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AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. CAPITAL APPRECIATION FUND
AIM V.I. DIVERSIFIED INCOME FUND
AIM V.I. GLOBAL UTILITIES FUND
AIM V.I. GOVERNMENT SECURITIES FUND
AIM V.I. GROWTH FUND
AIM V.I. GROWTH AND INCOME FUND
AIM V.I. INTERNATIONAL EQUITY FUND
AIM V.I. MONEY MARKET FUND
AIM V.I. VALUE FUND
Supplement dated December 16, 1996
to the Prospectus dated May 1, 1996
as supplemented October 9, 1996 and November 5, 1996
APPROVAL OF NEW ADVISORY, ADMINISTRATIVE SERVICES AND DISTRIBUTION AGREEMENTS
On December 11, 1996, the Board of Directors (the "Board") of AIM
Variable Insurance Funds, Inc. (the "Company") approved a new investment
advisory agreement, subject to shareholder approval, between A I M Advisors,
Inc. ("AIM") and the Company with respect to AIM V.I. Capital Appreciation
Fund, AIM V.I. Diversified Income Fund, AIM V.I. Global Utilities Fund, AIM
V.I. Government Securities Fund, AIM V.I. Growth Fund, AIM V.I. Growth and
Income Fund, AIM V.I. International Equity Fund, AIM V.I. Money Market Fund and
AIM V.I. Value Fund (the "Funds"). Shareholders will be asked to approve the
proposed advisory agreement at an annual meeting of shareholders to be held on
February 7, 1997 (the "Annual Meeting"). The Board has also approved a new
administrative services agreement with AIM and a new distribution agreement
with A I M Distributors, Inc. There are no material changes to the terms of
the new agreements, including the fees payable by the Funds. No change is
anticipated in the investment advisory or other personnel responsible for the
Funds as a result of these new agreements.
The Board has approved these new agreements because each Fund's
corresponding existing agreements will terminate upon the consummation of the
proposed merger of A I M Management Group Inc., the parent of AIM, into a
subsidiary of INVESCO plc. INVESCO plc and its subsidiaries are an independent
investment management group engaged in institutional investment management and
retail mutual fund businesses in the United States, Europe and the Pacific
region. It is contemplated that the merger will occur on February 28, 1997.
Provided that each Fund's shareholders approve the new advisory agreement at
the Annual Meeting and the merger is consummated, the new advisory agreement
with respect to each such Fund, as well as the new administrative services and
distribution agreements, will automatically become effective as of the closing
of the merger.
PROPOSED CHANGES TO FUNDAMENTAL INVESTMENT POLICIES
The Board has unanimously approved the elimination of and changes to
certain fundamental investment policies of each Fund, subject to shareholder
approval. Shareholders will be asked to approve these changes at the Annual
Meeting. If approved, they will become effective on March 1, 1997.
Each of the Funds is currently subject to a fundamental investment
policy which generally prohibits it from investing in other investment
companies. The Board has approved the elimination of this prohibition, and the
amendment to other fundamental investment policies that correspond to the
proposed elimination. The elimination of the fundamental investment policy
that prohibits each Fund from investing in other investment companies and the
proposed amendments to the corresponding fundamental investment policies would
permit investment in other investment companies to the extent permitted by the
Investment Company Act of 1940, and rules and regulations thereunder, and, if
applicable, exemptive orders granted by the Securities and Exchange Commission.
For additional information regarding the proposed changes described
above, see the Funds' Statement of Additional Information dated May 1, 1996, as
supplemented as of December 16, 1996.
