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AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. AGGRESSIVE GROWTH FUND
AIM V.I. BALANCED FUND
AIM V.I. CAPITAL APPRECIATION FUND
AIM V.I. CAPITAL DEVELOPMENT 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. HIGH YIELD FUND
AIM V.I. INTERNATIONAL EQUITY FUND
AIM V.I. MONEY MARKET FUND
AIM V.I. VALUE FUND
Supplement dated February 4, 2000
to the Prospectus dated May 3, 1999
as supplemented July 1, 1999, October 1, 1999,
October 21, 1999 and January 6, 2000
At a meeting held on February 3, 2000, the Board of Directors of AIM Variable
Insurance Funds, Inc. (the company), on behalf of AIM V.I. Aggressive Growth
Fund, AIM V.I. Balanced Fund, AIM Capital Appreciation Fund, AIM Capital
Development 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. High Yield Fund, AIM V.I. International Equity
Fund, AIM V.I. Money Market Fund and AIM V.I. Value Fund (the funds), voted to
request shareholders to approve the following items that will affect the funds:
- - An Agreement and Plan of Reorganization which provides for the
reorganization of the company, which is currently a Maryland
corporation, as a Delaware business trust;
- - A new advisory agreement between the company and A I M Advisors, Inc.
(AIM). The principal changes to the advisory agreement are (i) the
deletion of references to the provision of administrative services, and
(ii) the clarification of provisions relating to delegations of
responsibilities and the non-exclusive nature of AIM's services. The
revised advisory agreement does not change the fees paid by the funds'
(except that the agreement permits the funds to pay a fee to AIM in
connection with any new securities lending program implemented in the
future);
- - Changing the funds' fundamental investment restrictions. The proposed
revisions to the funds' fundamental investment restrictions are
described in a supplement to the funds' statement of additional
information; and
- - Changing the funds' investment objectives and making them
non-fundamental. For the AIM V.I. Capital Appreciation Fund, AIM V.I.
Government Securities Fund, AIM V.I. Growth Fund, AIM V.I.
International Equity Fund and AIM V.I. Value Fund, the investment
objective of the funds would be changed by deleting references to the
types of securities that the funds will purchase to achieve their
objective. Pursuant to this proposal, the funds' investment objectives
that change would read:
AIM V.I. Capital Appreciation Fund: The fund's investment
objective is growth of capital.
AIM V.I. Government Securities Fund: The fund's investment
objective is to achieve a high level of current
income consistent with a reasonable concern for
safety of principal.
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AIM V.I. Growth Fund: The fund's investment objective is
to achieve growth of capital.
AIM V.I. International Equity Fund: The fund's investment
objective is to achieve long-term growth of
capital.
AIM V.I. Value Fund: The fund's investment objective is
to achieve long-term growth of capital. Income
is a secondary objective.
The investment objective of the AIM V.I. Global Utilities Fund would be
changed so that it would read: "The fund's investment objective is to
achieve a high total return." If the investment objective of each fund
becomes non-fundamental, it can be changed in the future by the Board of
Directors of the company without further approval by shareholders.
The Board of Directors of the company has called a meeting of the fund's
shareholders to be held on or about April 10, 2000 to vote on these and other
proposals. Only shareholders of record as of January 20, 2000 are entitled to
vote at the meeting. Proposals that are approved are expected to become
effective on or about April 17, 2000.
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AIM V.I. AGGRESSIVE GROWTH FUND
AIM V.I. BALANCED FUND
AIM V.I. BLUE CHIP FUND
AIM V.I. CAPITAL APPRECIATION FUND
AIM V.I. CAPITAL DEVELOPMENT FUND
AIM V.I. DENT DEMOGRAPHIC TRENDS FUND
AIM V.I. DIVERSIFIED INCOME FUND
AIM V.I. GLOBAL GROWTH AND INCOME FUND
AIM V.I. GLOBAL UTILITIES FUND
AIM V.I. GOVERNMENT SECURITIES FUND
AIM V.I. GROWTH AND INCOME FUND
AIM V.I. GROWTH FUND
AIM V.I. HIGH YIELD FUND
AIM V.I. INTERNATIONAL EQUITY FUND
AIM V.I. MONEY MARKET FUND
AIM V.I. TELECOMMUNICATIONS FUND
AIM V.I. VALUE FUND
(SERIES PORTFOLIOS OF AIM VARIABLE INSURANCE FUNDS, INC.)
Supplement dated February 4, 2000
to the Statement of Additional Information dated November 15, 1999
At a meeting held on February 3, 2000, the Board of Directors of AIM Variable
Insurance Funds, Inc. (the "Company"), on behalf of its series portfolios (the
"Funds"), voted to request shareholder approval to amend the Funds' fundamental
investment restrictions. The Board of Directors has called a meeting of the
Funds' shareholders to be held on or about April 10, 2000. Only shareholders of
record as of January 20, 2000 are entitled to vote at the meeting. Proposals
that are approved are expected to become effective on or about April 17, 2000.
If shareholders approve the proposal to amend the Funds' fundamental investment
restrictions, each of AIM V.I. Aggressive Growth Fund, AIM V.I. Balanced Fund,
AIM V.I. Blue Chip Fund, AIM V.I. Capital Appreciation Fund, AIM V.I. Capital
Development Fund, AIM V.I. Dent Demographic Trends Fund, AIM V.I. Diversified
Income Fund, AIM V.I. Global Growth and Income Fund, AIM V.I. Global Utilities
Fund, AIM V.I. Government Securities Fund, AIM V.I. Growth and Income Fund, AIM
V.I. Growth Fund, AIM V.I. High Yield Fund, AIM V.I. International Equity Fund,
AIM V.I. Money Market Fund, AIM V.I. Telecommunications Fund and AIM V.I. Value
Fund, will operate under the following fundamental investment restrictions:
Each Fund is subject to the following investment restrictions, which may be
changed only by a vote of a majority of such Fund's outstanding shares, except
that AIM V.I. Global Utilities Fund is not subject to restrictions (a) or (d):
(a) the Fund is a "diversified company" as defined in the 1940 Act. The
Fund will not purchase the securities of any issuer if, as a result, the
Fund would fail to be a diversified company within the meaning of the 1940
Act, and the rules and regulations promulgated thereunder, as such statute,
rules and regulations are amended from time to time or are interpreted from
time to time by the SEC staff (collectively, the 1940 Act laws and
interpretations) or except to the extent that the Fund may be permitted to
do so by exemptive order or similar relief (collectively, with the 1940 Act
laws and interpretations, the 1940 Act laws, interpretations and
exemptions). In complying with this restriction, however, the Fund may
purchase securities of other investment companies to the extent permitted
by the 1940 Act laws, interpretations and exemptions.
(b) the Fund may not borrow money or issue senior securities, except as
permitted by the 1940 Act laws, interpretations and exemptions.
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(c) the Fund may not underwrite the securities of other issuers. This
restriction does not prevent the Fund from engaging in transactions
involving the acquisition, disposition or resale of its portfolio
securities, regardless of whether the Fund may be considered to be an
underwriter under the Securities Act of 1933.
(d) the Fund will not make investments that will result in the
concentration (as that term may be defined or interpreted by the 1940 Act
laws, interpretations and exemptions) of its investments in the securities
of issuers primarily engaged in the same industry. This restriction does
not limit the Fund's investments in (i) obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities, (ii) tax-exempt
obligations issued by governments or political subdivisions of governments,
or (iii) for AIM V.I. Money Market Fund, bank instruments. In complying
with this restriction, the Fund will not consider a bank-issued guaranty or
financial guaranty insurance as a separate security.
(e) the Fund may not purchase real estate or sell real estate unless
acquired as a result of ownership of securities or other instruments. This
restriction does not prevent the Fund from investing in issuers that
invest, deal, or otherwise engage in transactions in real estate or
interests therein, or investing in securities that are secured by real
estate or interests therein.
(f) the Fund may not purchase physical commodities or sell physical
commodities unless acquired as a result of ownership of securities or other
instruments. This restriction does not prevent the Fund from engaging in
transactions involving futures contracts and options thereon or investing
in securities that are secured by physical commodities.
(g) the Fund may not make personal loans or loans of its assets to
persons who control or are under common control of the Fund, except to the
extent permitted by 1940 Act laws, interpretations and exemptions. This
restriction does not prevent the Fund from, among other things, purchasing
debt obligations, entering into repurchase agreements, loaning its assets
to broker-dealers or institutional investors, or investing in loans,
including assignments and participation interests.
(h) the Fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the same
fundamental investment objectives, policies and restrictions as the Fund.
AIM V.I. Global Utilities Fund will concentrate (as such term may be
defined or interpreted by the 1940 Act laws, interpretations and exemptions) its
investments in the securities of domestic and foreign public utility companies.
The investment restrictions set forth above provide the Funds with the ability
to operate under new interpretations of the 1940 Act or pursuant to exemptive
relief from the SEC without receiving prior shareholder approval of the change.
Even though the Funds have this flexibility, the Board of Directors of the
Company has adopted internal guidelines for each Fund relating to certain of
these restrictions which the adviser must follow in managing the Funds. Any
changes to these guidelines, which are set forth below, require the approval of
the Board of Directors.
1. In complying with the fundamental restriction regarding issuer
diversification, the Fund will not, with respect to 75% of its total
assets (and for AIM V.I. Money Market Fund, with respect to 100% of its
total assets), purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities), if, as a result, (i) more than 5% of
the fund's total assets would be invested in the securities of that
issuer, except as permitted by Rule 2a-7 under the 1940 Act, or (ii)
the Fund would hold more than 10% of the outstanding voting securities
of that issuer. The Fund may (i) purchase securities of other
investment companies as permitted by Section 12(d)(1) of the 1940 Act
and (ii) invest its assets in securities of other money market funds
and lend money to other investment companies and their series
portfolios that have AIM as an investment adviser, subject to the terms
and conditions of any exemptive orders issued by the SEC.
2. In complying with the fundamental restrictions regarding borrowing
money and issuing senior securities, the Fund may borrow money in an
amount not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). The Fund may borrow
from banks, broker/dealers or other investment companies or their
series portfolios that have AIM or an affiliate of AIM as an investment
advisor
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(an "AIM Fund"). The Fund may not borrow for leveraging, but may
borrow for temporary or emergency purposes, in anticipation of or in
response to adverse market conditions, or for cash management
purposes. The Fund may not purchase additional securities when any
borrowings from banks exceed 5% of the Fund's total assets.
3. In complying with the fundamental restriction regarding industry
concentration, the Fund may invest up to 25% of its total assets in the
securities of issuers whose principal business activities are in the
same industry (this guideline does not apply to AIM V.I. Global
Utilities Fund).
4. In complying with the fundamental restriction with regard to making
loans, the Fund may lend up to 33 1/3% of its total assets and may lend
money to another AIM Fund, on such terms and conditions as the SEC may
require in an exemptive order.
5. Notwithstanding the fundamental restriction on investing all of the
Fund's assets in an open-end fund, the Fund may not invest all of its
assets in the securities of a single open-end management investment
company with the same fundamental investment objectives, policies and
limitations as the Fund.
If a percentage restriction is adhered to at the time of investment, a later
change in percentage resulting from changes in values of assets will not be
considered a violation of the restriction.
Effective immediately, the following section is added after the section "RULE
144A SECURITIES" on page 27 of the Statement of Additional Information:
"EQUITY-LINKED DERIVATIVES
AIM V.I. Aggressive Growth Fund, AIM V.I. Balanced Fund, AIM V.I. Blue
Chip Fund, AIM V.I. Capital Appreciation Fund, AIM V.I. Capital Development
Fund, AIM V.I. Dent Demographic Trends Fund, AIM V.I. Global Growth and
Income Fund, AIM V.I. Global Utilities Fund, AIM V.I. Growth and Income
Fund, AIM V.I. Growth Fund, AIM V.I. International Equity Fund, AIM V.I.
Telecommunications Fund and AIM V.I. Value Fund may invest in equity-linked
derivative products designed to replicate the composition and performance
of particular indices. Examples of such products include S&P Depositary
Receipts ("SPDRs"), World Equity Benchmark Series ("WEBs"), NASDAQ 100
tracking shares ("QQQs"), Dow Jones Industrial Average Instruments
("DIAMONDS") and Optomised Portfolios as Listed Securities ("OPALS").
Investments in equity-linked derivatives involve the same risks associated
with a direct investment in the types of securities included in the indices
such products are designed to track. There can be no assurance that the
trading price of the equity-linked derivatives will equal the underlying
value of the basket of securities purchased to replicate a particular index
or that such basket will replicate the index. Investments in equity-linked
derivatives may constitute investment in other investment companies. See
"INVESTMENT IN OTHER INVESTMENT COMPANIES.""
Effective immediately, the following paragraph replaces in its entirety the
paragraph following the section "INVESTMENT IN OTHER INVESTMENT COMPANIES" on
page 27 of the Statement of Additional Information:
"Each of the Funds may invest in other investment companies to the
extent permitted by the 1940 Act, and rules and regulations thereunder, and
if applicable, exemptive orders granted by the SEC. The following
restrictions apply to investments in other investment companies other than
Affiliated Money Market Funds (defined below): (i) a Fund may not purchase
more than 3% of the total outstanding voting stock of another investment
company; (ii) a Fund may not invest more than 5% of its total assets in
securities issued by another investment company; and (iii) a Fund may not
invest more than 10% of its total assets in securities issued by other
investment companies other than Affiliated Money Market Funds. With respect
to a Fund's purchase of shares of another investment company, including
Affiliated Money Market Funds, the Fund will indirectly bear its
proportionate share of the advisory fees and other operating expenses of
such investment company. The Funds have obtained an exemptive order from
the SEC allowing them to invest in money market funds that have AIM or an
affiliate of AIM as an investment advisor (the "Affiliated Money Market
Funds"), provided that investments in Affiliated Money Market Funds do not
exceed 25% of the total assets of such Fund. With respect to a Fund's
purchase of shares of the Affiliated Money Market Funds, the Fund will
indirectly pay the advisory fees and other operating expenses of the
Affiliated Money Market Funds."
