Federated Strategic Income Fund II
(A Portfolio of Federated Insurance Series)
Supplement to Prospectus dated May 21, 1999 and Combined Prospectus dated April
20, 1999 (Revised June 1, 1999)
1. Please revise paragraph eight under the section entitled "What are the Fund's
Investment Strategies?" to read as follows:
"In implementing this strategy, the Adviser may invest up to 100% of
its foreign securities allocation in emerging market countries. Many
emerging market countries issue securities rated below investment
grade."
2. Please add the following immediately after the paragraph entitled "Risks of
Foreign Investing" under the section entitled "What are the Specific Risks of
Investing in the Fund?":
"Risks of Investing in Emerging Market Countries
o Securities issued or traded in emerging markets generally entail
greater risks than securities issued or traded in developed markets.
For example, the prices of such securities may be significantly more
volatile than prices of securities in developed countries. Emerging
market economies may also experience more severe downturns (with
corresponding currency devaluations) than developed economies.
o Emerging market countries may have relatively unstable governments
and may present the risks of nationalization of businesses,
expropriation, confiscatory taxation or, in certain instances,
reversion to closed market, centrally planned economies.
o The Adviser is seeking information regarding the Year 2000 readiness
of issuers or Fund service providers located in emerging market
countries. The Year 2000 problem is the potential for computer errors
or failures because certain computer systems may be unable to interpret
dates after
December 31, 1999, or may experience other date-related problems.
However, such Year 2000 information may not exist, or may be
incomplete, inaccurate or difficult to obtain. As a result, the Adviser
might not be able to assess accurately or avoid the potential effects
of the Year 2000 problem on these companies, and this problem could
result in material losses to the Fund."
September 30, 1999
Cusip 313916868
G02588-02 (9/99)
