, or was Being Considered for Purchase or Sale by a
Fund.

Contents
- --------

Every report required as described above shall be made not later than ten (10)
days after the end of the calendar quarter in which the transaction to which the
report relates was effected, and shall contain the following information:

(i) The date of the transaction, the title and the number of shares, and the
principal amount of each Security involved;

(ii) The nature of the transaction (i.e., Purchase, Sale or any other type of
acquisition or disposition);

(iii) The price at which the transaction was effected; and

(iv) The name of the broker, dealer or bank with or through whom the
transaction was effected.

Any report may contain a statement that the report shall not be construed as an
admission by the Access Person making such report that he has any direct or
indirect Beneficial Ownership in the Security to which the report relates.

Reporting Under the investment Advisers Act of 1940
- ---------------------------------------------------

Notwithstanding the reporting requirements described in this Section 5, an
Access Person need not make a report where the report would duplicate
information recorded pursuant to Rules 204-2(a)(12) or 204-2(a)(13) under the
Investment Advisers Act of 1940.
<PAGE>

Section 6
=========

Sanctions
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The Compliance Officer of the Trust shall review or supervise the review of the
personal Securities transactions reported pursuant to Section 5. As part of
that review, each such reported Securities transaction shall be compared against
complete and contemplated portfolio transactions of the Trust to determine
whether a violation of this Code of Ethics may have occurred. If the Compliance
Officer of the Trust determines that a violation may have occurred, he shall
submit the pertinent information regarding the transaction to counsel for the
Trust. Such counsel shall evaluate whether a material violation of this Code of
Ethics has occurred, taking into account all the exemptions provided under
Section 4. Before making any determination that a violation has occurred, such
counsel shall give the person involved an opportunity to supply additional
information regarding the transaction in question and shall consult with counsel
for the Access Person whose transaction is in question.

If such counsel determines that a material violation of this Code of Ethics has
occurred, such counsel shall so advise the President of the Trust. If the
President determines the violation to be material, he shall provide a written
report to the Nominating Committee of the Board of Trustees for such further
action and sanctions as said Committee deems appropriate.
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Exhibit A

EXAMPLES OF BENEFICIAL OWNERSHIP

The Code of Ethics relates to the Purchase or Sale of Securities of which an
officer or trustee has a direct or indirect "Beneficial Ownership" except for
Purchases or Sales over which such individual has no direct or indirect
influence or control.

Examples of Beneficial Ownership
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What constitutes "Beneficial Ownership" has been dealt with in a number of
SEC releases and has grown to encompass many diverse situations. These include
Securities held:

(a) by you for your own benefit, whether as bearer, registered in your own
name, or otherwise;

(b) by others for your benefit (regardless of whether or how registered),
such as Securities held for you by custodians, brokers, relatives,
executors or administrators;

(d) by a trust in which you have an income or remainder interest.
Exceptions: where your only interest is to get principal if (1) some
other remainderman dies before distribution, or (2) if some other person
can direct by will a distribution of trust property or income to you;

(e) by you as trustee or co-trustee, where either you or members of your
immediate family, i.e., spouse, children and their descendants, step-
children, parents and their ancestors, and step-parents (treating a
legal adoption as blood relationship), have an income or remainder
interest in the trust;

(f) by a trust of which you are the settlor, if you have the power to revoke
the trust without obtaining the consent of all the beneficiaries;

(g) by any partnership in which you are a partner;

(h) by a personal holding company controlled by you alone or jointly with
others;

(i) in the name of your spouse unless legally separated;

(j) in the name of minor children or in the name of any relative of yours or
of your spouse (including an adult child) who is presently sharing your
home. This apples even if the Securities were not received from you and
the dividends are not actually used for the maintenance of your home;

(k) in the name of another person (other than those listed
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in (i) and (j) just above), if by reason of any contract, understanding,
relationship, agreement or other arrangement you obtain benefits
substantially equivalent to those of ownership;

(l) in the name of any person other than yourself, even though you do not
obtain benefits substantially equivalent to those of ownership (as
described in (k) above), if you can vest or revest title in yourself.