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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, 1999
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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]
[PricewaterhouseCoopers
Letterhead]
INDEPENDENT ACCOUNTANTS' REPORT
To the Trustees of the Variable Insurance Funds
We have examined management's assertion about AmSouth Equity Income Fund's and
AmSouth Select Equity Fund's (two separate portfolios constituting the Variable
Insurance Funds, hereafter referred to as the "Funds") compliance with the
requirements of subsection (b) and (c) of Rule 17f-2 under the Investment
Company Act of 1940 as of December 31, 1999, 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, 1999, with respect to the securities of the Funds:
- - Count and inspect all securities located in the vault of AmSouth Bank
without prior notice to management;
- - Confirmation, or other procedures as we considered necessary, of all
securities held in book entry form by the Federal Reserve Bank of
Atlanta, Depository Trust Company, or Chase Bank;
- - Confirmation, or other procedures as we consider necessary, of all
securities out for transfer with brokers;
- - Confirmation, or other procedures as we deemed necessary, of all
variable fund investments with transfer agents;
- - Confirmation, or other procedures we deemed necessary, of all
repurchase agreements with brokers/banks and agreement of underlying
collateral with AmSouth Bank's records; and
- - Reconciliation of all such securities to the books and records of the
Funds 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.
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[PricewaterhouseCoopers Logo]
In our opinion, management's assertion that the Funds were in compliance with
requirements of subsections (b) and (c) of Rule 17f-2 of the Investment Company
Act of 1940 as of December 31, 1999, with respect to securities reflected in the
investment accounts of the Funds are fairly stated, in all material respects.
This report is intended for the information and use of management of the Funds
and the Securities and Exchange Commission and should not be used for any other
purpose.
/s/ PricewaterhouseCoopers LLP
February 16, 2000
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MANAGEMENT STATEMENT REGARDING COMPLIANCE WITH CERTAIN PROVISIONS
OF THE INVESTMENT COMPANY ACT OF 1940
We, as members of management of AmSouth Equity Income Fund and AmSouth Select
Equity Fund (two separate portfolios constituting the Variable Insurance Funds,
hereafter referred to as the "Funds") are responsible for complying with the
requirements of Rule 17f-2, "Custody of Investments by Registered Management
Investments Companies," of the Investment Company Act of 1940. We are also
responsible for establishing and maintaining an effective internal control over
compliance with Rule 17f-2 requirements. We have performed an evaluation of the
Funds' compliance with the requirements of Rule 17f-2 as of December 31, 1999.
Based on this evaluation, we assert that the Company was in compliance with the
provisions of subsection (b) and (c) of Rule 17f-2 of the Investment Company Act
of 1940 as of December 31, 1999 with respect to securities reflected in the
investment of the Funds.
Variable Insurance Funds
