Victory Variable Insurance Funds N-CSR Certified annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number			811-08979
Victory Variable Insurance Funds
(Exact name of registrant as specified in charter)
4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio					44144
(Address of principal executive offices)					(Zip code)
Citi Fund Services Ohio, Inc., 4400 Easton Commons, Suite 200, Columbus, OH 43219
(Name and address of agent for service)
Registrant’s telephone number, including area code:				800-539-3863
Date of fiscal year end:	December 31
Date of reporting period:		December 31, 2019

Item 1.  Reports to Stockholders.

December 31, 2019

Annual Report

Victory Variable Insurance Funds

Victory INCORE Investment Quality Bond VIP Series

Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports may no longer be sent by mail from the insurance company that issued your variable annuity and variable life insurance contract, unless you specifically request paper copies of the reports from your insurance company. Instead, the reports will be made available on www.victoryfunds.com. The insurance company that offers your contract may also make these reports available on a website, and such insurance company will notify you by mail each time a report is posted and provide you with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the insurance company electronically by following the instructions provided by the insurance company.

If offered by your insurance company, you may elect to receive all future reports in paper and free of charge from the insurance company. You can inform your insurance company that you wish to continue receiving paper copies of your reports. Your election to receive reports in paper will apply to all funds available under your contract.

www.vcm.com

News, Information And Education 24 Hours A Day, 7 Days A Week

The Victory Funds site gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:

•  Detailed performance records

•  Daily share prices

•  The latest fund news

•  Investment resources to help you become a better investor

•  A section dedicated to investment professionals

Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.

Victory Variable Insurance Funds

Table of Contents

Shareholder Letter (Unaudited)	3
Fund Review and Commentary (Unaudited)	5
Financial Statements
Schedule of Portfolio Investments	8
Statement of Assets and Liabilities	16
Statement of Operations	17
Statements of Changes in Net Assets	18
Financial Highlights	20
Notes to Financial Statements	22
Report of Independent Registered Public Accounting Firm	34
Supplemental Information (Unaudited)
Trustee and Officer Information	35
Proxy Voting and Portfolio Holdings Information	38
Expense Examples	38
Advisory Contract Renewal	39
Privacy Policy (inside back cover)

The Fund is distributed by Victory Capital Advisers, Inc. Victory Capital Management Inc. is the investment adviser to the Fund and receives fees from the Fund for performing services for the Fund.

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus of the Fund.

For additional information about any Victory Fund, including fees, expenses, and risks, view our prospectus online at www.vcm.com or call 800-539-3863. Read it carefully before you invest or send money.

The information in this annual report is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections, or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Past investment performance of the Fund, markets or securities mentioned herein should not be considered to be indicative of future results.

• NOT FDIC INSURED • NO BANK GUARANTEE
• MAY LOSE VALUE

Call Victory at:

800-539-FUND (800-539-3863)

Visit our website at:

www.vcm.com

1

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2

Victory Funds Letter to Shareholders
(Unaudited)

Dear Shareholder,

As we turn the page into a new decade, it's hard not to reflect on the fact that we have been enjoying the longest-ever bull market in U.S. equities. The run has been impressive, and despite periods of tumult and plenty of negative news, the bull market endured throughout 2019.

For the annual reporting period ended December 31, 2019, the S&P 500^® Index posted impressive gains of 31.49%. This represents the greatest one-year gain since 2013 and also illustrates a swift bounce-back after a precipitous drop late in 2018. The move higher supports the notion that underlying fundamentals of U.S. companies drive performance, rather than the political rancor and headline fears that often capture the attention of investors.

Perhaps we shouldn't be surprised at the impressive performance of equities. The U.S. economy — the world's largest — remains on solid footing and has been a key driver of both domestic and international stocks. Robust job creation, near-record low unemployment, and steady consumer spending continue and offer reasons for further optimism. Meanwhile, inflation remains muted, and the Federal Reserve (the Fed) and other major global central banks have taken an accommodative stance. In fact, the Fed has cut interest rates by a total of 0.75% over three meetings last July, September and October.

The risk-on attitudes of investors, coupled with the accommodative monetary policy, had an expected impact on U.S. Treasury yields. The 10-year Treasury yield declined significantly over the course of 2019, falling from 2.66% to 1.92% at year-end. More interesting, however, was the fact that, the yield on 10-year Treasurys fell below shorter-term yields for the first time since before the 2007-2008 Global Financial Crisis. This inverted yield curve spooked investors for a spell, only to revert back to a traditional upward sloping yield curve by the end of the year.

The robust domestic economy, low interest rates, and ample liquidity from central banks provided a potent tonic for the stock market in 2019. In fact, at year-end 2019, the S&P 500^® Index was approaching its highest valuation level since 1999. This reminds all of us to retain some historical context on the bull market. Many of us remember the Global Financial Crisis and, before that, the collapse of the dot-com bubble. Although those are now but a distant memory (and we are not forecasting such tumult), we should not forget that stocks don't always go up and cycles don't last forever. In other words, valuations still matter.

The key point is not to discount the risks. In addition to lofty valuations, investors need to keep apprised of trade disputes, geopolitical hotspots, a contentious U.S. election, and a host of other potential headwinds. Yet it is these very risks — these cross-currents — that may create pricing dislocations. This is an environment in which we believe our Victory Capital independent investment franchises can thrive.

On the following pages, you will find information relating to your Victory Funds investment. If you have any questions, we encourage you to contact your financial

3

advisor. Or, if you invest with us directly, you may call (800) 539-3863, or visit our website at www.vcm.com.

My colleagues and I sincerely appreciate the confidence you have placed in the Victory Funds, and we value the opportunity to help meet your investment goals.

Christopher K. Dyer, CFA

President,

Victory Funds

4

Victory Variable Insurance Funds (Unaudited)

Victory INCORE Investment Quality Bond VIP Series

Portfolio Holdings

As a Percentage of Total Investments

Following a small dip in early October, interest rates and stocks both took a steep trip higher in Q4 concluding an impressive year for both stocks and bonds. Themes driving 2019 returns included an about face on monetary policy by the U.S. Federal Reserve, a global reach for yield driven by negative interest rate policies in Japan and Europe, a resilient U.S. consumer, and easing trade tensions.

Taking its cues from market volatility in late 2018 and early 2019, the Federal Reserve quickly changed course from their December 2018 stance of "auto-pilot" on quantitative tightening, and the need for more interest rate increases in 2019. As the yield curve inverted in Q3, the Federal Reserve responded by lowering the Federal Funds Target Rate by .75% over three meetings. In late Q3 and Q4 repurchase rate volatility inspired the Federal Reserve to end quantitative tightening and instead expand their balance sheet by purchasing $173 billion in U.S. Treasury securities, the bulk of the purchases being in U.S. Treasury bills. Chairman Powell convinced board members to cut rates enough to un-invert the yield curve, and moved them to a low-inflation, rates-lower-for-longer outlook. This policy reversal moved longer term yields lower by nearly 1% for the year, providing the bond market with strong absolute returns in 2019. Negative interest rate policies in Japan and Europe also drove international investors to the U.S. bond market in search of positive yields, and lower rates domestically inspired U.S. investors to reach for yield, providing an even greater boost to corporate bond returns relative to U.S. Treasuries.

The U.S. consumer, not surprisingly, remained confident and seemingly willing to spend. U3 (U.S. official) unemployment rate is at 3.5%, and U6 (broader measure) unemployment rate is at 6.7% and trending lower, are both at generational lows. The percentage of U.S. workers who perceive jobs as plentiful versus those who perceive jobs as hard to get are at levels not seen since the records set in the late 1990s, and personal income grew 3.9% over the year. This confidence reflected in retail sales which grew at a 5.8% annual rate, ending the year with strong holiday sales and counterbalancing lackluster business investment due to trade tensions, and driving U.S. GDP to grow at 2.3% with inflation running at a benign 1.6%.

Progress in trade negotiations late in the year brightened the outlook for business and investment, moving markets higher at the end of the year. After months of negotiations to modify the USMCA trade deal with Canada and Mexico, the treaty was passed by the House of Representatives in December, and may be ratified by the Senate soon. Progress was also made with China as a Phase 1 trade deal was scheduled to be signed on January 15.

5

Victory Variable Insurance Funds (Unaudited)

Victory INCORE Investment Quality Bond VIP Series (continued)

The Victory INCORE Investment Quality Bond VIP Series (the "Fund") seeks to provide a high level of current income and capital appreciation without undue risk to principal. For the year, the Fund returned 7.72%, trailing the Bloomberg Barclays US Aggregate Bond Index which returned 8.72%. The bulk of underperformance came from sector allocation in Q1, as we took a cautious stance and entered the year underweight corporate bond exposure and overweight mortgage-backed securities. Interest rate and yield curve positioning were small detractors for the year, as was credit selection.

6

Victory Variable Insurance Funds (Unaudited)

Victory INCORE Investment Quality Bond VIP Series (continued)

Average Annual Total Return

Year Ended December 31, 2019

	Class I
INCEPTION DATE	5/1/83
	Net Asset Value			Bloomberg Barclays U.S. Aggregate Bond Index1
One Year		7.72	%		8.72	%
Three Year		3.77	%		4.03	%
Five Year		3.02	%		3.05	%
Ten Year		3.99	%		3.75	%
Since Inception		6.67	%		N/A

Expense Ratios

Gross	0.62	%
With Applicable Waivers	0.56	%

Past performance is not indicative of future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month's end, please visit www.vcm.com.

The above expense ratios are from the Fund's prospectus dated May 1, 2019. Additional information pertaining to the Fund's expense ratios as of December 31, 2019 can be found in the financial highlights.

The total return figures set forth above include all waivers of fees for various periods since inception. Without such fee waivers, the total returns would have been lower. Some fee waivers are voluntary and may be modified or terminated at any time. The total returns do not include any insurance, sales or administrative charges of variable annuity or life insurance contracts. If these charges were included, the total returns would have been lower.

Victory INCORE Investment Quality Bond VIP Series — Growth of $10,000

¹The Bloomberg Barclays U.S. Aggregate Bond Index is generally considered to be representative of U.S. bond market activity. The Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index that is not available for direct investment. There are no expenses associated with the index while there are expenses associated with the Fund. It is not possible to invest directly in an index.

The graph reflects investment of growth of a hypothetical $10,000 investment in the Fund. Past performance is no guarantee of future results.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

7

Victory Variable Insurance Funds
Victory INCORE Investment Quality Bond VIP Series Schedule of Portfolio Investments
December 31, 2019

Security Description	Principal Amount		Value
Asset Backed Securities (1.4%)
AmeriCredit Automobile Receivables Trust, Series 2018-1, Class B, 3.26%, 1/18/24, Callable 9/18/22 @ 100 (a)	$	1,000,000	$	1,014,769
Popular ABS Mortgage Pass-Through Trust, Series 2005-2, Class AV1B, 2.05% (LIBOR01M+26bps), 4/25/35, Callable 1/25/20 @ 100 (b)		189,051		188,978
Santander Drive Auto Receivables Trust, Series 2017-3, Class B, 2.19%, 3/15/22, Callable 8/15/21 @ 100 (a)		201,491		201,472
Santander Drive Auto Receivables Trust, Series 2018-2, Class B, 3.03%, 9/15/22, Callable 10/15/21 @ 100 (a)		3,033,815		3,039,518
Santander Retail Auto Lease Trust, Series 2018-A, Class B, 3.20%, 4/20/22, Callable 2/20/21 @ 100 (a) (c)		3,825,000		3,854,403
Total Asset Backed Securities (Cost $8,244,180)				8,299,140
Collateralized Mortgage Obligations (1.6%)
DBUBS Mortgage Trust, Series 2011-LC1A, Class A3, 5.00%, 11/10/46 (a) (c)		2,995,089		3,043,410
GS Mortgage Securities Trust, Series 2012-GC6, Class B, 5.65%, 1/10/45 (a) (c) (d)		3,250,000		3,430,589
Morgan Stanley BAML Trust, Series 2013-C13, Class A2, 2.94%, 11/15/46 (a)		58,763		59,020
WF-RBS Commercial Mortgage Trust, Series 2012-C6, Class B, 4.70%, 4/15/45		3,275,000		3,411,242
Total Collateralized Mortgage Obligations (Cost $10,842,227)				9,944,261
Corporate Bonds (43.2%)
Communication Services (2.3%):
Activision Blizzard, Inc., 2.60%, 6/15/22, Callable 5/15/22 @ 100 (e)		1,000,000		1,012,240
AT&T, Inc. 3.20%, 3/1/22, Callable 2/1/22 @ 100 (a)		1,429,000		1,463,296
4.25%, 3/1/27, Callable 12/1/26 @ 100 (a)		2,030,000		2,228,108
5.15%, 11/15/46, Callable 5/15/46 @ 100 (a) (e)		2,433,000		2,906,437
Comcast Corp., 3.45%, 2/1/50, Callable 8/1/49 @ 100		1,346,000		1,382,006
Verizon Communications, Inc. 5.15%, 9/15/23 (a)		1,323,000		1,469,258
3.38%, 2/15/25 (a)		1,404,000		1,486,288
Vodafone Group PLC, 5.25%, 5/30/48 (e)		1,718,000		2,066,634
				14,014,267
Consumer Discretionary (4.5%):
Best Buy Co., Inc., 4.45%, 10/1/28, Callable 7/1/28 @ 100 (a) (e)		1,747,000		1,916,407
DR Horton, Inc., 2.50%, 10/15/24, Callable 9/15/24 @ 100		5,960,000		5,960,477
General Motors Co., 4.88%, 10/2/23 (a)		2,072,000		2,231,150
Hasbro, Inc., 6.35%, 3/15/40 (e)		1,596,000		1,853,483
Lear Corp., 5.25%, 5/15/49, Callable 11/15/48 @ 100		1,377,000		1,433,939
Magna International, Inc., 3.63%, 6/15/24, Callable 3/15/24 @ 100		4,305,000		4,546,296
NIKE, Inc., 3.88%, 11/1/45, Callable 5/1/45 @ 100		2,624,000		2,991,806
NVR, Inc., 3.95%, 9/15/22, Callable 6/15/22 @ 100 (a)		2,375,000		2,477,766

See notes to financial statements.

8

Victory Variable Insurance Funds
Victory INCORE Investment Quality Bond VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Principal Amount		Value
Ross Stores, Inc., 3.38%, 9/15/24, Callable 6/15/24 @ 100	$	1,220,000	$	1,269,239
Starbucks Corp., 3.80%, 8/15/25, Callable 6/15/25 @ 100		2,256,000		2,435,442
				27,116,005
Consumer Staples (3.8%):
Altria Group, Inc., 4.40%, 2/14/26, Callable 12/14/25 @ 100 (a)		2,388,000		2,592,986
Constellation Brands, Inc., 4.65%, 11/15/28, Callable 8/15/28 @ 100 (a)		1,474,000		1,657,823
Estee Lauder Cos., Inc., 4.15%, 3/15/47, Callable 9/15/46 @ 100		1,000,000		1,167,290
Kerry Group Financial Services Unlimited Co., 3.20%, 4/9/23, Callable 1/9/23 @ 100 (c)		2,500,000		2,544,575
Keurig Dr Pepper, Inc. 4.06%, 5/25/23, Callable 4/25/23 @ 100 (e)		3,070,000		3,243,086
5.09%, 5/25/48, Callable 11/25/47 @ 100 (e)		559,000		675,596
Mead Johnson Nutrition Co. 3.00%, 11/15/20		3,000,000		3,026,040
4.60%, 6/1/44, Callable 12/1/43 @ 100 (a)		2,091,000		2,492,744
Reynolds American, Inc., 5.70%, 8/15/35, Callable 2/15/35 @ 100		1,835,000		2,123,792
Suntory Holdings, Ltd., 2.25%, 10/16/24, Callable 9/16/24 @ 100 (c) (e)		1,600,000		1,590,336
Tyson Foods, Inc., 5.10%, 9/28/48, Callable 3/28/48 @ 100		1,285,000		1,615,785
				22,730,053
Energy (3.7%):
Canadian Natural Resources Ltd., 2.95%, 1/15/23, Callable 12/15/22 @ 100		1,255,000		1,279,824
Continental Resources, 4.50%, 4/15/23, Callable 1/15/23 @ 100 (a)		2,084,000		2,183,761
Ecopetrol SA, 5.88%, 9/18/23 (a)		2,914,000		3,234,948
EQM Midstream Partners LP, 4.75%, 7/15/23, Callable 6/15/23 @ 100		2,186,000		2,192,667
Exxon Mobil Corp., 4.11%, 3/1/46, Callable 9/1/45 @ 100		657,000		769,472
Marathon Petroleum Corp. 6.50%, 3/1/41, Callable 9/1/40 @ 100		1,285,000		1,668,997
5.85%, 12/15/45, Callable 6/15/45 @ 100		850,000		969,680
Occidental Petroleum Corp., 2.90%, 8/15/24, Callable 7/15/24 @ 100		2,422,000		2,460,340
Plains All American Pipeline LP/PAA Finance Corp., 2.85%, 1/31/23, Callable 10/31/22 @ 100		2,215,000		2,233,052
Statoil ASA, 3.95%, 5/15/43		930,000		1,036,327
Valero Energy Corp. 4.00%, 4/1/29, Callable 1/1/29 @ 100 (a)		1,622,000		1,749,116
6.63%, 6/15/37 (e)		2,520,000		3,345,830
				23,124,014
Financials (14.6%):
Aflac, Inc. 2.88%, 10/15/26, Callable 7/15/26 @ 100		2,450,000		2,523,255
4.75%, 1/15/49, Callable 7/15/48 @ 100		341,000		415,901
Alleghany Corp., 4.90%, 9/15/44, Callable 3/15/44 @ 100		1,648,000		1,904,890
Bank of America Corp. 2.33%(LIBOR03M+63bps), 10/1/21, Callable 10/1/20 @ 100 (a) (b)		1,875,000		1,878,825
2.50%, 10/21/22, Callable 10/21/21 @ 100, MTN		3,500,000		3,535,035
4.20%, 8/26/24, MTN (a)		1,931,000		2,074,551
3.25%, 10/21/27, Callable 10/21/26 @ 100, MTN		1,775,000		1,853,011
Capital One Financial Corp., 3.30%, 10/30/24, Callable 9/30/24 @ 100 (a)		2,669,000		2,778,990

See notes to financial statements.

9

Victory Variable Insurance Funds
Victory INCORE Investment Quality Bond VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Principal Amount		Value
Cincinnati Financial Corp., 6.13%, 11/1/34	$	2,170,000	$	2,968,147
Citigroup, Inc. 2.75%, 4/25/22, Callable 3/25/22 @ 100		3,443,000		3,497,434
3.88%, 3/26/25		1,282,000		1,357,382
4.60%, 3/9/26 (a)		873,000		960,614
4.45%, 9/29/27 (a)		1,781,000		1,962,644
3.88%(LIBOR03M+117bps), 1/24/39, Callable 1/24/38 @ 100 (b)		813,000		896,568
Enel Finance International NV, 2.88%, 5/25/22 (c)		3,685,000		3,730,583
Fifth Third Bancorp, 3.65%, 1/25/24, Callable 12/25/23 @ 100 (a)		3,105,000		3,275,744
Ford Motor Credit Co. LLC, 4.06%, 11/1/24, Callable 10/1/24 @ 100		2,510,000		2,563,061
General Motors Financial Co, Inc., 4.15%, 6/19/23, Callable 5/19/23 @ 100		966,000		1,015,411
HSBC Holdings PLC, 5.10%, 4/5/21 (a)		5,000,000		5,184,400
JPMorgan Chase & Co. 2.95%, 10/1/26, Callable 7/1/26 @ 100		3,400,000		3,507,304
5.60%, 7/15/41		980,000		1,346,530
KeyBank NA, 2.25%, 3/16/20		6,523,000		6,526,978
Morgan Stanley 4.88%, 11/1/22 (a)		2,718,000		2,915,164
3.75%, 2/25/23 (a)		3,000,000		3,141,030
3.13%, 7/27/26, MTN		5,500,000		5,684,744
Newcrest Finance Pty Ltd., 5.75%, 11/15/41 (c)		1,720,000		2,032,214
The Goldman Sachs Group, Inc. 2.35%, 11/15/21, Callable 11/15/20 @ 100		4,540,000		4,555,300
5.75%, 1/24/22 (a)		2,750,000		2,950,503
Truist Financial Corp., 2.75%, 4/1/22, MTN, Callable 3/1/22 @ 100 (e)		3,550,000		3,611,699
Unum Group, 4.00%, 6/15/29, Callable 3/15/29 @ 100		1,713,000		1,806,787
Wells Fargo & Co. 4.30%, 7/22/27, MTN		3,553,000		3,890,996
4.90%, 11/17/45 (a)		1,450,000		1,776,555
Zions Bancorp NA, 3.25%, 10/29/29, Callable 7/29/29 @ 100		2,000,000		1,966,100
				90,088,350
Health Care (3.6%):
AbbVie, Inc. 2.30%, 5/14/21, Callable 4/14/21 @ 100 (a)		2,905,000		2,915,516
3.20%, 11/21/29, Callable 8/21/29 @ 100 (c)		2,580,000		2,632,890
Amgen, Inc., 4.40%, 5/1/45, Callable 11/1/44 @ 100		1,825,000		2,046,573
Bristol-Myers Squibb Co., 3.40%, 7/26/29, Callable 4/26/29 @ 100 (c)		4,325,000		4,633,027
Gilead Sciences, Inc., 4.40%, 12/1/21, Callable 9/1/21 @ 100 (a)		6,150,000		6,413,958
HCA, Inc., 4.13%, 6/15/29, Callable 3/15/29 @ 100		1,716,000		1,822,753
Humana, Inc., 2.90%, 12/15/22, Callable 11/15/22 @ 100		1,234,000		1,258,396
				21,723,113
Industrials (3.1%):
Canadian National Railway Co., 3.20%, 8/2/46, Callable 2/2/46 @ 100		825,000		851,804
Delta Air Lines, Inc., 3.80%, 4/19/23, Callable 3/19/23 @ 100		2,465,000		2,558,571
Fortive Corp., 3.15%, 6/15/26, Callable 3/15/26 @ 100 (a)		1,839,000		1,883,136
Hillenbrand, Inc., 4.50%, 9/15/26, Callable 7/15/26 @ 100		3,720,000		3,895,435
Kansas City Southern, 4.95%, 8/15/45, Callable 2/15/45 @ 100		1,440,000		1,708,416

See notes to financial statements.

10

Victory Variable Insurance Funds
Victory INCORE Investment Quality Bond VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Principal Amount		Value
Rockwell Automation, Inc. 3.50%, 3/1/29, Callable 12/1/28 @ 100 (e)	$	1,270,000	$	1,367,942
6.25%, 12/1/37		1,151,000		1,576,974
Roper Technologies, Inc., 2.95%, 9/15/29, Callable 6/15/29 @ 100		923,000		932,350
Snap-on, Inc., 4.10%, 3/1/48, Callable 9/1/47 @ 100 (e)		1,100,000		1,244,298
Valmont Industries, Inc., 5.00%, 10/1/44, Callable 4/1/44 @ 100 (a)		2,603,000		2,662,921
				18,681,847
Information Technology (2.5%):
Apple, Inc., 4.65%, 2/23/46, Callable 8/23/45 @ 100		974,000		1,222,652
Broadcom Corp., 3.00%, 1/15/22, Callable 12/15/21 @ 100 (a)		1,448,000		1,469,619
Lam Research Corp., 4.00%, 3/15/29, Callable 12/15/28 @ 100 (a)		1,571,000		1,729,451
Micron Technology, Inc., 4.19%, 2/15/27, Callable 12/15/26 @ 100		2,105,000		2,253,697
NetApp, Inc., 3.25%, 12/15/22, Callable 9/15/22 @ 100		1,345,000		1,383,763
NVIDIA Corp., 2.20%, 9/16/21, Callable 8/16/21 @ 100		1,230,000		1,235,670
Texas Instruments, Inc., 4.15%, 5/15/48, Callable 11/15/47 @ 100		1,512,000		1,806,069
Tyco Electronics Group SA, 7.13%, 10/1/37 (e)		650,000		955,370
VMware, Inc., 2.95%, 8/21/22, Callable 7/21/22 @ 100 (e)		3,174,000		3,234,846
				15,291,137
Materials (1.1%):
Celanese US Holdings LLC, 4.63%, 11/15/22		1,870,000		1,977,207
LYB International Finance II BV, 3.50%, 3/2/27, Callable 12/2/26 @ 100 (a)		2,179,000		2,286,904
Rio Tinto Finance USA Ltd. 3.75%, 6/15/25, Callable 3/15/25 @ 100		1,415,000		1,521,649
5.20%, 11/2/40		723,000		947,723
				6,733,483
Real Estate (1.3%):
Highwoods Realty LP, 3.63%, 1/15/23, Callable 10/15/22 @ 100		1,482,000		1,529,913
Retail Properties of America, Inc., 4.00%, 3/15/25, Callable 12/15/24 @ 100		3,006,000		3,062,393
Service Properties Trust, 4.35%, 10/1/24, Callable 9/1/24 @ 100		3,000,000		3,088,560
				7,680,866
Utilities (2.7%):
Arizona Public Service Co., 2.95%, 9/15/27, Callable 6/15/27 @ 100		1,800,000		1,841,418
Consolidated Edison, Inc., 6.30%, 8/15/37		1,870,000		2,575,962
Iberdrola International BV 6.75%, 9/15/33		373,000		482,945
6.75%, 7/15/36		783,000		1,093,429
Nevada Power Co., 6.65%, 4/1/36 (a)		600,000		834,546
NextEra Energy Capital Holdings, Inc., 2.80%, 1/15/23, Callable 12/15/22 @ 100		2,765,000		2,810,843
Oklahoma G&E Co., 5.25%, 5/15/41, Callable 11/15/40 @ 100		1,546,000		1,854,412
Public Service Electric & Gas Co., 4.00%, 6/1/44, Callable 12/1/43 @ 100		1,289,000		1,406,763
Union Electric Co., 3.25%, 10/1/49, Callable 4/1/49 @ 100		725,000		719,889

See notes to financial statements.

11

Victory Variable Insurance Funds
Victory INCORE Investment Quality Bond VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Principal Amount		Value
Vistra Operations Co. LLC, 3.70%, 1/30/27, Callable 11/30/26 @ 100 (c)	$	2,579,000	$	2,564,016
				16,184,223
Total Corporate Bonds (Cost $253,934,689)				263,367,358
Residential Mortgage Backed Securities (0.5%)
Bear Stearns Alt-A Trust, Series 2003-3, Class 2A, 4.34%, 10/25/33, Callable 1/25/20 @ 100 (a) (d)		955,972		955,972
Credit Suisse First Boston Mortgage Securities Corp., Series 2002-HE16, Class M1, 3.11% (LIBOR01M+132bps), 10/25/32, Callable 1/25/20 @ 100 (b)		800,802		802,443
JPMorgan Mortgage Trust, Series 2004-S2, Class 1A3, 4.75%, 2/25/20, Callable 1/25/20 @ 100 (a)		29,030		29,154
JPMorgan Mortgage Trust, Series 2016-4, Class A5, 3.50%, 10/25/46, Callable 9/25/29 @ 100 (a) (c) (d)		1,292,318		1,310,760
Residential Funding Mortgage Securities I, Inc., Series 2005-S3, Class A1, 4.75%, 3/25/20, Callable 1/25/20 @ 100 (a)		3,273		3,271
Total Residential Mortgage Backed Securities (Cost $3,096,843)				3,101,600
U.S. Government Mortgage Backed Agencies (38.6%)
Federal Home Loan Mortgage Corp. 5.00%, 6/15/23 – 7/1/39 (a)		1,811,341		1,995,735
Series 4139, Class DA, 1.25%, 12/15/27 (a)		6,227,264		6,046,465
Series: 4763, Class: VC, 4.00%, 4/15/29		562,023		591,262
Series 4395, Class PA, 2.50%, 4/15/37 (a)		2,526,201		2,542,805
7.00%, 9/1/38 (a)		45,937		55,243
Series 4290, Class CA, 3.50%, 12/15/38 – 3/1/49 (a)		53,370,449		55,542,231
Series 3713, Class PA, 2.00%, 2/15/40 – 3/15/40 (a)		7,307,443		7,213,695
4.50%, 1/1/41 – 12/1/45 (a)		11,956,528		12,981,077
Series 4444, Class CH, 3.00%, 1/15/41		224,063		228,098
Series 4049, Class AB, 2.75%, 12/15/41 (a)		1,172,796		1,184,843
Series 4494, Class JA, 3.75%, 5/15/42 (a)		4,803,267		4,949,649
				93,331,103
Federal National Mortgage Association 6.00%, 8/1/21 – 2/1/37 (a)		2,476,612		2,836,998
5.00%, 4/1/23 – 12/1/39 (a)		1,165,413		1,285,971
7.50%, 12/1/29 (a)		39,219		45,737
8.00%, 1/1/30 – 9/1/30 (a)		21,269		25,092
7.00%, 2/1/32 – 6/1/32 (a)		34,005		40,055
3.75%(LIBOR12M+166bps), 12/1/36 (a) (b)		133,109		136,757
5.50%, 1/1/38 – 2/1/39 (a)		759,038		849,057
4.50%, 12/1/38 – 6/1/40 (a)		7,347,574		7,756,747
Series 2013-33, Class UD, 2.50%, 4/25/39 – 12/25/47 (a)		7,401,446		7,433,742
Series 2013-137, Class A, 3.50%, 3/25/40 – 12/25/50 (a)		18,420,479		19,066,847
Series 2011-101, Class LA, 3.00%, 10/25/40 – 2/25/49 (a)		47,923,011		49,065,937
Series 2013-81, Class KA, 2.75%, 9/25/42 (a)		5,041,299		5,104,535

See notes to financial statements.

12

Victory Variable Insurance Funds
Victory INCORE Investment Quality Bond VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares or Principal Amount		Value
Series 2013-44, Class PB, 1.75%, 1/25/43 (a)	$	5,492,439	$	5,356,319
4.00%, 11/1/43 – 6/1/49 (a)		34,436,881		36,488,146
				135,491,940
Government National Mortgage Association 6.00%, 10/15/32 (a)		79,125		88,797
Series 2014-42, Class AD, 2.50%, 7/16/41		414,554		418,953
Series 2019-85, Class KG, 3.00%, 6/20/43		5,108,263		5,200,345
4.50%, 10/20/49		1,129,408		1,187,102
				6,895,197
Multi-family (0.0%): (f)
Collateralized Mortgage Obligations (0.0%): (f)
Government National Mortgage Association 6.00%, 12/15/33 (a)		31,416		35,590
Total U.S. Government Mortgage Backed Agencies (Cost $232,119,634)				235,753,830
U.S. Treasury Obligations (12.3%)
U.S. Treasury Bills, 1.47%, 3/26/20 (g)		38,300,000		38,165,897
U.S. Treasury Bonds 3.00%, 2/15/48		3,300,000		3,720,234
3.00%, 2/15/49		28,500,000		32,236,172
U.S. Treasury Notes, 1.25%, 8/31/24		911,000		893,634
Total U.S. Treasury Obligations (Cost $73,077,553)				75,015,937
Collateral for Securities Loaned^ (0.7%)
BlackRock Liquidity Funds TempFund Portfolio, Institutional Class, 1.75% (h)		205,692		205,692
Fidelity Investments Money Market Government Portfolio, Class I, 1.54% (h)		1,133,218		1,133,218
Fidelity Investments Prime Money Market Portfolio, Class I, 1.75% (h)		34,356		34,356
Goldman Sachs Financial Square Prime Obligations Fund, Institutional Class, 1.80% (h)		684,581		684,581
JPMorgan Prime Money Market Fund, Capital Class, 1.73% (h)		753,092		753,092
Morgan Stanley Institutional Liquidity Prime Portfolio, Institutional Class, 1.76% (h)		1,506,134		1,506,134
Total Collateral for Securities Loaned (Cost $4,317,073)				4,317,073
Total Investments (Cost $585,632,199) — 98.3%				599,799,199
Other assets in excess of liabilities — 1.7%				10,639,945
NET ASSETS — 100.00%			$	610,439,144

^  Purchased with cash collateral from securities on loan.

(a)  All or a portion of this security has been segregated as collateral for derivative instrument.

(b)  Variable or Floating-Rate Security. Rate disclosed is as of December 31, 2019.

See notes to financial statements.

13

Victory Variable Insurance Funds
Victory INCORE Investment Quality Bond VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

(c)  Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid based upon procedures approved by the Board of Trustees. As of December 31, 2019, the fair value of these securities was $31,366,803 and amounted to 5.1% of net assets.

(d)  The rate for certain asset-backed and mortgage backed securities may vary based on factors relating to the pool of assets underlying the security. The rate disclosed is the rate in effect at December 31, 2019.

(e)  All or a portion of this security is on loan.

(f)  Amount represents less than 0.05% of net assets.

(g)  Rate represents the effective yield at December 31, 2019.

(h)  Rate disclosed is the daily yield on December 31, 2019.

bps — Basis points

LIBOR — London InterBank Offered Rate

LIBOR01M — 1 Month US Dollar LIBOR, rate disclosed as of December 31, 2019, based on the last reset date of the security

LIBOR03M — 3 Month US Dollar LIBOR, rate disclosed as of December 31, 2019, based on the last reset date of the security

LIBOR12M — 12 Month US Dollar LIBOR, rate disclosed as of December 31, 2019, based on the last reset date of the security

LLC — Limited Liability Company

LP — Limited Partnership

MTN — Medium Term Note

PLC — Public Limited Company

Futures Contracts Purchased

	Number of Contracts		Expiration Date	Notional Amount		Value		Unrealized Appreciation (Depreciation)
10-Year U.S. Treasury Note Future		55	3/20/20	$	7,114,956	$	7,063,203	$	(51,753	)
2-Year U.S. Treasury Note Future		30	3/31/20		6,465,945		6,465,000		(945	)
5-Year U.S. Treasury Note Future		290	3/31/20		34,507,612		34,396,719		(110,893	)
								$	(163,591	)
	Total unrealized appreciation							$	—
	Total unrealized depreciation								(163,591	)
	Total net unrealized appreciation(depreciation)							$	(163,591	)

See notes to financial statements.

14

Victory Variable Insurance Funds
Victory INCORE Investment Quality Bond VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Centrally Cleared

Credit Default Swap Agreements — Sell Protection (a)

Underlying Instruments*	Fixed Deal Received Rate			Maturity Date	Payment Frequency	Implied Credit Spread at December 31, 2019 (b)			Notional Amount (c)		Value		Premiums Paid/ (Received)		Unrealized Appreciation (Depreciation)
CDX North America High Yield Index; Series 33		5.00	%	12/20/24	Quarterly		2.79	%	$	13,860,000	$	1,338,029	$	1,056,132	$	281,897
											$	1,338,029	$	1,056,132	$	281,897

*  As of December 31, 2019, the CDX North America High Yield Index (the "Index") included securities which had defaulted and represented 1% of the Index. Reflects the notional amount after the default of securities.

(a)  When a credit event occurs as defined under the terms of the swap agreement, the Fund as a seller of credit protection will either (i) pay to the buyer of protection an amount equal to the par value of the defaulted reference entity and take delivery of the reference entity or (ii) pay a net amount equal to the par value of the defaulted reference entity less its recovery value.

(b)  Implied credit spread, represented in absolute terms, utilized in determining the value of the credit default swap agreements as of period end will serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a referenced entity reflects the cost of buying/selling protection and may include payments required to be made to enter into the agreement. Generally, wider credit spreads represent a perceived deterioration of the referenced entity's credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the swap agreement.

(c)  The notional amount represents the maximum potential amount the Fund could be required to pay as a seller of credit protection if a credit event occurs, as defined under the terms of the swap agreement, for each security included in the Index.

See notes to financial statements.

15

Victory Variable Insurance Funds Statement of Assets and Liabilities
December 31, 2019

	Victory INCORE Investment Quality Bond VIP Series
ASSETS:
Investments, at value (Cost $585,632,199)	$	599,799,199	(a)
Cash and cash equivalents		6,490,847
Deposits with brokers for futures contracts		2,096,169
Deposits with brokers for swap agreements		3,503,362
Interest and dividends receivable		3,455,117
Receivable for capital shares issued		11,001
Receivable from Adviser		174,431
Prepaid expenses		39,387
Total Assets		615,569,513
LIABILITIES:
Payables:
Collateral received on loaned securities		4,317,073
Investments purchased		282,461
Capital shares redeemed		91,015
Variation margin on open futures contracts		11,407
Variation margin on open swap agreements		6,211
Accrued expenses and other payables:
Investment advisory fees		260,311
Administration fees		29,284
Custodian fees		4,663
Transfer agent fees		71,644
Compliance fees		393
Trustees' fees		1,257
Other accrued expenses		54,650
Total Liabilities		5,130,369
NET ASSETS:
Capital		584,582,121
Total distributable earnings/(loss)		25,857,023
Net Assets	$	610,439,144
Shares (unlimited shares authorized with a par value of $0.001 per share):		48,810,830
Net asset value:	$	12.51

(a)  Includes $4,188,743 of securities on loan.

See notes to financial statements.

16

Victory Variable Insurance Funds Statement of Operations
For the Year Ended December 31, 2019

	Victory INCORE Investment Quality Bond VIP Series
Investment Income:
Interest	$	19,025,900
Securities lending (net of fees)		4,655
Total Income		19,030,555
Expenses:
Investment advisory fees		3,156,265
Administration fees		386,041
Custodian fees		33,149
Transfer agent fees		860,793
Trustees' fees		54,673
Compliance fees		4,278
Legal and audit fees		71,388
Interfund lending fees		313
Other expenses		116,857
Total Expenses		4,683,757
Expenses waived/reimbursed by Adviser		(1,148,942	)
Net Expenses		3,534,815
Net Investment Income (Loss)		15,495,740
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment securities		14,792,883
Net realized gains (losses) from futures contracts		(1,407,778	)
Net realized gains (losses) from swap agreements		(4,912,240	)
Net change in unrealized appreciation/depreciation on investment securities		18,571,365
Net change in unrealized appreciation/depreciation on futures contracts		1,160,672
Net change in unrealized appreciation/depreciation on swap agreements		3,447,306
Net realized/unrealized gains on investments		31,652,208
Change in net assets resulting from operations	$	47,147,948

See notes to financial statements.

17

Victory Variable Insurance Funds Statements of Changes in Net Assets

	Victory INCORE Investment Quality Bond VIP Series
	Year Ended December 31, 2019			Year Ended December 31, 2018
From Investment Activities:
Operations:
Net investment income (loss)	$	15,495,740		$	17,481,631
Net realized gains (losses) from investments		8,472,865			(11,008,512	)
Net change in unrealized appreciation/depreciation on investments		23,179,343			(10,833,615	)
Change in net assets resulting from operations		47,147,948			(4,360,496	)
Change in net assets resulting from distributions to shareholders		(17,229,625	)		(4,289,680	)
Change in net assets resulting from capital transactions		(64,480,616	)		(73,069,861	)
Change in net assets		(34,562,293	)		(81,720,037	)
Net Assets:
Beginning of period		645,001,437			726,721,474
End of period	$	610,439,144		$	645,001,437
Capital Transactions:
Proceeds from shares issued	$	37,119,834		$	47,220,231
Distributions reinvested		17,229,625			4,289,680
Cost of shares redeemed		(118,830,075	)		(124,579,772	)
Change in net assets resulting from capital transactions	$	(64,480,616	)	$	(73,069,861	)
Share Transactions:
Issued		2,998,867			3,953,299
Reinvested		1,380,579			360,968
Redeemed		(9,535,445	)		(10,495,215	)
Change in Shares		(5,155,999	)		(6,180,948	)

See notes to financial statements.

18

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19

Victory Variable Insurance Funds Financial Highlights

For a Share Outstanding Throughout Each Period

			Investment Activities								Distributions to Shareholders From
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)(a)		Net Realized and Unrealized Gains (Losses) on Investments			Total from Investment Activities			Net Investment Income			Net Realized Gains from Investments
Victory INCORE Investment Quality Bond VIP Series
Year Ended 12/31/19	$	11.95		0.31		0.61			0.92			(0.36	)		—
Year Ended 12/31/18	$	12.08		0.30		(0.35	)		(0.05	)		(0.08	)		—	(c)
Year Ended 12/31/17	$	11.88		0.28		0.21			0.49			(0.29	)		—
Year Ended 12/31/16	$	11.98		0.27		0.15			0.42			(0.30	)		(0.22	)
Year Ended 12/31/15	$	12.38		0.31		(0.27	)		0.04			(0.32	)		(0.12	)

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Total returns do not reflect the effects of charges deducted pursuant to the terms of The Guardian Insurance & Annuity Company, Inc.'s variable contracts. Inclusion of such charges would reduce the total returns for all periods shown.

(c)  Amount is less than $0.005 per share.

(d)  The Fund received monies related to a nonrecurring refund from the prior Custodian. The corresponding impact to the total return was less than 0.01% for the period shown. (See Note 8)

See notes to financial statements.

20

Victory Variable Insurance Funds Financial Highlights — continued

For a Share Outstanding Throughout Each Period

												Ratios to Average Net Assets									Supplemental Data
	Total Distributions			Capital Contribution From Prior Custodian, Net (See Note 8)			Net Asset Value, End of Period		Total Return(b)			Net Expenses			Net Investment Income (Loss)			Gross Expenses			Net Assets, End of Period (000's)		Portfolio Turnover
Victory INCORE Investment Quality Bond VIP Series
Year Ended 12/31/19		(0.36	)		—		$	12.51		7.72	%		0.56	%		2.46	%		0.74	%	$	610,439		96	%
Year Ended 12/31/18		(0.08	)		—		$	11.95		(0.41	)%		0.56	%		2.52	%		0.62	%	$	645,001		109	%
Year Ended 12/31/17		(0.29	)		—		$	12.08		4.15	%		0.56	%		2.28	%		0.61	%	$	726,721		83	%
Year Ended 12/31/16		(0.52	)		—	(c)	$	11.88		3.53	%(d)		0.55	%		2.17	%		0.55	%	$	716,292		142	%
Year Ended 12/31/15		(0.44	)		—		$	11.98		0.33	%		0.56	%		2.47	%		0.56	%	$	755,696		41	%

See notes to financial statements.

21

Victory Variable Insurance Funds Notes to Financial Statements
December 31, 2019

1. Organization:

Victory Variable Insurance Funds (the "Trust") was organized on February 11, 1998 as a Delaware statutory trust. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified open-end investment company. The Trust is comprised of nine funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with a par value of $0.001 per share.

The accompanying financial statements are those of the Victory INCORE Investment Quality Bond VIP Series (the "Fund"). The Fund offers a single class of shares: Class I Shares. Sales of shares of the Fund may only be made to certain separate accounts of The Guardian Insurance & Annuity Company, Inc. ("GIAC") that fund certain variable annuity and variable life insurance contracts issued by GIAC. GIAC is a wholly owned subsidiary of The Guardian Life Insurance Company of America ("Guardian Life").

Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.

2. Significant Accounting Policies:

The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies.

Investment Valuation:

The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:

• Level 1 — quoted prices in active markets for identical securities

• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)

• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.

Portfolio securities listed or traded on securities exchanges, including American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.

22

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Futures contracts are valued at the settlement price established each day by the board of trade or an exchange on which they are traded. These valuations are typically categorized as Level 1 in the fair value hierarchy.

Swap agreements are valued at the mean between the current bid and ask prices. These valuations are typically categorized as Level 2 in the fair value hierarchy.

Debt securities of United States ("U.S.") issuers (other than short-term investments maturing in 60 days or less), including corporate and municipal securities, are valued on the basis of bid valuations provided by dealers or an independent pricing service approved by the Trust's Board of Trustees (the "Board"). Short-term investments maturing in 60 days or less may be valued at amortized cost, which approximates market value. Under the amortized cost method, premium or discount, if any, is amortized or accreted, respectively, on a constant basis to the maturity of the security. In each of these situations, valuations are typically categorized as Level 2 in the fair value hierarchy.

Investments for which there are no such quotations, or for which quotations do not appear reliable, are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value.

A summary of the valuations as of December 31, 2019, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments.

	LEVEL 1			LEVEL 2		Total
Asset Backed Securities	$	—		$	8,299,140	$	8,299,140
Collateralized Mortgage Obligations		—			9,944,261		9,944,261
Corporate Bonds		—			263,367,358		263,367,358
Residential Mortgage Backed Securities		—			3,101,600		3,101,600
U.S. Government Mortgage Backed Agencies		—			235,753,830		235,753,830
U.S. Treasury Obligations		—			75,015,937		75,015,937
Collateral for Securities Loaned		4,317,073			—		4,317,073
Total	$	4,317,073		$	595,482,126	$	599,799,199
Other Financial Instruments^:
Assets:
Credit Default Swap Agreements		—			281,897		281,897
Liabilities:
Futures Contracts		(163,591	)		—		(163,591	)
Total	$	(163,591	)	$	281,897	$	118,306

^  Futures Contracts and Credit Default Swap Agreements are valued at the unrealized appreciation (depreciation) on the investment.

For the year ended December 31, 2019, there were no Level 3 investments for which significant unobservable inputs were used to determine fair value.

Securities Purchased on a When-Issued Basis:

The Fund may purchase securities on a when-issued basis. When-issued securities are securities purchased for delivery beyond normal settlement periods at a stated price and/or yield, thereby involving the risk that the price and/or yield obtained may be more or less than those available in the market when delivery takes place. At the time the Fund makes the commitment to purchase a security on a when-issued basis, the Fund records the transaction and reflects the value of the security in determining net asset value. No interest accrues to the Fund until the transaction settles and payment takes place. Normally, the settlement date occurs within one month of the purchase. A segregated account is established and the Fund maintains cash and/or marketable securities at least equal in value to commitments for when-issued securities. If the Fund owns when-issued securities, these values are

23

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

included in "Payable for investments purchased" on the accompanying Statement of Assets and Liabilities and the segregated assets as identified in the Schedule of Portfolio Investments.

Loans:

Floating rate loans in which the Fund invests are primarily "senior" loans. Senior floating rate loans typically hold a senior position in the capital structure of the borrower, are typically secured by specific collateral, and have a claim on the assets and/or stock of the borrower that is senior to that held by subordinated debtholders and stockholders of the borrower. While these protections may reduce risk, these investments still present significant credit risk. A significant portion of the Fund's floating rate investments may be issued in connection with highly leveraged transactions such as leveraged buyouts, leveraged recapitalization loans, and other types of acquisition financing. Obligations in these types of transactions are subject to greater credit risk (including default and bankruptcy) than many other investments and may be, or become, illiquid. See note regarding below investment grade securities.

The Fund may purchase second lien loans (secured loans with a claim on collateral subordinate to a senior lender's claim on such collateral), fixed rate loans, unsecured loans, and other debt obligations.

Transactions in loans often settle on a delayed basis, and the Fund may not receive the proceeds from the sale of a loan or pay for a loan purchase for a substantial period of time after entering into the transactions.

Below Investment Grade Securities:

The Fund may invest in below investment grade securities (i.e. lower-quality, "junk" debt), which are subject to various risks. Lower-quality debt is considered to be speculative because it is less certain that the issuer will be able to pay interest or repay the principal than in the case of investment grade debt. These securities can involve a substantially greater risk of default than higher-rated securities, and their values can decline significantly over short periods of time. Lower-quality debt securities tend to be more sensitive to adverse news about their issuers, the market and the economy in general, than higher-quality debt securities. The market for these securities can be less liquid, especially during periods of recession or general market decline.

Investment Companies:

The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.

Derivatives Instruments:

Futures Contracts:

The Fund may enter into contracts for the future delivery of securities or foreign currencies and futures contracts based on a specific security, class of securities, foreign currency or an index, and purchase or sell options on any such futures contracts. A futures contract on a securities index is an agreement obligating either party to pay, and entitling the other party to receive, while the contract is outstanding, cash payments based on the level of a specified securities index. No physical delivery of the underlying asset is made. The Fund may enter into futures contracts in an effort to hedge against market risks. The acquisition of put and call options on futures contracts will give the Fund the right (but not the obligation), for a specified price, to sell or to purchase the underlying futures contract, upon exercise of the option, at any time during the option period. Futures transactions involve brokerage costs and require the Fund to segregate assets to cover contracts that would require it to purchase securities or currencies. A good faith margin deposit, known as initial margin, of cash or government securities with a broker or custodian is required to initiate and maintain open positions in futures contracts. Subsequent payments, known as variation margin, are made or received by the Fund based on the change in the

24

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

market value of the position and are recorded as unrealized appreciation or depreciation until the contract is closed out, at which time the gain or loss is realized. The Fund may lose the expected benefit of futures transactions if interest rates, exchange rates or securities prices change in an unanticipated manner. Such unanticipated changes may also result in lower overall performance than if the Fund had not entered into any futures transactions. In addition, the value of the Fund's futures positions may not prove to be perfectly or even highly correlated with the value of its portfolio securities or foreign currencies, limiting the Fund's ability to hedge effectively against interest rate, exchange rate and/or market risk and giving rise to additional risks. There is no assurance of liquidity in the secondary market for purposes of closing out futures positions. The collateral held by the Fund is presented on the Statement of Assets and Liabilities under Deposits with broker for futures contracts. As of December 31, 2019, the Fund entered into Futures Contracts primarily for the strategy of hedging or other purposes, including but not limited to, providing liquidity and equitizing cash.

Credit Derivatives:

The Fund may enter into credit derivatives, including centrally cleared credit default swaps on individual obligations or credit indices. The Fund may use these investments (i) as alternatives to direct long or short investment in a particular security or securities, (ii) to adjust the Fund's asset allocation or risk exposure, or (iii) for hedging purposes. The use by the Fund of credit default swaps may have the effect of creating a short position in a security. Credit derivatives can create investment leverage and may create additional investment risks that may subject the Fund to greater volatility than investments in more traditional securities, as described in the Fund's Statement of Additional Information.

Centrally cleared credit default swap ("CDS") agreements on credit indices involve one party making a stream of payments (referred to as the buyer of protection) to another party (the seller of protection) in exchange for the right to receive a specified return in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising the credit index. A credit index is a basket of credit instruments or exposures designed to be representative of a specific sector of the credit market as a whole. These indices are made up of reference credits that are judged by a poll of dealers to be the most liquid entities in the CDS.

The counterparty risk for cleared swap agreements is generally lower than uncleared over-the-counter swap agreements because generally a clearing organization becomes substituted for each counterparty to a centrally cleared swap agreement and, in effect, guarantees each party's performance under the contract as each party to a trade looks only to the clearing organization for performance of financial obligations. However, there can be no assurance that the clearing organization, or its members, will satisfy its obligations to the Fund.

The Fund may enter into CDS agreements either as a buyer or seller. The Fund may buy protection under a CDS to attempt to mitigate the risk of default or credit quality deterioration in one or more individual holdings or in a segment of the fixed income securities market. The Fund may sell protection under a CDS in an attempt to gain exposure to an underlying issuer's credit quality characteristics without investing directly in that issuer. For swaps entered with an individual counterparty, the Fund bears the risk of loss of the uncollateralized amount expected to be received under a CDS agreement in the event of the default or bankruptcy of the counterparty. CDS agreements are generally valued at a price at which the counterparty to such agreement would terminate the agreement. The Fund may also enter into cleared swaps.

Upon entering into a cleared CDS, the Fund may be required to deposit with the broker an amount of cash or cash equivalents in the range of approximately 3% to 6% of the notional amount for CDS on high yield debt issuers (this amount is subject to change by the clearing organization that clears the trade). This amount, known as "initial margin," is in the nature of a performance bond or good faith deposit on the CDS and is returned to a Fund upon termination of the CDS, assuming all contractual obligations have been satisfied. Subsequent payments, known as "variation margin," to and from the broker will be made daily as the price of the CDS fluctuates, making the long and short positions in the CDS contract more or less valuable, a process known as "marking-to-market." The premium (discount)

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Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

payments are built into the daily price of the CDS and thus are amortized through the variation margin. The variation margin payment also includes the daily portion of the periodic payment stream.

The maximum potential amount of future payments (undiscounted) that the Fund as a seller of protection could be required to make under a CDS agreement equals the notional amount of the agreement. Notional amounts of each individual CDS agreement outstanding as of period end for which the Fund is the seller of protection are disclosed on the Schedule of Portfolio Investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, periodic interest payments, or net amounts received from the settlement of buy protection CDS agreements entered into by the Fund for the same referenced entity or entities.

As of December 31, 2019, the Fund entered into centrally cleared CDS agreements primarily for the strategy of asset allocation and risk exposure management.

Offsetting of Financial Assets and Derivatives Assets:

The Fund is subject to various Master Netting Arrangements, which govern the terms of certain transactions with select counterparties. The Master Netting Arrangements allow the Fund to close out and net total exposure to a counterparty in the event of a default with respect to all the transactions governed under a single agreement with a counterparty. The Master Netting Arrangements also specify collateral posting arrangements at pre-arranged exposure levels. Under the Master Netting Arrangements, collateral is routinely transferred if the total net exposure to certain transactions (net of existing collateral already in place) governed under the relevant Master Netting Arrangement with a counterparty in a given account exceeds a specified threshold depending on the counterparty and the type of Master Netting Arrangement.

The table below, as of December 31, 2019, discloses both gross information and net information about instruments and transactions eligible for offset in the Statement of Assets and Liabilities and instruments and transactions that are subject to an agreement similar to a master netting agreement as well as amounts related to collateral held at clearing brokers and counterparties.

	Gross Amounts of Recognized Assets		Gross Amounts Available for Offset			Net Amount Presented in the Statement of Assets and Liabilities		Cash Collateral Received		Net Amount
Futures Contracts-Goldman Sachs & Co.	$	1,406	$	(1,406	)	$	—	$	—	$	—
	Gross Amounts of Recognized Liabilities		Gross Amounts Available for Offset			Net Amount Presented in the Statement of Assets and Liabilities		Cash Collateral Pledged*		Net Amount
Futures Contracts-Goldman Sachs & Co.	$	12,813	$	(1,406	)	$	11,407	$	11,407	$	—

*  Cash collateral pledged may be in excess of the amounts shown in the table. The total cash collateral pledged by the Fund is disclosed in the Statements of Asset and Liabilities.

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Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Summary of Derivative Instruments:

The following table presents the effect of derivative instruments on the Statement of Assets and Liabilities, categorized by risk exposure, as of December 31, 2019.

	Assets				Liabilities
	Variation Margin Receivable on Open Futures Contracts*		Variation Margin Receivable on Open Swap Agreements*		Variation Margin Payable on Open Futures Contracts*		Variation Margin Payable on Open Swap Agreements*
Credit Risk Exposure	$	—	$	281,897	$	—	$	—
Interest Rate Risk Exposure		—		—		163,591		—

*  Includes cumulative appreciation/depreciation of futures contracts and credit default swap agreements as reported on the Schedule of Portfolio Investments. Only current day's variation margin for both futures contracts and credit default swap agreements are reported within the Statement of Assets and Liabilities.

The following table presents the effect of derivative instruments on the Statement of Operations, categorized by risk exposure, for the year ended December 31, 2019.

	Net Realized Gains (Losses) on Derivatives Recognized as a Result from Operations						Net Change in Unrealized Appreciation/Depreciation on Derivatives Recognized as a Result of Operations
	Net Realized Gains (Losses) from Futures Contracts			Net Realized Gains (Losses) from Swap Agreements			Net Change in Unrealized Appreciation/ Depreciation on Futures Contracts		Net Change in Unrealized Appreciation/ Depreciation on Swap Agreements
Credit Risk Exposure	$	—		$	(4,912,240	)	$	—	$	3,447,306
Interest Rate Risk Exposure		(1,407,778	)		—			1,160,672		—

All open derivative positions at year end are reflected on the Fund's Schedule of Portfolio Investments. The underlying face value of open derivative positions relative to the Fund's net assets at year end is generally representative of the notional amount of open positions to net assets throughout the year.

Investment Transactions and Related Income:

Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds. Paydown gains or losses on applicable securities, if any, are recorded as components of interest income on the Statement of Operations.

Withholding taxes on interest, dividends and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.

Securities Lending:

The Trust has entered into a Master Securities Lending Agreement ("MSLA") with Citibank, N.A. ("Citibank" or the "Agent"). Under the terms of the MSLA, the Fund may lend securities to certain broker-dealers and banks in exchange for collateral in the amount of at least 102% of the value of U.S.

27

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are adjusted the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities, letters of credit and certificates of deposit. The cash collateral is invested in short-term instruments or cash equivalents as noted on the Fund's Schedule of Portfolio Investments. The Trust does not have effective control of the non-cash collateral and therefore it is not disclosed in the Fund's Schedule of Portfolio Investments. The Fund continues to benefit from interest or dividends on the securities loaned and may also earn a return from the collateral. The Fund pays various fees in connection with the investment of cash collateral. The Fund pays the Agent fees based on the investment income received from securities lending activities. Securities lending income is disclosed in the Fund's Statement of Operations. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them.

Securities lending transactions are entered into by the Fund under the MSLA, which permits the Fund, under certain circumstances such as an event of default, to offset amounts payable by the Fund to the same counterparty against amounts receivable from the counterparty to create a net payment due to or from the Fund.

The following table is a summary of the Fund's securities lending transactions which are subject to offset under the MSLA as of December 31, 2019. These transactions are accounted for as secured borrowings with an overnight and continuous contractual maturity for cash collateral, and greater than overnight and continuous contractual maturity for non-cash collateral.

Gross Amount of Recognized Assets (Value of		Value of Cash		Value of Non-cash Collateral Received by Maturity
Securities on Loan)		Collateral Received*		<30 Days		Between 30 & 90 days		>90 Days		Net Amount
$	4,188,743	$	4,188,743	$	—	$	—	$	—	$	—

*  Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by the Fund is disclosed in the Statement of Assets and Liabilities.

Distributions to Shareholders:

Dividends from net investment income, if any, are declared and paid annually by the Fund. Distributable net realized gains, if any, are declared and distributed at least annually.

The amounts of dividends from net investment income and distributions from net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distributions reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.

As of December 31, 2019 on the Statement of Assets and Liabilities, as a result of permanent book-to-tax differences, reclassification adjustments were as follows:

Total Distributable Earnings/(Loss)			Capital
$	(3	)	$	3

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Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Federal Income Taxes:

It is the policy of the Fund to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of December 31.

Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., all open tax years and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.

Allocations:

Expenses directly attributable to the Fund are charged to the Fund, while expenses which are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.

Cross-Trade Transactions:

Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For the year ended December 31, 2019, the Fund did not engage in any Rule 17a-7 transactions under the 1940 Act.

3. Purchases and Sales of Securities:

Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the year ended December 31, 2019 were as follows for the Fund:

Purchases (excluding U.S. Government Securities)		Sales (excluding U.S. Government Securities)		Purchases of U.S. Government Securities		Sales of U.S. Government Securities
$	284,531,945	$	202,451,830	$	277,753,886	$	457,106,924

4. Fees and Transactions with Affiliates and Related Parties:

Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or the "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.

Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive 0.50% of the average daily net assets of the Fund. The Adviser may use its resources to assist with the Fund's distribution and marketing expenses.

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Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

VCM also serves as the Fund's administrator and fund accountant. Under an Administration and Fund Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.08% of the first $15 billion in average daily net assets of the Trust, Victory Portfolios and Victory Portfolios II (collectively, the "Victory Funds Complex"), 0.05% of the average daily net assets above $15 billion to $30 billion of the Victory Funds Complex and 0.04% of the average daily net assets over $30 billion of the Victory Funds Complex.

Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of-pocket expenses incurred in providing these services.

FIS Investor Services, LLC ("FIS") serves as the Fund's transfer agent. Under the Transfer Agent Agreement, the Trust pays FIS a fee for its services and reimburses FIS for all of their reasonable out-of-pocket expenses incurred in providing these services.

The Chief Compliance Officer ("CCO") is an employee of the Adviser, which pays the compensation of the CCO and his support staff. The Trust has entered into an Agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the CCO, and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The Funds in the Victory Funds Complex, in aggregate, compensate the Adviser for these services.

The Victory Funds Complex pays an annual retainer to each Independent Trustee, plus an additional annual retainer to the Chairman of the Board. The aggregate amount of the fees and expenses of the Independent Trustees are allocated amongst all the funds in the Victory Funds Complex and are presented in the Statement of Operations.

Shearman & Sterling LLP provides legal services to the Trust.

Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust.

The Adviser has entered into an expense limitation agreement with the Fund until at least April 30, 2020. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by the Fund in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of a Fund's business are excluded from the expense limits. As of December 31, 2019, the expense limit (excluding voluntary waivers) is 0.56%.

The Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three fiscal years after such waiver or reimbursement was made to the extent such payments or repayments would not cause the expenses to exceed the original expense limitation in place at time of the waiver or reimbursement or any expense limitation agreement in place at the time of repayment. As of December 31, 2019, the following amounts are available to be repaid to the Adviser. Amounts repaid to the Adviser during the year ended, if any, are reflected on the Statement of Operations as "Recoupment of prior expenses waived/reimbursed by Adviser".

Expires December 31, 2020		Expires December 31, 2021		Expires December 31, 2022		Total
$	362,552	$	441,458	$	1,148,942	$	1,952,952

The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining a competitive expense ratio. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the year ended December 31, 2019.

Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Fund Accountant, Sub-Administrator, Sub-Fund Accountant and Legal Counsel.

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Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

5. Risks:

The Fund may be subject to other risks in addition to these identified risks.

An investment in the Fund's shares represents an indirect investment in the securities owned by the Fund, some of which will be traded on a national securities exchange or in the over-the-counter markets. The value of the securities in which the Fund invests, like other market investments, may move up or down, sometimes rapidly and unpredictably. The value of the securities in which the Fund invests may affect the value of the Fund's shares. An investment in the Fund's shares at any point in time may be worth less than the original investment, even after taking into account the reinvestment of the Fund's distributions.

The Fund will be subject to credit risk with respect to the amount it expects to receive from counterparties for financial instruments entered into by the Fund. The Fund may be negatively impacted if a counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties. The Fund may experience significant delays in obtaining any recovery in bankruptcy or other reorganization proceeding and the Fund may obtain only limited recovery or may obtain no recovery in such circumstances. The Fund typically enters into transactions with counterparties whose credit ratings are investment grade, as determined by a nationally recognized statistical rating organization or, if unrated, judged by the Adviser to be of comparable quality.

6. Borrowing and Interfund Lending:

Line of Credit:

For the year ended December 31, 2019, the Victory Funds Complex participated in a short-term, demand note "Line of Credit" with Citibank. Under the agreement with Citibank, for the period January 1, 2019 to June 30, 2019, the Victory Funds Complex could borrow up to $250 million, of which $100 million was committed and $150 million was uncommitted. Effective July 1, 2019, the agreement was amended to include the USAA Mutual Funds Complex (another series of mutual funds managed by the Adviser) and has a new termination date of June 29, 2020. Under this amended agreement, the Victory Funds Complex and USAA Mutual Funds Complex, combined, may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund (herein, the "Fund"), another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs, including redemption requests that might otherwise require the untimely disposition of securities. With the agreement in effect for the period January 1, 2019 to June 30, 2019, Citibank received an annual commitment fee of 0.15% on $100 million for providing the Line of Credit. For the period July 1, 2019 to December 31, 2019, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. For the year ended December 31, 2019, Citibank earned approximately $300 thousand in commitment fees from the combined Victory Funds Complex and USAA Mutual Funds Complex. Each fund in the Victory Funds Complex and the USAA Mutual Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Line of credit fees.

The Fund did not utilize the Line of Credit during the year ended December 31, 2019.

Interfund Lending:

The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Victory Fund relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the

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Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Fund during the period, if applicable, is presented on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund during the period, if applicable, is presented on the Statement of Operations under Income on interfund lending.

Borrower or Lender	Amount Outstanding at December 31, 2019		Average Borrowing*		Days Borrowing Outstanding		Average Interest Rate*			Maximum Borrowing During the Period
Borrower	$	—	$	1,909,500		2		2.99	%	$	2,009,000

*  For the year ended December 31, 2019, based on the number of days borrowings were outstanding.

7. Federal Income Tax Information:

The tax character of distributions paid during the most recent tax years ended, as noted below, were as follows (total distributions paid may differ from the Statements of Changes in Net Assets because, for tax purposes, dividends are recognized when actually paid).

Year Ended December 31, 2019
Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	17,229,625	$	—	$	17,229,625
Year Ended December 31, 2018
Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	4,289,680	$	—	$	4,289,680

As of the tax year ended December 31, 2019, the components of distributable earnings/accumulated deficit on a tax basis were as follows:

Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Earnings		Accumulated Capital and Other Losses			Unrealized Appreciation (Depreciation)*		Total Accumulated Earnings (Deficit)
$	17,475,401	$	—	$	17,475,401	$	(5,435,442	)	$	13,817,064	$	25,857,023

*  The difference between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales.

As of the tax year ended December 31, 2019, the Fund had long-term capital loss carryforwards of $5,435,442 that are not subject to expiration.

During the tax year ended December 31, 2019, the Fund utilized $7,852,573 of capital loss carryforwards.

As of December 31, 2019, the cost basis for federal income tax purposes, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation) for investments and derivatives were as follows:

Cost of Investments for Federal Tax Purposes		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
$	585,823,924	$	16,145,670	$	(2,170,395	)	$	13,975,275

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Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

8. Capital Contribution from Prior Custodian:

During 2016, the Fund received notification from the Fund's prior custodian, State Street Bank and Trust ("State Street"), concerning issues related to billing on certain categories of expenses during the approximately 16-year period from 1998 through October 31, 2014. The over-billing primarily related to categories of expenses that involved an allocation of general costs among multiple clients.

State Street paid the refunded amounts during January 2017. Based on billing information received during 2016 from State Street and an analysis of any expense limitation agreements that were in place during the period of the activities in question, including the application of any recoupment provisions in such agreements, the Adviser received a portion of the refund.

The portion of the refund retained by the Fund was accounted for as a capital contribution and is reflected on the Financial Highlights as "Capital Contribution from Prior Custodian, Net".

9. Fund Ownership:

Ownership of more than 25% of the voting securities of a fund creates presumptions of control of the Fund, under section 2(a)(9) of the 1940 Act. As of December 31, 2019, the shareholder listed below held more than 25% of the shares outstanding of the Fund and may be deemed to control the Fund.

Shareholder	Percent
GIAC		100.0	%

10. Recent Accounting Pronouncements:

In March 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards ("ASU") Update No. 2017-08 "Premium Amortization on Purchased Callable Debt Securities" ("ASU 2017-08"), which shortens the premium amortization period for purchased non-contingently callable debt securities. ASU 2017-08 specifies that the premium amortization period ends at the earliest call date, for purchased non-contingently callable debt securities. The Fund has adopted and applied ASU 2017-08 on a modified retrospective basis through a cumulative-effect adjustment as of the beginning of the period of adoption. The adoption of ASU 2017-08 had no material impact on information presented in the financial statements.

11. Subsequent Events:

The Fund has evaluated the need for additional disclosures or adjustments resulting from subsequent events through the date these financial statements were issued. Based on this evaluation, there were no subsequent events to report that would have a material impact on the Fund's financial statements.

33

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Trustees of Victory Variable Insurance Funds

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of portfolio investments, of Victory INCORE Investment Quality Bond VIP Series (the "Fund"), a series of Victory Variable Insurance Funds, as of December 31, 2019, the related statements of operations and changes in net assets, including the related notes, and the financial highlights for the year then ended (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2019, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The Fund's financial statements and financial highlights for the three years ended December 31, 2018, were audited by other auditors whose report dated February 15, 2019 and the Fund's financial highlights for the year ended December 31, 2015, were audited by other auditors whose report dated February 22, 2016, expressed unqualified opinions on those financial statements and financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2019, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

We have served as the auditor of one or more of the investment companies advised by Victory Capital Management, Inc. since 2015.

COHEN & COMPANY, LTD.
Cleveland, Ohio
February 18, 2020

34

Victory Variable Insurance Funds Supplemental Information
December 31, 2019

  (Unaudited)

Trustee and Officer Information

Board of Trustees:

Overall responsibility for management of the Trust rests with the Board. The Trust is managed by the Board in accordance with the laws of the State of Delaware. There are currently ten Trustees, nine of whom are not "interested persons" of the Trust within the meaning of that term under the 1940 Act ("Independent Trustees") and one of whom is an "interested person" of the Trust within the meaning of that term under the 1940 Act ("Interested Trustee"). The Trustees, in turn, elect the officers of the Trust to actively supervise its day-to-day operations. The following tables list the Trustees, their ages, position with the Trust, commencement of service, principal occupations during the past five years and any directorships of other investment companies or companies whose securities are registered under the Securities Exchange Act of 1934, as amended, or who file reports under that Act. Each Trustee oversees nine portfolios in the Trust, 42 portfolios in Victory Portfolios and 26 portfolios in Victory Portfolios II, each a registered investment company that, together with the Trust, comprise the Victory Funds Complex. Each Trustee's address is c/o Victory Variable Insurance Funds, 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. Each Trustee has an indefinite term.

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Independent Trustees.
David Brooks Adcock, 68	Trustee	February 2005	Consultant (since 2006).	Chair and Trustee, Turner Funds (December 2016-December 2017).
Nigel D.T. Andrews, 72	Vice Chair and Trustee	August 2002	Retired.	Director, TCG BDC II, Inc. (since 2017); Director, TCG BDC I, Inc. (formerly Carlyle GMS Finance, Inc.) (since 2012); Director, Old Mutual US Asset Management (2002-2014).
E. Lee Beard, 68*	Trustee	February 2005	Retired (since 2015); Consultant, The Henlee Group, LLC (consulting) (2005-2015).	None.
Dennis M. Bushe, 76	Trustee	July 2016	Retired.	Trustee, RS Investment Trust and RS Variable Products Trust (November 2011-July 2016).

35

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Sally M. Dungan, 65	Trustee	February 2011	Chief Investment Officer, Tufts University (since 2002).	None.
John L. Kelly, 66	Trustee	February 2015	Partner, McCarvill Capital Partners (September 2016-September 2017); Advisor, Endgate Commodities LLC (January 2016-April 2016); Managing Partner, Endgate Commodities LLC (August 2014-January 2016); Chief Operating Officer, Liquidnet Holdings, Inc. (December 2011-July 2014).	Director, Caledonia Mining Corporation (since May 2012).
David L. Meyer, 62*	Trustee	December 2008	Retired.	None.
Gloria S. Nelund, 58	Trustee	July 2016	Chair, CEO and Co-Founder of TriLinc Global, LLC, an investment firm.	TriLinc Global Impact Fund, LLC (since 2012); Trustee, RS Investment Trust and RS Variable Products Trust (November 2007-July 2016).
Leigh A. Wilson, 75	Chair and Trustee	February 1998	Private Investor.	Chair (since 2013), Caledonia Mining Corporation.
Interested Trustee.
David C. Brown, 47**	Trustee	May 2008	Chairman and Chief Executive Officer (since 2013), Co-Chief Executive Officer (2011-2013), the Adviser; Chairman and Chief Executive Officer, Victory Capital Holdings, Inc. (since 2013).	USAA Mutual Funds Trust.

*  The Board has designated Mr. Meyer and Ms. Beard as its Audit Committee Financial Experts.

**  Mr. Brown is an "Interested Person" by reason of his relationship with the Adviser.

The Statement of Additional Information includes additional information about the Trustees of the Trust and is available, without charge, by calling 800-539-3863.

36

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Officers:

The officers of the Trust, their ages, commencement of service and their principal occupations during the past five years, are detailed in the following table. Each officer serves until the earlier of his or her resignation, removal, retirement, death, or the election of a successor. The mailing address of each officer of the Trust is 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. The officers of the Trust receive no compensation directly from the Trust for performing the duties of their offices.

Name and Age	Position with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years
Christopher K. Dyer, 58	President	February 2006*	Director of Fund Administration, the Adviser.
Scott A. Stahorsky, 50	Vice President	December 2014	Manager, Fund Administration, the Adviser (since 2015); Senior Analyst, Fund Administration, the Adviser (prior to 2015).
Erin G. Wagner, 46	Secretary	December 2014	Associate General Counsel, the Adviser (since 2013).
Allan Shaer, 54	Treasurer	May 2017	Senior Vice President, Financial Administration, Citi Fund Services Ohio, Inc. (since 2016); Vice President, Mutual Fund Administration, JP Morgan Chase (2011-2016).
Christopher A. Ponte, 35	Assistant Treasurer	December 2017	Manager, Fund Administration, the Adviser (since 2017); Senior Analyst, Fund Administration, the Adviser (prior to 2017); Chief Financial Officer, Victory Capital Advisers, Inc. (since 2018).
Colin Kinney, 46	Chief Compliance Officer	July 2017	Chief Compliance Officer (since 2013) and Chief Risk Officer (2009-2017), the Adviser.
Chuck Booth, 59	Anti-Money Laundering Compliance Officer and Identity Theft Officer	May 2015	Director, Regulatory Administration and CCO Support Services, Citi Fund Services Ohio, Inc.
Jay G. Baris, 66	Assistant Secretary	February 1998	Partner, Shearman & Sterling LLP (since 2018); Partner, Morrison & Foerster LLP (2011-January 2018).

*  On December 3, 2014, Mr. Dyer resigned as Secretary of the Trust and accepted the position of President.

37

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Proxy Voting and Portfolio Holdings Information

Proxy Voting:

Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 800-539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.

Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent twelve months ended June 30 is available on the SEC's website at www.sec.gov.

Availability of Schedules of Portfolio Investments:

The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-PORT. Prior to the implementation of Form N-PORT, the Trust filed a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-PORT and Forms N-Q are available on the SEC's website at www.sec.gov.

Expense Examples

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2019 through December 31, 2019.

The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

Please note the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Beginning Account Value 7/1/19		Actual Ending Account Value 12/31/19		Hypothetical Ending Account Value 12/31/19		Actual Expenses Paid During Period 7/1/19-12/31/19*		Hypothetical Expenses Paid During Period 7/1/19-12/31/19*		Annualized Expense Ratio During Period 7/1/19-12/31/19
$	1,000.00	$	1,025.70	$	1,022.38	$	2.86	$	2.85		0.56	%

*  Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).

38

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Considerations of the Board in Continuing the Investment Advisory Agreement (the "Agreement")

The Board approved the Agreement on behalf of the Fund at an in-person meeting, which was called for that purpose, on December 4, 2019. The Board also considered information relating to the Fund and the Agreement provided throughout the year and, more specifically, at a meeting on October 22, 2019. The Board noted that prior to the Fund's reorganization on July 29, 2016, the Fund was managed by RS Investment Management Co. LLC, which was acquired by the Adviser on July 29, 2016. In considering whether to approve the Agreement, the Board requested, and the Adviser provided, information that the Board believed to be reasonably necessary to reach its conclusions.

The Board, including the Independent Trustees, evaluated this information along with other information obtained throughout the year and was advised by legal counsel to the Fund, which also serves as independent legal counsel to the Independent Trustees. In addition, in 2017 the Independent Trustees, through their counsel, retained an independent consultant to assist with a review of the overall process for conducting the annual review of these advisory arrangements.

The Board considered the Fund's advisory fee, expense ratio and investment performance as significant factors in determining whether the Agreement should be continued. In considering whether the compensation paid to the Adviser was fair and reasonable, the Board also evaluated, among other things, the following factors:

•  The requirements of the Fund for the services provided by the Adviser;

•  The nature, quality and extent of the services provided and expected to be provided;

•  The performance of the Fund as compared to comparable funds;

•  The fees payable for the services and whether the fee arrangements provided for economies of scale that would benefit Fund shareholders as the Fund grows;

•  Whether the fee would be sufficient to enable the Adviser to attract and retain experienced personnel and continue to provide quality services to the Fund;

•  The fees paid by other clients of the Adviser whose accounts are managed in a similar investment style and any differences in the services provided to the other clients compared to those provided to the Fund;

•  The total expenses of the Fund, taking into consideration any distribution or shareholder servicing fees;

•  Management's commitment to operating the Fund at competitive expense levels;

•  The profitability of the Adviser (as reflected by comparing fees earned against an estimate of the Adviser's costs) with respect to the Adviser's relationship with the Fund;

•  Research and other service benefits received by the Adviser obtained through payment of client commissions for securities transactions;

•  Other benefits received by the Adviser, and its affiliates, including revenues paid to the Adviser, or its affiliates, by the Fund for administration and fund accounting services, and distribution;

•  The capabilities and financial condition of the Adviser;

•  Current economic and industry trends; and

•  The historical relationship between the Fund and the Adviser.

The Board reviewed the Fund's current management fee, comprised of the advisory fee plus the administrative services fee paid to the Adviser, in the context of the Adviser's profitability with respect to the Fund. In addition, the Board compared the Fund's total operating expense ratio on a net and gross basis, taking into consideration any distribution or shareholder servicing fees and management fees with a universe of comparable mutual funds compiled by an independent consultant and a peer group of funds with similar investment strategies selected by that independent consultant from the universe. The Board reviewed the factors and methodology used by the independent consultant in the selection of the Fund's peer group, including that independent consultant's selection of a broad universe of funds, the more specific universe of comparable funds, and peer groups of funds with comparable investment strategies and asset levels, among other factors. The Board also reviewed any changes to that independent consultant's methodology as compared to the prior year, including those resulting from the Adviser's input, if any. The Board also reviewed fees and other information related to the Adviser's management of similarly managed institutional or private accounts, and the differences in the

39

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

services provided to the other accounts, to the extent applicable. The Board noted that the advisory fee arrangements for the Fund do not include breakpoints, which are generally viewed as a method by which the investment adviser shares any economies of scale with a fund as a fund grows. The Board also considered the Adviser's commitment to limit expenses as discussed in more detail below, and would consider breakpoints at a future time if the Fund's assets were to grow significantly.

The Board reviewed the Fund's performance over one-, three-, five- and ten-year periods against the performance of the Fund's selected peer group and benchmark index. The Board recognized that the performance of the Fund and the peer group funds are net of expenses, while the performance of the benchmark index reflects gross returns. The Board considered the additional resources that the Adviser has committed to enhance portfolio analysis, compliance and trading systems.

The Board reviewed various other specific factors with respect to the Fund, as described below. In their deliberations, the Trustees did not rank the importance of any particular information or factor considered and each Trustee may have attributed different weights to various factors.

The Board concluded that the Fund's gross annual management fee was reasonable as compared to the median gross management fee charged to the funds in the Fund's peer group. The Board noted that the Fund's net annual expense ratio, taking into account any shareholder servicing or distribution fees, was reasonable as compared to the median expense ratio for the peer group. The Board considered the Adviser's contractual agreement to waive its fees and reimburse expenses for a specified period of time, as described in the Fund's prospectus.

The Board then compared the Fund's performance for the one-, three-, five- and ten-year periods ended June 30, 2019, to that of the median performance of the peer group and benchmark index for the same periods and considered the fact that the Fund underperformed both the benchmark index and the peer group median for the one-, three- and five-year periods, outperformed the benchmark index for the ten-year period, and underperformed the peer group median for the ten-year period. The Board discussed with the Adviser how market conditions affected the Fund during periods of underperformance given the Fund's investment strategy and fee and expense profile.

Having considered, among other things: (1) that the Fund's management fee was within the ranges of advisory fees charged to comparable mutual funds; (2) that the Fund's total expense ratio was reasonable; (3) the Adviser's willingness to limit the expenses for a period of time would provide stability to the Fund's expenses during that period; (4) the transition of the investment team following the reorganization; and (5) the performance of the Fund, the Board concluded that the Agreement continued to be in the best interests of the Fund's shareholders.

Conclusion

Based on its review of the information requested and provided, and following extended discussions, the Board determined that the Agreement, on behalf of the Fund, was consistent with the best interests of the Fund and its shareholders, and the Board unanimously approved the Agreement, on behalf of the Fund, for an additional annual period on the basis of the foregoing review and discussions and the following considerations, among others:

•  The fairness and reasonableness of the investment advisory fee payable to the Adviser under the Agreement in light of the investment advisory services provided, the costs of these services, the profitability of the Adviser's relationship with the Fund and the comparability of the fee paid to the fees paid by other investment companies;

•  The nature, quality and extent of the investment advisory services provided by the Adviser;

•  The Adviser's entrepreneurial commitment to the management of the Fund and the creation of a broad-based family of funds, which could entail a substantial commitment of the Adviser's resources to the successful operation of the Fund;

•  The Adviser's representations regarding its staffing and capabilities to manage the Fund, including the retention of personnel with relevant portfolio management experience;

•  The Adviser's efforts to enhance investment results by, among other things, developing quality portfolio management teams; and

•  The overall high quality of the personnel, operations, financial condition, investment management capabilities, methodologies and performance of the Adviser.

40

Privacy Policy

Protecting the Privacy of Information

The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.

We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.

To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*

*  You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.

Victory Funds
P.O. Box 182593
Columbus, Ohio 43218-2593

Visit our website at:	Call Victory at:
www.vcm.com	800-539-FUND (800-539-3863)

VVIF-RS-IIQBVIP-AR (12/19)

December 31, 2019

Annual Report

Victory Variable Insurance Funds

Victory High Yield VIP Series

Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports may no longer be sent by mail from the insurance company that issued your variable annuity and variable life insurance contract, unless you specifically request paper copies of the reports from your insurance company. Instead, the reports will be made available on www.victoryfunds.com. The insurance company that offers your contract may also make these reports available on a website, and such insurance company will notify you by mail each time a report is posted and provide you with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the insurance company electronically by following the instructions provided by the insurance company.

If offered by your insurance company, you may elect to receive all future reports in paper and free of charge from the insurance company. You can inform your insurance company that you wish to continue receiving paper copies of your reports. Your election to receive reports in paper will apply to all funds available under your contract.

www.vcm.com

News, Information And Education 24 Hours A Day, 7 Days A Week

The Victory Funds site gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:

•  Detailed performance records

•  Daily share prices

•  The latest fund news

•  Investment resources to help you become a better investor

•  A section dedicated to investment professionals

Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.

Victory Variable Insurance Funds

Table of Contents

Shareholder Letter (Unaudited)	3
Fund Review and Commentary (Unaudited)	5
Financial Statements
Schedule of Portfolio Investments	9
Statement of Assets and Liabilities	13
Statement of Operations	14
Statements of Changes in Net Assets	15
Financial Highlights	16
Notes to Financial Statements	18
Report of Independent Registered Public Accounting Firm	27
Supplemental Information (Unaudited)
Trustee and Officer Information	28
Proxy Voting and Portfolio Holdings Information	31
Expense Examples	31
Additional Federal Income Tax Information	32
Advisory Contract Renewal	33
Privacy Policy (inside back cover)

The Fund is distributed by Victory Capital Advisers, Inc. Victory Capital Management Inc. is the investment adviser to the Fund and receives fees from the Fund for performing services for the Fund.

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus of the Fund.

For additional information about any Victory Fund, including fees, expenses, and risks, view our prospectus online at www.vcm.com or call 800-539-3863. Read it carefully before you invest or send money.

The information in this annual report is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections, or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Past investment performance of the Fund, markets or securities mentioned herein should not be considered to be indicative of future results.

• NOT FDIC INSURED • NO BANK GUARANTEE
• MAY LOSE VALUE

Call Victory at:

800-539-FUND (800-539-3863)

Visit our website at:

www.vcm.com

1

This page is intentionally left blank.

2

Victory Funds Letter to Shareholders
(Unaudited)

Dear Shareholder,

As we turn the page into a new decade, it's hard not to reflect on the fact that we have been enjoying the longest-ever bull market in U.S. equities. The run has been impressive, and despite periods of tumult and plenty of negative news, the bull market endured throughout 2019.

For the annual reporting period ended December 31, 2019, the S&P 500^® Index posted impressive gains of 31.49%. This represents the greatest one-year gain since 2013 and also illustrates a swift bounce-back after a precipitous drop late in 2018. The move higher supports the notion that underlying fundamentals of U.S. companies drive performance, rather than the political rancor and headline fears that often capture the attention of investors.

Perhaps we shouldn't be surprised at the impressive performance of equities. The U.S. economy — the world's largest — remains on solid footing and has been a key driver of both domestic and international stocks. Robust job creation, near-record low unemployment, and steady consumer spending continue and offer reasons for further optimism. Meanwhile, inflation remains muted, and the Federal Reserve (the Fed) and other major global central banks have taken an accommodative stance. In fact, the Fed has cut interest rates by a total of 0.75% over three meetings last July, September and October.

The risk-on attitudes of investors, coupled with the accommodative monetary policy, had an expected impact on U.S. Treasury yields. The 10-year Treasury yield declined significantly over the course of 2019, falling from 2.66% to 1.92% at year-end. More interesting, however, was the fact that, the yield on 10-year Treasurys fell below shorter-term yields for the first time since before the 2007-2008 Global Financial Crisis. This inverted yield curve spooked investors for a spell, only to revert back to a traditional upward sloping yield curve by the end of the year.

The robust domestic economy, low interest rates, and ample liquidity from central banks provided a potent tonic for the stock market in 2019. In fact, at year-end 2019, the S&P 500^® Index was approaching its highest valuation level since 1999. This reminds all of us to retain some historical context on the bull market. Many of us remember the Global Financial Crisis and, before that, the collapse of the dot-com bubble. Although those are now but a distant memory (and we are not forecasting such tumult), we should not forget that stocks don't always go up and cycles don't last forever. In other words, valuations still matter.

The key point is not to discount the risks. In addition to lofty valuations, investors need to keep apprised of trade disputes, geopolitical hotspots, a contentious U.S. election, and a host of other potential headwinds. Yet it is these very risks — these cross-currents — that may create pricing dislocations. This is an environment in which we believe our Victory Capital independent investment franchises can thrive.

On the following pages, you will find information relating to your Victory Funds investment. If you have any questions, we encourage you to contact your financial

3

advisor. Or, if you invest with us directly, you may call (800) 539-3863, or visit our website at www.vcm.com.

My colleagues and I sincerely appreciate the confidence you have placed in the Victory Funds, and we value the opportunity to help meet your investment goals.

Christopher K. Dyer, CFA

President,

Victory Funds

4

Victory Variable Insurance Funds (Unaudited)

Victory High Yield VIP Series

Portfolio Holdings

As a Percentage of Total Investments

Performance Discussion

The Victory High Yield VIP Series (the "Fund") seeks to provide current income. For the year ended December 31, 2019, the Bloomberg Barclays U.S. Corporate High Yield Index (the "Index") rose 14.32% while the Fund outperformed the benchmark Index, returning 15.89% respectively.

Security selection, particularly at the lower end of the ratings scale and in gaming and pharmaceuticals, was the source of the Fund's outperformance. The Fund's underweight position in the volatile energy sector also was a key contributor to its relative performance.

Asset allocation, specifically the Fund's out-of-Index allocation to floating rate bank loans, detracted from its performance relative to the Index, as did the Fund's underweight position in BB-rated bonds and security selection in manufacturing.

Portfolio Review

We slightly decreased our exposure to floating rate loans in the second half of the year, sometimes swapping out loans to add to existing high yield bond positions from the same issuer. Our exposure to loans remained substantial; however, their underperformance relative to high yield bonds created some compelling relative value opportunities.

Despite the possibility of idiosyncratic rallies in energy, particularly in response to geopolitical events, we continued to anticipate further deterioration in what we believe is an unfavorable supply and demand dynamic for oil, and thus we remained cautious about the sector.

We continued to view valuations in the higher-quality segment of the market as unattractive. We increased the Fund's CCC-rated exposure over the course of the year given our desire to capture excess return from company-specific opportunities while remaining nimble enough to reduce exposure quickly if necessary.

Overall Market Review

After a woeful 2018, securities markets roared back in 2019. Returns of 25% or more were commonplace among major equity indexes and returns for traditionally riskier fixed-income asset classes also broke into the double digits as the U.S. Federal Reserve (the "Fed") and other central banks around the world reassured investors and encouraged risk taking by cutting interest rates.

The rally defied a daunting array of real and potential threats at home and abroad: cooling economies and heated politics; trade disputes; volatile energy prices; Brexit drama; the impeachment of President Trump; high valuations for many asset classes; and potential early warning signs of recession in the U.S. Treasury market. While these concerns caused bursts of anxiety, investors mostly took comfort from central bank support, steady (if lackluster) economic growth, extremely low unemployment, and strong consumer spending.

5

Victory Variable Insurance Funds (Unaudited)

Victory High Yield VIP Series (continued)

The S&P 500^® Index returned 31.5% for the year, its best showing since 1997. In fixed income, the 10-year Treasury returned 8.9%.

High Yield Market Review

What a difference 12 months made. At the end of 2018, the high-yield market was unloved, with yields approaching 8.0%. It seemed unthinkable that all would be forgiven another year into one of the longest positive credit cycles in memory, but that's what happened.

The Index advanced in bursts during the year with strong rallies in January, June, and December. The January 2019 advance was a Fed-fueled rebound from a sharply oversold December 2018; the June rally was triggered by both the Fed and an improvement in the trade outlook; and December brought a potent surge for riskier assets.

Quality led the way in 2019 with each successive rating category outperforming the one below it. At a time when riskier assets generally outperformed, the underperformance of CCC-rated bonds may seem like something of an enigma. The explanation was that this category contained a high percentage of distressed and defaulting energy companies. Excluding energy and commodities, CCC-rated bonds posted a respectable 12.0% annual return.

High Yield Market Outlook

The end of 2019 presented a mirror image of the high-yield market at the end of 2018. The year's rebound brought low absolute yields, tight credit spreads, lower coupon income, and increased sensitivity to increases in interest rates. Given these Index characteristics, investors could be forgiven for wondering what could possibly go...right?

With the Index as a whole, possibly not much. But with a highly selective, deeply researched, and focused portfolio, we believe there's still plenty that could go right.

The Index ended 2019 with rich valuations. Fully two-thirds of bonds in it were trading with yields below the 5.4% mean and 41% traded to a yield below 4.0%. Contrast this with year-end 2018 when only 3.6% of the Index traded to a yield below 4.0%. We believe that selectiveness is now more important than ever, and employing a concentrated, high-conviction strategy could potentially avoid the risk of owning low-yielding "passengers" that contribute little and dilute returns.

Sector risks also underscore the importance of research and selection. The high-yield market has experienced an increase in stressed companies in energy, health care, retail, and telecommunication, which together accounted for over 36% of the Index at year-end. Skillfully navigating or avoiding these industries could significantly distinguish portfolio returns from Index returns.

New issues are likely to present their own risks in 2020. Issuance is expected to decline from 2019 levels and a scarcity of deals could continue to produce overly generous terms for borrowers, including some unrealistic valuations at levels not seen since near the end of the previous credit cycle in 2007.

Throughout the year, our strategy continued to focus on mid- to lower-rated issues that we believed had clear catalysts for improvement. At the same time, we continued to choose

6

Victory Variable Insurance Funds (Unaudited)

Victory High Yield VIP Series (continued)

certain high-quality secured loans over bonds, often from the same issuer, given loans' more attractive valuations and minimal duration risk.

Overall Market Outlook

We believe that while the Fed's renewed focus on supporting economic growth may bear fruit slowly for the U.S. economy, it had a meaningful impact on securities markets throughout 2019. We believe that much will continue to depend on whether investors view the Fed and its peers around the world as both committed to supporting growth and capable of doing so. We would note that a market leaning too heavily on central bank support could be fragile if the Fed proves unwilling or unable to prevent a downturn. We continue to view global growth concerns, domestic politics, trade tensions, and energy prices as key potential catalysts for shifts in risk.

As we attempt to balance the genuine benefit of current Fed policy and the minimal risk of imminent recession with the fact that the economy is decelerating and there are few obvious catalysts to boost returns, we believe it is important to take a highly selective approach rather than counting on broad-based spread tightening.

7

Victory Variable Insurance Funds (Unaudited)

Victory High Yield VIP Series (continued)

Average Annual Total Return

Year Ended December 31, 2019

	Class I
INCEPTION DATE	9/13/99
	Net Asset Value			Bloomberg Barclays U.S. Corporate High Yield Index1
One Year		15.89	%		14.32	%
Three Year		8.52	%		6.37	%
Five Year		7.08	%		6.13	%
Ten Year		7.32	%		7.57	%
Since Inception		6.05	%		N/A

Expense Ratios

Gross	0.83	%
With Applicable Waivers	0.83	%

Past performance is not indicative of future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month's end, please visit www.vcm.com.

The above expense ratios are from the Fund's prospectus dated May 1, 2019. Additional information pertaining to the Fund's expense ratios as of December 31, 2019 can be found in the financial highlights.

The total return figures set forth above include all waivers of fees for various periods since inception. Without such fee waivers, the total returns would have been lower. Some fee waivers are voluntary and may be modified or terminated at any time. The total returns do not include any insurance, sales or administrative charges of variable annuity or life insurance contracts. If these charges were included, the total returns would have been lower.

Victory High Yield VIP Series — Growth of $10,000

¹The Bloomberg Barclays U.S. Corporate High Yield Index is generally considered to be representative of the investable universe of the U.S.-dominated high yield debt market. The Barclays U.S. Corporate High Yield Index is not available for direct investment. There are no expenses associated with the index, while there are expenses associated with the Fund. It is not possible to invest directly in an index.

The graph reflects investment of growth of a hypothetical $10,000 investment in the Fund. Past performance is no guarantee of future results.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

8

Victory Variable Insurance Funds
Victory High Yield VIP Series Schedule of Portfolio Investments
December 31, 2019

Security Description	Shares or Principal Amount		Value
Common Stocks (1.6%)
Communication Services (1.6%):
AMC Networks, Inc., Class A (a)		3,000	$	118,500
Cinemark Holdings, Inc.		2,500		84,625
TEGNA, Inc.		17,000		283,730
				486,855
Total Common Stocks (Cost $455,583)				486,855
Senior Secured Loans (27.0%)
1199169 BC ULC, 6.10% (LIBOR03M+400bps), 4/6/26 (b)	$	87,194		87,725
Ai Ladder Luxembourg Subco Sarl, 1st Lien Term Loan B, 6.60% (LIBOR03M+450bps), 5/4/25 (b)		391,425		390,446
Alphabet Holding Co., Inc., 2nd Lien Term Loan, 9.45% (LIBOR01M+775bps), 8/15/25 (b)		500,000		437,915
Avaya, Inc., 1st Lien Term Loan B, 5.99% (LIBOR01M+425bps), 12/15/24 (b)		313,960		307,524
Bass Pro Group LLC, Term Loan B, 6.70% (LIBOR01M+500bps), 12/16/23 (b)		486,282		484,458
Clear Channel Outdoor Holdings, Inc., 5.20% (LIBOR01M+350bps), 11/25/26 (b)		249,375		250,532
CPM Holdings, Inc., 1st Lien Term Loan, 5.45% (LIBOR01M+375bps), 11/17/25 (b)		198,000		195,624
Crown Finance U.S., Inc., 1st Lien Term Loan B, 3.95% (LIBOR01M+225bps), 2/7/25 (b)		285,980		285,589
Dayco Products LLC , 6.16% (LIBOR03M+425bps), 5/19/24 (b)		487,500		424,125
Diamond Sports Group LLC, 5.03% (LIBOR01M+325bps), 8/24/26 (b)		249,375		248,856
Dynasty Acquisition Co., Inc., 6.10% (LIBOR03M+400bps), 4/6/26 (b)		162,181		163,169
GTT Communications, Inc., 1st Lien Term Loan B, 4.45% (LIBOR01M+275bps), 5/31/25 (b)		124,369		103,526
Hertz Corp., Term Loan B1, 4.46% (LIBOR01M+275bps), 6/30/23 (b)		479,644		482,143
Holley Purchaser, Inc., 1st Lien Term Loan, 6.93% (LIBOR03M+500bps), 10/24/25 (b)		198,000		185,130
II-VI, Inc., 5.21% (LIBOR01M+350bps), 9/24/26 (b)		249,375		250,310
LifeScan Global Corp., 1st Lien Term Loan, 8.06% (LIBOR06M+600bps), 6/19/24 (b)		465,000		441,555
Navistar, Inc., 1st Lien Term Loan B, 5.24% (LIBOR01M+350bps), 11/2/24 (b)		243,769		242,752
Nexstar Broadcasting, Inc., 1st Lien Term Loan, 4.45% (LIBOR01M+275bps), 6/20/26 (b)		250,000		251,165
Packaging Coordinators Midco, Inc., 2nd Lien Term Loan, 10.86% (LIBOR03M+875bps), 7/1/24 (b)		250,000		248,750
Radiate Holdco LLC, 4.70% (LIBOR01M+300bps), 2/1/24 (b)		241,203		241,927
Reynolds Group Holdings, Inc., 1st Lien Term Loan B, 4.45% (LIBOR01M+275bps), 2/5/23 (b)		252,357		252,950
SIWF Holdings, Inc., 10.20% (LIBOR01M+850bps), 5/26/26 (b)		500,000		471,250
Specialty Building Products Holdings LLC, 1st Lien Term Loan, 7.45% (LIBOR01M+575bps), 10/1/25 (b)		497,500		494,600
Spectacle Gary Holdings LLC, 10.80% (LIBOR01M+900bps), 10/17/24 (b) (c)		233,108		235,439
Spectacle Gary Holdings LLC 10/17/25 (c) (d)		16,892		17,061
Sprint Communications, Inc., 1st Lien Term Loan B, 4.25% (LIBOR01M+250bps), 2/2/24 (b)		491,162		486,372

See notes to financial statements.

9

Victory Variable Insurance Funds
Victory High Yield VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Principal Amount		Value
Stars Group Holdings BV, 5.60% (LIBOR03M+350bps), 6/27/25 (b)	$	429,563	$	432,948
Tenneco, Inc., 1st Lien Term Loan B, 4.70% (LIBOR01M+300bps), 6/18/25 (b)		198,000		193,256
Total Senior Secured Loans (Cost $8,399,694)				8,307,097
Corporate Bonds (68.3%)
Communication Services (6.0%):
AMC Entertainment Holdings, Inc., 6.13%, 5/15/27, Callable 5/15/22 @ 103.06 (e)		500,000		457,200
AMC Networks, Inc., 4.75%, 8/1/25, Callable 8/1/21 @ 102.38 (e)		400,000		402,452
Consolidated Communications, Inc., 6.50%, 10/1/22, Callable 2/10/20 @ 101.63 (e)		250,000		228,358
Hughes Satellite Systems Corp., 6.63%, 8/1/26 (e)		500,000		553,995
Telesat Canada/Telesat LLC, 6.50%, 10/15/27, Callable 10/15/22 @ 103.25 (f)		200,000		208,174
				1,850,179
Consumer Discretionary (14.5%):
1011778 BC ULC / New Red Finance, Inc., 4.38%, 1/15/28, Callable 11/15/22 @ 102.19 (f)		220,000		221,663
Beazer Homes USA, Inc., 5.88%, 10/15/27, Callable 10/15/22 @ 102.94 (e)		400,000		403,576
Boyd Gaming Corp., 6.38%, 4/1/26, Callable 4/1/21 @ 103.19		392,000		422,396
Eldorado Resorts, Inc., 6.00%, 9/15/26, Callable 9/15/21 @ 104.5		400,000		441,712
Golden Nugget, Inc., 8.75%, 10/1/25, Callable 10/1/20 @ 104.38 (f)		500,000		535,425
Installed Building Products, Inc., 5.75%, 2/1/28, Callable 2/1/23 @ 102.88 (f)		200,000		213,742
Mattel, Inc., 5.45%, 11/1/41, Callable 5/1/41 @ 100		250,000		210,925
MGM Resorts International, 5.50%, 4/15/27, Callable 1/15/27 @ 100		250,000		277,650
Panther BF Aggregator 2 LP/Panther Finance Co., Inc., 8.50%, 5/15/27, Callable 5/15/22 @ 104.25 (f)		250,000		265,640
Scientific Games International, Inc., 8.25%, 3/15/26, Callable 3/15/22 @ 104.13 (f)		300,000		330,684
The Enterprise Development Authority, 12.00%, 7/15/24, Callable 7/15/21 @ 109 (f)		500,000		573,289
Yum! Brands, Inc., 5.35%, 11/1/43, Callable 5/1/43 @ 100		550,000		550,049
				4,446,751
Consumer Staples (8.1%):
Albertsons Cos. LLC, 5.75%, 3/15/25, Callable 2/10/20 @ 104.31		500,000		518,715
Albertsons Cos., Inc./Safeway, Inc./New Albertsons LP/Albertsons LLC, 5.88%, 2/15/28, Callable 8/15/22 @ 104.41 (f)		125,000		132,963
B&G Foods, Inc., 5.25%, 4/1/25, Callable 4/1/20 @ 103.94		200,000		206,136
Cott Holdings, Inc., 5.50%, 4/1/25, Callable 4/1/20 @ 104.13 (f) (g)		500,000		522,720
Dole Food Co., Inc., 7.25%, 6/15/25, Callable 6/15/20 @ 103.63 (f)		500,000		483,929
Post Holdings, Inc., 5.00%, 8/15/26, Callable 8/15/21 @ 102.5 (f)		250,000		264,938
Simmons Foods, Inc., 7.75%, 1/15/24, Callable 1/15/21 @ 103.88 (f)		330,000		354,829
				2,484,230

See notes to financial statements.

10

Victory Variable Insurance Funds
Victory High Yield VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Principal Amount		Value
Energy (0.4%):
Citgo Holding, Inc., 9.25%, 8/1/24, Callable 8/1/21 @ 104.63 (f)	$	125,000	$	134,251
Financials (10.4%):
Acrisure LLC/Acrisure Finance, Inc., 8.13%, 2/15/24, Callable 2/15/21 @ 104.06 (f)		225,000		244,548
BCPE Cycle Merger Sub II, Inc., 10.63%, 7/15/27, Callable 7/15/22 @ 105.31 (f)		200,000		204,314
Capitol Investment Merger Sub 2 LLC, 10.00%, 8/1/24, Callable 8/1/21 @ 105 (f)		250,000		260,145
Compass Group Diversified Holdings LLC, 8.00%, 5/1/26, Callable 5/1/21 @ 104 (f) (g)		500,000		542,039
Downstream Development Authority of the Quapaw Tribe of Oklahoma, 10.50%, 2/15/23, Callable 2/15/20 @ 107.25 (f)		500,000		525,015
Eagle Holding Co. II LLC, 7.75%, 5/15/22, Callable 2/10/20 @ 101 (e) (f)		250,000		253,675
Gray Escrow, Inc., 7.00%, 5/15/27, Callable 5/15/22 @ 105.25 (f)		120,000		133,702
Intelsat Jackson Holdings SA, 5.50%, 8/1/23, Callable 2/10/20 @ 101.83		250,000		214,575
LABL Escrow Issuer LLC, 10.50%, 7/15/27, Callable 7/15/22 @ 105.25 (f)		250,000		255,943
Resideo Funding, Inc., 6.13%, 11/1/26, Callable 11/1/21 @ 104.59 (e) (f)		300,000		299,976
Wolverine Escrow LLC, 13.13%, 11/15/27, Callable 11/15/22 @ 109.84 (f)		250,000		257,215
				3,191,147
Health Care (9.2%):
Air Medical Group Holdings, Inc., 6.38%, 5/15/23, Callable 2/10/20 @ 101.59 (f)		500,000		445,169
Avantor, Inc., 9.00%, 10/1/25, Callable 10/1/20 @ 106.75 (f) (g)		250,000		279,788
Bausch Health Cos., Inc., 6.13%, 4/15/25, Callable 4/15/20 @ 103.06 (f)		500,000		517,395
Endo Finance LLC, 6.00%, 2/1/25, Callable 2/10/20 @ 103 (f)		200,000		135,398
Ortho-Clinical Diagnostics, Inc., 6.63%, 5/15/22, Callable 2/10/20 @ 100 (e) (f) (g)		300,000		298,614
Regional Care Hospital Partners Holdings, Inc./LifePoint Health, Inc., 9.75%, 12/1/26, Callable 12/1/21 @ 104.88 (f)		300,000		339,534
Surgery Center Holdings, Inc., 10.00%, 4/15/27, Callable 4/15/22 @ 105 (e) (f)		250,000		273,983
Verscend Escrow Corp., 9.75%, 8/15/26, Callable 8/15/21 @ 104.88 (f)		500,000		548,075
				2,837,956
Industrials (12.7%):
Ahern Rentals, Inc., 7.38%, 5/15/23, Callable 2/10/20 @ 103.69 (f)		500,000		396,875
Algeco Global Finance 2 PLC, 10.00%, 8/15/23, Callable 2/15/20 @ 105 (e) (f) (g)		300,000		297,261
Apex Tool Group LLC/BC Mountain Finance, Inc., 9.00%, 2/15/23, Callable 2/10/20 @ 102 (f)		250,000		224,088
Beacon Escrow Corp., 4.88%, 11/1/25, Callable 11/1/20 @ 102.44 (e) (f)		470,000		472,109
Bombardier, Inc., 7.88%, 4/15/27, Callable 4/15/22 @ 103.94 (f)		400,000		412,128
Covanta Holding Corp., 5.88%, 7/1/25, Callable 7/1/20 @ 104.41		500,000		527,640
Pisces Midco, Inc., 8.00%, 4/15/26, Callable 4/15/21 @ 104 (e) (f)		500,000		521,830
SRS Distribution, Inc., 8.25%, 7/1/26, Callable 7/1/21 @ 104.13 (e) (f) (g)		250,000		258,158
TransDigm, Inc., 6.50%, 7/15/24, Callable 2/10/20 @ 103.25		400,000		413,504
Triumph Group, Inc., 6.25%, 9/15/24, Callable 9/15/20 @ 103.13 (f)		150,000		157,821
United Rentals North America, Inc., 6.50%, 12/15/26, Callable 12/15/21 @ 103.25		200,000		220,098
				3,901,512
Materials (7.0%):
Ardagh Packaging Finance PLC/Holdings USA, Inc., 6.00%, 2/15/25, Callable 2/15/20 @ 104.5 (f)		450,000		472,010
Greif, Inc., 6.50%, 3/1/27, Callable 3/1/22 @ 103.25 (e) (f)		400,000		432,996
Intertape Polymer Group, Inc., 7.00%, 10/15/26, Callable 10/15/21 @ 103.5 (f)		670,000		706,609
Plastipak Holdings, Inc., 6.25%, 10/15/25, Callable 10/15/20 @ 103.13 (e) (f)		330,000		284,236

See notes to financial statements.

11

Victory Variable Insurance Funds
Victory High Yield VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares or Principal Amount		Value
Titan Acquisition Ltd./Titan Co-Borrower LLC, 7.75%, 4/15/26, Callable 4/15/21 @ 103.88 (e) (f) (g)	$	250,000	$	247,958
				2,143,809
Total Corporate Bonds (Cost $20,224,695)				20,989,835
Collateral for Securities Loaned^ (14.8%)
BlackRock Liquidity Funds TempFund Portfolio, Institutional Class, 1.75% (h)		217,410		217,410
Fidelity Investments Money Market Government Portfolio, Class I, 1.54% (h)		1,197,776		1,197,776
Fidelity Investments Prime Money Market Portfolio, Class I, 1.75% (h)		36,313		36,313
Goldman Sachs Financial Square Prime Obligations Fund, Institutional Class, 1.80% (h)		723,580		723,580
JPMorgan Prime Money Market Fund, Capital Class, 1.73% (h)		795,995		795,995
Morgan Stanley Institutional Liquidity Prime Portfolio, Institutional Class, 1.76% (h)		1,591,935		1,591,935
Total Collateral for Securities Loaned (Cost $4,563,009)				4,563,009
Total Investments (Cost $33,642,981) — 111.7%				34,346,796
Liabilities in excess of other assets — (11.7)%				(3,607,258	)
NET ASSETS — 100.00%			$	30,739,538

^  Purchased with cash collateral from securities on loan.

(a)  Non-income producing security.

(b)  Variable or Floating-Rate Security. Rate disclosed is as of December 31, 2019.

(c)  Security purchased on a when-issued basis.

(d)  The rates for this senior secured loan will be known on settlement date of the loan, subsequent to this report date. Senior secured loans have rates that will fluctuate over time in line with prevailing interest rates.

(e)  All or a portion of this security is on loan.

(f)  Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid based upon procedures approved by the Board of Trustees. As of December 31, 2019, the fair value of these securities was $14,940,854 and amounted to 48.6% of net assets.

(g)  All or a portion of this security has been segregated as collateral for securities purchased on a when-issued basis.

(h)  Rate disclosed is the daily yield on December 31, 2019.

bps — Basis points

LIBOR — London InterBank Offered Rate

LIBOR01M — 1 Month US Dollar LIBOR, rate disclosed as of December 31, 2019, based on the last reset date of the security

LIBOR03M — 3 Month US Dollar LIBOR, rate disclosed as of December 31, 2019, based on the last reset date of the security

LIBOR06M — 6 Month US Dollar LIBOR, rate disclosed as of December 31, 2019, based on the last reset date of the security

LLC — Limited Liability Company

LP — Limited Partnership

PLC — Public Limited Company

ULC — Unlimited Liability Co.

See notes to financial statements.

12

Victory Variable Insurance Funds Statement of Assets and Liabilities
December 31, 2019

	Victory High Yield VIP Series
ASSETS:
Investments, at value (Cost $33,642,981)	$	34,346,796	(a)
Cash and cash equivalents		794,142
Interest and dividends receivable		440,242
Receivable for capital shares issued		4,939
Receivable for investments sold		9,994
Receivable from Adviser		8,472
Prepaid expenses		1,987
Total Assets		35,606,572
LIABILITIES:
Payables:
Collateral received on loaned securities		4,563,009
Investments purchased		242,500
Capital shares redeemed		18,593
Accrued expenses and other payables:
Investment advisory fees		15,698
Administration fees		1,474
Custodian fees		2,560
Transfer agent fees		3,588
Compliance fees		20
Trustees' fees		63
Other accrued expenses		19,529
Total Liabilities		4,867,034
NET ASSETS:
Capital		31,704,358
Total distributable earnings/(loss)		(964,820	)
Net Assets	$	30,739,538
Shares (unlimited shares authorized with a par value of $0.001 per share):		4,177,521
Net asset value:	$	7.36

(a)  Includes $4,395,413 of securities on loan.

See notes to financial statements.

13

Victory Variable Insurance Funds Statement of Operations
For the Year Ended December 31, 2019

	Victory High Yield VIP Series
Investment Income:
Dividends	$	16,135
Interest		2,216,389
Securities lending (net of fees)		21,154
Total Income		2,253,678
Expenses:
Investment advisory fees		190,287
Administration fees		19,396
Custodian fees		12,878
Transfer agent fees		43,321
Trustees' fees		3,986
Compliance fees		214
Legal and audit fees		14,571
Other expenses		29,949
Total Expenses		314,602
Expenses waived/reimbursed by Adviser		(32,348	)
Net Expenses		282,254
Net Investment Income (Loss)		1,971,424
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment securities		11,875
Net change in unrealized appreciation/depreciation on investment securities		2,697,750
Net realized/unrealized gains on investments		2,709,625
Change in net assets resulting from operations	$	4,681,049

See notes to financial statements.

14

Victory Variable Insurance Funds Statements of Changes in Net Assets

	Victory High Yield VIP Series
	Year Ended December 31, 2019			Year Ended December 31, 2018
From Investment Activities:
Operations:
Net investment income (loss)	$	1,971,424		$	2,232,471
Net realized gains (losses) from investments		11,875			356,829
Net change in unrealized appreciation/depreciation on investments		2,697,750			(2,369,605	)
Change in net assets resulting from operations		4,681,049			219,695
Change in net assets resulting from distributions to shareholders		(2,209,102	)		(179,666	)
Change in net assets resulting from capital transactions		(2,650,644	)		(6,521,715	)
Change in net assets		(178,697	)		(6,481,686	)
Net Assets:
Beginning of period		30,918,235			37,399,921
End of period	$	30,739,538		$	30,918,235
Capital Transactions:
Proceeds from shares issued	$	1,334,140		$	1,232,848
Distributions reinvested		2,209,102			179,666
Cost of shares redeemed		(6,193,886	)		(7,934,229	)
Change in net assets resulting from capital transactions	$	(2,650,644	)	$	(6,521,715	)
Share Transactions:
Issued		176,852			176,340
Reinvested		300,558			26,344
Redeemed		(822,666	)		(1,133,739	)
Change in Shares		(345,256	)		(931,055	)

See notes to financial statements.

15

Victory Variable Insurance Funds Financial Highlights

For a Share Outstanding Throughout Each Period

			Investment Activities								Distributions to Shareholders From
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)(a)		Net Realized and Unrealized Gains (Losses) on Investments			Total from Investment Activities			Net Investment Income			Return of Capital			Total Distributions
Victory High Yield VIP Series
Year Ended 12/31/19	$	6.84		0.47		0.62			1.09			(0.57	)		—			(0.57	)
Year Ended 12/31/18	$	6.86		0.45		(0.43	)		0.02			(0.04	)		—			(0.04	)
Year Ended 12/31/17	$	6.63		0.42		0.24			0.66			(0.43	)		—			(0.43	)
Year Ended 12/31/16	$	6.13		0.41		0.53			0.94			(0.45	)		—			(0.45	)
Year Ended 12/31/15	$	6.90		0.43		(0.75	)		(0.32	)		(0.44	)		(0.01	)		(0.45	)

*  Includes adjustments in accordance with U.S. generally accepted accounting principals.

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Total returns do not reflect the effects of charges deducted pursuant to the terms of The Guardian Insurance & Annuity Company, Inc.'s variable contracts. Inclusion of such charges would reduce the total returns for all periods shown.

(c)  The Fund received monies related to a nonrecurring refund from the prior Custodian. The corresponding impact to the total return was less than 0.15% for the period shown. (See Note 8)

See notes to financial statements.

16

Victory Variable Insurance Funds Financial Highlights — continued

For a Share Outstanding Throughout Each Period

								Ratios to Average Net Assets									Supplemental Data
	Capital Contribution from Prior Custodian, Net (See Note 8)		Net Asset Value, End of Period		Total Return(b)*			Net Expenses			Net Investment Income (Loss)			Gross Expenses			Net Assets, End of Period (000's)		Portfolio Turnover
Victory High Yield VIP Series
Year Ended 12/31/19		—	$	7.36		15.89	%		0.89	%		6.22	%		0.99	%	$	30,739		60	%
Year Ended 12/31/18		—	$	6.84		0.29	%		0.83	%		6.38	%		0.83	%	$	30,918		94	%
Year Ended 12/31/17		—	$	6.86		9.94	%		0.79	%		6.02	%		0.79	%	$	37,411		173	%
Year Ended 12/31/16		0.01	$	6.63		15.44	%(c)		0.87	%		6.31	%		0.87	%	$	38,842		159	%
Year Ended 12/31/15		—	$	6.13		(4.58	)%		0.89	%		6.15	%		0.89	%	$	38,503		148	%

See notes to financial statements.

17

Victory Variable Insurance Funds Notes to Financial Statements
December 31, 2019

1. Organization:

Victory Variable Insurance Funds (the "Trust") was organized on February 11, 1998 as a Delaware statutory trust. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified open-end investment company. The Trust is comprised of nine funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with a par value of $0.001 per share.

The accompanying financial statements are those of the Victory High Yield VIP Series (the "Fund"). The Fund offers a single class of shares: Class I Shares. Sales of shares of the Fund may only be made to certain separate accounts of The Guardian Insurance & Annuity Company, Inc. ("GIAC") that fund certain variable annuity and variable life insurance contracts issued by GIAC. GIAC is a wholly owned subsidiary of The Guardian Life Insurance Company of America ("Guardian Life"). The Fund seeks to provide long-term capital appreciation.

Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.

2. Significant Accounting Policies:

The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies.

Investment Valuation:

The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:

• Level 1 — quoted prices in active markets for identical securities

• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)

• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.

Portfolio securities listed or traded on securities exchanges, including American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.

18

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Investments in open-end investment companies are valued at net asset value. These valuations are typically categorized as Level 1 in the fair value hierarchy.

Debt securities of United States ("U.S.") issuers (other than short-term investments maturing in 60 days or less), including corporate and municipal securities, are valued on the basis of bid valuations provided by dealers or an independent pricing service approved by the Trust's Board of Trustees (the "Board"). Short-term investments maturing in 60 days or less may be valued at amortized cost, which approximates market value. Under the amortized cost method, premium or discount, if any, is amortized or accreted, respectively, on a constant basis to the maturity of the security. In each of these situations, valuations are typically categorized as Level 2 in the fair value hierarchy.

Investments for which there are no such quotations, or for which quotations do not appear reliable, are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value.

A summary of the valuations as of December 31, 2019, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments:

	LEVEL 1		LEVEL 2		Total
Common Stocks	$	486,855	$	—	$	486,855
Senior Secured Loans		—		8,307,097		8,307,097
Corporate Bonds		—		20,989,835		20,989,835
Collateral for Securities Loaned		4,563,009		—		4,563,009
Total	$	5,049,864	$	29,296,932	$	34,346,796

For the year ended December 31, 2019, there were no Level 3 investments for which significant unobservable inputs were used to determine fair value.

Securities Purchased on a When-Issued Basis:

The Fund may purchase securities on a when-issued basis. When-issued securities are securities purchased for delivery beyond normal settlement periods at a stated price and/or yield, thereby involving the risk that the price and/or yield obtained may be more or less than those available in the market when delivery takes place. At the time the Fund makes the commitment to purchase a security on a when-issued basis, the Fund records the transaction and reflects the value of the security in determining net asset value. No interest accrues to the Fund until the transaction settles and payment takes place. Normally, the settlement date occurs within one month of the purchase. A segregated account is established and the Fund maintains cash and/or marketable securities at least equal in value to commitments for when-issued securities. If the Fund owns when-issued securities, these values are included in "Payable for investments purchased" on the accompanying Statement of Assets and Liabilities and the segregated assets as identified in the Schedule of Portfolio Investments.

Loans:

Floating rate loans in which the Fund invests are primarily "senior" loans. Senior floating rate loans typically hold a senior position in the capital structure of the borrower, are typically secured by specific collateral, and have a claim on the assets and/or stock of the borrower that is senior to that held by subordinated debtholders and stockholders of the borrower. While these protections may reduce risk, these investments still present significant credit risk. A significant portion of the Fund's floating rate investments may be issued in connection with highly leveraged transactions such as leveraged buyouts, leveraged recapitalization loans, and other types of acquisition financing. Obligations in these types of transactions are subject to greater credit risk (including default and bankruptcy) than many other investments and may be, or become, illiquid. See note regarding below investment grade securities.

The Fund may purchase second lien loans (secured loans with a claim on collateral subordinate to a senior lender's claim on such collateral), fixed rate loans, unsecured loans, and other debt obligations.

19

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Transactions in loans often settle on a delayed basis, and the Fund may not receive the proceeds from the sale of a loan or pay for a loan purchase for a substantial period of time after entering into the transactions.

Below Investment Grade Securities:

The Fund may invest in below investment grade securities (i.e. lower-quality, "junk" debt), which are subject to various risks. Lower-quality debt is considered to be speculative because it is less certain that the issuer will be able to pay interest or repay the principal than in the case of investment grade debt. These securities can involve a substantially greater risk of default than higher-rated securities, and their values can decline significantly over short periods of time. Lower-quality debt securities tend to be more sensitive to adverse news about their issuers, the market and the economy in general, than higher-quality debt securities. The market for these securities can be less liquid, especially during periods of recession or general market decline.

Investment Companies:

The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.

Investment Transactions and Related Income:

Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds. Paydown gains or losses on applicable securities, if any, are recorded as components of interest income on the Statement of Operations.

The Fund may receive other income from investment in loan assignments and/or unfunded commitments, including amendment fees, consent fees and commitment fees. These fees are recorded as income when received by the Fund. These amounts are included in Interest Income in the Statement of Operations.

Withholding taxes on interest, dividends and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.

Securities Lending:

The Trust has entered into a Master Securities Lending Agreement ("MSLA") with Citibank, N.A. ("Citibank" or the "Agent"). Under the terms of the MSLA, the Fund may lend securities to certain broker-dealers and banks in exchange for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are adjusted the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities, letters of credit and certificates of deposit. The cash collateral is invested in short-term instruments or cash equivalents as noted on the Fund's Schedule of Portfolio Investments. The Trust does not have effective control of the non-cash collateral and therefore it is not disclosed in the Fund's Schedule of Portfolio Investments. The Fund continues to benefit from interest or dividends on the securities loaned and may also earn a return from the collateral. The Fund pays various fees in connection with the investment of cash collateral. The Fund pays the Agent fees based on the investment income received from securities lending activities. Securities lending income is disclosed in the Fund's Statement of Operations. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them.

20

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Securities lending transactions are entered into by the Fund under the MSLA, which permits the Fund, under certain circumstances such as an event of default, to offset amounts payable by the Fund to the same counterparty against amounts receivable from the counterparty to create a net payment due to or from the Fund.

The following table is a summary of the Fund's securities lending transactions which are subject to offset under the MSLA as of December 31, 2019. These transactions are accounted for as secured borrowings with an overnight and continuous contractual maturity for cash collateral, and greater than overnight and continuous contractual maturity for non-cash collateral.

Gross Amount of Recognized Assets (Value of		Value of Cash		Value of Non-cash Collateral Received by Maturity
Securities on Loan)		Collateral Received*		<30 Days		Between 30 & 90 days		>90 Days		Net Amount
$	4,395,413	$	4,395,413	$	—	$	—	$	—	$	—

*  Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by the Fund is disclosed in the Statement of Assets and Liabilities.

Distributions to Shareholders:

Dividends from net investment income, if any, are declared and paid annually by the Fund. Distributable net realized gains, if any, are declared and distributed at least annually.

The amounts of dividends from net investment income and distributions from net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.

As of December 31, 2019 on the Statement of Assets and Liabilities, as a result of permanent book-to-tax differences, reclassification adjustments were as follows:

Total Distributable Earnings/(Loss)			Capital
$	(5	)	$	5

Federal Income Taxes:

It is the policy of the Fund to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of December 31.

Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., all open tax years and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.

Allocations:

Expenses directly attributable to the Fund are charged to the Fund, while expenses which are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among

21

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.

Cross-Trade Transactions:

Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For the year ended December 31, 2019, the Fund did not engage in any Rule 17a-7 transactions under the 1940 Act.

3. Purchases and Sales of Securities:

Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the fiscal year ended December 31, 2019 were as follows for the Fund:

Purchases		Sales
$	18,423,180	$	21,719,334

For the year ended December 31, 2019, there were no purchases or sales of U.S. Government Securities.

4. Fees and Transactions with Affiliates and Related Parties:

Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or the "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.

VCM has entered into a Sub-Advisory Agreement with Park Avenue Institutional Advisers LLC ("Park Avenue") with respect to the Fund. Park Avenue is responsible for providing day-to-day investment advisory services to the Fund, subject to the oversight of the Board of Trustees of the Trust. Sub-investment advisory fees, which are paid by VCM to Park Avenue, do not represent a separate or additional expense to the Fund.

Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive 0.60% of the average daily net assets of the Fund. The Adviser may use its resources to assist with the Fund's distribution and marketing expenses.

VCM also serves as the Fund's administrator and fund accountant. Under an Administration and Fund Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.08% of the first $15 billion in average daily net assets of the Trust, Victory Portfolios and Victory Portfolios II (collectively, the "Victory Funds Complex"), 0.05% of the average daily net assets above $15 billion to $30 billion of the Victory Funds Complex and 0.04% of the average daily net assets over $30 billion of the Victory Funds Complex.

Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of-pocket expenses incurred in providing these services.

FIS Investor Services, LLC ("FIS") serves as the Fund's transfer agent. Under the Transfer Agent Agreement, the Trust pays FIS a fee for its services and reimburses FIS for all of their reasonable out-of-pocket expenses incurred in providing these services.

The Chief Compliance Officer ("CCO") is an employee of the Adviser, which pays the compensation of the CCO and his support staff. The Trust has entered into an Agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the

22

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

services of the CCO, and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The Funds in the Victory Funds Complex, in aggregate, compensate the Adviser for these services.

The Victory Funds Complex pays an annual retainer to each Independent Trustee, plus an additional annual retainer to the Chairman of the Board. The aggregate amount of the fees and expenses of the Independent Trustees are allocated amongst all the funds in the Victory Funds Complex and are presented in the Statement of Operations.

Shearman & Sterling LLP provides legal services to the Trust.

Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust.

The Adviser has entered into an expense limitation agreement with the Fund until at least April 30, 2020. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by the Fund in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of a Fund's business are excluded from the expense limits. As of December 31, 2019, the expense limit (excluding voluntary waivers) is 0.89%.

The Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three fiscal years after such waiver or reimbursement was made to the extent such payments or repayments would not cause the expenses to exceed the original expense limitation in place at time of the waiver or reimbursement or any expense limitation agreement in place at the time of repayment. As of December 31, 2019, the following amounts are available to be repaid to the Adviser. Amounts repaid to the Adviser during the year ended, if any, are reflected on the Statement of Operations as "Recoupment of prior expenses waived/reimbursed by Adviser".

Expires December 31, 2022		Total
$	32,348	$	32,348

The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining a competitive expense ratio. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the year ended December 31, 2019.

Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Fund Accountant, Sub-Administrator, Sub-Fund Accountant and Legal Counsel.

5. Risks:

The Fund may be subject to other risks in addition to these identified risks.

An investment in the Fund's shares represents an indirect investment in the securities owned by the Fund, some of which will be traded on a national securities exchange or in the over-the-counter markets. The value of the securities in which the Fund invests, like other market investments, may move up or down, sometimes rapidly and unpredictably. The value of the securities in which the Fund invests may affect the value of the Fund's shares. An investment in the Fund's shares at any point in time may be worth less than the original investment, even after taking into account the reinvestment of the Fund's distributions.

The Fund will be subject to credit risk with respect to the amount it expects to receive from counterparties for financial instruments entered into by the Fund. The Fund may be negatively impacted if a counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties. The Fund may experience significant delays in obtaining any recovery in bankruptcy or other reorganization proceeding and the Fund may obtain only limited recovery or may obtain no

23

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

recovery in such circumstances. The Fund typically enters into transactions with counterparties whose credit ratings are investment grade, as determined by a nationally recognized statistical rating organization or, if unrated, judged by the Adviser to be of comparable quality.

6. Borrowing and Interfund Lending:

Line of Credit:

For the year ended December 31, 2019, the Victory Funds Complex participated in a short-term, demand note "Line of Credit" with Citibank. Under the agreement with Citibank, for the period January 1, 2019 to June 30, 2019, the Victory Funds Complex could borrow up to $250 million, of which $100 million was committed and $150 million was uncommitted. Effective July 1, 2019, the agreement was amended to include the USAA Mutual Funds Complex (another series of mutual funds managed by the Adviser) and has a new termination date of June 29, 2020. Under this amended agreement, the Victory Funds Complex and USAA Mutual Funds Complex, combined, may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund (herein, the "Fund"), another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs, including redemption requests that might otherwise require the untimely disposition of securities. With the agreement in effect for the period January 1, 2019 to June 30, 2019, Citibank received an annual commitment fee of 0.15% on $100 million for providing the Line of Credit. For the period July 1, 2019 to December 31, 2019, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. For the year ended December 31, 2019, Citibank earned approximately $300 thousand in commitment fees from the combined Victory Funds Complex and USAA Mutual Funds Complex. Each fund in the Victory Funds Complex and the USAA Mutual Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Line of credit fees.

The Fund did not utilize the Line of Credit during the year ended December 31, 2019.

Interfund Lending:

The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Victory Fund relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund during the period, if applicable, is presented on the Statement of Operations under Income on interfund lending.

The Fund did not utilize the Facility during the year ended December 31, 2019.

7. Federal Income Tax Information:

The tax character of distributions paid during the most recent tax years ended, as noted below, were as follows (total distributions paid may differ from the Statements of Changes in Net Assets because, for tax purposes, dividends are recognized when actually paid).

24

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Year Ended December 31, 2019
Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	2,209,102	$	—	$	2,209,102
Year Ended December 31, 2018
Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	179,666	$	—	$	179,666

As of the tax year ended December 31, 2019, the components of distributable earnings/accumulated deficit on a tax basis were as follows:

Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Earnings		Accumulated Capital and Other Losses			Unrealized Appreciation (Depreciation)		Total Accumulated Earnings (Deficit)
$	1,971,684	$	—	$	1,971,684	$	(3,640,076	)	$	703,572	$	(964,820	)

As of the tax year ended December 31, 2019, the Fund has short-term and long-term capital loss carryforwards of $949,620 and $2,690,456, respectively, that are not subject to expiration.

During the tax year ended December 31, 2019, the Fund utilized $11,713 of capital loss carryforwards.

As of December 31, 2019, the cost basis for federal income tax purposes, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation) for investments and derivatives were as follows:

Cost of Investments for Federal Tax Purposes		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
$	33,643,224	$	1,212,145	$	(508,573	)	$	703,572

8. Capital Contribution from Prior Custodian:

During 2016, the Fund received notification from the Fund's prior custodian, State Street Bank and Trust ("State Street"), concerning issues related to billing on certain categories of expenses during the approximately 16-year period from 1998 through October 31, 2014. The over-billing primarily related to categories of expenses that involved an allocation of general costs among multiple clients.

State Street paid the refunded amounts during January 2017. Based on billing information received during 2016 from State Street and an analysis of any expense limitation agreements that were in place during the period of the activities in question, including the application of any recoupment provisions in such agreements, the Adviser received a portion of the refund.

The portion of the refund retained by the Fund was accounted for as a capital contribution and is reflected on the Financial Highlights as "Capital Contribution from Prior Custodian, Net".

9. Fund Ownership:

Ownership of more than 25% of the voting securities of a fund creates presumptions of control of the Fund, under section 2(a)(9) of the 1940 Act. As of December 31, 2019, the shareholder listed below held more than 25% of the shares outstanding of the Fund and may be deemed to control the Fund.

Shareholder	Percent
GIAC		100.0	%

25

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

10. Recent Accounting Pronouncements:

In March 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards ("ASU") Update No. 2017-08 "Premium Amortization on Purchased Callable Debt Securities" ("ASU 2017-08"), which shortens the premium amortization period for purchased non-contingently callable debt securities. ASU 2017-08 specifies that the premium amortization period ends at the earliest call date, for purchased non-contingently callable debt securities. The Fund has adopted and applied ASU 2017-08 on a modified retrospective basis through a cumulative-effect adjustment as of the beginning of the period of adoption. The adoption of ASU 2017-08 had no material impact on information presented in the financial statements

11. Subsequent Events:

The Fund has evaluated the need for additional disclosures or adjustments resulting from subsequent events through the date these financial statements were issued. Based on this evaluation, there were no subsequent events to report that would have a material impact on the Fund's financial statements.

26

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Trustees of Victory Variable Insurance Funds

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of portfolio investments, of Victory High Yield VIP Series (the "Fund"), a series of Victory Variable Insurance Funds, as of December 31, 2019, the related statements of operations and changes in net assets, including the related notes, and the financial highlights for the year then ended (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2019, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The Fund's financial statements and financial highlights for the three years ended December 31, 2018, were audited by other auditors whose report dated February 15, 2019 and the Fund's financial highlights for the year ended December 31, 2015, were audited by other auditors whose report dated February 22, 2016, expressed unqualified opinions on those financial statements and financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2019, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers or counterparties were not received. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

We have served as the auditor of one or more of the investment companies advised by Victory Capital Management, Inc. since 2015.

COHEN & COMPANY, LTD.
Cleveland, Ohio
February 18, 2020

27

Victory Variable Insurance Funds Supplemental Information
December 31, 2019

  (Unaudited)

Trustee and Officer Information

Board of Trustees:

Overall responsibility for management of the Trust rests with the Board. The Trust is managed by the Board in accordance with the laws of the State of Delaware. There are currently ten Trustees, nine of whom are not "interested persons" of the Trust within the meaning of that term under the 1940 Act ("Independent Trustees") and one of whom is an "interested person" of the Trust within the meaning of that term under the 1940 Act ("Interested Trustee"). The Trustees, in turn, elect the officers of the Trust to actively supervise its day-to-day operations. The following tables list the Trustees, their ages, position with the Trust, commencement of service, principal occupations during the past five years and any directorships of other investment companies or companies whose securities are registered under the Securities Exchange Act of 1934, as amended, or who file reports under that Act. Each Trustee oversees nine portfolios in the Trust, 42 portfolios in Victory Portfolios and 26 portfolios in Victory Portfolios II, each a registered investment company that, together with the Trust, comprise the Victory Funds Complex. Each Trustee's address is c/o Victory Variable Insurance Funds, 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. Each Trustee has an indefinite term.

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Independent Trustees.
David Brooks Adcock, 68	Trustee	February 2005	Consultant (since 2006).	Chair and Trustee, Turner Funds (December 2016-December 2017).
Nigel D.T. Andrews, 72	Vice Chair and Trustee	August 2002	Retired.	Director, TCG BDC II, Inc. (since 2017); Director, TCG BDC I, Inc. (formerly Carlyle GMS Finance, Inc.) (since 2012); Director, Old Mutual US Asset Management (2002-2014).
E. Lee Beard, 68*	Trustee	February 2005	Retired (since 2015); Consultant, The Henlee Group, LLC (consulting) (2005-2015).	None.
Dennis M. Bushe, 76	Trustee	July 2016	Retired.	Trustee, RS Investment Trust and RS Variable Products Trust (November 2011-July 2016).

28

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Sally M. Dungan, 65	Trustee	February 2011	Chief Investment Officer, Tufts University (since 2002).	None.
John L. Kelly, 66	Trustee	February 2015	Partner, McCarvill Capital Partners (September 2016-September 2017); Advisor, Endgate Commodities LLC (January 2016-April 2016); Managing Partner, Endgate Commodities LLC (August 2014-January 2016); Chief Operating Officer, Liquidnet Holdings, Inc. (December 2011-July 2014).	Director, Caledonia Mining Corporation (since May 2012).
David L. Meyer, 62*	Trustee	December 2008	Retired.	None.
Gloria S. Nelund, 58	Trustee	July 2016	Chair, CEO and Co-Founder of TriLinc Global, LLC, an investment firm.	TriLinc Global Impact Fund, LLC (since 2012); Trustee, RS Investment Trust and RS Variable Products Trust (November 2007-July 2016).
Leigh A. Wilson, 75	Chair and Trustee	February 1998	Private Investor.	Chair (since 2013), Caledonia Mining Corporation.
Interested Trustee.
David C. Brown, 47**	Trustee	May 2008	Chairman and Chief Executive Officer (since 2013), Co-Chief Executive Officer (2011- 2013), the Adviser; Chairman and Chief Executive Officer, Victory Capital Holdings, Inc. (since 2013).	USAA Mutual Funds Trust.

*  The Board has designated Mr. Meyer and Ms. Beard as its Audit Committee Financial Experts.

**  Mr. Brown is an "Interested Person" by reason of his relationship with the Adviser.

The Statement of Additional Information includes additional information about the Trustees of the Trust and is available, without charge, by calling 800-539-3863.

29

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Officers:

The officers of the Trust, their ages, commencement of service and their principal occupations during the past five years, are detailed in the following table. Each officer serves until the earlier of his or her resignation, removal, retirement, death, or the election of a successor. The mailing address of each officer of the Trust is 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. The officers of the Trust receive no compensation directly from the Trust for performing the duties of their offices.

Name and Age	Position with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years
Christopher K. Dyer, 58	President	February 2006*	Director of Fund Administration, the Adviser.
Scott A. Stahorsky, 50	Vice President	December 2014	Manager, Fund Administration, the Adviser (since 2015); Senior Analyst, Fund Administration, the Adviser (prior to 2015).
Erin G. Wagner, 46	Secretary	December 2014	Associate General Counsel, the Adviser (since 2013).
Allan Shaer, 54	Treasurer	May 2017	Senior Vice President, Financial Administration, Citi Fund Services Ohio, Inc. (since 2016); Vice President, Mutual Fund Administration, JP Morgan Chase (2011-2016).
Christopher A. Ponte, 35	Assistant Treasurer	December 2017	Manager, Fund Administration, the Adviser (since 2017); Senior Analyst, Fund Administration, the Adviser (prior to 2017); Chief Financial Officer, Victory Capital Advisers, Inc. (since 2018).
Colin Kinney, 46	Chief Compliance Officer	July 2017	Chief Compliance Officer (since 2013) and Chief Risk Officer (2009-2017), the Adviser.
Chuck Booth, 59	Anti-Money Laundering Compliance Officer and Identity Theft Officer	May 2015	Director, Regulatory Administration and CCO Support Services, Citi Fund Services Ohio, Inc.
Jay G. Baris, 66	Assistant Secretary	February 1998	Partner, Shearman & Sterling LLP (since 2018); Partner, Morrison & Foerster LLP (2011-January 2018).

*  On December 3, 2014, Mr. Dyer resigned as Secretary of the Trust and accepted the position of President.

30

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Proxy Voting and Portfolio Holdings Information

Proxy Voting:

Information regarding the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 800-539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.

Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent twelve months ended June 30 is available on the SEC's website at www.sec.gov.

Availability of Schedules of Portfolio Investments:

The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-PORT. Prior to the implementation of Form N-PORT, the Trust filed a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-PORT and Forms N-Q are available on the SEC's website at www.sec.gov.

Expense Examples

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2019 through December 31, 2019.

The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

Please note the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Beginning Account Value 7/1/19		Actual Ending Account Value 12/31/19		Hypothetical Ending Account Value 12/31/19		Actual Expenses Paid During Period 7/1/19-12/31/19*		Hypothetical Expenses Paid During Period 7/1/19-12/31/19*		Annualized Expense Ratio During Period 7/1/19-12/31/19
$	1,000.00	$	1,051.30	$	1,020.72	$	4.60	$	4.53		0.89	%

*  Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).

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Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Additional Federal Income Tax Information

For the year ended December 31, 2019, the Fund paid qualified dividend income for the purposes of reduced individual federal income tax rates of 1%.

Dividends qualified for corporate dividends received deductions of 1%.

32

Victory Variable Insurance Funds Supplemental Information
December 31, 2019

  (Unaudited)

Considerations of the Board in Continuing the Investment Advisory Agreements

The Board approved the advisory agreement with the Adviser, on behalf of the Fund (the "Agreement"), and the sub-advisory agreement between the Adviser and Park Avenue Institutional Advisers LLC (the "Sub-Adviser"), on behalf of the Fund (the "Sub-Advisory Agreement"), at an in-person meeting, which was called for that purpose, on December 4, 2019. The Board also considered information relating to the Fund and both the Agreement and the Sub-Advisory Agreement provided throughout the year and, more specifically, at a meeting on October 22, 2019. The Board noted that prior to the Fund's reorganization on July 29, 2016, the Fund was managed by RS Investment Management Co. LLC, which was acquired by the Adviser on July 29, 2016, and sub-advised by the Sub-Adviser. In considering whether to approve the Agreement, the Board requested, and the Adviser or the Sub-Adviser provided, information that the Board believed to be reasonably necessary to reach its conclusions.

The Board, including the Independent Trustees, evaluated this information along with other information obtained throughout the year and was advised by legal counsel to the Fund, which also serves as independent legal counsel to the Independent Trustees. In addition, in 2017 the Independent Trustees, through their counsel, retained an independent consultant to assist with a review of the overall process for conducting the annual review of these advisory arrangements.

The Board considered the Fund's advisory fee, expense ratio and investment performance as significant factors in determining whether the Agreement and the Sub-Advisory Agreement should be continued. The Board reviewed numerous factors with respect to the Fund, including the Sub-Adviser's history as sub-adviser for the predecessor fund and the services to be provided by the Sub-Adviser. In considering whether the compensation paid to the Adviser was fair and reasonable, the Board also evaluated, among other things, the following factors:

•  The requirements of the Fund for the services provided by the Adviser;

•  The nature, quality and extent of the services provided and expected to be provided;

•  The performance of the Fund as compared to comparable funds;

•  The fees payable for the services and whether the fee arrangements provided for economies of scale that would benefit Fund shareholders as the Fund grows;

•  Whether the fee would be sufficient to enable the Adviser to attract and retain experienced personnel and continue to provide quality services to the Fund;

•  The fees paid by other clients of the Adviser whose accounts are managed in a similar investment style and any differences in the services provided to the other clients compared to those provided to the Fund;

•  The total expenses of the Fund, taking into consideration any distribution or shareholder servicing fees;

•  Management's commitment to operating the Fund at competitive expense levels;

•  The profitability of the Adviser (as reflected by comparing fees earned against an estimate of the Adviser's costs) with respect to the Adviser's relationship with the Fund;

•  Research and other service benefits received by the Adviser obtained through payment of client commissions for securities transactions;

•  Other benefits received by the Adviser, and its affiliates, including revenues paid to the Adviser, or its affiliates, by the Fund for administration and fund accounting services, and distribution;

•  The capabilities and financial condition of the Adviser;

•  Current economic and industry trends; and

•  The historical relationship between the Fund and the Adviser.

In considering whether the compensation paid to the Sub-Adviser was fair and reasonable, the Board also evaluated, among other things, the following factors:

•  The requirements of the Fund for the services provided by the Sub-Adviser;

•  The nature, quality and extent of the services provided and expected to be provided;

33

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

•  The fees payable for the services;

•  Representations by the Adviser that the sub-advisory fee for the Fund is within the range of fees agreed to in the market for similar services;

•  Whether the fee would be sufficient to enable the Sub-Adviser to attract and retain experienced personnel and continue to provide quality services to the Fund;

•  Management's commitment to operating the Fund at competitive expense levels;

•  Research and other service benefits received by the Sub-Adviser obtained through payment of client commissions for securities transactions;

•  Other benefits received by the Sub-Adviser as a result of its sub-advisory relationship with the Fund;

•  The capabilities and financial condition of the Sub-Adviser;

•  The nature, quality and extent of the oversight and compliance services provided by the Adviser;

•  The historical relationship between the Fund and the Sub-Adviser; and

•  Current economic and industry trends.

The Board reviewed the Fund's current management fee, comprised of the advisory fee plus the administrative services fee paid to the Adviser, in the context of the Adviser's profitability with respect to the Fund. In addition, the Board compared the Fund's total operating expense ratio on a net and gross basis, taking into consideration any distribution or shareholder servicing fees and management fees with a universe of comparable mutual funds compiled by an independent consultant and a peer group of funds with similar investment strategies selected by that independent consultant from the universe. The Board reviewed the factors and methodology used by the independent consultant in the selection of the Fund's peer group, including the independent consultant's selection of a broad universe of funds, the more specific universe of comparable funds, and peer groups of funds with comparable investment strategies and asset levels, among other factors. The Board also reviewed any changes to the independent consultant's methodology as compared to the prior year, including those resulting from the Adviser's input, if any. The Board also reviewed fees and other information related to the Adviser's management of similarly managed institutional or private accounts, and the differences in the services provided to the other accounts, to the extent applicable. The Board noted that the advisory fee arrangements for the Fund do not include breakpoints, which are generally viewed as a method by which the investment adviser shares any economies of scale with a fund as a fund grows. The Board recognized that because the sub-advisory fees are paid by the Adviser, any arrangement by the Sub-Adviser to reduce its fee as the Fund grows would have no direct impact on the Fund or its shareholders. The Board also considered the Adviser's commitment to limit expenses as discussed in more detail below.

The Board reviewed the Fund's performance over one-, three-, five- and ten-year periods against the performance of the Fund's selected peer group and benchmark index. The Board recognized that the performance of the Fund and the peer group funds are net of expenses, while the performance of the benchmark index reflects gross returns. The Board considered the additional resources that the Adviser has committed to enhance portfolio analysis, compliance and trading systems. The Board noted that, following the Fund's reorganization, the Fund is managed by substantially the same investment management team that managed the comparable predecessor fund.

The Board considered the relative roles and responsibilities of the Adviser and the Sub-Adviser and noted that, among other things: (1) the sub-advisory fees for the Fund would be paid by the Adviser and, therefore, would not be a direct expense of the Fund; and (2) the Adviser would supervise the Sub-Adviser. The Board also considered the Adviser's representation that the fees to be paid to the Sub-Adviser are within the range of sub-advisory fees paid to other sub-advisers for similar services.

The Board reviewed various other specific factors with respect to the Fund, as described below. In their deliberations, the Trustees did not rank the importance of any particular information or factor considered and each Trustee may have attributed different weights to various factors.

The Board concluded that the Fund's gross annual management fee was reasonable as compared to the median gross management fee charged to the funds in the Fund's peer group. The Board noted that the Fund's net

34

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

annual expense ratio, taking into account any shareholder servicing or distribution fees, was reasonable as compared to the median expense ratio for the peer group. The Board considered the Adviser's contractual agreement to waive its fees and reimburse expenses for a specified period of time, as described in the Fund's prospectus.

The Board then compared the Fund's performance for the one-, three-, five- and ten-year periods ended June 30, 2019, to that of the median performance of the peer group and benchmark index and considered the fact that the Fund outperformed both the benchmark index and the peer group median for the one- and three-year periods, underperformed the benchmark index for the five- and ten-year periods, outperformed the peer group median for the five-year period, and matched the peer group median for the ten-year period.

Having considered, among other things: (1) that the Fund's management fee was within the ranges of advisory fees charged to comparable mutual funds; (2) that the Fund's total expense ratio was reasonable; (3) the Adviser's willingness to limit the expenses for a period of time would provide stability to the Fund's expenses during that period; and (4) the performance of the Fund, the Board concluded that the Agreement continued to be in the best interests of the Fund's shareholders.

Conclusion

Based on its review of the information requested and provided, and following extended discussions, the Board determined that the Agreement, on behalf of the Fund, was consistent with the best interests of the Fund and its shareholders, and the Board unanimously approved the Agreement, on behalf of the Fund, for an additional annual period on the basis of the foregoing review and discussions and the following considerations, among others:

•  The fairness and reasonableness of the investment advisory fee payable to the Adviser under the Agreement in light of the investment advisory services provided, the costs of these services, the profitability of the Adviser's relationship with the Fund and the comparability of the fee paid to the fees paid by other investment companies;

•  The nature, quality and extent of the investment advisory services provided by the Adviser;

•  The Adviser's entrepreneurial commitment to the management of the Fund and the creation of a broad-based family of funds, which could entail a substantial commitment of the Adviser's resources to the successful operation of the Fund;

•  The Adviser's representations regarding its staffing and capabilities to manage the Fund, including the retention of personnel with relevant portfolio management experience;

•  The Adviser's efforts to enhance investment results by, among other things, developing quality portfolio management teams; and

•  The overall high quality of the personnel, operations, financial condition, investment management capabilities, methodologies and performance of the Adviser.

Based on its review of the information requested and provided, and following extended discussions, the Board concluded, among other things, that the Sub-Advisory Agreement, with respect to the Fund, was consistent with the best interests of the Fund and its shareholders and unanimously approved the Sub-Advisory Agreement (including the fees to be charged for services thereunder), on the basis of the foregoing review and discussions and the following considerations, among others:

•  The fairness and reasonableness of the investment advisory fee payable to the Sub-Adviser under the Sub-Advisory Agreement in light of the investment advisory services provided, the costs of these services and the estimated profitability of the Sub-Adviser's relationship with the Fund;

•  The nature, quality and extent of the investment advisory services provided by the portfolio management team of the Sub-Adviser which have resulted in each Fund achieving its stated investment objective;

•  The Sub-Adviser's representations regarding its staffing and capabilities to manage the Fund; and

•  The overall high quality of the personnel, operations, financial condition, investment management capabilities, methodologies and performance of the Sub-Adviser.

35

Privacy Policy

Protecting the Privacy of Information

The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.

We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.

To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*

*  You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.

Privacy Policy

Protecting the Privacy of Information

The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.

We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.

To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*

*  You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.

Victory Funds
P.O. Box 182593
Columbus, Ohio 43218-2593

Visit our website at:	Call Victory at:
www.vcm.com	800-539-FUND (800-539-3863)

VVIF-RS-HYVIP-AR (12/19)

December 31, 2019

Annual Report

Victory Variable Insurance Funds

Victory INCORE Low Duration Bond VIP Series

Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports may no longer be sent by mail from the insurance company that issued your variable annuity and variable life insurance contract, unless you specifically request paper copies of the reports from your insurance company. Instead, the reports will be made available on www.victoryfunds.com. The insurance company that offers your contract may also make these reports available on a website, and such insurance company will notify you by mail each time a report is posted and provide you with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the insurance company electronically by following the instructions provided by the insurance company.

If offered by your insurance company, you may elect to receive all future reports in paper and free of charge from the insurance company. You can inform your insurance company that you wish to continue receiving paper copies of your reports. Your election to receive reports in paper will apply to all funds available under your contract.

www.vcm.com

News, Information And Education 24 Hours A Day, 7 Days A Week

The Victory Funds site gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:

•  Detailed performance records

•  Daily share prices

•  The latest fund news

•  Investment resources to help you become a better investor

•  A section dedicated to investment professionals

Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.

Victory Variable Insurance Funds

Table of Contents

Shareholder Letter (Unaudited)	3
Fund Review and Commentary (Unaudited)	5
Financial Statements
Schedule of Portfolio Investments	7
Statement of Assets and Liabilities	14
Statement of Operations	15
Statements of Changes in Net Assets	16
Financial Highlights	18
Notes to Financial Statements	20
Report of Independent Registered Public Accounting Firm	32
Supplemental Information (Unaudited)
Trustee and Officer Information	33
Proxy Voting and Portfolio Holdings Information	36
Expense Examples	36
Advisory Contract Renewal	37
Privacy Policy (inside back cover)

The Fund is distributed by Victory Capital Advisers, Inc. Victory Capital Management Inc. is the investment adviser to the Fund and receives fees from the Fund for performing services for the Fund.

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus of the Fund.

For additional information about any Victory Fund, including fees, expenses, and risks, view our prospectus online at www.vcm.com or call 800-539-3863. Read it carefully before you invest or send money.

The information in this annual report is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections, or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Past investment performance of the Fund, markets or securities mentioned herein should not be considered to be indicative of future results.

• NOT FDIC INSURED • NO BANK GUARANTEE
• MAY LOSE VALUE

Call Victory at:

800-539-FUND (800-539-3863)

Visit our website at:

www.vcm.com

1

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2

Victory Funds Letter to Shareholders
(Unaudited)

Dear Shareholder,

As we turn the page into a new decade, it's hard not to reflect on the fact that we have been enjoying the longest-ever bull market in U.S. equities. The run has been impressive, and despite periods of tumult and plenty of negative news, the bull market endured throughout 2019.

For the annual reporting period ended December 31, 2019, the S&P 500^® Index posted impressive gains of 31.49%. This represents the greatest one-year gain since 2013 and also illustrates a swift bounce-back after a precipitous drop late in 2018. The move higher supports the notion that underlying fundamentals of U.S. companies drive performance, rather than the political rancor and headline fears that often capture the attention of investors.

Perhaps we shouldn't be surprised at the impressive performance of equities. The U.S. economy — the world's largest — remains on solid footing and has been a key driver of both domestic and international stocks. Robust job creation, near-record low unemployment, and steady consumer spending continue and offer reasons for further optimism. Meanwhile, inflation remains muted, and the Federal Reserve (the Fed) and other major global central banks have taken an accommodative stance. In fact, the Fed has cut interest rates by a total of 0.75% over three meetings last July, September and October.

The risk-on attitudes of investors, coupled with the accommodative monetary policy, had an expected impact on U.S. Treasury yields. The 10-year Treasury yield declined significantly over the course of 2019, falling from 2.66% to 1.92% at year-end. More interesting, however, was the fact that, the yield on 10-year Treasurys fell below shorter-term yields for the first time since before the 2007-2008 Global Financial Crisis. This inverted yield curve spooked investors for a spell, only to revert back to a traditional upward sloping yield curve by the end of the year.

The robust domestic economy, low interest rates, and ample liquidity from central banks provided a potent tonic for the stock market in 2019. In fact, at year-end 2019, the S&P 500^® Index was approaching its highest valuation level since 1999. This reminds all of us to retain some historical context on the bull market. Many of us remember the Global Financial Crisis and, before that, the collapse of the dot-com bubble. Although those are now but a distant memory (and we are not forecasting such tumult), we should not forget that stocks don't always go up and cycles don't last forever. In other words, valuations still matter.

The key point is not to discount the risks. In addition to lofty valuations, investors need to keep apprised of trade disputes, geopolitical hotspots, a contentious U.S. election, and a host of other potential headwinds. Yet it is these very risks — these cross-currents — that may create pricing dislocations. This is an environment in which we believe our Victory Capital independent investment franchises can thrive.

On the following pages, you will find information relating to your Victory Funds investment. If you have any questions, we encourage you to contact your financial

3

advisor. Or, if you invest with us directly, you may call (800) 539-3863, or visit our website at www.vcm.com.

My colleagues and I sincerely appreciate the confidence you have placed in the Victory Funds, and we value the opportunity to help meet your investment goals.

Christopher K. Dyer, CFA

President,

Victory Funds

4

Victory INCORE Low Duration Bond VIP Series

Victory Variable Insurance Funds (Unaudited)

Following a small dip in early October, interest rates and stocks both took a steep trip higher in Q4 concluding an impressive year for both stocks and bonds. Themes driving 2019 returns included an about face on monetary policy by the U.S. Federal Reserve, a global reach for yield driven by negative interest rate policies in Japan and Europe, a resilient U.S. consumer, and easing trade tensions.

Taking its cues from market volatility in late 2018 and early 2019, the Federal Reserve quickly changed course from their December 2018 stance of "auto-pilot" on quantitative tightening, and the need for more interest rate increases in 2019. As the yield curve inverted in Q3, the Federal Reserve responded by lowering the Federal Funds Target Rate by .75% over three meetings. In late Q3 and Q4 repurchase rate volatility inspired the Federal Reserve to end quantitative tightening and instead expand their balance sheet by purchasing $173 billion in U.S. Treasury securities, the bulk of the purchases being in U.S. Treasury bills. Chairman Powell convinced board members to cut rates enough to un-invert the yield curve, and moved them to a low-inflation, rates-lower-for-longer outlook. This policy reversal moved longer term yields lower by nearly 1% for the year, providing the bond market with strong absolute returns in 2019. Negative interest rate policies in Japan and Europe also drove international investors to the U.S. bond market in search of positive yields, and lower rates domestically inspired U.S. investors to reach for yield, providing an even greater boost to corporate bond returns relative to U.S. Treasuries.

The U.S. consumer, not surprisingly, remained confident and seemingly willing to spend. U3 (U.S. official) unemployment rate is at 3.5%, and U6 (broader measure) unemployment rate is at 6.7% and trending lower, are both at generational lows. The percentage of U.S. workers who perceive jobs as plentiful versus those who perceive jobs as hard to get are at levels not seen since the records set in the late 1990s, and personal income grew 3.9% over the year. This confidence reflected in retail sales which grew at a 5.8% annual rate, ending the year with strong holiday sales and counterbalancing lackluster business investment due to trade tensions, and driving U.S. GDP to grow at 2.3% with inflation running at a benign 1.6%.

Progress in trade negotiations late in the year brightened the outlook for business and investment, moving markets higher at the end of the year. After months of negotiations to modify the USMCA trade deal with Canada and Mexico, the treaty was passed by the House of Representatives in December, and may be ratified by the Senate soon. Progress was also made with China as a Phase 1 trade deal was scheduled to be signed on January 15.

The Victory INCORE Low Duration Bond VIP Series (the "Fund") seeks to provide a high level of current income consistent with preservation of capital. For the year, the Fund returned 3.79%, ahead of the Bloomberg Barclays U.S. Government 1-3 Year Bond Index which returned 3.59%. While the Fund was positioned relatively defensively early in the year, overweight to high yield and corporate bonds boosted returns, while duration and yield curve positioning detracted from returns.

5

Victory Variable Insurance Funds (Unaudited)

Victory INCORE Low Duration Bond VIP Series (continued)

Average Annual Total Return

Year Ended December 31, 2019

	Class I
INCEPTION DATE	8/28/03
	Net Asset Value			Bloomberg Barclays U.S. Government 1-3 Year Bond Index1
One Year		3.79	%		3.59	%
Three Year		2.14	%		1.86	%
Five Year		1.78	%		1.40	%
Ten Year		1.97	%		1.25	%
Since Inception		2.58	%		N/A

Expense Ratios

Gross	0.58	%
With Applicable Waivers	0.53	%

Past performance is not indicative of future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month's end, please visit www.vcm.com.

The above expense ratios are from the Fund's prospectus dated May 1, 2019. Additional information pertaining to the Fund's expense ratios as of December 31, 2019 can be found in the financial highlights.

The total return figures set forth above include all waivers of fees for various periods since inception. Without such fee waivers, the total returns would have been lower. Some fee waivers are voluntary and may be modified or terminated at any time. The total returns do not include any insurance, sales or administrative charges of variable annuity or life insurance contracts. If these charges were included, the total returns would have been lower.

Victory INCORE Low Duration Bond VIP Series — Growth of $10,000

¹The Bloomberg Barclays U.S. Government 1-3 Year Bond Index is generally considered to be representative of U.S. government bonds with maturities between one and three years. The Bloomberg Barclays U.S. Government 1-3 Year Bond Index is an unmanaged index that is not available for direct investment. There are no expenses associated with the index, while there are expenses associated with the Fund. It is not possible to invest directly in an index.

The graph reflects investment of growth of a hypothetical $10,000 investment in the Fund. Past performance is no guarantee of future results.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

6

Victory Variable Insurance Funds
Victory INCORE Low Duration Bond VIP Series Schedule of Portfolio Investments
December 31, 2019

Security Description	Principal Amount		Value
Asset Backed Securities (6.2%)
AmeriCredit Automobile Receivables Trust, Series 2016-3, Class C, 2.24%, 4/8/22, Callable 3/8/21 @ 100 (a)	$	1,635,000	$	1,635,419
AmeriCredit Automobile Receivables Trust, Series 2015-3, Class D, 3.34%, 8/8/21, Callable 2/8/20 @ 100 (a)		1,617,211		1,618,878
AmeriCredit Automobile Receivables Trust, Series 2017-2, Class B, 2.40%, 5/18/22, Callable 11/18/21 @ 100 (a)		1,385,000		1,386,888
AmeriCredit Automobile Receivables Trust, Series 2018-1, Class B, 3.26%, 1/18/24, Callable 9/18/22 @ 100 (a)		2,800,000		2,841,352
Chrysler Capital Auto Receivables Trust, Series 2016-BA, Class B, 2.22%, 5/16/22, Callable 7/15/21 @ 100 (a) (b)		1,700,000		1,701,076
Drive Auto Receivables Trust, Series 2017-AA, Class C, 2.98%, 1/18/22, Callable 3/15/21 @ 100 (a) (b)		55,940		55,953
Santander Drive Auto Receivables Trust, Series 2016-3, Class C, 2.46%, 3/15/22, Callable 1/15/21 @ 100 (a)		1,271,112		1,272,409
Santander Drive Auto Receivables Trust, Series 2017-3, Class B, 2.19%, 3/15/22, Callable 8/15/21 @ 100 (a)		79,271		79,263
Santander Drive Auto Receivables Trust, Series 2018-2, Class B, 3.03%, 9/15/22, Callable 10/15/21 @ 100 (a)		1,963,057		1,966,747
Santander Retail Auto Lease Trust, Series 2018-A, Class B, 3.20%, 4/20/22, Callable 2/20/21 @ 100 (a) (b)		1,585,000		1,597,184
World Financial Network Credit Card Master Trust, Series 2017-A, Class A, 2.12%, 3/15/24 (a)		1,610,000		1,609,986
Total Asset Backed Securities (Cost $15,716,082)				15,765,155
Collateralized Mortgage Obligations (2.5%)
Galaxy CLO Ltd., Series 2017-24A, Class A, 3.12% (LIBOR03M+112bps), 1/15/31, Callable 1/15/20 @ 100 (a) (b) (c)		1,000,000		992,750
GS Mortgage Securities Trust, Series 2012-GC6, Class B, 5.65%, 1/10/45 (a) (b) (d)		2,000,000		2,111,132
Morgan Stanley BAML Trust, Series 2013-C13, Class A2, 2.94%, 11/15/46 (a)		14,691		14,755
Steele Creek CLO Ltd., Series 2017-1A, Class A, 3.25% (LIBOR03M+125bps), 1/15/30, Callable 1/15/20 @ 100 (a) (b) (c)		2,175,000		2,167,918
Voya CLO Ltd., Series 2017-4A, Class A1, 3.13% (LIBOR03M+113bps), 10/15/30, Callable 1/15/20 @ 100 (a) (b) (c)		1,000,000		996,862
Total Collateralized Mortgage Obligations (Cost $6,369,260)				6,283,417
Corporate Bonds (41.9%)
Communication Services (3.6%):
Activision Blizzard, Inc., 2.60%, 6/15/22, Callable 5/15/22 @ 100		420,000		425,141
AT&T, Inc. 2.45%, 6/30/20, Callable 5/30/20 @ 100 (a)		4,079,000		4,090,095
3.20%, 3/1/22, Callable 2/1/22 @ 100 (a)		468,000		479,232
4.25%, 3/1/27, Callable 12/1/26 @ 100 (a)		471,000		516,965
Electronic Arts, Inc., 3.70%, 3/1/21, Callable 2/1/21 @ 100 (a)		2,255,000		2,296,424

See notes to financial statements.

7

Victory Variable Insurance Funds
Victory INCORE Low Duration Bond VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Principal Amount		Value
Verizon Communications, Inc. 5.15%, 9/15/23 (a)	$	200,000	$	222,110
3.38%, 2/15/25 (a)		325,000		344,048
3.01% (LIBOR03M+110bps), 5/15/25, Callable 3/15/25 @ 100 (a) (c)		719,000		735,127
				9,109,142
Consumer Discretionary (5.2%):
Best Buy Co., Inc. 5.50%, 3/15/21, Callable 12/15/20 @ 100 (a) (e)		2,115,000		2,181,432
4.45%, 10/1/28, Callable 7/1/28 @ 100 (a)		375,000		411,364
BorgWarner, Inc., 4.63%, 9/15/20 (a)		859,000		872,675
D. R. Horton, Inc., 4.75%, 2/15/23, Callable 11/15/22 @ 100		1,506,000		1,606,315
D. R. Horton, Inc., 4.00%, 2/15/20 (a)		2,133,000		2,137,244
General Motors Co., 4.88%, 10/2/23 (a)		473,000		509,331
Hasbro, Inc., 3.15%, 5/15/21, Callable 3/15/21 @ 100 (a)		2,622,000		2,652,992
NVR, Inc., 3.95%, 9/15/22, Callable 6/15/22 @ 100 (a)		2,985,000		3,114,160
				13,485,513
Consumer Staples (3.0%):
Altria Group, Inc., 4.40%, 2/14/26, Callable 12/14/25 @ 100 (a)		568,000		616,757
Constellation Brands, Inc. 2.61% (LIBOR03M+70bps), 11/15/21, Callable 2/10/20 @ 100 (a) (c)		2,500,000		2,503,674
4.65%, 11/15/28, Callable 8/15/28 @ 100 (a)		343,000		385,776
Ingredion, Inc., 4.63%, 11/1/20 (a)		900,000		918,153
Kerry Group Financial Services Unlimited Co., 3.20%, 4/9/23, Callable 1/9/23 @ 100 (b)		1,000,000		1,017,830
Keurig Dr Pepper, Inc., 4.06%, 5/25/23, Callable 4/25/23 @ 100		1,270,000		1,341,603
Pernod Ricard SA, 4.25%, 7/15/22 (b)		767,000		806,608
				7,590,401
Energy (4.2%):
Continental Resources, 4.50%, 4/15/23, Callable 1/15/23 @ 100 (a)		732,000		767,041
Ecopetrol SA, 5.88%, 9/18/23 (a)		454,000		504,004
EQM Midstream Partners LP, 4.75%, 7/15/23, Callable 6/15/23 @ 100		918,000		920,800
LUKOIL International Finance BV, 6.13%, 11/9/20 (a) (b)		2,815,000		2,907,614
Marathon Petroleum Corp., 3.40%, 12/15/20, Callable 11/15/20 @ 100 (a)		1,040,000		1,052,032
Pioneer Natural Resource Co. 7.50%, 1/15/20 (a)		1,135,000		1,136,997
3.45%, 1/15/21, Callable 12/15/20 @ 100 (a)		1,825,000		1,849,126
Plains All American Pipeline LP/PAA Finance Corp., 2.85%, 1/31/23, Callable 10/31/22 @ 100		925,000		932,539
Valero Energy Corp., 4.00%, 4/1/29, Callable 1/1/29 @ 100 (a)		350,000		377,430
				10,447,583
Financials (9.1%):
Alleghany Corp., 5.63%, 9/15/20 (a)		800,000		818,952
Bank of America Corp. 2.25%, 4/21/20, MTN (a)		1,300,000		1,301,183
2.33% (LIBOR03M+63bps), 10/1/21, Callable 10/1/20 @ 100 (a) (c)		754,000		755,538
4.20%, 8/26/24, MTN (a)		421,000		452,297

See notes to financial statements.

8

Victory Variable Insurance Funds
Victory INCORE Low Duration Bond VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Principal Amount		Value
Capital One Financial Corp. 2.50%, 5/12/20, Callable 4/12/20 @ 100 (a)	$	590,000	$	590,761
3.45%, 4/30/21, Callable 3/30/21 @ 100 (a)		3,500,000		3,562,825
3.30%, 10/30/24, Callable 9/30/24 @ 100 (a)		627,000		652,839
Citigroup, Inc. 2.95% (LIBOR03M+107bps), 12/8/21, Callable 11/8/21 @ 100 (a) (c)		1,500,000		1,519,079
4.45%, 9/29/27 (a)		371,000		408,838
Enel Finance International NV, 2.88%, 5/25/22 (b)		1,525,000		1,543,864
Fifth Third Bancorp, 3.65%, 1/25/24, Callable 12/25/23 @ 100 (a)		731,000		771,198
Level 3 Financing, Inc., 5.38%, 1/15/24, Callable 2/10/20 @ 101.34 (a)		325,000		330,034
Marsh & McLennan Cos., Inc., 2.35%, 3/6/20, Callable 2/10/20 @ 100 (a)		335,000		335,107
Morgan Stanley 2.65%, 1/27/20 (a)		1,355,000		1,355,488
4.88%, 11/1/22 (a)		918,000		984,592
Newcrest Finance Pty Ltd. 4.45%, 11/15/21 (a) (b)		1,569,000		1,626,127
4.20%, 10/1/22 (a) (b)		1,756,000		1,832,439
The Goldman Sachs Group, Inc., 3.08% (LIBOR03M+117bps), 11/15/21, Callable 11/15/20 @ 100 (a) (c)		1,500,000		1,511,595
ZB NA, 3.50%, 8/27/21 (a)		1,465,000		1,498,212
Zions Bancorp NA, 3.35%, 3/4/22, Callable 2/4/22 @ 100 (a) (e)		910,000		932,723
				22,783,691
Health Care (3.9%):
AbbVie, Inc., 2.30%, 5/14/21, Callable 4/14/21 @ 100 (a)		1,094,000		1,097,960
Amgen, Inc., 2.20%, 5/11/20 (a)		2,705,000		2,706,759
Biogen, Inc., 2.90%, 9/15/20 (a)		2,623,000		2,639,761
Bristol-Myers Squibb Co., 2.88%, 2/19/21 (b)		3,020,000		3,055,062
Humana, Inc., 2.90%, 12/15/22, Callable 11/15/22 @ 100		515,000		525,182
				10,024,724
Industrials (2.2%):
AerCap Ireland Capital DAC / AerCap Global Aviation Trust, 4.63%, 10/30/20 (a)		2,015,000		2,055,945
Delta Air Lines, Inc., 3.80%, 4/19/23, Callable 3/19/23 @ 100 (e)		1,025,000		1,063,909
Fortive Corp., 3.15%, 6/15/26, Callable 3/15/26 @ 100 (a)		176,000		180,224
IDEX Corp., 4.50%, 12/15/20, Callable 9/15/20 @ 100 (a)		1,150,000		1,168,124
Roper Technologies, Inc., 2.95%, 9/15/29, Callable 6/15/29 @ 100		358,000		361,627
Spirit AeroSystems, Inc., 2.69% (LIBOR03M+80bps), 6/15/21, Callable 2/10/20 @ 100 (a) (c)		1,000,000		996,420
				5,826,249
Information Technology (3.8%):
Broadcom Corp., 3.00%, 1/15/22, Callable 12/15/21 @ 100 (a)		861,000		873,855
FLIR Systems, Inc., 3.13%, 6/15/21, Callable 5/15/21 @ 100 (a) (e)		2,050,000		2,064,617
Lam Research Corp., 4.00%, 3/15/29, Callable 12/15/28 @ 100 (a)		459,000		505,295
Lam Research Group, 2.80%, 6/15/21, Callable 5/15/21 @ 100 (a)		2,928,000		2,963,048
NetApp, Inc., 3.38%, 6/15/21, Callable 4/15/21 @ 100 (a)		1,310,000		1,332,375
VMware, Inc., 2.30%, 8/21/20 (a)		2,110,000		2,113,524
				9,852,714

See notes to financial statements.

9

Victory Variable Insurance Funds
Victory INCORE Low Duration Bond VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Principal Amount		Value
Materials (2.1%):
Anglo American Capital PLC, 4.13%, 4/15/21 (a) (b)	$	3,275,000	$	3,344,004
Celanese US Holdings LLC, 4.63%, 11/15/22		780,000		824,717
LYB International Finance II BV, 3.50%, 3/2/27, Callable 12/2/26 @ 100 (a)		502,000		526,859
Lyondellbasell Industries NV, 6.00%, 11/15/21, Callable 8/17/21 @ 100 (a)		800,000		849,704
				5,545,284
Real Estate (2.4%):
CubeSmart, LP, 4.80%, 7/15/22, Callable 4/15/22 @ 100 (a)		2,731,000		2,885,656
Highwoods Realty LP, 3.20%, 6/15/21, Callable 4/15/21 @ 100 (a)		2,200,000		2,228,754
Piedmont Operating Partnership LP, 3.40%, 6/1/23, Callable 3/1/23 @ 100		967,000		991,852
				6,106,262
Utilities (2.4%):
Eversource Energy, 2.50%, 3/15/21, Callable 2/15/21 @ 100 (a)		1,950,000		1,959,945
Exelon Corp. 3.50%, 6/1/22, Callable 5/1/22 @ 100 (a)		2,117,000		2,173,121
3.95%, 6/15/25, Callable 3/15/25 @ 100 (a)		541,000		581,402
NextEra Energy Capital Holdings, Inc., 2.80%, 1/15/23, Callable 12/15/22 @ 100		1,345,000		1,367,300
				6,081,768
Total Corporate Bonds (Cost $105,706,734)				106,853,331
Residential Mortgage Backed Securities (3.6%)
Bear Stearns Alt-A Trust, Series 2003-3, Class 2A, 4.34%, 10/25/33, Callable 1/25/20 @ 100 (a) (d)		405,124		405,124
Bear Stearns Alt-A Trust, Series 2004-6, Class 1A, 2.43% (LIBOR01M+64bps), 7/25/34, Callable 1/25/20 @ 100 (a) (c)		61,911		61,696
Credit Suisse First Boston Mortgage Securities Corp., Series 2003-23, Class 2A8, 4.50%, 12/31/49 (a)		2,385		2,474
Credit Suisse First Boston Mortgage Securities Corp., Series 2004-AR7, Class 4A1, 4.09%, 11/25/34, Callable 1/25/20 @ 100 (a) (d)		301,135		301,135
JPMorgan Mortgage Trust, Series 2004-S2, Class 1A3, 4.75%, 2/25/20, Callable 1/25/20 @ 100 (a)		1,906		1,914
JPMorgan Mortgage Trust, Series 2016-4, Class A5, 3.50%, 10/25/46, Callable 9/25/29 @ 100 (a) (b) (d)		516,927		524,304
JPMorgan Mortgage Trust, Series 2004-S1, Class 1A7, 5.00%, 9/25/34, Callable 1/25/20 @ 100 (a)		1,564		1,504
JPMorgan Mortgage Trust, Series 2016-3, Class 1A3, 3.50%, 10/25/46, Callable 6/25/25 @ 100 (a) (b) (d)		1,103,133		1,118,855
JPMorgan Mortgage Trust, Series 2014-5, Class A11, 2.98%, 10/25/29, Callable 7/25/23 @ 100 (a) (b) (d)		1,680,325		1,699,721
JPMorgan Mortgage Trust, Series 2017-1, Class A5, 3.50%, 1/25/47, Callable 1/25/28 @ 100 (a) (b) (d)		744,476		755,030
JPMorgan Mortgage Trust, Series 2017-3, Class 2A2, 2.50%, 8/25/47, Callable 11/25/24 @ 100 (a) (b) (d)		2,084,535		2,079,951
Madison Park Funding Ltd., Series 2007-4A, Class AR, 3.13% (LIBOR03M+120bps), 7/29/30, Callable 1/29/20 @ 100 (a) (b) (c)		1,750,000		1,749,061
Residential Asset Securities Corp., Series 2005-KS1, Class M1, 2.47% (LIBOR01M+68bps), 2/25/35, Callable 1/25/20 @ 100 (a) (c)		519,942		517,390

See notes to financial statements.

10

Victory Variable Insurance Funds
Victory INCORE Low Duration Bond VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares or Principal Amount		Value
Residential Funding Mortgage Securities I, Inc., Series 2005-S3, Class A1, 4.75%, 3/25/20, Callable 1/25/20 @ 100 (a)	$	186	$	186
Total Residential Mortgage Backed Securities (Cost $9,230,107)				9,218,345
U.S. Government Mortgage Backed Agencies (14.4%)
Federal Home Loan Mortgage Corp. 5.00%, 6/15/23 – 8/1/40 (a)		814,580		898,121
5.50%, 10/25/23 (a)		4,502		4,694
Series 4207, Class JD, 1.50%, 5/15/28 (a)		2,066,398		2,020,908
Series 4430, Class NG, 2.50%, 2/15/38 (a)		1,387,932		1,392,604
7.00%, 9/1/38 (a)		3,907		4,699
Series 4320, Class AP, 3.50%, 7/15/39 (a)		804,205		832,428
Series 3713, Class PA, 2.00%, 2/15/40 – 4/15/44 (a)		8,443,616		8,366,554
Series 4444, Class CH, 3.00%, 1/15/41		2,285,442		2,326,596
Series 4049, Class AB, 2.75%, 12/15/41 (a)		478,248		483,161
				16,329,765
Federal National Mortgage Association Series 2012-63, Class VG, 4.00%, 8/25/23 (a)		340,694		349,053
Series 2010-156, Class DY, 3.50%, 1/25/26 – 3/25/44 (a)		4,934,371		5,030,591
6.00%, 2/1/37 (a)		941,638		1,079,555
Series 2013-33, Class UD, 2.50%, 4/25/39 – 5/25/40 (a)		2,612,286		2,627,779
Series 2011-21, Class PA, 4.50%, 5/25/40 (a)		1,940,620		2,020,653
Series 2011-101, Class LA, 3.00%, 10/25/40 (a)		764,980		775,003
5.00%, 2/1/41 – 10/1/41 (a)		3,082,198		3,398,515
				15,281,149
Government National Mortgage Association Series 2016-156, Class AP, 2.25%, 12/20/42 (a)		3,430,661		3,427,288
Series 2018-22, Class JA, 3.00%, 1/20/44 (a)		1,560,209		1,579,605
				5,006,893
Total U.S. Government Mortgage Backed Agencies (Cost $36,458,434)				36,617,807
U.S. Treasury Obligations (28.9%)
U.S. Treasury Bills 1.23%, 1/2/20 (a) (f)		3,301,000		3,300,774
1.47%, 3/26/20 (f)		11,655,000		11,614,191
U.S. Treasury Notes 1.50%, 8/31/21		55,000,000		54,911,914
1.50%, 8/15/22		4,000,000		3,991,563
Total U.S. Treasury Obligations (Cost $73,740,080)				73,818,442
Collateral for Securities Loaned^ (0.3%)
BlackRock Liquidity Funds TempFund Portfolio, Institutional Class, 1.75% (g)		31,361		31,361
Fidelity Investments Money Market Government Portfolio, Class I, 1.54% (g)		172,778		172,778
Fidelity Investments Prime Money Market Portfolio, Class I, 1.75% (g)		5,238		5,238
Goldman Sachs Financial Square Prime Obligations Fund, Institutional Class, 1.80% (g)		104,376		104,376

See notes to financial statements.

11

Victory Variable Insurance Funds
Victory INCORE Low Duration Bond VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
JPMorgan Prime Money Market Fund, Capital Class, 1.73% (g)		114,821	$	114,821
Morgan Stanley Institutional Liquidity Prime Portfolio, Institutional Class, 1.76% (g)		229,635		229,635
Total Collateral for Securities Loaned (Cost $658,209)				658,209
Total Investments (Cost $247,878,906) — 97.8%				249,214,706
Other assets in excess of liabilities — 2.2%				5,482,898
NET ASSETS — 100.00%			$	254,697,604

^  Purchased with cash collateral from securities on loan.

(a)  All or a portion of this security has been segregated as collateral for derivative instruments.

(b)  Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid based upon procedures approved by the Board of Trustees. As of December 31, 2019, the fair value of these securities was $33,683,345 and amounted to 13.2% of net assets.

(c)  Variable or Floating-Rate Security. Rate disclosed is as of December 31, 2019.

(d)  The rate for certain asset-backed and mortgage backed securities may vary based on factors relating to the pool of assets underlying the security. The rate disclosed is the rate in effect at December 31, 2019.

(e)  All or a portion of this security is on loan.

(f)  Rate represents the effective yield at December 31, 2019.

(g)  Rate disclosed is the daily yield on December 31, 2019.

bps — Basis points

LIBOR — London InterBank Offered Rate

LIBOR01M — 1 Month US Dollar LIBOR, rate disclosed as of December 31, 2019, based on the last reset date of the security

LIBOR03M — 3 Month US Dollar LIBOR, rate disclosed as of December 31, 2019, based on the last reset date of the security

LLC — Limited Liability Company

LP — Limited Partnership

MTN — Medium Term Note

PLC — Public Limited Company

Futures Contracts Purchased

	Number of Contracts		Expiration Date	Notional Amount		Value		Unrealized Appreciation (Depreciation)
2-Year U.S. Treasury Note Future		390	3/31/20	$	84,115,757	$	84,045,000	$	(70,757	)

See notes to financial statements.

12

Victory Variable Insurance Funds
Victory INCORE Low Duration Bond VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Futures Contracts Sold

	Number of Contracts		Expiration Date	Notional Amount		Value		Unrealized Appreciation (Depreciation)
5-Year U.S. Treasury Note Future		263	3/31/20	$	31,268,427	$	31,194,266	$	74,161
	Total unrealized appreciation							$	74,161
	Total unrealized depreciation								(70,757	)
	Total net unrealized appreciation(depreciation)							$	3,404

Centrally Cleared

Credit Default Swap Agreements — Sell Protection (a)

Underlying Instrument*	Fixed Deal Received Rate			Maturity Date	Payment Frequency	Implied Credit Spread at December 31, 2019 (b)			Notional Amount (c)		Value		Premiums Paid (Received)		Unrealized Appreciation (Depreciation)
CDX North America High Yield Index; Series 33		5.00	%	12/20/24	Quarterly		2.79	%	$	5,643,000	$	544,769	$	429,997	$	114,772
											$	544,769	$	429,997	$	114,772

*  As of December 31, 2019, the CDX North America High Yield Index (the "Index") included securities which had defaulted and represented 1% of the Index. Reflects the notional amount after the default of securities.

(a)  When a credit event occurs as defined under the terms of the swap agreement, the Fund as a seller of credit protection will either (i) pay to the buyer of protection an amount equal to the par value of the defaulted reference entity and take delivery of the reference entity or (ii) pay a net amount equal to the par value of the defaulted reference entity less its recovery value.

(b)  Implied credit spread, represented in absolute terms, utilized in determining the value of the credit default swap agreements as of period end will serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a referenced entity reflects the cost of buying/selling protection and may include payments required to be made to enter into the agreement. Generally, wider credit spreads represent a perceived deterioration of the referenced entity's credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the swap agreement.

(c)  The notional amount represents the maximum potential amount the Fund could be required to pay as a seller of credit protection if a credit event occurs, as defined under the terms of the swap agreement, for each security included in the Index.

See notes to financial statements.

13

Victory Variable Insurance Funds Statement of Assets and Liabilities
December 31, 2019

	Victory INCORE Low Duration Bond VIP Series
ASSETS:
Investments, at value (Cost $247,878,906)	$	249,214,706	(a)
Cash and cash equivalents		1,763,711
Deposits with brokers for futures contracts		1,092,675
Deposits with brokers for swap agreements		2,040,757
Interest and dividends receivable		1,363,068
Receivable for capital shares issued		2,000
Variation margin receivable on open futures contracts		24,445
Receivable from Adviser		68,244
Prepaid expenses		16,525
Total Assets		255,586,131
LIABILITIES:
Payables:
Collateral received on loaned securities		658,209
Capital shares redeemed		48,657
Variation margin on open swap agreements		2,529
Accrued expenses and other payables:
Investment advisory fees		97,818
Administration fees		12,234
Custodian fees		2,444
Transfer agent fees		29,463
Compliance fees		166
Trustees' fees		527
Other accrued expenses		36,480
Total Liabilities		888,527
NET ASSETS:
Capital		253,054,781
Total distributable earnings/(loss)		1,642,823
Net Assets	$	254,697,604
Shares (unlimited shares authorized with a par value of $0.001 per share):		24,383,992
Net asset value:	$	10.45

(a)  Includes $639,947 of securities on loan.

See notes to financial statements.

14

Victory Variable Insurance Funds Statement of Operations
For the Year Ended December 31, 2019

	Victory INCORE Low Duration Bond VIP Series
Investment Income:
Interest	$	7,031,732
Securities lending (net of fees)		1,947
Total Income		7,033,679
Expenses:
Investment advisory fees		1,178,472
Administration fees		160,142
Custodian fees		17,689
Transfer agent fees		356,966
Trustees' fees		23,426
Compliance fees		1,782
Legal and audit fees		35,801
Other expenses		73,220
Total Expenses		1,847,498
Expenses waived/reimbursed by Adviser		(459,668	)
Net Expenses		1,387,830
Net Investment Income (Loss)		5,645,849
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment securities		483,983
Net realized gains (losses) from futures contracts		382,956
Net realized gains (losses) from swap agreements		(1,859,807	)
Net change in unrealized appreciation/depreciation on investment securities		4,045,486
Net change in unrealized appreciation/depreciation on futures contracts		(690,127	)
Net change in unrealized appreciation/depreciation on swap agreements		1,597,266
Net realized/unrealized gains on investments		3,959,757
Change in net assets resulting from operations	$	9,605,606

See notes to financial statements.

15

Victory Variable Insurance Funds Statements of Changes in Net Assets

	Victory INCORE Low Duration Bond VIP Series
	Year Ended December 31, 2019			Year Ended December 31, 2018
From Investment Activities:
Operations:
Net investment income (loss)	$	5,645,849		$	5,274,270
Net realized gains (losses) from investments		(992,868	)		(154,847	)
Net change in unrealized appreciation/depreciation on investments		4,952,625			(2,268,960	)
Change in net assets resulting from operations		9,605,606			2,850,463
Change in net assets resulting from distributions to shareholders		(5,011,793	)		(1,374,412	)
Change in net assets resulting from capital transactions		(14,344,949	)		(29,333,670	)
Change in net assets		(9,751,136	)		(27,857,619	)
Net Assets:
Beginning of period		264,448,740			292,306,359
End of period	$	254,697,604		$	264,448,740
Capital Transactions:
Proceeds from shares issued	$	20,029,224		$	20,030,792
Distributions reinvested		5,011,793			1,374,412
Cost of shares redeemed		(39,385,966	)		(50,738,874	)
Change in net assets resulting from capital transactions	$	(14,344,949	)	$	(29,333,670	)
Share Transactions:
Issued		1,914,121			1,955,580
Reinvested		480,517			134,219
Redeemed		(3,753,428	)		(4,949,055	)
Change in Shares		(1,358,790	)		(2,859,256	)

See notes to financial statements.

16

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17

Victory Variable Insurance Funds Financial Highlights

For a Share Outstanding Throughout Each Period

			Investment Activities							Distributions to Shareholders From
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)(a)		Net Realized and Unrealized Gains (Losses) on Investments			Total from Investment Activities		Net Investment Income			Net Realized Gains From Investments		Total Distributions
Victory INCORE Low Duration Bond VIP Series
Year Ended 12/31/19	$	10.27		0.23		0.16			0.39		(0.21	)		—		(0.21	)
Year Ended 12/31/18	$	10.22		0.19		(0.09	)		0.10		(0.05	)		—		(0.05	)
Year Ended 12/31/17	$	10.20		0.15		0.02			0.17		(0.15	)		—		(0.15	)
Year Ended 12/31/16	$	10.13		0.12		0.09			0.21		(0.14	)		—		(0.14	)
Year Ended 12/31/15	$	10.22		0.14		(0.09	)		0.05		(0.14	)		—		(0.14	)

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Total returns do not reflect the effects of charges deducted pursuant to the terms of The Guardian Insurance & Annuity Company, Inc.'s variable contracts. Inclusion of such charges would reduce the total returns for all periods shown.

(c)  Portfolio turnover increased due to a change within the portfolio holdings during the year.

(d)  Amount is less than $0.005 per share.

(e)  The Fund received monies related to a nonrecurring refund from the prior Custodian. The corresponding impact to the total return was less than 0.005% for the period shown. (See Note 8)

See notes to financial statements.

18

Victory Variable Insurance Funds Financial Highlights — continued

For a Share Outstanding Throughout Each Period

									Ratios to Average Net Assets									Supplemental Data
	Capital Contribution from Prior Custodian, Net (See Note 8)			Net Asset Value, End of Period		Total Return(b)			Net Expenses			Net Investment Income (Loss)			Gross Expenses			Net Assets, End of Period (000's)		Portfolio Turnover
Victory INCORE Low Duration Bond VIP Series
Year Ended 12/31/19		—		$	10.45		3.79	%		0.53	%		2.16	%		0.71	%	$	254,698		75	%
Year Ended 12/31/18		—		$	10.27		1.01	%		0.53	%		1.85	%		0.58	%	$	264,449		55	%
Year Ended 12/31/17		—		$	10.22		1.64	%		0.53	%		1.44	%		0.58	%	$	292,306		91	%(c)
Year Ended 12/31/16		—	(d)	$	10.20		2.04	%(e)		0.53	%		1.21	%		0.53	%	$	273,151		55	%
Year Ended 12/31/15		—		$	10.13		0.47	%		0.53	%		1.33	%		0.53	%	$	276,164		38	%

See notes to financial statements.

19

Victory Variable Insurance Funds Notes to Financial Statements
December 31, 2019

1. Organization:

Victory Variable Insurance Funds (the "Trust") was organized on February 11, 1998 as a Delaware statutory trust. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified open-end investment company. The Trust is comprised of nine funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with a par value of $0.001 per share.

The accompanying financial statements are those of the Victory INCORE Low Duration Bond VIP Series (the "Fund"). The Fund offers a single class of shares: Class I Shares. Sales of shares of the Fund may only be made to certain separate accounts of The Guardian Insurance & Annuity Company, Inc. ("GIAC") that fund certain variable annuity and variable life insurance contracts issued by GIAC. GIAC is a wholly owned subsidiary of The Guardian Life Insurance Company of America ("Guardian Life").

Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.

2. Significant Accounting Policies:

The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies.

Investment Valuation:

The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:

• Level 1 — quoted prices in active markets for identical securities

• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)

• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.

Portfolio securities listed or traded on securities exchanges, including American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.

20

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Futures contracts are valued at the settlement price established each day by the board of trade or an exchange on which they are traded. These valuations are typically categorized as Level 1 in the fair value hierarchy.

Swap agreements are valued at the mean between the current bid and ask prices. These valuations are typically categorized as Level 2 in the fair value hierarchy.

Debt securities of United States ("U.S.") issuers (other than short-term investments maturing in 60 days or less), including corporate and municipal securities, are valued on the basis of bid valuations provided by dealers or an independent pricing service approved by the Trust's Board of Trustees (the "Board"). Short-term investments maturing in 60 days or less may be valued at amortized cost, which approximates market value. Under the amortized cost method, premium or discount, if any, is amortized or accreted, respectively, on a constant basis to the maturity of the security. In each of these situations, valuations are typically categorized as Level 2 in the fair value hierarchy.

Investments for which there are no such quotations, or for which quotations do not appear reliable, are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Board. These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value.

A summary of the valuations as of December 31, 2019, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments.

	LEVEL 1			LEVEL 2		Total
Asset Backed Securities	$	—		$	15,765,155	$	15,765,155
Collateralized Mortgage Obligations		—			6,283,417		6,283,417
Corporate Bonds		—			106,853,331		106,853,331
Residential Mortgage Backed Securities		—			9,218,345		9,218,345
U.S. Government Mortgage Backed Agencies		—			36,617,807		36,617,807
U.S. Treasury Obligations		—			73,818,442		73,818,442
Collateral for Securities Loaned		658,209			—		658,209
Total	$	658,209		$	248,556,497	$	249,214,706
Other Financial Instruments^:
Assets:
Futures Contracts		74,161			—		74,161
Credit Default Swap Agreements		—			114,772		114,772
Liabilities:
Futures Contracts		(70,757	)		—		(70,757	)
Total	$	3,404		$	114,772	$	118,176

^  Futures Contracts and Credit Default Swap Agreements are valued at the unrealized appreciation (depreciation) on the investment.

For the year ended December 31, 2019, there were no Level 3 investments for which significant unobservable inputs were used to determine fair value.

Securities Purchased on a When-Issued Basis:

The Fund may purchase securities on a when-issued basis. When-issued securities are securities purchased for delivery beyond normal settlement periods at a stated price and/or yield, thereby involving the risk that the price and/or yield obtained may be more or less than those available in the market when delivery takes place. At the time the Fund makes the commitment to purchase a security on a when-issued basis, the Fund records the transaction and reflects the value of the security in determining net asset value. No interest accrues to the Fund until the transaction settles and payment takes place. Normally, the settlement date occurs within one month of the purchase. A segregated account is established and the Fund maintains cash and/or marketable securities at least equal in value to

21

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

commitments for when-issued securities. If the Fund owns when-issued securities, these values are included in "Payable for investments purchased" on the accompanying Statement of Assets and Liabilities and the segregated assets as identified in the Schedule of Portfolio Investments.

Loans:

Floating rate loans in which the Fund invests are primarily "senior" loans. Senior floating rate loans typically hold a senior position in the capital structure of the borrower, are typically secured by specific collateral, and have a claim on the assets and/or stock of the borrower that is senior to that held by subordinated debtholders and stockholders of the borrower. While these protections may reduce risk, these investments still present significant credit risk. A significant portion of the Fund's floating rate investments may be issued in connection with highly leveraged transactions such as leveraged buyouts, leveraged recapitalization loans, and other types of acquisition financing. Obligations in these types of transactions are subject to greater credit risk (including default and bankruptcy) than many other investments and may be, or become, illiquid. See note regarding below investment grade securities.

The Fund may purchase second lien loans (secured loans with a claim on collateral subordinate to a senior lender's claim on such collateral), fixed rate loans, unsecured loans, and other debt obligations.

Transactions in loans often settle on a delayed basis, and the Fund may not receive the proceeds from the sale of a loan or pay for a loan purchase for a substantial period of time after entering into the transactions.

Below Investment Grade Securities:

The Fund may invest in below investment grade securities (i.e. lower-quality, "junk" debt), which are subject to various risks. Lower-quality debt is considered to be speculative because it is less certain that the issuer will be able to pay interest or repay the principal than in the case of investment grade debt. These securities can involve a substantially greater risk of default than higher-rated securities, and their values can decline significantly over short periods of time. Lower-quality debt securities tend to be more sensitive to adverse news about their issuers, the market and the economy in general, than higher-quality debt securities. The market for these securities can be less liquid, especially during periods of recession or general market decline.

Investment Companies:

The Fund may invest in portfolios of open-end investment companies. These investment companies value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the underlying funds.

Derivative Instruments:

Futures Contracts:

The Fund may enter into contracts for the future delivery of securities or foreign currencies and futures contracts based on a specific security, class of securities, foreign currency or an index, and purchase or sell options on any such futures contracts. A futures contract on a securities index is an agreement obligating either party to pay, and entitling the other party to receive, while the contract is outstanding, cash payments based on the level of a specified securities index. No physical delivery of the underlying asset is made. The Fund may enter into futures contracts in an effort to hedge against market risks. The acquisition of put and call options on futures contracts will give the Fund the right (but not the obligation), for a specified price, to sell or to purchase the underlying futures contract, upon exercise of the option, at any time during the option period. Futures transactions involve brokerage costs and require the Fund to segregate assets to cover contracts that would require it to purchase securities or currencies. A good faith margin deposit, known as initial margin, of cash or government securities with a broker or custodian is required to initiate and maintain open positions in futures contracts. Subsequent

22

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

payments, known as variation margin, are made or received by the Fund based on the change in the market value of the position and are recorded as unrealized appreciation or depreciation until the contract is closed out, at which time the gain or loss is realized. The Fund may lose the expected benefit of futures transactions if interest rates, exchange rates or securities prices change in an unanticipated manner. Such unanticipated changes may also result in lower overall performance than if the Fund had not entered into any futures transactions. In addition, the value of the Fund's futures positions may not prove to be perfectly or even highly correlated with the value of its portfolio securities or foreign currencies, limiting the Fund's ability to hedge effectively against interest rate, exchange rate and/or market risk and giving rise to additional risks. There is no assurance of liquidity in the secondary market for purposes of closing out futures positions. The collateral held by the Fund is presented on the Statement of Assets and Liabilities under Deposits with broker for futures contracts. As of December 31, 2019, the Fund entered into Futures Contracts primarily for the strategy of hedging or other purposes, including but not limited to, providing liquidity and equitizing cash.

Credit Derivatives:

The Fund may enter into credit derivatives, including centrally cleared credit default swaps on individual obligations or credit indices. The Fund may use these investments (i) as alternatives to direct long or short investment in a particular security or securities, (ii) to adjust the Fund's asset allocation or risk exposure, or (iii) for hedging purposes. The use by the Fund of credit default swaps may have the effect of creating a short position in a security. Credit derivatives can create investment leverage and may create additional investment risks that may subject the Fund to greater volatility than investments in more traditional securities, as described in the Fund's Statement of Additional Information.

Centrally cleared credit default swap ("CDS") agreements on credit indices involve one party making a stream of payments (referred to as the buyer of protection) to another party (the seller of protection) in exchange for the right to receive a specified return in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising the credit index. A credit index is a basket of credit instruments or exposures designed to be representative of a specific sector of the credit market as a whole. These indices are made up of reference credits that are judged by a poll of dealers to be the most liquid entities in the CDS.

The counterparty risk for cleared swap agreements is generally lower than uncleared over-the-counter swap agreements because generally a clearing organization becomes substituted for each counterparty to a centrally cleared swap agreement and, in effect, guarantees each party's performance under the contract as each party to a trade looks only to the clearing organization for performance of financial obligations. However, there can be no assurance that the clearing organization, or its members, will satisfy its obligations to the Fund.

The Fund may enter into CDS agreements either as a buyer or seller. The Fund may buy protection under a CDS to attempt to mitigate the risk of default or credit quality deterioration in one or more individual holdings or in a segment of the fixed income securities market. The Fund may sell protection under a CDS in an attempt to gain exposure to an underlying issuer's credit quality characteristics without investing directly in that issuer. For swaps entered with an individual counterparty, the Fund bears the risk of loss of the uncollateralized amount expected to be received under a CDS agreement in the event of the default or bankruptcy of the counterparty. CDS agreements are generally valued at a price at which the counterparty to such agreement would terminate the agreement. The Fund may also enter into cleared swaps.

Upon entering into a cleared CDS, the Fund may be required to deposit with the broker an amount of cash or cash equivalents in the range of approximately 3% to 6% of the notional amount for CDS on high yield debt issuers (this amount is subject to change by the clearing organization that clears the trade). This amount, known as "initial margin," is in the nature of a performance bond or good faith deposit on the CDS and is returned to a Fund upon termination of the CDS, assuming all contractual obligations have been satisfied. Subsequent payments, known as "variation margin," to and from the broker will be made daily as the price of the CDS fluctuates, making the long and short positions in the

23

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

CDS contract more or less valuable, a process known as "marking-to-market." The premium (discount) payments are built into the daily price of the CDS and thus are amortized through the variation margin. The variation margin payment also includes the daily portion of the periodic payment stream.

The maximum potential amount of future payments (undiscounted) that the Fund as a seller of protection could be required to make under a CDS agreement equals the notional amount of the agreement. Notional amounts of each individual CDS agreement outstanding as of period end for which the Fund is the seller of protection are disclosed on the Schedule of Portfolio Investments. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, periodic interest payments, or net amounts received from the settlement of buy protection CDS agreements entered into by the Fund for the same referenced entity or entities.

As of December 31, 2019, the Fund entered into centrally cleared CDS agreements primarily for the strategy of asset allocation and risk exposure management.

Offsetting of Financial Assets and Derivatives Assets:

The Fund is subject to various Master Netting Arrangements, which govern the terms of certain transactions with select counterparties. The Master Netting Arrangements allow the Fund to close out and net total exposure to a counterparty in the event of a default with respect to all the transactions governed under a single agreement with a counterparty. The Master Netting Arrangements also specify collateral posting arrangements at pre-arranged exposure levels. Under the Master Netting Arrangements, collateral is routinely transferred if the total net exposure to certain transactions (net of existing collateral already in place) governed under the relevant Master Netting Arrangement with a counterparty in a given account exceeds a specified threshold depending on the counterparty and the type of Master Netting Arrangement.

The table below, as of December 31, 2019, discloses both gross information and net information about instruments and transactions eligible for offset in the Statement of Assets and Liabilities and instruments and transactions that are subject to an agreement similar to a master netting agreement as well as amounts related to collateral held at clearing brokers and counterparties.

	Gross Amounts of Recognized Assets		Gross Amounts Available for Offset		Net Amount Presented in the Statement of Assets and Liabilities		Cash Collateral Received		Net Amount
Futures Contracts-Goldman Sachs & Co.	$	24,445	$	—	$	24,445	$	—	$	24,445

Summary of Derivative Instruments:

The following table presents the effect of derivative instruments on the Statement of Assets and Liabilities, categorized by risk exposure, as of December 31, 2019.

	Assets				Liabilities
	Variation Margin Receivable on Open Futures Contracts*		Variation Margin Receivable on Open Swap Agreements*		Variation Margin Payable on Open Futures Contracts*		Variation Margin Payable on Open Swap Agreements*
Credit Risk Exposure	$	—	$	114,772	$	—	$	—
Interest Rate Risk Exposure		74,161		—		70,757		—

*Includes cumulative appreciation/depreciation of futures contracts and credit default swap agreements as reported on the Schedule of Portfolio Investments. Only current day's variation margin for both futures contracts and credit default swap agreements are reported within the Statement of Assets and Liabilities.

24

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

The following table presents the effect of derivative instruments on the Statement of Operations, categorized by risk exposure, for the year ended December 31, 2019.

	Net Realized Gains (Losses) on Derivatives Recognized as a Result from Operations					Net Change in Unrealized Appreciation/Depreciation on Derivatives Recognized as a Result of Operations
	Net Realized Gains (Losses) from Futures Contracts		Net Realized Gains (Losses) from Swap Agreements			Net Change in Unrealized Appreciation/ Depreciation on Futures Contracts			Net Change in Unrealized Appreciation/ Depreciation on Swap Agreements
Credit Risk Exposure	$	—	$	(1,859,807	)	$	—		$	1,597,266
Interest Rate Risk Exposure		382,956		—			(690,127	)		—

All open derivative positions at period end are reflected on the Fund's Schedule of Portfolio Investments. The volume associated with derivative positions in the Fund was 36% based on average monthly notional amounts in comparison to net assets during the year ended December 31, 2019.

Investment Transactions and Related Income:

Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds. Paydown gains or losses on applicable securities, if any, are recorded as components of interest income on the Statement of Operations.

The Fund may receive other income from investment in loan assignments and/or unfunded commitments, including amendment fees, consent fees and commitment fees. These fees are recorded as income when received by the Fund. These amounts are included in Interest Income in the Statement of Operations.

Withholding taxes on interest, dividends and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.

Securities Lending:

The Trust has entered into a Master Securities Lending Agreement ("MSLA") with Citibank, N.A. ("Citibank" or the "Agent"). Under the terms of the MSLA, the Fund may lend securities to certain broker-dealers and banks in exchange for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are adjusted the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities, letters of credit and certificates of deposit. The cash collateral is invested in short-term instruments or cash equivalents as noted on the Fund's Schedule of Portfolio Investments. The Trust does not have effective control of the non-cash collateral and therefore it is not disclosed in the Fund's Schedule of Portfolio Investments. The Fund continues to benefit from interest or dividends on the securities loaned and may also earn a return from the collateral. The Fund pays various fees in connection with the investment of cash collateral. The Fund pays the Agent fees based on the investment income received from securities lending activities. Securities lending income is disclosed in the Fund's Statement of Operations. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them.

25

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Securities lending transactions are entered into by the Fund under the MSLA, which permits the Fund, under certain circumstances such as an event of default, to offset amounts payable by the Fund to the same counterparty against amounts receivable from the counterparty to create a net payment due to or from the Fund.

The following table is a summary of the Fund's securities lending transactions which are subject to offset under the MSLA as of December 31, 2019. These transactions are accounted for as secured borrowings with an overnight and continuous contractual maturity for cash collateral, and greater than overnight and continuous contractual maturity for non-cash collateral.

Gross Amount of Recognized Assets (Value of		Value of Cash		Value of Non-cash Collateral Received by Maturity
Securities on Loan)		Collateral Received*		<30 Days		Between 30 & 90 days		>90 Days		Net Amount
$	639,947	$	639,947	$	—	$	—	$	—	$	—

*  Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by the Fund is disclosed in the Statement of Assets and Liabilities.

Distributions to Shareholders:

Dividends from net investment income, if any, are declared and paid annually by the Fund. Distributable net realized gains, if any, are declared and distributed at least annually.

The amounts of dividends from net investment income and distributions from net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distributions reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.

As of December 31, 2019 on the Statement of Assets and Liabilities, there were no permanent book-to-tax difference reclassification adjustments.

Federal Income Taxes:

It is the policy of the Fund to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of December 31.

Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., all open tax years and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.

Allocations:

Expenses directly attributable to the Fund are charged to the Fund, while expenses which are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.

26

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Cross-Trade Transactions:

Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For the year ended December 31, 2019, the Fund did not engage in any Rule 17a-7 transactions under the 1940 Act.

3. Purchases and Sales of Securities:

Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the year ended December 31, 2019 were as follows for the Fund:

Purchases (excluding U.S. Government Securities)		Sales (excluding U.S. Government Securities)		Purchases of U.S. Government Securities		Sales of U.S. Government Securities
$	53,686,786	$	108,766,726	$	109,621,132	$	59,364,623

4. Fees and Transactions with Affiliates and Related Parties:

Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or the "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.

Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive 0.45% of the average daily net assets of the Fund. The Adviser may use its resources to assist with the Fund's distribution and marketing expenses.

VCM also serves as the Fund's administrator and fund accountant. Under an Administration and Fund Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.08% of the first $15 billion in average daily net assets of the Trust, Victory Portfolios and Victory Portfolios II (collectively, the "Victory Funds Complex"), 0.05% of the average daily net assets above $15 billion to $30 billion of the Victory Funds Complex and 0.04% of the average daily net assets over $30 billion of the Victory Funds Complex.

Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of-pocket expenses incurred in providing these services.

FIS Investor Services, LLC ("FIS") serves as the Fund's transfer agent. Under the Transfer Agent Agreement, the Trust pays FIS a fee for its services and reimburses FIS for all of their reasonable out-of-pocket expenses incurred in providing these services.

The Chief Compliance Officer ("CCO") is an employee of the Adviser, which pays the compensation of the CCO and his support staff. The Trust has entered into an Agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the CCO, and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The Funds in the Victory Funds Complex, in aggregate, compensate the Adviser for these services.

The Victory Funds Complex pays an annual retainer to each Independent Trustee, plus an additional annual retainer to the Chairman of the Board. The aggregate amount of the fees and expenses of the

27

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Independent Trustees are allocated amongst all the funds in the Victory Funds Complex and are presented in the Statement of Operations.

Shearman & Sterling LLP provides legal services to the Trust.

Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust.

The Adviser has entered into an expense limitation agreement with the Fund until at least April 30, 2020. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by the Fund in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of a Fund's business are excluded from the expense limits. As of December 31, 2019, the expense limit (excluding voluntary waivers) is 0.53%.

The Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three fiscal years after such waiver or reimbursement was made to the extent such payments or repayments would not cause the expenses to exceed the original expense limitation in place at time of the waiver or reimbursement or any expense limitation agreement in place at the time of repayment. As of December 31, 2019, the following amounts are available to be repaid to the Adviser. Amounts repaid to the Adviser during the year ended, if any, are reflected on the Statement of Operations as "Recoupment of prior expenses waived/reimbursed by Adviser".

Expires December 31, 2020		Expires December 31, 2021		Expires December 31, 2022		Total
$	132,033	$	155,683	$	459,668	$	747,384

The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining a competitive expense ratio. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the year ended December 31, 2019.

Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Fund Accountant, Sub-Administrator, Sub-Fund Accountant and Legal Counsel.

5. Risks:

The Fund may be subject to other risks in addition to these identified risks.

An investment in the Fund's shares represents an indirect investment in the securities owned by the Fund, some of which will be traded on a national securities exchange or in the over-the-counter markets. The value of the securities in which the Fund invests, like other market investments, may move up or down, sometimes rapidly and unpredictably. The value of the securities in which the Fund invests may affect the value of the Fund's shares. An investment in the Fund's shares at any point in time may be worth less than the original investment, even after taking into account the reinvestment of the Fund's distributions.

The Fund will be subject to credit risk with respect to the amount it expects to receive from counterparties for financial instruments entered into by the Fund. The Fund may be negatively impacted if a counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties. The Fund may experience significant delays in obtaining any recovery in bankruptcy or other reorganization proceeding and the Fund may obtain only limited recovery or may obtain no recovery in such circumstances. The Fund typically enters into transactions with counterparties whose credit ratings are investment grade, as determined by a nationally recognized statistical rating organization or, if unrated, judged by the Adviser to be of comparable quality.

28

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

6. Borrowing and Interfund Lending:

Line of Credit:

For the year ended December 31, 2019, the Victory Funds Complex participated in a short-term, demand note "Line of Credit" with Citibank. Under the agreement with Citibank, for the period January 1, 2019 to June 30, 2019, the Victory Funds Complex could borrow up to $250 million, of which $100 million was committed and $150 million was uncommitted. Effective July 1, 2019, the agreement was amended to include the USAA Mutual Funds Complex (another series of mutual funds managed by the Adviser) and has a new termination date of June 29, 2020. Under this amended agreement, the Victory Funds Complex and USAA Mutual Funds Complex, combined, may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund (herein, the "Fund"), another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs, including redemption requests that might otherwise require the untimely disposition of securities. With the agreement in effect for the period January 1, 2019 to June 30, 2019, Citibank received an annual commitment fee of 0.15% on $100 million for providing the Line of Credit. For the period July 1, 2019 to December 31, 2019, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. For the year ended December 31, 2019, Citibank earned approximately $300 thousand in commitment fees from the combined Victory Funds Complex and USAA Mutual Funds Complex. Each fund in the Victory Funds Complex and the USAA Mutual Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Line of credit fees.

The Fund did not utilize the Line of Credit during the year ended December 31, 2019.

Interfund Lending:

The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Victory Fund relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund during the period, if applicable, is presented on the Statement of Operations under Income on interfund lending.

The Fund did not utilize the Facility during the year ended December 31, 2019.

7. Federal Income Tax Information:

The tax character of distributions paid during the most recent tax years ended, as noted below, were as follows (total distributions paid may differ from the Statements of Changes in Net Assets because, for tax purposes, dividends are recognized when actually paid).

Year Ended December 31, 2019
Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	5,011,793	$	—	$	5,011,793

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Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Year Ended December 31, 2018
Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	1,374,412	$	—	$	1,374,412

As of the tax year ended December 31, 2019, the components of distributable earnings/accumulated deficit on a tax basis were as follows:

Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Earnings		Accumulated Capital and Other Losses			Unrealized Appreciation (Depreciation)		Total Accumulated Earnings (Deficit)
$	6,215,649	$	—	$	6,215,649	$	(5,898,311	)	$	1,325,485	$	1,642,823

As of the tax year ended December 31, 2019, the Fund had short-term and long-term capital loss carryforwards of $1,664,163 and $4,234,148, respectively, that are not subject to expiration.

During the tax year ended December 31, 2019, the Fund did not utilize capital loss carryforwards.

As of December 31, 2019, the cost basis for federal income tax purposes, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation) for investments and derivatives were as follows:

Cost of Investments for Federal Tax Purposes		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
$	247,889,221	$	1,742,694	$	(417,209	)	$	1,325,485

8. Capital Contribution from Prior Custodian:

During 2016, the Fund received notification from the Fund's prior custodian, State Street Bank and Trust ("State Street"), concerning issues related to billing on certain categories of expenses during the approximately 16-year period from 1998 through October 31, 2014. The over-billing primarily related to categories of expenses that involved an allocation of general costs among multiple clients.

State Street paid the refunded amounts during January 2017. Based on billing information received during 2016 from State Street and an analysis of any expense limitation agreements that were in place during the period of the activities in question, including the application of any recoupment provisions in such agreements, the Adviser received a portion of the refund.

The portion of the refund retained by the Fund was accounted for as a capital contribution and is reflected on the Financial Highlights as "Capital Contribution from Prior Custodian, Net".

9. Fund Ownership:

Ownership of more than 25% of the voting securities of a fund creates presumptions of control of the Fund, under section 2(a)(9) of the 1940 Act. As of December 31, 2019, the shareholder listed below held more than 25% of the shares outstanding of the Fund and may be deemed to control the Fund.

Shareholder	Percent
GIAC		100.0	%

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Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

10. Recent Accounting Pronouncements:

In March 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards ("ASU") Update No. 2017-08 "Premium Amortization on Purchased Callable Debt Securities" ("ASU 2017-08"), which shortens the premium amortization period for purchased non-contingently callable debt securities. ASU 2017-08 specifies that the premium amortization period ends at the earliest call date, for purchased non-contingently callable debt securities. The Fund has adopted and applied ASU 2017-08 on a modified retrospective basis through a cumulative-effect adjustment as of the beginning of the period of adoption. The adoption of ASU 2017-08 had no material impact on information presented in the financial statements.

11. Subsequent Events:

The Fund has evaluated the need for additional disclosures or adjustments resulting from subsequent events through the date these financial statements were issued. Based on this evaluation, there were no subsequent events to report that would have a material impact on the Fund's financial statements.

31

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Trustees of Victory Variable Insurance Funds

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of portfolio investments, of Victory INCORE Low Duration Bond VIP Series (the "Fund"), a series of Victory Variable Insurance Funds, as of December 31, 2019, the related statements of operations and changes in net assets, including the related notes, and the financial highlights for the year then ended (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2019, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The Fund's financial statements and financial highlights for the three years ended December 31, 2018, were audited by other auditors whose report dated February 15, 2019 and the Fund's financial highlights for the year ended December 31, 2015, were audited by other auditors whose report dated February 22, 2016, expressed unqualified opinions on those financial statements and financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2019, by correspondence with the custodian and brokers. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

We have served as the auditor of one or more of the investment companies advised by Victory Capital Management, Inc. since 2015.

COHEN & COMPANY, LTD.
Cleveland, Ohio
February 18, 2020

32

Victory Variable Insurance Funds Supplemental Information
December 31, 2019

  (Unaudited)

Trustee and Officer Information

Board of Trustees:

Overall responsibility for management of the Trust rests with the Board. The Trust is managed by the Board in accordance with the laws of the State of Delaware. There are currently ten Trustees, nine of whom are not "interested persons" of the Trust within the meaning of that term under the 1940 Act ("Independent Trustees") and one of whom is an "interested person" of the Trust within the meaning of that term under the 1940 Act ("Interested Trustee"). The Trustees, in turn, elect the officers of the Trust to actively supervise its day-to-day operations.

The following tables list the Trustees, their ages, position with the Trust, commencement of service, principal occupations during the past five years and any directorships of other investment companies or companies whose securities are registered under the Securities Exchange Act of 1934, as amended, or who file reports under that Act. Each Trustee oversees nine portfolios in the Trust, 42 portfolios in Victory Portfolios and 26 portfolios in Victory Portfolios II, each a registered investment company that, together with the Trust, comprise the Victory Funds Complex. Each Trustee's address is c/o Victory Variable Insurance Funds, 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. Each Trustee has an indefinite term.

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Independent Trustees.
David Brooks Adcock, 68	Trustee	February 2005	Consultant (since 2006).	Chair and Trustee, Turner Funds (December 2016-December 2017).
Nigel D.T. Andrews, 72	Vice Chair and Trustee	August 2002	Retired.	Director, TCG BDC II, Inc. (since 2017); Director, TCG BDC I, Inc. (formerly Carlyle GMS Finance, Inc.) (since 2012); Director, Old Mutual US Asset Management (2002-2014).
E. Lee Beard, 68*	Trustee	February 2005	Retired (since 2015); Consultant, The Henlee Group, LLC (consulting) (2005-2015).	None.
Dennis M. Bushe, 76	Trustee	July 2016	Retired.	Trustee, RS Investment Trust and RS Variable Products Trust (November 2011-July 2016).

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Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Sally M. Dungan, 65	Trustee	February 2011	Chief Investment Officer, Tufts University (since 2002).	None.
John L. Kelly, 66	Trustee	February 2015	Partner, McCarvill Capital Partners (September 2016-September 2017); Advisor, Endgate Commodities LLC (January 2016-April 2016); Managing Partner, Endgate Commodities LLC (August 2014-January 2016); Chief Operating Officer, Liquidnet Holdings, Inc. (December 2011-July 2014).	Director, Caledonia Mining Corporation (since May 2012).
David L. Meyer, 62*	Trustee	December 2008	Retired.	None.
Gloria S. Nelund, 58	Trustee	July 2016	Chair, CEO and Co-Founder of TriLinc Global, LLC, an investment firm.	TriLinc Global Impact Fund, LLC (since 2012); Trustee, RS Investment Trust and RS Variable Products Trust (November 2007-July 2016).
Leigh A. Wilson, 75	Chair and Trustee	February 1998	Private Investor.	Chair (since 2013), Caledonia Mining Corporation.
Interested Trustee.
David C. Brown, 47**	Trustee	May 2008	Chairman and Chief Executive Officer (since 2013), Co-Chief Executive Officer (2011- 2013), the Adviser; Chairman and Chief Executive Officer, Victory Capital Holdings, Inc. (since 2013).	USAA Mutual Funds Trust.

*  The Board has designated Mr. Meyer and Ms. Beard as its Audit Committee Financial Experts.

**  Mr. Brown is an "Interested Person" by reason of his relationship with the Adviser.

The Statement of Additional Information includes additional information about the Trustees of the Trust and is available, without charge, by calling 800-539-3863.

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Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Officers:

The officers of the Trust, their ages, commencement of service and their principal occupations during the past five years, are detailed in the following table. Each officer serves until the earlier of his or her resignation, removal, retirement, death, or the election of a successor. The mailing address of each officer of the Trust is 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. The officers of the Trust receive no compensation directly from the Trust for performing the duties of their offices.

Name and Age	Position with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years
Christopher K. Dyer, 58	President	February 2006*	Director of Fund Administration, the Adviser.
Scott A. Stahorsky, 50	Vice President	December 2014	Manager, Fund Administration, the Adviser (since 2015); Senior Analyst, Fund Administration, the Adviser (prior to 2015).
Erin G. Wagner, 46	Secretary	December 2014	Associate General Counsel, the Adviser (since 2013).
Allan Shaer, 54	Treasurer	May 2017	Senior Vice President, Financial Administration, Citi Fund Services Ohio, Inc. (since 2016); Vice President, Mutual Fund Administration, JP Morgan Chase (2011-2016).
Christopher A. Ponte, 35	Assistant Treasurer	December 2017	Manager, Fund Administration, the Adviser (since 2017); Senior Analyst, Fund Administration, the Adviser (prior to 2017); Chief Financial Officer, Victory Capital Advisers, Inc. (since 2018).
Colin Kinney, 46	Chief Compliance Officer	July 2017	Chief Compliance Officer (since 2013) and Chief Risk Officer (2009-2017), the Adviser.
Chuck Booth, 59	Anti-Money Laundering Compliance Officer and Identity Theft Officer	May 2015	Director, Regulatory Administration and CCO Support Services, Citi Fund Services Ohio, Inc.
Jay G. Baris, 66	Assistant Secretary	February 1998	Partner, Shearman & Sterling LLP (since 2018); Partner, Morrison & Foerster LLP (2011-January 2018).

*  On December 3, 2014, Mr. Dyer resigned as Secretary of the Trust and accepted the position of President.

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Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Proxy Voting and Portfolio Holdings Information

Proxy Voting:

Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 800-539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.

Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent twelve months ended June 30 is available on the SEC's website at www.sec.gov.

Availability of Schedules of Portfolio Investments:

The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-PORT. Prior to the implementation of Form N-PORT, the Trust filed a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-PORT and Forms N-Q are available on the SEC's website at www.sec.gov.

Expense Examples

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2019 through December 31, 2019.

The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

Please note the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Beginning Account Value 7/1/19		Actual Ending Account Value 12/31/19		Hypothetical Ending Account Value 12/31/19		Actual Expenses Paid During Period 7/1/19-12/31/19*		Hypothetical Expenses Paid During Period 7/1/19-12/31/19*		Annualized Expense Ratio During Period 7/1/19-12/31/19
$	1,000.00	$	1,012.30	$	1,022.53	$	2.69	$	2.70		0.53	%

*  Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).

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Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Considerations of the Board in Continuing the Investment Advisory Agreement (the "Agreement")

The Board approved the Agreement on behalf of the Fund at an in-person meeting, which was called for that purpose, on December 4, 2019. The Board also considered information relating to the Fund and the Agreement provided throughout the year and, more specifically, at a meeting on October 22, 2019. The Board noted that prior to the Fund's reorganization on July 29, 2016, the Fund was managed by RS Investment Management Co. LLC, which was acquired by the Adviser on July 29, 2016. In considering whether to approve the Agreement, the Board requested, and the Adviser provided, information that the Board believed to be reasonably necessary to reach its conclusions.

The Board, including the Independent Trustees, evaluated this information along with other information obtained throughout the year and was advised by legal counsel to the Fund, which also serves as independent legal counsel to the Independent Trustees. In addition, in 2017 the Independent Trustees, through their counsel, retained an independent consultant to assist with a review of the overall process for conducting the annual review of these advisory arrangements.

The Board considered the Fund's advisory fee, expense ratio and investment performance as significant factors in determining whether the Agreement should be continued. In considering whether the compensation paid to the Adviser was fair and reasonable, the Board also evaluated, among other things, the following factors:

•  The requirements of the Fund for the services provided by the Adviser;

•  The nature, quality and extent of the services provided and expected to be provided;

•  The performance of the Fund as compared to comparable funds;

•  The fees payable for the services and whether the fee arrangements provided for economies of scale that would benefit Fund shareholders as the Fund grows;

•  Whether the fee would be sufficient to enable the Adviser to attract and retain experienced personnel and continue to provide quality services to the Fund;

•  The fees paid by other clients of the Adviser whose accounts are managed in a similar investment style and any differences in the services provided to the other clients compared to those provided to the Fund;

•  The total expenses of the Fund, taking into consideration any distribution or shareholder servicing fees;

•  Management's commitment to operating the Fund at competitive expense levels;

•  The profitability of the Adviser (as reflected by comparing fees earned against an estimate of the Adviser's costs) with respect to the Adviser's relationship with the Fund;

•  Research and other service benefits received by the Adviser obtained through payment of client commissions for securities transactions;

•  Other benefits received by the Adviser, and its affiliates, including revenues paid to the Adviser, or its affiliates, by the Fund for administration and fund accounting services, and distribution;

•  The capabilities and financial condition of the Adviser;

•  Current economic and industry trends; and

•  The historical relationship between the Fund and the Adviser.

The Board reviewed the Fund's current management fee, comprised of the advisory fee plus the administrative services fee paid to the Adviser, in the context of the Adviser's profitability with respect to the Fund. In addition, the Board compared the Fund's total operating expense ratio on a net and gross basis, taking into consideration any distribution or shareholder servicing fees and management fees with a universe of comparable mutual funds compiled by an independent consultant and a peer group of funds with similar investment strategies selected by that independent consultant from the universe. The Board reviewed the factors and methodology used by the independent consultant in the selection of the Fund's peer group, including the independent consultant's selection of a broad universe of funds, the more specific universe of comparable funds, and peer groups of funds with comparable investment strategies and asset levels, among other factors. The Board also reviewed any changes to the independent consultant's methodology as compared to the prior year, including

37

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

those resulting from the Adviser's input, if any. The Board also reviewed fees and other information related to the Adviser's management of similarly managed institutional or private accounts, and the differences in the services provided to the other accounts, to the extent applicable. The Board noted that the advisory fee arrangements for the Fund do not include breakpoints, which are generally viewed as a method by which the investment adviser shares any economies of scale with a fund as a fund grows. The Board also considered the Adviser's commitment to limit expenses as discussed in more detail below, and would consider breakpoints at a future time if the Fund's assets were to grow significantly.

The Board reviewed the Fund's performance over one-, three-, five- and ten-year periods against the performance of the Fund's selected peer group and benchmark index. The Board recognized that the performance of the Fund and the peer group funds are net of expenses, while the performance of the benchmark index is gross returns. The Board considered the additional resources that the Adviser has committed to enhance portfolio analysis, compliance and trading systems.

The Board reviewed various other specific factors with respect to the Fund, as described below. In their deliberations, the Trustees did not rank the importance of any particular information or factor considered and each Trustee may have attributed different weights to various factors.

The Board concluded that the Fund's gross annual management fee was reasonable as compared to the median gross management fee charged to the funds in the Fund's peer group. The Board noted that the Fund's net annual expense ratio, taking into account any shareholder servicing or distribution fees, was reasonable as compared to the median expense ratio for the peer group. The Board considered the Adviser's contractual agreement to waive its fees and reimburse expenses for a specified period of time, as described in the Fund's prospectus.

The Board then compared the Fund's performance for the one-, three-, five- and ten-year periods ended June 30, 2019, to that of the median performance of the peer group and benchmark index for the same periods and considered the fact that the Fund outperformed the benchmark index for all of the periods reviewed, with the exception of the one-year period, and underperformed the peer group median for all of the periods reviewed, with the exception of the ten-year period.

Having considered, among other things: (1) that the Fund's management fee was within the ranges of advisory fees charged to comparable mutual funds; (2) that the Fund's total expense ratio was reasonable; (3) the Adviser's willingness to limit the expenses for a period of time would provide stability to the Fund's expenses during that period; (4) the transition of the investment team following the reorganization; and (5) the performance of the Fund, the Board concluded that the Agreement continued to be in the best interests of the Fund's shareholders.

Conclusion

Based on its review of the information requested and provided, and following extended discussions, the Board determined that the Agreement, on behalf of the Fund, was consistent with the best interests of the Fund and its shareholders, and the Board unanimously approved the Agreement, on behalf of the Fund, for an additional annual period on the basis of the foregoing review and discussions and the following considerations, among others:

•  The fairness and reasonableness of the investment advisory fee payable to the Adviser under the Agreement in light of the investment advisory services provided, the costs of these services, the profitability of the Adviser's relationship with the Fund and the comparability of the fee paid to the fees paid by other investment companies;

•  The nature, quality and extent of the investment advisory services provided by the Adviser;

•  The Adviser's entrepreneurial commitment to the management of the Fund and the creation of a broad-based family of funds, which could entail a substantial commitment of the Adviser's resources to the successful operation of the Fund;

•  The Adviser's representations regarding its staffing and capabilities to manage the Fund, including the retention of personnel with relevant portfolio management experience;

•  The Adviser's efforts to enhance investment results by, among other things, developing quality portfolio management teams; and

•  The overall high quality of the personnel, operations, financial condition, investment management capabilities, methodologies and performance of the Adviser.

38

Privacy Policy

Protecting the Privacy of Information

The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.

We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.

To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*

*  You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.

Victory Funds
P.O. Box 182593
Columbus, Ohio 43218-2593

Visit our website at:	Call Victory at:
www.vcm.com	800-539-FUND (800-539-3863)

VVIF-RS-ILDBVIP-AR (12/19)

December 31, 2019

Annual Report

Victory Variable Insurance Funds

Victory RS International VIP Series

Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports may no longer be sent by mail from the insurance company that issued your variable annuity and variable life insurance contract, unless you specifically request paper copies of the reports from your insurance company. Instead, the reports will be made available on www.victoryfunds.com. The insurance company that offers your contract may also make these reports available on a website, and such insurance company will notify you by mail each time a report is posted and provide you with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the insurance company electronically by following the instructions provided by the insurance company.

If offered by your insurance company, you may elect to receive all future reports in paper and free of charge from the insurance company. You can inform your insurance company that you wish to continue receiving paper copies of your reports. Your election to receive reports in paper will apply to all funds available under your contract.

www.vcm.com

News, Information And Education 24 Hours A Day, 7 Days A Week

The Victory Funds site gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:

•  Detailed performance records

•  Daily share prices

•  The latest fund news

•  Investment resources to help you become a better investor

•  A section dedicated to investment professionals

Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.

Victory Variable Insurance Funds

Table of Contents

Shareholder Letter (Unaudited)	3
Fund Review and Commentary (Unaudited)	5
Financial Statements
Schedule of Portfolio Investments	8
Statement of Assets and Liabilities	13
Statement of Operations	14
Statements of Changes in Net Assets	15
Financial Highlights	16
Notes to Financial Statements	18
Report of Independent Registered Public Accounting Firm	27
Supplemental Information (Unaudited)
Trustee and Officer Information	28
Proxy Voting and Portfolio Holdings Information	31
Expense Examples	31
Additional Federal Income Tax Information	32
Advisory Contract Renewal	33
Privacy Policy (inside back cover)

The Fund is distributed by Victory Capital Advisers, Inc. Victory Capital Management Inc. is the investment adviser to the Fund and receives fees from the Fund for performing services for the Fund.

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus of the Fund.

For additional information about any Victory Fund, including fees, expenses, and risks, view our prospectus online at www.vcm.com or call 800-539-3863. Read it carefully before you invest or send money.

The information in this annual report is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections, or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Past investment performance of the Fund, markets or securities mentioned herein should not be considered to be indicative of future results.

• NOT FDIC INSURED • NO BANK GUARANTEE
• MAY LOSE VALUE

Call Victory at:

800-539-FUND (800-539-3863)

Visit our website at:

www.vcm.com

1

This page is intentionally left blank.

2

Victory Funds Letter to Shareholders
(Unaudited)

Dear Shareholder,

As we turn the page into a new decade, it's hard not to reflect on the fact that we have been enjoying the longest-ever bull market in U.S. equities. The run has been impressive, and despite periods of tumult and plenty of negative news, the bull market endured throughout 2019.

For the annual reporting period ended December 31, 2019, the S&P 500^® Index posted impressive gains of 31.49%. This represents the greatest one-year gain since 2013 and also illustrates a swift bounce-back after a precipitous drop late in 2018. The move higher supports the notion that underlying fundamentals of U.S. companies drive performance, rather than the political rancor and headline fears that often capture the attention of investors.

Perhaps we shouldn't be surprised at the impressive performance of equities. The U.S. economy — the world's largest — remains on solid footing and has been a key driver of both domestic and international stocks. Robust job creation, near-record low unemployment, and steady consumer spending continue and offer reasons for further optimism. Meanwhile, inflation remains muted, and the Federal Reserve (the Fed) and other major global central banks have taken an accommodative stance. In fact, the Fed has cut interest rates by a total of 0.75% over three meetings last July, September and October.

The risk-on attitudes of investors, coupled with the accommodative monetary policy, had an expected impact on U.S. Treasury yields. The 10-year Treasury yield declined significantly over the course of 2019, falling from 2.66% to 1.92% at year-end. More interesting, however, was the fact that, the yield on 10-year Treasurys fell below shorter-term yields for the first time since before the 2007-2008 Global Financial Crisis. This inverted yield curve spooked investors for a spell, only to revert back to a traditional upward sloping yield curve by the end of the year.

The robust domestic economy, low interest rates, and ample liquidity from central banks provided a potent tonic for the stock market in 2019. In fact, at year-end 2019, the S&P 500^® Index was approaching its highest valuation level since 1999. This reminds all of us to retain some historical context on the bull market. Many of us remember the Global Financial Crisis and, before that, the collapse of the dot-com bubble. Although those are now but a distant memory (and we are not forecasting such tumult), we should not forget that stocks don't always go up and cycles don't last forever. In other words, valuations still matter.

The key point is not to discount the risks. In addition to lofty valuations, investors need to keep apprised of trade disputes, geopolitical hotspots, a contentious U.S. election, and a host of other potential headwinds. Yet it is these very risks — these cross-currents — that may create pricing dislocations. This is an environment in which we believe our Victory Capital independent investment franchises can thrive.

On the following pages, you will find information relating to your Victory Funds investment. If you have any questions, we encourage you to contact your financial

3

advisor. Or, if you invest with us directly, you may call (800) 539-3863, or visit our website at www.vcm.com.

My colleagues and I sincerely appreciate the confidence you have placed in the Victory Funds, and we value the opportunity to help meet your investment goals.

Christopher K. Dyer, CFA

President,

Victory Funds

4

Victory Variable Insurance Funds (Unaudited)

Victory RS International VIP Series

Portfolio Holdings

As a Percentage of Total Investments

Portfolio Review

The Victory RS International VIP Series (the "Fund") seeks to provide long-term capital appreciation. For the year ended December 31, 2019, the MSCI EAFE Index (the "Index") rose 22.01% while the Fund outperformed the Index, returning 22.79%.

The Fund's performance relative to the Index was aided by positive stock selection in a number of economic sectors, including Financials, Consumer discretionary, and Utilities. Negative stock selection in the Real Estate, and Communication Services sectors detracted from relative performance. From a regional perspective, Fund investments in Sweden, Japan, Italy, and the United Kingdom benefitted relative results, while stock selection was negative in Spain and the Netherlands.

Key individual contributors for the period included Atlas Copco AB, a Swedish supplier of industrial equipment, and Next PLC, a multinational retailer of clothing and home wares based in the United Kingdom. Enel SpA, an Italian distributor of gas and electricity, also aided relative returns.

Telefonica, S.A., a telecommunications provider based in Spain, was the largest detractor from relative performance for the period. Australian shopping center developer and operator, Scentre Group, also detracted from relative results, as did United Arrows Ltd., a clothing and accessories retailer based in Japan.

Market Review

Fears of an end to the historic bull run were once again proven overdone as international markets, as measured by the Index, soared 22% during 2019 and posted a financial crisis high in late December. Despite a steady drumbeat of negative news flow, the Index recorded one of its best performances of the decade. However, you would have struggled to reach that conclusion based on the macroeconomic picture alone.

Starting in the United Kingdom, with the decisive election of Prime Minister Boris Johnson in December, the country finally may achieve some resolution three years on from its initial vote to leave the European Union. However, much of the year was spent under a shroud of uncertainty making the local market performance, +21%, and currency strength, +4% against the U.S. dollar, all the more surprising.

Meanwhile, on the Continent, the European Manufacturing PMI continued to grind lower finishing December at a dismal 46.3, driven by Germany where exports continued to slow. France and Spain were less of a drag but not enough to keep the Eurozone from heading towards its lowest growth rate since 2012. But like the United Kingdom, European equity securities not only shook it off but managed to thrive by soaring almost 25%.

China appears to have taken the brunt of the trade war impact. Both imports and exports are likely to finish the year in the red as consumer confidence waned and tariffs took their

5

Victory Variable Insurance Funds (Unaudited)

Victory RS International VIP Series (continued)

toll. Market observers had expected a recovery in the second half but were left disappointed as the growth in auto sales remained negative despite easy comparisons to 2018. Asia ex-Japan, where exports to China are important, took collateral damage. Notably, GDP in South Korea and Taiwan slowed for the third consecutive year. As for Japan, exports plunged over 2%, but the domestic economy remained resilient. When it comes to equity securities though, the story was positive with stocks in most Asian countries posting high-teen returns.

One common thread, which may explain at least some of the disconnect between the stellar performance of equity securities and the more decidedly mixed economic outlook, is global monetary policy. From the U.S. Federal Reserve cutting rates by 75 basis points to the European Central Bank cutting the deposit rate to -.5% to the Bank of China slashing the reserve requirement ratio, central banks with few exceptions were in easing mode. The extent to which global easing buoyed stock prices is up for debate, but it does appear it had some positive impact.

QVS Factor Performance

In this section, we offer insight into the factors driving market performance from a quantitative point of view. The RS Global Markets team's proprietary QVS (Quality, Value, and Sentiment) (the "Model") scours the globe, screening over 10,000 companies while looking for the best investment opportunities. It is designed to identify companies that have the potential to consistently create shareholder value, are reasonably valued, and exhibit favorable market sentiment. We continually use this quantitative model to help us focus our resources and fundamental research on those companies with the highest probability of outperformance.

Last year, all factors contributed positively to composite Model performance led by Quality and Sentiment. By region, the Model performed best in Asia ex. Japan and had negative performance only in Japan. Within Japan, negative Value and Sentiment factor performance both contributed to negative overall Model performance.

Out of favor for the better part of the decade, Value as a factor was a hot topic in 2019, showing signs of leadership at different points during the year. Alas, it was not to be, as our Value factor, though positive in absolute terms, underperformed the Quality and Sentiment components of the overall Model. That said, Value was the strongest factor in Emerging Markets, and had negative performance only in Japan.

Outlook

We expect market volatility to increase and will continue to be vigilant when constructing the Fund's portfolio, remaining sector- and region-neutral, as we believe that strong risk management should be at the forefront of any strategy. Making correct macro allocation calls can be immensely challenging; therefore, we do not forecast regional performance. In our view, stock selection can be far more impactful to fund performance than allocation.

6

Victory Variable Insurance Funds (Unaudited)

Victory RS International VIP Series (continued)

Average Annual Total Return

Year Ended December 31, 2019

	Class I
INCEPTION DATE	2/8/91
	Net Asset Value			MSCI EAFE Index1
One Year		22.79	%		22.01	%
Three Year		11.30	%		9.56	%
Five Year		7.15	%		5.67	%
Ten Year		6.73	%		5.50	%
Since Inception		7.18	%		N/A

Expense Ratios

Gross	0.94	%
With Applicable Waivers	0.93	%

Past performance is not indicative of future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month's end, please visit www.vcm.com.

The above expense ratios are from the Fund's prospectus dated May 1, 2019. Additional information pertaining to the Fund's expense ratios as of December 31, 2019 can be found in the financial highlights.

The total return figures set forth above include all waivers of fees for various periods since inception. Without such fee waivers, the total returns would have been lower. Some fee waivers are voluntary and may be modified or terminated at any time. The total returns do not include any insurance, sales or administrative charges of variable annuity or life insurance contracts. If these charges were included, the total returns would have been lower.

Victory RS International VIP Series — Growth of $10,000

¹The MSCI EAFE Index (Europe, Australasia, and Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The index reflects the reinvestment of dividends paid on the stocks constituting the index net of withholding taxes. You may not invest in the index, and, unlike the Fund, the index does not incur fees or expenses.

The graph reflects investment of growth of a hypothetical $10,000 investment in the Fund. Past performance is no guarantee of future results.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

7

Victory Variable Insurance Funds
Victory RS International VIP Series Schedule of Portfolio Investments
December 31, 2019

Security Description	Shares		Value
Common Stocks (97.3%)
Australia (5.9%):
Financials (1.4%):
Macquarie Group Ltd.		21,562	$	2,087,715
Health Care (1.7%):
CSL Ltd.		12,937		2,507,723
Materials (1.7%):
BHP Group Ltd.		96,556		2,643,368
Real Estate (1.1%):
Scentre Group		596,529		1,605,073
				8,843,879
Belgium (0.5%):
Information Technology (0.5%):
Melexis NV		10,114		762,862
China (2.1%):
Communication Services (1.1%):
Tencent Holdings Ltd.		35,500		1,710,363
Financials (1.0%):
China Merchants Bank Co. Ltd., Class H		281,500		1,447,321
				3,157,684
Denmark (1.3%):
Consumer Staples (1.3%):
Royal Unibrew A/S		21,519		1,971,395
France (9.7%):
Consumer Discretionary (4.2%):
Cie Generale des Etablissements Michelin SCA		9,087		1,118,143
Faurecia SE		27,845		1,511,510
LVMH Moet Hennessy Louis Vuitton SE		7,836		3,650,904
				6,280,557
Energy (1.8%):
Total SA		49,501		2,746,602
Financials (1.1%):
AXA SA		59,675		1,686,048
Information Technology (1.4%):
Capgemini SE		16,554		2,024,462
Materials (1.2%):
Arkema SA		16,071		1,718,286
				14,455,955
Germany (7.8%):
Financials (1.9%):
Allianz SE		11,292		2,766,618

See notes to financial statements.

8

Victory Variable Insurance Funds
Victory RS International VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Health Care (0.6%):
Bayer AG, Registered Shares		11,957	$	971,981
Industrials (2.1%):
Siemens AG		17,743		2,316,889
Washtec AG		13,291		799,335
				3,116,224
Information Technology (2.0%):
SAP SE		21,654		2,914,342
Real Estate (1.2%):
Vonovia SE		32,939		1,768,982
				11,538,147
Hong Kong (2.0%):
Financials (0.9%):
AIA Group Ltd.		132,400		1,392,668
Real Estate (1.1%):
CK Asset Holdings Ltd.		226,500		1,634,580
				3,027,248
Ireland (1.1%):
Industrials (1.1%):
Experian PLC		45,843		1,553,817
Italy (4.1%):
Financials (0.8%):
Banca Generali SpA		39,006		1,267,930
Health Care (0.9%):
Recordati SpA		31,083		1,310,184
Utilities (2.4%):
Enel SpA		447,003		3,550,611
				6,128,725
Japan (23.8%):
Communication Services (1.2%):
Nippon Telegraph & Telephone Corp.		73,000		1,845,234
Consumer Discretionary (4.6%):
Hikari Tsushin, Inc.		5,100		1,281,796
Toyota Motor Corp.		61,900		4,362,170
United Arrows Ltd.		40,100		1,135,783
				6,779,749
Consumer Staples (1.4%):
Ito En Ltd.		33,600		719,490
Matsumotokiyoshi Holdings Co. Ltd.		34,500		1,335,850
				2,055,340

See notes to financial statements.

9

Victory Variable Insurance Funds
Victory RS International VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Financials (3.1%):
Jafco Co. Ltd.		19,200	$	752,741
Mitsubishi UFJ Financial Group, Inc.		405,000		2,189,869
Tokio Marine Holdings, Inc.		29,600		1,657,498
				4,600,108
Health Care (2.7%):
Hoya Corp.		23,700		2,262,763
Shionogi & Co. Ltd.		28,600		1,769,484
				4,032,247
Industrials (6.6%):
en-japan, Inc.		41,000		1,782,259
Fuji Electric Co. Ltd.		60,900		1,850,233
Hitachi Construction Machinery Co. Ltd.		65,900		1,963,256
ITOCHU Corp.		59,600		1,381,521
Kyowa Exeo Corp.		15,000		379,498
OKUMA Corp.		21,900		1,151,981
Sanwa Holdings Corp.		118,100		1,323,581
				9,832,329
Information Technology (2.4%):
Fujitsu Ltd.		14,800		1,392,218
Oracle Corp. Japan		13,400		1,216,336
Ulvac, Inc.		22,700		895,959
				3,504,513
Materials (0.1%):
DIC Corp.		7,600		209,777
Real Estate (0.6%):
Sumitomo Realty & Development Co. Ltd.		27,300		952,615
Utilities (1.1%):
Chubu Electric Power Co., Inc.		111,800		1,580,606
				35,392,518
Macau (1.2%):
Consumer Discretionary (1.2%):
Wynn Macau Ltd. (a)		737,200		1,816,670
Netherlands (4.1%):
Communication Services (1.0%):
Koninklijke KPN NV		516,611		1,528,716
Financials (1.5%):
ING Groep NV		189,051		2,272,655
Industrials (1.6%):
Wolters Kluwer NV		31,665		2,311,839
				6,113,210

See notes to financial statements.

10

Victory Variable Insurance Funds
Victory RS International VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Norway (1.5%):
Energy (0.7%):
Aker BP ASA		29,745	$	976,577
Financials (0.8%):
SpareBank 1 SMN		111,387		1,272,571
				2,249,148
Russian Federation (0.5%):
Materials (0.5%):
Evraz PLC		147,945		792,098
Spain (2.7%):
Communication Services (1.6%):
Telefonica SA		341,633		2,388,872
Financials (1.1%):
Banco Santander SA		403,367		1,691,072
				4,079,944
Sweden (3.0%):
Industrials (3.0%):
Atlas Copco AB, Class B		101,402		3,521,892
Epiroc AB, Class B		72,930		867,025
				4,388,917
Switzerland (11.0%):
Consumer Staples (3.4%):
Nestle SA, Registered Shares		46,332		5,017,183
Financials (2.0%):
Cembra Money Bank AG		11,690		1,279,256
UBS Group AG, Registered Shares		136,445		1,722,208
				3,001,464
Health Care (5.6%):
Novartis AG		39,909		3,779,749
Roche Holding AG		14,234		4,627,046
				8,406,795
				16,425,442
United Kingdom (15.0%):
Consumer Discretionary (1.2%):
Next PLC		19,111		1,780,544
Consumer Staples (3.7%):
Britvic PLC		118,534		1,420,367
Diageo PLC		57,723		2,431,886
Unilever PLC		29,136		1,667,568
				5,519,821
Energy (2.7%):
BP PLC		220,479		1,386,779
Royal Dutch Shell PLC, Class A		89,899		2,661,884
				4,048,663

See notes to financial statements.

11

Victory Variable Insurance Funds
Victory RS International VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Financials (3.3%):
Close Brothers Group PLC		37,047	$	784,537
HSBC Holdings PLC		248,219		1,942,872
Legal & General Group PLC		547,451		2,198,807
				4,926,216
Health Care (0.8%):
Smith & Nephew PLC		49,964		1,203,986
Industrials (1.0%):
RELX PLC		57,167		1,442,867
Materials (2.3%):
Croda International PLC		14,303		971,435
Rio Tinto PLC		40,292		2,384,721
				3,356,156
				22,278,253
Total Common Stocks (Cost $117,795,994)				144,975,912
Exchange-Traded Funds (0.3%)
United States (0.3%):
iShares MSCI EAFE ETF		5,375		373,240
Total Exchange-Traded Funds (Cost $351,793)				373,240
Collateral for Securities Loaned^ (0.0%)
United States (0.0%): (b)
BlackRock Liquidity Funds TempFund Portfolio, Institutional Class, 1.75% (c)		5,593		5,593
Fidelity Investments Money Market Government Portfolio, Class I, 1.54% (c)		30,811		30,811
Fidelity Investments Prime Money Market Portfolio, Class I, 1.75% (c)		934		934
Goldman Sachs Financial Square Prime Obligations Fund, Institutional Class, 1.80% (c)		18,614		18,614
JPMorgan Prime Money Market Fund, Capital Class, 1.73% (c)		20,477		20,477
Morgan Stanley Institutional Liquidity Prime Portfolio, Institutional Class, 1.76% (c)		40,952		40,952
Total Collateral for Securities Loaned (Cost $117,381)				117,381
Total Investments (Cost $118,265,168) — 97.6%				145,466,533
Other assets in excess of liabilities — 2.4%				3,567,612
NET ASSETS — 100.00%			$	149,034,145

^  Purchased with cash collateral from securities on loan.

(a)  All or a portion of this security is on loan.

(b)  Amount represents less than 0.05% of net assets.

(c)  Rate disclosed is the daily yield on December 31, 2019.

ETF — Exchange-Traded Fund

PLC — Public Limited Company

See notes to financial statements.

12

Victory Variable Insurance Funds Statement of Assets and Liabilities
December 31, 2019

	Victory RS International VIP Series
ASSETS:
Investments, at value (Cost $118,265,168)	$	145,466,533	(a)
Cash and cash equivalents		3,183,194
Interest and dividends receivable		66,223
Receivable for capital shares issued		1,647
Reclaims receivable		619,608
Receivable from Adviser		11,212
Prepaid expenses		9,468
Total Assets		149,357,885
LIABILITIES:
Payables
Collateral received on loaned securities		117,381
Capital shares redeemed		62,617
Accrued expenses and other payables:
Investment advisory fees		100,560
Administration fees		7,109
Custodian fees		7,335
Transfer agent fees		51
Compliance fees		97
Trustees' fees		303
Other accrued expenses		28,287
Total Liabilities		323,740
NET ASSETS:
Capital		118,109,293
Total distributable earnings/(loss)		30,924,852
Net Assets	$	149,034,145
Shares (unlimited shares authorized with a par value of $0.001 per share):		8,527,717
Net asset value:	$	17.48

(a)  Includes $111,669 of securities on loan.

See notes to financial statements.

13

Victory Variable Insurance Funds Statement of Operations
For the Year Ended December 31, 2019

	Victory RS International VIP Series
Investment Income:
Dividends	$	5,676,474
Interest		26,256
Securities lending (net of fees)		23,503
Foreign tax withholding		(630,337	)
Total Income		5,095,896
Expenses:
Investment advisory fees		1,190,847
Administration fees		91,041
Custodian fees		38,766
Transfer agent fees		349
Trustees' fees		13,723
Compliance fees		994
Legal and audit fees		22,845
Other expenses		63,486
Total Expenses		1,422,051
Expenses waived/reimbursed by Adviser		(37,537	)
Net Expenses		1,384,514
Net Investment Income (Loss)		3,711,382
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment securities and foreign currency translations		2,838,117
Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations		23,830,462
Net realized/unrealized gains on investments		26,668,579
Change in net assets resulting from operations	$	30,379,961

See notes to financial statements.

14

Victory Variable Insurance Funds Statements of Changes in Net Assets

	Victory RS International VIP Series
	Year Ended December 31, 2019			Year Ended December 31, 2018
From Investment Activities:
Operations:
Net investment income (loss)	$	3,711,382		$	3,661,623
Net realized gains (losses) from investments		2,838,117			9,269,743
Net change in unrealized appreciation/depreciation on investments		23,830,462			(30,264,562	)
Change in net assets resulting from operations		30,379,961			(17,333,196	)
Change in net assets resulting from distributions to shareholders		(12,127,758	)		(2,621,141	)
Change in net assets resulting from capital transactions		(11,741,589	)		(19,040,351	)
Change in net assets		6,510,614			(38,994,688	)
Net Assets:
Beginning of period		142,523,531			181,518,219
End of period	$	149,034,145		$	142,523,531
Capital Transactions:
Proceeds from shares issued	$	2,897,082		$	6,913,816
Distributions reinvested		12,127,758			2,621,141
Cost of shares redeemed		(26,766,429	)		(28,575,308	)
Change in net assets resulting from capital transactions	$	(11,741,589	)	$	(19,040,351	)
Share Transactions:
Issued		165,264			400,845
Reinvested		684,295			169,597
Redeemed		(1,532,898	)		(1,650,290	)
Change in Shares		(683,339	)		(1,079,848	)

See notes to financial statements.

15

Victory Variable Insurance Funds Financial Highlights

For a Share Outstanding Throughout Each Period

			Investment Activities								Distributions to Shareholders From
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)(a)		Net Realized and Unrealized Gains (Losses) on Investments			Total from Investment Activities			Net Investment Income			Net Realized Gains From Investments			Total Distributions
Victory RS International VIP Series
Year Ended 12/31/19	$	15.47		0.43		3.09			3.52			(0.39	)		(1.12	)		(1.51	)
Year Ended 12/31/18	$	17.64		0.38		(2.26	)		(1.88	)		(0.15	)		(0.14	)		(0.29	)
Year Ended 12/31/17	$	14.31		0.31		3.36			3.67			(0.34	)		—			(0.34	)
Year Ended 12/31/16	$	14.39		0.30		(0.10	)		0.20			(0.31	)		—			(0.31	)
Year Ended 12/31/15	$	14.63		0.31		(0.19	)		0.12			(0.32	)		(0.04	)		(0.36	)

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Total returns do not reflect the effects of charges deducted pursuant to the terms of The Guardian Insurance & Annuity Company, Inc.'s variable contracts. Inclusion of such charges would reduce the total returns for all periods shown.

(c)  The Fund received monies related to a nonrecurring refund from the prior Custodian. The corresponding impact to the total return was less than 0.23% for the period shown. (See Note 8)

See notes to financial statements.

16

Victory Variable Insurance Funds Financial Highlights — continued

For a Share Outstanding Throughout Each Period  

								Ratios to Average Net Assets									Supplemental Data
	Capital Contribution from Prior Custodian, Net (See Note 8)		Net Asset Value, End of Period		Total Return(b)			Net Expenses			Net Investment Income (Loss)			Gross Expenses			Net Assets, End of Period (000's)		Portfolio Turnover
Victory RS International VIP Series
Year Ended 12/31/19		—	$	17.48		22.79	%		0.93	%		2.49	%		0.96	%	$	149,034		32	%
Year Ended 12/31/18		—	$	15.47		(10.66	)%		0.93	%		2.20	%		0.94	%	$	142,524		44	%
Year Ended 12/31/17		—	$	17.64		25.68	%		0.93	%		1.93	%		0.95	%	$	181,518		57	%
Year Ended 12/31/16		0.03	$	14.31		1.60	%(c)		0.90	%		2.13	%		0.90	%	$	175,026		110	%
Year Ended 12/31/15		—	$	14.39		0.84	%		0.92	%		2.00	%		0.92	%	$	185,028		117	%

See notes to financial statements.

17

Victory Variable Insurance Funds Notes to Financial Statements
December 31, 2019

1. Organization:

Victory Variable Insurance Funds (the "Trust") was organized on February 11, 1998 as a Delaware statutory trust. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified open-end investment company. The Trust is comprised of nine funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with a par value of $0.001 per share.

The accompanying financial statements are those of the Victory RS International VIP Series (the "Fund"). The Fund offers a single class of shares: Class I Shares. Sales of shares of the Fund may only be made to certain separate accounts of The Guardian Insurance & Annuity Company, Inc. ("GIAC") that fund certain variable annuity and variable life insurance contracts issued by GIAC. GIAC is a wholly owned subsidiary of The Guardian Life Insurance Company of America ("Guardian Life").

Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.

2. Significant Accounting Policies:

The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies.

Investment Valuation:

The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:

• Level 1 — quoted prices in active markets for identical securities

• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)

• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.

Portfolio securities listed or traded on securities exchanges, including exchange-traded funds ("ETF"), American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.

18

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Investments in open-end investment companies are valued at net asset value. These valuations are typically categorized as Level 1 in the fair value hierarchy.

Investments for which there are no such quotations, or for which quotations do not appear reliable, are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Trust's Board of Trustees (the "Board"). These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value.

In accordance with procedures adopted by the Board, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the exchange on which they are traded closes and the time the Fund's net asset value is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value their international equity securities. To the extent this model is utilized, these valuations are considered as a Level 2 in the fair value hierarchy.

A summary of the valuations as of December 31, 2019, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments.

	LEVEL 1		LEVEL 2		Total
Common Stocks	$	—	$	144,975,912	$	144,975,912
Exchange-Traded Funds		373,240		—		373,240
Collateral for Securities Loaned		117,381		—		117,381
Total	$	490,621	$	144,975,912	$	145,466,533

For the year ended December 31, 2019, there were no Level 3 investments for which significant unobservable inputs were used to determine fair value.

Investment Companies:

The Fund may invest in ETFs. Shares of an ETF are bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.

Foreign Exchange Currency Contracts:

The Fund may enter into foreign exchange currency contracts to convert U.S. dollars to and from various foreign currencies. A foreign exchange currency contract is an obligation by the Fund to purchase or sell a specific currency at a future date at a price (in U.S. dollars) set at the time of the contract. The Fund does not engage in "cross-currency" foreign exchange contracts (i.e., contracts to purchase or sell one foreign currency in exchange for another foreign currency). The Fund's foreign exchange currency contracts might be considered spot contracts (typically a contract of one week or less) or forward contracts (typically a contract term over one week). A spot contract is entered into for purposes of hedging against foreign currency fluctuations relating to a specific portfolio transaction, such as the delay between a security transaction trade date and settlement date. Forward contracts are entered into for purposes of hedging portfolio holdings or concentrations of such holdings. The Fund enters into foreign exchange currency contracts solely for spot or forward hedging purposes, and not for speculative purposes (i.e., the Fund does not enter into such contracts solely for the purpose of earning foreign currency gains). Each foreign exchange currency contract is adjusted daily by the prevailing spot or forward rate of the underlying currency, and any appreciation or depreciation is recorded for financial statement purposes as unrealized until the contract settlement date, at which time the Fund records realized gains or losses equal to the difference between the value of a contract at the time it was opened and the value at the time it was closed. The Fund could be exposed to risk if a counterparty is unable to meet the terms of a foreign exchange currency contract or if the value of

19

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

the foreign currency changes unfavorably. In addition, the use of foreign exchange currency contracts does not eliminate fluctuations in the underlying prices of the securities. During the year ended December 31, 2019, the Fund had no open forward foreign exchange currency contracts.

Investment Transactions and Related Income:

Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.

Withholding taxes on interest, dividends and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.

Securities Lending:

The Trust has entered into a Master Securities Lending Agreement ("MSLA") with Citibank, N.A. ("Citibank" or the "Agent"). Under the terms of the MSLA, the Fund may lend securities to certain broker-dealers and banks in exchange for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are adjusted the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities, letters of credit and certificates of deposit. The cash collateral is invested in short-term instruments or cash equivalents as noted on the Fund's Schedule of Portfolio Investments. The Trust does not have effective control of the non-cash collateral and therefore it is not disclosed in the Fund's Schedule of Portfolio Investments. The Fund continues to benefit from interest or dividends on the securities loaned and may also earn a return from the collateral. The Fund pays various fees in connection with the investment of cash collateral. The Fund pays the Agent fees based on the investment income received from securities lending activities. Securities lending income is disclosed in the Fund's Statement of Operations. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them.

Securities lending transactions are entered into by the Fund under the MSLA, which permits the Fund, under certain circumstances such as an event of default, to offset amounts payable by the Fund to the same counterparty against amounts receivable from the counterparty to create a net payment due to or from the Fund.

The following table is a summary of the Fund's securities lending transactions which are subject to offset under the MSLA as of December 31, 2019. These transactions are accounted for as secured borrowings with an overnight and continuous contractual maturity for cash collateral, and greater than overnight and continuous contractual maturity for non-cash collateral.

Gross Amount of Recognized Assets (Value of		Value of Cash		Value of Non-cash Collateral Received by Maturity
Securities on Loan)		Collateral Received*		<30 Days		Between 30 & 90 days		>90 Days		Net Amount
$	111,669	$	111,669	$	—	$	—	$	—	$	—

*  Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by the Fund is disclosed in the Statement of Assets and Liabilities.

20

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Foreign Currency Translations:

The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations are disclosed as Net realized gains (losses) from investments and foreign currency translations on the Statement of Operations.

Foreign Taxes:

The Fund may be subject to foreign taxes related to foreign income received (a portion of which may be reclaimable), capital gains on the sale of securities, and certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable regulations and rates that exist in the foreign jurisdictions in which the Fund invests.

Distributions to Shareholders:

Dividends from net investment income, if any, are declared and paid annually by the Fund. Distributable net realized gains, if any, are declared and distributed at least annually.

The amounts of dividends from net investment income and distributions from net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.

Total Distributable Earnings/(Loss)		Capital
$	1	$	(1	)

Federal Income Taxes:

It is the policy of the Fund to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of December 31.

Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., all open tax years and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.

Allocations:

Expenses directly attributable to the Fund are charged to the Fund, while expenses which are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.

21

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Cross-Trade Transactions:

Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For the year ended December 31, 2019, the Fund did not engage in any Rule 17a-7 transactions under the 1940 Act.

3. Purchases and Sales of Securities:

Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the year ended December 31, 2019 were as follows for the Fund:

Purchases		Sales
$	47,203,055	$	69,437,460

For the year ended December 31, 2019, there were no purchases or sales of U.S. Government Securities.

4. Fees and Transactions with Affiliates and Related Parties:

Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or the "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.

Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive 0.80% of the average daily net assets of the Fund. The Adviser may use its resources to assist with the Fund's distribution and marketing expenses.

VCM also serves as the Fund's administrator and fund accountant. Under an Administration and Fund Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.08% of the first $15 billion in average daily net assets of the Trust, Victory Portfolios and Victory Portfolios II (collectively, the "Victory Funds Complex"), 0.05% of the average daily net assets above $15 billion to $30 billion of the Victory Funds Complex and 0.04% of the average daily net assets over $30 billion of the Victory Funds Complex.

Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of-pocket expenses incurred in providing these services.

FIS Investor Services, LLC ("FIS") serves as the Fund's transfer agent. Under the Transfer Agent Agreement, the Trust pays FIS a fee for its services and reimburses FIS for all of their reasonable out-of-pocket expenses incurred in providing these services.

The Chief Compliance Officer ("CCO") is an employee of the Adviser, which pays the compensation of the CCO and his support staff. The Trust has entered into an Agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the CCO, and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The Funds in the Victory Funds Complex, in aggregate, compensate the Adviser for these services.

The Victory Funds Complex pays an annual retainer to each Independent Trustee, plus an additional annual retainer to the Chairman of the Board. The aggregate amount of the fees and expenses of the Independent Trustees are allocated amongst all the funds in the Victory Funds Complex and are presented in the Statement of Operations.

22

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Shearman & Sterling LLP provides legal services to the Trust.

Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust.

The Adviser has entered into an expense limitation agreement with the Fund until at least April 30, 2020. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by the Fund in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of a Fund's business are excluded from the expense limits. As of December 31, 2019, the expense limit (excluding voluntary waivers) is 0.93%.

The Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three fiscal years after such waiver or reimbursement was made to the extent such payments or repayments would not cause the expenses to exceed the original expense limitation in place at time of the waiver or reimbursement or any expense limitation agreement in place at the time of repayment. As of December 31, 2019, the following amounts are available to be repaid to the Adviser. Amounts repaid to the Adviser during the year ended, if any, are reflected on the Statement of Operations as "Recoupment of prior expenses waived/reimbursed by Adviser".

Expires December 31, 2020		Expires December 31, 2021		Expires December 31, 2022		Total
$	39,115	$	15,196	$	37,537	$	91,848

The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining a competitive expense ratio. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the year ended December 31, 2019.

Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Fund Accountant, Sub-Administrator, Sub-Fund Accountant and Legal Counsel.

5. Risks:

The Fund may be subject to other risks in addition to these identified risks.

An investment in the Fund's shares represents an indirect investment in the securities owned by the Fund, some of which will be traded on a national securities exchange or in the over-the-counter markets. The value of the securities in which the Fund invests, like other market investments, may move up or down, sometimes rapidly and unpredictably. The value of the securities in which the Fund invests may affect the value of the Fund's shares. An investment in the Fund's shares at any point in time may be worth less than the original investment, even after taking into account the reinvestment of the Fund's distributions.

The Fund will be subject to foreign securities risk. Foreign securities are (including ADRs and other depository receipts) are subject to political, regulatory, and economic risks not present in domestic investments. In addition, when the Fund buys securities denominated in a foreign currency, there are special risks such as changes in currency exchange rates and the risk that a foreign government could regulate foreign exchange transactions. In addition, to the extent investments are made in a limited number of countries, events in those countries will have a more significant impact on the Fund.

The Fund will be subject to emerging market risk. Risk of investment in emerging markets include greater political and economic instability, greater volatility in currency exchange rates, less developed securities markets, possible trade barriers, currency transfer restrictions, a more limited number of potential buyers and issuers, an emerging market country's dependence on revenue from particular commodities or international aid, less governmental supervision and regulation, unavailability of currency hedging techniques, differences in auditing and financial reporting standards and less developed legal systems.

The Fund will be subject to credit risk with respect to the amount it expects to receive from counterparties for financial instruments entered into by the Fund. The Fund may be negatively impacted

23

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

if a counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties. The Fund may experience significant delays in obtaining any recovery in bankruptcy or other reorganization proceeding and the Fund may obtain only limited recovery or may obtain no recovery in such circumstances. The Fund typically enters into transactions with counterparties whose credit ratings are investment grade, as determined by a nationally recognized statistical rating organization or, if unrated, judged by the Adviser to be of comparable quality.

6. Borrowing and Interfund Lending:

Line of Credit:

For the year ended December 31, 2019, the Victory Funds Complex participated in a short-term, demand note "Line of Credit" with Citibank. Under the agreement with Citibank, for the period January 1, 2019 to June 30, 2019, the Victory Funds Complex could borrow up to $250 million, of which $100 million was committed and $150 million was uncommitted. Effective July 1, 2019, the agreement was amended to include the USAA Mutual Funds Complex (another series of mutual funds managed by the Adviser) and has a new termination date of June 29, 2020. Under this amended agreement, the Victory Funds Complex and USAA Mutual Funds Complex, combined, may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund (herein, the "Fund"), another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs, including redemption requests that might otherwise require the untimely disposition of securities. With the agreement in effect for the period January 1, 2019 to June 30, 2019, Citibank received an annual commitment fee of 0.15% on $100 million for providing the Line of Credit. For the period July 1, 2019 to December 31, 2019, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. For the year ended December 31, 2019, Citibank earned approximately $300 thousand in commitment fees from the combined Victory Funds Complex and USAA Mutual Funds Complex. Each fund in the Victory Funds Complex and the USAA Mutual Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Line of credit fees.

The Fund did not utilize the Line of Credit during the year ended December 31, 2019.

Interfund Lending:

The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Victory Fund relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund during the period, if applicable, is presented on the Statement of Operations under Income on interfund lending.

The Fund did not utilize the Facility during the year ended December 31, 2019.

7. Federal Income Tax Information:

The tax character of distributions paid during the most recent tax years ended, as noted below, were as follows (total distributions paid may differ from the Statements of Changes in Net Assets because, for tax purposes, dividends are recognized when actually paid).

24

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Year Ended December 31, 2019
Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	3,274,066	$	8,853,692	$	12,127,758
Year Ended December 31, 2018
Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	1,384,165	$	1,236,976	$	2,621,141

As of the tax year ended December 31, 2019, the components of distributable earnings/accumulated deficit on a tax basis were as follows:

Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Earnings		Accumulated Capital and Other Losses		Unrealized Appreciation (Depreciation)*		Total Accumulated Earnings (Deficit)
$	3,686,531	$	4,006,642	$	7,693,173	$	—	$	23,231,679	$	30,924,852

*The difference between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales.

During the tax year ended December 31, 2019, the Fund did not utilize capital loss carryforwards.

As of December 31, 2019, the cost basis for federal income tax purposes, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation) for investments and derivatives were as follows:

Cost of Investments for Federal Tax Purposes		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
$	122,238,727	$	29,526,916	$	(6,299,110	)	$	23,227,806

8. Capital Contribution from Prior Custodian:

During 2016, the Fund received notification from the Fund's prior custodian, State Street Bank and Trust ("State Street"), concerning issues related to billing on certain categories of expenses during the approximately 16-year period from 1998 through October 31, 2014. The over-billing primarily related to categories of expenses that involved an allocation of general costs among multiple clients.

State Street paid the refunded amounts during January 2017. Based on billing information received during 2016 from State Street and an analysis of any expense limitation agreements that were in place during the period of the activities in question, including the application of any recoupment provisions in such agreements, the Adviser received a portion of the refund.

The portion of the refund retained by the Fund was accounted for as a capital contribution and is reflected on the Financial Highlights as "Capital Contribution from Prior Custodian, Net".

25

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

9. Fund Ownership:

Ownership of more than 25% of the voting securities of a fund creates presumptions of control of the Fund, under section 2(a)(9) of the 1940 Act. As of December 31, 2019, the shareholder listed below held more than 25% of the shares outstanding of the Fund and may be deemed to control the Fund.

Shareholder	Percent
GIAC		99.8	%

10. Subsequent Events:

The Fund has evaluated the need for additional disclosures or adjustments resulting from subsequent events through the date these financial statements were issued. Based on this evaluation, there were no subsequent events to report that would have a material impact on the Fund's financial statements.

26

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Trustees of Victory Variable Insurance Funds

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of portfolio investments, of Victory RS International VIP Series (the "Fund"), a series of Victory Variable Insurance Funds, as of December 31, 2019, the related statements of operations and changes in net assets, including the related notes, and the financial highlights for the year then ended (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2019, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The Fund's financial statements and financial highlights for the three years ended December 31, 2018, were audited by other auditors whose report dated February 15, 2019 and the Fund's financial highlights for the year ended December 31, 2015, were audited by other auditors whose report dated February 22, 2016, expressed unqualified opinions on those financial statements and financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2019, by correspondence with the custodian. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

We have served as the auditor of one or more of the investment companies advised by Victory Capital Management, Inc. since 2015.

COHEN & COMPANY, LTD.
Cleveland, Ohio
February 18, 2020

27

Victory Variable Insurance Funds Supplemental Information
December 31, 2019

  (Unaudited)

Trustee and Officer Information

Board of Trustees:

Overall responsibility for management of the Trust rests with the Board. The Trust is managed by the Board in accordance with the laws of the State of Delaware. There are currently ten Trustees, nine of whom are not "interested persons" of the Trust within the meaning of that term under the 1940 Act ("Independent Trustees") and one of whom is an "interested person" of the Trust within the meaning of that term under the 1940 Act ("Interested Trustee"). The Trustees, in turn, elect the officers of the Trust to actively supervise its day-to-day operations. The following tables list the Trustees, their ages, position with the Trust, commencement of service, principal occupations during the past five years and any directorships of other investment companies or companies whose securities are registered under the Securities Exchange Act of 1934, as amended, or who file reports under that Act. Each Trustee oversees nine portfolios in the Trust, 42 portfolios in Victory Portfolios and 26 portfolios in Victory Portfolios II, each a registered investment company that, together with the Trust, comprise the Victory Funds Complex. Each Trustee's address is c/o Victory Variable Insurance Funds, 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. Each Trustee has an indefinite term.

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Independent Trustees.
David Brooks Adcock, 68	Trustee	February 2005	Consultant (since 2006).	Chair and Trustee, Turner Funds (December 2016-December 2017).
Nigel D.T. Andrews, 72	Vice Chair and Trustee	August 2002	Retired.	Director, TCG BDC II, Inc. (since 2017); Director, TCG BDC I, Inc. (formerly Carlyle GMS Finance, Inc.) (since 2012); Director, Old Mutual US Asset Management (2002-2014).
E. Lee Beard, 68*	Trustee	February 2005	Retired (since 2015); Consultant, The Henlee Group, LLC (consulting) (2005-2015).	None.
Dennis M. Bushe, 76	Trustee	July 2016	Retired.	Trustee, RS Investment Trust and RS Variable Products Trust (November 2011-July 2016).

28

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Sally M. Dungan, 65	Trustee	February 2011	Chief Investment Officer, Tufts University (since 2002).	None.
John L. Kelly, 66	Trustee	February 2015	Partner, McCarvill Capital Partners (September 2016-September 2017); Advisor, Endgate Commodities LLC (January 2016-April 2016); Managing Partner, Endgate Commodities LLC (August 2014-January 2016); Chief Operating Officer, Liquidnet Holdings, Inc. (December 2011-July 2014).	Director, Caledonia Mining Corporation (since May 2012).
David L. Meyer, 62*	Trustee	December 2008	Retired.	None.
Gloria S. Nelund, 58	Trustee	July 2016	Chair, CEO and Co-Founder of TriLinc Global, LLC, an investment firm.	TriLinc Global Impact Fund, LLC (since 2012); Trustee, RS Investment Trust and RS Variable Products Trust (November 2007-July 2016).
Leigh A. Wilson, 75	Chair and Trustee	February 1998	Private Investor.	Chair (since 2013), Caledonia Mining Corporation.
Interested Trustee.
David C. Brown, 47**	Trustee	May 2008	Chairman and Chief Executive Officer (since 2013), Co-Chief Executive Officer (2011-2013), the Adviser; Chairman and Chief Executive Officer, Victory Capital Holdings, Inc. (since 2013).	USAA Mutual Funds Trust.

*  The Board has designated Mr. Meyer and Ms. Beard as its Audit Committee Financial Experts.

**  Mr. Brown is an "Interested Person" by reason of his relationship with the Adviser.

The Statement of Additional Information includes additional information about the Trustees of the Trust and is available, without charge, by calling 800-539-3863.

29

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Officers:

The officers of the Trust, their ages, commencement of service and their principal occupations during the past five years, are detailed in the following table. Each officer serves until the earlier of his or her resignation, removal, retirement, death, or the election of a successor. The mailing address of each officer of the Trust is 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. The officers of the Trust receive no compensation directly from the Trust for performing the duties of their offices.

Name and Age	Position with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years
Christopher K. Dyer, 58	President	February 2006*	Director of Fund Administration, the Adviser.
Scott A. Stahorsky, 50	Vice President	December 2014	Manager, Fund Administration, the Adviser (since 2015); Senior Analyst, Fund Administration, the Adviser (prior to 2015).
Erin G. Wagner, 46	Secretary	December 2014	Associate General Counsel, the Adviser (since 2013).
Allan Shaer, 54	Treasurer	May 2017	Senior Vice President, Financial Administration, Citi Fund Services Ohio, Inc. (since 2016); Vice President, Mutual Fund Administration, JP Morgan Chase (2011-2016).
Christopher A. Ponte, 35	Assistant Treasurer	December 2017	Manager, Fund Administration, the Adviser (since 2017); Senior Analyst, Fund Administration, the Adviser (prior to 2017); Chief Financial Officer, Victory Capital Advisers, Inc. (since 2018).
Colin Kinney, 46	Chief Compliance Officer	July 2017	Chief Compliance Officer (since 2013) and Chief Risk Officer (2009-2017), the Adviser.
Chuck Booth, 59	Anti-Money Laundering Compliance Officer and Identity Theft Officer	May 2015	Director, Regulatory Administration and CCO Support Services, Citi Fund Services Ohio, Inc.
Jay G. Baris, 66	Assistant Secretary	February 1998	Partner, Shearman & Sterling LLP (since 2018); Partner, Morrison & Foerster LLP (2011-January 2018).

*  On December 3, 2014, Mr. Dyer resigned as Secretary of the Trust and accepted the position of President.

30

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Proxy Voting and Portfolio Holdings Information

Proxy Voting:

Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 800-539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.

Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent twelve months ended June 30 is available on the SEC's website at www.sec.gov.

Availability of Schedules of Portfolio Investments:

The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-PORT. Prior to the implementation of Form N-PORT, the Trust filed a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-PORT and Forms N-Q are available on the SEC's website at www.sec.gov.

Expense Examples

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2019 through December 31, 2019.

The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

Please note the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Beginning Account Value 7/1/19		Actual Ending Account Value 12/31/19		Hypothetical Ending Account Value 12/31/19		Actual Expenses Paid During Period 7/1/19-12/31/19*		Hypothetical Expenses Paid During Period 7/1/19-12/31/19*		Annualized Expense Ratio During Period 7/1/19-12/31/19
$	1,000.00	$	1,058.20	$	1,020.52	$	4.82	$	4.74		0.93	%

*  Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).

31

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Additional Federal Income Tax Information

For the year ended December 31, 2019, the Fund paid qualified dividend income for the purposes of reduced individual federal income tax rates of 64%.

For the year ended December 31, 2019, the Fund designated long-term capital gain distributions in the amount of $8,853,692.

The Fund intends to elect to pass through to shareholders the income tax credit for taxes paid to foreign countries. Foreign source income and foreign tax expense per shares outstanding on December 31, 2019 were $0.58 and $0.06, respectively.

32

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Considerations of the Board in Continuing the Investment Advisory Agreement (the "Agreement")

The Board approved the Agreement on behalf of the Fund at an in-person meeting, which was called for that purpose, on December 4, 2019. The Board also considered information relating to the Fund and the Agreement provided throughout the year and, more specifically, at a meeting on October 22, 2019. The Board noted that prior to the Fund's reorganization on July 29, 2016, the Fund was managed by RS Investment Management Co. LLC, which was acquired by the Adviser on July 29, 2016. In considering whether to approve the Agreement, the Board requested, and the Adviser provided, information that the Board believed to be reasonably necessary to reach its conclusions.

The Board, including the Independent Trustees, evaluated this information along with other information obtained throughout the year and was advised by legal counsel to the Fund, which also serves as independent legal counsel to the Independent Trustees. In addition, in 2017 the Independent Trustees, through their counsel, retained an independent consultant to assist with a review of the overall process for conducting the annual review of these advisory arrangements.

The Board considered the Fund's advisory fee, expense ratio and investment performance as significant factors in determining whether the Agreement should be continued. In considering whether the compensation paid to the Adviser was fair and reasonable, the Board also evaluated, among other things, the following factors:

•  The requirements of the Fund for the services provided by the Adviser;

•  The nature, quality and extent of the services provided and expected to be provided;

•  The performance of the Fund as compared to comparable funds;

•  The fees payable for the services and whether the fee arrangements provided for economies of scale that would benefit Fund shareholders as the Fund grows;

•  Whether the fee would be sufficient to enable the Adviser to attract and retain experienced personnel and continue to provide quality services to the Fund;

•  The fees paid by other clients of the Adviser whose accounts are managed in a similar investment style and any differences in the services provided to the other clients compared to those provided to the Fund;

•  The total expenses of the Fund, taking into consideration any distribution or shareholder servicing fees;

•  Management's commitment to operating the Fund at competitive expense levels;

•  The profitability of the Adviser (as reflected by comparing fees earned against an estimate of the Adviser's costs) with respect to the Adviser's relationship with the Fund;

•  Research and other service benefits received by the Adviser obtained through payment of client commissions for securities transactions;

•  Other benefits received by the Adviser, and its affiliates, including revenues paid to the Adviser, or its affiliates, by the Fund for administration and fund accounting services, and distribution;

•  The capabilities and financial condition of the Adviser;

•  Current economic and industry trends; and

•  The historical relationship between the Fund and the Adviser.

The Board reviewed the Fund's current management fee, comprised of the advisory fee plus the administrative services fee paid to the Adviser, in the context of the Adviser's profitability with respect to the Fund. In addition, the Board compared the Fund's total operating expense ratio on a net and gross basis, taking into consideration any distribution or shareholder servicing fees and management fees with a universe of comparable mutual funds compiled by an independent consultant and a peer group of funds with similar investment strategies selected by that independent consultant from the universe. The Board reviewed the factors and methodology used by the independent consultant in the selection of the Fund's peer group, including the independent consultant's selection of a broad universe of funds, the more specific universe of comparable funds, and peer groups of funds with comparable investment strategies and asset levels, among other factors. The Board also reviewed any changes to the independent consultant's methodology as compared to the prior year, including those resulting from the Adviser's input, if any. The Board also reviewed fees and other information related to

33

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

the Adviser's management of similarly managed institutional or private accounts, and the differences in the services provided to the other accounts, to the extent applicable. The Board noted that the advisory fee arrangements for the Fund do not include breakpoints, which are generally viewed as a method by which the investment adviser shares any economies of scale with a fund as a fund grows. The Board also considered the Adviser's commitment to limit expenses as discussed in more detail below, and would consider breakpoints at a future time if the Fund's assets were to grow significantly.

The Board reviewed the Fund's performance over one-, three-, five- and ten-year periods against the performance of the Fund's selected peer group and benchmark index. The Board recognized that the performance of the Fund and the peer group funds are net of expenses, while the performance of the benchmark index reflects gross returns. The Board considered the additional resources that the Adviser has committed to enhance portfolio analysis, compliance and trading systems. The Board noted that, following the Fund's reorganization, the Fund is managed by substantially the same investment management team that managed the comparable predecessor fund.

The Board reviewed various other specific factors with respect to the Fund, as described below. In their deliberations, the Trustees did not rank the importance of any particular information or factor considered and each Trustee may have attributed different weights to various factors.

The Board concluded that the Fund's gross annual management fee was reasonable as compared to the median gross management fee charged to the funds in the Fund's peer group. The Board noted that the Fund's net annual expense ratio, taking into account any shareholder servicing or distribution fees, was reasonable as compared to the median expense ratio for the peer group. The Board considered the Adviser's contractual agreement to waive its fees and reimburse expenses for a specified period of time, as described in the Fund's prospectus. The Board then compared the Fund's performance for the one-, three-, five- and ten-year periods ended June 30, 2019, to that of the median performance of the peer group and benchmark index for the same periods and considered the fact that the Fund outperformed both the benchmark index and the peer group median for all of the periods reviewed.

Having considered, among other things: (1) that the Fund's management fee was within the ranges of advisory fees charged to comparable mutual funds; (2) that the Fund's total expense ratio was reasonable; (3) the Adviser's willingness to limit the expenses for a period of time would provide stability to the Fund's expenses during that period; and (4) the performance of the Fund, the Board concluded that the Agreement continued to be in the best interests of the Fund's shareholders.

Conclusion

Based on its review of the information requested and provided, and following extended discussions, the Board determined that the Agreement, on behalf of the Fund, was consistent with the best interests of the Fund and its shareholders, and the Board unanimously approved the Agreement, on behalf of the Fund, for an additional annual period on the basis of the foregoing review and discussions and the following considerations, among others:

•  The fairness and reasonableness of the investment advisory fee payable to the Adviser under the Agreement in light of the investment advisory services provided, the costs of these services, the profitability of the Adviser's relationship with the Fund and the comparability of the fee paid to the fees paid by other investment companies;

•  The nature, quality and extent of the investment advisory services provided by the Adviser;

•  The Adviser's entrepreneurial commitment to the management of the Fund and the creation of a broad-based family of funds, which could entail a substantial commitment of the Adviser's resources to the successful operation of the Fund;

•  The Adviser's representations regarding its staffing and capabilities to manage the Fund, including the retention of personnel with relevant portfolio management experience;

•  The Adviser's efforts to enhance investment results by, among other things, developing quality portfolio management teams; and

•  The overall high quality of the personnel, operations, financial condition, investment management capabilities, methodologies and performance of the Adviser.

34

Privacy Policy

Protecting the Privacy of Information

The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.

We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.

To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*

*  You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.

Victory Funds
P.O. Box 182593
Columbus, Ohio 43218-2593

Visit our website at:	Call Victory at:
www.vcm.com	800-539-FUND (800-539-3863)

VVIF-RS-IVIP-AR (12/19)

December 31, 2019

Annual Report

Victory Variable Insurance Funds

Victory RS Large Cap Alpha VIP Series

Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports may no longer be sent by mail from the insurance company that issued your variable annuity and variable life insurance contract, unless you specifically request paper copies of the reports from your insurance company. Instead, the reports will be made available on www.victoryfunds.com. The insurance company that offers your contract may also make these reports available on a website, and such insurance company will notify you by mail each time a report is posted and provide you with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the insurance company electronically by following the instructions provided by the insurance company.

If offered by your insurance company, you may elect to receive all future reports in paper and free of charge from the insurance company. You can inform your insurance company that you wish to continue receiving paper copies of your reports. Your election to receive reports in paper will apply to all funds available under your contract.

www.vcm.com

News, Information And Education 24 Hours A Day, 7 Days A Week

The Victory Funds site gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:

•  Detailed performance records

•  Daily share prices

•  The latest fund news

•  Investment resources to help you become a better investor

•  A section dedicated to investment professionals

Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.

Victory Variable Insurance Funds

Table of Contents

Shareholder Letter (Unaudited)	3
Fund Review and Commentary (Unaudited)	5
Financial Statements
Schedule of Portfolio Investments	9
Statement of Assets and Liabilities	12
Statement of Operations	13
Statements of Changes in Net Assets	14
Financial Highlights	16
Notes to Financial Statements	18
Report of Independent Registered Public Accounting Firm	25
Supplemental Information (Unaudited)
Trustee and Officer Information	26
Proxy Voting and Portfolio Holdings Information	29
Expense Examples	29
Additional Federal Income Tax Information	30
Advisory Contract Renewal	31
Privacy Policy (inside back cover)

The Fund is distributed by Victory Capital Advisers, Inc. Victory Capital Management Inc. is the investment adviser to the Fund and receives fees from the Fund for performing services for the Fund.

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus of the Fund.

For additional information about any Victory Fund, including fees, expenses, and risks, view our prospectus online at www.vcm.com or call 800-539-3863. Read it carefully before you invest or send money.

The information in this annual report is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections, or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Past investment performance of the Fund, markets or securities mentioned herein should not be considered to be indicative of future results.

• NOT FDIC INSURED • NO BANK GUARANTEE
• MAY LOSE VALUE

Call Victory at:

800-539-FUND (800-539-3863)

Visit our website at:

www.vcm.com

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2

Victory Funds Letter to Shareholders
(Unaudited)

Dear Shareholder,

As we turn the page into a new decade, it's hard not to reflect on the fact that we have been enjoying the longest-ever bull market in U.S. equities. The run has been impressive, and despite periods of tumult and plenty of negative news, the bull market endured throughout 2019.

For the annual reporting period ended December 31, 2019, the S&P 500^® Index posted impressive gains of 31.49%. This represents the greatest one-year gain since 2013 and also illustrates a swift bounce-back after a precipitous drop late in 2018. The move higher supports the notion that underlying fundamentals of U.S. companies drive performance, rather than the political rancor and headline fears that often capture the attention of investors.

Perhaps we shouldn't be surprised at the impressive performance of equities. The U.S. economy — the world's largest — remains on solid footing and has been a key driver of both domestic and international stocks. Robust job creation, near-record low unemployment, and steady consumer spending continue and offer reasons for further optimism. Meanwhile, inflation remains muted, and the Federal Reserve (the Fed) and other major global central banks have taken an accommodative stance. In fact, the Fed has cut interest rates by a total of 0.75% over three meetings last July, September and October.

The risk-on attitudes of investors, coupled with the accommodative monetary policy, had an expected impact on U.S. Treasury yields. The 10-year Treasury yield declined significantly over the course of 2019, falling from 2.66% to 1.92% at year-end. More interesting, however, was the fact that, the yield on 10-year Treasurys fell below shorter-term yields for the first time since before the 2007-2008 Global Financial Crisis. This inverted yield curve spooked investors for a spell, only to revert back to a traditional upward sloping yield curve by the end of the year.

The robust domestic economy, low interest rates, and ample liquidity from central banks provided a potent tonic for the stock market in 2019. In fact, at year-end 2019, the S&P 500^® Index was approaching its highest valuation level since 1999. This reminds all of us to retain some historical context on the bull market. Many of us remember the Global Financial Crisis and, before that, the collapse of the dot-com bubble. Although those are now but a distant memory (and we are not forecasting such tumult), we should not forget that stocks don't always go up and cycles don't last forever. In other words, valuations still matter.

The key point is not to discount the risks. In addition to lofty valuations, investors need to keep apprised of trade disputes, geopolitical hotspots, a contentious U.S. election, and a host of other potential headwinds. Yet it is these very risks — these cross-currents — that may create pricing dislocations. This is an environment in which we believe our Victory Capital independent investment franchises can thrive.

On the following pages, you will find information relating to your Victory Funds investment. If you have any questions, we encourage you to contact your financial

3

advisor. Or, if you invest with us directly, you may call (800) 539-3863, or visit our website at www.vcm.com.

My colleagues and I sincerely appreciate the confidence you have placed in the Victory Funds, and we value the opportunity to help meet your investment goals.

Christopher K. Dyer, CFA

President,

Victory Funds

4

Victory Variable Insurance Funds (Unaudited)

Victory RS Large Cap Alpha VIP Series

Portfolio Holdings

As a Percentage of Total Investments

Performance Update and Review

The Victory RS Large Cap Alpha VIP Series (the "Fund") seeks to provide long-term capital appreciation. For the 12-month period ended December 31, 2019, the Fund delivered a 31.16% absolute return, outperforming the Fund's benchmark, the Russell 1000^® Value Index (the "Index"), which returned 26.54%. Stock selection drove all of the outperformance, with the allocation effect being largely neutral. The largest positive sector contributors to performance in 2019 were Financials and Communication Services. Within Communication Services, social media company Facebook, Inc. continued to generate exceptional returns and recover some lost valuation after media criticism of the company earlier in the year. In Financials, Citigroup Inc. continued to execute despite a slowing global economic environment, proving to some skeptics the resilience of its business model. On a less positive note, the Utilities and Energy sectors were a drag on Fund performance. Stock-specific negative contributions for the year were EQT Corporation, a natural gas business that experienced a hostile takeover, and the online travel business Expedia Group, Inc., which faced additional competitive pressures. In the end, the Fund outperformed its Index in 2019.

Market Overview

The U.S. equity market's performance was impressive in 2019, with the broad-based Russell 3000^® Index registering a gain of 31.02%. The move higher after last year's decline was driven by a significant reversal in monetary policy at global central banks. The United States went from tightening in December 2018, to easing by 75 bps in 2019. Other major central banks around the world took aggressive action during 2019, flooding the markets with liquidity. Value-oriented stocks, as measured by the Russell 3000^® Value Index, increased 26.26% during the year.

Although gains were broad across the capitalization spectrum, small-cap value stocks underperformed their mid- and large-cap counterparts during 2019, as measured by the Russell family of indices. This is the third year in a row that small-cap value stocks have underperformed their mid- and large-cap peers. Small-cap stocks, as measured by the Russell 2000^® Value Index, returned 22.39%, while the Russell Midcap^® Value Index and Russell 1000^® Value Index returned 27.06% and 26.54%, respectively. However, since the end of August (the month that saw a full inversion in the yield curve), small-cap value stocks have started to outperform.

5

Victory Variable Insurance Funds (Unaudited)

Victory RS Large Cap Alpha VIP Series (continued)

Perhaps this reflects a shift in leadership of smaller-cap value companies. It also may indicate that investors are repositioning to take advantage of the attractive relative valuations of small versus large companies. Even after the strong year-end performance of small-cap stocks, their relative attractiveness continues as the new year begins with near-decade-wide valuation spreads relative to large-cap stocks, as measured by forward price-to-earnings. Moreover, consensus expectations for small-cap stocks are for higher earnings-per-share growth versus large-cap stocks over the next three to five years.

Overall, we expect the market to continue to benefit from a dovish monetary policy, a very strong consumer, and negative real interest rates across the globe. However, we do not believe there will be any material trade deal with China prior to the presidential election. The relative strength in both the U.S. economy and labor market, as well as a U.S. Federal Reserve (the "Fed") that seems content allowing the economy to run hot, should continue to be positive for asset prices. It is our view that the U.S. equity market can continue to rise given steady U.S. economic growth and may even see higher nominal growth and a continued recovery in cyclical businesses. Looking ahead to 2020, economic growth looks to continue and, coupled with the continuation of the longest job growth streak in history, supports our constructive outlook for domestic stocks and value-oriented strategies in particular.

Outlook

As we enter our 11th year of economic expansion, a period of consistent underlying factors for equity investing, conditions have shifted. Interest rate policy in 2019 changed course dramatically, with the Fed cutting rates 75 bps as a covert quantitative easing was initiated as an "insurance policy" against any fallout from the trade war and overall global economic slowing. The rate reduction provided further liquidity to the global economy after major central banks from around the world had already instituted similar policies and has flooded the global economy with liquidity yet again, helping to boost asset prices. In addition, it appears that many of the larger developed economies have either started or are now looking to start fiscal stimulus to boost economic growth. With negative real interest rates across the globe, this is a very positive environment for equity securities.

Energy prices remain significantly below peak levels, despite declining inventories worldwide. Natural gas prices have materially lagged oil prices. This stimulates consumer spending and confidence in the long run for the United States and for non-oil-producing countries abroad. In the United States we enjoy the competitive advantage of a long-term supply of abundant cheap natural gas. However, we are watchful of rising commodity prices and how this may affect the economy.

Interest rates have fallen materially, but it is now more questionable as to where they move from here. Based on the Fed's commentary and the fact that it is a presidential election year, we wouldn't expect the Fed to take any action in 2020 unless some sort of exogenous event occurs. In fact, based on the Fed's language, we would need to see a material increase in inflation before we might see the Fed increase interest rates again. This is somewhat perplexing, as the Fed lowered interest rates 75 bps largely in response to the U.S.-China trade war, and with the trade war seeming to de-escalate, one would think those rate increases might come back.

6

Victory Variable Insurance Funds (Unaudited)

Victory RS Large Cap Alpha VIP Series (continued)

We remain watchful of corporations continuing to lever their balance sheets, although some of this has been offset by strong free cash flow generation. The decline in interest rates and tightening credit spreads will help to offset some of this growth but may very well fuel even further growth. The U.S. Treasury 10-year/2-year rate spread has widened from 16 bps 12 months ago to 30 bps today but remains well below the 10-year average of 176 bps. With the world awash with liquidity and a dovish Fed, it seems like there is a low probability of an inverted yield curve in the near term, but this situation remains very data dependent.

Despite all of the media coverage surrounding the 2020 presidential election, it is still very early in the election cycle, and much can change. No matter what your political preference may be, it's important to understand how each candidate is viewed by the market, what likelihood the market is assigning to each candidate's chance of winning, and how changes to that likelihood may impact equity markets. We are somewhat concerned that the market is already factoring in the winner of the presidential election when it is still 10 months away.

In our estimation, equity valuations remain at historically high levels (at a level not seen since the dot-com era on trailing operating earnings). We believe we are in the later stages of a bull market, although nothing is certain. Equity securities look most reasonable compared to U.S. Treasury and corporate bond yields. In any case, we believe equity securities are the superior asset allocation alternative to bonds over the longer term.

7

Victory Variable Insurance Funds (Unaudited)

Victory RS Large Cap Alpha VIP Series (continued)

Average Annual Total Return

Year Ended December 31, 2019

	Class I
INCEPTION DATE	4/13/83
	Net Asset Value			Russell 1000® Value Index1			S&P 500® Index2
One Year		31.16	%		26.54	%		31.49	%
Three Year		12.30	%		9.68	%		15.27	%
Five Year		8.64	%		8.29	%		11.70	%
Ten Year		11.43	%		11.80	%		13.56	%
Since Inception		10.73	%		N/A			N/A

Expense Ratios

Gross	0.62	%
With Applicable Waivers	0.55	%

Past performance is not indicative of future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month's end, please visit www.vcm.com.

The above expense ratios are from the Fund's prospectus dated May 1, 2019. Additional information pertaining to the Fund's expense ratios as of December 31, 2019 can be found in the financial highlights.

The total return figures set forth above include all waivers of fees for various periods since inception. Without such fee waivers, the total returns would have been lower. Some fee waivers are voluntary and may be modified or terminated at any time. The total returns do not include any insurance, sales or administrative charges of variable annuity or life insurance contracts. If these charges were included, the total returns would have been lower.

Victory RS Large Cap Alpha VIP Series — Growth of $10,000

¹The Russell 1000^® Value Index is an unmanaged market-capitalization-weighted index that measures the performance of those companies in the Russell 1000^® Index (which consists of the 1,000 largest U.S. companies based on total market capitalization) with lower price-to-book ratios and lower forecasted growth values. Index results assume the reinvestment of dividends paid on stocks constituting the index. You may not invest in the index, and, unlike the Fund, the index does not incur fees or expenses.

²The S&P 500^® Index is an unmanaged index comprised of 500 domestically traded common stocks, is weighted according to the market value of each common stock in the index, and includes reinvestment of dividends. This index does not include effect of sales charges and is not representative of the Fund. It is not possible to invest directly in an index.

The graph reflects investment of growth of a hypothetical $10,000 investment in the Fund. Past performance is no guarantee of future results.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

8

Victory Variable Insurance Funds
Victory RS Large Cap Alpha VIP Series Schedule of Portfolio Investments
December 31, 2019

Security Description	Shares		Value
Common Stocks (96.4%)
Banks (12.4%):
Citigroup, Inc.		372,720	$	29,776,600
JPMorgan Chase & Co.		174,770		24,362,938
The PNC Financial Services Group, Inc.		150,070		23,955,674
U.S. Bancorp		392,610		23,277,847
Wells Fargo & Co.		341,050		18,348,490
				119,721,549
Capital Markets (6.3%):
Cboe Global Markets, Inc.		346,620		41,594,400
E*TRADE Financial Corp.		415,950		18,871,652
				60,466,052
Communication Services (7.9%):
Alphabet, Inc., Class A (a)		26,175		35,058,533
Facebook, Inc., Class A (a)		197,650		40,567,663
				75,626,196
Consumer Discretionary (4.1%):
Aramark		269,140		11,680,676
LKQ Corp. (a)		524,350		18,719,295
McDonald's Corp.		41,040		8,109,914
				38,509,885
Consumer Staples (5.0%):
Keurig Dr Pepper, Inc. (b)		383,650		11,106,668
Mondelez International, Inc., Class A		561,030		30,901,532
Post Holdings, Inc. (a) (b)		53,670		5,855,397
				47,863,597
Energy (10.1%):
Chevron Corp.		182,460		21,988,255
Diamondback Energy, Inc.		242,990		22,564,051
Enterprise Products Partners LP		812,970		22,893,234
Noble Energy, Inc.		805,670		20,012,843
Suncor Energy, Inc.		297,090		9,744,552
				97,202,935
Health Care (11.1%):
Cigna Corp.		41,950		8,578,356
CVS Health Corp.		188,455		14,000,322
Humana, Inc. (b)		39,020		14,301,610
Johnson & Johnson		133,330		19,448,847
Pfizer, Inc.		344,590		13,501,036
UnitedHealth Group, Inc.		45,905		13,495,152
Zimmer Biomet Holdings, Inc.		156,910		23,486,289
				106,811,612

See notes to financial statements.

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Victory Variable Insurance Funds
Victory RS Large Cap Alpha VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Industrials (8.4%):
Air Canada (a)		398,550	$	14,890,373
Eaton Corp. PLC, ADR		272,680		25,828,250
Parker-Hannifin Corp.		87,490		18,007,192
Raytheon Co.		66,190		14,544,591
Union Pacific Corp.		38,310		6,926,065
				80,196,471
Information Technology (2.4%):
Visa, Inc., Class A		119,920		22,532,968
Insurance (11.4%):
Aflac, Inc.		720,440		38,111,275
Brown & Brown, Inc.		731,150		28,865,802
RenaissanceRe Holdings Ltd.		69,690		13,660,634
The Progressive Corp.		406,440		29,422,192
				110,059,903
Materials (4.8%):
Freeport-McMoRan, Inc.		1,599,470		20,985,046
Sealed Air Corp.		618,200		24,622,906
				45,607,952
Real Estate (4.9%):
Equity Commonwealth		618,160		20,294,193
Invitation Homes, Inc.		878,470		26,327,746
				46,621,939
Utilities (7.6%):
Exelon Corp.		399,430		18,210,014
FirstEnergy Corp.		460,820		22,395,852
Vistra Energy Corp.		1,397,330		32,124,617
				72,730,483
Total Common Stocks (Cost $746,152,717)				923,951,542
Collateral for Securities Loaned^ (1.2%)
BlackRock Liquidity Funds TempFund Portfolio, Institutional Class, 1.75% (c)		548,648		548,648
Fidelity Investments Money Market Government Portfolio, Class I, 1.54% (c)		3,022,658		3,022,658
Fidelity Investments Prime Money Market Portfolio, Class I, 1.75% (c)		91,638		91,638
Goldman Sachs Financial Square Prime Obligations Fund, Institutional Class, 1.80% (c)		1,825,998		1,825,998
JPMorgan Prime Money Market Fund, Capital Class, 1.73% (c)		2,008,739		2,008,739
Morgan Stanley Institutional Liquidity Prime Portfolio, Institutional Class, 1.76% (c)		4,017,341		4,017,341
Total Collateral for Securities Loaned (Cost $11,515,022)				11,515,022
Total Investments (Cost $757,667,739) — 97.6%				935,466,564
Other assets in excess of liabilities — 2.4%				23,228,364
NET ASSETS — 100.00%			$	958,694,928

See notes to financial statements.

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Victory Variable Insurance Funds
Victory RS Large Cap Alpha VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

^  Purchased with cash collateral from securities on loan.

(a)  Non-income producing security.

(b)  All or a portion of this security is on loan.

(c)  Rate disclosed is the daily yield on December 31, 2019.

ADR — American Depositary Receipt

LP — Limited Partnership

PLC — Public Limited Company

See notes to financial statements.

11

Victory Variable Insurance Funds Statement of Assets and Liabilities
December 31, 2019

	Victory RS Large Cap Alpha VIP Series
ASSETS:
Investments, at value (Cost $757,667,739)	$	935,466,564	(a)
Cash and cash equivalents		34,825,775
Interest and dividends receivable		425,607
Receivable for capital shares issued		105
Receivable from Adviser		273,176
Prepaid expenses		60,167
Total Assets		971,051,394
LIABILITIES:
Payables:
Collateral received on loaned securities		11,515,022
Capital shares redeemed		220,796
Accrued expenses and other payables:
Investment advisory fees		401,654
Administration fees		45,496
Custodian fees		6,639
Transfer agent fees		104,473
Compliance fees		622
Trustees' fees		1,934
Other accrued expenses		59,830
Total Liabilities		12,356,466
NET ASSETS:
Capital		710,570,962
Total distributable earnings/(loss)		248,123,966
Net Assets	$	958,694,928
Shares (unlimited shares authorized with a par value of $0.001 per share):		19,859,621
Net asset value:	$	48.27

(a)  Includes $11,290,461 of securities on loan.

See notes to financial statements.

12

Victory Variable Insurance Funds Statement of Operations
For the Year Ended December 31, 2019

	Victory RS Large Cap Alpha VIP Series
Investment Income:
Dividends	$	17,291,671
Interest		590,218
Securities lending (net of fees)		21,967
Total Income		17,903,856
Expenses:
Investment advisory fees		4,652,311
Administration fees		568,692
Custodian fees		41,878
Transfer agent fees		1,257,108
Trustees' fees		78,855
Compliance fees		6,268
Legal and audit fees		100,606
Other expenses		112,268
Total Expenses		6,817,986
Expenses waived/reimbursed by Adviser		(1,698,805	)
Net Expenses		5,119,181
Net Investment Income (Loss)		12,784,675
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment securities and foreign currency translations		55,134,556
Net change in unrealized appreciation/depreciation on investment securities		181,336,352
Net realized/unrealized gains on investments		236,470,908
Change in net assets resulting from operations	$	249,255,583

See notes to financial statements.

13

Victory Variable Insurance Funds Statements of Changes in Net Assets

	Victory RS Large Cap Alpha VIP Series
	Year Ended December 31, 2019			Year Ended December 31, 2018
From Investment Activities:
Operations:
Net investment income (loss)	$	12,784,675		$	11,067,077
Net realized gains (losses) from investments		55,134,556			137,400,719
Net change in unrealized appreciation/depreciation on investments		181,336,352			(229,244,068	)
Change in net assets resulting from operations		249,255,583			(80,776,272	)
Change in net assets resulting from distributions to shareholders		(147,135,028	)		(99,131,571	)
Change in net assets resulting from capital transactions		9,584,172			(33,842,009	)
Change in net assets		111,704,727			(213,749,852	)
Net Assets:
Beginning of period		846,990,201			1,060,740,053
End of period	$	958,694,928		$	846,990,201
Capital Transactions:
Proceeds from shares issued	$	4,367,525		$	17,538,132
Distributions reinvested		147,135,028			99,131,571
Cost of shares redeemed		(141,918,381	)		(150,511,712	)
Change in net assets resulting from capital transactions	$	9,584,172		$	(33,842,009	)
Share Transactions:
Issued		85,475			327,122
Reinvested		3,050,512			2,271,183
Redeemed		(2,771,086	)		(2,743,529	)
Change in Shares		364,901			(145,224	)

See notes to financial statements.

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15

Victory Variable Insurance Funds Financial Highlights

For a Share Outstanding Throughout Each Period

			Investment Activities								Distributions to Shareholders From
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)(a)		Net Realized and Unrealized Gains (Losses) on Investments			Total from Investment Activities			Net Investment Income			Net Realized Gains From Investments			Total Distributions
Victory RS Large Cap Alpha VIP Series
Year Ended 12/31/19	$	43.45		0.70		12.75			13.45			(0.48	)		(8.15	)		(8.63	)
Year Ended 12/31/18	$	54.01		0.60		(5.44	)		(4.84	)		(0.02	)		(5.70	)		(5.72	)
Year Ended 12/31/17	$	45.98		0.51		8.07			8.58			(0.55	)		—			(0.55	)
Year Ended 12/31/16	$	44.26		0.50		3.50			4.00			(0.52	)		(1.76	)		(2.28	)
Year Ended 12/31/15	$	50.63		0.60		(1.64	)		(1.04	)		(0.67	)		(4.66	)		(5.33	)

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Total returns do not reflect the effects of charges deducted pursuant to the terms of The Guardian Insurance & Annuity Company, Inc.'s variable contracts. Inclusion of such charges would reduce the total returns for all periods shown.

(c)  Amount is less than $0.005 per share.

(d)  The Fund received monies related to a nonrecurring refund from the prior Custodian. The corresponding impact to the total return was less than 0.01% for the period shown. (See Note 8)

See notes to financial statements.

16

Victory Variable Insurance Funds Financial Highlights — continued

For a Share Outstanding Throughout Each Period

									Ratios to Average Net Assets									Supplemental Data
	Capital Contribution from Prior Custodian, Net (See Note 8)			Net Asset Value, End of Period		Total Return(b)			Net Expenses			Net Investment Income (Loss)			Gross Expenses			Net Assets, End of Period (000's)		Portfolio Turnover
Victory RS Large Cap Alpha VIP Series
Year Ended 12/31/19		—		$	48.27		31.16	%		0.55	%		1.37	%		0.73	%	$	958,695		50	%
Year Ended 12/31/18		—		$	43.45		(9.00	)%		0.55	%		1.10	%		0.62	%	$	846,990		60	%
Year Ended 12/31/17		—		$	54.01		18.67	%		0.55	%		1.02	%		0.60	%	$	1,060,740		56	%
Year Ended 12/31/16		—	(c)	$	45.98		9.03	%(d)		0.54	%		1.12	%		0.54	%	$	1,020,600		84	%
Year Ended 12/31/15		—		$	44.26		(2.01	)%		0.55	%		1.20	%		0.55	%	$	1,015,821		47	%

See notes to financial statements.

17

Victory Variable Insurance Funds Notes to Financial Statements
December 31, 2019

1. Organization:

Victory Variable Insurance Funds (the "Trust") was organized on February 11, 1998 as a Delaware statutory trust. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified open-end investment company. The Trust is comprised of nine funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with a par value of $0.001 per share.

The accompanying financial statements are those of the Victory RS Large Cap Alpha VIP Series (the "Fund"). The Fund offers a single class of shares: Class I Shares. Sales of shares of the Fund may only be made to certain separate accounts of The Guardian Insurance & Annuity Company, Inc. ("GIAC") that fund certain variable annuity and variable life insurance contracts issued by GIAC. GIAC is a wholly owned subsidiary of The Guardian Life Insurance Company of America ("Guardian Life").

Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.

2. Significant Accounting Policies:

The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.

The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies.

Investment Valuation:

The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:

• Level 1 — quoted prices in active markets for identical securities

• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)

• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.

Portfolio securities listed or traded on securities exchanges, including American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the

18

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.

Investments for which there are no such quotations, or for which quotations do not appear reliable, are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Trust's Board of Trustees (the "Board"). These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value.

A summary of the valuations as of December 31, 2019, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments.

	LEVEL 1		Total
Common Stocks	$	923,951,542	$	923,951,542
Collateral for Securities Loaned		11,515,022		11,515,022
Total	$	935,466,564	$	935,466,564

For the year ended December 31, 2019, there were no Level 3 investments for which significant unobservable inputs were used to determine fair value.

Investment Transactions and Related Income:

Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.

Withholding taxes on interest, dividends and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.

Securities Lending:

The Trust has entered into a Master Securities Lending Agreement ("MSLA") with Citibank, N.A. ("Citibank" or the "Agent"). Under the terms of the MSLA, the Fund may lend securities to certain broker-dealers and banks in exchange for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are adjusted the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities, letters of credit and certificates of deposit. The cash collateral is invested in short-term instruments or cash equivalents as noted on the Fund's Schedule of Portfolio Investments. The Trust does not have effective control of the non-cash collateral and therefore it is not disclosed in the Fund's Schedule of Portfolio Investments. The Fund continues to benefit from interest or dividends on the securities loaned and may also earn a return from the collateral. The Fund pays various fees in connection with the investment of cash collateral. The Fund pays the Agent fees based on the investment income received from securities lending activities. Securities lending income is disclosed in the Fund's Statement of Operations. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them.

Securities lending transactions are entered into by the Fund under the MSLA, which permits the Fund, under certain circumstances such as an event of default, to offset amounts payable by the Fund to the same counterparty against amounts receivable from the counterparty to create a net payment due to or from the Fund.

19

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

The following table is a summary of the Fund's securities lending transactions which are subject to offset under the MSLA as of December 31, 2019. These transactions are accounted for as secured borrowings with an overnight and continuous contractual maturity for cash collateral, and greater than overnight and continuous contractual maturity for non-cash collateral.

Gross Amount of Recognized Assets (Value of		Value of Cash		Value of Non-cash Collateral Received by Maturity
Securities on Loan)		Collateral Received*		<30 Days		Between 30 & 90 days		>90 Days		Net Amount
$	11,290,461	$	11,290,461	$	—	$	—	$	—	$	—

*  Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by the Fund is disclosed in the Statement of Assets and Liabilities.

Distributions to Shareholders:

Dividends from net investment income, if any, are declared and paid annually by the Fund. Distributable net realized gains, if any, are declared and distributed at least annually.

The amounts of dividends from net investment income and distributions from net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distributions reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.

As of December 31, 2019 on the Statement of Assets and Liabilities, as a result of permanent book-to-tax differences, reclassification adjustments were as follows:

Total distributable earnings/(loss)		Capital
$	418	$	(418	)

Federal Income Taxes:

It is the policy of the Fund to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of December 31.

Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., all open tax years and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.

Allocations:

Expenses directly attributable to the Fund are charged to the Fund, while expenses which are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.

20

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Cross-Trade Transactions:

Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For the year ended December 31, 2019, the Fund did not engage in any Rule 17a-7 transactions under the 1940 Act.

3. Purchases and Sales of Securities:

Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the year ended December 31, 2019 were as follows for the Fund:

Purchases		Sales
$	449,039,189	$	594,755,806

For the year ended December 31, 2019, there were no purchases or sales of U.S. Government Securities.

4. Fees and Transactions with Affiliates and Related Parties:

Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or the "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.

Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive 0.50% of the average daily net assets of the Fund. The Adviser may use its resources to assist with the Fund's distribution and marketing expenses.

VCM also serves as the Fund's administrator and fund accountant. Under an Administration and Fund Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.08% of the first $15 billion in average daily net assets of the Trust, Victory Portfolios and Victory Portfolios II (collectively, the "Victory Funds Complex"), 0.05% of the average daily net assets above $15 billion to $30 billion of the Victory Funds Complex and 0.04% of the average daily net assets over $30 billion of the Victory Funds Complex.

Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of-pocket expenses incurred in providing these services.

FIS Investor Services, LLC ("FIS") serves as the Fund's transfer agent. Under the Transfer Agent Agreement, the Trust pays FIS a fee for its services and reimburses FIS for all of their reasonable out-of-pocket expenses incurred in providing these services.

The Chief Compliance Officer ("CCO") is an employee of the Adviser, which pays the compensation of the CCO and his support staff. The Trust has entered into an Agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the CCO, and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The Funds in the Victory Funds Complex, in aggregate, compensate the Adviser for these services.

The Victory Funds Complex pays an annual retainer to each Independent Trustee, plus an additional annual retainer to the Chairman of the Board. The aggregate amount of the fees and expenses of the

21

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Independent Trustees are allocated amongst all the funds in the Victory Funds Complex and are presented in the Statement of Operations.

Shearman & Sterling LLP provides legal services to the Trust.

Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust.

The Adviser has entered into an expense limitation agreement with the Fund until at least April 30, 2020. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by the Fund in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of a Fund's business are excluded from the expense limits. As of December 31, 2019, the expense limit (excluding voluntary waivers) is 0.55%.

The Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three fiscal years after such waiver or reimbursement was made to the extent such payments or repayments would not cause the expenses to exceed the original expense limitation in place at time of the waiver or reimbursement or any expense limitation agreement in place at the time of repayment. As of December 31, 2019, the following amounts are available to be repaid to the Adviser. Amounts repaid to the Adviser during the year ended, if any, are reflected on the Statement of Operations as "Recoupment of prior expenses waived/reimbursed by Adviser".

Expires December 31, 2020		Expires December 31, 2021		Expires December 31, 2022		Total
$	522,796	$	690,695	$	1,698,805	$	2,912,296

The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining a competitive expense ratio. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the year ended December 31, 2019.

Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Fund Accountant, Sub-Administrator, Sub-Fund Accountant and Legal Counsel.

5. Risks:

The Fund may be subject to other risks in addition to these identified risks.

An investment in the Fund's shares represents an indirect investment in the securities owned by the Fund, some of which will be traded on a national securities exchange or in the over-the-counter markets. The value of the securities in which the Fund invests, like other market investments, may move up or down, sometimes rapidly and unpredictably. The value of the securities in which the Fund invests may affect the value of the Fund's shares. An investment in the Fund's shares at any point in time may be worth less than the original investment, even after taking into account the reinvestment of the Fund's distributions.

The Fund will be subject to credit risk with respect to the amount it expects to receive from counterparties for financial instruments entered into by the Fund. The Fund may be negatively impacted if a counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties. The Fund may experience significant delays in obtaining any recovery in bankruptcy or other reorganization proceeding and the Fund may obtain only limited recovery or may obtain no recovery in such circumstances. The Fund typically enters into transactions with counterparties whose credit ratings are investment grade, as determined by a nationally recognized statistical rating organization or, if unrated, judged by the Adviser to be of comparable quality.

22

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

6. Borrowing and Interfund Lending:

Line of Credit:

For the year ended December 31, 2019, the Victory Funds Complex participated in a short-term, demand note "Line of Credit" with Citibank. Under the agreement with Citibank, for the period January 1, 2019 to June 30, 2019, the Victory Funds Complex could borrow up to $250 million, of which $100 million was committed and $150 million was uncommitted. Effective July 1, 2019, the agreement was amended to include the USAA Mutual Funds Complex (another series of mutual funds managed by the Adviser) and has a new termination date of June 29, 2020. Under this amended agreement, the Victory Funds Complex and USAA Mutual Funds Complex, combined, may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund (herein, the "Fund"), another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs, including redemption requests that might otherwise require the untimely disposition of securities. With the agreement in effect for the period January 1, 2019 to June 30, 2019, Citibank received an annual commitment fee of 0.15% on $100 million for providing the Line of Credit. For the period July 1, 2019 to December 31, 2019, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. For the year ended December 31, 2019, Citibank earned approximately $300 thousand in commitment fees from the combined Victory Funds Complex and USAA Mutual Funds Complex. Each fund in the Victory Funds Complex and the USAA Mutual Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Line of credit fees.

The Fund did not utilize the Line of Credit during the year ended December 31, 2019.

Interfund Lending:

The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Victory Fund relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund during the period, if applicable, is presented on the Statement of Operations under Income on interfund lending.

The Fund did not utilize the Facility during the year ended December 31, 2019.

7. Federal Income Tax Information:

The tax character of distributions paid during the most recent tax years ended, as noted below, were as follows (total distributions paid may differ from the Statements of Changes in Net Assets because, for tax purposes, dividends are recognized when actually paid).

Year Ended December 31, 2019
Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	9,475,017	$	137,660,011	$	147,135,028

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Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Year Ended December 31, 2018
Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	11,515,218	$	87,616,353	$	99,131,571

As of the tax year ended December 31, 2019, the components of distributable earnings/accumulated deficit on a tax basis were as follows:

Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Earnings		Accumulated Capital and Other Losses		Unrealized Appreciation (Depreciation)		Total Accumulated Earnings (Deficit)
$	12,770,407	$	55,064,815	$	67,835,222	$	—	$	180,288,744	$	248,123,966

During the tax year ended December 31, 2019, the Fund did not utilize capital loss carryforwards.

As of December 31, 2019, the cost basis for federal income tax purposes, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation) for investments and derivatives were as follows:

Cost of Investments for Federal Tax Purposes		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
$	755,177,820	$	181,128,293	$	(839,549	)	$	180,288,744

8. Capital Contribution from Prior Custodian:

During 2016, the Fund received notification from the Fund's prior custodian, State Street Bank and Trust ("State Street"), concerning issues related to billing on certain categories of expenses during the approximately 16-year period from 1998 through October 31, 2014. The over-billing primarily related to categories of expenses that involved an allocation of general costs among multiple clients.

State Street paid the refunded amounts during January 2017. Based on billing information received during 2016 from State Street and an analysis of any expense limitation agreements that were in place during the period of the activities in question, including the application of any recoupment provisions in such agreements, the Adviser received a portion of the refund.

The portion of the refund retained by the Fund was accounted for as a capital contribution and is reflected on the Financial Highlights as "Capital Contribution from Prior Custodian, Net".

9. Fund Ownership:

Ownership of more than 25% of the voting securities of a fund creates presumptions of control of the Fund, under section 2(a)(9) of the 1940 Act. As of December 31, 2019, the shareholder listed below held more than 25% of the shares outstanding of the Fund and may be deemed to control the Fund.

Shareholder	Percent
GIAC		99.9	%

10. Subsequent Events:

The Fund has evaluated the need for additional disclosures or adjustments resulting from subsequent events through the date these financial statements were issued. Based on this evaluation, there were no subsequent events to report that would have a material impact on the Fund's financial statements.

24

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Trustees of Victory Variable Insurance Funds

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of portfolio investments, of Victory RS Large Cap Alpha VIP Series (the "Fund"), a series of Victory Variable Insurance Funds, as of December 31, 2019, the related statements of operations and changes in net assets, including the related notes, and the financial highlights for the year then ended (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2019, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The Fund's financial statements and financial highlights for the three years ended December 31, 2018, were audited by other auditors whose report dated February 15, 2019 and the Fund's financial highlights for the year ended December 31, 2015, were audited by other auditors whose report dated February 22, 2016, expressed unqualified opinions on those financial statements and financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2019, by correspondence with the custodian. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

We have served as the auditor of one or more of the investment companies advised by Victory Capital Management, Inc. since 2015.

COHEN & COMPANY, LTD.
Cleveland, Ohio
February 18, 2020

25

Victory Variable Insurance Funds Supplemental Information
December 31, 2019

  (Unaudited)

Trustee and Officer Information

Board of Trustees:

Overall responsibility for management of the Trust rests with the Board. The Trust is managed by the Board in accordance with the laws of the State of Delaware. There are currently ten Trustees, nine of whom are not "interested persons" of the Trust within the meaning of that term under the 1940 Act ("Independent Trustees") and one of whom is an "interested person" of the Trust within the meaning of that term under the 1940 Act ("Interested Trustee"). The Trustees, in turn, elect the officers of the Trust to actively supervise its day-to-day operations. The following tables list the Trustees, their ages, position with the Trust, commencement of service, principal occupations during the past five years and any directorships of other investment companies or companies whose securities are registered under the Securities Exchange Act of 1934, as amended, or who file reports under that Act. Each Trustee oversees nine portfolios in the Trust, 42 portfolios in Victory Portfolios and 26 portfolios in Victory Portfolios II, each a registered investment company that, together with the Trust, comprise the Victory Funds Complex. Each Trustee's address is c/o Victory Variable Insurance Funds, 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. Each Trustee has an indefinite term.

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Independent Trustees.
David Brooks Adcock, 68	Trustee	February 2005	Consultant (since 2006).	Chair and Trustee, Turner Funds (December 2016-December 2017).
Nigel D.T. Andrews, 72	Vice Chair and Trustee	August 2002	Retired.	Director, TCG BDC II, Inc. (since 2017); Director, TCG BDC I, Inc. (formerly Carlyle GMS Finance, Inc.) (since 2012); Director, Old Mutual US Asset Management (2002-2014).
E. Lee Beard, 68*	Trustee	February 2005	Retired (since 2015); Consultant, The Henlee Group, LLC (consulting) (2005-2015).	None.
Dennis M. Bushe, 76	Trustee	July 2016	Retired.	Trustee, RS Investment Trust and RS Variable Products Trust (November 2011-July 2016).

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Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Sally M. Dungan, 65	Trustee	February 2011	Chief Investment Officer, Tufts University (since 2002).	None.
John L. Kelly, 66	Trustee	February 2015	Partner, McCarvill Capital Partners (September 2016-September 2017); Advisor, Endgate Commodities LLC (January 2016-April 2016); Managing Partner, Endgate Commodities LLC (August 2014-January 2016); Chief Operating Officer, Liquidnet Holdings, Inc. (December 2011-July 2014).	Director, Caledonia Mining Corporation (since May 2012).
David L. Meyer, 62*	Trustee	December 2008	Retired.	None.
Gloria S. Nelund, 58	Trustee	July 2016	Chair, CEO and Co-Founder of TriLinc Global, LLC, an investment firm.	TriLinc Global Impact Fund, LLC (since 2012); Trustee, RS Investment Trust and RS Variable Products Trust (November 2007-July 2016).
Leigh A. Wilson, 75	Chair and Trustee	February 1998	Private Investor.	Chair (since 2013), Caledonia Mining Corporation.
Interested Trustee.
David C. Brown, 47**	Trustee	May 2008	Chairman and Chief Executive Officer (since 2013), Co-Chief Executive Officer (2011-2013), the Adviser; Chairman and Chief Executive Officer, Victory Capital Holdings, Inc. (since 2013).	USAA Mutual Funds Trust.

*  The Board has designated Mr. Meyer and Ms. Beard as its Audit Committee Financial Experts.

**  Mr. Brown is an "Interested Person" by reason of his relationship with the Adviser.

The Statement of Additional Information includes additional information about the Trustees of the Trust and is available, without charge, by calling 800-539-3863.

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Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Officers:

The officers of the Trust, their ages, commencement of service and their principal occupations during the past five years, are detailed in the following table. Each officer serves until the earlier of his or her resignation, removal, retirement, death, or the election of a successor. The mailing address of each officer of the Trust is 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. The officers of the Trust receive no compensation directly from the Trust for performing the duties of their offices.

Name and Age	Position with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years
Christopher K. Dyer, 58	President	February 2006*	Director of Fund Administration, the Adviser.
Scott A. Stahorsky, 50	Vice President	December 2014	Manager, Fund Administration, the Adviser (since 2015); Senior Analyst, Fund Administration, the Adviser (prior to 2015).
Erin G. Wagner, 46	Secretary	December 2014	Associate General Counsel, the Adviser (since 2013).
Allan Shaer, 54	Treasurer	May 2017	Senior Vice President, Financial Administration, Citi Fund Services Ohio, Inc. (since 2016); Vice President, Mutual Fund Administration, JP Morgan Chase (2011-2016).
Christopher A. Ponte, 35	Assistant Treasurer	December 2017	Manager, Fund Administration, the Adviser (since 2017); Senior Analyst, Fund Administration, the Adviser (prior to 2017); Chief Financial Officer, Victory Capital Advisers, Inc. (since 2018).
Colin Kinney, 46	Chief Compliance Officer	July 2017	Chief Compliance Officer (since 2013) and Chief Risk Officer (2009-2017), the Adviser.
Chuck Booth, 59	Anti-Money Laundering Compliance Officer and Identity Theft Officer	May 2015	Director, Regulatory Administration and CCO Support Services, Citi Fund Services Ohio, Inc.
Jay G. Baris, 66	Assistant Secretary	February 1998	Partner, Shearman & Sterling LLP (since 2018); Partner, Morrison & Foerster LLP (2011-January 2018).

*  On December 3, 2014, Mr. Dyer resigned as Secretary of the Trust and accepted the position of President.

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Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Proxy Voting and Portfolio Holdings Information

Proxy Voting:

Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 800-539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.

Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent twelve months ended June 30 is available on the SEC's website at www.sec.gov.

Availability of Schedules of Portfolio Investments:

The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-PORT. Prior to the implementation of Form N-PORT, the Trust filed a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-PORT and Forms N-Q are available on the SEC's website at www.sec.gov.

Expense Examples

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2019 through December 31, 2019.

The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

Please note the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Beginning Account Value 7/1/19		Actual Ending Account Value 12/31/19		Hypothetical Ending Account Value 12/31/19		Actual Expenses Paid During Period 7/1/19-12/31/19*		Hypothetical Expenses Paid During Period 7/1/19-12/31/19*		Annualized Expense Ratio During Period 7/1/19-12/31/19
$	1,000.00	$	1,103.20	$	1,022.43	$	2.92	$	2.80		0.55	%

*  Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).

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Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Additional Federal Income Tax Information

For the year ended December 31, 2019, the Fund paid qualified dividend income for the purposes of reduced individual federal income tax rates of 100%.

Dividends qualified for corporate dividends received deductions of 100%.

For the year ended December 31, 2019, the Fund designated long-term capital gain distributions in the amount of $137,660,011.

30

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Considerations of the Board in Continuing the Investment Advisory Agreement (the "Agreement")

The Board approved the Agreement on behalf of the Fund at an in-person meeting, which was called for that purpose, on December 4, 2019. The Board also considered information relating to the Fund and the Agreement provided throughout the year and, more specifically, at a meeting on October 22, 2019. The Board noted that prior to the Fund's reorganization on July 29, 2016, the Fund was managed by RS Investment Management Co. LLC, which was acquired by the Adviser on July 29, 2016. In considering whether to approve the Agreement, the Board requested, and the Adviser provided, information that the Board believed to be reasonably necessary to reach its conclusions.

The Board, including the Independent Trustees, evaluated this information along with other information obtained throughout the year and was advised by legal counsel to the Fund, which also serves as independent legal counsel to the Independent Trustees. In addition, in 2017 the Independent Trustees, through their counsel, retained an independent consultant to assist with a review of the overall process for conducting the annual review of these advisory arrangements.

The Board considered the Fund's advisory fee, expense ratio and investment performance as significant factors in determining whether the Agreement should be continued. In considering whether the compensation paid to the Adviser was fair and reasonable, the Board also evaluated, among other things, the following factors:

•  The requirements of the Fund for the services provided by the Adviser;

•  The nature, quality and extent of the services provided and expected to be provided;

•  The performance of the Fund as compared to comparable funds;

•  The fees payable for the services and whether the fee arrangements provided for economies of scale that would benefit Fund shareholders as the Fund grows;

•  Whether the fee would be sufficient to enable the Adviser to attract and retain experienced personnel and continue to provide quality services to the Fund;

•  The fees paid by other clients of the Adviser whose accounts are managed in a similar investment style and any differences in the services provided to the other clients compared to those provided to the Fund;

•  The total expenses of the Fund, taking into consideration any distribution or shareholder servicing fees;

•  Management's commitment to operating the Fund at competitive expense levels;

•  The profitability of the Adviser (as reflected by comparing fees earned against an estimate of the Adviser's costs) with respect to the Adviser's relationship with the Fund;

•  Research and other service benefits received by the Adviser obtained through payment of client commissions for securities transactions;

•  Other benefits received by the Adviser, and its affiliates, including revenues paid to the Adviser, or its affiliates, by the Fund for administration and fund accounting services, and distribution;

•  The capabilities and financial condition of the Adviser;

•  Current economic and industry trends; and

•  The historical relationship between the Fund and the Adviser.

The Board reviewed the Fund's current management fee, comprised of the advisory fee plus the administrative services fee paid to the Adviser, in the context of the Adviser's profitability with respect to the Fund. In addition, the Board compared the Fund's total operating expense ratio on a net and gross basis, taking into consideration any distribution or shareholder servicing fees and management fees with a universe of comparable mutual funds compiled by an independent consultant and a peer group of funds with similar investment strategies selected by that independent consultant from the universe. The Board reviewed the factors and methodology used by the independent consultant in the selection of the Fund's peer group, including the independent consultant's selection of a broad universe of funds, the more specific universe of comparable funds, and peer groups of funds with comparable investment strategies and asset levels, among other factors. The Board also reviewed any changes to the independent consultant's methodology as compared to the prior year, including those resulting from the Adviser's input, if any. The Board also reviewed fees and other information related to the Adviser's management of similarly managed institutional or private accounts, and the differences in the

31

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

services provided to the other accounts, to the extent applicable. The Board noted that the advisory fee arrangements for the Fund do not include breakpoints, which are generally viewed as a method by which the investment adviser shares any economies of scale with a fund as a fund grows. The Board also considered the Adviser's commitment to limit expenses as discussed in more detail below, and would consider breakpoints at a future time if the Fund's assets were to grow significantly.

The Board reviewed the Fund's performance over one-, three-, five- and ten-year periods against the performance of the Fund's selected peer group and benchmark index. The Board recognized that the performance of the Fund and the peer group funds are net of expenses, while the performance of the benchmark index reflects gross returns. The Board considered the additional resources that the Adviser has committed to enhance portfolio analysis, compliance and trading systems.

The Board reviewed various other specific factors with respect to the Fund, as described below. In their deliberations, the Trustees did not rank the importance of any particular information or factor considered and each Trustee may have attributed different weights to various factors.

The Board concluded that the Fund's gross annual management fee was reasonable as compared to the median gross management fee charged to the funds in the Fund's peer group. The Board noted that the Fund's net annual expense ratio, taking into account any shareholder servicing or distribution fees, was reasonable as compared to the median expense ratio for the peer group. The Board considered the Adviser's contractual agreement to waive its fees and reimburse expenses for a specified period of time, as described in the Fund's prospectus. The Board then compared the Fund's performance for the one-, three-, five- and ten-year periods ended June 30, 2019, to that of the median performance of the peer group and benchmark index for the same periods and considered the fact that the Fund underperformed the benchmark index for the one- and ten-year periods, outperformed the benchmark index for the three- and five-year periods, and underperformed the peer group median for all of the periods reviewed. The Board brought the Fund's underperformance to management's attention and discussed with the Adviser any steps that had been or could be taken to enhance performance in the future.

Having considered, among other things: (1) that the Fund's management fee was within the ranges of advisory fees charged to comparable mutual funds; (2) that the Fund's total expense ratio was reasonable; (3) the Adviser's willingness to limit the expenses for a period of time would provide stability to the Fund's expenses during that period; and (4) the performance of the Fund, the Board concluded that the Agreement continued to be in the best interests of the Fund's shareholders.

Conclusion

Based on its review of the information requested and provided, and following extended discussions, the Board determined that the Agreement, on behalf of the Fund, was consistent with the best interests of the Fund and its shareholders, and the Board unanimously approved the Agreement, on behalf of the Fund, for an additional annual period on the basis of the foregoing review and discussions and the following considerations, among others:

•  The fairness and reasonableness of the investment advisory fee payable to the Adviser under the Agreement in light of the investment advisory services provided, the costs of these services, the profitability of the Adviser's relationship with the Fund and the comparability of the fee paid to the fees paid by other investment companies;

•  The nature, quality and extent of the investment advisory services provided by the Adviser;

•  The Adviser's entrepreneurial commitment to the management of the Fund and the creation of a broad-based family of funds, which could entail a substantial commitment of the Adviser's resources to the successful operation of the Fund;

•  The Adviser's representations regarding its staffing and capabilities to manage the Fund, including the retention of personnel with relevant portfolio management experience;

•  The Adviser's efforts to enhance investment results by, among other things, developing quality portfolio management teams; and

•  The overall high quality of the personnel, operations, financial condition, investment management capabilities, methodologies and performance of the Adviser.

32

Privacy Policy

Protecting the Privacy of Information

The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.

We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.

To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*

*  You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.

Victory Funds
P.O. Box 182593
Columbus, Ohio 43218-2593

Visit our website at:	Call Victory at:
www.vcm.com	800-539-FUND (800-539-3863)

VVIF-RS-LCAVIP-AR (12/19)

December 31, 2019

Annual Report

Victory Variable Insurance Funds

Victory RS Small Cap Growth Equity VIP Series

Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports may no longer be sent by mail from the insurance company that issued your variable annuity and variable life insurance contract, unless you specifically request paper copies of the reports from your insurance company. Instead, the reports will be made available on www.victoryfunds.com. The insurance company that offers your contract may also make these reports available on a website, and such insurance company will notify you by mail each time a report is posted and provide you with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the insurance company electronically by following the instructions provided by the insurance company.

If offered by your insurance company, you may elect to receive all future reports in paper and free of charge from the insurance company. You can inform your insurance company that you wish to continue receiving paper copies of your reports. Your election to receive reports in paper will apply to all funds available under your contract.

www.vcm.com

News, Information And Education 24 Hours A Day, 7 Days A Week

The Victory Funds site gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:

•  Detailed performance records

•  Daily share prices

•  The latest fund news

•  Investment resources to help you become a better investor

•  A section dedicated to investment professionals

Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.

Victory Variable Insurance Funds

Table of Contents

Shareholder Letter (Unaudited)	3
Fund Review and Commentary (Unaudited)	5
Financial Statements
Schedule of Portfolio Investments	9
Statement of Assets and Liabilities	12
Statement of Operations	13
Statements of Changes in Net Assets	14
Financial Highlights	16
Notes to Financial Statements	18
Report of Independent Registered Public Accounting Firm	25
Supplemental Information (Unaudited)
Trustee and Officer Information	26
Proxy Voting and Portfolio Holdings Information	29
Expense Examples	29
Additional Federal Income Tax Information	30
Advisory Contract Renewal	31
Privacy Policy (inside back cover)

The Fund is distributed by Victory Capital Advisers, Inc. Victory Capital Management Inc. is the investment adviser to the Fund and receives fees from the Fund for performing services for the Fund.

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus of the Fund.

For additional information about any Victory Fund, including fees, expenses, and risks, view our prospectus online at www.vcm.com or call 800-539-3863. Read it carefully before you invest or send money.

The information in this annual report is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections, or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Past investment performance of the Fund, markets or securities mentioned herein should not be considered to be indicative of future results.

• NOT FDIC INSURED • NO BANK GUARANTEE
• MAY LOSE VALUE

Call Victory at:

800-539-FUND (800-539-3863)

Visit our website at:

www.vcm.com

1

This page is intentionally left blank.

2

Victory Funds Letter to Shareholders
(Unaudited)

Dear Shareholder,

As we turn the page into a new decade, it's hard not to reflect on the fact that we have been enjoying the longest-ever bull market in U.S. equities. The run has been impressive, and despite periods of tumult and plenty of negative news, the bull market endured throughout 2019.

For the annual reporting period ended December 31, 2019, the S&P 500^® Index posted impressive gains of 31.49%. This represents the greatest one-year gain since 2013 and also illustrates a swift bounce-back after a precipitous drop late in 2018. The move higher supports the notion that underlying fundamentals of U.S. companies drive performance, rather than the political rancor and headline fears that often capture the attention of investors.

Perhaps we shouldn't be surprised at the impressive performance of equities. The U.S. economy — the world's largest — remains on solid footing and has been a key driver of both domestic and international stocks. Robust job creation, near-record low unemployment, and steady consumer spending continue and offer reasons for further optimism. Meanwhile, inflation remains muted, and the Federal Reserve (the Fed) and other major global central banks have taken an accommodative stance. In fact, the Fed has cut interest rates by a total of 0.75% over three meetings last July, September and October.

The risk-on attitudes of investors, coupled with the accommodative monetary policy, had an expected impact on U.S. Treasury yields. The 10-year Treasury yield declined significantly over the course of 2019, falling from 2.66% to 1.92% at year-end. More interesting, however, was the fact that, the yield on 10-year Treasurys fell below shorter-term yields for the first time since before the 2007-2008 Global Financial Crisis. This inverted yield curve spooked investors for a spell, only to revert back to a traditional upward sloping yield curve by the end of the year.

The robust domestic economy, low interest rates, and ample liquidity from central banks provided a potent tonic for the stock market in 2019. In fact, at year-end 2019, the S&P 500^® Index was approaching its highest valuation level since 1999. This reminds all of us to retain some historical context on the bull market. Many of us remember the Global Financial Crisis and, before that, the collapse of the dot-com bubble. Although those are now but a distant memory (and we are not forecasting such tumult), we should not forget that stocks don't always go up and cycles don't last forever. In other words, valuations still matter.

The key point is not to discount the risks. In addition to lofty valuations, investors need to keep apprised of trade disputes, geopolitical hotspots, a contentious U.S. election, and a host of other potential headwinds. Yet it is these very risks — these cross-currents — that may create pricing dislocations. This is an environment in which we believe our Victory Capital independent investment franchises can thrive.

On the following pages, you will find information relating to your Victory Funds investment. If you have any questions, we encourage you to contact your financial

3

advisor. Or, if you invest with us directly, you may call (800) 539-3863, or visit our website at www.vcm.com.

My colleagues and I sincerely appreciate the confidence you have placed in the Victory Funds, and we value the opportunity to help meet your investment goals.

Christopher K. Dyer, CFA

President,

Victory Funds

4

Victory Variable Insurance Funds (Unaudited)

Victory RS Small Cap Growth Equity VIP Series

Portfolio Holdings

As a Percentage of Total Investments

Performance Update

The Victory RS Small Cap Growth Equity VIP Series (the "Fund") seeks to provide long-term capital appreciation. The Fund returned 38.78% in 2019, outperforming its benchmark, the Russell 2000^® Growth Index (the "Index"), which returned 28.48%.

Market Overview

U.S. equity markets delivered solid performance across styles throughout 2019, as the S&P 500^® Index delivered its 10th year of positive returns in the last 11 years. U.S. stocks rebounded from a challenging 2018, driven by resilience in the U.S. economy and renewed risk-taking among investors and supported by a strong job market and more accommodative monetary policy.

The year began on a positive note, with strong performance in the first half of the year before volatility emerged in the third quarter, dampening the strong investor sentiment and causing some investors to wonder whether 2018's challenging second half of the year would repeat. The market rebounded sharply in the fourth quarter (despite a challenging environment for corporate earnings, given higher input costs) on improved prospects for global growth in 2020. Top-line sales growth continued to be supported by the strength of the U.S. economy, which helped fuel the best annual performance for U.S. stocks (as represented by the Russell 3000^® Index) since 2013.

Large-cap stocks outperformed mid- and small-cap stocks during the year, as measured by the Russell family of indices, a continued trend experienced in both 2017 and 2018, while growth-oriented investments outperformed value as investors favored the strong fundamentals of growth stocks. Growth stocks, as measured by the Russell 3000^® Growth Index, have now outperformed value stocks as measured by the Russell 3000^® Value Index over 1, 3, 5, 10, 15, and even 30 years.

Portfolio Review

Within the Technology sector, contributors to the Fund's performance included RingCentral, Inc. (RingCentral), a provider of software-as-a-service solutions for businesses to support modern communications. We initially purchased the stock in early 2014 given the thesis that RingCentral operates in a huge, approximately $50 billion global market (with approximately $15 billion in the United States alone) that was only 10% penetrated by cloud offerings. The company has executed very well due to their industry-leading technology driven by a large research and development budget which, combined with aggressive marketing, has allowed the company to take market share. In the most recent quarter, RingCentral announced a commercial agreement with Avaya Holdings Corp. (Avaya), a global leader in communications, where RingCentral would become the exclusive provider of unified communications as a service (UCaaS) solutions to Avaya in a strategic partnership that would provide RingCentral access to Avaya's installed base of 100 million customers for a new RingCentral product on

5

Victory Variable Insurance Funds (Unaudited)

Victory RS Small Cap Growth Equity VIP Series (continued)

Avaya's Cloud Office. We expect this deal to accelerate RingCentral's global expansion, as well as to become an important channel for RingCentral for years to come.

Technology holding Coupa Software Incorporated (Coupa) was another strong contributor to the Fund's performance in 2019. Coupa is a cloud-based platform that allows organizations to automate purchase, invoice, and expense management. We originally purchased the stock given the tailwinds associated with the shift by corporations toward solutions that can be easily scaled, the company's intuitive consumer-friendly interface that leads to greater adoption, and pricing that allows for better targeting. Coupa performed exceptionally well in 2019, driven by the company's ability to move up market, which has driven improved unit economics and strong demand for the company's Coupa pay modules that allow customers to directly pay invoices. Given the success of the holding, we did sell the position from the Fund for market cap reasons.

Stock selection within the Financial Services sector also added to the Fund's performance, due in large part to an investment in eHealth, Inc. (eHealth), a private health insurance exchange for individuals, families, and small businesses. We originally purchased eHealth given its leadership in a growing marketplace that we felt was protected by high barriers given the rigorous approval process required in the healthcare insurance marketplace. eHealth performed exceptionally well throughout the year, easily beating expectations for agent count and sponsor commission revenue, which helped drive market expectations higher.

Within the Health Care sector, the largest detractor to Fund performance was biotechnology holding Ligand Pharmaceuticals Incorporated (Ligand), a biotechnology company with a unique business approach that provides diversified exposure to a range of promising drugs under development by other biotech and pharmaceutical companies. Ligand was dragged lower in part by a bearish report by short-seller Citron, Inc. (published in January) that made the case that Ligand's pipeline of drugs was not as robust as investors thought. We reviewed their analysis and came away unimpressed. In fact, less than two months after the report that put a $35 price target on the company, Ligand sold their Promacta assets (one of their many drugs) to Royalty Pharma for $827 million, which provided cash of $40 per share (higher than the short seller price target alone). Following this news of the asset sale (which Ligand outlined would be used to acquire new assets and repurchase shares), we were surprised that the stock did not respond positively, but we believe in the fundamentals of the company and business model; thus, we continue to hold the position at a more attractive valuation.

Financial Services holding Green Dot Corporation (Green Dot) also detracted from Fund performance in 2019. Green Dot is a bank and financial technology company that provides prepaid cards, debit cards, checking accounts, and consumer cash processing services. We initially purchased the stock given the strong leadership team, market leadership position within several channels, strong cash flows, and merger and acquisition opportunities. In the most recent calendar year, the company was weighed down by poor execution and the unexpected announcement during the first quarter that technology and marketing investment would be much higher than anticipated. We were fortunate to use that as an opportunity to exit the position, as the company continued to disappoint the remainder of the year, falling another 35% following their second quarter results.

6

Victory Variable Insurance Funds (Unaudited)

Victory RS Small Cap Growth Equity VIP Series (continued)

Technology holding Mercury Systems, Inc. (Mercury) also proved to be disappointing in 2019. Mercury is a leading provider of secure and mission-critical processing subsystems across several defense platforms for the U.S. Department of Defense and prime contractors. We initially purchased the stock given the strong commercial model the company applies to the defense electronic industry, wherein they fund research and development themselves rather than being funded directly by the government, which leads to higher margins for finished goods. Despite solid execution in recent quarters, the stock has been weighed down by their heavy investment in manufacturing, as capital expenditure was expected to be up 90% year-over-year to modernize their West Coast facilities, pushing expected earnings below Street forecasts. We believe the decision to invest in their business makes sense; thus, we continued to hold the position.

Outlook

We view the outsized outperformance of the market over the past year, which followed a tumultuous 2018 calendar year, as noise, preferring to focus on how our investments perform relative to the fundamental anchor points that track the progress of our long-term growth stories. Instead of fearing these periods, we prefer to use this heightened volatility to take gains in investments where we believe price action has exceeded fundamentals, to initiate new investments at attractive prices, and add to some of our favorite investments. We believe that this environment works to our strength as stock pickers as we work to uncover companies with high-quality growth stories at valuations that are attractive relative to the broader market.

Overall, we expect the market to benefit from an accommodative U.S. Federal Reserve that is once again in easing mode, and our continued base case is that there will be a constructive resolution to ongoing trade disputes. The relative strength in both the U.S. economy and labor market, the impact of lower projected inflation, and expectations of future monetary policy, have reinforced our view that earnings for growth stocks will remain attractive. It is our view that the U.S. equity market can continue to rise given strong U.S. growth, as reflected in gross domestic product increasing 2.1% year-over-year in the most recent quarter, the 12^th consecutive quarterly period of greater than 2% year-over-year growth. All this supports our constructive outlook for U.S. small-cap growth stocks.

7

Victory Variable Insurance Funds (Unaudited)

Victory RS Small Cap Growth Equity VIP Series (continued)

Average Annual Total Return

Year Ended December 31, 2019

	Class I
INCEPTION DATE	5/1/97
	Net Asset Value			Russell 2000® Growth Index1			Russell 2000® Index2
One Year		38.78	%		28.48	%		25.52	%
Three Year		20.73	%		12.49	%		8.59	%
Five Year		12.42	%		9.34	%		8.23	%
Ten Year		15.64	%		13.01	%		11.83	%
Since Inception		10.69	%		N/A			N/A

Expense Ratios

Gross	0.89	%
With Applicable Waivers	0.88	%

Past performance is not indicative of future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month's end, please visit www.vcm.com.

The above expense ratios are from the Fund's prospectus dated May 1, 2019. Additional information pertaining to the Fund's expense ratios as of December 31, 2019 can be found in the financial highlights.

The total return figures set forth above include all waivers of fees for various periods since inception. Without such fee waivers, the total returns would have been lower. Some fee waivers are voluntary and may be modified or terminated at any time. The total returns do not include any insurance, sales or administrative charges of variable annuity or life insurance contracts. If these charges were included, the total returns would have been lower.

Victory RS Small Cap Growth Equity VIP Series — Growth of $10,000

¹The Russell 2000^® Growth Index is an unmanaged market-capitalization-weighted index that measures the performance of those companies in the Russell 2000^® Index with higher price-to-book ratios and higher forecasted growth values. Index results assume the reinvestment of dividends paid on the stocks constituting the index. You may not invest in the index, and, unlike the Fund, the index does not incur fees and expenses. It is not possible to invest directly in an index.

²The Russell 2000^® Index is an unmanaged market-capitalization-weighted index that measures the performance of the 2,000 smallest companies in the Russell 3000^® Index, which consists of the 3,000 largest U.S. companies based on total market capitalization. Index results assume the reinvestment of dividends paid on the stocks constituting the index. You may not invest in the index, and, unlike the Fund, the index does not incur fees or expenses. It is not possible to invest directly in an index.

The graph reflects investment of growth of a hypothetical $10,000 investment in the Fund. Past performance is no guarantee of future results.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

8

Victory Variable Insurance Funds
Victory RS Small Cap Growth Equity VIP Series Schedule of Portfolio Investments
December 31, 2019

Security Description	Shares		Value
Common Stocks (97.8%)
Biotechnology (17.8%):
Aimmune Therapeutics, Inc. (a) (b)		44,500	$	1,489,415
Amicus Therapeutics, Inc. (a)		97,699		951,588
Apellis Pharmaceuticals, Inc. (a) (b)		42,310		1,295,532
Arena Pharmaceuticals, Inc. (a)		17,220		782,132
Ascendis Pharma A/S, ADR (a)		9,670		1,345,290
Bluebird Bio, Inc. (a) (b)		17,452		1,531,413
Blueprint Medicines Corp. (a)		11,996		961,000
Celyad SA, ADR (a)		18,150		189,123
CytomX Therapeutics, Inc., Class A (a)		56,740		471,509
Epizyme, Inc. (a)		60,420		1,486,332
Equillium, Inc. (a) (c)		40,127		135,629
Fate Therapeutics, Inc. (a)		83,040		1,625,094
Gossamer Bio, Inc. (a)		30,060		469,838
Immunomedics, Inc. (a)		44,020		931,463
Invitae Corp. (a) (b)		55,760		899,409
Iovance Biotherapeutics, Inc. (a) (b)		52,754		1,460,231
Kura Oncology, Inc. (a)		43,620		599,775
Mirati Therapeutics, Inc. (a) (b)		9,270		1,194,532
Myovant Sciences Ltd. (a)		53,493		830,211
				18,649,516
Communication Services (2.4%):
Bandwidth, Inc., Class A (a) (b)		19,630		1,257,302
Cardlytics, Inc. (a)		8,650		543,739
QuinStreet, Inc. (a)		45,554		697,432
				2,498,473
Consumer Discretionary (11.7%):
Aaron's, Inc. (b)		12,190		696,171
Arco Platform Ltd., ADR, Class A (a)		32,830		1,451,086
Dine Brands Global, Inc. (b)		14,500		1,211,040
Eldorado Resorts, Inc. (a) (b)		26,310		1,569,128
Frontdoor, Inc. (a)		19,460		922,793
Monro, Inc		16,540		1,293,428
Planet Fitness, Inc., Class A (a)		17,550		1,310,634
Regis Corp. (a) (b)		36,360		649,753
Skyline Champion Corp. (a) (b)		17,560		556,652
Steven Madden Ltd.		17,613		757,535
Strategic Education, Inc.		12,260		1,948,114
				12,366,334
Consumer Staples (4.8%):
BellRing Brands, Inc., Class A (a)		27,630		588,243
BJ's Wholesale Club Holdings, Inc. (a) (b)		44,560		1,013,294
Freshpet, Inc. (a)		13,096		773,843
Hostess Brands, Inc. (a)		94,550		1,374,757
Nomad Foods Ltd., ADR (a)		59,070		1,321,396
				5,071,533

See notes to financial statements.

9

Victory Variable Insurance Funds
Victory RS Small Cap Growth Equity VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Energy (0.7%):
Newpark Resources, Inc. (a) (b)		120,219	$	753,773
Financials (6.2%):
eHealth, Inc. (a) (b)		10,070		967,526
Essent Group Ltd.		32,110		1,669,399
FirstCash, Inc., Class A		23,580		1,901,255
LendingTree, Inc. (a) (b)		3,620		1,098,453
Western Alliance Bancorp		16,190		922,830
				6,559,463
Health Care Equipment & Supplies (4.7%):
Cryoport, Inc. (a) (b)		43,650		718,479
Irhythm Technologies, Inc. (a) (b)		13,510		919,896
Masimo Corp. (a)		7,650		1,209,159
Nevro Corp. (a)		10,730		1,261,204
Silk Road Medical, Inc. (a) (b)		20,160		814,061
				4,922,799
Health Care Providers & Services (4.0%):
Hanger, Inc. (a)		41,350		1,141,674
HealthEquity, Inc. (a)		15,460		1,145,122
LHC Group, Inc. (a) (b)		13,720		1,890,067
				4,176,863
Health Care Technology (2.0%):
Health Catalyst, Inc. (a) (b)		23,930		830,371
Inspire Medical System, Inc. (a) (b)		16,870		1,251,923
				2,082,294
Industrials (16.3%):
Albany International Corp.		18,710		1,420,463
Armstrong World Industries, Inc.		9,770		918,087
Axon Enterprise, Inc. (a)		19,360		1,418,701
Azul SA, ADR (a) (b)		41,830		1,790,324
ESCO Technologies, Inc.		16,430		1,519,775
FTI Consulting, Inc. (a)		8,880		982,661
Generac Holdings, Inc. (a)		14,310		1,439,443
Mercury Systems, Inc. (a)		24,010		1,659,331
Simpson Manufacturing Co., Inc.		10,340		829,578
Siteone Landscape Supply, Inc. (a)		22,170		2,009,711
SPX Corp. (a)		9,160		466,061
Trex Co., Inc. (a)		12,110		1,088,447
Watts Water Technologies, Inc., Class A (b)		16,920		1,687,939
				17,230,521
Information Technology (24.7%):
ACI Worldwide, Inc. (a)		57,910		2,193,920
Advanced Energy Industries, Inc. (a)		26,960		1,919,551
Cabot Microelectronics Corp.		10,780		1,555,770
Cornerstone OnDemand, Inc. (a)		32,120		1,880,626
Envestnet, Inc. (a)		13,150		915,635
Everbridge, Inc. (a) (b)		20,970		1,637,338

See notes to financial statements.

10

Victory Variable Insurance Funds
Victory RS Small Cap Growth Equity VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Evo Payments, Inc. (a)		57,610	$	1,521,480
Inphi Corp. (a)		4,510		333,830
Itron, Inc. (a)		19,700		1,653,815
Lattice Semiconductor Corp. (a)		48,340		925,228
Littelfuse, Inc. (b)		4,379		837,703
Liveramp Holdings, Inc. (a)		22,290		1,071,480
MACOM Technology Solutions Holdings, Inc. (a)		21,420		569,772
Monolithic Power Systems, Inc.		2,597		462,318
Q2 Holdings, Inc. (a)		10,350		839,178
Silicon Laboratories, Inc. (a)		14,750		1,710,705
Varonis Systems, Inc. (a)		30,930		2,403,570
Wix.com Ltd., ADR (a)		16,010		1,959,304
WNS Holdings Ltd., ADR (a)		22,936		1,517,216
				25,908,439
Materials (1.1%):
Ingevity Corp. (a)		12,700		1,109,726
Pharmaceuticals (1.4%):
Assembly Biosciences, Inc. (a)		21,540		440,708
GW Pharmaceuticals PLC, ADR (a) (b)		9,970		1,042,463
				1,483,171
Total Common Stocks (Cost $86,754,584)				102,812,905
Collateral for Securities Loaned^ (13.7%)
BlackRock Liquidity Funds TempFund Portfolio, Institutional Class, 1.75% (d)		684,688		684,688
Fidelity Investments Money Market Government Portfolio, Class I, 1.54% (d)		3,772,143		3,772,143
Fidelity Investments Prime Money Market Portfolio, Class I, 1.75% (d)		114,360		114,360
Goldman Sachs Financial Square Prime Obligations Fund, Institutional Class, 1.80% (d)		2,278,764		2,278,764
JPMorgan Prime Money Market Fund, Capital Class, 1.73% (d)		2,506,817		2,506,817
Morgan Stanley Institutional Liquidity Prime Portfolio, Institutional Class, 1.76% (d)		5,013,464		5,013,464
Total Collateral for Securities Loaned (Cost $14,370,236)				14,370,236
Total Investments (Cost $101,124,820) — 111.5%				117,183,141
Liabilities in excess of other assets — (11.5)%				(12,070,806	)
NET ASSETS — 100.00%			$	105,112,335

^  Purchased with cash collateral from securities on loan.

(a)  Non-income producing security.

(b)  All or a portion of this security is on loan.

(c)  The Fund's Adviser has deemed this security to be illiquid based upon procedures approved by the Board of Trustees. As of December 31, 2019, illiquid securities were 0.1% of the Fund's net assets.

(d)  Rate disclosed is the daily yield on December 31, 2019.

ADR — American Depositary Receipt

PLC — Public Limited Company

See notes to financial statements.

11

Victory Variable Insurance Funds Statement of Assets and Liabilities
December 31, 2019

	Victory RS Small Cap Growth Equity VIP Series
ASSETS:
Investments, at value (Cost $101,124,820)	$	117,183,141	(a)
Cash and cash equivalents		2,626,645
Interest and dividends receivable		28,583
Receivable for capital shares issued		165,456
Receivable for investments sold		546,331
Receivable from Adviser		21,096
Prepaid expenses		6,457
Total Assets		120,577,709
LIABILITIES:
Payables:
Collateral received on loaned securities		14,370,236
Investments purchased		924,618
Capital shares redeemed		69,914
Accrued expenses and other payables:
Investment advisory fees		65,895
Administration fees		4,984
Custodian fees		1,118
Transfer agent fees		10,440
Compliance fees		71
Trustees' fees		212
Other accrued expenses		17,886
Total Liabilities		15,465,374
NET ASSETS:
Capital		70,326,063
Total distributable earnings/(loss)		34,786,272
Net Assets	$	105,112,335
Shares (unlimited shares authorized with a par value of $0.001 per share):		6,272,033
Net asset value:	$	16.76

(a)  Includes $14,109,950 of securities on loan.

See notes to financial statements.

12

Victory Variable Insurance Funds Statement of Operations
For the Year Ended December 31, 2019

	Victory RS Small Cap Growth Equity VIP Series
Investment Income:
Dividends	$	275,014
Interest		44,697
Securities lending (net of fees)		27,737
Total Income		347,448
Expenses:
Investment advisory fees		774,501
Administration fees		63,140
Custodian fees		6,716
Transfer agent fees		137,690
Trustees' fees		9,991
Compliance fees		706
Legal and audit fees		18,012
Other expenses		31,844
Total Expenses		1,042,600
Expenses waived/reimbursed by Adviser		(133,480	)
Net Expenses		909,120
Net Investment Income (Loss)		(561,672	)
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment securities		20,085,016
Net change in unrealized appreciation/depreciation on investment securities		13,360,263
Net realized/unrealized gains on investments		33,445,279
Change in net assets resulting from operations	$	32,883,607

See notes to financial statements.

13

Victory Variable Insurance Funds Statements of Changes in Net Assets

	Victory RS Small Cap Growth Equity VIP Series
	Year Ended December 31, 2019			Year Ended December 31, 2018
From Investment Activities:
Operations:
Net investment income (loss)	$	(561,672	)	$	(500,451	)
Net realized gains (losses) from investments		20,085,016			22,267,262
Net change in unrealized appreciation/depreciation on investments		13,360,263			(28,678,125	)
Change in net assets resulting from operations		32,883,607			(6,911,314	)
Change in net assets resulting from distributions to shareholders		(21,884,620	)		(16,485,913	)
Change in net assets resulting from capital transactions		5,057,374			982,954
Change in net assets		16,056,361			(22,414,273	)
Net Assets:
Beginning of period		89,055,974			111,470,247
End of period	$	105,112,335		$	89,055,974
Capital Transactions:
Proceeds from shares issued	$	5,861,988		$	6,277,058
Distributions reinvested		21,884,620			16,485,913
Cost of shares redeemed		(22,689,234	)		(21,780,017	)
Change in net assets resulting from capital transactions	$	5,057,374		$	982,954
Share Transactions:
Issued		305,660			284,919
Reinvested		1,330,372			1,088,898
Redeemed		(1,188,577	)		(991,856	)
Change in Shares		447,455			381,961

See notes to financial statements.

14

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15

Victory Variable Insurance Funds Financial Highlights

For a Share Outstanding Throughout Each Period

			Investment Activities									Distributions to Shareholders From
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)(a)			Net Realized and Unrealized Gains (Losses) on Investments			Total from Investment Activities			Net Realized Gains From Investments			Total Distributions
Victory RS Small Cap Growth Equity VIP Series
Year Ended 12/31/19	$	15.29		(0.10	)		5.95			5.85			(4.38	)		(4.38	)
Year Ended 12/31/18	$	20.48		(0.10	)		(1.62	)		(1.72	)		(3.47	)		(3.47	)
Year Ended 12/31/17	$	14.82		(0.05	)		5.71			5.66			—			—
Year Ended 12/31/16	$	14.61		(0.05	)		0.25			0.20			—			—
Year Ended 12/31/15	$	17.47		(0.10	)		0.24			0.14			(3.00	)		(3.00	)

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Total returns do not reflect the effects of charges deducted pursuant to the terms of The Guardian Insurance & Annuity Company, Inc.'s variable contracts. Inclusion of such charges would reduce the total returns for all periods shown.

(c)  The Fund received monies related to a nonrecurring refund from the prior Custodian. The corresponding impact to the total return was less than 0.01% for the period shown. (See Note 8)

See notes to financial statements.

16

Victory Variable Insurance Funds Financial Highlights — continued

For a Share Outstanding Throughout Each Period

								Ratios to Average Net Assets									Supplemental Data
	Capital Contribution from Prior Custodian, Net (See Note 8)		Net Asset Value, End of Period		Total Return(b)			Net Expenses			Net Investment Income (Loss)			Gross Expenses			Net Assets, End of Period (000's)		Portfolio Turnover
Victory RS Small Cap Growth Equity VIP Series
Year Ended 12/31/19		—	$	16.76		38.78	%		0.88	%		(0.54	)%		1.01	%	$	105,112		90	%
Year Ended 12/31/18		—	$	15.29		(8.25	)%		0.88	%		(0.44	)%		0.89	%	$	89,056		76	%
Year Ended 12/31/17		—	$	20.48		38.19	%		0.87	%		(0.30	)%		0.87	%	$	111,470		71	%
Year Ended 12/31/16		0.01	$	14.82		1.44	%(c)		0.88	%		(0.39	)%		0.88	%	$	97,242		91	%
Year Ended 12/31/15		—	$	14.61		0.62	%		0.88	%		(0.54	)%		0.88	%	$	106,962		88	%

See notes to financial statements.

17

Victory Variable Insurance Funds Notes to Financial Statements
December 31, 2019

1. Organization:

Victory Variable Insurance Funds (the "Trust") was organized on February 11, 1998 as a Delaware statutory trust. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified open-end investment company. The Trust is comprised of nine funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with a par value of $0.001 per share.

The accompanying financial statements are those of the Victory RS Small Cap Growth Equity VIP Series (the "Fund"). The Fund offers a single class of shares: Class I Shares. Sales of shares of the Fund may only be made to certain separate accounts of The Guardian Insurance & Annuity Company, Inc. ("GIAC") that fund certain variable annuity and variable life insurance contracts issued by GIAC. GIAC is a wholly owned subsidiary of The Guardian Life Insurance Company of America ("Guardian Life").

Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.

2. Significant Accounting Policies:

The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.

The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies.

Investment Valuation:

The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:

• Level 1 — quoted prices in active markets for identical securities

• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)

• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.

Portfolio securities listed or traded on securities exchanges, including American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the

18

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.

Investments for which there are no such quotations, or for which quotations do not appear reliable, are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Trust's Board of Trustees (the "Board"). These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value.

A summary of the valuations as of December 31, 2019, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments.

	LEVEL 1		Total
Common Stocks	$	102,812,905	$	102,812,905
Collateral for Securities Loaned		14,370,236		14,370,236
Total	$	117,183,141	$	117,183,141

For the year ended December 31, 2019, there were no Level 3 investments for which significant unobservable inputs were used to determine fair value.

Investment Transactions and Related Income:

Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.

Withholding taxes on interest, dividends and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.

Securities Lending:

The Trust has entered into a Master Securities Lending Agreement ("MSLA") with Citibank, N.A. ("Citibank" or the "Agent"). Under the terms of the MSLA, the Fund may lend securities to certain broker-dealers and banks in exchange for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are adjusted the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities, letters of credit and certificates of deposit. The cash collateral is invested in short-term instruments or cash equivalents as noted on the Fund's Schedule of Portfolio Investments. The Trust does not have effective control of the non-cash collateral and therefore it is not disclosed in the Fund's Schedule of Portfolio Investments. The Fund continues to benefit from interest or dividends on the securities loaned and may also earn a return from the collateral. The Fund pays various fees in connection with the investment of cash collateral. The Fund pays the Agent fees based on the investment income received from securities lending activities. Securities lending income is disclosed in the Fund's Statement of Operations. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them.

Securities lending transactions are entered into by the Fund under the MSLA, which permits the Fund, under certain circumstances such as an event of default, to offset amounts payable by the Fund to the same counterparty against amounts receivable from the counterparty to create a net payment due to or from the Fund.

19

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

The following table is a summary of the Fund's securities lending transactions which are subject to offset under the MSLA as of December 31, 2019. These transactions are accounted for as secured borrowings with an overnight and continuous contractual maturity for cash collateral, and greater than overnight and continuous contractual maturity for non-cash collateral.

Gross Amount of Recognized Assets (Value of		Value of Cash		Value of Non-cash Collateral Received by Maturity
Securities on Loan)		Collateral Received*		<30 Days		Between 30 & 90 days		>90 Days		Net Amount
$	14,109,950	$	14,109,950	$	—	$	—	$	—	$	—

*  Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by the Fund is disclosed in the Statement of Assets and Liabilities.

Distributions to Shareholders:

Dividends from net investment income, if any, are declared and paid annually by the Fund. Distributable net realized gains, if any, are declared and distributed at least annually.

The amounts of dividends from net investment income and distributions from net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distributions reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.

As of December 31, 2019 on the Statement of Assets and Liabilities, as a result of permanent book-to-tax differences, reclassification adjustments were as follows:

Total Distributable Earnings/(Loss)		Capital
$	2	$	(2	)

Federal Income Taxes:

It is the policy of the Fund to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of December 31.

Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., all open tax years and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.

Allocations:

Expenses directly attributable to the Fund are charged to the Fund, while expenses which are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.

20

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Cross-Trade Transactions:

Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For the year ended December 31, 2019, the Fund did not engage in any Rule 17a-7 transactions under the 1940 Act.

3. Purchases and Sales of Securities:

Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the year ended December 31, 2019 were as follows for the Fund:

Purchases		Sales
$	90,466,760	$	108,699,242

For the year ended December 31, 2019, there were no purchases or sales of U.S. Government Securities.

4. Fees and Transactions with Affiliates and Related Parties:

Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or the "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.

Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive 0.75% of the average daily net assets of the Fund. The Adviser may use its resources to assist with the Fund's distribution and marketing expenses.

VCM also serves as the Fund's administrator and fund accountant. Under an Administration and Fund Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.08% of the first $15 billion in average daily net assets of the Trust, Victory Portfolios and Victory Portfolios II (collectively, the "Victory Funds Complex"), 0.05% of the average daily net assets above $15 billion to $30 billion of the Victory Funds Complex and 0.04% of the average daily net assets over $30 billion of the Victory Funds Complex.

Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of-pocket expenses incurred in providing these services.

FIS Investor Services, LLC ("FIS") serves as the Fund's transfer agent. Under the Transfer Agent Agreement, the Trust pays FIS a fee for its services and reimburses FIS for all of their reasonable out-of-pocket expenses incurred in providing these services.

The Chief Compliance Officer ("CCO") is an employee of the Adviser, which pays the compensation of the CCO and his support staff. The Trust has entered into an Agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the CCO, and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The Funds in the Victory Funds Complex, in aggregate, compensate the Adviser for these services.

The Victory Funds Complex pays an annual retainer to each Independent Trustee, plus an additional annual retainer to the Chairman of the Board. The aggregate amount of the fees and expenses of the

21

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Independent Trustees are allocated amongst all the funds in the Victory Funds Complex and are presented in the Statement of Operations.

Shearman & Sterling LLP provides legal services to the Trust.

Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust.

The Adviser has entered into an expense limitation agreement with the Fund until at least April 30, 2020. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by the Fund in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of a Fund's business are excluded from the expense limits. As of December 31, 2019, the expense limit (excluding voluntary waivers) is 0.88%.

The Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three fiscal years after such waiver or reimbursement was made to the extent such payments or repayments would not cause the expenses to exceed the original expense limitation in place at time of the waiver or reimbursement or any expense limitation agreement in place at the time of repayment. As of December 31, 2019, the following amounts are available to be repaid to the Adviser. Amounts repaid to the Adviser during the year ended, if any, are reflected on the Statement of Operations as "Recoupment of prior expenses waived/reimbursed by Adviser".

Expires December 31, 2021		Expires December 31, 2022		Total
$	5,628	$	133,480	$	139,108

The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining a competitive expense ratio. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the year ended December 31, 2019.

Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Fund Accountant, Sub-Administrator, Sub-Fund Accountant and Legal Counsel.

5. Risks:

The Fund may be subject to other risks in addition to these identified risks.

An investment in the Fund's shares represents an indirect investment in the securities owned by the Fund, some of which will be traded on a national securities exchange or in the over-the-counter markets. The value of the securities in which the Fund invests, like other market investments, may move up or down, sometimes rapidly and unpredictably. The value of the securities in which the Fund invests may affect the value of the Fund's shares. An investment in the Fund's shares at any point in time may be worth less than the original investment, even after taking into account the reinvestment of the Fund's distributions.

The Fund will be subject to credit risk with respect to the amount it expects to receive from counterparties for financial instruments entered into by the Fund. The Fund may be negatively impacted if a counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties. The Fund may experience significant delays in obtaining any recovery in bankruptcy or other reorganization proceeding and the Fund may obtain only limited recovery or may obtain no recovery in such circumstances. The Fund typically enters into transactions with counterparties whose credit ratings are investment grade, as determined by a nationally recognized statistical rating organization or, if unrated, judged by the Adviser to be of comparable quality.

22

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

6. Borrowing and Interfund Lending:

Line of Credit:

For the year ended December 31, 2019, the Victory Funds Complex participated in a short-term, demand note "Line of Credit" with Citibank. Under the agreement with Citibank, for the period January 1, 2019 to June 30, 2019, the Victory Funds Complex could borrow up to $250 million, of which $100 million was committed and $150 million was uncommitted. Effective July 1, 2019, the agreement was amended to include the USAA Mutual Funds Complex (another series of mutual funds managed by the Adviser) and has a new termination date of June 29, 2020. Under this amended agreement, the Victory Funds Complex and USAA Mutual Funds Complex, combined, may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund (herein, the "Fund"), another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs, including redemption requests that might otherwise require the untimely disposition of securities. With the agreement in effect for the period January 1, 2019 to June 30, 2019, Citibank received an annual commitment fee of 0.15% on $100 million for providing the Line of Credit. For the period July 1, 2019 to December 31, 2019, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. For the year ended December 31, 2019, Citibank earned approximately $300 thousand in commitment fees from the combined Victory Funds Complex and USAA Mutual Funds Complex. Each fund in the Victory Funds Complex and the USAA Mutual Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Line of credit fees.

The Fund did not utilize the Line of Credit during the year ended December 31, 2019.

Interfund Lending:

The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Victory Fund relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund during the period, if applicable, is presented on the Statement of Operations under Income on interfund lending.

The Fund did not utilize the Facility during the year ended December 31, 2019.

7. Federal Income Tax Information:

The tax character of distributions paid during the most recent tax years ended, as noted below, were as follows (total distributions paid may differ from the Statements of Changes in Net Assets because, for tax purposes, dividends are recognized when actually paid).

Year Ended December 31, 2019
Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	77,122	$	21,807,498	$	21,884,620

23

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Year Ended December 31, 2018
Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	411,847	$	16,074,066	$	16,485,913

As of the tax year ended December 31, 2019, the components of distributable earnings/accumulated deficit on a tax basis were as follows:

Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Earnings		Accumulated Capital and Other Losses		Unrealized Appreciation (Depreciation)		Total Accumulated Earnings (Deficit)
$	990,940	$	18,467,020	$	19,457,960	$	—	$	15,328,312	$	34,786,272

During the tax year ended December 31, 2019, the Fund did not utilize capital loss carryforwards.

As of December 31, 2019, the cost basis for federal income tax purposes, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation) for investments and derivatives were as follows:

Cost of Investments for Federal Tax Purposes		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
$	101,854,829	$	19,368,943	$	(4,040,631	)	$	15,328,312

8. Capital Contribution from Prior Custodian:

During 2016, the Fund received notification from the Fund's prior custodian, State Street Bank and Trust ("State Street"), concerning issues related to billing on certain categories of expenses during the approximately 16-year period from 1998 through October 31, 2014. The over-billing primarily related to categories of expenses that involved an allocation of general costs among multiple clients.

State Street paid the refunded amounts during January 2017. Based on billing information received during 2016 from State Street and an analysis of any expense limitation agreements that were in place during the period of the activities in question, including the application of any recoupment provisions in such agreements, the Adviser received a portion of the refund.

The portion of the refund retained by the Fund was accounted for as a capital contribution and is reflected on the Financial Highlights as "Capital Contribution from Prior Custodian, Net".

9. Fund Ownership:

Ownership of more than 25% of the voting securities of a fund creates presumptions of control of the Fund, under section 2(a)(9) of the 1940 Act. As of December 31, 2019, the shareholder listed below held more than 25% of the shares outstanding of the Fund and may be deemed to control the Fund.

Shareholder	Percent
GIAC		98.4	%

10. Subsequent Events:

The Fund has evaluated the need for additional disclosures or adjustments resulting from subsequent events through the date these financial statements were issued. Based on this evaluation, there were no subsequent events to report that would have a material impact on the Fund's financial statements.

24

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Trustees of Victory Variable Insurance Funds

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of portfolio investments, of Victory RS Small Cap Growth Equity VIP Series (the "Fund"), a series of Victory Variable Insurance Funds, as of December 31, 2019, the related statements of operations and changes in net assets, including the related notes, and the financial highlights for the year then ended (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2019, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The Fund's financial statements and financial highlights for the three years ended December 31, 2018, were audited by other auditors whose report dated February 15, 2019 and the Fund's financial highlights for the year ended December 31, 2015, were audited by other auditors whose report dated February 22, 2016, expressed unqualified opinions on those financial statements and financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2019, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

We have served as the auditor of one or more of the investment companies advised by Victory Capital Management, Inc. since 2015.

COHEN & COMPANY, LTD.
Cleveland, Ohio
February 18, 2020

25

Victory Variable Insurance Funds Supplemental Information
December 31, 2019

  (Unaudited)

Trustee and Officer Information

Board of Trustees:

Overall responsibility for management of the Trust rests with the Board. The Trust is managed by the Board in accordance with the laws of the State of Delaware. There are currently ten Trustees, nine of whom are not "interested persons" of the Trust within the meaning of that term under the 1940 Act ("Independent Trustees") and one of whom is an "interested person" of the Trust within the meaning of that term under the 1940 Act ("Interested Trustee"). The Trustees, in turn, elect the officers of the Trust to actively supervise its day-to-day operations.

The following tables list the Trustees, their ages, position with the Trust, commencement of service, principal occupations during the past five years and any directorships of other investment companies or companies whose securities are registered under the Securities Exchange Act of 1934, as amended, or who file reports under that Act. Each Trustee oversees nine portfolios in the Trust, 42 portfolios in Victory Portfolios and 26 portfolios in Victory Portfolios II, each a registered investment company that, together with the Trust, comprise the Victory Funds Complex. Each Trustee's address is c/o Victory Variable Insurance Funds, 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. Each Trustee has an indefinite term.

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Independent Trustees.
David Brooks Adcock, 68	Trustee	February 2005	Consultant (since 2006).	Chair and Trustee, Turner Funds (December 2016-December 2017).
Nigel D.T. Andrews, 72	Vice Chair and Trustee	August 2002	Retired.	Director, TCG BDC II, Inc. (since 2017); Director, TCG BDC I, Inc. (formerly Carlyle GMS Finance, Inc.) (since 2012); Director, Old Mutual US Asset Management (2002-2014).
E. Lee Beard, 68*	Trustee	February 2005	Retired (since 2015); Consultant, The Henlee Group, LLC (consulting) (2005-2015).	None.
Dennis M. Bushe, 76	Trustee	July 2016	Retired.	Trustee, RS Investment Trust and RS Variable Products Trust (November 2011-July 2016).

26

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Sally M. Dungan, 65	Trustee	February 2011	Chief Investment Officer, Tufts University (since 2002).	None.
John L. Kelly, 66	Trustee	February 2015	Partner, McCarvill Capital Partners (September 2016-September 2017); Advisor, Endgate Commodities LLC (January 2016-April 2016); Managing Partner, Endgate Commodities LLC (August 2014-January 2016); Chief Operating Officer, Liquidnet Holdings, Inc. (December 2011-July 2014).	Director, Caledonia Mining Corporation (since May 2012).
David L. Meyer, 62*	Trustee	December 2008	Retired.	None.
Gloria S. Nelund, 58	Trustee	July 2016	Chair, CEO and Co-Founder of TriLinc Global, LLC, an investment firm.	TriLinc Global Impact Fund, LLC (since 2012); Trustee, RS Investment Trust and RS Variable Products Trust (November 2007-July 2016).
Leigh A. Wilson, 75	Chair and Trustee	February 1998	Private Investor.	Chair (since 2013), Caledonia Mining Corporation.
Interested Trustee.
David C. Brown, 47**	Trustee	May 2008	Chairman and Chief Executive Officer (since 2013), Co-Chief Executive Officer (2011-2013), the Adviser; Chairman and Chief Executive Officer, Victory Capital Holdings, Inc. (since 2013).	USAA Mutual Funds Trust.

*  The Board has designated Mr. Meyer and Ms. Beard as its Audit Committee Financial Experts.

**  Mr. Brown is an "Interested Person" by reason of his relationship with the Adviser.

The Statement of Additional Information includes additional information about the Trustees of the Trust and is available, without charge, by calling 800-539-3863.

27

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Officers:

The officers of the Trust, their ages, commencement of service and their principal occupations during the past five years, are detailed in the following table. Each officer serves until the earlier of his or her resignation, removal, retirement, death, or the election of a successor. The mailing address of each officer of the Trust is 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. The officers of the Trust receive no compensation directly from the Trust for performing the duties of their offices.

Name and Age	Position with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years
Christopher K. Dyer, 58	President	February 2006*	Director of Fund Administration, the Adviser.
Scott A. Stahorsky, 50	Vice President	December 2014	Manager, Fund Administration, the Adviser (since 2015); Senior Analyst, Fund Administration, the Adviser (prior to 2015).
Erin G. Wagner, 46	Secretary	December 2014	Associate General Counsel, the Adviser (since 2013).
Allan Shaer, 54	Treasurer	May 2017	Senior Vice President, Financial Administration, Citi Fund Services Ohio, Inc. (since 2016); Vice President, Mutual Fund Administration, JP Morgan Chase (2011-2016).
Christopher A. Ponte, 35	Assistant Treasurer	December 2017	Manager, Fund Administration, the Adviser (since 2017); Senior Analyst, Fund Administration, the Adviser (prior to 2017); Chief Financial Officer, Victory Capital Advisers, Inc. (since 2018).
Colin Kinney, 46	Chief Compliance Officer	July 2017	Chief Compliance Officer (since 2013) and Chief Risk Officer (2009-2017), the Adviser.
Chuck Booth, 59	Anti-Money Laundering Compliance Officer and Identity Theft Officer	May 2015	Director, Regulatory Administration and CCO Support Services, Citi Fund Services Ohio, Inc.
Jay G. Baris, 66	Assistant Secretary	February 1998	Partner, Shearman & Sterling LLP (since 2018); Partner, Morrison & Foerster LLP (2011-January 2018).

*  On December 3, 2014, Mr. Dyer resigned as Secretary of the Trust and accepted the position of President.

28

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Proxy Voting and Portfolio Holdings Information

Proxy Voting:

Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 800-539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.

Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent twelve months ended June 30 is available on the SEC's website at www.sec.gov.

Availability of Schedules of Portfolio Investments:

The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-PORT. Prior to the implementation of Form N-PORT, the Trust filed a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-PORT and Forms N-Q are available on the SEC's website at www.sec.gov.

Expense Examples

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2019 through December 31, 2019.

The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

Please note the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Beginning Account Value 7/1/19		Actual Ending Account Value 12/31/19		Hypothetical Ending Account Value 12/31/19		Actual Expenses Paid During Period 7/1/19-12/31/19*		Hypothetical Expenses Paid During Period 7/1/19-12/31/19*		Annualized Expense Ratio During Period 7/1/19-12/31/19
$	1,000.00	$	1,052.60	$	1,020.77	$	4.55	$	4.48		0.88	%

*  Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).

29

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Additional Federal Income Tax Information

For the year ended December 31, 2019, the Fund paid qualified dividend income for the purposes of reduced individual federal income tax rates of 100%.

Dividends qualified for corporate dividends received deductions of 100%.

For the year ended December 31, 2019, the Fund designated short-term and long-term capital gain distributions in the amount of $77,122 and $21,807,498, respectively.

30

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Considerations of the Board in Continuing the Investment Advisory Agreement (the "Agreement")

The Board approved the Agreement on behalf of the Fund at an in-person meeting, which was called for that purpose, on December 4, 2019. The Board also considered information relating to the Fund and the Agreement provided throughout the year and, more specifically, at a meeting on October 22, 2019. The Board noted that prior to the Fund's reorganization on July 29, 2016, the Fund was managed by RS Investment Management Co. LLC, which was acquired by the Adviser on July 29, 2016. In considering whether to approve the Agreement, the Board requested, and the Adviser provided, information that the Board believed to be reasonably necessary to reach its conclusions.

The Board, including the Independent Trustees, evaluated this information along with other information obtained throughout the year and was advised by legal counsel to the Fund, which also serves as independent legal counsel to the Independent Trustees. In addition, in 2017 the Independent Trustees, through their counsel, retained an independent consultant to assist with a review of the overall process for conducting the annual review of these advisory arrangements.

The Board considered the Fund's advisory fee, expense ratio and investment performance as significant factors in determining whether the Agreement should be continued. In considering whether the compensation paid to the Adviser was fair and reasonable, the Board also evaluated, among other things, the following factors:

•  The requirements of the Fund for the services provided by the Adviser;

•  The nature, quality and extent of the services provided and expected to be provided;

•  The performance of the Fund as compared to comparable funds;

•  The fees payable for the services and whether the fee arrangements provided for economies of scale that would benefit Fund shareholders as the Fund grows;

•  Whether the fee would be sufficient to enable the Adviser to attract and retain experienced personnel and continue to provide quality services to the Fund;

•  The fees paid by other clients of the Adviser whose accounts are managed in a similar investment style and any differences in the services provided to the other clients compared to those provided to the Fund;

•  The total expenses of the Fund, taking into consideration any distribution or shareholder servicing fees;

•  Management's commitment to operating the Fund at competitive expense levels;

•  The profitability of the Adviser (as reflected by comparing fees earned against an estimate of the Adviser's costs) with respect to the Adviser's relationship with the Fund;

•  Research and other service benefits received by the Adviser obtained through payment of client commissions for securities transactions;

•  Other benefits received by the Adviser, and its affiliates, including revenues paid to the Adviser, or its affiliates, by the Fund for administration and fund accounting services, and distribution;

•  The capabilities and financial condition of the Adviser;

•  Current economic and industry trends; and

•  The historical relationship between the Fund and the Adviser.

The Board reviewed the Fund's current management fee, comprised of the advisory fee plus the administrative services fee paid to the Adviser, in the context of the Adviser's profitability with respect to the Fund. In addition, the Board compared the Fund's total operating expense ratio on a net and gross basis, taking into consideration any distribution or shareholder servicing fees and management fees with a universe of comparable mutual funds compiled by an independent consultant and a peer group of funds with similar investment strategies selected by that independent consultant from the universe. The Board reviewed the factors and methodology used by the independent consultant in the selection of the Fund's peer group, including the independent consultant's selection of a broad universe of funds, the more specific universe of comparable funds, and peer groups of funds with comparable investment strategies and asset levels, among other factors. The Board also reviewed any changes to the independent consultant's methodology as compared to the prior year, including those resulting from the Adviser's input, if any. The Board also reviewed fees and other information related to the Adviser's management of similarly managed institutional or private accounts, and the differences in the

31

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

services provided to the other accounts, to the extent applicable. The Board noted that the advisory fee arrangements for the Fund do not include breakpoints, which are generally viewed as a method by which the investment adviser shares any economies of scale with a fund as a fund grows. The Board also considered the Adviser's commitment to limit expenses as discussed in more detail below, and would consider breakpoints at a future time if the Fund's assets were to grow significantly.

The Board reviewed the Fund's performance over one-, three-, five- and ten-year periods against the performance of the Fund's selected peer group and benchmark index. The Board recognized that the performance of the Fund and the peer group funds are net of expenses, while the performance of the benchmark index reflects gross returns. The Board considered the additional resources that the Adviser has committed to enhance portfolio analysis, compliance and trading systems. The Board noted that, following the Fund's reorganization, the Fund is managed by substantially the same investment management team that managed the comparable predecessor fund.

The Board reviewed various other specific factors with respect to the Fund, as described below. In their deliberations, the Trustees did not rank the importance of any particular information or factor considered and each Trustee may have attributed different weights to various factors.

The Board concluded that the Fund's gross annual management fee was reasonable as compared to the median gross management fee charged to the funds in the Fund's peer group. The Board noted that the Fund's net annual expense ratio, taking into account any shareholder servicing or distribution fees, was reasonable as compared to the median expense ratio for the peer group. The Board considered the Adviser's contractual agreement to waive its fees and reimburse expenses for a specified period of time, as described in the Fund's prospectus.

The Board then compared the Fund's performance for the one-, three-, five- and ten-year periods ended June 30, 2019, to that of the median performance of the peer group and benchmark index for the same periods and considered the fact that the Fund outperformed the benchmark index for all of the periods reviewed, and outperformed the peer group median for all of the periods reviewed, with the exception of the one-year period.

Having considered, among other things: (1) that the Fund's management fee was within the ranges of advisory fees charged to comparable mutual funds; (2) that the Fund's total expense ratio was reasonable; (3) the Adviser's willingness to limit the expenses for a period of time would provide stability to the Fund's expenses during that period; and (4) the performance of the Fund, the Board concluded that the Agreement continued to be in the best interests of the Fund's shareholders.

Conclusion

Based on its review of the information requested and provided, and following extended discussions, the Board determined that the Agreement, on behalf of the Fund, was consistent with the best interests of the Fund and its shareholders, and the Board unanimously approved the Agreement, on behalf of the Fund, for an additional annual period on the basis of the foregoing review and discussions and the following considerations, among others:

•  The fairness and reasonableness of the investment advisory fee payable to the Adviser under the Agreement in light of the investment advisory services provided, the costs of these services, the profitability of the Adviser's relationship with the Fund and the comparability of the fee paid to the fees paid by other investment companies;

•  The nature, quality and extent of the investment advisory services provided by the Adviser;

•  The Adviser's entrepreneurial commitment to the management of the Fund and the creation of a broad-based family of funds, which could entail a substantial commitment of the Adviser's resources to the successful operation of the Fund;

•  The Adviser's representations regarding its staffing and capabilities to manage the Fund, including the retention of personnel with relevant portfolio management experience;

•  The Adviser's efforts to enhance investment results by, among other things, developing quality portfolio management teams; and

•  The overall high quality of the personnel, operations, financial condition, investment management capabilities, methodologies and performance of the Adviser.

32

Privacy Policy

Protecting the Privacy of Information

The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.

We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.

To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*

*  You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.

Victory Funds
P.O. Box 182593
Columbus, Ohio 43218-2593

Visit our website at:	Call Victory at:
www.vcm.com	800-539-FUND (800-539-3863)

VVIF-RS-SCGEVIP-AR (12/19)

December 31, 2019

Annual Report

Victory Variable Insurance Funds

Victory S&P 500 Index VIP Series

Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports may no longer be sent by mail from the insurance company that issued your variable annuity and variable life insurance contract, unless you specifically request paper copies of the reports from your insurance company. Instead, the reports will be made available on www.victoryfunds.com. The insurance company that offers your contract may also make these reports available on a website, and such insurance company will notify you by mail each time a report is posted and provide you with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the insurance company electronically by following the instructions provided by the insurance company.

If offered by your insurance company, you may elect to receive all future reports in paper and free of charge from the insurance company. You can inform your insurance company that you wish to continue receiving paper copies of your reports. Your election to receive reports in paper will apply to all funds available under your contract.

www.vcm.com

News, Information And Education 24 Hours A Day, 7 Days A Week

The Victory Funds site gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:

•  Detailed performance records

•  Daily share prices

•  The latest fund news

•  Investment resources to help you become a better investor

•  A section dedicated to investment professionals

Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.

Victory Variable Insurance Funds

Table of Contents

Shareholder Letter (Unaudited)	3
Fund Review and Commentary (Unaudited)	5
Financial Statements
Schedule of Portfolio Investments	7
Statement of Assets and Liabilities	19
Statement of Operations	20
Statements of Changes in Net Assets	21
Financial Highlights	22
Notes to Financial Statements	24
Report of Independent Registered Public Accounting Firm	33
Supplemental Information (Unaudited)
Trustee and Officer Information	34
Proxy Voting and Portfolio Holdings Information	37
Expense Examples	37
Additional Federal Income Tax Information	38
Advisory Contract Renewal	39
Privacy Policy (inside back cover)

The Fund is distributed by Victory Capital Advisers, Inc. Victory Capital Management Inc. is the investment adviser to the Fund and receives fees from the Fund for performing services for the Fund.

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus of the Fund.

For additional information about any Victory Fund, including fees, expenses, and risks, view our prospectus online at www.vcm.com or call 800-539-3863. Read it carefully before you invest or send money.

The information in this annual report is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections, or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Past investment performance of the Fund, markets or securities mentioned herein should not be considered to be indicative of future results.

• NOT FDIC INSURED • NO BANK GUARANTEE
• MAY LOSE VALUE

Call Victory at:

800-539-FUND (800-539-3863)

Visit our website at:

www.vcm.com

1

This page is intentionally left blank.

2

Victory Funds Letter to Shareholders
(Unaudited)

Dear Shareholder,

As we turn the page into a new decade, it's hard not to reflect on the fact that we have been enjoying the longest-ever bull market in U.S. equities. The run has been impressive, and despite periods of tumult and plenty of negative news, the bull market endured throughout 2019.

For the annual reporting period ended December 31, 2019, the S&P 500^® Index posted impressive gains of 31.49%. This represents the greatest one-year gain since 2013 and also illustrates a swift bounce-back after a precipitous drop late in 2018. The move higher supports the notion that underlying fundamentals of U.S. companies drive performance, rather than the political rancor and headline fears that often capture the attention of investors.

Perhaps we shouldn't be surprised at the impressive performance of equities. The U.S. economy — the world's largest — remains on solid footing and has been a key driver of both domestic and international stocks. Robust job creation, near-record low unemployment, and steady consumer spending continue and offer reasons for further optimism. Meanwhile, inflation remains muted, and the Federal Reserve (the Fed) and other major global central banks have taken an accommodative stance. In fact, the Fed has cut interest rates by a total of 0.75% over three meetings last July, September and October.

The risk-on attitudes of investors, coupled with the accommodative monetary policy, had an expected impact on U.S. Treasury yields. The 10-year Treasury yield declined significantly over the course of 2019, falling from 2.66% to 1.92% at year-end. More interesting, however, was the fact that, the yield on 10-year Treasurys fell below shorter-term yields for the first time since before the 2007-2008 Global Financial Crisis. This inverted yield curve spooked investors for a spell, only to revert back to a traditional upward sloping yield curve by the end of the year.

The robust domestic economy, low interest rates, and ample liquidity from central banks provided a potent tonic for the stock market in 2019. In fact, at year-end 2019, the S&P 500^® Index was approaching its highest valuation level since 1999. This reminds all of us to retain some historical context on the bull market. Many of us remember the Global Financial Crisis and, before that, the collapse of the dot-com bubble. Although those are now but a distant memory (and we are not forecasting such tumult), we should not forget that stocks don't always go up and cycles don't last forever. In other words, valuations still matter.

The key point is not to discount the risks. In addition to lofty valuations, investors need to keep apprised of trade disputes, geopolitical hotspots, a contentious U.S. election, and a host of other potential headwinds. Yet it is these very risks — these cross-currents — that may create pricing dislocations. This is an environment in which we believe our Victory Capital independent investment franchises can thrive.

On the following pages, you will find information relating to your Victory Funds investment. If you have any questions, we encourage you to contact your financial

3

advisor. Or, if you invest with us directly, you may call (800) 539-3863, or visit our website at www.vcm.com.

My colleagues and I sincerely appreciate the confidence you have placed in the Victory Funds, and we value the opportunity to help meet your investment goals.

Christopher K. Dyer, CFA

President,

Victory Funds

4

Victory Variable Insurance Funds (Unaudited)

Victory S&P 500 Index VIP Series

Portfolio Holdings

As a Percentage of Total Investments

Commentary

The Victory S&P 500 Index VIP Series (the "Fund") seeks to track the investment performance of the S&P 500^® Index (the "Index"). The Fund returned 31.04% for the 12-months ended December 31, 2019, slightly underperforming the Index, which returned 31.49%. The difference in performance between the Fund and the Index was primarily due to fees and expenses to manage the Fund. The Index is not an investable product; therefore, fees and expenses do not apply. All sectors within the Index finished the year in positive territory with Information Technology and Communication Services leading the way.

Overview

On the heels of a volatile fourth quarter of 2018 in which the Index was down -13.52%, it rebounded with a strong 2019, returning 31.49%, despite the ongoing U.S.-China trade war and recession fears sparked by the inversion of the yield curve. The Index bounced back in the first quarter of 2019 returning 13.65% as optimism grew with support from an accommodative U.S. Federal Reserve (the "Fed") and progress in trade talks. Volatility returned in May when trade talks broke down and the United States increased tariffs on Chinese imports, but central banks were able to calm the markets through further stimulus with the Fed cutting interest rates in July, September, and October. The Fund ended the year with strong returns as well, up 9.07% in the fourth quarter with the aid of positive economic data along with the promise of a phase one trade deal between the United States and China.

5

Victory Variable Insurance Funds (Unaudited)

Victory S&P 500 Index VIP Series (continued)

Average Annual Total Return

Year Ended December 31, 2019

	Class A
INCEPTION DATE	8/25/99
	Net Asset Value			S&P 500® Index1
One Year		31.04	%		31.49	%
Three Year		14.96	%		15.27	%
Five Year		11.40	%		11.70	%
Ten Year		13.27	%		13.56	%
Since Inception		6.04	%		N/A

Expense Ratios

Gross	0.38	%
With Applicable Waivers	0.28	%

Past performance is not indicative of future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month's end, please visit www.vcm.com.

The above expense ratios are from the Fund's prospectus dated May 1, 2019. Additional information pertaining to the Fund's expense ratios as of December 31, 2019 can be found in the financial highlights.

The total return figures set forth above include all waivers of fees for various periods since inception. Without such fee waivers, the total returns would have been lower. Some fee waivers are voluntary and may be modified or terminated at any time. The total returns do not include any insurance, sales or administrative charges of variable annuity or life insurance contracts. If these charges were included, the total returns would have been lower.

Victory S&P 500 Index VIP Series — Growth of $10,000

¹The S&P 500^® Index is an unmanaged index comprised of 500 domestically traded common stocks, is weighted according to the market value of each common stock in the index, and includes reinvestment of dividends. This index does not include effect of sales charges and is not representative of the Fund. It is not possible to invest directly in an index.

The graph reflects investment of growth of a hypothetical $10,000 investment in the Fund. Past performance is no guarantee of future results.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

6

Victory Variable Insurance Funds
Victory S&P 500 Index VIP Series Schedule of Portfolio Investments
December 31, 2019

Security Description	Shares		Value
Common Stocks (99.5%)
Communication Services (10.5%):
Activision Blizzard, Inc.		2,860	$	169,941
Alphabet, Inc., Class C (a)		1,113		1,488,103
Alphabet, Inc., Class A (a)		1,115		1,493,420
AT&T, Inc.		27,194		1,062,742
CenturyLink, Inc.		3,653		48,256
Charter Communications, Inc., Class A (a)		584		283,287
Comcast Corp., Class A		16,900		759,993
Discovery, Inc., Class A (a)		589		19,284
Discovery, Inc., Class C (a)		1,249		38,082
DISH Network Corp., Class A (a)		949		33,661
Electronic Arts, Inc. (a)		1,087		116,863
Facebook, Inc., Class A (a)		8,958		1,838,629
Fox Corp., Class A		1,320		48,932
Fox Corp., Class B		604		21,986
Live Nation Entertainment, Inc. (a)		521		37,236
Netflix, Inc. (a)		1,631		527,743
News Corp., Class A		1,446		20,446
News Corp., Class B		453		6,573
Omnicom Group, Inc.		811		65,707
Take-Two Interactive Software, Inc. (a)		421		51,543
The Interpublic Group of Co., Inc.		1,443		33,333
The Walt Disney Co.		6,710		970,467
T-Mobile US, Inc. (a)		1,178		92,379
Twitter, Inc. (a)		2,890		92,625
Verizon Communications, Inc.		15,396		945,314
ViacomCBS, Inc., Class B		2,012		84,444
				10,350,989
Consumer Discretionary (9.5%):
Advance Auto Parts, Inc.		258		41,321
Amazon.com, Inc. (a)		1,550		2,864,152
Aptiv PLC		950		90,222
AutoZone, Inc. (a)		89		106,027
Best Buy Co., Inc.		848		74,454
Booking Holdings, Inc. (a)		156		320,382
BorgWarner, Inc.		769		33,359
Capri Holdings Ltd. (a)		564		21,517
CarMax, Inc. (a)		612		53,654
Carnival Corp.		1,491		75,788
Chipotle Mexican Grill, Inc. (a)		95		79,525
Darden Restaurants, Inc.		456		49,709
Dollar General Corp.		948		147,869
Dollar Tree, Inc. (a)		881		82,858
DR Horton, Inc.		1,248		65,832
eBay, Inc.		2,847		102,805
Expedia Group, Inc.		520		56,233
Ford Motor Co.		14,496		134,813
Garmin Ltd.		538		52,487

See notes to financial statements.

7

Victory Variable Insurance Funds
Victory S&P 500 Index VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
General Motors Co., Class C		4,681	$	171,324
Genuine Parts Co.		541		57,470
H&R Block, Inc.		727		17,070
Hanesbrands, Inc.		1,346		19,988
Harley-Davidson, Inc.		574		21,347
Hasbro, Inc.		474		50,059
Hilton Worldwide Holdings, Inc.		1,050		116,456
Kohl's Corp.		583		29,704
L Brands, Inc.		865		15,674
Las Vegas Sands Corp. (b)		1,258		86,852
Leggett & Platt, Inc.		490		24,907
Lennar Corp., Class A		1,042		58,133
LKQ Corp. (a)		1,141		40,734
Lowe's Cos., Inc.		2,853		341,675
Macy's, Inc.		1,150		19,550
Marriott International, Inc., Class A		1,010		152,944
McDonald's Corp.		2,804		554,099
MGM Resorts International		1,917		63,779
Mohawk Industries, Inc. (a)		221		30,140
Newell Brands, Inc.		1,419		27,273
Nike, Inc., Class B		4,639		469,977
Nordstrom, Inc.		399		16,331
Norwegian Cruise Line Holdings Ltd. (a)		792		46,261
NVR, Inc. (a)		13		49,509
O'Reilly Automotive, Inc. (a)		282		123,589
PulteGroup, Inc.		948		36,782
PVH Corp.		276		29,021
Ralph Lauren Corp.		185		21,686
Ross Stores, Inc.		1,347		156,818
Royal Caribbean Cruises Ltd.		640		85,446
Starbucks Corp.		4,397		386,584
Tapestry, Inc.		1,027		27,698
Target Corp.		1,886		241,804
The Gap, Inc.		792		14,003
The Home Depot, Inc.		4,061		886,841
The TJX Cos., Inc.		4,514		275,625
Tiffany & Co.		402		53,727
Tractor Supply Co.		441		41,207
Ulta Beauty, Inc. (a)		213		53,919
Under Armour, Inc., Class A (a)		701		15,142
Under Armour, Inc., Class C (a)		724		13,886
VF Corp.		1,219		121,486
Whirlpool Corp.		235		34,670
Wynn Resorts Ltd.		360		49,993
Yum! Brands, Inc.		1,126		113,422
				9,717,612
Consumer Staples (7.1%):
Altria Group, Inc.		6,954		347,074
Archer-Daniels-Midland Co.		2,072		96,037
Brown-Forman Corp., Class B		678		45,833

See notes to financial statements.

8

Victory Variable Insurance Funds
Victory S&P 500 Index VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Campbell Soup Co.		629	$	31,085
Church & Dwight Co., Inc.		914		64,291
Colgate-Palmolive Co.		3,191		219,668
Conagra Brands, Inc.		1,812		62,043
Constellation Brands, Inc., Class A		624		118,404
Costco Wholesale Corp.		1,645		483,498
Coty, Inc., Class A (b)		1,100		12,375
General Mills, Inc.		2,250		120,510
Hormel Foods Corp.		1,035		46,689
Kellogg Co.		927		64,111
Kimberly-Clark Corp.		1,276		175,514
Lamb Weston Holdings, Inc.		544		46,800
McCormick & Co., Inc.		460		78,076
Molson Coors Beverage Co., Class B		699		37,676
Mondelez International, Inc., Class A		5,360		295,230
Monster Beverage Corp. (a)		1,421		90,305
PepsiCo, Inc.		5,191		709,454
Philip Morris International, Inc.		5,792		492,841
Sysco Corp.		1,899		162,440
The Clorox Co.		467		71,703
The Coca-Cola Co.		14,355		794,549
The Estee Lauder Cos., Inc., Class A		828		171,015
The Hershey Co.		552		81,133
The J.M. Smucker Co.		425		44,255
The Kraft Heinz Co.		2,318		74,477
The Kroger Co.		2,985		86,535
The Procter & Gamble Co.		9,284		1,159,572
Tyson Foods, Inc., Class A		1,099		100,053
Walgreens Boots Alliance, Inc.		2,791		164,557
Walmart, Inc.		5,281		627,595
				7,175,398
Energy (4.3%):
Apache Corp.		1,400		35,826
Baker Hughes Co.		2,419		61,999
Cabot Oil & Gas Corp.		1,519		26,446
Chevron Corp.		7,039		848,270
Cimarex Energy Co.		379		19,894
Concho Resources, Inc.		748		65,502
ConocoPhillips		4,085		265,648
Devon Energy Corp.		1,441		37,423
Diamondback Energy, Inc.		600		55,716
EOG Resources, Inc.		2,166		181,424
Exxon Mobil Corp.		15,751		1,099,105
Halliburton Co.		3,268		79,967
Helmerich & Payne, Inc.		404		18,354
Hess Corp.		964		64,405
HollyFrontier Corp.		553		28,043
Kinder Morgan, Inc.		7,251		153,504
Marathon Oil Corp.		2,978		40,441
Marathon Petroleum Corp.		2,417		145,624

See notes to financial statements.

9

Victory Variable Insurance Funds
Victory S&P 500 Index VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
National Oilwell Varco, Inc.		1,436	$	35,972
Noble Energy, Inc.		1,781		44,240
Occidental Petroleum Corp.		3,326		137,064
ONEOK, Inc.		1,538		116,380
Phillips 66		1,654		184,272
Pioneer Natural Resources Co.		617		93,395
Schlumberger Ltd.		5,154		207,191
TechnipFMC PLC		1,564		33,532
The Williams Cos., Inc.		4,512		107,025
Valero Energy Corp.		1,529		143,191
				4,329,853
Financials (12.8%):
Aflac, Inc.		2,733		144,576
American Express Co.		2,498		310,976
American International Group, Inc.		3,239		166,258
Ameriprise Financial, Inc.		472		78,626
Aon PLC		872		181,629
Arthur J. Gallagher & Co.		694		66,090
Assurant, Inc.		226		29,624
Bank of America Corp.		30,138		1,061,460
Berkshire Hathaway, Inc., Class B (a)		7,282		1,649,373
BlackRock, Inc., Class A		439		220,685
Capital One Financial Corp.		1,734		178,446
Cboe Global Markets, Inc.		413		49,560
Chubb Ltd.		1,687		262,599
Cincinnati Financial Corp.		566		59,515
Citigroup, Inc.		8,127		649,266
Citizens Financial Group, Inc.		1,618		65,707
CME Group, Inc.		1,334		267,760
Comerica, Inc.		537		38,530
Discover Financial Services		1,167		98,985
E*TRADE Financial Corp.		841		38,156
Everest Re Group Ltd.		152		42,080
Fifth Third BanCorp.		2,642		81,215
First Republic Bank		627		73,641
Franklin Resources, Inc.		1,038		26,967
Globe Life, Inc.		371		39,048
Huntington Bancshares, Inc.		3,845		57,983
Intercontinental Exchange, Inc.		2,073		191,856
Invesco Ltd.		1,386		24,920
JPMorgan Chase & Co.		11,676		1,627,635
KeyCorp		3,667		74,220
Lincoln National Corp.		738		43,549
Loews Corp.		952		49,970
M&T Bank Corp.		491		83,347
MarketAxess Holdings, Inc.		141		53,455
Marsh & McLennan Cos., Inc.		1,879		209,338
MetLife, Inc.		2,910		148,323
Moody's Corp.		604		143,396
Morgan Stanley		4,579		234,078

See notes to financial statements.

10

Victory Variable Insurance Funds
Victory S&P 500 Index VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
MSCI, Inc.		315	$	81,327
Nasdaq, Inc.		427		45,732
Northern Trust Corp.		789		83,823
People's United Financial, Inc.		1,653		27,936
Principal Financial Group, Inc.		961		52,855
Prudential Financial, Inc.		1,497		140,329
Raymond James Financial, Inc.		460		41,152
Regions Financial Corp.		3,591		61,622
S&P Global, Inc.		910		248,476
State Street Corp.		1,354		107,101
SVB Financial Group (a)		192		48,200
Synchrony Financial		2,213		79,690
T. Rowe Price Group, Inc.		870		106,001
The Allstate Corp.		1,206		135,615
The Bank of New York Mellon Corp.		3,124		157,231
The Charles Schwab Corp.		4,256		202,415
The Goldman Sachs Group, Inc.		1,186		272,697
The Hartford Financial Services Group, Inc.		1,342		81,553
The PNC Financial Services Group, Inc.		1,631		260,357
The Progressive Corp.		2,176		157,521
The Travelers Cos., Inc.		961		131,609
Truist Financial Corp.		4,992		281,149
U.S. Bancorp		5,291		313,703
Unum Group		768		22,395
Wells Fargo & Co.		14,328		770,846
Willis Towers Watson PLC		479		96,729
WR Berkley Corp.		540		37,314
Zions Bancorp NA		635		32,969
				12,901,189
Health Care (14.1%):
Abbott Laboratories		6,579		571,451
AbbVie, Inc.		5,505		487,412
ABIOMED, Inc. (a)		168		28,659
Agilent Technologies, Inc.		1,152		98,277
Alexion Pharmaceuticals, Inc. (a)		824		89,116
Align Technology, Inc. (a)		267		74,504
Allergan PLC		1,222		233,610
AmerisourceBergen Corp.		560		47,611
Amgen, Inc.		2,212		533,246
Anthem, Inc.		944		285,116
Baxter International, Inc.		1,901		158,962
Becton, Dickinson & Co.		1,007		273,874
Biogen, Inc. (a)		672		199,403
Boston Scientific Corp. (a)		5,189		234,647
Bristol-Myers Squibb Co.		8,727		560,186
Cardinal Health, Inc.		1,089		55,082
Centene Corp. (a)		1,540		96,820
Cerner Corp.		1,169		85,793
Cigna Corp.		1,390		284,241
CVS Health Corp.		4,843		359,786

See notes to financial statements.

11

Victory Variable Insurance Funds
Victory S&P 500 Index VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Danaher Corp.		2,380	$	365,281
DaVita, Inc. (a)		334		25,060
DENTSPLY SIRONA, Inc.		828		46,857
Edwards Lifesciences Corp. (a)		776		181,033
Eli Lilly & Co.		3,145		413,347
Gilead Sciences, Inc.		4,710		306,056
HCA Healthcare, Inc.		985		145,593
Henry Schein, Inc. (a)		546		36,429
Hologic, Inc. (a)		998		52,106
Humana, Inc.		493		180,694
IDEXX Laboratories, Inc. (a)		319		83,300
Illumina, Inc. (a)		547		181,462
Incyte Pharmaceuticals, Inc. (a)		666		58,155
Intuitive Surgical, Inc. (a)		430		254,195
IQVIA Holdings, Inc. (a)		672		103,831
Johnson & Johnson		9,798		1,429,234
Laboratory Corp. of America Holdings (a)		361		61,070
McKesson Corp.		671		92,813
Medtronic PLC		4,990		566,115
Merck & Co., Inc.		9,478		862,024
Mettler-Toledo International, Inc. (a)		91		72,188
Mylan NV (a)		1,921		38,612
PerkinElmer, Inc.		414		40,199
Perrigo Co. PLC		507		26,192
Pfizer, Inc.		20,602		807,186
Quest Diagnostics, Inc.		501		53,502
Regeneron Pharmaceuticals, Inc. (a)		297		111,518
ResMed, Inc.		535		82,909
STERIS PLC		313		47,707
Stryker Corp.		1,199		251,718
Teleflex, Inc.		172		64,748
The Cooper Co., Inc.		185		59,439
Thermo Fisher Scientific, Inc.		1,493		485,031
UnitedHealth Group, Inc.		3,527		1,036,868
Universal Health Services, Inc., Class B		299		42,895
Varian Medical Systems, Inc. (a)		338		47,999
Vertex Pharmaceuticals, Inc. (a)		957		209,535
Waters Corp. (a)		240		56,076
WellCare Health Plans, Inc. (a)		187		61,749
Zimmer Biomet Holdings, Inc.		766		114,655
Zoetis, Inc.		1,773		234,657
				14,147,834
Industrials (8.9%):
3M Co.		2,141		377,715
Alaska Air Group, Inc.		459		31,097
Allegion PLC		346		43,091
American Airlines Group, Inc.		1,451		41,615
AMETEK, Inc.		851		84,879
AO Smith Corp.		510		24,296
Arconic, Inc.		1,442		44,370

See notes to financial statements.

12

Victory Variable Insurance Funds
Victory S&P 500 Index VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
C.H. Robinson Worldwide, Inc.		503	$	39,335
Caterpillar, Inc.		2,057		303,777
Cintas Corp.		312		83,953
Copart, Inc. (a)		761		69,205
CSX Corp.		2,895		209,482
Cummins, Inc.		570		102,007
Deere & Co.		1,172		203,061
Delta Air Lines, Inc.		2,143		125,322
Dover Corp.		541		62,356
Eaton Corp. PLC, ADR		1,539		145,774
Emerson Electric Co.		2,268		172,958
Equifax, Inc.		451		63,194
Expeditors International of Washington, Inc.		634		49,465
Fastenal Co.		2,135		78,888
FedEx Corp.		894		135,182
Flowserve Corp.		487		24,238
Fortive Corp.		1,100		84,029
Fortune Brands Home & Security, Inc.		518		33,846
General Dynamics Corp.		872		153,777
General Electric Co.		32,512		362,834
Honeywell International, Inc.		2,660		470,820
Huntington Ingalls Industries, Inc.		152		38,134
IDEX Corp.		283		48,676
IHS Markit Ltd. (a)		1,493		112,498
Illinois Tool Works, Inc.		1,089		195,617
Ingersoll-Rand PLC		892		118,564
J.B. Hunt Transport Services, Inc.		317		37,019
Jacobs Engineering Group, Inc.		504		45,275
Johnson Controls International PLC		2,872		116,920
Kansas City Southern		369		56,516
L3Harris Technologies, Inc.		823		162,847
Lockheed Martin Corp.		924		359,787
Masco Corp.		1,058		50,773
Nielsen Holdings PLC		1,325		26,898
Norfolk Southern Corp.		971		188,500
Northrop Grumman Corp.		583		200,535
Old Dominion Freight Line, Inc.		238		45,168
PACCAR, Inc.		1,288		101,881
Parker-Hannifin Corp.		478		98,382
Pentair PLC		626		28,715
Quanta Services, Inc.		530		21,576
Raytheon Co.		1,037		227,870
Republic Services, Inc., Class A		784		70,270
Robert Half International, Inc.		438		27,660
Rockwell Automation, Inc.		430		87,148
Rollins, Inc.		524		17,376
Roper Technologies, Inc.		387		137,087
Snap-on, Inc.		204		34,558
Southwest Airlines Co.		1,763		95,167
Stanley Black & Decker, Inc.		566		93,809

See notes to financial statements.

13

Victory Variable Insurance Funds
Victory S&P 500 Index VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Textron, Inc.		850	$	37,910
The Boeing Co.		1,990		648,263
TransDigm Group, Inc.		185		103,600
Union Pacific Corp.		2,584		467,162
United Airlines Holdings, Inc. (a)		810		71,353
United Parcel Service, Inc., Class B		2,609		305,409
United Rentals, Inc. (a)		280		46,696
United Technologies Corp.		3,020		452,275
Verisk Analytics, Inc., Class A		610		91,097
W.W. Grainger, Inc.		162		54,840
Wabtec Corp.		678		52,748
Waste Management, Inc.		1,453		165,584
Xylem, Inc.		670		52,789
				9,015,518
Information Technology (23.4%):
Accenture PLC, Class A		2,364		497,787
Adobe, Inc. (a)		1,802		594,318
Advanced Micro Devices, Inc. (a)		4,145		190,090
Akamai Technologies, Inc. (a)		602		52,001
Alliance Data Systems Corp.		153		17,167
Amphenol Corp., Class A		1,104		119,486
Analog Devices, Inc.		1,371		162,930
ANSYS, Inc. (a)		319		82,114
Apple, Inc.		15,549		4,565,964
Applied Materials, Inc.		3,439		209,917
Arista Networks, Inc. (a)		202		41,087
Autodesk, Inc. (a)		819		150,254
Automatic Data Processing, Inc.		1,611		274,676
Broadcom, Inc.		1,477		466,762
Broadridge Financial Solutions, Inc.		427		52,752
Cadence Design Systems, Inc. (a)		1,045		72,481
CDW Corp.		535		76,419
Cisco Systems, Inc.		15,793		757,432
Citrix Systems, Inc.		456		50,570
Cognizant Technology Solutions Corp., Class A		2,038		126,397
Corning, Inc.		2,863		83,342
DXC Technology Co.		953		35,823
F5 Networks, Inc. (a)		226		31,561
Fidelity National Information Services, Inc.		2,288		318,238
Fiserv, Inc. (a)		2,126		245,829
FleetCor Technologies, Inc. (a)		323		92,934
FLIR Systems, Inc.		499		25,983
Fortinet, Inc. (a)		528		56,369
Gartner, Inc. (a)		333		51,315
Global Payments, Inc.		1,119		204,285
Hewlett Packard Enterprises Co.		4,817		76,398
HP, Inc.		5,517		113,374
Intel Corp.		16,194		969,210
International Business Machines Corp.		3,297		441,930
Intuit, Inc.		969		253,810

See notes to financial statements.

14

Victory Variable Insurance Funds
Victory S&P 500 Index VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
IPG Photonics Corp. (a)		132	$	19,129
Jack Henry & Associates, Inc.		286		41,662
Juniper Networks, Inc.		1,246		30,689
Keysight Technologies, Inc. (a)		698		71,636
KLA Corp.		587		104,586
Lam Research Corp.		540		157,896
Leidos Holdings, Inc.		495		48,456
Mastercard, Inc., Class A		3,305		986,839
Maxim Integrated Products, Inc.		1,007		61,941
Microchip Technology, Inc.		890		93,201
Micron Technology, Inc. (a)		4,121		221,627
Microsoft Corp. (b)		28,400		4,478,680
Motorola Solutions, Inc.		638		102,807
NetApp, Inc.		850		52,913
NortonLifeLock, Inc.		2,134		54,460
NVIDIA Corp.		2,278		536,012
Oracle Corp.		8,065		427,284
Paychex, Inc.		1,186		100,881
PayPal Holdings, Inc. (a)		4,371		472,810
Qorvo, Inc. (a)		432		50,211
QUALCOMM, Inc.		4,251		375,066
Salesforce.com, Inc. (a)		3,302		537,037
Seagate Technology PLC		861		51,230
ServiceNow, Inc. (a) (b)		702		198,189
Skyworks Solutions, Inc.		634		76,638
Synopsys, Inc. (a)		560		77,952
TE Connectivity Ltd.		1,245		119,321
Texas Instruments, Inc.		3,480		446,449
The Western Union Co.		1,561		41,804
VeriSign, Inc. (a)		385		74,182
Visa, Inc., Class A		6,373		1,197,486
Western Digital Corp.		1,107		70,261
Xerox Holdings Corp.		692		25,514
Xilinx, Inc.		936		91,513
Zebra Technologies Corp. (a)		199		50,833
				23,108,200
Materials (2.7%):
Air Products & Chemicals, Inc.		821		192,926
Albemarle Corp.		395		28,851
Amcor PLC		6,031		65,376
Avery Dennison Corp.		311		40,685
Ball Corp.		1,218		78,768
Celanese Corp., Series A		450		55,404
CF Industries Holdings, Inc.		809		38,622
Corteva, Inc.		2,786		82,354
Dow, Inc.		2,760		151,055
DuPont de Nemours, Inc.		2,758		177,064
Eastman Chemical Co.		506		40,106
Ecolab, Inc.		934		180,253
FMC Corp.		483		48,213

See notes to financial statements.

15

Victory Variable Insurance Funds
Victory S&P 500 Index VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Freeport-McMoRan, Inc.		5,401	$	70,861
International Flavors & Fragrances, Inc.		397		51,221
International Paper Co.		1,460		67,233
Linde PLC		2,000		425,799
Lyondellbasell Industries NV, Class A		956		90,323
Martin Marietta Materials, Inc.		233		65,156
Newmont Goldcorp Corp.		3,052		132,610
Nucor Corp.		1,129		63,540
Packaging Corp. of America		352		39,420
PPG Industries, Inc.		880		117,471
Sealed Air Corp.		575		22,902
The Mosaic Co.		1,302		28,175
The Sherwin-Williams Co.		306		178,563
Vulcan Materials Co.		493		70,987
Westrock Co.		960		41,194
				2,645,132
Real Estate (2.9%):
Alexandria Real Estate Equities, Inc.		429		69,318
American Tower Corp.		1,649		378,972
Apartment Investment & Management Co.		554		28,614
AvalonBay Communities, Inc.		520		109,044
Boston Properties, Inc.		535		73,755
CBRE Group, Inc., Class A (a)		1,246		76,367
Crown Castle International Corp.		1,548		220,047
Digital Realty Trust, Inc.		777		93,038
Duke Realty Investments, Inc.		1,368		47,429
Equinix, Inc.		317		185,033
Equity Residential		1,299		105,115
Essex Property Trust, Inc.		246		74,012
Extra Space Storage, Inc.		482		50,909
Federal Realty Investment Trust		261		33,599
Healthpeak Properties, Inc.		1,842		63,494
Host Hotels & Resorts, Inc.		2,670		49,529
Iron Mountain, Inc.		1,069		34,069
Kimco Realty Corp.		1,572		32,556
Mid-America Apartment Communities, Inc.		425		56,041
Prologis, Inc.		2,352		209,656
Public Storage		559		119,045
Realty Income Corp.		1,213		89,313
Regency Centers Corp.		624		39,368
SBA Communications Corp.		419		100,975
Simon Property Group, Inc.		1,142		170,112
SL Green Realty Corp.		303		27,840
UDR, Inc.		1,091		50,950
Ventas, Inc.		1,388		80,143
Vornado Realty Trust		590		39,235
Welltower, Inc.		1,510		123,488
Weyerhaeuser Co.		2,774		83,775
				2,914,841

See notes to financial statements.

16

Victory Variable Insurance Funds
Victory S&P 500 Index VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Utilities (3.3%):
AES Corp.		2,471	$	49,173
Alliant Energy Corp.		895		48,974
Ameren Corp.		916		70,349
American Electric Power Co., Inc.		1,839		173,804
American Water Works Co., Inc.		673		82,678
Atmos Energy Corp.		444		49,666
CenterPoint Energy, Inc.		1,870		50,995
CMS Energy Corp.		1,057		66,422
Consolidated Edison, Inc.		1,238		112,002
Dominion Energy, Inc.		3,064		253,760
DTE Energy Co.		715		92,857
Duke Energy Corp.		2,714		247,544
Edison International		1,335		100,672
Entergy Corp.		741		88,772
Evergy, Inc.		848		55,196
Eversource Energy		1,205		102,509
Exelon Corp.		3,619		164,990
FirstEnergy Corp.		2,011		97,735
NextEra Energy, Inc.		1,820		440,732
NiSource, Inc.		1,391		38,725
NRG Energy, Inc.		937		37,246
Pinnacle West Capital Corp.		418		37,591
PPL Corp.		2,692		96,589
Public Service Enterprise Group, Inc.		1,883		111,191
Sempra Energy		1,049		158,903
The Southern Co.		3,904		248,685
WEC Energy Group, Inc.		1,174		108,278
Xcel Energy, Inc.		1,952		123,932
				3,309,970
Total Common Stocks (Cost $29,229,876)				99,616,536
Total Investments (Cost $29,229,876) — 99.5%				99,616,536
Other assets in excess of liabilities — 0.5%				522,613
NET ASSETS — 100.00%			$	100,139,149

(a)  Non-income producing security.

(b)  All or a portion of this security has been segregated as collateral for derivative instruments.

ADR — American Depositary Receipt

PLC — Public Limited Company

See notes to financial statements.

17

Victory Variable Insurance Funds
Victory S&P 500 Index VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Futures Contracts Purchased

	Number of Contracts		Expiration Date	Notional Amount		Value		Unrealized Appreciation (Depreciation)
E-Mini S&P 500 Future		3	3/20/20	$	471,905	$	484,665	$	12,760
	Total unrealized appreciation							$	12,760
	Total unrealized depreciation								—
	Total net unrealized appreciation(depreciation)							$	12,760

See notes to financial statements.

18

Victory Variable Insurance Funds Statement of Assets and Liabilities
December 31, 2019

	Victory S&P 500 Index VIP Series
ASSETS:
Investments, at value (Cost $29,229,876)	$	99,616,536
Cash and cash equivalents		385,678
Deposits with brokers for futures contracts		76,749
Interest and dividends receivable		105,639
Variation margin receivable on open futures contracts		781
Receivable from Adviser		32,819
Prepaid expenses		6,304
Total Assets		100,224,506
LIABILITIES:
Payables:
Capital shares redeemed		19,957
Accrued expenses and other payables:
Investment advisory fees		21,036
Administration fees		4,729
Custodian fees		1,062
Transfer agent fees		10,622
Compliance fees		66
Trustees' fees		203
Other accrued expenses		27,682
Total Liabilities		85,357
NET ASSETS:
Capital		7,905,170
Total distributable earnings/(loss)		92,233,979
Net Assets	$	100,139,149
Shares (unlimited shares authorized with a par value of $0.001 per shares):		5,175,358
Net asset value:	$	19.35

See notes to financial statements.

19

Victory Variable Insurance Funds Statement of Operations
For the Year Ended December 31, 2019

	Victory S&P 500 Index VIP Series
Investment Income:
Dividends	$	2,145,557
Interest		14,278
Securities lending (net of fees)		329
Total Income		2,160,164
Expenses:
Investment advisory fees		271,564
Administration fees		66,564
Custodian fees		6,431
Transfer agent fees		146,607
Trustees' fees		10,585
Compliance fees		741
Legal and audit fees		18,909
Other expenses		43,130
Total Expenses		564,531
Expenses waived/reimbursed by Adviser		(260,434	)
Net Expenses		304,097
Net Investment Income (Loss)		1,856,067
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment securities		24,187,474
Net realized gains (losses) from futures contracts		188,869
Net change in unrealized appreciation/depreciation on investment securities		3,523,327
Net change in unrealized appreciation/depreciation on futures contracts		44,831
Net realized/unrealized gains on investments		27,944,501
Change in net assets resulting from operations	$	29,800,568

See notes to financial statements.

20

Victory Variable Insurance Funds Statements of Changes in Net Assets

	Victory S&P 500 Index VIP Series
	Year Ended December 31, 2019			Year Ended December 31, 2018
From Investment Activities:
Operations:
Net investment income (loss)	$	1,856,067		$	2,052,531
Net realized gains (losses) from investments		24,376,343			11,525,904
Net change in unrealized appreciation/depreciation on investments		3,568,158			(18,228,830	)
Change in net assets resulting from operations		29,800,568			(4,650,395	)
Change in net assets resulting from distributions to shareholders		(12,905,780	)		(7,462,566	)
Change in net assets resulting from capital transactions		(23,187,353	)		(10,536,165	)
Change in net assets		(6,292,565	)		(22,649,126	)
Net Assets:
Beginning of period		106,431,714			129,080,840
End of period	$	100,139,149		$	106,431,714
Capital Transactions:
Proceeds from shares issued	$	4,642,884		$	5,103,469
Distributions reinvested		12,905,780			7,462,566
Cost of shares redeemed		(40,736,017	)		(23,102,200	)
Change in net assets resulting from capital transactions	$	(23,187,353	)	$	(10,536,165	)
Share Transactions:
Issued		240,425			260,170
Reinvested		663,420			440,689
Redeemed		(2,019,404	)		(1,183,894	)
Change in Shares		(1,115,559	)		(483,035	)

See notes to financial statements.

21

Victory Variable Insurance Funds Financial Highlights

For a Share Outstanding Throughout Each Period

			Investment Activities								Distributions to Shareholders From
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)(a)		Net Realized and Unrealized Gains (Losses) on Investments			Total from Investment Activities			Net Investment Income			Net Realized Gains from Investments			Total Distributions
Victory S&P 500 Index VIP Series
Year Ended 12/31/19	$	16.92		0.34		4.88			5.22			(0.37	)		(2.42	)		(2.79	)
Year Ended 12/31/18	$	19.06		0.32		(1.21	)		(0.89	)		(0.02	)		(1.23	)		(1.25	)
Year Ended 12/31/17	$	15.98		0.30		3.15			3.45			(0.33	)		(0.04	)		(0.37	)
Year Ended 12/31/16	$	14.84		0.28		1.46			1.74			(0.32	)		(0.28	)		(0.60	)
Year Ended 12/31/15	$	14.97		0.27		(0.12	)		0.15			(0.28	)		—			(0.28	)

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Total returns do not reflect the effects of charges deducted pursuant to the terms of The Guardian Insurance & Annuity Company, Inc.'s variable contracts. Inclusion of such charges would reduce the total returns for all periods shown.

(c)  Amount is less than $0.005 per share.

(d)  The Fund received monies related to a nonrecurring refund from the prior Custodian. The corresponding impact to the total return was less than 0.01% for the period shown. (See Note 8)

See notes to financial statements.

22

Victory Variable Insurance Funds Financial Highlights — continued

For a Share Outstanding Throughout Each Period

									Ratios to Average Net Assets									Supplemental Data
	Capital Contribution from Prior Custodian, Net (See Note 8)			Net Asset Value, End of Period		Total Return(b)			Net Expenses			Net Investment Income (Loss)			Gross Expenses			Net Assets, End of Period (000's)		Portfolio Turnover
Victory S&P 500 Index VIP Series
Year Ended 12/31/19		—		$	19.35		31.04	%		0.28	%		1.71	%		0.52	%	$	100,139		3	%
Year Ended 12/31/18		—		$	16.92		(4.65	)%		0.28	%		1.65	%		0.38	%	$	106,432		3	%
Year Ended 12/31/17		—		$	19.06		21.60	%		0.28	%		1.70	%		0.41	%	$	129,081		3	%
Year Ended 12/31/16		—	(c)	$	15.98		11.75	%(d)		0.28	%		1.84	%		0.37	%	$	120,157		4	%
Year Ended 12/31/15		—		$	14.84		1.03	%		0.28	%		1.75	%		0.39	%	$	118,752		3	%

See notes to financial statements.

23

Victory Variable Insurance Funds Notes to Financial Statements
December 31, 2019

1. Organization:

Victory Variable Insurance Funds (the "Trust") was organized on February 11, 1998 as a Delaware statutory trust. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified open-end investment company. The Trust is comprised of nine funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with a par value of $0.001 per share.

The accompanying financial statements are those of the Victory S&P 500 Index VIP Series (the "Fund"). The Fund offers a single class of shares: Class I Shares. Sales of shares of the Fund may only be made to certain separate accounts of The Guardian Insurance & Annuity Company, Inc. ("GIAC") that fund certain variable annuity and variable life insurance contracts issued by GIAC. GIAC is a wholly owned subsidiary of The Guardian Life Insurance Company of America ("Guardian Life").

Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.

2. Significant Accounting Policies:

The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies.

Investment Valuation:

The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Funds' investments are summarized in the three broad levels listed below:

• Level 1 — quoted prices in active markets for identical securities

• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)

• Level 3 — significant unobservable inputs (including the Funds' own assumptions in determining the fair value of investments)

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.

Portfolio securities listed or traded on securities exchanges, including American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.

24

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Futures contracts are valued at the settlement price established each day by the board of trade or an exchange on which they are traded. These valuations are typically categorized as Level 1 in the fair value hierarchy.

Investments for which there are no such quotations, or for which quotations do not appear reliable, are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Trust's Board of Trustees (the "Board"). These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value.

A summary of the valuations as of December 31, 2019, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments.

	LEVEL 1		Total
Common Stocks	$	99,616,536	$	99,616,536
Total		99,616,536		99,616,536
Other Financial Instruments^:
Assets:
Futures Contracts		12,760		12,760
Total	$	12,760	$	12,760

^  Futures Contracts are valued at the unrealized appreciation (depreciation) on the investment.

For the year ended December 31, 2019, there were no Level 3 investments for which significant unobservable inputs were used to determine fair value.

Derivative Instruments:

Futures Contracts:

The Fund may enter into contracts for the future delivery of securities or foreign currencies and futures contracts based on a specific security, class of securities, foreign currency or an index, and purchase or sell options on any such futures contracts. A futures contract on a securities index is an agreement obligating either party to pay, and entitling the other party to receive, while the contract is outstanding, cash payments based on the level of a specified securities index. No physical delivery of the underlying asset is made. The Fund may enter into futures contracts in an effort to hedge against market risks. The acquisition of put and call options on futures contracts will give the Fund the right (but not the obligation), for a specified price, to sell or to purchase the underlying futures contract, upon exercise of the option, at any time during the option period. Futures transactions involve brokerage costs and require the Fund to segregate assets to cover contracts that would require it to purchase securities or currencies. A good faith margin deposit, known as initial margin, of cash or government securities with a broker or custodian is required to initiate and maintain open positions in futures contracts. Subsequent payments, known as variation margin, are made or received by the Fund based on the change in the market value of the position and are recorded as unrealized appreciation or depreciation until the contract is closed out, at which time the gain or loss is realized. The Fund may lose the expected benefit of futures transactions if interest rates, exchange rates or securities prices change in an unanticipated manner. Such unanticipated changes may also result in lower overall performance than if the Fund had not entered into any futures transactions. In addition, the value of the Fund's futures positions may not prove to be perfectly or even highly correlated with the value of its portfolio securities or foreign currencies, limiting the Fund's ability to hedge effectively against interest rate, exchange rate and/or market risk and giving rise to additional risks. There is no assurance of liquidity in the secondary market for purposes of closing out futures positions. The collateral held by the Fund is presented on the Statement of Assets and Liabilities under Deposits with broker for futures contracts. As of December 31, 2019, the Fund entered into futures contracts primarily for the strategy of hedging or other purposes, including but not limited to, providing liquidity and equitizing cash.

25

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Offsetting of Financial Assets and Derivatives Assets:

The Fund is subject to various Master Netting Arrangements, which govern the terms of certain transactions with select counterparties. The Master Netting Arrangements allow the Fund to close out and net total exposure to a counterparty in the event of a default with respect to all the transactions governed under a single agreement with a counterparty. The Master Netting Arrangements also specify collateral posting arrangements at pre-arranged exposure levels. Under the Master Netting Arrangements, collateral is routinely transferred if the total net exposure to certain transactions (net of existing collateral already in place) governed under the relevant Master Netting Arrangement with a counterparty in a given account exceeds a specified threshold depending on the counterparty and the type of Master Netting Arrangement.

The table below, as of December 31, 2019, discloses both gross information and net information about instruments and transactions eligible for offset in the Statement of Assets and Liabilities and instruments and transactions that are subject to an agreement similar to a master netting agreement as well as amounts related to collateral held at clearing brokers and counterparties.

	Gross Amounts of Recognized Assets		Gross Amounts Available for Offset			Net Amount Presented in the Statement of Assets and Liabilities		Cash Collateral Received		Net Amount
Futures Contracts-Goldman Sachs & Co.	$	1,155	$	(374	)	$	781	$	—	$	781
	Gross Amounts of Recognized Liabilities		Gross Amounts Available for Offset			Net Amount Presented in the Statement of Assets and Liabilities		Cash Collateral Pledged*		Net Amount
Futures Contracts-Goldman Sachs & Co.	$	374	$	(374	)	$	—	$	—	$	—

*  Cash collateral pledged may be in excess of the amounts shown in the table. The total cash collateral pledged by the Fund is disclosed in the Statement of Assets and Liabilities.

Summary of Derivative Instruments:

The following table presents the effect of derivative instruments on the Statement of Assets and Liabilities, categorized by risk exposure, as of December 31, 2019.

	Assets
	Variation Margin Receivable on Open Futures Contracts*
Equity Risk Exposure:	$	12,760

*  Includes cumulative appreciation (depreciation) of futures contracts as reported in the Schedule of Portfolio Investments. Only current day's variation margin is reported within the Statement of Assets and Liabilities.

The following table presents the effect of derivative instruments on the Statement of Operations, categorized by risk exposure, for the year ended December 31, 2019.

	Net Realized Gains (Losses) on Derivatives Recognized as a Result from Operations		Net Change in Unrealized Appreciation/Depreciation on Derivatives Recognized as a Result of Operations
	Net Realized Gains (Losses) on Futures Contracts		Net Change in Unrealized Appreciation/Depreciation on Futures Contracts
Equity Risk Exposure	$	188,869	$	44,831

26

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

All open derivative positions at year end are reflected on the Fund's Schedule of Portfolio Investments. The underlying face value of open derivative positions relative to the Fund's net assets at year end is generally representative of the notional amount of open positions to net assets throughout the year.

Investment Transactions and Related Income:

Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.

Withholding taxes on interest, dividends and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.

Securities Lending:

The Trust has entered into a Master Securities Lending Agreement ("MSLA") with Citibank, N.A. ("Citibank" or the "Agent"). Under the terms of the MSLA, the Fund may lend securities to certain broker-dealers and banks in exchange for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are adjusted the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities, letters of credit and certificates of deposit. The cash collateral is invested in short-term instruments or cash equivalents as noted on the Fund's Schedule of Portfolio Investments. The Trust does not have effective control of the non-cash collateral and therefore it is not disclosed in the Fund's Schedule of Portfolio Investments. The Fund continues to benefit from interest or dividends on the securities loaned and may also earn a return from the collateral. The Fund pays various fees in connection with the investment of cash collateral. The Fund pays the Agent fees based on the investment income received from securities lending activities. Securities lending income is disclosed in the Fund's Statement of Operations. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them.

Securities lending transactions are entered into by the Fund under the MSLA, which permits the Fund, under certain circumstances such as an event of default, to offset amounts payable by the Fund to the same counterparty against amounts receivable from the counterparty to create a net payment due to or from the Fund.

As of December 31, 2019, the Fund had no securities on loan.

Dividends to Shareholders:

Dividends from net investment income, if any, are declared and paid annually by the Fund. Distributable net realized gains, if any, are declared and distributed at least annually.

The amounts of dividends from net investment income and distributions from net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.

27

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

As of December 31, 2019 on the Statement of Assets and Liabilities, as a result of permanent book-to-tax differences, reclassification adjustments were as follows:

Total Distributable Earnings/(Loss)			Capital
$	(2	)	$	2

Federal Income Taxes:

It is the policy of the Fund to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of December 31.

Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., all open tax years and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.

Allocations:

Expenses directly attributable to the Fund are charged to the Fund, while expenses which are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.

Cross-Trade Transactions:

Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For the year ended December 31, 2019, the Fund did not engage in any Rule 17a-7 transactions under the 1940 Act.

3. Purchases and Sales of Securities:

Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the year ended December 31, 2019 were as follows for the Fund:

Purchases		Sales
$	2,895,100	$	36,906,337

For the year ended December 31, 2019, there were no purchases or sales of U.S. Government Securities.

4. Fees and Transactions with Affiliates and Related Parties:

Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or the "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.

28

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive 0.25% of the average daily net assets of the Fund. The Adviser may use its resources to assist with the Fund's distribution and marketing expenses.

VCM also serves as the Fund's administrator and fund accountant. Under an Administration and Fund Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.08% of the first $15 billion in average daily net assets of the Trust, Victory Portfolios and Victory Portfolios II (collectively, the "Victory Funds Complex"), 0.05% of the average daily net assets above $15 billion to $30 billion of the Victory Funds Complex and 0.04% of the average daily net assets over $30 billion of the Victory Funds Complex.

Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of-pocket expenses incurred in providing these services.

FIS Investor Services, LLC ("FIS") serves as the Fund's transfer agent. Under the Transfer Agent Agreement, the Trust pays FIS a fee for its services and reimburses FIS for all of their reasonable out-of-pocket expenses incurred in providing these services.

The Chief Compliance Officer ("CCO") is an employee of the Adviser, which pays the compensation of the CCO and his support staff. The Trust has entered into an Agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the CCO, and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The Funds in the Victory Funds Complex, in aggregate, compensate the Adviser for these services.

The Victory Funds Complex pays an annual retainer to each Independent Trustee, plus an additional annual retainer to the Chairman of the Board. The aggregate amount of the fees and expenses of the Independent Trustees are allocated amongst all the funds in the Victory Funds Complex and are presented in the Statement of Operations.

Shearman & Sterling LLP provides legal services to the Trust.

Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust.

The Adviser has entered into an expense limitation agreement with the Fund until at least April 30, 2020. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by the Fund in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of a Fund's business are excluded from the expense limits. As of December 31, 2019, the expense limit (excluding voluntary waivers) is 0.28%.

The Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three fiscal years after such waiver or reimbursement was made to the extent such payments or repayments would not cause the expenses to exceed the original expense limitation in place at time of the waiver or reimbursement or any expense limitation agreement in place at the time of repayment. As of December 31, 2019, the following amounts are available to be repaid to the Adviser. Amounts repaid to the Adviser during the year ended, if any, are reflected on the Statement of Operations as "Recoupment of prior expenses waived/reimbursed by Adviser".

Expires 12/31/2020		Expires 12/31/2021		Expires 12/31/2022		Total
$	167,384	$	126,360	$	260,434	$	554,178

The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining a competitive expense ratio. Voluntary waivers and reimbursements applicable to the Fund are not

29

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

available to be recouped at a future time. There were no voluntary waivers or reimbursements for the year ended December 31, 2019.

Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Fund Accountant, Sub-Administrator, Sub-Fund Accountant and Legal Counsel.

5. Risks:

The Fund may be subject to other risks in addition to these identified risks.

An investment in the Fund's shares represents an indirect investment in the securities owned by the Fund, some of which will be traded on a national securities exchange or in the over-the-counter markets. The value of the securities in which the Fund invests, like other market investments, may move up or down, sometimes rapidly and unpredictably. The value of the securities in which the Fund invests may affect the value of the Fund's shares. An investment in the Fund's shares at any point in time may be worth less than the original investment, even after taking into account the reinvestment of the Fund's distributions.

The Fund will be subject to credit risk with respect to the amount it expects to receive from counterparties for financial instruments entered into by the Fund. The Fund may be negatively impacted if a counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties. The Fund may experience significant delays in obtaining any recovery in bankruptcy or other reorganization proceeding and the Fund may obtain only limited recovery or may obtain no recovery in such circumstances. The Fund typically enters into transactions with counterparties whose credit ratings are investment grade, as determined by a nationally recognized statistical rating organization or, if unrated, judged by the Adviser to be of comparable quality.

6. Borrowing and Interfund Lending:

Line of Credit:

For the year ended December 31, 2019, the Victory Funds Complex participated in a short-term, demand note "Line of Credit" with Citibank. Under the agreement with Citibank, for the period January 1, 2019 to June 30, 2019, the Victory Funds Complex could borrow up to $250 million, of which $100 million was committed and $150 million was uncommitted. Effective July 1, 2019, the agreement was amended to include the USAA Mutual Funds Complex (another series of mutual funds managed by the Adviser) and has a new termination date of June 29, 2020. Under this amended agreement, the Victory Funds Complex and USAA Mutual Funds Complex, combined, may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund (herein, the "Fund"), another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs, including redemption requests that might otherwise require the untimely disposition of securities. With the agreement in effect for the period January 1, 2019 to June 30, 2019, Citibank received an annual commitment fee of 0.15% on $100 million for providing the Line of Credit. For the period July 1, 2019 to December 31, 2019, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. For the year ended December 31, 2019, Citibank earned approximately $300 thousand in commitment fees from the combined Victory Funds Complex and USAA Mutual Funds Complex. Each fund in the Victory Funds Complex and the USAA Mutual Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Line of credit fees.

The Fund did not utilize the Line of Credit during the year ended December 31, 2019.

Interfund Lending:

The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility

30

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

allows the Fund to directly lend and borrow money to or from any other Victory Fund relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund during the period, if applicable, is presented on the Statement of Operations under Income on interfund lending.

The Fund did not utilize the Facility during the year ended December 31, 2019.

7. Federal Income Tax Information:

The tax character of distributions paid during the most recent tax years ended, as noted below, were as follows (total distributions paid may differ from the Statements of Changes in Net Assets because, for tax purposes, dividends are recognized when actually paid).

Year Ended December 31, 2019
Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	1,891,446	$	11,014,334	$	12,905,780
Year Ended December 31, 2018
Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	349,417	$	7,113,149	$	7,462,566

As of the tax year ended December 31, 2019, the components of distributable earnings/accumulated deficit on a tax basis were as follows:

Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Earnings		Accumulated Capital and Other Losses		Unrealized Appreciation (Depreciation)		Total Accumulated Earnings (Deficit)
$	2,003,389	$	22,828,416	$	24,831,805	$	—	$	67,402,174	$	92,233,979

During the tax year ended December 31, 2019, the Fund did not utilize capital loss carryforwards.

As of December 31, 2019, the cost basis for federal income tax purposes, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation) for investments and derivatives were as follows:

Cost of Investments for Federal Tax Purposes		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
$	32,214,362	$	71,223,720	$	(3,821,546	)	$	67,402,174

8. Capital Contribution from Prior Custodian:

During 2016, the Fund received notification from the Fund's prior custodian, State Street Bank and Trust ("State Street"), concerning issues related to billing on certain categories of expenses during the approximately 16-year period from 1998 through October 31, 2014. The over-billing primarily related to categories of expenses that involved an allocation of general costs among multiple clients.

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Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

State Street paid the refunded amounts during January 2017. Based on billing information received during 2016 from State Street and an analysis of any expense limitation agreements that were in place during the period of the activities in question, including the application of any recoupment provisions in such agreements, the Adviser received a portion of the refund.

The portion of the refund retained by the Fund was accounted for as a capital contribution and is reflected on the Financial Highlights as "Capital Contribution from Prior Custodian, Net".

9. Fund Ownership:

Ownership of more than 25% of the voting securities of a fund creates presumptions of control of the Fund, under section 2(a)(9) of the 1940 Act. As of December 31, 2019, the shareholder listed below held more than 25% of the shares outstanding of the Fund and may be deemed to control the Fund.

Shareholder	Percent
GIAC		100.0	%

10. Subsequent Events:

The Fund has evaluated the need for additional disclosures or adjustments resulting from subsequent events through the date these financial statements were issued. Based on this evaluation, there were no subsequent events to report that would have a material impact on the Fund's financial statements.

32

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Trustees of Victory Variable Insurance Funds

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of portfolio investments, of Victory S&P 500 Index VIP Series (the "Fund"), a series of Victory Variable Insurance Funds, as of December 31, 2019, the related statements of operations and changes in net assets, including the related notes, and the financial highlights for the year then ended (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2019, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The Fund's financial statements and financial highlights for the three years ended December 31, 2018, were audited by other auditors whose report dated February 15, 2019 and the Fund's financial highlights for the year ended December 31, 2015, were audited by other auditors whose report dated February 22, 2016, expressed unqualified opinions on those financial statements and financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2019, by correspondence with the custodian and brokers. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

We have served as the auditor of one or more of the investment companies advised by Victory Capital Management, Inc. since 2015.

COHEN & COMPANY, LTD.
Cleveland, Ohio
February 18, 2020

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Victory Variable Insurance Funds Supplemental Information
December 31, 2019

  (Unaudited)

Trustee and Officer Information

Board of Trustees:

Overall responsibility for management of the Trust rests with the Board. The Trust is managed by the Board in accordance with the laws of the State of Delaware. There are currently ten Trustees, nine of whom are not "interested persons" of the Trust within the meaning of that term under the 1940 Act ("Independent Trustees") and one of whom is an "interested person" of the Trust within the meaning of that term under the 1940 Act ("Interested Trustee"). The Trustees, in turn, elect the officers of the Trust to actively supervise its day-to-day operations. The following tables list the Trustees, their ages, position with the Trust, commencement of service, principal occupations during the past five years and any directorships of other investment companies or companies whose securities are registered under the Securities Exchange Act of 1934, as amended, or who file reports under that Act. Each Trustee oversees nine portfolios in the Trust, 42 portfolios in Victory Portfolios and 26 portfolios in Victory Portfolios II, each a registered investment company that, together with the Trust, comprise the Victory Funds Complex. Each Trustee's address is c/o Victory Variable Insurance Funds, 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. Each Trustee has an indefinite term.

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Independent Trustees.
David Brooks Adcock, 68	Trustee	February 2005	Consultant (since 2006).	Chair and Trustee, Turner Funds (December 2016-December 2017).
Nigel D.T. Andrews, 72	Vice Chair and Trustee	August 2002	Retired.	Director, TCG BDC II, Inc. (since 2017); Director, TCG BDC I, Inc. (formerly Carlyle GMS Finance, Inc.) (since 2012); Director, Old Mutual US Asset Management (2002-2014).
E. Lee Beard, 68*	Trustee	February 2005	Retired (since 2015); Consultant, The Henlee Group, LLC (consulting) (2005-2015).	None.
Dennis M. Bushe, 76	Trustee	July 2016	Retired.	Trustee, RS Investment Trust and RS Variable Products Trust (November 2011-July 2016).

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Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Sally M. Dungan, 65	Trustee	February 2011	Chief Investment Officer, Tufts University (since 2002).	None.
John L. Kelly, 66	Trustee	February 2015	Partner, McCarvill Capital Partners (September 2016- September 2017); Advisor, Endgate Commodities LLC (January 2016-April 2016); Managing Partner, Endgate Commodities LLC (August 2014-January 2016); Chief Operating Officer, Liquidnet Holdings, Inc. (December 2011-July 2014).	Director, Caledonia Mining Corporation (since May 2012).
David L. Meyer, 62*	Trustee	December 2008	Retired.	None.
Gloria S. Nelund, 58	Trustee	July 2016	Chair, CEO and Co-Founder of TriLinc Global, LLC, an investment firm.	TriLinc Global Impact Fund, LLC (since 2012); Trustee, RS Investment Trust and RS Variable Products Trust (November 2007-July 2016).
Leigh A. Wilson, 75	Chair and Trustee	February 1998	Private Investor.	Chair (since 2013), Caledonia Mining Corporation.
Interested Trustee.
David C. Brown, 47**	Trustee	May 2008	Chairman and Chief Executive Officer (since 2013), Co-Chief Executive Officer (2011-2013), the Adviser; Chairman and Chief Executive Officer, Victory Capital Holdings, Inc. (since 2013).	USAA Mutual Funds Trust.

*  The Board has designated Mr. Meyer and Ms. Beard as its Audit Committee Financial Experts.

**  Mr. Brown is an "Interested Person" by reason of his relationship with the Adviser.

The Statement of Additional Information includes additional information about the Trustees of the Trust and is available, without charge, by calling 800-539-3863.

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Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Officers:

The officers of the Trust, their ages, commencement of service and their principal occupations during the past five years, are detailed in the following table. Each officer serves until the earlier of his or her resignation, removal, retirement, death, or the election of a successor. The mailing address of each officer of the Trust is 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. The officers of the Trust receive no compensation directly from the Trust for performing the duties of their offices.

Name and Age	Position with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years
Christopher K. Dyer, 58	President	February 2006*	Director of Fund Administration, the Adviser.
Scott A. Stahorsky, 50	Vice President	December 2014	Manager, Fund Administration, the Adviser (since 2015); Senior Analyst, Fund Administration, the Adviser (prior to 2015).
Erin G. Wagner, 46	Secretary	December 2014	Associate General Counsel, the Adviser (since 2013).
Allan Shaer, 54	Treasurer	May 2017	Senior Vice President, Financial Administration, Citi Fund Services Ohio, Inc. (since 2016); Vice President, Mutual Fund Administration, JP Morgan Chase (2011-2016).
Christopher A. Ponte, 35	Assistant Treasurer	December 2017	Manager, Fund Administration, the Adviser (since 2017); Senior Analyst, Fund Administration, the Adviser (prior to 2017); Chief Financial Officer, Victory Capital Advisers, Inc. (since 2018).
Colin Kinney, 46	Chief Compliance Officer	July 2017	Chief Compliance Officer (since 2013) and Chief Risk Officer (2009-2017), the Adviser.
Chuck Booth, 59	Anti-Money Laundering Compliance Officer and Identity Theft Officer	May 2015	Director, Regulatory Administration and CCO Support Services, Citi Fund Services Ohio, Inc.
Jay G. Baris, 66	Assistant Secretary	February 1998	Partner, Shearman & Sterling LLP (since 2018); Partner, Morrison & Foerster LLP (2011-January 2018).

*  On December 3, 2014, Mr. Dyer resigned as Secretary of the Trust and accepted the position of President.

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Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Proxy Voting and Portfolio Holdings Information

Proxy Voting:

Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 800-539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.

Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent twelve months ended June 30 is available on the SEC's website at www.sec.gov.

Availability of Schedules of Portfolio Investments:

The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-PORT. Prior to the implementation of Form N-PORT, the Trust filed a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-PORT and Forms N-Q are available on the SEC's website at www.sec.gov.

Expense Examples

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2019 through December 31, 2019.

The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

Please note the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Beginning Account Value 7/1/19		Actual Ending Account Value 12/31/19		Hypothetical Ending Account Value 12/31/19		Actual Expenses Paid During Period 7/1/19-12/31/19*		Hypothetical Expenses Paid During Period 7/1/19-12/31/19*		Annualized Expense Ratio During Period 7/1/19-12/31/19
$	1,000.00	$	1,107.50	$	1,023.79	$	1.49	$	1.43		0.28	%

*  Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).

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Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Additional Federal Income Tax Information

For the year ended December 31, 2019, the Fund paid qualified dividend income for the purposes of reduced individual federal income tax rates of 99%.

Dividends qualified for corporate dividends received deductions of 98%.

For the year ended December 31, 2019, the Fund designated long-term capital gain distributions in the amount of $11,014,334.

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Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Considerations of the Board in Continuing the Investment Advisory Agreement (the "Agreement")

The Board approved the Agreement on behalf of the Fund at an in-person meeting, which was called for that purpose, on December 4, 2019. The Board also considered information relating to the Fund and the Agreement provided throughout the year and, more specifically, at a meeting on October 22, 2019. The Board noted that prior to the Fund's reorganization on July 29, 2016, the Fund was managed by RS Investment Management Co. LLC, which was acquired by the Adviser on July 29, 2016. In considering whether to approve the Agreement, the Board requested, and the Adviser provided, information that the Board believed to be reasonably necessary to reach its conclusions.

The Board, including the Independent Trustees, evaluated this information along with other information obtained throughout the year and was advised by legal counsel to the Fund and by independent legal counsel to the Independent Trustees. In addition, in 2017 the Independent Trustees, through their counsel, retained an independent consultant to assist with a review of the overall process for conducting the annual review of these advisory arrangements.

The Board considered the Fund's advisory fee, expense ratio and investment performance as significant factors in determining whether the Agreement should be continued. In considering whether the compensation paid to the Adviser was fair and reasonable, the Board also evaluated, among other things, the following factors:

•  The requirements of the Fund for the services provided by the Adviser;

•  The nature, quality and extent of the services provided and expected to be provided;

•  The performance of the Fund as compared to comparable funds;

•  The fees payable for the services and whether the fee arrangements provided for economies of scale that would benefit Fund shareholders as the Fund grows;

•  Whether the fee would be sufficient to enable the Adviser to attract and retain experienced personnel and continue to provide quality services to the Fund;

•  The fees paid by other clients of the Adviser whose accounts are managed in a similar investment style and any differences in the services provided to the other clients compared to those provided to the Fund;

•  The total expenses of the Fund, taking into consideration any distribution or shareholder servicing fees;

•  Management's commitment to operating the Fund at competitive expense levels;

•  The profitability of the Adviser (as reflected by comparing fees earned against an estimate of the Adviser's costs) with respect to the Adviser's relationship with the Fund;

•  Research and other service benefits received by the Adviser obtained through payment of client commissions for securities transactions;

•  Other benefits received by the Adviser, and its affiliates, including revenues paid to the Adviser, or its affiliates, by the Fund for administration and fund accounting services, and distribution;

•  The capabilities and financial condition of the Adviser;

•  Current economic and industry trends; and

•  The historical relationship between the Fund and the Adviser.

The Board reviewed the Fund's current management fee, comprised of the advisory fee plus the administrative services fee paid to the Adviser, in the context of the Adviser's profitability with respect to the Fund. In addition, the Board compared the Fund's total operating expense ratio on a net and gross basis, taking into consideration any distribution or shareholder servicing fees and management fees with a universe of comparable mutual funds compiled by an independent consultant and a peer group of funds with similar investment strategies selected by that independent consultant from the universe. The Board reviewed the factors and methodology used by the independent consultant in the selection of the Fund's peer group, including the independent consultant's selection of a broad universe of funds, the more specific universe of comparable funds, and peer groups of funds with comparable investment strategies and asset levels, among other factors. The Board also

39

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

reviewed any changes to the independent consultant's methodology as compared to the prior year, including those resulting from the Adviser's input, if any. The Board also reviewed fees and other information related to the Adviser's management of similarly managed institutional or private accounts, and the differences in the services provided to the other accounts, to the extent applicable. The Board noted that the advisory fee arrangements for the Fund do not include breakpoints, which are generally viewed as a method by which the investment adviser shares any economies of scale with a fund as a fund grows. The Board also considered the Adviser's commitment to limit expenses as discussed in more detail below, and would consider breakpoints at a future time if the Fund's assets were to grow significantly.

The Board reviewed the Fund's performance over one-, three-, five- and ten-year periods against the performance of the Fund's selected peer group and benchmark index, noting that the Fund's investment objective is to track its benchmark index before fees and expenses. The Board recognized that the performance of the Fund is net of expenses, while the performance of the benchmark index reflects gross returns and as a result, the Fund generally will underperform its benchmark index due to fees and expenses. The Board considered the Fund's tracking error as a factor in evaluating performance. The Board also considered the additional resources that the Adviser has committed to enhance portfolio analysis, compliance and trading systems.

The Board reviewed various other specific factors with respect to the Fund, as described below. In their deliberations, the Trustees did not rank the importance of any particular information or factor considered and each Trustee may have attributed different weights to various factors.

The Board concluded that the Fund's gross annual management fee was reasonable as compared to the median gross management fee charged to the funds in the Fund's peer group. The Board noted that the Fund's net annual expense ratio, taking into account any shareholder servicing or distribution fees, was reasonable as compared to the median expense ratio for the peer group. The Board considered the Adviser's contractual agreement to waive its fees and reimburse expenses for a specified period of time, as described in the Fund's prospectus.

The Board then compared the Fund's performance for the one-, three-, five- and ten-year periods ended June 30, 2019, to that of the median performance of the peer group and benchmark index for the same periods and considered the fact that the Fund underperformed the benchmark index for all of the periods reviewed, and outperformed the peer group median for all of the periods reviewed.

Having considered, among other things: (1) that the Fund's management fee was within the ranges of advisory fees charged to comparable mutual funds; (2) that the Fund's total expense ratio was reasonable; (3) the Adviser's willingness to limit the expenses for a period of time would provide stability to the Fund's expenses during that period; and (4) the performance of the Fund, the Board concluded that the Agreement continued to be in the best interests of the Fund's shareholders.

The Board noted that the Adviser's investment management team replaced the predecessor fund's investment sub-adviser as portfolio managers for the Fund upon completion of the Fund's reorganization.

Conclusion

Based on its review of the information requested and provided, and following extended discussions, the Board determined that the Agreement, on behalf of the Fund, was consistent with the best interests of the Fund and its shareholders, and the Board unanimously approved the Agreement, on behalf of the Fund, for an additional annual period on the basis of the foregoing review and discussions and the following considerations, among others:

•  The fairness and reasonableness of the investment advisory fee payable to the Adviser under the Agreement in light of the investment advisory services provided, the costs of these services, the profitability of the Adviser's relationship with the Fund and the comparability of the fee paid to the fees paid by other investment companies;

•  The nature, quality and extent of the investment advisory services provided by the Adviser;

40

Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

•  The Adviser's entrepreneurial commitment to the management of the Fund and the creation of a broad-based family of funds, which could entail a substantial commitment of the Adviser's resources to the successful operation of the Fund;

•  The Adviser's representations regarding its staffing and capabilities to manage the Fund, including the retention of personnel with relevant portfolio management experience;

•  The Adviser's efforts to enhance investment results by, among other things, developing quality portfolio management teams; and

•  The overall high quality of the personnel, operations, financial condition, investment management capabilities, methodologies and performance of the Adviser.

41

Privacy Policy

Protecting the Privacy of Information

The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.

We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.

To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*

*  You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.

Victory Funds
P.O. Box 182593
Columbus, Ohio 43218-2593

Visit our website at:	Call Victory at:
www.vcm.com	800-539-FUND (800-539-3863)

VVIF-RS-SPIVIP-AR (12/19)

December 31, 2019

Annual Report

Victory Variable Insurance Funds

Victory Sophus Emerging Markets VIP Series

Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports may no longer be sent by mail from the insurance company that issued your variable annuity and variable life insurance contract, unless you specifically request paper copies of the reports from your insurance company. Instead, the reports will be made available on www.victoryfunds.com. The insurance company that offers your contract may also make these reports available on a website, and such insurance company will notify you by mail each time a report is posted and provide you with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the insurance company electronically by following the instructions provided by the insurance company.

If offered by your insurance company, you may elect to receive all future reports in paper and free of charge from the insurance company. You can inform your insurance company that you wish to continue receiving paper copies of your reports. Your election to receive reports in paper will apply to all funds available under your contract.

www.vcm.com

News, Information And Education 24 Hours A Day, 7 Days A Week

The Victory Funds site gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:

•  Detailed performance records

•  Daily share prices

•  The latest fund news

•  Investment resources to help you become a better investor

•  A section dedicated to investment professionals

Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.

Victory Variable Insurance Funds

Table of Contents

Shareholder Letter (Unaudited)	3
Fund Review and Commentary (Unaudited)	5
Financial Statements
Schedule of Portfolio Investments	9
Statement of Assets and Liabilities	16
Statement of Operations	17
Statements of Changes in Net Assets	18
Financial Highlights	20
Notes to Financial Statements	22
Report of Independent Registered Public Accounting Firm	31
Supplemental Information (Unaudited)
Trustee and Officer Information	32
Proxy Voting and Portfolio Holdings Information	35
Expense Examples	35
Additional Federal Income Tax Information	36
Advisory Contract Renewal	37
Privacy Policy (inside back cover)

The Fund is distributed by Victory Capital Advisers, Inc. Victory Capital Management Inc. is the investment adviser to the Fund and receives fees from the Fund for performing services for the Fund.

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus of the Fund.

For additional information about any Victory Fund, including fees, expenses, and risks, view our prospectus online at www.vcm.com or call 800-539-3863. Read it carefully before you invest or send money.

The information in this annual report is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections, or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Past investment performance of the Fund, markets or securities mentioned herein should not be considered to be indicative of future results.

• NOT FDIC INSURED • NO BANK GUARANTEE
• MAY LOSE VALUE

Call Victory at:

800-539-FUND (800-539-3863)

Visit our website at:

www.vcm.com

1

This page is intentionally left blank.

2

Victory Funds Letter to Shareholders
(Unaudited)

Dear Shareholder,

As we turn the page into a new decade, it's hard not to reflect on the fact that we have been enjoying the longest-ever bull market in U.S. equities. The run has been impressive, and despite periods of tumult and plenty of negative news, the bull market endured throughout 2019.

For the annual reporting period ended December 31, 2019, the S&P 500^® Index posted impressive gains of 31.49%. This represents the greatest one-year gain since 2013 and also illustrates a swift bounce-back after a precipitous drop late in 2018. The move higher supports the notion that underlying fundamentals of U.S. companies drive performance, rather than the political rancor and headline fears that often capture the attention of investors.

Perhaps we shouldn't be surprised at the impressive performance of equities. The U.S. economy — the world's largest — remains on solid footing and has been a key driver of both domestic and international stocks. Robust job creation, near-record low unemployment, and steady consumer spending continue and offer reasons for further optimism. Meanwhile, inflation remains muted, and the Federal Reserve (the Fed) and other major global central banks have taken an accommodative stance. In fact, the Fed has cut interest rates by a total of 0.75% over three meetings last July, September and October.

The risk-on attitudes of investors, coupled with the accommodative monetary policy, had an expected impact on U.S. Treasury yields. The 10-year Treasury yield declined significantly over the course of 2019, falling from 2.66% to 1.92% at year-end. More interesting, however, was the fact that, the yield on 10-year Treasurys fell below shorter-term yields for the first time since before the 2007-2008 Global Financial Crisis. This inverted yield curve spooked investors for a spell, only to revert back to a traditional upward sloping yield curve by the end of the year.

The robust domestic economy, low interest rates, and ample liquidity from central banks provided a potent tonic for the stock market in 2019. In fact, at year-end 2019, the S&P 500^® Index was approaching its highest valuation level since 1999. This reminds all of us to retain some historical context on the bull market. Many of us remember the Global Financial Crisis and, before that, the collapse of the dot-com bubble. Although those are now but a distant memory (and we are not forecasting such tumult), we should not forget that stocks don't always go up and cycles don't last forever. In other words, valuations still matter.

The key point is not to discount the risks. In addition to lofty valuations, investors need to keep apprised of trade disputes, geopolitical hotspots, a contentious U.S. election, and a host of other potential headwinds. Yet it is these very risks — these cross-currents — that may create pricing dislocations. This is an environment in which we believe our Victory Capital independent investment franchises can thrive.

On the following pages, you will find information relating to your Victory Funds investment. If you have any questions, we encourage you to contact your financial

3

advisor. Or, if you invest with us directly, you may call (800) 539-3863, or visit our website at www.vcm.com.

My colleagues and I sincerely appreciate the confidence you have placed in the Victory Funds, and we value the opportunity to help meet your investment goals.

Christopher K. Dyer, CFA

President,

Victory Funds

4

Victory Variable Insurance Funds (Unaudited)

Victory Sophus Emerging Markets VIP Series

Portfolio Holdings

As a Percentage of Total Investments

Performance Update

For the year ended December 31, 2019, Victory Sophus Emerging Market VIP Series (the "Fund") had a total return of 23.13% versus the MSCI Emerging Market Index (the "Index"), the Fund's benchmark, which had a return of 18.42%.

Commentary

The Fund seeks to provide long-term capital appreciation. The Fund outperformed the Index for the year ended December 31, 2019. Sophus Capital employs a disciplined, bottom-up approach utilizing both quantitative and fundamental processes to invest in businesses that we believe have superior and sustainable earnings growth at attractive valuations, with revisions as the catalyst. By investing in companies with these characteristics, coupled with our risk-managed approach, we seek to provide a more consistent return pattern over time.

Market Overview

Emerging markets rose strongly in the first quarter, scaling 9.6%, but lost track subsequently, declining over the next two quarters as investor risk appetite was marred by the escalation of trade tensions. However, emerging markets sprung back to life in the last quarter over positive developments on the trade front along with global monetary easing. In a risk-on sentiment fueled by a more dovish U.S. Federal Reserve (the "Fed"), emerging markets rallied 8.76% in January 2019. The rally was similar to that seen a year prior in January of 2018, but the reasons were quite dissimilar as markets were giddy last year from a synchronized growth narrative. At the beginning of the second quarter, investor sentiment remained upbeat on signs of a global growth recovery, building on the momentum seen in the first quarter. The U.S. dollar rose against all the major currencies, encouraged by renewed economic divergence. Commodities saw strong gains, led by a rally on oil as supply concerns intensified following the United States' decision to end waivers on Iranian oil imports. However, the re-escalation of the U.S./China trade war put investors in a risk-off mode which, along with soft economic data in both China and the United States, heightened concerns of a global growth slowdown, raising uncertainty across global markets. Adding to the skittishness of the markets, mid-quarter, President Trump threatened to raise tariffs on Mexico as the administration sought Mexico's attention to help constrain the flood of illegal migrants into the United States. Fortunately, this was short-lived as an agreement between Mexico and the United States was reached shortly thereafter. Emerging markets ended the second quarter on a strong note, led by a more dovish Fed and optimism for fresh trade talks between the United States and China. The interest rate cut expectations in the United States pushed the U.S. dollar lower and the yield on the 10-year U.S. Treasury bond to 2.00%, its lowest level since November of 2016.

At mid-year, the situation would soon change as these conditions could not quell investor fears of a slowdown in global growth, helping to push the U.S. dollar higher and weighing on

5

Victory Variable Insurance Funds (Unaudited)

Victory Sophus Emerging Markets VIP Series (continued)

emerging markets equity securities. During the third quarter of 2019, emerging markets declined as markets responded to a re-escalation of the trade war. Furthermore. the United States designated China as a currency manipulator. This back-and-forth between the United States and China fueled global growth concerns leading to a risk-off sentiment in the markets. Mid-quarter, sentiment improved a bit as the United States agreed to delay tariffs on certain products and both countries agreed to go back to the table.

Emerging markets continued to advance during the beginning of the fourth quarter, and on October 11, 2019, it was announced that "Phase 1" of a trade deal was agreed to in principle. Mid-October, the Fed cut rates by 25 basis points, as expected, and announced they would expand their balance sheet. This all helped push the U.S. dollar down. A growing optimism on the Phase 1 trade deal and steepening U.S. yield curve provided fuel to the risk-on trade and pushed out fears of a recession. The year finished on a high note with market "giddiness" fueled by the "finalization" of a Phase 1 U.S./China trade agreement, and the United States indefinitely delaying new tariffs that were set to go into effect on December 15, 2019. Furthermore, elections in the United Kingdom appeared to put Brexit on a more certain path, while global macro indicators provided a rosier outlook for global growth.

Portfolio Review

By sectors, the largest contributor to performance was stock selection in communication services. The largest detractor from relative performance was stock selection in consumer staples. By country, the largest contributor was stock selection in China. The largest detractor was stock selection in Russia.

Outlook

The continued strength of the mighty dollar is now in question, thanks to the regionalization of trade, economic growth, and in all likelihood political influence. We believe that the weaker dollar will benefit emerging markets economies and markets in 2020. Further, we see the growth differential between emerging markets and the developed markets widening again, and we believe emerging markets earnings likely will grow at twice the rate of developed markets earnings.

The global economy is expected to grow by 3.4%, according to the World Bank. Emerging economies are forecast to grow by 4.6% versus 1.7% for developed economies — the main contributors being China, India, and Brazil. Trade volume is expected to pick up again to 3.2% globally (from 1.2% in 2019), led by emerging market economies. Emerging markets have suffered from a perception that its growth is mostly commodity driven. While this has been true at times in the past, the emerging markets today is more technology and communication services driven, as it was at the turn of the century. Consumption and financial intermediation (credit growth) also are poorly understood elements, but are expected to be major contributors to growth.

Consensus estimates are for 15-17% earnings growth in emerging markets in 2020, driven by 1) Technology, 2) Financials, and 3) Consumer Discretionary sectors. Within technology, the memory cycle has turned, and we see DRAM or dynamic random-access memory and NAND flash memory prices recouping lost ground. Processing capacity — thanks to the Internet of Things, artificial intelligence, and machine learning — is expected to push the hardware cycle to new heights. While interest rates remain low and bank appetite for lending

6

Victory Variable Insurance Funds (Unaudited)

has been subdued, the extended growth cycle requires capital investment, in lagging economies like Brazil, Poland, Turkey, and parts of the Persian Gulf. Consumption is now a global theme, and the combination of cheap credit, worldwide campaigns, and coordinated technological shifts (5G, for example) are pushing ever more activity into services and purchasing across the emerging markets space.

Growth and quality investment styles outperformed in 2019, while value styles lagged. We do not see any changes in 2020, as the world remains starved for growth in the post-financial-crisis economy. We look to capture sustainable growth with positive catalysts. The emerging markets universe is dynamic, exciting, and differentiated. We invest across all market caps, knowing that the inefficiencies, which are inherent in this asset class, are most powerful in smaller countries, companies, or out-of-favor segments.

In anticipation of a weaker U.S. dollar, accelerating emerging markets growth, rising earnings, and attractive valuations, we expect another positive year for emerging markets equity securities.

7

Victory Variable Insurance Funds (Unaudited)

Victory Sophus Emerging Markets VIP Series (continued)

Average Annual Total Return

Year Ended December 31, 2019

	Class I
Inception Date	10/17/94
	Net Asset Value			MSCI Emerging Markets Index1
One Year		23.13	%		18.42	%
Three Year		12.55	%		11.57	%
Five Year		6.78	%		5.61	%
Ten Year		3.27	%		3.68	%
Since Inception		7.55	%		N/A

Expense Ratios

Gross	1.33	%
With Applicable Waivers	1.33	%

Past performance is not indicative of future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month's end, please visit www.vcm.com.

The above expense ratios are from the Fund's prospectus dated May 1, 2019. Additional information pertaining to the Fund's expense ratios as of December 31, 2019 can be found in the financial highlights.

The total return figures set forth above include all waivers of fees for various periods since inception. Without such fee waivers, the total returns would have been lower. Some fee waivers are voluntary and may be modified or terminated at any time. The total returns do not include any insurance, sales or administrative charges of variable annuity or life insurance contracts. If these charges were included, the total returns would have been lower.

Victory Sophus Emerging Markets VIP Series — Growth of $10,000

¹The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity performance of emerging markets. The index reflects the reinvestment of dividends paid on the stocks constituting the index net of withholding taxes. You may not invest in the index and, unlike the Fund, the index does not incur fees or expenses. It is not possible to invest directly in an index.

The graph reflects investment of growth of a hypothetical $10,000 investment in the Fund. Past performance is no guarantee of future results.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

8

Victory Variable Insurance Funds
Victory Sophus Emerging Markets VIP Series Schedule of Portfolio Investments
December 31, 2019

Security Description	Shares		Value
Common Stocks (97.9%)
Brazil (8.9%):
Consumer Discretionary (1.5%):
Cyrela Brazil Realty SA Empreendimentos e Participacoes		39,300	$	292,273
Grupo SBF SA (a)		42,300		371,610
				663,883
Energy (1.2%):
Petroleo Brasileiro SA, ADR		32,369		515,962
Financials (2.7%):
Banco Bradesco SA, ADR		67,797		606,783
Banco do Brasil SA		46,100		608,558
				1,215,341
Health Care (0.9%):
Qualicorp Consultoria e Corretora de Seguros SA		42,300		391,621
Industrials (0.9%):
Companhia de Locacao das Americas		61,200		346,729
JSL SA		7,800		52,146
				398,875
Real Estate (1.0%):
Aliansce Sonae Shopping Centers SA (a)		37,592		469,781
Utilities (0.7%):
Neoenergia SA		53,300		330,779
				3,986,242
Chile (0.1%):
Financials (0.1%):
Banco de Credito e Inversiones SA		1,208		54,791
China (30.3%):
Communication Services (6.2%):
Momo, Inc., ADR		5,626		188,471
Tencent Holdings Ltd.		48,330		2,328,503
Wuhu Sanqi Interactive Entertainment Network Technology Group Co. Ltd., Class A		60,000		232,298
				2,749,272
Consumer Discretionary (10.3%):
Alibaba Group Holding Ltd., ADR (a)		13,675		2,900,467
Gree Electric Appliances, Inc. of Zhuhai, Class A		28,700		270,662
Huayu Automotive Systems Co. Ltd., Class A		61,300		228,923
JD.com, Inc., ADR (a)		12,311		433,717
New Oriental Education & Technology Group, Inc., ADR (a)		2,476		300,215
Tongcheng-Elong Holdings Ltd. (a)		130,400		234,066
Topsports International Holdings Ltd. (b)		167,829		202,899
				4,570,949

See notes to financial statements.

9

Victory Variable Insurance Funds
Victory Sophus Emerging Markets VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Consumer Staples (1.4%):
China Mengniu Dairy Co. Ltd.		94,000	$	380,263
Wuliangye Yibin Co. Ltd., Class A		13,900		266,011
				646,274
Energy (1.1%):
China Oilfield Services Ltd., Class H		312,000		489,877
Financials (5.8%):
China Construction Bank Corp., Class H		1,005,638		871,987
China Galaxy Securities Co. Ltd. (c)		672,000		395,901
China Merchants Bank Co. Ltd., Class H		76,000		390,751
Ping An Insurance Group Co. of China Ltd.		76,500		905,318
				2,563,957
Industrials (0.8%):
Zoomlion Heavy Industry Science and Technology Co. Ltd., Class H		447,000		374,719
Information Technology (1.7%):
Beijing Sinnet Technology Co. Ltd., Class A		107,900		311,200
Kingdee International Software Group Co. Ltd.		166,000		166,084
Venustech Group, Inc., Class A		57,000		276,926
				754,210
Materials (1.6%):
Anhui Conch Cement Co. Ltd., Class H		62,500		455,412
Hengli Petrochemical Co. Ltd., Class A		122,100		282,507
				737,919
Real Estate (1.4%):
China SCE Group Holdings Ltd.		454,000		264,465
Sunac China Holdings Ltd.		58,000		346,284
				610,749
				13,497,926
Cyprus (0.7%):
Financials (0.7%):
TCS Group Holding PLC, GDR		13,960		300,553
Greece (1.0%):
Communication Services (0.7%):
Hellenic Telecommunications Organization SA		19,292		308,774
Industrials (0.3%):
Mytilineos Holdings SA		14,765		162,151
				470,925
Hong Kong (3.7%):
Energy (0.8%):
Kunlun Energy Co. Ltd.		388,000		342,797
Health Care (1.0%):
CSPC Pharmaceutical Group Ltd.		188,000		448,672

See notes to financial statements.

10

Victory Variable Insurance Funds
Victory Sophus Emerging Markets VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Information Technology (0.7%):
Kingboard Laminates Holdings Ltd.		252,000	$	312,390
Real Estate (1.2%):
Shimao Property Holdings Ltd.		136,000		527,086
				1,630,945
India (7.8%):
Consumer Discretionary (0.7%):
Aditya Birla Fashion And Retail Ltd. (a)		54,722		177,739
The Indian Hotels Co. Ltd.		70,068		142,393
				320,132
Energy (2.1%):
Petronet LNG Ltd.		62,053		233,047
Reliance Industries Ltd.		31,982		678,478
				911,525
Financials (2.6%):
Axis Bank Ltd.		32,820		346,973
Cholamandalam Investment and Finance Co. Ltd.		59,750		255,796
Housing Development Finance Corp. Ltd.		16,484		557,424
				1,160,193
Information Technology (1.0%):
HCL Technologies Ltd.		27,070		215,517
Infosys Technologies Ltd., ADR		23,445		241,952
				457,469
Materials (1.4%):
Berger Paints India Ltd.		27,028		195,282
UltraTech Cement Ltd.		4,444		252,022
UPL Ltd.		23,544		192,790
				640,094
				3,489,413
Indonesia (1.8%):
Financials (0.8%):
PT Bank Negara Indonesia (Persero) Tbk		587,100		331,487
Industrials (0.5%):
PT Wijaya Karya (Persero) Tbk		1,589,800		227,366
Materials (0.5%):
PT Indocement Tunggal Prakarsa Tbk		169,100		231,325
				790,178
Korea, Republic Of (13.8%):
Communication Services (0.4%):
Innocean Worldwide, Inc.		2,846		174,635

See notes to financial statements.

11

Victory Variable Insurance Funds
Victory Sophus Emerging Markets VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Consumer Discretionary (1.7%):
Fila Korea Ltd.		3,633	$	166,027
Hyundai Mobis Co. Ltd.		1,843		407,799
Kia Motors Corp.		4,530		173,026
				746,852
Consumer Staples (0.4%):
NeoPharm Co. Ltd.		4,500		188,013
Energy (0.8%):
SK Innovation Co. Ltd.		2,613		338,211
Financials (0.6%):
Hana Financial Group, Inc.		8,687		276,352
Health Care (0.7%):
Hanmi Pharm Co. Ltd. (a)		1,271		324,903
Industrials (0.6%):
Samsung Engineering Co. Ltd. (a)		16,175		267,346
Information Technology (8.0%):
Douzone Bizon Co. Ltd.		3,769		263,509
Samsung Electro-Mechanics Co. Ltd.		5,967		641,901
Samsung Electronics Co. Ltd.		38,680		1,864,110
SK Hynix, Inc.		9,770		794,773
				3,564,293
Materials (0.6%):
Ssangyong Cement Industrial Co. Ltd.		54,997		269,434
				6,150,039
Mexico (1.9%):
Consumer Discretionary (0.5%):
Alsea SAB de CV (a)		78,887		207,951
Financials (0.4%):
Gentera SAB de CV		188,644		194,300
Industrials (0.4%):
Controladora Vuela Cia de Aviacion SAB de CV, ADR (a)		18,743		195,302
Real Estate (0.6%):
Corp Inmobiliaria Vesta SAB de CV		140,165		252,106
				849,659
Peru (0.9%):
Financials (0.9%):
Credicorp Ltd.		1,960		417,735
Philippines (1.4%):
Financials (1.4%):
BDO Unibank, Inc.		125,670		391,827
Metropolitan Bank & Trust Co.		165,000		215,924
				607,751

See notes to financial statements.

12

Victory Variable Insurance Funds
Victory Sophus Emerging Markets VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Poland (1.3%):
Communication Services (0.8%):
CD Projekt SA		4,934	$	363,976
Energy (0.5%):
Grupa Lotos SA		9,573		211,251
				575,227
Russian Federation (3.4%):
Energy (1.7%):
LUKOIL PJSC, ADR		7,577		754,719
Financials (0.9%):
Sberbank of Russia PJSC		25,259		416,129
Materials (0.8%):
MMC Norilsk Nickel PJSC, ADR		10,906		332,524
				1,503,372
Saudi Arabia (1.4%):
Consumer Discretionary (0.7%):
Jarir Marketing Co.		4,009		177,011
Leejam Sports Co. JSC		6,521		140,917
				317,928
Financials (0.7%):
Arab National Bank		40,056		292,441
				610,369
South Africa (4.0%):
Communication Services (0.9%):
Naspers Ltd.		2,492		408,027
Consumer Staples (0.7%):
The SPAR Group Ltd.		21,040		297,392
Financials (1.5%):
Liberty Holdings Ltd.		50,222		397,282
Nedbank Group Ltd.		18,875		289,165
				686,447
Materials (0.9%):
AngloGold Ashanti Ltd.		17,669		401,581
				1,793,447
Taiwan (10.4%):
Consumer Discretionary (0.6%):
Giant Manufacturing Co. Ltd.		36,000		256,290
Financials (2.3%):
Chailease Holding Co. Ltd.		64,890		299,152
Fubon Financial Holding Co. Ltd.		199,000		308,199
Yuanta Financial Holding Co. Ltd.		649,000		437,551
				1,044,902

See notes to financial statements.

13

Victory Variable Insurance Funds
Victory Sophus Emerging Markets VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Industrials (0.6%):
Far Eastern New Century Corp.		283,000	$	281,876
Information Technology (6.9%):
Globalwafers Co. Ltd.		50,000		640,363
Taiwan Semiconductor Manufacturing Co. Ltd.		177,259		1,962,003
Walsin Technology Corp.		56,000		447,031
				3,049,397
				4,632,465
Thailand (3.2%):
Communication Services (0.9%):
Advanced Info Service PCL		28,500		202,397
Plan B Media Public Co. Ltd.		817,300		207,147
				409,544
Consumer Discretionary (0.3%):
Com7 PCL (c)		132,800		117,366
Consumer Staples (0.3%):
CP ALL PCL		59,600		143,627
Financials (0.6%):
Siam Commercial Bank PCL		64,600		262,723
Industrials (0.5%):
Gunkul Engineering PCL		2,209,800		219,700
Materials (0.6%):
Tipco Asphalt PCL		367,300		259,658
				1,412,618
Turkey (0.9%):
Consumer Discretionary (0.5%):
Tofas Turk Otomobil Fabrikasi AS		49,435		223,417
Yatas Yatak ve Yorgan Sanayi ve Ticaret AS (a)		—		1
				223,418
Energy (0.4%):
Tupras Turkiye Petrol Rafinerileri AS		7,743		165,259
				388,677
United Kingdom (1.1%):
Materials (1.1%):
Anglo American PLC		7,082		203,420
Antofagasta PLC		22,814		276,184
				479,604
Total Common Stocks (Cost $33,827,065)				43,641,936

See notes to financial statements.

14

Victory Variable Insurance Funds
Victory Sophus Emerging Markets VIP Series Schedule of Portfolio Investments — continued
December 31, 2019

Security Description	Shares		Value
Preferred Stocks (0.7%)
Brazil (0.7%):
Industrials (0.7%):
Randon SA Implementos e Participacoes		97,600	$	326,339
Total Preferred Stocks (Cost $196,696)				326,339
Collateral for Securities Loaned^ (0.9%)
United States (0.9%):
BlackRock Liquidity Funds TempFund Portfolio, Institutional Class, 1.75% (d)		18,522		18,522
Fidelity Investments Money Market Government Portfolio, Class I, 1.54% (d)		102,041		102,041
Fidelity Investments Prime Money Market Portfolio, Class I, 1.75% (d)		3,094		3,094
Goldman Sachs Financial Square Prime Obligations Fund, Institutional Class, 1.80% (d)		61,643		61,643
JPMorgan Prime Money Market Fund, Capital Class, 1.73% (d)		67,812		67,812
Morgan Stanley Institutional Liquidity Prime Portfolio, Institutional Class, 1.76% (d)		135,620		135,620
Total Collateral for Securities Loaned (Cost $388,732)				388,732
Total Investments (Cost $34,412,493) — 99.5%				44,357,007
Other assets in excess of liabilities — 0.5%				213,945
NET ASSETS — 100.00%			$	44,570,952

^  Purchased with cash collateral from securities on loan.

(a)  Non-income producing security.

(b)  Rule 144A security or other security that is restricted as to resale to institutional investors. The Fund's Adviser has deemed this security to be liquid based upon procedures approved by the Board of Trustees. As of December 31, 2019, the fair value of these securities was $202,899 and amounted to 0.5% of net assets.

(c)  All or a portion of this security is on loan.

(d)  Rate disclosed is the daily yield on December 31, 2019.

ADR — American Depositary Receipt

GDR — Global Depositary Receipt

PCL — Public Company Limited

PLC — Public Limited Company

See notes to financial statements.

15

Victory Variable Insurance Funds Statement of Assets and Liabilities
December 31, 2019

	Victory Sophus Emerging Markets VIP Series
ASSETS:
Investments, at value (Cost $34,412,493)	$	44,357,007	(a)
Foreign currency, at value (Cost $70,484)		70,561
Cash and cash equivalents		453,193
Interest and dividends receivable		144,795
Receivable for capital shares issued		20,779
Receivable for investments sold		56,607
Reclaims receivable		521
Receivable from Adviser		12,056
Prepaid expenses		2,728
Total Assets		45,118,247
LIABILITIES:
Payables:
Collateral received on loaned securities		388,732
Investments purchased		18,890
Capital shares redeemed		50,019
Accrued foreign capital gains taxes		13,213
Accrued expenses and other payables:
Investment advisory fees		36,512
Administration fees		2,073
Custodian fees		11,782
Transfer agent fees		44
Compliance fees		28
Trustees' fees		87
Other accrued expenses		25,915
Total Liabilities		547,295
NET ASSETS:
Capital		33,674,227
Total distributable earnings/(loss)		10,896,725
Net Assets	$	44,570,952
Shares (unlimited shares authorized with a par value of $0.001 per share):		2,833,404
Net asset value:	$	15.73

(a)  Includes $369,336 of securities on loan.

See notes to financial statements.

16

Victory Variable Insurance Funds Statement of Operations
For the Year Ended December 31, 2019

	Victory Sophus Emerging Markets VIP Series
Investment Income:
Cash dividends	$	1,257,581
Non-cash dividends		258,010
Interest		5,711
Securities lending (net of fees)		15,673
Foreign tax withholding		(119,604	)
Total Income		1,417,371
Expenses:
Investment advisory fees		432,613
Administration fees		26,468
Custodian fees		71,754
Transfer agent fees		282
Trustees' fees		4,906
Compliance fees		279
Legal and audit fees		25,824
Interfund lending fees		12
Other expenses		44,884
Total Expenses		607,022
Expenses waived/reimbursed by Adviser		(22,632	)
Net Expenses		584,390
Net Investment Income (Loss)		832,981
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment securities and foreign currency translations		361,239
Foreign taxes on realized gains		(6,290	)
Net change in unrealized appreciation/depreciation on investment securities and foreign currency translations		7,850,865
Net change in accrued foreign taxes on unrealized gains		(4,529	)
Net realized/unrealized gains on investments		8,201,285
Change in net assets resulting from operations	$	9,034,266

See notes to financial statements.

17

Victory Variable Insurance Funds Statements of Changes in Net Assets

	Victory Sophus Emerging Markets VIP Series
	Year Ended December 31, 2019			Year Ended December 31, 2018
From Investment Activities:
Operations:
Net investment income (loss)	$	832,981		$	617,718
Net realized gains (losses) from investments		354,949			1,957,167
Net change in unrealized appreciation/depreciation on investments		7,846,336			(12,921,981	)
Change in net assets resulting from operations		9,034,266			(10,347,096	)
Change in net assets resulting from distributions to shareholders		(2,706,474	)		(4,578,069	)
Change in net assets resulting from capital transactions		(4,141,635	)		(5,239,557	)
Change in net assets		2,186,157			(20,164,722	)
Net Assets:
Beginning of period		42,384,795			62,549,517
End of period	$	44,570,952		$	42,384,795
Capital Transactions:
Proceeds from shares issued	$	1,667,106		$	3,506,148
Distributions reinvested		2,706,474			4,578,069
Cost of shares redeemed		(8,515,215	)		(13,323,774	)
Change in net assets resulting from capital transactions	$	(4,141,635	)	$	(5,239,557	)
Share Transactions:
Issued		111,672			186,585
Reinvested		174,181			338,686
Redeemed		(571,160	)		(735,217	)
Change in Shares		(285,307	)		(209,946	)

See notes to financial statements.

18

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19

Victory Variable Insurance Funds Financial Highlights

For a Share Outstanding Throughout Each Period

			Investment Activities								Distributions to Shareholders From
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)(a)		Net Realized and Unrealized Gains (Losses) on Investments			Total from Investment Activities			Net Investment Income			Net Realized Gains From Investments			Total Distributions
Victory Sophus Emerging Markets VIP Series
Year Ended 12/31/19	$	13.59		0.29		2.85			3.14			(0.16	)		(0.84	)		(1.00	)
Year Ended 12/31/18	$	18.79		0.20		(3.79	)		(3.59	)		(0.14	)		(1.47	)		(1.61	)
Year Ended 12/31/17	$	13.26		0.17		5.51			5.68			(0.15	)		—			(0.15	)
Year Ended 12/31/16	$	11.99		0.12		1.14			1.26			(0.12	)		—			(0.12	)
Year Ended 12/31/15	$	13.81		0.13		(1.89	)		(1.76	)		(0.06	)		—			(0.06	)

*  Includes adjustments in accordance with U.S. generally accepted accounting principals.

(a)  Per share net investment income (loss) has been calculated using the average daily shares method.

(b)  Total returns do not reflect the effects of charges deducted pursuant to the terms of The Guardian Insurance & Annuity Company, Inc.'s variable contracts. Inclusion of such charges would reduce the total returns for all periods shown.

(c)  The Fund received monies related to a nonrecurring refund from the prior Custodian. The corresponding impact to the total return was less than 0.95% for the period shown. (See Note 8)

See notes to financial statements.

20

Victory Variable Insurance Funds Financial Highlights — continued

For a Share Outstanding Throughout Each Period  (continued)

								Ratios to Average Net Assets									Supplemental Data
	Capital Contribution from Prior Custodian, Net (See Note 8)		Net Asset Value, End of Period		Total Return(b)*			Net Expenses			Net Investment Income (Loss)			Gross Expenses			Net Assets, End of Period (000's)		Portfolio Turnover
Victory Sophus Emerging Markets VIP Series
Year Ended 12/31/19		—	$	15.73		23.28	%		1.35	%		1.93	%		1.40	%	$	44,571		91	%
Year Ended 12/31/18		—	$	13.59		(18.97	)%		1.34	%		1.12	%		1.34	%	$	42,385		105	%
Year Ended 12/31/17		—	$	18.79		42.88	%		1.33	%		1.03	%		1.33	%	$	62,550		99	%
Year Ended 12/31/16		0.13	$	13.26		11.57	%(c)		1.34	%		0.98	%		1.35	%	$	48,634		102	%
Year Ended 12/31/15		—	$	11.99		(12.74	)%		1.35	%		0.92	%		1.35	%	$	48,426		123	%

See notes to financial statements.

21

Victory Variable Insurance Funds Notes to Financial Statements
December 31, 2019

1. Organization:

Victory Variable Insurance Funds (the "Trust") was organized on February 11, 1998 as a Delaware statutory trust. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified open-end investment company. The Trust is comprised of nine funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with a par value of $0.001 per share. The accompanying financial statements are those of the Victory Sophus Emerging Markets VIP Series (the "Fund").

The Fund offers a single class of shares: Class I Shares. Sales of shares of the Fund may only be made to certain separate accounts of The Guardian Insurance & Annuity Company, Inc. ("GIAC") that fund certain variable annuity and variable life insurance contracts issued by GIAC. GIAC is a wholly owned subsidiary of The Guardian Life Insurance Company of America ("Guardian Life").

Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.

2. Significant Accounting Policies:

The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.

The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies.

Investment Valuation:

The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:

• Level 1 — quoted prices in active markets for identical securities

• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)

• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.

Portfolio securities listed or traded on securities exchanges, including American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.

22

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

Investments in open-end investment companies are valued at net asset value. These valuations are typically categorized as Level 1 in the fair value hierarchy.

Investments for which there are no such quotations, or for which quotations do not appear reliable, are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Trust's Board of Trustees (the "Board"). These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value.

In accordance with procedures adopted by the Board, fair value pricing may be used if events materially affecting the value of foreign securities occur between the time the exchange on which they are traded closes and the time the Fund's net asset value is calculated. The Fund uses a systematic valuation model, provided daily by an independent third party to fair value their international equity securities. To the extent this model is utilized, these valuations are categorized as a Level 2 in the fair value hierarchy.

A summary of the valuations as of December 31, 2019, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments.

	LEVEL 1		LEVEL 2		Total
Common Stocks	$	6,990,385	$	36,651,551	$	43,641,936
Preferred Stocks		—		326,339		326,339
Collateral for Securities Loaned		388,732		—		388,732
Total	$	7,379,117	$	36,977,890	$	44,357,007

For the year ended December 31, 2019, there were no Level 3 investments for which significant unobservable inputs were used to determine fair value.

Foreign Exchange Currency Contracts:

The Fund may enter into foreign exchange currency contracts to convert U.S. dollars to and from various foreign currencies. A foreign exchange currency contract is an obligation by the Fund to purchase or sell a specific currency at a future date at a price (in U.S. dollars) set at the time of the contract. The Fund does not engage in "cross-currency" foreign exchange contracts (i.e., contracts to purchase or sell one foreign currency in exchange for another foreign currency). The Fund's foreign exchange currency contracts might be considered spot contracts (typically a contract of one week or less) or forward contracts (typically a contract term over one week). A spot contract is entered into for purposes of hedging against foreign currency fluctuations relating to a specific portfolio transaction, such as the delay between a security transaction trade date and settlement date. Forward contracts are entered into for purposes of hedging portfolio holdings or concentrations of such holdings. The Fund enters into foreign exchange currency contracts solely for spot or forward hedging purposes, and not for speculative purposes (i.e., the Fund does not enter into such contracts solely for the purpose of earning foreign currency gains). Each foreign exchange currency contract is adjusted daily by the prevailing spot or forward rate of the underlying currency, and any appreciation or depreciation is recorded for financial statement purposes as unrealized until the contract settlement date, at which time the Fund records realized gains or losses equal to the difference between the value of a contract at the time it was opened and the value at the time it was closed. The Fund could be exposed to risk if a counterparty is unable to meet the terms of a foreign exchange currency contract or if the value of the foreign currency changes unfavorably. In addition, the use of foreign exchange currency contracts does not eliminate fluctuations in the underlying prices of the securities. During the year ended December 31, 2019, the Fund had no open forward foreign exchange currency contracts.

Investment Transactions and Related Income:

Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the

23

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.

Withholding taxes on interest, dividends and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.

Securities Lending:

The Trust has entered into a Master Securities Lending Agreement ("MSLA") with Citibank, N.A. ("Citibank" or the "Agent"). Under the terms of the MSLA, the Fund may lend securities to certain broker-dealers and banks in exchange for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are adjusted the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities, letters of credit and certificates of deposit. The cash collateral is invested in short-term instruments or cash equivalents as noted on the Fund's Schedule of Portfolio Investments. The Trust does not have effective control of the non-cash collateral and therefore it is not disclosed in the Fund's Schedule of Portfolio Investments. The Fund continues to benefit from interest or dividends on the securities loaned and may also earn a return from the collateral. The Fund pays various fees in connection with the investment of cash collateral. The Fund pays the Agent fees based on the investment income received from securities lending activities. Securities lending income is disclosed in the Fund's Statement of Operations. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them.

Securities lending transactions are entered into by the Fund under the MSLA, which permits the Fund, under certain circumstances such as an event of default, to offset amounts payable by the Fund to the same counterparty against amounts receivable from the counterparty to create a net payment due to or from the Fund.

The following table is a summary of the Fund's securities lending transactions which are subject to offset under the MSLA as of December 31, 2019. These transactions are accounted for as secured borrowings with an overnight and continuous contractual maturity for cash collateral, and greater than overnight and continuous contractual maturity for non-cash collateral.

Gross Amount of Recognized Assets (Value of		Value of Cash		Value of Non-cash Collateral Received by Maturity
Securities on Loan)		Collateral Received*		<30 Days		Between 30 & 90 days		>90 Days		Net Amount
$	369,336	$	369,336	$	—	$	—	$	—	$	—

*  Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by the Fund is disclosed in the Statement of Assets and Liabilities.

Foreign Currency Translations:

The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities of the Fund denominated in a foreign currency are translated into U.S. dollars at current exchange rates. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the exchange rates on the date of the transactions. The Fund does not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. Such fluctuations are disclosed as Net change in unrealized appreciation/depreciation on investment securities and

24

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

foreign currency translations on the Statement of Operations. Any realized gains or losses from these fluctuations are disclosed as Net realized gains (losses) from investments and foreign currency translations on the Statement of Operations.

Foreign Taxes:

The Fund may be subject to foreign taxes related to foreign income received (a portion of which may be reclaimable), capital gains on the sale of securities, and certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable regulations and rates that exist in the foreign jurisdictions in which the Fund invests.

Distributions to Shareholders:

Dividends from net investment income, if any, are declared and paid annually by the Fund. Distributable net realized gains, if any, are declared and distributed at least annually.

The amounts of dividends from net investment income and distributions from net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.

As of December 31, 2019 on the Statement of Assets and Liabilities, as a result of permanent book-to-tax differences, reclassification adjustments were as follows:

Total Distributable Earnings/(Loss)			Capital
$	(2	)	$	2

Federal Income Taxes:

It is the policy of the Fund to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of December 31.

Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., all open tax years and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.

Allocations:

Expenses directly attributable to the Fund are charged to the Fund, while expenses which are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.

Cross-Trade Transactions:

Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected

25

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For the year ended December 31, 2019, the Fund did not engage in any Rule 17a-7 transactions under the 1940 Act.

3. Purchases and Sales of Securities:

Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the year ended December 31, 2019 were as follows for the Fund:

Purchases		Sales
$	38,837,268	$	45,382,744

For the year ended December 31, 2019, there were no purchases or sales of U.S. Government Securities.

4. Fees and Transactions with Affiliates and Related Parties:

Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or the "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.

Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive 1.00% of the average daily net assets of the Fund. The Adviser may use its resources to assist with the Fund's distribution and marketing expenses.

VCM also serves as the Fund's administrator and fund accountant. Under an Administration and Fund Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.08% of the first $15 billion in average daily net assets of the Trust, Victory Portfolios and Victory Portfolios II (collectively, the "Victory Funds Complex"), 0.05% of the average daily net assets above $15 billion to $30 billion of the Victory Funds Complex and 0.04% of the average daily net assets over $30 billion of the Victory Funds Complex.

Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, N.A., acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of-pocket expenses incurred in providing these services.

FIS Investor Services, LLC ("FIS") serves as the Fund's transfer agent. Under the Transfer Agent Agreement, the Trust pays FIS a fee for its services and reimburses FIS for all of their reasonable out-of-pocket expenses incurred in providing these services.

The Chief Compliance Officer ("CCO") is an employee of the Adviser, which pays the compensation of the CCO and his support staff. The Trust has entered into an Agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the CCO, and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The funds in the Victory Funds Complex, in the aggregate, compensate the Adviser for these services.

The Victory Funds Complex pays an annual retainer to each Independent Trustee, plus an additional annual retainer to the Chairman of the Board. The aggregate amount of the fees and expenses of the Independent Trustees are allocated amongst all the funds in the Victory Funds Complex and are presented in the Statement of Operations.

Shearman & Sterling LLP provides legal services to the Trust.

Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust.

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Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

The Adviser has entered into an expense limitation agreement with the Fund until at least April 30, 2020. Under the terms of the agreement, the Adviser has agreed to waive fees or reimburse certain expenses to the extent that ordinary operating expenses incurred by the Fund in any fiscal year exceed the expense limit for the Fund. Such excess amounts will be the liability of the Adviser. Interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of a Fund's business are excluded from the expense limits. As of December 31, 2019, the expense limit (excluding voluntary waivers) is 1.35%.

The Fund has agreed to repay fees and expenses that were waived or reimbursed by the Adviser for a period up to three fiscal years after such waiver or reimbursement was made to the extent such payments or repayments would not cause the expenses to exceed the original expense limitation in place at time of the waiver or reimbursement or any expense limitation agreement in place at the time of repayment. As of December 31, 2019, the following amounts are available to be repaid to the Adviser. Amounts repaid to the Adviser during the year ended, if any, are reflected on the Statement of Operations as "Recoupment of prior expenses waived/reimbursed by Adviser".

Expires December 31, 2022		Total
$	22,632	$	22,632

The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining a competitive expense ratio. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the year ended December 31, 2019.

Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Fund Accountant, Sub-Administrator, Sub-Fund Accountant and Legal Counsel.

5. Risks:

The Fund may be subject to other risks in addition to these identified risks.

An investment in the Fund's shares represents an indirect investment in the securities owned by the Fund, some of which will be traded on a national securities exchange or in the over-the-counter markets. The value of the securities in which the Fund invests, like other market investments, may move up or down, sometimes rapidly and unpredictably. The value of the securities in which the Fund invests may affect the value of the Fund's shares. An investment in the Fund's shares at any point in time may be worth less than the original investment, even after taking into account the reinvestment of the Fund's distributions.

The Fund will be subject to foreign securities risk. Foreign securities are (including ADRs and other depository receipts) are subject to political, regulatory, and economic risks not present in domestic investments. In addition, when the Fund buys securities denominated in a foreign currency, there are special risks such as changes in currency exchange rates and the risk that a foreign government could regulate foreign exchange transactions. In addition, to the extent investments are made in a limited number of countries, events in those countries will have a more significant impact on the Fund.

The Fund will be subject to emerging market risk. Risk of investment in emerging markets include greater political and economic instability, greater volatility in currency exchange rates, less developed securities markets, possible trade barriers, currency transfer restrictions, a more limited number of potential buyers and issuers, an emerging market country's dependence on revenue from particular commodities or international aid, less governmental supervision and regulation, unavailability of currency hedging techniques, differences in auditing and financial reporting standards and less developed legal systems.

The Fund will be subject to credit risk with respect to the amount it expects to receive from counterparties for financial instruments entered into by the Fund. The Fund may be negatively impacted if a counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial

27

Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

difficulties. The Fund may experience significant delays in obtaining any recovery in bankruptcy or other reorganization proceeding and the Fund may obtain only limited recovery or may obtain no recovery in such circumstances. The Fund typically enters into transactions with counterparties whose credit ratings are investment grade, as determined by a nationally recognized statistical rating organization or, if unrated, judged by the Adviser to be of comparable quality.

6. Borrowing and Interfund Lending:

Line of Credit:

For the year ended December 31, 2019, the Victory Funds Complex participated in a short-term, demand note "Line of Credit" with Citibank. Under the agreement with Citibank, for the period January 1, 2019 to June 30, 2019, the Victory Funds Complex could borrow up to $250 million, of which $100 million was committed and $150 million was uncommitted. Effective July 1, 2019, the agreement was amended to include the USAA Mutual Funds Complex (another series of mutual funds managed by the Adviser) and has a new termination date of June 29, 2020. Under this amended agreement, the Victory Funds Complex and USAA Mutual Funds Complex, combined, may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund (herein, the "Fund"), another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs, including redemption requests that might otherwise require the untimely disposition of securities. With the agreement in effect for the period January 1, 2019 to June 30, 2019, Citibank received an annual commitment fee of 0.15% on $100 million for providing the Line of Credit. For the period July 1, 2019 to December 31, 2019, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. For the year ended December 31, 2019, Citibank earned approximately $300 thousand in commitment fees from the combined Victory Funds Complex and USAA Mutual Funds Complex. Each fund in the Victory Funds Complex and the USAA Mutual Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Line of credit fees.

The Fund did not utilize the line of credit during the year ended December 31, 2019.

Interfund Lending:

The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Victory Fund relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund during the period, if applicable, is presented on the Statement of Operations under Income on interfund lending.

Borrower or Lender	Amount Outstanding at December 31, 2019		Average Borrowing*		Days Borrowing Outstanding		Average Interest Rate*			Maximum Borrowing During the Period
Borrower	$	—	$	143,000		1		2.99	%	$	143,000

*  For the year ended December 31, 2019, based on the number of days borrowings were outstanding.

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Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

7. Federal Income Tax Information:

The tax character of distributions paid during the most recent tax years ended, as noted below, were as follows (total distributions paid may differ from the Statements of Changes in Net Assets because, for tax purposes, dividends are recognized when actually paid).

Year Ended December 31, 2019
Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	457,783	$	2,248,691	$	2,706,474
Year Ended December 31, 2018
Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	437,091	$	4,140,978	$	4,578,069

As of the tax year ended December 31, 2019, the components of distributable earnings/accumulated deficit on a tax basis were as follows:

Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Earnings		Unrealized Appreciation (Depreciation)*		Total Accumulated Earnings (Deficit)
$	793,134	$	359,357	$	1,152,491	$	9,744,234	$	10,896,725

*  The difference between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales.

During the tax year ended December 31, 2019, the Fund did not utilize capital loss carryforwards.

As of December 31, 2019, the cost basis for federal income tax purposes, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation) for investments and derivatives were as follows:

Cost of Investments for Federal Tax Purposes		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
$	34,606,198	$	10,547,796	$	(796,987	)	$	9,750,809

8. Capital Contribution from Prior Custodian:

During 2016, the Fund received notification from the Fund's prior custodian, State Street Bank and Trust ("State Street"), concerning issues related to billing on certain categories of expenses during the approximately 16-year period from 1998 through October 31, 2014. The over-billing primarily related to categories of expenses that involved an allocation of general costs among multiple clients.

State Street paid the refunded amounts during January 2017. Based on billing information received during 2016 from State Street and an analysis of any expense limitation agreements that were in place during the period of the activities in question, including the application of any recoupment provisions in such agreements, the Adviser received a portion of the refund.

The portion of the refund retained by the Fund was accounted for as a capital contribution and is reflected on the Financial Highlights as "Capital Contribution from Prior Custodian, Net".

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Victory Variable Insurance Funds Notes to Financial Statements — continued
December 31, 2019

9. Fund Ownership:

Ownership of more than 25% of the voting securities of a fund creates presumptions of control of the fund, under section 2(a)(9) of the 1940 Act. As of December 31, 2019, the shareholder listed below held more than 25% of the shares outstanding of the Fund and may be deemed to control the Fund.

Shareholder	Percent
GIAC		99.5	%

10. Subsequent Events:

The Fund has evaluated the need for additional disclosures or adjustments resulting from subsequent events through the date these financial statements were issued. Based on this evaluation, there were no subsequent events to report that would have a material impact on the Fund's financial statements.

30

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Trustees of Victory Variable Insurance Funds

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of portfolio investments, of Victory Sophus Emerging Markets VIP Series (the "Fund"), a series of Victory Variable Insurance Funds, as of December 31, 2019, the related statements of operations and changes in net assets, including the related notes, and the financial highlights for the year then ended (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2019, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The Fund's financial statements and financial highlights for the three years ended December 31, 2018, were audited by other auditors whose report dated February 15, 2019 and the Fund's financial highlights for the year ended December 31, 2015, were audited by other auditors whose report dated February 22, 2016, expressed unqualified opinions on those financial statements and financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2019, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

We have served as the auditor of one or more of the investment companies advised by Victory Capital Management, Inc. since 2015.

COHEN & COMPANY, LTD.
Cleveland, Ohio
February 18, 2020

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Victory Variable Insurance Funds Supplemental Information
December 31, 2019

  (Unaudited)

Trustee and Officer Information

Board of Trustees:

Overall responsibility for management of the Trust rests with the Board. The Trust is managed by the Board in accordance with the laws of the State of Delaware. There are currently ten Trustees, nine of whom are not "interested persons" of the Trust within the meaning of that term under the 1940 Act ("Independent Trustees") and one of whom is an "interested person" of the Trust within the meaning of that term under the 1940 Act ("Interested Trustee"). The Trustees, in turn, elect the officers of the Trust to actively supervise its day-to-day operations.

The following tables list the Trustees, their ages, position with the Trust, commencement of service, principal occupations during the past five years and any directorships of other investment companies or companies whose securities are registered under the Securities Exchange Act of 1934, as amended, or who file reports under that Act. Each Trustee oversees nine portfolios in the Trust, 42 portfolios in Victory Portfolios and 26 portfolios in Victory Portfolios II, each a registered investment company that, together with the Trust, comprise the Victory Funds Complex. Each Trustee's address is c/o Victory Variable Insurance Funds, 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. Each Trustee has an indefinite term.

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Independent Trustees.
David Brooks Adcock, 68	Trustee	February 2005	Consultant (since 2006).	Chair and Trustee, Turner Funds (December 2016-December 2017).
Nigel D.T. Andrews, 72	Vice Chair and Trustee	August 2002	Retired.	Director, TCG BDC II, Inc. (since 2017); Director, TCG BDC I, Inc. (formerly Carlyle GMS Finance, Inc.) (since 2012); Director, Old Mutual US Asset Management (2002-2014).
E. Lee Beard, 68*	Trustee	February 2005	Retired (since 2015); Consultant, The Henlee Group, LLC (consulting) (2005-2015).	None.
Dennis M. Bushe, 76	Trustee	July 2016	Retired.	Trustee, RS Investment Trust and RS Variable Products Trust (November 2011-July 2016).

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December 31, 2019

  (Unaudited)

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Sally M. Dungan, 65	Trustee	February 2011	Chief Investment Officer, Tufts University (since 2002).	None.
John L. Kelly, 66	Trustee	February 2015	Partner, McCarvill Capital Partners (September 2016-September 2017); Advisor, Endgate Commodities LLC (January 2016-April 2016); Managing Partner, Endgate Commodities LLC (August 2014-January 2016); Chief Operating Officer, Liquidnet Holdings, Inc. (December 2011-July 2014).	Director, Caledonia Mining Corporation (since May 2012).
David L. Meyer, 62*	Trustee	December 2008	Retired.	None.
Gloria S. Nelund, 58	Trustee	July 2016	Chair, CEO and Co-Founder of TriLinc Global, LLC, an investment firm.	TriLinc Global Impact Fund, LLC (since 2012); Trustee, RS Investment Trust and RS Variable Products Trust (November 2007-July 2016).
Leigh A. Wilson, 75	Chair and Trustee	February 1998	Private Investor.	Chair (since 2013), Caledonia Mining Corporation.
Interested Trustee.
David C. Brown, 47**	Trustee	May 2008	Chairman and Chief Executive Officer (since 2013), Co-Chief Executive Officer (2011-2013), the Adviser; Chairman and Chief Executive Officer, Victory Capital Holdings, Inc. (since 2013).	USAA Mutual Funds Trust.

*  The Board has designated Mr. Meyer and Ms. Beard as its Audit Committee Financial Experts.

**  Mr. Brown is an "Interested Person" by reason of his relationship with the Adviser.

The Statement of Additional Information includes additional information about the Trustees of the Trust and is available, without charge, by calling 800-539-3863.

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  (Unaudited)

Officers:

The officers of the Trust, their ages, commencement of service and their principal occupations during the past five years, are detailed in the following table. Each officer serves until the earlier of his or her resignation, removal, retirement, death, or the election of a successor. The mailing address of each officer of the Trust is 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. The officers of the Trust receive no compensation directly from the Trust for performing the duties of their offices.

Name and Age	Position with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years
Christopher K. Dyer, 58	President	February 2006*	Director of Fund Administration, the Adviser.
Scott A. Stahorsky, 50	Vice President	December 2014	Manager, Fund Administration, the Adviser (since 2015); Senior Analyst, Fund Administration, the Adviser (prior to 2015).
Erin G. Wagner, 46	Secretary	December 2014	Associate General Counsel, the Adviser (since 2013).
Allan Shaer, 54	Treasurer	May 2017	Senior Vice President, Financial Administration, Citi Fund Services Ohio, Inc. (since 2016); Vice President, Mutual Fund Administration, JP Morgan Chase (2011-2016).
Christopher A. Ponte, 35	Assistant Treasurer	December 2017	Manager, Fund Administration, the Adviser (since 2017); Senior Analyst, Fund Administration, the Adviser (prior to 2017); Chief Financial Officer, Victory Capital Advisers, Inc. (since 2018).
Colin Kinney, 46	Chief Compliance Officer	July 2017	Chief Compliance Officer (since 2013) and Chief Risk Officer (2009-2017), the Adviser.
Chuck Booth, 59	Anti-Money Laundering Compliance Officer and Identity Theft Officer	May 2015	Director, Regulatory Administration and CCO Support Services, Citi Fund Services Ohio, Inc.
Jay G. Baris, 66	Assistant Secretary	February 1998	Partner, Shearman & Sterling LLP (since 2018); Partner, Morrison & Foerster LLP (2011-January 2018).

*  On December 3, 2014, Mr. Dyer resigned as Secretary of the Trust and accepted the position of President.

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  (Unaudited)

Proxy Voting and Portfolio Holdings Information

Proxy Voting:

Information regarding the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 800-539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.

Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent twelve months ended June 30 is available on the SEC's website at www.sec.gov.

Availability of Schedules of Portfolio Investments:

The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-PORT. Prior to the implementation of Form N-PORT, the Trust filed a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-PORT and Forms N-Q are available on the SEC's website at www.sec.gov.

Expense Examples

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2019 through December 31, 2019.

The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

Please note the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Beginning Account Value 7/1/19		Actual Ending Account Value 12/31/19		Hypothetical Ending Account Value 12/31/19		Actual Expenses Paid During Period 7/1/19-12/31/19*		Hypothetical Expenses Paid During Period 7/1/19-12/31/19*		Annualized Expense Ratio During Period 7/1/19-12/31/19
$	1,000.00	$	1,106.60	$	1,018.30	$	7.27	$	6.97		1.37	%

*  Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).

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  (Unaudited)

Additional Federal Income Tax Information

For the year ended December 31, 2019, the Fund paid qualified dividend income for the purposes of reduced individual federal income tax rates of 87%.

For the year ended December 31, 2019, the Fund designated long-term capital gain distributions in the amount of $2,248,691.

The Fund intends to elect to pass through to shareholders the income tax credit for taxes paid to foreign countries. Foreign source income and foreign tax expense per shares outstanding on December 31, 2019 were $0.53 and $0.04, respectively.

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Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

Considerations of the Board in Continuing the Investment Advisory Agreement (the "Agreement")

The Board approved the Agreement on behalf of the Fund at an in-person meeting, which was called for that purpose, on December 4, 2019. The Board also considered information relating to the Fund and the Agreement provided throughout the year and, more specifically, at a meeting on October 22, 2019. The Board noted that prior to the Fund's reorganization on July 29, 2016, the Fund was managed by RS Investment Management Co. LLC, which was acquired by the Adviser on July 29, 2016. In considering whether to approve the Agreement, the Board requested, and the Adviser provided, information that the Board believed to be reasonably necessary to reach its conclusions.

The Board, including the Independent Trustees, evaluated this information along with other information obtained throughout the year and was advised by legal counsel to the Fund, which also serves as independent legal counsel to the Independent Trustees. In addition, in 2017 the Independent Trustees, through their counsel, retained an independent consultant to assist with a review of the overall process for conducting the annual review of these advisory arrangements.

The Board considered the Fund's advisory fee, expense ratio and investment performance as significant factors in determining whether the Agreement should be continued. In considering whether the compensation paid to the Adviser was fair and reasonable, the Board also evaluated, among other things, the following factors:

•  The requirements of the Fund for the services provided by the Adviser;

•  The nature, quality and extent of the services provided and expected to be provided;

•  The performance of the Fund as compared to comparable funds;

•  The fees payable for the services and whether the fee arrangements provided for economies of scale that would benefit Fund shareholders as the Fund grows;

•  Whether the fee would be sufficient to enable the Adviser to attract and retain experienced personnel and continue to provide quality services to the Fund;

•  The fees paid by other clients of the Adviser whose accounts are managed in a similar investment style and any differences in the services provided to the other clients compared to those provided to the Fund;

•  The total expenses of the Fund, taking into consideration any distribution or shareholder servicing fees;

•  Management's commitment to operating the Fund at competitive expense levels;

•  The profitability of the Adviser (as reflected by comparing fees earned against an estimate of the Adviser's costs) with respect to the Adviser's relationship with the Fund;

•  Research and other service benefits received by the Adviser obtained through payment of client commissions for securities transactions;

•  Other benefits received by the Adviser, and its affiliates, including revenues paid to the Adviser, or its affiliates, by the Fund for administration and fund accounting services, and distribution;

•  The capabilities and financial condition of the Adviser;

•  Current economic and industry trends; and

•  The historical relationship between the Fund and the Adviser.

The Board reviewed the Fund's current management fee, comprised of the advisory fee plus the administrative services fee paid to the Adviser, in the context of the Adviser's profitability with respect to the Fund. In addition, the Board compared the Fund's total operating expense ratio on a net and gross basis, taking into consideration any distribution or shareholder servicing fees and management fees with a universe of comparable mutual funds compiled by an independent consultant and a peer group of funds with similar investment strategies selected by that independent consultant from the universe. The Board reviewed the factors and methodology used by the independent consultant in the selection of the Fund's peer group, including the independent consultant's selection of a broad universe of funds, the more specific universe of comparable funds, and peer groups of funds with comparable investment strategies and asset levels, among other factors. The Board also reviewed any changes to the independent consultant's methodology as compared to the prior year, including those resulting from the Adviser's input, if any. The Board also reviewed fees and other information related to the Adviser's management of similarly managed institutional or private accounts, and the differences in the services provided to the other accounts, to the extent applicable. The Board noted that the advisory fee

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Victory Variable Insurance Funds Supplemental Information — continued
December 31, 2019

  (Unaudited)

arrangements for the Fund do not include breakpoints, which are generally viewed as a method by which the investment adviser shares any economies of scale with a fund as a fund grows. The Board also considered the Adviser's commitment to limit expenses as discussed in more detail below, and would consider breakpoints at a future time if the Fund's assets were to grow significantly.

The Board reviewed the Fund's performance over one-, three-, five- and ten-year periods against the performance of the Fund's selected peer group and benchmark index. The Board recognized that the performance of the Fund and the peer group funds are net of expenses, while the performance of the benchmark index reflects gross returns. The Board considered the additional resources that the Adviser has committed to enhance portfolio analysis, compliance and trading systems. The Board noted that, following the Fund's reorganization, the Fund is managed by substantially the same investment management team that managed the comparable predecessor fund.

The Board reviewed various other specific factors with respect to the Fund, as described below. In their deliberations, the Trustees did not rank the importance of any particular information or factor considered and each Trustee may have attributed different weights to various factors.

The Board concluded that the Fund's gross annual management fee was reasonable as compared to the median gross management fee charged to the funds in the Fund's peer group. The Board noted that the Fund's net annual expense ratio, taking into account any shareholder servicing or distribution fees, was reasonable as compared to the median expense ratio for the peer group. The Board considered the Adviser's contractual agreement to waive its fees and reimburse expenses for a specified period of time, as described in the Fund's prospectus.

The Board then compared the Fund's performance for the one-, three-, five- and ten-year periods ended June 30, 2019, to that of the median performance of the peer group and benchmark index for the same periods and considered the fact that the Fund underperformed the benchmark index for all of the periods reviewed, with the exception of the three-year and five-year periods, underperformed the peer group median for the one- and ten-year periods, matched the peer group median for the three-year period, and outperformed the peer group median for the five-year period.

Having considered, among other things: (1) that the Fund's management fee was within the ranges of advisory fees charged to comparable mutual funds; (2) that the Fund's total expense ratio was reasonable; (3) the Adviser's willingness to limit the expenses for a period of time would provide stability to the Fund's expenses during that period; and (4) the performance of the Fund, the Board concluded that the Agreement continued to be in the best interests of the Fund's shareholders.

Conclusion

Based on its review of the information requested and provided, and following extended discussions, the Board determined that the Agreement, on behalf of the Fund, was consistent with the best interests of the Fund and its shareholders, and the Board unanimously approved the Agreement, on behalf of the Fund, for an additional annual period on the basis of the foregoing review and discussions and the following considerations, among others:

•  The fairness and reasonableness of the investment advisory fee payable to the Adviser under the Agreement in light of the investment advisory services provided, the costs of these services, the profitability of the Adviser's relationship with the Fund and the comparability of the fee paid to the fees paid by other investment companies;

•  The nature, quality and extent of the investment advisory services provided by the Adviser;

•  The Adviser's entrepreneurial commitment to the management of the Fund and the creation of a broad-based family of funds, which could entail a substantial commitment of the Adviser's resources to the successful operation of the Fund;

•  The Adviser's representations regarding its staffing and capabilities to manage the Fund, including the retention of personnel with relevant portfolio management experience;

•  The Adviser's efforts to enhance investment results by, among other things, developing quality portfolio management teams; and

•  The overall high quality of the personnel, operations, financial condition, investment management capabilities, methodologies and performance of the Adviser.

38

Privacy Policy

Protecting the Privacy of Information

The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.

We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.

To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*

*  You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.

Victory Funds
P.O. Box 182593
Columbus, Ohio 43218-2593

Visit our website at:	Call Victory at:
www.vcm.com	800-539-FUND (800-539-3863)

VVIF-RS-SEMVIP-AR (12/19)

December 31, 2019

Annual Report

Victory Variable Insurance Funds

Diversified Stock Fund

Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports may no longer be sent by mail from the insurance company that issued your variable annuity and variable life insurance contract, unless you specifically request paper copies of the reports from your insurance company. Instead, the reports will be made available on www.victoryfunds.com. The insurance company that offers your contract may also make these reports available on a website, and such insurance company will notify you by mail each time a report is posted and provide you with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the insurance company electronically by following the instructions provided by the insurance company.

If offered by your insurance company, you may elect to receive all future reports in paper and free of charge from the insurance company. You can inform your insurance company that you wish to continue receiving paper copies of your reports. Your election to receive reports in paper will apply to all funds available under your contract.

www.vcm.com

News, Information And Education 24 Hours A Day, 7 Days A Week

The Victory Funds site gives fund shareholders, prospective shareholders, and investment professionals a convenient way to access fund information, get guidance, and track fund performance anywhere they can access the Internet. The site includes:

•  Detailed performance records

•  Daily share prices

•  The latest fund news

•  Investment resources to help you become a better investor

•  A section dedicated to investment professionals

Whether you're a potential investor searching for the fund that matches your investment philosophy, a seasoned investor interested in planning tools, or an investment professional, www.vcm.com has what you seek. Visit us anytime. We're always open.

Victory Variable Insurance Funds

Table of Contents

Shareholder Letter (Unaudited)	2
Fund Review and Commentary (Unaudited)	3
Financial Statements
Schedule of Portfolio Investments	5
Statement of Assets and Liabilities	7
Statement of Operations	8
Statements of Changes in Net Assets	9
Financial Highlights	10
Notes to Financial Statements	12
Report of Independent Registered Public Accounting Firm	18
Supplemental Information (Unaudited)
Trustee and Officer Information	19
Proxy Voting and Portfolio Holdings Information	21
Expense Examples	21
Additional Federal Income Tax Information	22
Advisory Contract Renewal	23
Privacy Policy (inside back cover)

The Fund is distributed by Victory Capital Advisers, Inc. Victory Capital Management Inc. is the investment adviser to the Fund and receives fees from the Fund for performing services for the Fund.

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus of the Victory Variable Insurance Diversified Stock Fund.

The information in this annual report is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections, or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Past investment performance of the Fund, markets or securities mentioned herein should not be considered to be indicative of future results.

• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

Call Victory at:

800-539-FUND (800-539-3863)

Visit our website at:

www.vcm.com

1

Victory Funds Letter to Shareholders
(Unaudited)

Dear Shareholder,

As we turn the page into a new decade, it's hard not to reflect on the fact that we have been enjoying the longest-ever bull market in U.S. equities. The run has been impressive, and despite periods of tumult and plenty of negative news, the bull market endured throughout 2019.

For the annual reporting period ended December 31, 2019, the S&P 500^® Index posted impressive gains of 31.49%. This represents the greatest one-year gain since 2013 and also illustrates a swift bounce-back after a precipitous drop late in 2018. The move higher supports the notion that underlying fundamentals of U.S. companies drive performance, rather than the political rancor and headline fears that often capture the attention of investors.

Perhaps we shouldn't be surprised at the impressive performance of equities. The U.S. economy — the world's largest — remains on solid footing and has been a key driver of both domestic and international stocks. Robust job creation, near-record low unemployment, and steady consumer spending continue and offer reasons for further optimism. Meanwhile, inflation remains muted, and the Federal Reserve (the Fed) and other major global central banks have taken an accommodative stance. In fact, the Fed has cut interest rates by a total of 0.75% over three meetings last July, September and October.

The risk-on attitudes of investors, coupled with the accommodative monetary policy, had an expected impact on U.S. Treasury yields. The 10-year Treasury yield declined significantly over the course of 2019, falling from 2.66% to 1.92% at year-end. More interesting, however, was the fact that, the yield on 10-year Treasurys fell below shorter-term yields for the first time since before the 2007-2008 Global Financial Crisis. This inverted yield curve spooked investors for a spell, only to revert back to a traditional upward sloping yield curve by the end of the year.

The robust domestic economy, low interest rates, and ample liquidity from central banks provided a potent tonic for the stock market in 2019. In fact, at year-end 2019, the S&P 500^® Index was approaching its highest valuation level since 1999. This reminds all of us to retain some historical context on the bull market. Many of us remember the Global Financial Crisis and, before that, the collapse of the dot-com bubble. Although those are now but a distant memory (and we are not forecasting such tumult), we should not forget that stocks don't always go up and cycles don't last forever. In other words, valuations still matter.

The key point is not to discount the risks. In addition to lofty valuations, investors need to keep apprised of trade disputes, geopolitical hotspots, a contentious U.S. election, and a host of other potential headwinds. Yet it is these very risks — these cross-currents — that may create pricing dislocations. This is an environment in which we believe our Victory Capital independent investment franchises can thrive.

On the following pages, you will find information relating to your Victory Funds investment. If you have any questions, we encourage you to contact your financial advisor. Or, if you invest with us directly, you may call (800) 539-3863, or visit our website at www.vcm.com.

My colleagues and I sincerely appreciate the confidence you have placed in the Victory Funds, and we value the opportunity to help meet your investment goals.

Christopher K. Dyer, CFA

President,
Victory Funds

2

Portfolio Commentary (Unaudited)

Diversified Stock Fund

Portfolio Holdings

As a Percentage of Total Investments

Victory Variable Insurance Diversified Stock Fund Commentary

The Victory Variable Insurance Diversified Stock Fund (the "Fund") seeks to provide long-term growth of capital. The Fund generated a 28.39% total return for the fiscal year ended December 31, 2019, as compared to its benchmark, the S&P 500^® Index, which returned 31.49%. It was a banner year for stocks, driven by resilient U.S. economic growth and job creation, dovish global monetary policy, and improving U.S./China trade relations. Technology stocks, including many large-cap Tech/Communication Services giants with durable growth and reasonable valuations, led the indices higher. Higher rates and an improved economic outlook benefited Financials and Industrials, while pressuring defensive/bond proxy sectors (Consumer Discretionary, Real Estate, and Consumer Staples). Energy was the worst performing sector during the fiscal year.

Relative to the benchmark, the Fund's smaller size, value-tilt, and positive beta/volatility exposure detracted from results, as did sector allocation (cash drag, overweight Financials). Good stock selection in Industrials and Consumer Discretionary was offset by challenges in Health Care and Consumer Staples.

In Industrials, Universal Forest Products, Inc., a supplier of wood, wood composite, and other products to the retail, construction, and industrial markets, was a top performer. Since taking our initial position in April, the stock has been propelled higher by a string of better-than-expected results, highlighted by accelerating organic volume growth, and solid margin expansion.

In Consumer Discretionary, our outperformance was mostly driven by our retail holdings, with Target Corporation, the U.S.-based general merchandise retailer with approximately 1,800 stores nationally, one of our top performers. The company is one of the few winners in an otherwise tough retail environment, posting robust same-store-sales and double-digit earnings per share growth.

In Health Care, we had some industry headwinds, mostly from our overweight positioning in managed care and facilities names due to ongoing regulatory concerns heading into the 2020 election (i.e., "Medicare for All"). Importantly, these names have started to show positive relative strength recently, and contributed strongly to relative performance in the fourth quarter. UnitedHealth Group, one of the largest health benefits providers in the United States, is a prime example. The company recently reported strong third quarter results and raised its 2019 full-year adjusted earnings guidance range, driven by strength in its Medicare and commercial health benefits businesses, as well as broad-based strength within its OptumHealth segment. Despite the strong fourth quarter performance, shares remain inexpensive as investors discount Democratic presidential candidates' proposals to remake the American health care system, something we view as unlikely.

In Consumer Staples, Medifast, Inc., a manufacturer and distributor of health products and programs including weight loss / weight management plan OPTAVIA, was our weakest holding. The company cited three sources of business disruption: (1) fraudulent e-commerce credit card transactions, (2) issues with a technology platform migration, and (3) supply chain problems resulting from the 40% increase in manufacturing capacity. We exited our position.

At year end, the Fund had overweight allocations to the Technology Hardware, Storage & Peripherals, Consumer Discretionary, and Communication Services sectors. Within Technology, our largest active industry weightings are in data processing services, system software, distributors, and electronic manufacturing services. In Consumer Discretionary, our biggest active weightings are in housing and general merchandise retail. In Communication Services we have large overweight positions in broadcasting, interactive media, and cable. We maintained underweight allocations to the Consumer Discretionary, Health Care, Real Estate, and Materials sectors. Overall, the style had positive exposure to price momentum, growth, earnings yield, and highly profitable companies, with a smaller size bias.

The Fund continues to focus on companies that we believe have superior earnings growth, return on invested capital, and positive earnings/price momentum combined with a reasonable valuation over a wide spectrum of market capitalizations. We are confident that this combination of characteristics positions the Fund for strong competitive performance in the future.

3

Portfolio Commentary (Unaudited)

Diversified Stock Fund (continued)

Average Annual Total Return

Year Ended December 31, 2019

	Class A Shares
Inception Date		7/1/99
	Net Asset Value			S&P 500® Index1
One Year		28.39	%		31.49	%
Three Year		12.07	%		15.27	%
Five Year		7.22	%		11.70	%
Ten Year		9.79	%		13.56	%
Since Inception		5.68	%		N/A
Expense Ratios
Gross					0.96	%
With Applicable Waivers					0.96	%

Past performance is not indicative of future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month's end, please visit www.vcm.com.

The above expense ratio is from the Fund's prospectus dated April 16, 2019. Additional information pertaining to the Fund's expense ratio as of December 31, 2019 can be found in the financial highlights.

The total return figures set forth above include all waivers of fees for various periods since inception. Without such fee waivers, the total returns would have been lower. Some fee waivers are voluntary and may be modified or terminated at any time. The total returns do not include any insurance, sales or administrative charges of variable annuity or life insurance contracts. If these charges were included, the total returns would have been lower.

Diversified Stock Fund — Growth of $10,000

¹ The S&P 500^® Index is an unmanaged index comprised of 500 domestically traded common stocks, is weighted according to the market value of each common stock in the index, and includes reinvestment of dividends. This index does not include effect of sales charges and is not representative of the Fund. It is not possible to invest directly in an index.

The graph reflects investment of growth of a hypothetical $10,000 investment in the Fund. Past performance is no guarantee of future results.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

4

Victory Variable Insurance Funds  Schedule of Portfolio Investments

Diversified Stock Fund  December 31, 2019

(Amounts in Thousands, Except for Shares)

Security Description	Shares		Value
Common Stocks (97.6%):
Communication Services (11.7%):
Alphabet, Inc., Class C (a)		866	$	1,158
Comcast Corp., Class A		14,084		634
Facebook, Inc., Class A (a)		3,416		701
Nexstar Media Group, Inc., Class A		3,934		461
The Walt Disney Co.		1,924		278
T-Mobile US, Inc. (a)		2,867		225
				3,457
Consumer Discretionary (11.1%):
Aaron's, Inc.		3,029		173
Amazon.com, Inc. (a)		425		785
Dollar General Corp.		997		156
DR Horton, Inc.		7,490		396
Group 1 Automotive, Inc.		1,926		193
LCI Industries		1,674		179
LGI Homes, Inc. (a)		2,532		179
Marriott Vacations Worldwide Corp.		1,385		178
Meritage Homes Corp. (a)		4,736		289
Skechers U.S.A., Inc., Class A (a)		7,306		316
Target Corp.		3,461		443
				3,287
Consumer Staples (6.7%):
PepsiCo, Inc.		2,842		388
The Coca-Cola Co.		7,693		426
The Procter & Gamble Co.		4,617		577
US Foods Holding Corp. (a)		9,885		414
Walmart, Inc.		1,404		167
				1,972
Energy (4.0%):
Chevron Corp.		2,372		286
Exxon Mobil Corp.		5,934		413
Phillips 66		2,223		248
Valero Energy Corp.		2,440		229
				1,176
Financials (13.5%):
Ally Financial, Inc.		12,502		382
Ameriprise Financial, Inc.		2,597		433
Citigroup, Inc.		7,632		610
Discover Financial Services		4,683		397
Essent Group Ltd.		7,443		387
LPL Financial Holdings, Inc.		4,783		441
Meta Financial Group, Inc.		5,032		184
NMI Holdings, Inc., Class A (a)		9,473		314
Primerica, Inc.		3,101		405
Western Alliance Bancorp		7,951		453
				4,006

See notes to financial statements.
5

Victory Variable Insurance Funds  Schedule of Portfolio Investments — continued

Diversified Stock Fund  December 31, 2019

(Amounts in Thousands, Except for Shares)

Security Description	Shares		Value
Health Care (11.8%):
AbbVie, Inc.		6,452	$	572
Anthem, Inc.		1,382		416
Biogen, Inc. (a)		1,164		345
Bristol-Myers Squibb Co.		9,768		627
CVS Health Corp.		3,415		254
HCA Healthcare, Inc.		2,407		356
Jazz Pharmaceuticals PLC (a)		1,859		278
Medtronic PLC		1,169		133
Regeneron Pharmaceuticals, Inc. (a)		773		290
UnitedHealth Group, Inc.		736		216
				3,487
Industrials (9.2%):
Air Lease Corp.		9,439		449
EMCOR Group, Inc.		4,454		384
Federal Signal Corp.		11,504		371
Kansas City Southern		1,124		172
L3Harris Technologies, Inc.		1,752		347
Lockheed Martin Corp.		1,234		480
SkyWest, Inc.		5,151		333
Universal Forest Products, Inc.		4,053		193
				2,729
Information Technology (26.8%):
Adobe, Inc. (a)		694		229
Apple, Inc.		5,636		1,655
Booz Allen Hamilton Holdings Corp.		3,833		273
Broadcom, Inc.		1,265		400
CDW Corp.		3,004		429
Cisco Systems, Inc.		4,732		227
EPAM Systems, Inc. (a)		1,383		293
Euronet Worldwide, Inc. (a)		2,575		406
Fiserv, Inc. (a)		3,593		415
Jabil, Inc.		10,686		442
Mastercard, Inc., Class A		757		226
Microsoft Corp.		10,749		1,695
Oracle Corp.		6,082		322
Visa, Inc., Class A		1,718		323
WNS Holdings Ltd., ADR (a)		6,445		427
Zebra Technologies Corp. (a)		730		186
				7,948
Materials (1.4%):
Vulcan Materials Co.		2,896		417
Real Estate (1.4%):
CBRE Group, Inc., Class A (a)		6,868		421
Total Common Stocks (Cost $22,528)				28,900
Exchange-Traded Fund (2.3%):
SPDR S&P 500 ETF Trust		2,129		685
Total Exchange-Traded Fund (Cost $665)				685
Total Investments (Cost $23,193) — 99.9%				29,585
Other assets in excess of liabilities — 0.1%				33
NET ASSETS — 100.0%			$	29,618

(a)  Non-income producing security.

ADR — American Depositary Receipt

PLC — Public Liability Company

ETF — Exchange-Traded Fund

See notes to financial statements.
6

  Statement of Assets and Liabilities

Victory Variable Insurance Funds  December 31, 2019

(Amounts in Thousands, Except for Per Share Amounts)

	Victory Variable Insurance Diversified Stock Fund
ASSETS:
Investments, at value (Cost $23,193)	$	29,585
Cash and cash equivalents		86
Dividends receivable		15
Prepaid expenses		2
Total Assets		29,688
LIABILITIES:
Payables:
Capital shares redeemed		13
Accrued expenses and other payables:
Investment advisory fees		8
Administration fees		1
Contract owner fees		30
Transfer agent fees		—	(a)
Compliance fees		—	(a)
Trustees' fees		—	(a)
12b-1 fees		3
Other accrued expenses		15
Total Liabilities		70
NET ASSETS:
Capital		21,685
Total distributable earnings/(loss)		7,933
Net Assets	$	29,618
Shares (unlimited number of shares authorized with a par value of $0.001 per share)		2,403
Net asset value, offering price & redemption price per share (b)	$	12.32

(a)  Rounds to less than $1.

(b)  Per share amount may not recalculate due to rounding of net assets and/or shares outstanding.

See notes to financial statements.
7

  Statement of Operations

Victory Variable Insurance Funds  For the Year Ended December 31, 2019

(Amounts in Thousands)  

	Victory Variable Insurance Diversified Stock Fund
Investment Income:
Interest	$	7
Dividends		440
Securities lending (net of fees)		—	(a)
Total Income		447
Expenses:
Investment advisory fees		90
Administration fees		18
Contract owner fees		73
12b-1 fees		75
Custodian fees		2
Transfer agent fees		—	(a)
Trustees' fees		2
Compliance fees		—	(a)
Legal and audit fees		11
Other expenses		27
Total Expenses		298
Net Investment Income (Loss)		149
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains (losses) from investment securities		1,600
Net change in unrealized appreciation/depreciation on investment securities		5,670
Net realized/unrealized gains on investments		7,270
Change in net assets resulting from operations	$	7,419

(a)  Rounds to less than $1.

See notes to financial statements.
8

Victory Variable Insurance Funds  Statements of Changes in Net Assets

(Amounts in Thousands)  

	Victory Variable Insurance Diversified Stock Fund
	Year Ended December 31, 2019			Year Ended December 31, 2018
From Investment Activities:
Operations:
Net investment income (loss)	$	149		$	174
Net realized gains (losses) from investments		1,600			1,594
Net change in unrealized appreciation/depreciation on investments		5,670			(6,154	)
Change in net assets resulting from operations		7,419			(4,386	)
Change in net assets resulting from distributions to shareholders		(1,827	)		(5,921	)
Change in net assets resulting from capital transactions		(4,104	)		(440	)
Change in net assets		1,488			(10,747	)
Net Assets:
Beginning of period		28,130			38,877
End of period	$	29,618		$	28,130
Capital Transactions:
Proceeds from shares issued	$	275		$	235
Dividends reinvested		1,827			5,921
Cost of shares redeemed		(6,206	)		(6,596	)
Change in net assets resulting from capital transactions	$	(4,104	)	$	(440	)
Share Transactions:
Issued		23			17
Reinvested		150			580
Redeemed		(523	)		(451	)
Change in Shares		(350	)		146

See notes to financial statements.
9

Victory Variable Insurance Funds  Financial Highlights

For a Share Outstanding Throughout Each Period

			Investment Activities									Distributions to Shareholders From
	Net Asset Value, Beginning of Period		Net Investment Income (Loss)			Net Realized and Unrealized Gains (Losses) on Investments			Total from Investment Activities			Net Investment Income			Net Realized Gains from Investments
Victory Variable Insurance Diversified Stock Fund
Year Ended December 31, 2019	$	10.22		0.06	(b)		2.82			2.88			(0.06	)		(0.72	)
Year Ended December 31, 2018	$	14.91		0.07	(b)		(2.07	)		(2.00	)		(0.06	)		(2.63	)
Year Ended December 31, 2017	$	12.03		0.09	(b)		3.08			3.17			(0.09	)		(0.20	)
Year Ended December 31, 2016	$	12.75		0.13	(b)		0.37			0.50			(0.13	)		(1.09	)
Year Ended December 31, 2015	$	15.15		0.09			(0.53	)		(0.44	)		(0.09	)		(1.87	)

(a)  Total returns do not include any insurance, sales, or administrative charges of variable annuity or life insurance contracts. If these charges were included,
the returns would be lower.

(b)  Per share net investment income (loss) has been calculated using the average daily shares method.

See notes to financial statements.
10

Victory Variable Insurance Funds  Financial Highlights — continued

For a Share Outstanding Throughout Each Period

									Ratios to Average Net Assets									Supplemental Data
	Total Distributions			Net Asset Value, End of Period		Total Return(a)			Net Expenses			Net Investment Income (Loss)			Gross Expenses			Net Assets, End of Period (000's)		Portfolio Turnover
Victory Variable Insurance Diversified Stock Fund
Year Ended December 31, 2019		(0.78	)	$	12.32		28.39	%		0.99	%		0.50	%		0.99	%	$	29,618		113	%
Year Ended December 31, 2018		(2.69	)	$	10.22		(13.30	)%		0.96	%		0.50	%		0.96	%	$	28,130		114	%
Year Ended December 31, 2017		(0.29	)	$	14.91		26.45	%		0.94	%		0.68	%		0.94	%	$	38,877		138	%
Year Ended December 31, 2016		(1.22	)	$	12.03		3.90	%		1.08	%		1.06	%		1.08	%	$	33,987		86	%
Year Ended December 31, 2015		(1.96	)	$	12.75		(3.11	)%		1.14	%		0.56	%		1.14	%	$	38,441		78	%

See notes to financial statements.
11

  Notes to Financial Statements

Victory Variable Insurance Funds  December 31, 2019

1.  Organization:

Victory Variable Insurance Funds (the "Trust") was organized on February 11, 1998 as a Delaware statutory trust. The Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified open-end investment company. The Trust is comprised of nine funds and is authorized to issue an unlimited number of shares, which are units of beneficial interest with a par value of $0.001 per share.

The accompanying financial statements are those of the Victory Variable Insurance Diversified Stock Fund (the "Fund"). The Fund offers a single class of shares: Class A Shares. Sales of shares of the Fund may only be made to separate accounts of various life insurance companies. The Fund seeks to provide long-term growth of capital.

Under the Trust's organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with its vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund. However, based on experience, the Fund expects that risk of loss to be remote.

2.  Significant Accounting Policies:

The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies.

Investment Valuation:

The Fund records investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for valuing the Fund's investments are summarized in the three broad levels listed below:

• Level 1 — quoted prices in active markets for identical securities

• Level 2 — other significant observable inputs (including quoted prices for similar securities or interest rates applicable to those securities, etc.)

• Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The inputs or methodologies used for valuation techniques are not necessarily an indication of the risk associated with entering into those investments.

Portfolio securities listed or traded on securities exchanges, including exchange-traded funds ("ETF") American Depositary Receipts ("ADRs") and Rights, are valued at the closing price on the exchange or system where the security is principally traded, if available, or at the Nasdaq Official Closing Price. If there have been no sales for that day on the exchange or system, then a security is valued at the last available bid quotation on the exchange or system where the security is principally traded. In each of these situations, valuations are typically categorized as Level 1 in the fair value hierarchy.

Investments for which there are no such quotations, or for which quotations do not appear reliable, are valued at fair value in accordance with procedures established by and under the general supervision and responsibility of the Trust's Board of Trustees (the "Board"). These valuations are typically categorized as Level 2 or Level 3 in the fair value hierarchy, based on the observability of inputs used to determine the fair value.

A summary of the valuations as of December 31, 2019, based upon the three levels defined above, is included in the table below while the breakdown, by category, of investments is disclosed in the Schedule of Portfolio Investments (amounts in thousands).

	LEVEL 1		Total
Common Stocks	$	28,900	$	28,900
Exchange-Traded Funds		685		685
Total	$	29,585	$	29,585

For the year ended December 31, 2019, there were no Level 3 investments for which significant unobservable inputs were used to determine fair value.

12

  Notes to Financial Statements — continued

Victory Variable Insurance Funds  December 31, 2019

Investment Companies:

The Fund may invest in ETFs. Shares of an ETF are bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The Fund may purchase shares of an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity of an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.

Investment Transactions and Related Income:

Changes in holdings of investments are accounted for no later than one business day following the trade date. For financial reporting purposes, however, investment transactions are accounted for on trade date on the last business day of the reporting period. Interest income is determined on the basis of coupon interest accrued using the effective interest method which adjusts, where applicable, the amortization of premiums or accretion of discounts. Dividend income is recorded on the ex-dividend date. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.

Withholding taxes on interest, dividends and gains as a result of certain investments in ADRs by the Fund have been provided for in accordance with each investment's applicable country's tax rules and rates.

Securities Lending:

The Trust has entered into a Master Securities Lending Agreement ("MSLA") with Citibank, N.A. ("Citibank" or the "Agent"). Under the terms of the MSLA, the Fund may lend securities to certain broker-dealers and banks in exchange for collateral in the amount of at least 102% of the value of U.S. securities loaned or at least 105% of the value of non-U.S. securities loaned, marked-to-market daily. Any collateral shortfalls associated with increases in the valuation of the securities loaned are adjusted the next business day. The collateral can be received in the form of cash collateral and/or non-cash collateral. Non-cash collateral can include U.S. Government Securities, letters of credit and certificates of deposit. The cash collateral is invested in short-term instruments or cash equivalents as noted on the Fund's Schedule of Portfolio Investments. The Trust does not have effective control of the non-cash collateral and therefore it is not disclosed in the Fund's Schedule of Portfolio Investments. The Fund continues to benefit from interest or dividends on the securities loaned and may also earn a return from the collateral. The Fund pays various fees in connection with the investment of cash collateral. The Fund pays the Agent fees based on the investment income received from securities lending activities. Securities lending income is disclosed in the Fund's Statement of Operations. Although risk is mitigated by the collateral, the Fund could experience a delay in recovering its securities and possible loss of income or value if the borrower fails to return them.

Securities lending transactions are entered into by the Fund under the MSLA, which permits the Fund, under certain circumstances such as an event of default, to offset amounts payable by the Fund to the same counterparty against amounts receivable from the counterparty to create a net payment due to or from the Fund.

As of December 31, 2019, the Fund did not have any securities on loan.

Distributions to Shareholders:

Dividends from net investment income, if any, are declared and paid quarterly by the Fund. Distributable net realized gains, if any, are declared and distributed at least annually.

The amounts of dividends from net investment income and distributions from net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. To the extent these "book/tax" differences are permanent in nature (e.g., net operating loss and distribution reclassification), such amounts are reclassified within the components of net assets based on their federal tax-basis treatment; temporary differences (e.g., wash sales) do not require reclassification. To the extent dividends and distributions exceed net investment income and net realized gains for tax purposes, they are reported as distributions of capital. Net investment losses incurred by the Fund may be reclassified as an offset to capital on the accompanying Statement of Assets and Liabilities.

As of December 31, 2019, on the Statement of Assets and Liabilities, there were no permanent book-to-tax difference reclassification adjustments.

Federal Income Taxes:

It is the policy of the Fund to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of net investment income and net realized gains sufficient to relieve it from all, or substantially all, federal income taxes. Accordingly, no provision for federal income taxes is required in the financial statements. The Fund has a tax year end of December 31.

Management of the Fund has reviewed tax positions taken in tax years that remain subject to examination by all major tax jurisdictions, including federal (i.e., all open tax years and the interim tax period since then). Management believes that there is no tax liability resulting from unrecognized tax benefits related to uncertain tax positions taken.

13

  Notes to Financial Statements — continued

Victory Variable Insurance Funds  December 31, 2019

Allocations:

Expenses directly attributable to the Fund are charged to the Fund, while expenses which are attributable to more than one fund in the Trust, or jointly with an affiliated trust, are allocated among the respective funds in the Trust and/or affiliated trust based upon net assets or another appropriate basis.

Cross-Trade Transactions:

Pursuant to Rule 17a-7 under the 1940 Act, the Fund may engage in cross-trades which are securities transactions with affiliated investment companies and advisory accounts managed by the Adviser and any applicable sub-adviser. Any such purchase or sale transaction must be effected without brokerage commission or other remuneration, except for customary transfer fees. The transaction must be effected at the current market price, which is either the security's last sale price on an exchange or, if there are no transactions in the security that day, at the average of the highest bid and lowest asked price. For the year ended December 31, 2019, the Fund did not engage in any Rule 17a-7 transactions under the 1940 Act.

3.  Purchases and Sales of Securities:

Purchases and sales of securities (excluding securities maturing less than one year from acquisition) for the year ended December 31, 2019 were as follows for the Fund (amounts in thousands):

Purchases		Sales
$	33,385	$	38,728

For the year ended December 31, 2019, there were no purchases or sales of U.S. government securities.

4.  Fees and Transactions with Affiliates and Related Parties:

Investment advisory services are provided to the Fund by Victory Capital Management Inc. ("VCM" or the "Adviser"), a New York corporation registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Adviser is a wholly owned indirect subsidiary of Victory Capital Holdings, Inc., a publicly traded Delaware corporation, and a wholly owned direct subsidiary of Victory Capital Operating, LLC.

Under the terms of the Investment Advisory Agreements, the Adviser is entitled to receive 0.30% of the average daily net assets of the Fund. The Adviser may use its resources to assist with the Fund's distribution and marketing expenses.

VCM also serves as the Fund's administrator and fund accountant. Under an Administration and Fund Accounting Agreement, VCM is paid for its services an annual fee at a rate of 0.08% of the first $15 billion in average daily net assets of the Trust, Victory Portfolios and Victory Portfolios II (collectively, the "Victory Funds Complex"), 0.05% of the average daily net assets above $15 billion to $30 billion of the Victory Funds Complex and 0.04% of the average daily net assets over $30 billion of the Victory Funds Complex.

Citi Fund Services Ohio, Inc. ("Citi"), an affiliate of Citibank, acts as sub-administrator and sub-fund accountant to the Fund pursuant to a Sub-Administration and Sub-Fund Accounting Services Agreement between VCM and Citi. VCM pays Citi a fee for providing these services. The Trust reimburses VCM and Citi for all of their reasonable out-of-pocket expenses incurred in providing these services.

FIS Investor Services, LLC ("FIS") serves as the Fund's transfer agent. Under the Transfer Agent Agreement, the Trust pays FIS a fee for its services and reimburses FIS for all of their reasonable out-of-pocket expenses incurred in providing these services.

The Chief Compliance Officer ("CCO") is an employee of the Adviser, which pays the compensation of the CCO and his support staff. The Trust has entered into an Agreement to provide compliance services with the Adviser, pursuant to which the Adviser furnishes its compliance personnel, including the services of the CCO, and other resources reasonably necessary to provide the Trust with compliance oversight services related to the design, administration and oversight of a compliance program for the Trust in accordance with Rule 38a-1 under the 1940 Act. The Funds in the Victory Funds Complex, in aggregate, compensate the Adviser for these services.

The Victory Funds Complex pays an annual retainer to each Independent Trustee, plus an additional annual retainer to the Chairman of the Board. The aggregate amount of the fees and expenses of the Independent Trustees are allocated amongst all the funds in the Victory Funds Complex and are presented in the Statement of Operations.

Shearman & Sterling LLP provides legal services to the Trust.

Victory Capital Advisers, Inc. (the "Distributor"), an affiliate of the Adviser, serves as distributor for the continuous offering of the shares of the Fund pursuant to a Distribution Agreement between the Distributor and the Trust.

Pursuant to the Trust's Distribution and Service Plans adopted in accordance with Rule 12b-1 under the 1940 Act, the Distributor may receive a monthly distribution and service fee, at an annual rate of 0.25% of the average daily net assets of the Fund. The Distributor may pay a 12b-1 fee to life insurance companies for activities primarily intended to result in the sale of Fund shares to life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies or to provide services to owners

14

  Notes to Financial Statements — continued

Victory Variable Insurance Funds  December 31, 2019

of variable annuity contracts and variable life insurance policies whose contracts or policies are funded with shares of the Fund, which services are not otherwise provided by life insurance companies and paid for with fees charged by life insurance companies. The Distributor re-allowed all except for approximately $1 thousand to life insurance companies to provide these services.

The Fund has entered into Contract Owner Administrative Services Agreements with certain contract owner servicing agents. A contract owner servicing agent performs a number of services for its customers who hold contracts offered by separate accounts that invest in the Fund, such as establishing and maintaining accounts and records, processing additional contract units attributable to Fund dividend payments, arranging for bank wires, assisting in transactions, and changing account information. For these services, Class A Shares of the Fund pay a fee at an annual rate of up to 0.25% of its average daily net assets serviced by the agent. The Fund may enter into these agreements with financial institutions that provide such services. Contract owner servicing agents may waive all or a portion of their fee. (Not all agents may provide all services listed above.)

The Adviser may voluntarily waive or reimburse additional fees to assist the Fund in maintaining a competitive expense ratio. Voluntary waivers and reimbursements applicable to the Fund are not available to be recouped at a future time. There were no voluntary waivers or reimbursements for the year ended December 31, 2019.

Certain officers and/or interested trustees of the Fund are also officers and/or employees of the Adviser, Administrator, Fund Accountant, Sub-Administrator, Sub-Fund Accountant and Legal Counsel.

5.  Risks:

The Fund may be subject to other risks in addition to these identified risks.

An investment in the Fund's shares represents an indirect investment in the securities owned by the Fund, some of which will be traded on a national securities exchange or in the over-the-counter markets. The value of the securities in which the Fund invests, like other market investments, may move up or down, sometimes rapidly and unpredictably. The value of the securities in which the Fund invests may affect the value of the Fund's shares. An investment in the Fund's shares at any point in time may be worth less than the original investment, even after taking into account the reinvestment of the Fund's distributions.

The Fund will be subject to credit risk with respect to the amount it expects to receive from counterparties for financial instruments entered into by the Fund. The Fund may be negatively impacted if a counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties. The Fund may experience significant delays in obtaining any recovery in bankruptcy or other reorganization proceeding and the Fund may obtain only limited recovery or may obtain no recovery in such circumstances. The Fund typically enters into transactions with counterparties whose credit ratings are investment grade, as determined by a nationally recognized statistical rating organization or, if unrated, judged by the Adviser to be of comparable quality.

6.  Borrowing and Interfund Lending:

Line of Credit:

For the year ended December 31, 2019, the Victory Funds Complex participated in a short-term, demand note "Line of Credit" with Citibank. Under the agreement with Citibank, for the period January 1, 2019 to June 30, 2019, the Victory Funds Complex could borrow up to $250 million, of which $100 million was committed and $150 million was uncommitted. Effective July 1, 2019, the agreement was amended to include the USAA Mutual Funds Complex (another series of mutual funds managed by the Adviser) and has a new termination date of June 29, 2020. Under this amended agreement, the Victory Funds Complex and USAA Mutual Funds Complex, combined, may borrow up to $600 million, of which $300 million is committed and $300 million is uncommitted. $40 million of the Line of Credit is reserved for use by the Victory Floating Rate Fund (herein, the "Fund"), another series of the Victory Funds Complex, with that Fund paying the related commitment fees for that amount. The purpose of the agreement is to meet temporary or emergency cash needs, including redemption requests that might otherwise require the untimely disposition of securities. With the agreement in effect for the period January 1, 2019 to June 30, 2019, Citibank received an annual commitment fee of 0.15% on $100 million for providing the Line of Credit. For the period July 1, 2019 to December 31, 2019, Citibank received an annual commitment fee of 0.15% on $300 million for providing the Line of Credit. For the year ended December 31, 2019, Citibank earned approximately $300 thousand in commitment fees from the combined Victory Funds Complex and USAA Mutual Funds Complex. Each fund in the Victory Funds Complex and the USAA Mutual Funds Complex pays a pro-rata portion of the commitment fees plus any interest (one month LIBOR plus one percent) on amounts borrowed. Interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Line of credit fees.

The Fund did not utilize the Line of Credit during the year ended December 31, 2019.

Interfund Lending:

The Trust and Adviser rely on an exemptive order granted by the SEC in March 2017 (the "Order"), permitting the establishment and operation of an Interfund Lending Facility (the "Facility"). The Facility allows the Fund to directly lend and borrow money to or from any other Victory Fund relying upon the Order at rates beneficial to both the borrowing and lending funds. Advances under the Facility

15

  Notes to Financial Statements — continued

Victory Variable Insurance Funds  December 31, 2019

are allowed for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities, and are subject to each fund's borrowing restrictions. The interfund loan rate is determined, as specified in the Order, by averaging the current repurchase agreement rate and the current bank loan rate. As a Borrower, interest charged to the Fund during the period, if applicable, is presented on the Statement of Operations under Interfund lending fees. As a Lender, interest earned by the Fund during the period, if applicable, is presented on the Statement of Operations under Income on interfund lending.

The Fund did not utilize the Facility during the year ended December 31, 2019.

7.  Federal Income Tax Information:

The tax character of distributions paid during the most recent tax years ended, as noted below, were as follows (total distributions paid may differ from the Statements of Changes in Net Assets because, for tax purposes, dividends are recognized when actually paid) (amounts in thousands):

Year Ended December 31, 2019 Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	384	$	1,443	$	1,827
Year Ended December 31, 2018 Distributions paid from
Ordinary Income		Net Long-Term Capital Gains		Total Distributions Paid
$	2,582	$	3,339	$	5,921

As of December 31, 2019, the components of accumulated earnings/(deficit) on a tax basis were as follows (amounts in thousands):

Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Accumulated Earnings		Accumulated Capital and Other Losses		Unrealized Appreciation/ (Depreciation)		Total Accumulated Earnings (Deficit)
$	518	$	1,056	$	1,574		—	$	6,359	$	7,933

During the most recent tax year ended December 31, 2019, the Fund did not utilize capital loss carryforwards.

At December 31, 2019, the cost basis for federal income tax purposes, gross unrealized appreciation, gross unrealized depreciation and net unrealized appreciation (depreciation) for investments and derivatives were as follows (amounts in thousands):

Cost of Investments for Federal Tax Purposes		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
$	23,226	$	6,549	$	(190	)	$	6,359

16

  Notes to Financial Statements — continued

Victory Variable Insurance Funds  December 31, 2019

8.  Fund Ownership:

Ownership of more than 25% of the voting securities of a fund creates presumptions of control of the Fund, under section 2(a)(9) of the 1940 Act. As of December 31, 2019, the shareholder listed below held more than 25% of the shares outstanding of the Fund and may be deemed to control the Fund.

Shareholder	Percent
NYLIAC		89.6	%

9.  Subsequent Events:

The Fund has evaluated the need for additional disclosures or adjustments resulting from subsequent events through the date these financial statements were issued. Based on this evaluation, there were no subsequent events to report that would have a material impact on the Fund's financial statements.

17

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Trustees of Victory Variable Insurance Funds

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of portfolio investments, of Victory Variable Insurance Diversified Stock Fund (the "Fund"), a series of Victory Variable Insurance Funds, as of December 31, 2019, the related statements of operations and changes in net assets, including the related notes, and the financial highlights for the year then ended (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2019, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The Fund's financial statements and financial highlights for the years ended December 31, 2018 and prior, were audited by other auditors whose report dated February 15, 2019, expressed an unqualified opinion on those financial statements and financial highlights.

Basis for Opinion

These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2019, by correspondence with the custodian. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

We have served as the auditor of one or more of the investment companies advised by Victory Capital Management, Inc. since 2015.

COHEN & COMPANY, LTD.
Cleveland, Ohio
February 18, 2020

18

  Supplemental Information

Victory Variable Insurance Funds  December 31, 2019

(Unaudited)

Trustee and Officer Information

Board of Trustees:

Overall responsibility for management of the Trust rests with the Board. The Trust is managed by the Board in accordance with the laws of the State of Delaware. There are currently ten Trustees, nine of whom are not "interested persons" of the Trust within the meaning of that term under the 1940 Act ("Independent Trustees") and one of whom is an "interested person" of the Trust within the meaning of that term under the 1940 Act ("Interested Trustee"). The Trustees, in turn, elect the officers of the Trust to actively supervise its day-to-day operations. The following tables list the Trustees, their ages, position with the Trust, commencement of service, principal occupations during the past five years and any directorships of other investment companies or companies whose securities are registered under the Securities Exchange Act of 1934, as amended, or who file reports under that Act. Each Trustee oversees nine portfolios in the Trust, 42 portfolios in Victory Portfolios and 26 portfolios in Victory Portfolios II, each a registered investment company that, together with the Trust, comprise the Victory Funds Complex. Each Trustee's address is c/o Victory Variable Insurance Funds, 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. Each Trustee has an indefinite term.

Name and Age	Position Held with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years	Other Directorships Held During Past 5 Years
Independent Trustees.
David Brooks Adcock, 68	Trustee	February 2005	Consultant (since 2006).	Chair and Trustee, Turner Funds (December 2016-December 2017).
Nigel D.T. Andrews, 72	Vice Chair and Trustee	August 2002	Retired.	Director, TCG BDC II, Inc. (since 2017); Director, TCG BDC I, Inc. (formerly Carlyle GMS Finance, Inc.) (since 2012); Director, Old Mutual US Asset Management (2002-2014).
E. Lee Beard, 68*	Trustee	February 2005	Retired (since 2015); Consultant, The Henlee Group, LLC (consulting) (2005-2015).	None.
Dennis M. Bushe, 76	Trustee	July 2016	Retired.	Trustee, RS Investment Trust and RS Variable Products Trust (November 2011-July 2016).
Sally M. Dungan, 65	Trustee	February 2011	Chief Investment Officer, Tufts University (since 2002).	None.
John L. Kelly, 66	Trustee	February 2015	Partner, McCarvill Capital Partners (September 2016-September 2017); Advisor, Endgate Commodities LLC (January 2016-April 2016); Managing Partner, Endgate Commodities LLC (August 2014-January 2016); Chief Operating Officer, Liquidnet Holdings, Inc. (December 2011-July 2014).	Director, Caledonia Mining Corporation (since May 2012).
David L. Meyer, 62*	Trustee	December 2008	Retired.	None.
Gloria S. Nelund, 58	Trustee	July 2016	Chair, CEO and Co-Founder of TriLinc Global, LLC, an investment firm.	TriLinc Global Impact Fund, LLC (since 2012); Trustee, RS Investment Trust and RS Variable Products Trust (November 2007-July 2016).
Leigh A. Wilson, 75	Chair and Trustee	February 1998	Private Investor.	Chair (since 2013), Caledonia Mining Corporation.
Interested Trustee.
David C. Brown, 47**	Trustee	May 2008	Chairman and Chief Executive Officer (since 2013), Co-Chief Executive Officer (2011-2013), the Adviser; Chairman and Chief Executive Officer, Victory Capital Holdings, Inc. (since 2013).	USAA Mutual Funds Trust.

*  The Board has designated Mr. Meyer and Ms. Beard as its Audit Committee Financial Experts.

**  Mr. Brown is an "Interested Person" by reason of his relationship with the Adviser.

The Statement of Additional Information includes additional information about the Trustees of the Trust and is available, without charge, by calling 800-539-3863.

19

  Supplemental Information — continued

Victory Variable Insurance Funds  December 31, 2019

(Unaudited)

Officers:

The officers of the Trust, their ages, commencement of service and their principal occupations during the past five years, are detailed in the following table. Each officer serves until the earlier of his or her resignation, removal, retirement, death, or the election of a successor. The mailing address of each officer of the Trust is 4900 Tiedeman Road, 4th Floor, Brooklyn, Ohio 44144. The officers of the Trust receive no compensation directly from the Trust for performing the duties of their offices.

Name and Age	Position with the Trust	Date Commenced Service	Principal Occupation During Past 5 Years
Christopher K. Dyer, 58	President	February 2006*	Director of Fund Administration, the Adviser.
Scott A. Stahorsky, 50	Vice President	December 2014	Manager, Fund Administration, the Adviser (since 2015); Senior Analyst, Fund Administration, the Adviser (prior to 2015).
Erin G. Wagner, 46	Secretary	December 2014	Associate General Counsel, the Adviser (since 2013).
Allan Shaer, 54	Treasurer	May 2017	Senior Vice President, Financial Administration, Citi Fund Services Ohio, Inc. (since 2016); Vice President, Mutual Fund Administration, JP Morgan Chase (2011-2016).
Christopher A. Ponte, 35	Assistant Treasurer	December 2017	Manager, Fund Administration, the Adviser (since 2017); Senior Analyst, Fund Administration, the Adviser (prior to 2017); Chief Financial Officer, Victory Capital Advisers, Inc. (since 2018).
Colin Kinney, 46	Chief Compliance Officer	July 2017	Chief Compliance Officer (since 2013) and Chief Risk Officer (2009-2017), the Adviser.
Chuck Booth, 59	Anti-Money Laundering Compliance Officer and Identity Theft Officer	May 2015	Director, Regulatory Administration and CCO Support Services, Citi Fund Services Ohio, Inc.
Jay G. Baris, 66	Assistant Secretary	February 1998	Partner, Shearman & Sterling LLP (since 2018); Partner, Morrison & Foerster LLP (2011-January 2018).

* On December 3, 2014, Mr. Dyer resigned as Secretary of the Trust and accepted the position of President.

20

  Supplemental Information — continued

Victory Variable Insurance Funds  December 31, 2019

(Unaudited)

Proxy Voting and Portfolio Holdings Information

Proxy Voting:

Information regarding the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 800-539-3863. The information is also included in the Fund's Statement of Additional Information, which is available on the SEC's website at www.sec.gov.

Information relating to how the Fund voted proxies relating to portfolio securities held during the most recent twelve months ended June 30 is available on the SEC's website at www.sec.gov.

Availability of Schedules of Portfolio Investments:

The Trust files a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-PORT. Prior to the implementation of Form N-PORT, the Trust filed a complete list of Schedules of Portfolio Investments with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-PORT and Forms N-Q are available on the SEC's website at www.sec.gov.

Expense Examples

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2019 through December 31, 2019.

The Actual Expense figures in the table below provide information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Actual Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

The Hypothetical Expense figures in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.

Please note the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Beginning Account Value 7/1/19		Actual Ending Account Value 12/31/19		Hypothetical Ending Account Value 12/31/19		Actual Expenses Paid During Period 7/1/19-12/31/19*		Hypothetical Expenses Paid During Period 7/1/19-12/31/19*		Annualized Expense Ratio During Period 7/1/19-12/31/19
$	1,000.00	$	1,107.10	$	1,020.01	$	5.47	$	5.24		1.03	%

*  Expenses are equal to the average account value multiplied by the Fund's annualized expense ratio multiplied by 184/365 (the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year).

21

  Supplemental Information — continued

Victory Variable Insurance Funds  December 31, 2019

(Unaudited)

Additional Federal Income Tax Information

For the year ended December 31, 2019, the Fund paid qualified dividend income for the purposes of reduced individual federal income tax rates of 24%.

Dividends qualified for corporate dividends received deductions of 24%.

For the year ended December 31, 2019, the Fund designated short-term and long-term capital gain distributions in the amount of $219 and $1,443, respectively.

22

  Supplemental Information — continued

Victory Variable Insurance Funds  December 31, 2019

(Unaudited)

Considerations of the Board in Continuing the Investment Advisory Agreement (the "Agreement")

The Board approved the Agreement on behalf of the Fund at an in-person meeting, which was called for that purpose, on December 4, 2019. The Board also considered information relating to the Fund and the Agreement provided throughout the year and, more specifically, at a meeting on October 22, 2019. In considering whether to approve the Agreement, the Board requested, and the Adviser provided, information that the Board believed to be reasonably necessary to reach its conclusions.

The Board, including the Independent Trustees, evaluated this information along with other information obtained throughout the year and was advised by legal counsel to the Fund, which also serves as independent legal counsel to the Independent Trustees. In addition, in 2017 the Independent Trustees, through their counsel, retained an independent consultant to assist with a review of the overall process for conducting the annual review of these advisory arrangements.

The Board considered the Fund's advisory fee, expense ratio and investment performance as significant factors in determining whether the Agreement should be continued. In considering whether the compensation paid to the Adviser was fair and reasonable, the Board also evaluated, among other things, the following factors:

•  The requirements of the Fund for the services provided by the Adviser;

•  The nature, quality and extent of the services provided and expected to be provided;

•  The performance of the Fund as compared to comparable funds;

•  The fees payable for the services and whether the fee arrangements provided for economies of scale that would benefit Fund shareholders as the Fund grows;

•  Whether the fee would be sufficient to enable the Adviser to attract and retain experienced personnel and continue to provide quality services to the Fund;

•  The fees paid by other clients of the Adviser whose accounts are managed in a similar investment style and any differences in the services provided to the other clients compared to those provided to the Fund;

•  The total expenses of the Fund, taking into consideration any distribution or shareholder servicing fees;

•  Management's commitment to operating the Fund at competitive expense levels;

•  The profitability of the Adviser (as reflected by comparing fees earned against an estimate of the Adviser's costs) with respect to the Adviser's relationship with the Fund;

•  Research and other service benefits received by the Adviser obtained through payment of client commissions for securities transactions;

•  Other benefits received by the Adviser, and its affiliates, including revenues paid to the Adviser, or its affiliates, by the Fund for administration and fund accounting services, and distribution;

•  The capabilities and financial condition of the Adviser;

•  Current economic and industry trends; and

•  The historical relationship between the Fund and the Adviser.

The Board reviewed the Fund's current management fee, comprised of the advisory fee plus the administrative services fee paid to the Adviser, in the context of the Adviser's profitability with respect to the Fund. In addition, the Board compared the Fund's total operating expense ratio on a net and gross basis, taking into consideration any distribution or shareholder servicing fees and management fees with a universe of comparable mutual funds compiled by an independent consultant and a peer group of funds with similar investment strategies selected by that independent consultant from the universe. The Board reviewed the factors and methodology used by the independent consultant in the selection of the Fund's peer group, including the independent consultant's selection of a broad universe of funds, the more specific universe of comparable funds, and peer groups of funds with comparable investment strategies and asset levels, among other factors. The Board also reviewed any changes to the independent consultant's methodology as compared to the prior year, including resulting from the Adviser's input, if any. With respect to the Fund, the Board also reviewed fees and other information related to the Adviser's management of similarly managed institutional or private accounts, and the differences in the services provided to the other accounts. The Board noted that the advisory fee arrangements for the Fund do not include breakpoints, which are generally viewed as a method by which the investment adviser shares any economies of scale with a fund as a fund grows.

The Board reviewed the Fund's performance over one-, three-, five- and ten-year periods against the performance of the Fund's selected peer group and benchmark index. The Board recognized that the performance of the Fund and the peer group funds are net of expenses, while the performance of the benchmark index reflects gross returns. The Board considered the additional resources that the Adviser has committed to enhance portfolio analysis, compliance and trading systems.

The Board reviewed various other specific factors with respect to the Fund, as described below. In their deliberations, the Trustees did not rank the importance of any particular information or factor considered and each Trustee may have attributed different weights to various factors.

The Board concluded that the Fund's gross annual management fee was reasonable as compared to the median gross management fee charged to the funds in the Fund's peer group. The Board noted that the Fund's Class A net annual expense ratio, taking into account any shareholder servicing or distribution fees, was reasonable as compared to the median expense ratio for the peer group. The Board then compared the Fund's Class A performance for the one-, three-, five- and ten-year periods ended June 30, 2019, to that of the median performance of the peer group and benchmark index for the same periods and considered the fact that the Fund underperformed both the benchmark index and the peer group median for all of the periods reviewed. The Board discussed the Fund's investment strategy, the Adviser's implementation of the strategy, and related market conditions, together with relevant fee and expense considerations. The Board also discussed the steps that had been or could be taken by the Adviser to enhance performance in the future, and the Board's continued monitoring of the Fund's performance.

Having considered, among other things: (1) that the Fund's management fee was within the ranges of advisory fees charged to comparable mutual funds; (2) that the Fund's total expense ratio was reasonable; and (3) the performance of the Fund, the Board concluded that the Agreement continued to be in the best interests of the Series' shareholders.

23

  Supplemental Information — continued

Victory Variable Insurance Funds  December 31, 2019

(Unaudited)

Conclusion

Based on its review of the information requested and provided, and following extended discussions, the Board determined that the Agreement, on behalf of the Fund, was consistent with the best interests of the Fund and its shareholders, and the Board unanimously approved the Agreement, on behalf of the Fund, for an additional annual period on the basis of the foregoing review and discussions and the following considerations, among others:

•  The fairness and reasonableness of the investment advisory fee payable to the Adviser under the Agreement in light of the investment advisory services provided, the costs of these services, the profitability of the Adviser's relationship with the Fund and the comparability of the fee paid to the fees paid by other investment companies;

•  The nature, quality and extent of the investment advisory services provided by the Adviser;

•  The Adviser's entrepreneurial commitment to the management of the Fund and the creation of a broad-based family of funds, which could entail a substantial commitment of the Adviser's resources to the successful operation of the Fund;

•  The Adviser's representations regarding its staffing and capabilities to manage the Fund, including the retention of personnel with relevant portfolio management experience;

•  The Adviser's efforts to enhance investment results by, among other things, developing quality portfolio management teams; and

•  The overall high quality of the personnel, operations, financial condition, investment management capabilities, methodologies and performance of the Adviser.

24

Privacy Policy

Protecting the Privacy of Information

The Trust respects your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain personal information about you. This is the information we collect from you on applications or other forms, and from the transactions you make with us or third parties. It may include your name, address, social security number, account transactions and balances, and information about investment goals and risk tolerance.

We do not disclose any information about you or about former customers to anyone except as permitted or required by law. Specifically, we may disclose the information we collect to companies that perform services on our behalf, such as the transfer agent that processes shareholder accounts and printers and mailers that assist us in the distribution of investor materials. We may also disclose this information to companies that perform marketing services on our behalf. This allows us to continue to offer you Victory investment products and services that meet your investing needs, and to effect transactions that you request or authorize. These companies will use this information only in connection with the services for which we hired them. They are not permitted to use or share this information for any other purpose.

To protect your personal information internally, we permit access only by authorized employees and maintain physical, electronic and procedural safeguards to guard your personal information.*

*  You may have received communications regarding information about privacy policies from other financial institutions which gave you the opportunity to "opt-out" of certain information sharing with companies which are not affiliated with that financial institution. The Trust does not share information with other companies for purposes of marketing solicitations for products other than the Trust. Therefore, the Trust does not provide opt-out options to their shareholders.

Visit our web site at:
www.vcm.com Call Victory at:
800-539-FUND (800-539-3863)

VF-VIDS-AR (12/19)

Item 2.  Code of Ethics.

(a) The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. This code of ethics is included as an Exhibit.

(b) During the period covered by the report, with respect to the registrant’s code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions; there have been no amendments to, not any waivers granted from, a provision that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item 2.

Item 3.  Audit Committee Financial Experts.

(a)(1) The registrant’s board of directors has determined that the registrant has at least one audit committee financial expert serving on its audit committee.

(a)(2) The audit committee financial experts are David L. Meyer and E. Lee Beard, who are “independent” for purposes of this Item 3 of Form N-CSR.

Item 4.  Principal Accountant Fees and Services.

	2019		2018
Audit Fees(1)	$	123,000	$	164,970
Audit-Related Fees(2)	0		0
Tax Fees(3)	37,000		42,937
All Other Fees(4)	0		0

(1)Audit fees include amounts related to the audit of the Registrant’s annual financial statements, security counts and services normally provided by the accountant in connection with statutory and regulatory filings. Audit fees billed were for professional services provided by the Funds’ independent registered public accounting firm for audit compliance, audit advice and audit planning.

(2)Represents the fee for assurance and related services by the Funds’ independent registered public accounting firm reasonably related to the performance of the audit of the Registrant’s financial statements that was not reported under (a) of this item.

(3)Represents the aggregate tax fee billed for professional services rendered by the Funds’ independent registered public accounting firm for tax compliance, tax advice and tax planning. Such tax services included the review of income and excise tax returns for the Registrant.

(4)For fiscal years ended December 31, 2019 and December 31, 2018, there were no fees billed for professional services rendered by the Funds’ independent registered public accounting firm to the Registrant, other than the services reported in (a) through (c) of this item.

Tax fees for 2019 and 2018 are for recurring tax fees for the preparation of the federal and state tax returns.

(e)(1) The Registrant’s Audit Committee must pre-approve non-audit services to be provided by the principal accountant and the fees charged for these services. The Committee may delegate authority to one or more Committee members to pre-approve these services, subject to subsequent review and approval by the Committee.

(e)(2) There were no services performed under Rule 2.01 (c)(7)(i)(C)

(f) Not applicable.

(g)

2019	$	—
2018	$	133,280

(h) The Registrant’s Audit Committee has evaluated the non-audit services that the principal accountant provided to the registrant’s investment adviser (and the adviser’s relevant affiliates), which services the Committee did not pre-approve, and has concluded that the provision of those services was compatible with maintaining the accountant’s independence.

Item 5.  Audit Committee of Listed Registrants.

Not applicable.

Item 6.  Investments.

(a)           Not applicable.

(b)           Not applicable.

Item 7.  Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8.  Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9.  Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10.  Submission of Matters to a Vote of Security Holders.

Not applicable.

Item 11.  Controls and Procedures.

(a) The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant’s disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by

the registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that have materially affected or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

(a)(1) Not applicable.

(a)(2) Not applicable.

(a)(3) Not applicable.

(a)(4) Not applicable.

(b)      Not applicable.

Item 13. Exhibits.

(a)(1) The code of ethics that is the subject of the disclosure required by Item 2 is attached hereto.

(a)(2) Certifications pursuant to Rule 30a-2(a) are attached hereto.

(a)(3) Not applicable.

(b) Certifications pursuant to Rule 30a-2(b) are furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant)		Victory Variable Insurance Funds
By (Signature and Title)*			/s/ Allan Shaer
			Allan Shaer, Principal Financial Officer
Date	February 27, 2020

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)*			/s/ Christopher K. Dyer
			Christopher K. Dyer, Principal Executive Officer
Date	February 27, 2020
By (Signature and Title)*			/s/ Allan Shaer
			Allan Shaer, Principal Financial Officer
Date		February 27, 2020