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SECURITIES AND EXCHANGE COMMISSION --------------------------
WASHINGTON, D.C. 20549 OMB Approval
FORM N-17f-2 --------------------------
OMB Number: 3235-0360
Certificate of Accounting of Securities and Similar Expires: July 31, 1994
Investment in the Custody of Estimated average burden
Management Investment Companies hours per response... 0.05
Pursuant to Rule 17f-2 [17 CFR 270.17f-2]
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1. Investment Company Act File Number: Date examination completed
811-8644 December 31, 1998
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2. State identification Number: N/A
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AL AK AZ AR CA CO
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CT DE DC FL GA HI
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ID IL IN IA KS KY
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LA ME MD MA MI MN
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MS MO MT NE NV NH
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NJ NM NY NC ND OH
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OK OR PA RI SC SD
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TN TX UT VT VA WA
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WV WI WY PUERTO RICO
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Other (specify):
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3. Exact name of investment company as specified in representation statement:
Variable Insurance Funds
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4. Address of principal executive office (number, street, city, state, zip code):
3435 Stelzer Road, Columbus, Ohio 43219
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[PRICEWATERHOUSECOOPERS LOGO]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of the AmSouth Equity Income Fund
of the Variable Insurance Funds:
We have examined management's assertion about the AmSouth Equity Income Fund of
the Variable Insurance Funds (the "Fund") compliance with the requirements of
subsections (b) and (c) of Rule 17f-2 under the Investment Company Act of 1940
as of December 31, 1998, included in the accompanying Management Statement
Regarding Compliance with Certain Provisions of the Investment Company Act of
1940. Management is responsible for the Funds' compliance with those
requirements. Our responsibility is to express an opinion on management's
assertion about the Funds' compliance based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
examining, on a test basis, evidence about the Funds' compliance with those
requirements and performing such other procedures as we considered necessary in
the circumstances. Included among our procedures were the following tests
performed as of December 31, 1998, with respect to securities of the Fund:
o Confirmation, or other procedures as we considered necessary, of all
securities held in book entry form by the Depository Trust Company;
o Confirmation, or other procedures as we considered necessary, of all
mutual fund investments with brokers/banks;
o Reconciliation of all such securities to the books and records of the
Fund and AmSouth Bank.
We believe that our examination provides a reasonable basis for our opinion. Our
examination does not provide a legal determination on the Funds' compliance with
specified requirements.
In our opinion, management's assertion that the Fund was in compliance with the
requirements of subsections (b) and (c) of Rule 17f-2 of the Investment Company
Act of 1940 as of December 31, 1998, is fairly stated, in all material respects.
This report is intended solely for the information and use of the trustees and
management of the Fund and the Securities and Exchange Commission and should not
be used for any other purpose.
/s/ PricewaterhouseCoopers LLP
Columbus, Ohio
February 11, 1999
