Franklin Templeton Variable Insurance Products Trust NCSR Certified annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-05583

Franklin Templeton Variable Insurance Products Trust

(Exact name of registrant as specified in charter)

One Franklin Parkway, San Mateo, CA 94403-1906

(Address of principal executive offices) (Zip code)

Craig S. Tyle, One Franklin Parkway, San Mateo, CA 94403-1906

(Name and address of agent for service)

Registrant’s telephone number, including area code: (650) 312-2000

Date of fiscal year end: 12/31

Date of reporting period: 12/31/13

Item 1.

Reports to Stockholders.

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DECEMBER 31, 2013

FRANKLIN TEMPLETON

VARIABLE INSURANCE PRODUCTS TRUST

ANNUAL

REPORT

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FRANKLIN TEMPLETON VARIABLE INSURANCE

PRODUCTS TRUST ANNUAL REPORT

TABLEOF CONTENTS


Important Notes to Performance Information			i
Fund Summaries
Templeton Developing Markets Securities Fund			TD-1
Templeton Foreign Securities Fund			TF-1
Templeton Global Bond Securities Fund			TGB-1
Index Descriptions			I-1
Board Members and Officers			BOD-1
Shareholder Information			SI-1

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

MASTER CLASS – 3

IMPORTANT NOTESTO

PERFORMANCE INFORMATION

Performance data is historical and cannot predict or guarantee future results. Principal value and investment return will fluctuate with market conditions, and you may have a gain or loss when you withdraw your money. Inception dates of the funds may have preceded the effective dates of the subaccounts, contracts, or their availability in all states.

When reviewing the index comparisons, please keep in mind that indexes have a number of inherent performance differentials over the funds. First, unlike the funds, which must hold a minimum amount of cash to maintain liquidity, indexes do not have a cash component. Second, the funds are actively managed and, thus, are subject to management fees to cover salaries of securities analysts or portfolio managers in addition to other expenses. Indexes are unmanaged and do not include any commissions or other expenses typically associated with investing in securities. Third, indexes often contain a different mix of securities than the fund to which they are compared. Additionally, please remember that indexes are simply a measure of performance and cannot be invested in directly.

TEMPLETON DEVELOPING MARKETS SECURITIES FUND

This annual report for Templeton Developing Markets Securities Fund covers the fiscal year ended December 31, 2013.

Performance Summary as of 12/31/13

Average annual total return of Class 3 shares* represents the average annual change in value, assuming reinvestment of dividends and capital gains. Average returns smooth out variations in returns, which can be significant; they are not the same as year-by-year results.

Periods ended 12/31/13

1-Year

5-Year

10-Year

Average Annual Total Return

-0.97%

+13.85%

+9.04%

*Since Class 3 shares were not offered until 5/1/04, performance prior to that date represents historical Class 2 performance. Since 5/1/04 (effective date), the average annual total return of Class 3 shares was +9.31%. The Fund has a fee waiver associated with its investments in a Franklin Templeton money fund, contractually guaranteed through at least its current fiscal year end. Fund investment results reflect the fee waiver, to the extent applicable; without this reduction, the results would have been lower.

Total Return Index Comparison

for a Hypothetical $10,000 Investment (1/1/04–12/31/13)

The graph below shows the change in value of a hypothetical $10,000 investment in the Fund over the indicated period and includes reinvestment of any income or distributions. The Fund’s performance* is compared to the performance of the MSCI Emerging Markets (EM) Index and the Standard & Poor’s^®/International Finance Corporation Investable (S&P^®/IFCI) Composite Index. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see Important Notes to Performance Information preceding the Fund Summaries.

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Templeton Developing Markets Securities Fund Class 3

Performance reflects the Fund’s Class 3 operating expenses, but does not include any contract fees, expenses or sales charges. If they had been included, performance would be lower. These charges and deductions, particularly for variable life policies, can have a significant effect on contract values and insurance benefits. See the contract prospectus for a complete description of these expenses, including sales charges.

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares.

Current performance may differ from figures shown.

TD-1

Fund Goal and Main Investments: Templeton Developing Markets Securities Fund seeks long-term capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in emerging market investments.

Performance Overview

You can find the Fund’s one-year total return in the Performance Summary. In comparison, the MSCI EM Index had a -2.27% total return, and the S&P/IFCI Composite Index had a -0.57% total return for the same period.¹ Please note index performance numbers are for reference and we do not attempt to track an index but rather undertake investments on the basis of fundamental research.

Economic and Market Overview

The 12 months under review were characterized by reinvigorated policy support, an economic recovery in developed markets and a slowdown in emerging markets. Although several emerging market countries faced headwinds such as soft domestic demand, weak exports, market volatility and social unrest, emerging market economies overall continued to grow faster than developed market economies. Following a relatively subdued first half, China’s growth rate stabilized in the second half. Economic growth rates moderated in Russia, India and Indonesia but improved in Brazil, South Korea and Turkey. However, emerging market stock performance during the period appeared to be driven less by economic growth and corporate fundamentals and more by the fiscal and monetary policies in developed market countries.

After a weak start to 2013 as many investors locked in 2012 gains, emerging market stocks experienced a sharp sell-off in May and June amid concerns about a spike in China’s interbank rates and the U.S. Federal Reserve Board’s (Fed’s) potential tapering of its asset purchase program. When these fears were not realized, investor confidence rose in late June, leading to a partial rebound in emerging market stock prices. Financial markets grew volatile again in late August but recovered as tension surrounding Syria was defused and as the Fed announced it would delay tapering its asset purchase program. A U.S. budget impasse in late September and its resolution in October also moved the markets. The Chinese government’s announcement of social, economic and financial reforms boosted Chinese stocks in November.

Fund Risks: All investments involve risks, including possible loss of principal. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets, of which frontier markets are a subset, involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Because these frameworks are typically even less developed in frontier markets, as well as various factors including the increased potential for extreme price volatility, illiquidity, trade barriers and exchange controls, the risks associated with developing markets are magnified in frontier markets. The Fund is designed for the aggressive portion of a well-diversified portfolio. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

TD-2

Emerging market stocks overall remained resilient despite the Fed’s December announcement that it would reduce its monthly bond purchases beginning in January 2014.

For the 12 months ended December 31, 2013, emerging market stocks, as measured by the MSCI EM Index, had a -2.27% total return in U.S. dollar terms, as weaker emerging market currencies hindered returns.¹ Asia and Eastern Europe produced modest gains, while Latin America declined. In Asia, Taiwan, Malaysia, South Korea and China delivered gains, while Indonesia, Thailand, India and the Philippines posted losses. In Eastern Europe, Poland and Russia generated gains, while the Czech Republic and Hungary posted losses. Latin American markets such as Peru, Chile, Colombia and Brazil were among the worst performers, partly because of generally weak commodity prices and local currencies. In the largely frontier markets of the Middle East and Africa, the United Arab Emirates (UAE), Ghana and Kenya outperformed many of their global peers, while Lebanon, Tunisia and South Africa underperformed.

At year-end, global liquidity conditions continued to be accommodative. The Fed committed to keeping interest rates low as long as the U.S. unemployment rate remained over 6.5% and inflation expectations remained low. Furthermore, there were no signs at period-end indicating the Bank of Japan or the European Central Bank would tighten policy. We believe emerging and frontier market countries with strong economic fundamentals could continue to benefit from the high liquidity provided by major central banks, as investors seek higher yielding assets in a low interest rate environment. We viewed greater cooperation among major emerging and developed market countries as potentially beneficial for economic growth and financial markets. For example, in August, Brazil, Russia, India, China and South Africa (BRICS) decided on a capital structure for a proposed development bank aimed at supporting emerging market countries’ financing needs for infrastructure projects. In September, the BRICS countries committed $100 billion for a joint currency reserve to protect their economies from global financial market volatility and currency shocks. Toward year-end, China and the European Union agreed to negotiate a bilateral investment treaty in an effort to increase bilateral trade and improve access to each other’s markets.

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TD-3

Investment Strategy

We employ a fundamental research, value-oriented, long-term investment approach. We focus on the market price of a company’s securities relative to our evaluation of its long-term earnings, asset value and cash flow potential. We also consider a company’s profit and loss outlook, balance sheet strength, cash flow trends and asset value in relation to the current price. Our analysis considers the company’s corporate governance behavior as well as its position in its sector, the economic framework and political environment. We invest in securities without regard to benchmark comparisons.

Manager’s Discussion

During the 12 months under review, key contributors to the Fund’s absolute performance included Emaar Properties, a major property developer and manager with operations throughout the Middle East, notably in Dubai, UAE; Tata Consultancy Services, one of India’s largest information technology (IT) consulting and services firms; and Melco Crown Entertainment, one of Macau’s leading casino operators.

We believe that Emaar Properties provides an attractive exposure to Dubai’s recovering real estate market. With a substantial income stream from its shopping mall and hotel properties, Emaar has a greater measure of financial security than some of its peers, in our assessment. Solid growth in all sectors of Dubai’s real estate market and the Emirate’s winning bid to host the 2020 World Expo benefited the shares of real estate companies in the region, notably Emaar. Furthermore, in our analysis, Dubai’s rising tourism could continue to support Emaar’s hotel and retail operations.

Tata Consultancy Services reported strong corporate results in 2013 amid the IT outsourcing industry’s continued growth. Moreover, the company benefited from the rupee’s significant weakness against major currencies such as the U.S. dollar and euro, as its revenues are primarily based in foreign currencies, while most costs are in rupees. In our view, Tata Consultancy is a well-managed, attractively valued service provider that is well positioned to potentially benefit from the IT outsourcing industry’s continued growth.

Melco Crown Entertainment’s solid earnings results and favorable growth outlook helped boost the casino resort operator’s share price. Macau casinos continued to report strong visitor numbers and

TD-4

gambling revenue growth, which supported the share prices of Macau-focused casino operators as investors anticipated higher earnings. We believe that Chinese consumers’ rising disposable income could potentially benefit leisure businesses such as Melco Crown. Additionally, recent improvements to the transportation links between China’s population centers and Macau could potentially lead to strong revenue growth.

In contrast, key detractors from the Fund’s absolute performance included Souza Cruz, a major Brazilian cigarette company; Brazil-based Ambev, one of the world’s largest beer and soft drink producers; and Antofagasta, a Chilean copper mining group.

Brazil’s weak consumer demand, currency depreciation and higher taxes resulted in a challenging operating environment for Souza Cruz and Ambev in 2013, leading to share price declines. In our longer term view, however, we considered these companies to be attractive investments based on our belief that they have strong operations, low debt levels, dominant market shares and popular brands. Moreover, Brazil’s hosting of the 2014 FIFA World Cup and 2016 Summer Olympics could potentially support consumer demand.

Concerns about copper prices and weak demand pressured the stocks of many copper mining companies, including Antofagasta. We divested the Fund’s holdings in the company to raise funds for investment opportunities that we considered to be more attractive within our investment universe.

It is important to recognize the effect of currency movements on the Fund’s performance. In general, if the value of the U.S. dollar goes up compared with a foreign currency, an investment traded in that foreign currency will go down in value because it will be worth fewer U.S. dollars. This can have a negative effect on Fund performance. Conversely, when the U.S. dollar weakens in relation to a foreign currency, an investment traded in that foreign currency will increase in value, which can contribute to Fund performance. For the 12 months ended December 31, 2013, the U.S. dollar rose in value relative to most currencies. As a result, the Fund’s performance was negatively affected by the portfolio’s investment predominantly in securities with non-U.S. currency exposure.

In the past 12 months, our continued search for investments we considered to be attractively valued led us to increase the Fund’s exposure to Hong Kong, South Korea and Macau and to initiate a position in the

Top 10 Holdings

Templeton Developing Markets Securities Fund

12/31/13


Company Sector/Industry, Country	% of Total Net Assets
Ambev SA		10.6%
Beverages, Brazil
Souza Cruz SA		4.5%
Tobacco, Brazil
Remgro Ltd.		4.4%
Diversified Financial Services, South Africa
Emaar Properties PJSC		4.3%
Real Estate Management & Development, UAE
Melco Crown Entertainment Ltd., ADR		3.7%
Hotels, Restaurants & Leisure, China
Tata Consultancy Services Ltd.		3.7%
IT Services, India
SJM Holdings Ltd.		3.5%
Hotels, Restaurants & Leisure, Hong Kong
Sands China Ltd.		3.3%
Hotels, Restaurants & Leisure, Macau
Compagnie Financiere Richemont SA		3.0%
Textiles, Apparel & Luxury Goods, Switzerland
Samsung Electronics Co. Ltd.		2.9%
Semiconductors & Semiconductor Equipment, South Korea

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments.

TD-5

Philippines. We also made some purchases in the U.K., Switzerland and Belgium as we identified companies listed in these developed countries that have significant emerging market operations, giving them the potential to benefit from emerging market countries’ stronger personal income and consumer demand growth. Moreover, we added to the Fund’s investments in Saudi Arabia, Qatar, the UAE and Nigeria as we identified companies in these frontier market countries that we believe have solid growth potential. We made some of the largest additions in hotels, restaurants and leisure; beverages; tobacco; real estate management and development; and textiles, apparel and luxury goods companies. Key purchases included new positions in Unilever, a U.K.-listed global consumer products company with more than 50% of its sales in emerging and frontier markets; Sands China and Melco Crown Entertainment, two of Macau’s leading casino operators; and Belgium-listed Anheuser-Busch InBev, the world’s largest brewer.

Conversely, we reduced the Fund’s investments in Russia, Indonesia, India and China via China H shares as certain stocks reached their target prices and as we focused on stocks we considered to be more attractively valued within our investment universe.² We reduced the Fund’s holdings largely in oil, gas and consumable fuels; commercial banking; and automobile companies. Key sales included the Fund’s positions in Indonesian car and motorcycle manufacturer Astra International, Chinese oil and gas company PetroChina and Thai commercial bank Kasikornbank.

Thank you for your participation in Templeton Developing Markets Securities Fund. We look forward to serving your future investment needs.

2. “China H” denotes shares of China-incorporated, Hong Kong Stock Exchange-listed companies with most businesses in China.

The foregoing information reflects our analysis, opinions and portfolio holdings as of December 31, 2013, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

Top 10 Countries

Templeton Developing Markets Securities Fund

12/31/13


	% of Total Net Assets
Brazil		16.6%
Hong Kong		11.4%
China		11.2%
U.K.		5.6%
India		5.1%
South Africa		5.0%
Russia		4.9%
UAE		4.3%
South Korea		4.3%
Macau		3.3%

TD-6

Fund Expenses

As an investor in a variable insurance contract (Contract) that indirectly provides for investment in an underlying mutual fund, you can incur transaction and/or ongoing expenses at both the Fund level and the Contract level.

•

Transaction expenses can include sales charges (loads) on purchases, redemption fees, surrender fees, transfer fees and premium taxes.

•

Ongoing expenses can include management fees, distribution and service (12b-1) fees, contract fees, annual maintenance fees, mortality and expense risk fees and other fees and expenses. All mutual funds and Contracts have some types of ongoing expenses.

The expenses shown in the table are meant to highlight ongoing expenses at the Fund level only and do not include ongoing expenses at the Contract level, or transaction expenses at either the Fund or Contract level. While the Fund does not have transaction expenses, if the transaction and ongoing expenses at the Contract level were included, the expenses shown below would be higher. You should consult your Contract prospectus or disclosure document for more information.

The table shows Fund-level ongoing expenses and can help you understand these expenses and compare them with those of other mutual funds offered through the Contract. The table assumes a $1,000 investment held for the six months indicated. Please refer to the Fund prospectus for additional information on operating expenses.

Actual Fund Expenses

The first line (Actual) of the table provides actual account values and expenses. The “Ending Account Value” is derived from the Fund’s actual return, which includes the effect of ongoing Fund expenses, but does not include the effect of ongoing Contract expenses.

You can estimate the Fund-level expenses you incurred during the period by following these steps. Of course, your account value and expenses will differ from those in this illustration:

1.	Divide your account value by $1,000.

If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.

2.	Multiply the result by the number under the heading “Fund-Level Expenses Incurred During Period.”

If Fund-Level Expenses Incurred During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses incurred this period at the Fund level are $64.50.

Templeton Developing Markets Securities Fund Class 3

TD-7

Hypothetical Example for Comparison with Other Mutual Funds

Information in the second line (Hypothetical) of the table can help you compare ongoing expenses of the Fund with those of other mutual funds offered through the Contract. This information may not be used to estimate the actual ending account balance or expenses you incurred during the period. The hypothetical “Ending Account Value” is based on the Fund’s actual expense ratio and an assumed 5% annual rate of return before expenses, which does not represent the Fund’s actual return. The figure under the heading “Fund-Level Expenses Incurred During Period” shows the hypothetical expenses your account would have incurred under this scenario. You can compare this figure with the 5% hypothetical examples that appear in shareholder reports of other funds offered through a Contract.


Class 3	Beginning Account Value 7/1/13		Ending Account Value 12/31/13		Fund-Level Expenses Incurred During Period* 7/1/13–12/31/13
Actual	$	1,000	$	1,072.00	$	8.30
Hypothetical (5% return before expenses)	$	1,000	$	1,017.19	$	8.08

*Expenses are calculated using the most recent six-month annualized expense ratio for the Fund’s Class 3 shares (1.59%), which does not include any ongoing expenses of the Contract for which the Fund is an investment option, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

TD-8

Franklin Templeton Variable Insurance Products Trust

Financial Highlights

Templeton Developing Markets Securities Fund


	Year Ended December 31,
Class 1	2013			2012			2011			2010			2009

Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	10.58		$	9.50		$	11.40		$	9.86		$	6.11

Income from investment operations^a:
Net investment income^b		0.13			0.19			0.17			0.09			0.12
Net realized and unrealized gains (losses)		(0.22	)		1.06			(1.94	)		1.63			4.02

Total from investment operations		(0.09	)		1.25			(1.77	)		1.72			4.14

Less distributions from:
Net investment income		(0.23	)		(0.17	)		(0.13	)		(0.18	)		(0.36	)
Net realized gains		—			—			—			—			(0.03	)

Total distributions		(0.23	)		(0.17	)		(0.13	)		(0.18	)		(0.39	)

Redemption fees^c		—			—			—			—			—

Net asset value, end of year	$	10.26		$	10.58		$	9.50		$	11.40		$	9.86


Total return^d		(0.73)%			13.40%			(15.67)%			17.83%			73.32%
Ratios to average net assets
Expenses		1.35%			1.35%			1.40%			1.49%	^e		1.45%	^e
Net investment income		1.25%			1.93%			1.57%			0.87%			1.64%

Supplemental data
Net assets, end of year (000’s)	$	145,707		$	203,568		$	232,544		$	347,242		$	325,927
Portfolio turnover rate		44.59%			24.45%			14.90%			24.41%			56.58%	^f

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^dTotal return does not include fees, charges or expenses imposed by the variable annuity and life insurance contracts for which the Franklin Templeton Variable Insurance Products Trust serves as an underlying investment vehicle.

^eBenefit of expense reduction rounds to less than 0.01%.

^fExcludes the value of portfolio securities delivered as a result of a redemption in-kind.

The accompanying notes are an integral part of these financial statements.

TD-9

Franklin Templeton Variable Insurance Products Trust

Financial Highlights (continued)

Templeton Developing Markets Securities Fund


	Year Ended December 31,
Class 2	2013			2012			2011			2010			2009

Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	10.50		$	9.42		$	11.30		$	9.78		$	6.04

Income from investment operations^a:
Net investment income^b		0.10			0.17			0.14			0.06			0.11
Net realized and unrealized gains (losses)		(0.21	)		1.05			(1.92	)		1.62			3.98

Total from investment operations		(0.11	)		1.22			(1.78	)		1.68			4.09

Less distributions from:
Net investment income		(0.20	)		(0.14	)		(0.10	)		(0.16	)		(0.32	)
Net realized gains		—			—			—			—			(0.03	)

Total distributions		(0.20	)		(0.14	)		(0.10	)		(0.16	)		(0.35	)

Redemption fees^c		—			—			—			—			—

Net asset value, end of year	$	10.19		$	10.50		$	9.42		$	11.30		$	9.78


Total return^d		(0.92)%			13.16%			(15.86)%			17.58%			72.59%
Ratios to average net assets
Expenses		1.60%			1.60%			1.65%			1.74%	^e		1.70%	^e
Net investment income		1.00%			1.68%			1.32%			0.62%			1.39%

Supplemental data
Net assets, end of year (000’s)	$	274,683		$	291,638		$	295,223		$	392,546		$	435,947
Portfolio turnover rate		44.59%			24.45%			14.90%			24.41%			56.58%	^f

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^eBenefit of expense reduction rounds to less than 0.01%.

^fExcludes the value of portfolio securities delivered as a result of a redemption in-kind.

The accompanying notes are an integral part of these financial statements.

TD-10

Franklin Templeton Variable Insurance Products Trust

Financial Highlights (continued)

Templeton Developing Markets Securities Fund


	Year Ended December 31,
Class 3	2013			2012			2011			2010			2009

Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	10.43		$	9.36		$	11.23		$	9.73		$	6.02

Income from investment operations^a:
Net investment income^b		0.11			0.17			0.14			0.06			0.10
Net realized and unrealized gains (losses)		(0.22	)		1.04			(1.91	)		1.60			3.97

Total from investment operations		(0.11	)		1.21			(1.77	)		1.66			4.07

Less distributions from:
Net investment income		(0.20	)		(0.14	)		(0.10	)		(0.16	)		(0.33	)
Net realized gains		—			—			—			—			(0.03	)

Total distributions		(0.20	)		(0.14	)		(0.10	)		(0.16	)		(0.36	)

Redemption fees^c		—			—			—			—			—

Net asset value, end of year	$	10.12		$	10.43		$	9.36		$	11.23		$	9.73


Total return^d		(0.97)%			13.16%			(15.86)%			17.51%			72.63%
Ratios to average net assets
Expenses		1.60%			1.60%			1.65%			1.74%	^e		1.70%	^e
Net investment income		1.00%			1.68%			1.32%			0.62%			1.39%

Supplemental data
Net assets, end of year (000’s)	$	34,651		$	48,277		$	44,702		$	66,484		$	66,718
Portfolio turnover rate		44.59%			24.45%			14.90%			24.41%			56.58%	^f

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^eBenefit of expense reduction rounds to less than 0.01%.

^fExcludes the value of portfolio securities delivered as a result of a redemption in-kind.

The accompanying notes are an integral part of these financial statements.

TD-11

Franklin Templeton Variable Insurance Products Trust

Financial Highlights (continued)

Templeton Developing Markets Securities Fund


	Year Ended December 31,
Class 4	2013			2012			2011			2010			2009

Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	10.50		$	9.42		$	11.30		$	9.80		$	6.09

Income from investment operations^a:
Net investment income^b		0.10			0.16			0.13			0.05			0.09
Net realized and unrealized gains (losses)		(0.21	)		1.04			(1.91	)		1.61			4.00

Total from investment operations		(0.11	)		1.20			(1.78	)		1.66			4.09

Less distributions from:
Net investment income		(0.19	)		(0.12	)		(0.10	)		(0.16	)		(0.35	)
Net realized gains		—			—			—			—			(0.03	)

Total distributions		(0.19	)		(0.12	)		(0.10	)		(0.16	)		(0.38	)

Redemption fees^c		—			—			—			—			—

Net asset value, end of year	$	10.20		$	10.50		$	9.42		$	11.30		$	9.80


Total return^d		(1.07)%			13.06%			(15.88)%			17.41%			72.45%
Ratios to average net assets
Expenses		1.70%			1.70%			1.75%			1.84%	^e		1.80%	^e
Net investment income		0.90%			1.58%			1.22%			0.52%			1.29%

Supplemental data
Net assets, end of year (000’s)	$	15,225		$	23,341		$	24,380		$	37,198		$	26,362
Portfolio turnover rate		44.59%			24.45%			14.90%			24.41%			56.58%	^f

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^eBenefit of expense reduction rounds to less than 0.01%.

^fExcludes the value of portfolio securities delivered as a result of a redemption in-kind.

The accompanying notes are an integral part of these financial statements.

TD-12

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013


Templeton Developing Markets Securities Fund	Industry	Shares		Value
Closed End Funds 0.4%
Romania 0.4%
SIF Moldova	Diversified Financial Services		1,326,345	$	599,363
SIF Oltenia	Diversified Financial Services		1,975,791		1,205,032

Total Closed End Funds (Cost $1,309,811)					1,804,395

Common Stocks 91.0%
Argentina 0.1%
^a,b Grupo Clarin SA, B, GDR, Reg S	Media		47,911		275,488

Australia 0.4%
BHP Billiton Ltd.	Metals & Mining		56,757		1,924,731

Belgium 2.2%
Anheuser-Busch InBev NV	Beverages		95,309		10,128,595

Brazil 16.6%
Ambev SA	Beverages		6,811,750		49,946,874
M Dias Branco SA	Food Products		173,700		7,353,626
Souza Cruz SA	Tobacco		2,053,928		20,964,482

					78,264,982

China 11.2%
AAC Technologies Holdings Inc.	Communications Equipment		889,600		4,319,310
^aAngang Steel Co. Ltd., H	Metals & Mining		5,129,000		3,809,867
China Overseas Land & Investment Ltd.	Real Estate Management & Development		2,002,900		5,630,803
^aChina Shipping Development Co. Ltd., H	Marine		6,062,800		4,691,148
CNOOC Ltd.	Oil, Gas & Consumable Fuels		1,191,400		2,215,529
Great Wall Motor Co. Ltd., H	Automobiles		867,077		4,774,635
Lenovo Group Ltd.	Computers & Peripherals		3,904,700		4,748,473
^aMelco Crown Entertainment Ltd., ADR	Hotels, Restaurants & Leisure		448,443		17,587,934
^aNetEase Inc., ADR	Internet Software & Services		63,300		4,975,380

					52,753,079

Colombia 0.4%
Ecopetrol SA, ADR	Oil, Gas & Consumable Fuels		46,835		1,800,806

Egypt 0.0%†
Egyptian International Pharmaceutical Industries Co.	Pharmaceuticals		23,609		147,290

Georgia 0.1%
Bank of Georgia Holdings PLC	Commercial Banks		11,994		475,171

Hong Kong 11.4%
Dairy Farm International Holdings Ltd.	Food & Staples Retailing		966,133		9,178,264
^aEsprit Holdings Ltd.	Specialty Retail		572,600		1,107,636
Giordano International Ltd.	Specialty Retail		4,631,000		4,138,687
I.T Ltd.	Specialty Retail		1,321,100		340,738
Luk Fook Holdings (International) Ltd.	Specialty Retail		2,224,513		8,462,751
^cLuk Fook Holdings (International) Ltd., 144A	Specialty Retail		130,000		494,561
MGM China Holdings Ltd.	Hotels, Restaurants & Leisure		2,826,100		12,081,634
SJM Holdings Ltd.	Hotels, Restaurants & Leisure		4,909,930		16,399,464
^aSummit Ascent Holdings Ltd.	Trading Companies & Distributors		927,000		1,482,368

					53,686,103

India 5.1%
Tata Consultancy Services Ltd.	IT Services		495,500		17,394,982
Tata Motors Ltd.	Automobiles		1,063,000		6,470,136

					23,865,118

TD-13

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Developing Markets Securities Fund	Industry	Shares		Value
Common Stocks (continued)
Indonesia 0.4%
Bank Rakyat Indonesia Persero Tbk PT	Commercial Banks		3,203,600	$	1,908,472

Kenya 1.5%
East African Breweries Ltd.	Beverages		210,500		707,358
Equity Bank Ltd.	Commercial Banks		8,986,101		3,201,884
Kenya Commercial Bank Ltd.	Commercial Banks		5,335,900		2,936,909

					6,846,151

Macau 3.3%
Sands China Ltd.	Hotels, Restaurants & Leisure		1,905,000		15,624,520

Mexico 0.3%
Kimberly Clark de Mexico SAB de CV, A	Household Products		489,532		1,395,388

Nigeria 1.7%
Ecobank Transnational Inc.	Commercial Banks		2,631,065		265,985
FBN Holdings PLC	Commercial Banks		36,527,236		3,722,375
Nigerian Breweries PLC	Beverages		3,770,084		3,957,469

					7,945,829

Philippines 1.1%
Ayala Corp.	Diversified Financial Services		429,820		5,014,567

Qatar 2.5%
Industries Qatar QSC	Industrial Conglomerates		255,782		11,863,677

Romania 0.2%
Nuclearelectrica SA	Independent Power Producers & Energy Traders		43,925		151,098
^a,c Societatea Nationala de Gaze Naturale ROMGAZ SA, 144A	Oil, Gas & Consumable Fuels		85,800		901,783

					1,052,881

Russia 3.5%
^cAlrosa AO, 144A	Metals & Mining		3,445,400		3,740,600
^d LUKOIL Holdings, ADR	Oil, Gas & Consumable Fuels		29,958		1,870,877
^d LUKOIL Holdings, ADR (London Stock Exchange)	Oil, Gas & Consumable Fuels		174,418		10,892,404

					16,503,881

Singapore 1.0%
K-REIT Asia	Real Estate Investment Trusts (REITs)		5,248,511		4,929,058

South Africa 5.0%
MTN Group Ltd.	Wireless Telecommunication Services		134,100		2,774,297
Remgro Ltd.	Diversified Financial Services		1,041,324		20,629,929

					23,404,226

South Korea 4.3%
Grand Korea Leisure Co. Ltd.	Hotels, Restaurants & Leisure		170,220		6,513,901
Samsung Electronics Co. Ltd.	Semiconductors & Semiconductor Equipment		10,508		13,655,996

					20,169,897

Sweden 0.6%
Oriflame Cosmetics SA, SDR	Personal Products		87,856		2,697,336

Switzerland 3.0%
Compagnie Financiere Richemont SA	Textiles, Apparel & Luxury Goods		143,641		14,298,886

Taiwan 1.0%
Taiwan Semiconductor Manufacturing Co. Ltd.	Semiconductors & Semiconductor Equipment		1,325,500		4,687,671

TD-14

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Developing Markets Securities Fund	Industry	Shares		Value
Common Stocks (continued)
Thailand 1.7%
Shin Corp. PCL, fgn.	Wireless Telecommunication Services		1,306,200	$	2,774,478
Thai Beverage PCL	Beverages		12,053,200		5,158,288

					7,932,766

Turkey 0.1%
Yazicilar Holding AS	Industrial Conglomerates		43,862		382,856

Turkmenistan 0.1%
Dragon Oil PLC	Oil, Gas & Consumable Fuels		65,784		619,005

United Arab Emirates 4.3%
Emaar Properties PJSC	Real Estate Management & Development		9,763,577		20,308,665

United Kingdom 5.6%
British American Tobacco PLC	Tobacco		249,100		13,352,129
Unilever PLC	Food Products		316,084		12,993,492

					26,345,621

United States 1.4%
Avon Products Inc.	Personal Products		391,680		6,744,730

Vietnam 0.2%
DHG Pharmaceutical JSC	Pharmaceuticals		95,800		517,715
Dong Phu Rubber JSC	Chemicals		104,160		231,576

					749,291

Zimbabwe 0.7%
Delta Corp. Ltd.	Beverages		2,209,976		3,096,176

Total Common Stocks (Cost $299,958,882)					427,842,913

^eParticipatory Notes 2.8%
Saudi Arabia 2.8%
^c Deutsche Bank AG/London, Saudi Dairy & Foodstuff Co., 144A, 5/13/14	Food Products		55,781		1,282,809
^cHSBC Bank PLC,
Al Mouwasat Medical Services, 144A, 4/13/15	Health Care Providers & Services		19,800		485,702
Etihad Etisalat Co., 144A, 12/05/14	Wireless Telecommunication Services		515,329		11,748,091

Total Participatory Notes (Cost $10,815,443)					13,516,602

Preferred Stocks 3.0%
Chile 1.6%
Embotelladora Andina SA, pfd., A	Beverages		2,068,717		7,283,521

Russia 1.4%
Sberbank of Russia, pfd.	Commercial Banks		2,752,211		6,719,064

Total Preferred Stocks (Cost $11,239,911)					14,002,585

Total Investments before Short Term Investments (Cost $323,324,047)					457,166,495

TD-15

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Developing Markets Securities Fund	Shares		Value
Short Term Investments (Cost $12,277,809) 2.6%
Money Market Funds 2.6%
United States 2.6%
^a,f Institutional Fiduciary Trust Money Market Portfolio		12,277,809	$	12,277,809

Total Investments (Cost $335,601,856) 99.8%				469,444,304
Other Assets, less Liabilities 0.2%				821,406

Net Assets 100.0%			$	470,265,710

See Abbreviations on page TD-28.

†Rounds to less than 0.1% of net assets.

^aNon-income producing.

^bSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. This security has been deemed liquid under guidelines approved by the Trust’s Board of Trustees.

^cSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At December 31, 2013, the aggregate value of these securities was $18,653,546, representing 3.97% of net assets.

^dAt December 31, 2013, pursuant to the Fund’s policies and the requirements of applicable securities law, the Fund may be restricted from trading these securities for a limited or extended period of time due to ownership limits and/or potential possession of material non-public information.

^eSee Note 1(c) regarding Participatory Notes.

^fSee Note 7 regarding investments in the Institutional Fiduciary Trust Money Market Portfolio.

The accompanying notes are an integral part of these financial statements.

TD-16

Franklin Templeton Variable Insurance Products Trust

Financial Statements

Statement of Assets and Liabilities

December 31, 2013


	Templeton Developing Markets Securities Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	323,324,047
Cost - Sweep Money Fund (Note 7)		12,277,809

Total cost of investments	$	335,601,856

Value - Unaffiliated issuers	$	457,166,495
Value - Sweep Money Fund (Note 7)		12,277,809

Total value of investments		469,444,304
Cash		852
Foreign currency, at value (cost $47,388)		47,388
Receivables:
Investment securities sold		2,415,950
Capital shares sold		142,999
Dividends		210,342
Foreign tax		25,179
Other assets		12

Total assets		472,287,026

Liabilities:
Payables:
Investment securities purchased		458,487
Capital shares redeemed		516,507
Management fees		433,361
Administrative fees		55,772
Distribution fees		137,500
Custodian fees		149,186
Reports to shareholders		214,744
Accrued expenses and other liabilities		55,759

Total liabilities		2,021,316

Net assets, at value	$	470,265,710

Net assets consist of:
Paid-in capital	$	363,881,784
Distributions in excess of net investment income		(481,395	)
Net unrealized appreciation (depreciation)		133,819,737
Accumulated net realized gain (loss)		(26,954,416	)

Net assets, at value	$	470,265,710

The accompanying notes are an integral part of these financial statements.

TD-17

Franklin Templeton Variable Insurance Products Trust

Financial Statements (continued)

Statement of Assets and Liabilities (continued)

December 31, 2013


	Templeton Developing Markets Securities Fund
Class 1:
Net assets, at value	$	145,707,342

Shares outstanding		14,195,852

Net asset value and maximum offering price per share	$	10.26

Class 2:
Net assets, at value	$	274,682,503

Shares outstanding		26,966,823

Net asset value and maximum offering price per share	$	10.19

Class 3:
Net assets, at value	$	34,650,803

Shares outstanding		3,422,536

Net asset value and maximum offering price per share^a	$	10.12

Class 4:
Net assets, at value	$	15,225,062

Shares outstanding		1,493,241

Net asset value and maximum offering price per share	$	10.20

^aRedemption price is equal to net asset value less redemption fees retained by the Fund.

The accompanying notes are an integral part of these financial statements.

TD-18

Franklin Templeton Variable Insurance Products Trust

Financial Statements (continued)

Statement of Operations

for the year ended December 31, 2013


	Templeton Developing Markets Securities Fund
Investment income:
Dividends (net of foreign taxes of $1,022,583)	$	13,364,543
Income from securities loaned		14,539

Total investment income		13,379,082

Expenses:
Management fees (Note 3a)		5,647,955
Administrative fees (Note 3b)		724,451
Distribution fees: (Note 3c)
Class 2		703,863
Class 3		102,353
Class 4		67,695
Unaffiliated transfer agent fees		911
Custodian fees (Note 4)		349,498
Reports to shareholders		142,286
Professional fees		58,627
Trustees’ fees and expenses		2,160
Other		23,136

Total expenses		7,822,935

Net investment income		5,556,147

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments		68,533,153
Foreign currency transactions		(570,528	)

Net realized gain (loss)		67,962,625

Net change in unrealized appreciation (depreciation) on:
Investments		(79,209,837	)
Translation of other assets and liabilities denominated in foreign currencies		(468	)
Change in deferred taxes on unrealized appreciation		21,147

Net change in unrealized appreciation (depreciation)		(79,189,158	)

Net realized and unrealized gain (loss)		(11,226,533	)

Net increase (decrease) in net assets resulting from operations	$	(5,670,386	)

The accompanying notes are an integral part of these financial statements.

TD-19

Franklin Templeton Variable Insurance Products Trust

Financial Statements (continued)

Statements of Changes in Net Assets


	Templeton Developing Markets Securities Fund
	Year Ended December 31,
	2013			2012

Increase (decrease) in net assets:
Operations:
Net investment income	$	5,556,147		$	10,321,744
Net realized gain (loss) from investments and foreign currency transactions		67,962,625			37,187,656
Net change in unrealized appreciation (depreciation) on investments, translation of other assets and liabilities denominated in foreign currencies and deferred taxes		(79,189,158	)		25,533,270

Net increase (decrease) in net assets resulting from operations		(5,670,386	)		73,042,670

Distributions to shareholders from:
Net investment income:
Class 1		(3,816,779	)		(3,523,272	)
Class 2		(5,449,449	)		(4,111,805	)
Class 3		(777,644	)		(716,639	)
Class 4		(373,848	)		(295,623	)

Total distributions to shareholders		(10,417,720	)		(8,647,339	)

Capital share transactions: (Note 2)
Class 1		(52,075,044	)		(52,933,691	)
Class 2		(8,867,643	)		(36,646,633	)
Class 3		(12,240,084	)		(1,195,085	)
Class 4		(7,287,727	)		(3,647,744	)

Total capital share transactions		(80,470,498	)		(94,423,153	)

Redemption fees		1,204			1,457

Net increase (decrease) in net assets		(96,557,400	)		(30,026,365	)

Net assets:
Beginning of year		566,823,110			596,849,475

End of year	$	470,265,710		$	566,823,110

Undistributed net investment income (distributions in excess of net investment income) included in net assets:
End of year	$	(481,395	)	$	3,581,480

The accompanying notes are an integral part of these financial statements.

TD-20

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements

Templeton Developing Markets Securities Fund

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940, as amended, (1940 Act) as an open-end investment company, consisting of twenty separate funds. The Templeton Developing Markets Securities Fund (Fund) is included in this report. The financial statements of the remaining funds in the Trust are presented separately. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. The Fund offers four classes of shares: Class 1, Class 2, Class 3, and Class 4. Each class of shares differs by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a. Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share at the close of the New York Stock Exchange (NYSE), generally at 4p.m. Eastern time (NYSE close) on each day the NYSE is open for trading. Under procedures approved by the Trust’s Board of Trustees (the Board), the Fund’s administrator, investment manager and other affiliates have formed the Valuation and Liquidity Oversight Committee (VLOC). The VLOC provides administration and oversight of the Fund’s valuation policies and procedures, which are approved annually by the Board. Among other things, these procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities and exchange traded funds listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of the NYSE close, whichever is earlier. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at the NYSE close on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities. Investments in open-end mutual funds are valued at the closing net asset value.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the VLOC convenes on a regular basis to review such financial instruments and considers a number of factors, including significant unobservable valuation inputs, when arriving at fair value. The VLOC primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The VLOC employs various methods for calibrating these valuation approaches including a regular review of key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before the daily NYSE close. In addition, trading in certain foreign markets may not take place on every NYSE business day. Occasionally, events occur between the time at which trading in a foreign security is completed and the close of the NYSE that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at the close of the NYSE. In order to minimize the potential for these differences, the VLOC monitors price movements following the close of trading in foreign stock

TD-21

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Developing Markets Securities Fund

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

a. Financial Instrument Valuation (continued)

markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

Also, when the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the NYSE is closed, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

b. Foreign Currency Translation

Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. The Fund may enter into foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. Portfolio securities and assets and liabilities denominated in foreign currencies contain risks that those currencies will decline in value relative to the U.S. dollar. Occasionally, events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Board.

The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments on the Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period.

c. Participatory Notes

The Fund invests in Participatory Notes (P-Notes). P-notes are promissory notes that are designed to offer a return linked to the performance of a particular underlying equity security or market. P-Notes are issued by banks or broker-dealers and allow the fund to gain exposure to common stocks in markets where direct investment is not allowed. Income received from P-Notes is recorded as dividend income in the Statement of Operations. P-Notes may contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract. These securities may be more volatile and less liquid than other investments held by the Fund.

d. Securities Lending

TD-22

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Developing Markets Securities Fund

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

d. Securities Lending (continued)

day. The collateral is invested in a non-registered money fund. The Fund receives income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower. At December 31, 2013, the Fund had no securities on loan.

e. Income and Deferred Taxes

It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and if applicable, excise taxes. As a result, no provision for U.S. federal income taxes is required.

The Fund may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which it invests. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests. When a capital gain tax is determined to apply the Fund records an estimated deferred tax liability in an amount that would be payable if the securities were disposed of on the valuation date.

The Fund recognizes the tax benefits of uncertain tax positions only when the position is “more likely than not” to be sustained upon examination by the tax authorities based on the technical merits of the tax position. As of December 31, 2013, and for all open tax years, the Fund has determined that no liability for unrecognized tax benefits is required in the Fund’s financial statements related to uncertain tax positions taken on a tax return (or expected to be taken on future tax returns). Open tax years are those that remain subject to examination and are based on each tax jurisdiction statute of limitation.

f. Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Estimated expenses are accrued daily. Dividend income is recorded on the ex-dividend date except that certain dividends from foreign securities are recognized as soon as the Fund is notified of the ex-dividend date. Distributions to shareholders are recorded on the ex-dividend date and are determined according to income tax regulations (tax basis). Distributable earnings determined on a tax basis may differ from earnings recorded in accordance with accounting principles generally accepted in the United States of America. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the funds based on the ratio of net assets of each fund to the combined net assets of the Trust. Fund specific expenses are charged directly to the fund that incurred the expense.

Realized and unrealized gains and losses and net investment income, not including class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions, by class, are generally due to differences in class specific expenses.

g. Accounting Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

TD-23

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Developing Markets Securities Fund

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

h. Redemption Fees

Redemptions and exchanges of interests in an insurance company subaccount that invests in Class 3 shares of the Fund will be subject to a 1.0% short term trading fee if the interest in the subaccount has been held for less than 60 days. Such fees are retained by the Fund and accounted for as an addition to paid-in capital, allocated to each class of shares based upon the relative proportion of net assets of each class.

i. Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

2. SHARES OF BENEFICIAL INTEREST

At December 31, 2013, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:


	Year Ended December 31,
	2013						2012
Class 1 Shares:	Shares			Amount			Shares			Amount
Shares sold		1,118,729		$	11,636,774			1,107,285		$	11,165,172
Shares issued in reinvestment of distributions		392,673			3,816,779			385,901			3,523,272
Shares redeemed		(6,552,381	)		(67,528,597	)		(6,733,412	)		(67,622,135	)

Net increase (decrease)		(5,040,979	)	$	(52,075,044	)		(5,240,226	)	$	(52,933,691	)

Class 2 Shares:
Shares sold		5,110,513		$	51,867,557			3,879,555		$	38,012,902
Shares issued in reinvestment of distributions		564,125			5,449,449			453,341			4,111,805
Shares redeemed		(6,483,017	)		(66,184,649	)		(7,891,630	)		(78,771,340	)

Net increase (decrease)		(808,379	)	$	(8,867,643	)		(3,558,734	)	$	(36,646,633	)

Class 3 Shares:
Shares sold		410,783		$	4,328,836			998,194		$	10,036,984
Shares issued in reinvestment of distributions		81,005			777,644			79,538			716,639
Shares redeemed		(1,696,602	)		(17,346,564	)		(1,224,195	)		(11,948,708	)

Net increase (decrease)		(1,204,814	)	$	(12,240,084	)		(146,463	)	$	(1,195,085	)

Class 4 Shares:
Shares sold		206,201		$	2,099,934			257,374		$	2,544,613
Shares issued on reinvestment of distributions		38,661			373,848			32,558			295,623
Shares redeemed		(973,500	)		(9,761,509	)		(656,835	)		(6,487,980	)

Net increase (decrease)		(728,638	)	$	(7,287,727	)		(366,903	)	$	(3,647,744	)

TD-24

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Developing Markets Securities Fund

3. TRANSACTIONS WITH AFFILIATES

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton Investments. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:


Subsidiary		Affiliation
Templeton Asset Management Ltd. (TAML)		Investment manager
Franklin Templeton Services, LLC (FT Services)		Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)		Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)		Transfer agent

a. Management Fees

The Fund pays an investment management fee to TAML based on the average daily net assets of the Fund as follows:


Annualized Fee Rate		Net Assets
1.100%		Up to and including $1 billion
1.050%		Over $1 billion, up to and including $5 billion
1.000%		Over $5 billion, up to and including $10 billion
0.950%		Over $10 billion, up to and including $15 billion
0.900%		Over $15 billion, up to and including $20 billion
0.850%		In excess of $20 billion

b. Administrative Fees

The Fund pays an administrative fee to FT Services based on the Fund’s average daily net assets as follows:


Annualized Fee Rate		Net Assets
0.150%		Up to and including $200 million
0.135%		Over $200 million, up to and including $700 million
0.100%		Over $700 million, up to and including $1.2 billion
0.075%		In excess of $1.2 billion

c. Distribution Fees

The Board has adopted distribution plans for Class 2, Class 3, and Class 4 shares pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s compensation distribution plans, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to 0.25%, 0.35%, and 0.35% per year of its average daily net assets of Class 2, Class 3, and Class 4, respectively. Some distribution fees are not charged on shares held by affiliates. The Board has agreed to limit the current rate to 0.25% per year for Class 3. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31.

d. Transfer Agent Fees

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

4. EXPENSE OFFSET ARRANGEMENT

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the year ended December 31, 2013, there were no credits earned.

TD-25

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Developing Markets Securities Fund

5. INCOME TAXES

For tax purposes, capital losses may be carried over to offset future capital gains. Capital loss carryforwards with no expiration, if any, must be fully utilized before those losses with expiration dates.

At December 31, 2013, the Fund had capital loss carryforwards of $21,512,788 expiring in 2017.

During the year ended December 31, 2013, the Fund utilized $66,613,489 of capital loss carryforwards.

The tax character of distributions paid during the years ended December 31, 2013 and 2012, was as follows:


	2013		2012
Distributions paid from ordinary income	$	10,417,720	$	8,647,339

At December 31, 2013, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:


Cost of investments	$	348,373,004


Unrealized appreciation	$	129,012,176
Unrealized depreciation		(7,940,876	)

Net unrealized appreciation (depreciation)	$	121,071,300

Undistributed ordinary income	$	6,847,606

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of foreign currency transactions, passive foreign investment company shares, corporate actions and wash sales.

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments (excluding short term securities) for the year ended December 31, 2013, aggregated $224,131,604 and $314,267,484, respectively.

7. INVESTMENTS IN INSTITUTIONAL FIDUCIARY TRUST MONEY MARKET PORTFOLIO

The Fund invests in the Institutional Fiduciary Trust Money Market Portfolio (Sweep Money Fund), an open-end investment company managed by Franklin Advisers, Inc. (an affiliate of the investment manager). Management fees paid by the Fund are reduced on assets invested in the Sweep Money Fund, in an amount not to exceed the management and administrative fees paid by the Sweep Money Fund.

8. CONCENTRATION OF RISK

Investing in foreign securities may include certain risks and considerations not typically associated with investing in U.S. securities, such as fluctuating currency values and changing local and regional economic, political and social conditions, which may result in greater market volatility. In addition, certain foreign securities may not be as liquid as U.S. securities.

9. CREDIT FACILITY

TD-26

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Developing Markets Securities Fund

9. CREDIT FACILITY (continued)

Facility) which, after an extension of the original terms, matured on February 14, 2014. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 14, 2014, the Borrowers renewed the Global Credit Facility which matures on February 13, 2015.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.07% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses on the Statement of Operations. During the year ended December 31, 2013, the Fund did not use the Global Credit Facility.

10. FAIR VALUE MEASUREMENTS

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

•

Level 1 – quoted prices in active markets for identical financial instruments

•

Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

•

Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.

A summary of inputs used as of December 31, 2013, in valuing the Fund’s assets carried at fair value, is as follows:


	Level 1		Level 2		Level 3		Total

Assets:
Investments in Securities:
Closed End Funds	$	1,804,395	$	—	$	—	$	1,804,395
Equity Investments:^a
Russia		21,352,068		1,870,877		—		23,222,945
All Other Equity Investments^b		418,622,553		—		—		418,622,553
Participatory Notes		—		13,516,602		—		13,516,602
Short Term Investments		12,277,809		—		—		12,277,809

Total Investments in Securities	$	454,056,825	$	15,387,479	$	—	$	469,444,304

^aIncludes common and preferred stocks.

^bFor detailed categories, see the accompanying Statement of Investments.

11. NEW ACCOUNTING PRONOUNCEMENTS

TD-27

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Developing Markets Securities Fund

11. NEW ACCOUNTING PRONOUNCEMENTS (continued)

used in defining an investment company under U.S. Generally Accepted Accounting Principles and also sets forth certain measurement and disclosure requirements. Under the ASU, an entity that is registered under the 1940 Act automatically qualifies as an investment company. The ASU is effective for interim and annual reporting periods beginning after December 15, 2013. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on the financial statements.

12. SUBSEQUENT EVENTS

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure other than those already disclosed in the financial statements.

ABBREVIATIONS

Selected Portfolio

ADR - American Depositary Receipt

GDR - Global Depositary Receipt

SDR - Swedish Depositary Receipt

TD-28

Franklin Templeton Variable Insurance Products Trust

Templeton Developing Markets Securities Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders

of Franklin Templeton Variable Insurance Products Trust

In our opinion, the accompanying statement of assets and liabilities, including the statement of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Templeton Developing Markets Securities Fund (the “Fund”) at December 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2013 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

February 14, 2014

TD-29

Franklin Templeton Variable Insurance Products Trust

Tax Information (unaudited)

Templeton Developing Markets Securities Fund

At December 31, 2013, more than 50% of the Fund’s total assets were invested in securities of foreign issuers. In most instances, foreign taxes were withheld from income paid to the Fund on these investments. The Fund elects to treat foreign taxes paid as allowed under Section 853 of the Internal Revenue Code (Code). This election will allow shareholders of record as of the 2014 distribution date, to treat their proportionate share of foreign taxes paid by the Fund as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.

TD-30

TEMPLETON FOREIGN SECURITIES FUND

This annual report for Templeton Foreign Securities Fund covers the fiscal year ended December 31, 2013.

Performance Summary as of 12/31/13

Periods ended 12/31/13

1-Year

5-Year

10-Year

Average Annual Total Return

+22.98%

+14.09%

+7.75%

*Since Class 3 shares were not offered until 5/1/04, performance prior to that date represents historical Class 2 performance. Since 5/1/04 (effective date), the average annual total return of Class 3 shares was +7.81%. The Fund has a fee waiver associated with its investments in a Franklin Templeton money fund, contractually guaranteed through at least its current fiscal year end. Fund investment results reflect the fee waiver, to the extent applicable; without this reduction, the results would have been lower.

Total Return Index Comparison

for a Hypothetical $10,000 Investment (1/1/04–12/31/13)

The graph below shows the change in value of a hypothetical $10,000 investment in the Fund over the indicated period and includes reinvestment of any income or distributions. The Fund’s performance* is compared to the performance of the MSCI Europe, Australasia, Far East (EAFE) Index. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see Important Notes to Performance Information preceding the Fund Summaries.

LOGO

Templeton Foreign Securities Fund – Class 3

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares.

Current performance may differ from figures shown.

TF-1

Fund Goal and Main Investments: Templeton Foreign Securities Fund seeks long-term capital growth. Under normal market conditions, the Fund invests at least 80% of its net assets in investments of issuers located outside the U.S., including those in emerging markets.

Performance Overview

You can find the Fund’s one-year total return in the Performance Summary. In comparison, the Fund’s benchmark, the MSCI EAFE Index, produced a +23.29% total return for the same period.¹ Please note, index performance information is provided for reference and we do not attempt to track the index but rather undertake investments on the basis of fundamental research.

Economic and Market Overview

The 12 months under review were characterized by reinvigorated policy support and an economic recovery in developed markets. However, differences in global economic trends corresponded with increasingly divergent monetary policies, and growth in emerging market economies tended to slow. The central banks of key developed markets generally reaffirmed their accommodative monetary stances while some emerging market counterparts tightened policy rates as they sought to control inflation and currency depreciation.

In the U.S., economic growth and employment trends generally exceeded expectations. The U.S. Federal Reserve Board (Fed) expanded its asset purchase program to $85 billion per month from $40 billion early in the year. After encouraging economic and employment reports, the Fed announced in December it would reduce its monthly bond purchases by $10 billion beginning in January 2014; however, the Fed committed to keeping interest rates low. In October, the federal government temporarily shut down after Congress failed to authorize routine federal funding amid a disagreement over a new health care law. However, Congress subsequently agreed to fund the government through early 2014 and later passed a two-year budget deal that could ease automatic spending cuts and lower the risk of another shutdown.

Outside the U.S., the eurozone emerged from its longest recession on record during 2013’s second half and Japan’s growth moderated. The European Central Bank reduced its policy rate to a record low and pledged to maintain systemic support following political turmoil in

Fund Risks: All investments involve risks, including possible loss of principal. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments; investments in emerging markets involve heightened risks related to the same factors. To the extent the Fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. Current political uncertainty surrounding the European Union (EU) and its membership may increase market volatility. The financial instability of some countries in the EU, including Greece, Italy and Spain, together with the risk of that impacting other more stable countries, may increase the economic risk of investing in companies in Europe. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

TF-2

Greece, Spain, Portugal and Italy. Germany’s re-election of Chancellor Angela Merkel was largely perceived as a vote of support for ongoing eurozone reform measures. In Asia, the Bank of Japan set an explicit inflation target and pledged to double bond purchases in an unprecedented wave of policy reform. The U.S. dollar fell versus the euro but rose versus the Japanese yen in 2013.

Growth in many emerging markets moderated based on lower domestic demand, falling exports and weakening commodity prices. Political turmoil in certain emerging markets, the Fed’s potential tapering of its asset purchase program and the Chinese central bank’s effort to tighten liquidity to curb real estate and credit speculation led to a sell-off in emerging market equities and a sharp depreciation in regional currencies against the U.S. dollar. Central banks in Brazil, India and Indonesia raised interest rates in the second half of 2013 as they sought to curb inflation.

The stock market rally in developed markets accelerated during 2013 amid redoubled central bank commitments, continued corporate earnings strength and increasing signs of economic progress. Emerging market stocks rebounded toward period-end, although Latin American stocks trailed their emerging market peers. Oil prices rallied in the third quarter and rose for the year mainly owing to supply concerns related to geopolitical turmoil, but gold posted its largest annual price decline in more than three decades. Increasingly divergent economic and political circumstances during the period resulted in declining market correlations, which many bottom-up investors perceived as more favorable.

Investment Strategy

Our investment philosophy is bottom up, value oriented and long term. In choosing investments, we generally focus on the market price of a company’s securities relative to our evaluation of the company’s potential long-term earnings, asset value and cash flow. Among factors we consider are a company’s historical value measures, including price/earnings ratio, profit margins and liquidation value. We do in-depth research to construct a bargain list from which we buy.

Manager’s Discussion

During the 12 months under review, all sectors in the MSCI EAFE Index delivered positive returns as the broad market rallied. Our stock selection in the financials sector, especially in insurance, diversified financial services and commercial banks, was a major contributor to

LOGO

TF-3

Fund performance relative to its benchmark index.² Among the top sector contributors were insurance providers AXA (France) and Aegon (Netherlands), diversified financial services providers ING Groep (Netherlands) and ING U.S.,³ a new holding, and commercial banks Lloyds Banking Group (U.K.), BNP Paribas (France) and UniCredit (Italy). AXA’s shares advanced through the year as the insurer reported moderate revenue growth across all its business segments and continued to focus on higher margin products. The insurer also continued to expand its presence in emerging markets by acquiring domestic insurers in China and Colombia. Our underweighting in the underperforming materials sector, especially in metals and mining, contributed to relative results.⁴ Stock selection in the health care sector also aided relative performance, with pharmaceutical company Roche Holding (Switzerland) as a notable contributor.⁵ The company reported encouraging earnings results through the year, driven by demand for its cancer drugs, especially Avastin. The drug maker also progressed on its product pipeline and launched cancer drugs Perjeta in the U.S. and Kadcyla in the European Union. Underweightings in utilities, a sector we eliminated by period-end, and in consumer staples also aided returns.⁶ Other individual contributors included telecommunication services provider Vodafone Group (U.K.), specialty retailer Kingfisher (U.K.) and Japanese automobile manufacturer Mazda Motor.⁷ Vodafone’s stock price advanced as the company entered into an agreement to sell a joint venture interest to its partner Verizon Communications and planned to return a large portion of the sale to Vodafone’s shareholders.

In contrast, our overweighting and stock selection in the energy sector detracted from Fund performance.⁸ Our positions in energy equipment and services companies Aker Solutions (Norway) and Trican Well Service³(Canada) as well as Norwegian oil and natural gas producer Statoil suffered from oil price fluctuations stemming from Middle East political tensions. Our stock selection in telecommunication services companies such as wireless telecommunication provider China Mobile³ and diversified telecommunication provider China Telecom³ weighed

2. The financials sector comprises capital markets, commercial banks, diversified financial services, insurance, and real estate management and development in the SOI.

3. Not part of the index.

4. The materials sector comprises chemicals, construction materials, containers and packaging, and metals and mining in the SOI.

5. The health care sector comprises health care equipment and supplies, health care providers and services, life sciences tools and services, and pharmaceuticals in the SOI.

6. The consumer staples sector comprises food and staples retailing in the SOI.

7. Sold by period-end.

8. The energy sector comprises energy equipment and services; and oil, gas and consumable fuels in the SOI.

Top 10 Holdings

Templeton Foreign Securities Fund

12/31/13


Company Sector/Industry, Country	% of Total Net Assets
BNP Paribas SA		3.2%
Commercial Banks, France
ING Groep NV, IDR		3.0%
Diversified Financial Services, Netherlands
GlaxoSmithKline PLC		2.7%
Pharmaceuticals, U.K.
Sanofi		2.6%
Pharmaceuticals, France
Aviva PLC		2.5%
Insurance, U.K.
Tesco PLC		2.4%
Food & Staples Retailing, U.K.
Credit Suisse Group AG		2.4%
Capital Markets, Switzerland
Samsung Electronics Co. Ltd.		2.2%
Semiconductors & Semiconductor Equipment, South Korea
Total SA, B		2.2%
Oil, Gas & Consumable Fuels, France
AXA SA		2.1%
Insurance, France

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI).

TF-4

on results.⁹ China Mobile’s stock price fell after the company reported lower-than-expected second- and third-quarter earnings because of rising network costs. Stock selection in the information technology sector detracted from relative performance, with an off-benchmark position in South Korean electronic products manufacturer Samsung Electronics as a major detractor.¹⁰ In other sectors, the Fund’s off-benchmark positions in POSCO (South Korea) and Potash Corp. of Saskatchewan⁷ (Canada) as well as holdings in food and staples retailer Tesco (U.K.) and Brazilian metals and mining company Vale hindered relative performance.

From a geographic perspective, our stock selection in Europe benefited the Fund’s relative performance, as a number of our investments in the U.K., Switzerland, the Netherlands, France and Italy performed well. A lack of exposure to Australia, an off-benchmark allocation to the U.S. and stock selection in Hong Kong also contributed to relative returns. However, elsewhere in Asia, off-benchmark allocations to South Korea and China detracted from relative performance. Our exposure to off-benchmark nation Canada and a few European countries, led by Norway, also hurt performance.

Thank you for your participation in Templeton Foreign Securities Fund. We look forward to serving your future investment needs.

9. The telecommunication services sector comprises diversified telecommunication services and wireless telecommunication services in the SOI.

10. The information technology sector comprises communications equipment; computers and peripherals; electronic equipment, instruments and components; semiconductors and semiconductor equipment; and software in the SOI.

TF-5

Fund Expenses

•

Transaction expenses can include sales charges (loads) on purchases, redemption fees, surrender fees, transfer fees and premium taxes.

•

Actual Fund Expenses

You can estimate the Fund-level expenses you incurred during the period by following these steps. Of course, your account value and expenses will differ from those in this illustration:

1.	Divide your account value by $1,000.

If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.

2.	Multiply the result by the number under the heading “Fund-Level Expenses Incurred During Period.”

If Fund-Level Expenses Incurred During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses incurred this period at the Fund level are $64.50.

Templeton Foreign Securities Fund – Class 3

TF-6

Hypothetical Example for Comparison with Other Mutual Funds


Class 3	Beginning Account Value 7/1/13		Ending Account Value 12/31/13		Fund-Level Expenses Incurred During Period* 7/1/13–12/31/13
Actual	$	1,000	$	1,202.20	$	5.66
Hypothetical (5% return before expenses)	$	1,000	$	1,020.06	$	5.19

*Expenses are calculated using the most recent six-month annualized expense ratio for the Fund’s Class 3 shares (1.02%), which does not include any ongoing expenses of the Contract for which the Fund is an investment option, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

TF-7

Franklin Templeton Variable Insurance Products Trust

Financial Highlights

Templeton Foreign Securities Fund


	Year Ended December 31,
Class 1	2013			2012			2011			2010			2009

Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	14.63		$	12.78		$	14.54		$	13.68		$	10.95

Income from investment operations^a:
Net investment income^b		0.34			0.38			0.42			0.28			0.25
Net realized and unrealized gains (losses)		3.00			1.91			(1.90	)		0.86			3.39

Total from investment operations		3.34			2.29			(1.48	)		1.14			3.64

Less distributions from:
Net investment income		(0.41	)		(0.44	)		(0.28	)		(0.28	)		(0.43	)
Net realized gains		—			—			—			—			(0.48	)

Total distributions		(0.41	)		(0.44	)		(0.28	)		(0.28	)		(0.91	)

Redemption fees^c		—			—			—			—			—

Net asset value, end of year	$	17.56		$	14.63		$	12.78		$	14.54		$	13.68


Total return^d		23.27%			18.60%			(10.44)%			8.67%			37.34%
Ratios to average net assets
Expenses		0.78%			0.79%			0.79%	^e		0.78%	^e		0.78%	^e
Net investment income		2.16%			2.84%			2.92%			2.10%			2.28%

Supplemental data
Net assets, end of year (000’s)	$	298,468		$	265,924		$	254,292		$	321,282		$	318,173
Portfolio turnover rate		23.61%			12.53%			21.09%			19.16%			22.50%

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^eBenefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.

TF-8

Franklin Templeton Variable Insurance Products Trust

Financial Highlights (continued)

Templeton Foreign Securities Fund


	Year Ended December 31,
Class 2	2013			2012			2011			2010			2009

Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	14.37		$	12.56		$	14.29		$	13.45		$	10.76

Income from investment operations^a:
Net investment income^b		0.30			0.34			0.37			0.25			0.22
Net realized and unrealized gains (losses)		2.94			1.87			(1.86	)		0.84			3.34

Total from investment operations		3.24			2.21			(1.49	)		1.09			3.56

Less distributions from:
Net investment income		(0.37	)		(0.40	)		(0.24	)		(0.25	)		(0.39	)
Net realized gains		—			—			—			—			(0.48	)

Total distributions		(0.37	)		(0.40	)		(0.24	)		(0.25	)		(0.87	)

Redemption fees^c		—			—			—			—			—

Net asset value, end of year	$	17.24		$	14.37		$	12.56		$	14.29		$	13.45


Total return^d		22.97%			18.23%			(10.63)%			8.41%			37.04%
Ratios to average net assets
Expenses		1.03%			1.04%			1.04%	^e		1.03%	^e		1.03%	^e
Net investment income		1.91%			2.59%			2.67%			1.85%			2.03%

Supplemental data
Net assets, end of year (000’s)	$	1,873,586		$	1,744,231		$	1,679,412		$	2,090,757		$	2,010,268
Portfolio turnover rate		23.61%			12.53%			21.09%			19.16%			22.50%

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^eBenefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.

TF-9

Franklin Templeton Variable Insurance Products Trust

Financial Highlights (continued)

Templeton Foreign Securities Fund


	Year Ended December 31,
Class 3	2013			2012			2011			2010			2009

Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	14.32		$	12.51		$	14.24		$	13.37		$	10.70

Income from investment operations^a:
Net investment income^b		0.30			0.34			0.37			0.25			0.25
Net realized and unrealized gains (losses)		2.93			1.87			(1.86	)		0.84			3.30

Total from investment operations		3.23			2.21			(1.49	)		1.09			3.55

Less distributions from:
Net investment income		(0.37	)		(0.40	)		(0.24	)		(0.22	)		(0.40	)
Net realized gains		—			—			—			—			(0.48	)

Total distributions		(0.37	)		(0.40	)		(0.24	)		(0.22	)		(0.88	)

Redemption fees^c		—			—			—			—			—

Net asset value, end of year	$	17.18		$	14.32		$	12.51		$	14.24		$	13.37


Total return^d		22.98%			18.30%			(10.68)%			8.41%			37.20%
Ratios to average net assets
Expenses		1.03%			1.04%			1.04%	^e		1.03%	^e		1.03%	^e
Net investment income		1.91%			2.59%			2.67%			1.85%			2.03%

Supplemental data
Net assets, end of year (000’s)	$	95,405		$	91,642		$	88,380		$	108,766		$	115,364
Portfolio turnover rate		23.61%			12.53%			21.09%			19.16%			22.50%

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^eBenefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.

TF-10

Franklin Templeton Variable Insurance Products Trust

Financial Highlights (continued)

Templeton Foreign Securities Fund


	Year Ended December 31,
Class 4	2013			2012			2011			2010			2009

Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	14.48		$	12.66		$	14.43		$	13.59		$	10.91

Income from investment operations^a:
Net investment income^b		0.28			0.33			0.36			0.17			0.21
Net realized and unrealized gains (losses)		2.97			1.89			(1.88	)		0.92			3.37

Total from investment operations		3.25			2.22			(1.52	)		1.09			3.58

Less distributions from:
Net investment income		(0.36	)		(0.40	)		(0.25	)		(0.25	)		(0.42	)
Net realized gains		—			—			—			—			(0.48	)

Total distributions		(0.36	)		(0.40	)		(0.25	)		(0.25	)		(0.90	)

Redemption fees^c		—			—			—			—			—

Net asset value, end of year	$	17.37		$	14.48		$	12.66		$	14.43		$	13.59


Total return^d		22.86%			18.14%			(10.74)%			8.38%			36.84%
Ratios to average net assets
Expenses		1.13%			1.14%			1.14%	^e		1.13%	^e		1.13%	^e
Net investment income		1.81%			2.49%			2.57%			1.75%			1.93%

Supplemental data
Net assets, end of year (000’s)	$	513,098		$	416,277		$	353,346		$	305,505		$	48,501
Portfolio turnover rate		23.61%			12.53%			21.09%			19.16%			22.50%

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^eBenefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.

TF-11

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013


Templeton Foreign Securities Fund	Country	Shares		Value
Common Stocks 97.1%
Aerospace & Defense 1.1%
BAE Systems PLC	United Kingdom		4,201,030	$	30,243,321

Airlines 0.8%
^a Deutsche Lufthansa AG	Germany		1,080,990		22,928,024

Auto Components 1.8%
Cie Generale des Etablissements Michelin, B	France		222,570		23,649,703
Hyundai Mobis	South Korea		100,634		27,977,057

					51,626,760

Automobiles 1.7%
Nissan Motor Co. Ltd.	Japan		1,341,500		11,261,975
Toyota Motor Corp., ADR	Japan		291,181		35,500,788

					46,762,763

Building Products 0.6%
Compagnie de Saint-Gobain	France		296,890		16,324,678

Capital Markets 2.8%
Credit Suisse Group AG	Switzerland		2,190,208		66,954,736
GAM Holding Ltd.	Switzerland		505,110		9,824,179

					76,778,915

Chemicals 1.6%
Akzo Nobel NV	Netherlands		594,220		46,049,475

Commercial Banks 14.2%
BNP Paribas SA	France		1,124,120		87,593,758
^a Commerzbank AG	Germany		793,900		12,787,430
DBS Group Holdings Ltd.	Singapore		2,174,520		29,469,244
Hana Financial Group Inc.	South Korea		1,255,380		52,202,214
HSBC Holdings PLC	United Kingdom		4,015,600		43,577,184
KB Financial Group Inc., ADR	South Korea		1,189,645		48,192,519
^a Lloyds Banking Group PLC	United Kingdom		19,072,470		24,875,644
Societe Generale	France		480,870		27,925,855
UniCredit SpA	Italy		6,991,743		51,740,224
United Overseas Bank Ltd.	Singapore		985,000		16,580,599

					394,944,671

Communications Equipment 0.4%
Ericsson, B, ADR	Sweden		997,972		12,215,177

Computers & Peripherals 0.5%
Compal Electronics Inc.	Taiwan		16,699,431		12,791,244

Construction & Engineering 0.7%
Carillion PLC	United Kingdom		3,750,730		20,520,595

Construction Materials 0.6%
CRH PLC	Ireland		659,820		16,608,757

Containers & Packaging 0.9%
Rexam PLC	United Kingdom		2,719,161		23,875,348

Diversified Financial Services 4.4%
^a ING Groep NV, IDR	Netherlands		6,093,334		84,651,943
ING U.S. Inc.	United States		1,076,240		37,829,836

					122,481,779

TF-12

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Foreign Securities Fund	Country	Shares		Value
Common Stocks (continued)
Diversified Telecommunication Services 5.6%
China Telecom Corp. Ltd., H	China		47,482,357	$	24,003,410
Orange SA	France		1,396,683		17,290,236
Singapore Telecommunications Ltd.	Singapore		9,394,000		27,248,407
^b Telefonica SA, ADR	Spain		2,270,951		37,107,339
Telenor ASA	Norway		1,103,354		26,305,418
Vivendi SA	France		928,427		24,461,917

					156,416,727

Electrical Equipment 0.9%
Alstom SA	France		438,720		15,976,586
Shanghai Electric Group Co. Ltd., H	China		23,792,000		8,590,997

					24,567,583

Electronic Equipment, Instruments & Components 1.8%
^a Flextronics International Ltd.	Singapore		2,385,970		18,538,987
Kingboard Chemical Holdings Ltd.	Hong Kong		11,646,000		30,337,707

					48,876,694

Energy Equipment & Services 3.7%
Aker Solutions ASA	Norway		1,617,940		28,917,033
Ensign Energy Services Inc.	Canada		1,965,300		30,955,580
Fugro NV, IDR	Netherlands		253,200		15,085,600
Trican Well Service Ltd.	Canada		2,373,000		28,999,237

					103,957,450

Food & Staples Retailing 3.2%
Metro AG	Germany		437,967		21,205,310
Tesco PLC	United Kingdom		12,226,930		67,709,603

					88,914,913

Health Care Equipment & Supplies 1.1%
Getinge AB, B	Sweden		417,870		14,290,929
Nobel Biocare Holding AG	Switzerland		974,135		15,179,055

					29,469,984

Health Care Providers & Services 0.5%
Shanghai Pharmaceuticals Holding Co. Ltd., H	China		5,268,500		12,881,900

Industrial Conglomerates 2.6%
Hutchison Whampoa Ltd.	Hong Kong		2,500,239		34,016,418
Siemens AG	Germany		285,414		38,979,957

					72,996,375

Insurance 10.1%
ACE Ltd.	United States		307,649		31,850,901
Aegon NV	Netherlands		5,507,530		51,983,816
AIA Group Ltd.	Hong Kong		7,789,600		39,076,833
Aviva PLC	United Kingdom		9,258,670		68,937,783
AXA SA	France		2,056,508		57,168,564
Muenchener Rueckversicherungs-Gesellschaft AG	Germany		68,060		14,992,686
Swiss Re AG	Switzerland		174,680		16,066,918

					280,077,501

TF-13

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Foreign Securities Fund	Country	Shares		Value
Common Stocks (continued)
Leisure Equipment & Products 1.0%
Namco Bandai Holdings Inc.	Japan		977,800	$	21,673,174
Nikon Corp.	Japan		386,100		7,366,333

					29,039,507

Life Sciences Tools & Services 0.6%
Lonza Group AG	Switzerland		175,440		16,638,332

Metals & Mining 2.6%
HudBay Minerals Inc.	Canada		2,891,000		23,788,862
Mining and Metallurgical Co. Norilsk Nickel OJSC, ADR	Russia		317,022		5,264,151
POSCO	South Korea		136,907		42,340,700

					71,393,713

Multiline Retail 1.0%
Marks & Spencer Group PLC	United Kingdom		4,066,900		29,146,395

Oil, Gas & Consumable Fuels 11.4%
BP PLC	United Kingdom		5,946,135		48,064,250
China Shenhua Energy Co. Ltd., H	China		8,462,000		26,626,706
Eni SpA	Italy		1,159,640		27,898,032
LUKOIL Holdings, ADR	Russia		109,772		6,855,261
Royal Dutch Shell PLC, A	United Kingdom		16,803		601,696
Royal Dutch Shell PLC, B	United Kingdom		1,094,263		41,308,844
Statoil ASA	Norway		1,816,110		44,017,109
Suncor Energy Inc.	Canada		901,700		31,614,469
Talisman Energy Inc.	Canada		2,554,600		29,703,253
Total SA, B	France		979,926		60,021,459

					316,711,079

Pharmaceuticals 8.4%
GlaxoSmithKline PLC	United Kingdom		2,772,585		73,997,433
Novartis AG	Switzerland		328,730		26,237,964
Roche Holding AG	Switzerland		179,480		50,138,912
Sanofi	France		670,755		71,152,721
Teva Pharmaceutical Industries Ltd., ADR	Israel		333,815		13,379,305

					234,906,335

Real Estate Management & Development 0.0%†
Cheung Kong (Holdings) Ltd.	Hong Kong		922		14,565

Semiconductors & Semiconductor Equipment 3.1%
Infineon Technologies AG	Germany		1,103,225		11,775,691
Samsung Electronics Co. Ltd.	South Korea		46,744		60,747,607
Taiwan Semiconductor Manufacturing Co. Ltd.	Taiwan		4,151,526		14,681,997

					87,205,295

Software 1.7%
Capcom Co. Ltd.	Japan		1,211,400		21,708,564
Trend Micro Inc.	Japan		713,300		24,928,243

					46,636,807

Specialty Retail 1.2%
Kingfisher PLC	United Kingdom		5,160,616		32,865,855

Trading Companies & Distributors 1.7%
ITOCHU Corp.	Japan		3,753,600		46,305,094

TF-14

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Foreign Securities Fund	Country	Shares		Value
Common Stocks (continued)
Wireless Telecommunication Services 2.8%
China Mobile Ltd.	China		2,340,000	$	24,216,730
Vodafone Group PLC, ADR	United Kingdom		1,340,319		52,687,940

					76,904,670

Total Common Stocks (Cost $2,052,849,016)					2,700,078,281

Preferred Stocks 0.6%
Metals & Mining 0.3%
Vale SA, ADR, pfd., A	Brazil		664,832		9,314,297

Oil, Gas & Consumable Fuels 0.3%
Petroleo Brasileiro SA, ADR, pfd.	Brazil		517,880		7,607,657

Total Preferred Stocks (Cost $12,298,385)					16,921,954

Total Investments before Short Term Investments (Cost $2,065,147,401)					2,717,000,235

Short Term Investments 2.7%
Money Market Funds (Cost $69,592,541) 2.5%
^a,c Institutional Fiduciary Trust Money Market Portfolio	United States		69,592,541		69,592,541

^dInvestments from Cash Collateral Received for Loaned Securities (Cost $6,432,000) 0.2%
Money Market Funds 0.2%
^e BNY Mellon Overnight Government Fund, 0.017%	United States		6,432,000		6,432,000

Total Investments (Cost $2,141,171,942) 100.4%					2,793,024,776
Other Assets, less Liabilities (0.4)%					(12,466,730	)

Net Assets 100.0%				$	2,780,558,046

See Abbreviations on page TF-27.

†Rounds to less than 0.1% of net assets.

^aNon-income producing.

^bA portion or all of the security is on loan at December 31, 2013. See Note 1(c).

^cSee Note 7 regarding investments in the Institutional Fiduciary Trust Money Market Portfolio.

^dSee Note 1(c) regarding securities on loan.

^eThe rate shown is the annualized seven-day yield at period end.

The accompanying notes are an integral part of these financial statements.

TF-15

Franklin Templeton Variable Insurance Products Trust

Financial Statements

Statement of Assets and Liabilities

December 31, 2013


	Templeton Foreign Securities Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	2,071,579,401
Cost - Sweep Money Fund (Note 7)		69,592,541

Total cost of investments	$	2,141,171,942

Value - Unaffiliated issuers	$	2,723,432,235
Value - Sweep Money Fund (Note 7)		69,592,541

Total value of investments (includes securities loaned in the amount $6,274,560)		2,793,024,776
Receivables:
Investment securities sold		515,083
Capital shares sold		982,086
Dividends		4,477,585
Other assets		60

Total assets		2,798,999,590

Liabilities:
Payables:
Investment securities purchased		495,501
Capital shares redeemed		7,960,888
Management fees		1,477,136
Administrative fees		222,190
Distribution fees		1,104,444
Payable upon return of securities loaned		6,432,000
Accrued expenses and other liabilities		749,385

Total liabilities		18,441,544

Net assets, at value	$	2,780,558,046

Net assets consist of:
Paid-in capital	$	2,147,551,858
Undistributed net investment income		49,005,172
Net unrealized appreciation (depreciation)		651,936,806
Accumulated net realized gain (loss)		(67,935,790	)

Net assets, at value	$	2,780,558,046

The accompanying notes are an integral part of these financial statements.

TF-16

Franklin Templeton Variable Insurance Products Trust

Financial Statements (continued)

Statement of Assets and Liabilities (continued)

December 31, 2013


	Templeton Foreign Securities Fund
Class 1:
Net assets, at value	$	298,468,465

Shares outstanding		16,995,615

Net asset value and maximum offering price per share	$	17.56

Class 2:
Net assets, at value	$	1,873,586,040

Shares outstanding		108,656,664

Net asset value and maximum offering price per share	$	17.24

Class 3:
Net assets, at value	$	95,405,319

Shares outstanding		5,553,970

Net asset value and maximum offering price per share^a	$	17.18

Class 4:
Net assets, at value	$	513,098,222

Shares outstanding		29,544,388

Net asset value and maximum offering price per share	$	17.37

^aRedemption price is equal to net asset value less redemption fees retained by the Fund.

The accompanying notes are an integral part of these financial statements.

TF-17

Franklin Templeton Variable Insurance Products Trust

Financial Statements (continued)

Statement of Operations

for the year ended December 31, 2013


	Templeton Foreign Securities Fund
Investment income:
Dividends (net of foreign taxes of $6,946,517)	$	75,267,252
Income from securities loaned		1,510,201

Total investment income		76,777,453

Expenses:
Management fees (Note 3a)		16,712,881
Administrative fees (Note 3b)		2,535,512
Distribution fees: (Note 3c)
Class 2		4,453,331
Class 3		230,038
Class 4		1,623,277
Unaffiliated transfer agent fees		1,774
Custodian fees (Note 4)		377,540
Reports to shareholders		436,387
Registration and filing fees		1,094
Professional fees		138,372
Trustees’ fees and expenses		10,256
Other		56,693

Total expenses		26,577,155

Net investment income		50,200,298

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments		40,989,015
Foreign currency transactions		(465,033	)

Net realized gain (loss)		40,523,982

Net change in unrealized appreciation (depreciation) on:
Investments		454,907,975
Translation of other assets and liabilities denominated in foreign currencies		77,388

Net change in unrealized appreciation (depreciation)		454,985,363

Net realized and unrealized gain (loss)		495,509,345

Net increase (decrease) in net assets resulting from operations	$	545,709,643

The accompanying notes are an integral part of these financial statements.

TF-18

Franklin Templeton Variable Insurance Products Trust

Financial Statements (continued)

Statements of Changes in Net Assets


	Templeton Foreign Securities Fund
	Year Ended December 31,
	2013			2012

Increase (decrease) in net assets:
Operations:
Net investment income	$	50,200,298		$	63,456,029
Net realized gain (loss) from investments and foreign currency transactions		40,523,982			19,998,467
Net change in unrealized appreciation (depreciation) on investments and translation of other assets and liabilities denominated in foreign currencies		454,985,363			333,368,769

Net increase (decrease) in net assets resulting from operations		545,709,643			416,823,265

Distributions to shareholders from:
Net investment income:
Class 1		(7,042,374	)		(8,240,958	)
Class 2		(42,339,120	)		(51,055,731	)
Class 3		(2,189,476	)		(2,656,996	)
Class 4		(10,745,373	)		(11,448,483	)

Total distributions to shareholders		(62,316,343	)		(73,402,168	)

Capital share transactions: (Note 2)
Class 1		(18,682,478	)		(24,104,168	)
Class 2		(199,579,456	)		(174,931,568	)
Class 3		(13,135,502	)		(9,153,115	)
Class 4		10,467,967			7,407,804

Total capital share transactions		(220,929,469	)		(200,781,047	)

Redemption fees		19,703			4,388

Net increase (decrease) in net assets		262,483,534			142,644,438
Net assets:
Beginning of year		2,518,074,512			2,375,430,074

End of year	$	2,780,558,046		$	2,518,074,512

Undistributed net investment income included in net assets:
End of year	$	49,005,172		$	61,586,250

The accompanying notes are an integral part of these financial statements.

TF-19

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements

Templeton Foreign Securities Fund

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940, as amended, (1940 Act) as an open-end investment company, consisting of twenty separate funds. The Templeton Foreign Securities Fund (Fund) is included in this report. The financial statements of the remaining funds in the Trust are presented separately. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. The Fund offers four classes of shares: Class 1, Class 2, Class 3, and Class 4. Each class of shares differs by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a. Financial Instrument Valuation

Equity securities listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of the NYSE close, whichever is earlier. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at the NYSE close on the day that the value of the security is determined. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities. Investments in open-end mutual funds and non-registered money market funds are valued at the closing net asset value.

TF-20

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Foreign Securities Fund

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

a. Financial Instrument Valuation (continued)

and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services.

b. Foreign Currency Translation

c. Securities Lending

The Fund participates in an agency based securities lending program. The Fund receives cash collateral against the loaned securities in an amount equal to at least 102% of the market value of the loaned securities. Collateral is maintained over the life of the loan in an amount not less than 100% of the market value of loaned securities, as determined at the close of fund business each day; any additional collateral required due to changes in security values is delivered to the Fund on the next business day. The collateral is invested in a non-registered money fund. The Fund receives income from the investment of cash collateral, in addition to lending fees and rebates paid by the borrower. The Fund bears the market risk with respect to the collateral investment, securities loaned, and the risk that the agent may default on its obligations to the Fund. The securities lending agent has agreed to indemnify the Fund in the event of default by a third party borrower.

d. Income and Deferred Taxes

TF-21

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Foreign Securities Fund

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

d. Income and Deferred Taxes (continued)

e. Security Transactions, Investment Income, Expenses and Distributions

f. Accounting Estimates

g. Redemption Fees

TF-22

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Foreign Securities Fund

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

h. Guarantees and Indemnifications

2. SHARES OF BENEFICIAL INTEREST

At December 31, 2013, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:


	Year Ended December 31,
	2013						2012
Class 1 Shares:	Shares			Amount			Shares			Amount
Shares sold		496,052		$	7,884,222			437,702		$	5,851,468
Shares issued in reinvestment of distributions		468,554			7,042,374			676,598			8,240,958
Shares redeemed		(2,142,399	)		(33,609,074	)		(2,835,243	)		(38,196,594	)

Net increase (decrease)		(1,177,793	)	$	(18,682,478	)		(1,720,943	)	$	(24,104,168	)

Class 2 Shares:
Shares sold		9,932,214		$	152,564,880			12,784,843		$	164,850,484
Shares issued in reinvestment of distributions		2,864,622			42,339,120			4,261,747			51,055,731
Shares redeemed		(25,480,434	)		(394,483,456	)		(29,457,075	)		(390,837,783	)

Net increase (decrease)		(12,683,598	)	$	(199,579,456	)		(12,410,485	)	$	(174,931,568	)

Class 3 Shares:
Shares sold		558,566		$	8,455,794			414,387		$	5,363,853
Shares issued in reinvestment of distributions		148,742			2,189,476			222,529			2,656,996
Shares redeemed		(1,552,340	)		(23,780,772	)		(1,302,161	)		(17,173,964	)

Net increase (decrease)		(845,032	)	$	(13,135,502	)		(665,245	)	$	(9,153,115	)

Class 4 Shares:
Shares sold		5,690,758		$	88,119,947			6,234,278		$	81,740,548
Shares issued on reinvestment of distributions		721,650			10,745,373			947,722			11,448,483
Shares redeemed		(5,613,738	)		(88,397,353	)		(6,356,073	)		(85,781,227	)

Net increase (decrease)		798,670		$	10,467,967			825,927		$	7,407,804

3. TRANSACTIONS WITH AFFILIATES


Subsidiary		Affiliation
Templeton Investment Counsel, LLC (TIC)		Investment manager
Franklin Templeton Services, LLC (FT Services)		Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)		Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)		Transfer agent

TF-23

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Foreign Securities Fund

3. TRANSACTIONS WITH AFFILIATES (continued)

a. Management Fees

The Fund pays an investment management fee to TIC based on the average daily net assets of the Fund as follows:


Annualized Fee Rate		Net Assets
0.750%		Up to and including $200 million
0.675%		Over $200 million, up to and including $1.3 billion
0.600%		Over $1.3 billion, up to and including $10 billion
0.580%		Over $10 billion, up to and including $15 billion
0.560%		Over $15 billion, up to and including $20 billion
0.540%		In excess of $20 billion

b. Administrative Fees

The Fund pays an administrative fee to FT Services based on the average daily net assets of the Fund as follows:


Annualized Fee Rate		Net Assets
0.150%		Up to and including $200 million
0.135%		Over $200 million, up to and including $700 million
0.100%		Over $700 million, up to and including $1.2 billion
0.075%		In excess of $1.2 billion

c. Distribution Fees

d. Transfer Agent Fees

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

4. EXPENSE OFFSET ARRANGEMENT

5. INCOME TAXES

TF-24

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Foreign Securities Fund

5. INCOME TAXES (continued)

At December 31, 2013, the Fund had capital loss carryforwards of $59,815,020 expiring in 2017. During the year ended December 31, 2013, the Fund utilized $40,989,015 of capital loss carryforwards.

The tax character of distributions paid during the years ended December 31, 2013 and 2012, was as follows:


	2013		2012
Distributions paid from ordinary income	$	62,316,343	$	73,402,168

At December 31, 2013, the cost of investments, net unrealized appreciation (depreciation), and undistributed ordinary income for income tax purposes were as follows:


Cost of investments	$	2,149,983,787


Unrealized appreciation	$	707,876,713
Unrealized depreciation		(64,835,724	)

Net unrealized appreciation (depreciation)	$	643,040,989

Distributable earnings – undistributed ordinary income	$	49,729,731

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of foreign currency transactions and wash sales.

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments (excluding short term securities) for the year ended December 31, 2013, aggregated $592,406,211 and $841,981,365, respectively.

7. INVESTMENTS IN INSTITUTIONAL FIDUCIARY TRUST MONEY MARKET PORTFOLIO

8. CONCENTRATION OF RISK

9. CREDIT FACILITY

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton Investments, are borrowers in a joint syndicated senior unsecured credit facility totaling $1.5 billion (Global Credit Facility) which, after an extension of the original terms, matured on February 14, 2014. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 14, 2014, the Borrowers renewed the Global Credit Facility which matures on February 13, 2015.

TF-25

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Foreign Securities Fund

9. CREDIT FACILITY (continued)

10. FAIR VALUE MEASUREMENTS

•

Level 1 – quoted prices in active markets for identical financial instruments

•

Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

•

Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.

A summary of inputs used as of December 31, 2013, in valuing the Fund’s assets carried at fair value, is as follows:


	Level 1		Level 2		Level 3		Total

Assets:
Investments in Securities:
Equity Investments^a,b	$	2,717,000,235	$	—	$	—	$	2,717,000,235
Short Term Investments		69,592,541		6,432,000		—		76,024,541

Total Investments in Securities	$	2,786,592,776	$	6,432,000	$	—	$	2,793,024,776

^aIncludes common and preferred stocks.

^bFor detailed categories, see the accompanying Statement of Investments.

11. NEW ACCOUNTING PRONOUNCEMENTS

In June 2013, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2013-08, Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements. The ASU modifies the criteria used in defining an investment company under U.S. Generally Accepted Accounting Principles and also sets forth certain measurement and disclosure requirements. Under the ASU, an entity that is registered under the 1940 Act automatically qualifies as an investment company. The ASU is effective for interim and annual reporting periods beginning after December 15, 2013. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on the financial statements.

TF-26

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Foreign Securities Fund

12. SUBSEQUENT EVENTS


ABBREVIATIONS
Selected Portfolio

ADR - American Depositary Receipt
IDR - International Depositary Receipt

TF-27

Franklin Templeton Variable Insurance Products Trust

Templeton Foreign Securities Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of

Franklin Templeton Variable Insurance Products Trust

In our opinion, the accompanying statement of assets and liabilities, including the statement of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Templeton Foreign Securities Fund (the “Fund”) at December 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2013 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

February 14, 2014

TF-28

Franklin Templeton Variable Insurance Products Trust

Tax Information (unaudited)

Templeton Foreign Securities Fund

TF-29

TEMPLETON GLOBAL BOND SECURITIES FUND

We are pleased to bring you Templeton Global Bond Securities Fund’s annual report for the fiscal year ended December 31, 2013.

Performance Summary as of 12/31/13

Periods ended 12/31/13

1-Year

5-Year

10-Year

Average Annual Total Return

+1.64%

+9.50%

+8.82%

*Class 3 performance prior to 4/1/05 reflects historical Class 2 performance. Since 4/1/05 (effective date), the average annual total return of Class 3 shares was +8.72%.

Total Return Index Comparison for a Hypothetical $10,000 Investment (1/1/04–12/31/13)

The graph below shows the change in value of a hypothetical $10,000 investment in the Fund over the indicated period and includes reinvestment of any income or distributions. The Fund’s performance* is compared to the performance of the J.P. Morgan (JPM) Global Government Bond Index (GGBI), the Citigroup World Government Bond Index (WGBI) and the Consumer Price Index (CPI). One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio. Please see Important Notes to Performance Information preceding the Fund Summaries.

LOGO

Templeton Global Bond Securities Fund – Class 3

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares.

Current performance may differ from figures shown.

TGB-1

Fund Goal and Main Investments: Templeton Global Bond Securities Fund seeks high current income, consistent with preservation of capital, with capital appreciation as a secondary consideration. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds, which include debt securities of any maturity, such as bonds, notes, bills and debentures.

Performance Overview

You can find the Fund’s one-year total return in the Performance Summary. For comparison, the Fund’s benchmarks, the JPM GGBI and the Citigroup WGBI, had -4.50% and -4.00% total returns for the same period.¹

Economic and Market Overview

The global economic recovery was mixed during the year under review. The recovery in emerging markets moderated after many economies had previously returned to and exceeded pre-crisis activity levels. Although some developed economies, such as those of Australia and some Scandinavian countries, have enjoyed relatively strong recoveries in the aftermath of the global financial crisis, growth in the eurozone and Japan continued to be slow by the standards of previous recoveries. Improving sentiment, relatively strong fundamentals and continued provision of global liquidity supported assets perceived as risky and equity markets performed well.

Fears of possible reductions in stimulative government policies contributed to periods of risk aversion, when credit spreads widened and assets perceived as risky sold off, alternating with periods of heightened risk appetite, when spreads narrowed and investors again favored risk assets. Against this backdrop, extensive liquidity creation continued, in particular from the Bank of Japan’s commitment to raise its inflation target, as well as from the European Central Bank’s interest rate cuts.

During the period, the U.S. Federal Reserve Board (Fed) announced it might reduce the size of its quantitative easing program at subsequent meetings. The announcement led risk assets, particularly those in emerging markets, to sell off as market participants’ expectations of global liquidity conditions began to change. The Fed later confirmed it would begin tapering its asset purchases from $85 billion per month to $75 billion per month beginning in January 2014.

Fund Risks: All investments involve risks, including possible loss of principal. Currency rates may fluctuate significantly over short periods of time, and can reduce returns. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio that may result in significant volatility and cause the Fund to participate in losses (as well as enable gains) on an amount that exceeds the Fund’s initial investment. The Fund may not achieve the anticipated benefits and may realize losses when a counterparty fails to perform as promised. Foreign securities involve special risks, including currency fluctuations and economic and political uncertainties. Investments in emerging markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size and lesser liquidity. Investments in lower rated bonds include higher risk of default and loss of principal. Changes in interest rates will affect the value of the Fund’s portfolio and its share price and yield. Bond prices generally move in the opposite direction of interest rates. As prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. The Fund is also nondiversified, which involves the risk of greater price fluctuation than a more diversified portfolio. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.

TGB-2

Global financial market volatility increased toward the end of the period as the U.S. federal government partially shut down and the U.S. Treasury approached its debt ceiling. As the government shutdown ended and the debt ceiling was raised, market volatility quickly subsided.

Investment Strategy

We invest selectively in bonds around the world based upon our assessment of changing market, political and economic conditions. While seeking opportunities, we monitor various factors including changes in interest rates, currency exchange rates and credit risks. We seek to manage the Fund’s exposure to various currencies and may utilize currency forward contracts.

Manager’s Discussion

The Fund’s total return was influenced by various factors, including interest rate developments, currency movements and exposure to sovereign debt markets. During the year under review, each of these sources of return benefited absolute and relative performance.

Interest Rate Strategy

As part of the Fund’s interest rate strategy we use interest rate swaps to manage duration. We maintained a defensive posture with respect to interest rate risk in developed and emerging markets. At period-end, the Fund had a shorter duration position than the JPM GGBI given our assessment that there was limited scope for further global interest rate reductions from historically low levels and improving economic conditions. However, we maintained some duration exposure in countries where we believed long-term bond yields could benefit from declining risk premiums, and select duration exposures in Europe and Latin America contributed to performance relative to the JPM GGBI.

Currency Strategy

As part of the Fund’s investment strategy, we used currency forward contracts seeking to hedge or gain exposure to various currencies. Overall, our diversified currency exposure contributed to absolute performance and performance relative to the JPM GGBI. As the Japanese yen depreciated against the U.S. dollar during the year, the Fund’s net negative position in the currency, achieved via the use of currency forward contracts, contributed meaningfully in terms of absolute and relative performance. Our net negative position in the yen reflected our pessimistic view on the relative prospects for the Japanese economy and

LOGO

What is duration?

Duration is a measure of a bond’s price sensitivity to interest rate changes. In general, a portfolio of securities with a lower duration can be expected to be less sensitive to interest rate changes than a portfolio with a higher duration.

What is an interest rate swap?

An interest rate swap is an agreement between two parties to exchange interest rate obligations, generally one based on an interest rate fixed to maturity while the other is based on an interest rate that changes in accordance with changes in a designated benchmark (for example, LIBOR, prime, commercial paper or other benchmarks).

What is a currency forward contract?

A currency forward contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date.

TGB-3

was meant as an implicit hedge against potentially rising yields in the U.S., given the yen’s historically strong correlation to long-term U.S. Treasury yields. However, as the euro appreciated against the U.S. dollar during the year, our net negative position in the monetary union’s currency detracted from performance.

Global Sovereign Debt Strategy

The Fund purchased investment-grade and subinvestment-grade hard currency-denominated sovereign debt that has historically typically compensated for greater credit risk by offering higher yields relative to U.S. Treasury and European benchmark bonds. Overall, the Fund’s sovereign credit exposures contributed to performance. These exposures were concentrated in non-eurozone Europe.

Thank you for your participation in Templeton Global Bond Securities Fund. We look forward to serving your future investment needs.

Currency Breakdown

Templeton Global Bond Securities Fund

12/31/13


	% of Total Net Assets

Americas		82.1%
U.S. Dollar		58.2%
Mexican Peso		11.7%
Brazilian Real		4.4%
Canadian Dollar		4.0%
Chilean Peso		3.7%
Peruvian Nuevo Sol		0.1%

Asia Pacific		24.6%
South Korean Won		16.4%
Malaysian Ringgit		12.7%
Singapore Dollar		8.5%
Indonesian Rupiah		2.4%
Indian Rupee		2.3%
Philippine Peso		1.4%
Sri Lankan Rupee		1.2%
Japanese Yen*		-20.3%

Europe*		-6.7%
Polish Zloty		10.6%
Swedish Krona		8.1%
Hungarian Forint		2.3%
Euro*		-27.7%

*A negative figure reflects net “short” exposure, designed to benefit if the value of the associated currency decreases. Conversely, the Fund’s value would potentially decline if the value of the associated currency increases.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments.

TGB-4

Fund Expenses

•

Transaction expenses can include sales charges (loads) on purchases, redemption fees, surrender fees, transfer fees and premium taxes.

•

Actual Fund Expenses

You can estimate the Fund-level expenses you incurred during the period by following these steps. Of course, your account value and expenses will differ from those in this illustration:

1.	Divide your account value by $1,000.

If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.

2.	Multiply the result by the number under the heading “Fund-Level Expenses Incurred During Period.”

If Fund-Level Expenses Incurred During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses incurred this period at the Fund level are $64.50.

Templeton Global Bond Securities Fund – Class 3

TGB-5

Hypothetical Example for Comparison with Other Mutual Funds

Information in the second line (Hypothetical) of the table can help you compare ongoing expenses of the Fund with those of other mutual funds offered through the Contract. This information may not be used to estimate the actual ending account balance or expenses you incurred during the period. The hypothetical “Ending Account Value” is based on the Fund’s actual expense ratio for each class and an assumed 5% annual rate of return before expenses, which does not represent the Fund’s actual return. The figure under the heading “Fund-Level Expenses Incurred During Period” shows the hypothetical expenses your account would have incurred under this scenario. You can compare this figure with the 5% hypothetical examples that appear in shareholder reports of other funds offered through a Contract.


Class 3	Beginning Account Value 7/1/13		Ending Account Value 12/31/13		Fund-Level Expenses Incurred During Period* 7/1/13–12/31/13
Actual	$	1,000	$	1,033.90	$	3.79
Hypothetical (5% return before expenses)	$	1,000	$	1,021.48	$	3.77

*Expenses are calculated using the most recent six-month annualized expense ratio for the Fund’s Class 3 shares (0.74%), which does not include any ongoing expenses of the Contract for which the Fund is an investment option, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

TGB-6

Franklin Templeton Variable Insurance Products Trust

Financial Highlights

Templeton Global Bond Securities Fund


	Year Ended December 31,
Class 1	2013			2012			2011			2010			2009

Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	20.01		$	18.61		$	19.94		$	17.72		$	17.42

Income from investment operations^a:
Net investment income^b		0.64			0.72			0.87			1.00			0.99
Net realized and unrealized gains (losses)		(0.30	)		1.99			(0.92	)		1.58			2.01

Total from investment operations		0.34			2.71			(0.05	)		2.58			3.00

Less distributions from:
Net investment income and net foreign currency gains		(0.96	)		(1.28	)		(1.15	)		(0.31	)		(2.70	)
Net realized gains		(0.24	)		(0.03	)		(0.13	)		(0.05	)		—

Total distributions		(1.20	)		(1.31	)		(1.28	)		(0.36	)		(2.70	)

Redemption fees^c		—			—			—			—			—

Net asset value, end of year	$	19.15		$	20.01		$	18.61		$	19.94		$	17.72


Total return^d		1.89%			15.31%			(0.61)%			14.71%			18.98%
Ratios to average net assets
Expenses^e		0.51%			0.55%			0.56%			0.55%			0.54%
Net investment income		3.26%			3.71%			4.40%			5.27%			5.73%

Supplemental data
Net assets, end of year (000’s)	$	280,963		$	307,142		$	269,819		$	272,232		$	195,662
Portfolio turnover rate		34.39%			43.26%			34.18%			8.77%			20.84%

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^eBenefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.

TGB-7

Franklin Templeton Variable Insurance Products Trust

Financial Highlights (continued)

Templeton Global Bond Securities Fund


	Year Ended December 31,
Class 2	2013			2012			2011			2010			2009

Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	19.47		$	18.15		$	19.49		$	17.34		$	17.10

Income from investment operations^a:
Net investment income^b		0.57			0.65			0.79			0.93			0.93
Net realized and unrealized gains (losses)		(0.27	)		1.94			(0.89	)		1.54			1.98

Total from investment operations		0.30			2.59			(0.10	)		2.47			2.91

Less distributions from:
Net investment income and net foreign currency gains		(0.93	)		(1.24	)		(1.11	)		(0.27	)		(2.67	)
Net realized gains		(0.24	)		(0.03	)		(0.13	)		(0.05	)		—

Total distributions		(1.17	)		(1.27	)		(1.24	)		(0.32	)		(2.67	)

Redemption fees^c		—			—			—			—			—

Net asset value, end of year	$	18.60		$	19.47		$	18.15		$	19.49		$	17.34


Total return^d		1.63%			15.07%			(0.87)%			14.45%			18.68%
Ratios to average net assets
Expenses^e		0.76%			0.80%			0.81%			0.80%			0.79%
Net investment income		3.01%			3.46%			4.15%			5.02%			5.48%

Supplemental data
Net assets, end of year (000’s)	$	2,826,039		$	2,418,229		$	1,812,814		$	1,490,794		$	1,262,783
Portfolio turnover rate		34.39%			43.26%			34.18%			8.77%			20.84%

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^eBenefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.

TGB-8

Franklin Templeton Variable Insurance Products Trust

Financial Highlights (continued)

Templeton Global Bond Securities Fund


	Year Ended December 31,
Class 3	2013			2012			2011			2010			2009

Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	19.48		$	18.15		$	19.48		$	17.33		$	17.08

Income from investment operations^a:
Net investment income^b		0.57			0.65			0.80			0.93			0.93
Net realized and unrealized gains (losses)		(0.27	)		1.94			(0.90	)		1.54			1.98

Total from investment operations		0.30			2.59			(0.10	)		2.47			2.91

Less distributions from:
Net investment income and net foreign currency gains		(0.92	)		(1.23	)		(1.10	)		(0.27	)		(2.66	)
Net realized gains		(0.24	)		(0.03	)		(0.13	)		(0.05	)		—

Total distributions		(1.16	)		(1.26	)		(1.23	)		(0.32	)		(2.66	)

Redemption fees^c		—			—			—			—			—

Net asset value, end of year	$	18.62		$	19.48		$	18.15		$	19.48		$	17.33


Total return^d		1.64%			15.06%			(0.83)%			14.38%			18.69%
Ratios to average net assets
Expenses^e		0.76%			0.80%			0.81%			0.80%			0.79%
Net investment income		3.01%			3.46%			4.15%			5.02%			5.48%

Supplemental data
Net assets, end of year (000’s)	$	194,122		$	198,077		$	185,811		$	183,380		$	143,264
Portfolio turnover rate		34.39%			43.26%			34.18%			8.77%			20.84%

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^eBenefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.

TGB-9

Franklin Templeton Variable Insurance Products Trust

Financial Highlights (continued)

Templeton Global Bond Securities Fund


	Year Ended December 31,
Class 4	2013			2012			2011			2010			2009

Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	19.82		$	18.44		$	19.78		$	17.61		$	17.37

Income from investment operations^a:
Net investment income^b		0.56			0.64			0.79			0.93			0.93
Net realized and unrealized gains (losses)		(0.28	)		1.98			(0.91	)		1.56			2.00

Total from investment operations		0.28			2.62			(0.12	)		2.49			2.93

Less distributions from:
Net investment income and net foreign currency gains		(0.89	)		(1.21	)		(1.09	)		(0.27	)		(2.69	)
Net realized gains		(0.24	)		(0.03	)		(0.13	)		(0.05	)		—

Total distributions		(1.13	)		(1.24	)		(1.22	)		(0.32	)		(2.69	)

Redemption fees^c		—			—			—			—			—

Net asset value, end of year	$	18.97		$	19.82		$	18.44		$	19.78		$	17.61


Total return^d		1.54%			14.97%			(0.96)%			14.28%			18.58%
Ratios to average net assets
Expenses^e		0.86%			0.90%			0.91%			0.90%			0.89%
Net investment income		2.91%			3.36%			4.05%			4.92%			5.38%

Supplemental data
Net assets, end of year (000’s)	$	118,145		$	163,241		$	151,695		$	150,891		$	108,910
Portfolio turnover rate		34.39%			43.26%			34.18%			8.77%			20.84%

^bBased on average daily shares outstanding.

^cAmount rounds to less than $0.01 per share.

^eBenefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements.

TGB-10

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013


Templeton Global Bond Securities Fund	Principal Amount*			Value
Foreign Government and Agency Securities 65.7%
Brazil 4.1%
Letra Tesouro Nacional, Strip,
1/01/15		3,971	^a BRL	$	1,517,952
1/01/16		26,160	^a BRL		8,866,995
1/01/17		46,660	^a BRL		13,913,524
Nota Do Tesouro Nacional,
10.00%, 1/01/14		7,100	^a BRL		3,005,713
10.00%, 1/01/17		22,490	^a BRL		9,010,015
10.00%, 1/01/21		9,240	^a BRL		3,398,793
10.00%, 1/01/23		26,700	^a BRL		9,526,924
^b Index Linked, 6.00%, 5/15/15		30,226	^a BRL		30,796,127
^b Index Linked, 6.00%, 8/15/16		14,388	^a BRL		14,526,395
^b Index Linked, 6.00%, 5/15/17		202	^a BRL		202,885
^b Index Linked, 6.00%, 8/15/18		12,725	^a BRL		12,679,621
^b Index Linked, 6.00%, 8/15/22		14,400	^a BRL		14,056,509
^b Index Linked, 6.00%, 5/15/45		10,825	^a BRL		10,079,341
senior note, 10.00%, 1/01/19		21,390	^a BRL		8,192,766

					139,773,560

Canada 2.7%
Government of Canada,
2.25%, 8/01/14		10,628,000	CAD		10,079,965
1.00%, 11/01/14		20,887,000	CAD		19,667,584
2.00%, 12/01/14		17,861,000	CAD		16,971,271
1.00%, 2/01/15		48,972,000	CAD		46,108,326

					92,827,146

Hungary 4.2%
Government of Hungary,
5.50%, 2/12/14		653,440,000	HUF		3,030,175
7.75%, 8/24/15		672,690,000	HUF		3,331,052
5.50%, 2/12/16		436,800,000	HUF		2,095,705
5.50%, 12/22/16		236,640,000	HUF		1,139,444
4.125%, 2/19/18		14,310,000			14,462,044
6.50%, 6/24/19		389,700,000	HUF		1,949,586
7.50%, 11/12/20		317,540,000	HUF		1,659,850
5.375%, 2/21/23		26,430,000			26,206,666
A, 8.00%, 2/12/15		280,000,000	HUF		1,364,846
A, 6.75%, 11/24/17		2,049,040,000	HUF		10,280,148
A, 5.50%, 12/20/18		446,060,000	HUF		2,136,985
A, 7.00%, 6/24/22		512,570,000	HUF		2,585,322
A, 6.00%, 11/24/23		173,290,000	HUF		822,136
B, 6.75%, 2/24/17		394,700,000	HUF		1,961,662
D, 6.75%, 8/22/14		1,856,440,000	HUF		8,782,954
senior note, 6.25%, 1/29/20		6,420,000			6,945,638
senior note, 6.375%, 3/29/21		14,820,000			16,033,387
^c senior note, Reg S, 3.50%, 7/18/16		1,055,000	EUR		1,500,165
^c senior note, Reg S, 4.375%, 7/04/17		7,480,000	EUR		10,771,024
^c senior note, Reg S, 5.75%, 6/11/18		14,475,000	EUR		21,677,406
^c senior note, Reg S, 3.875%, 2/24/20		3,120,000	EUR		4,302,289

					143,038,484

Iceland 0.2%
^dGovernment of Iceland, 144A, 5.875%, 5/11/22		7,660,000			7,870,650

TGB-11

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Global Bond Securities Fund	Principal Amount*			Value
Foreign Government and Agency Securities (continued)
Indonesia 2.4%
Government of Indonesia,
FR31, 11.00%, 11/15/20		170,808,000,000	IDR	$	15,972,581
FR34, 12.80%, 6/15/21		208,649,000,000	IDR		21,304,064
FR35, 12.90%, 6/15/22		67,421,000,000	IDR		6,974,170
FR36, 11.50%, 9/15/19		31,754,000,000	IDR		2,994,348
FR39, 11.75%, 8/15/23		5,491,000,000	IDR		541,430
FR40, 11.00%, 9/15/25		46,856,000,000	IDR		4,464,505
FR43, 10.25%, 7/15/22		69,179,000,000	IDR		6,264,366
FR44, 10.00%, 9/15/24		4,454,000,000	IDR		397,343
FR46, 9.50%, 7/15/23		226,780,000,000	IDR		19,656,723
FR48, 9.00%, 9/15/18		16,920,000,000	IDR		1,442,232
senior bond, FR53, 8.25%, 7/15/21		11,270,000,000	IDR		919,895
Indonesia Retail Bond, senior note, 8.50%, 10/15/16		3,358,000,000	IDR		276,243

					81,207,900

Ireland 8.9%
Government of Ireland,
5.50%, 10/18/17		27,708,700	EUR		43,369,903
5.90%, 10/18/19		20,597,000	EUR		33,280,628
4.50%, 4/18/20		19,512,000	EUR		29,375,017
5.00%, 10/18/20		58,588,000	EUR		90,671,337
senior bond, 4.50%, 10/18/18		8,090,000	EUR		12,354,689
senior bond, 4.40%, 6/18/19		20,943,000	EUR		31,673,977
senior bond, 5.40%, 3/13/25		40,422,910	EUR		63,308,941

					304,034,492

Lithuania 1.2%
^dGovernment of Lithuania, 144A,
6.75%, 1/15/15		19,480,000			20,600,587
7.375%, 2/11/20		12,690,000			15,267,656
6.125%, 3/09/21		3,240,000			3,676,315

					39,544,558

Malaysia 3.8%
Government of Malaysia,
3.434%, 8/15/14		59,260,000	MYR		18,129,565
3.741%, 2/27/15		61,480,000	MYR		18,893,122
3.835%, 8/12/15		36,620,000	MYR		11,287,025
4.72%, 9/30/15		230,000	MYR		71,971
3.197%, 10/15/15		14,220,000	MYR		4,337,783
senior bond, 5.094%, 4/30/14		187,985,000	MYR		57,734,359
senior bond, 3.814%, 2/15/17		18,885,000	MYR		5,820,163
senior bond, 4.24%, 2/07/18		44,360,000	MYR		13,820,132

					130,094,120

Mexico 3.7%
Government of Mexico,
7.00%, 6/19/14		286,280^e	MXN		2,232,692
9.50%, 12/18/14		1,774,400^e	MXN		14,371,673
6.00%, 6/18/15		732,200^e	MXN		5,805,212
8.00%, 12/17/15		4,996,150^e	MXN		41,408,288
6.25%, 6/16/16		733,810^e	MXN		5,918,589
7.25%, 12/15/16		250,000^e	MXN		2,067,835

TGB-12

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Global Bond Securities Fund	Principal Amount*			Value
Foreign Government and Agency Securities (continued)
Mexico (continued)
7.75%, 12/14/17		4,473,000	^e MXN	$	37,709,388
^fMexican Udibonos, Index Linked,
4.50%, 12/18/14		222,190	^g MXN		1,783,563
5.00%, 6/16/16		569,208	^g MXN		4,827,172
3.50%, 12/14/17		570,675	^g MXN		4,734,753
4.00%, 6/13/19		391,698	^g MXN		3,328,978
2.50%, 12/10/20		308,481	^g MXN		2,405,497

					126,593,640

Peru 0.1%
Government of Peru, senior bond, 7.84%, 8/12/20		11,090,000	PEN		4,535,287

Philippines 0.2%
Government of the Philippines,
senior bond, 7.00%, 1/27/16		53,190,000	PHP		1,292,639
senior bond, 9.125%, 9/04/16		31,840,000	PHP		821,907
senior note, 6.25%, 1/27/14		35,720,000	PHP		806,832
senior note, 1.625%, 4/25/16		236,480,000	PHP		5,278,929

					8,200,307

Poland 9.1%
Government of Poland,
5.75%, 4/25/14		336,990,000	PLN		112,776,374
5.50%, 4/25/15		31,408,000	PLN		10,771,993
6.25%, 10/24/15		75,580,000	PLN		26,531,088
5.00%, 4/25/16		45,810,000	PLN		15,820,591
5.75%, 9/23/22		48,750,000	PLN		17,824,390
^hFRN, 2.71%, 1/25/17		59,279,000	PLN		19,571,709
^hFRN, 2.71%, 1/25/21		60,135,000	PLN		19,455,558
Strip, 1/25/14		49,315,000	PLN		16,308,506
Strip, 7/25/14		35,420,000	PLN		11,578,650
Strip, 7/25/15		23,822,000	PLN		7,562,053
Strip, 1/25/16		169,757,000	PLN		52,892,364

					311,093,276

Russia 1.7%
^dRussia Foreign Bond, senior bond, 144A, 7.50%, 3/31/30		50,648,455			59,108,013

Serbia 0.7%
^dGovernment of Serbia, senior note, 144A,
5.25%, 11/21/17		4,590,000			4,627,294
4.875%, 2/25/20		8,800,000			8,371,000
7.25%, 9/28/21		9,670,000			10,232,987

					23,231,281

Singapore 0.8%
Government of Singapore, senior note,
3.625%, 7/01/14		21,650,000	SGD		17,442,766
1.125%, 4/01/16		11,000,000	SGD		8,876,166

					26,318,932

Slovenia 0.4%
^dGovernment of Slovenia, senior note, 144A,
5.50%, 10/26/22		8,140,000			8,166,455

TGB-13

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Global Bond Securities Fund	Principal Amount*			Value
Foreign Government and Agency Securities (continued)
Slovenia (continued)
5.85%, 5/10/23		5,030,000		$	5,143,276

					13,309,731

South Korea 14.0%
The Export-Import Bank of Korea, senior note,
4.625%, 2/20/17		230,000	EUR		346,546
^d144A, 1.45%, 5/19/14		40,580,000	SEK		6,318,181
Korea Monetary Stabilization Bond,
senior bond, 3.47%, 2/02/14		20,416,550,000	KRW		19,352,968
senior bond, 3.59%, 4/02/14		20,432,530,000	KRW		19,402,992
senior bond, 2.47%, 4/02/15		22,461,930,000	KRW		21,217,011
senior bond, 2.80%, 8/02/15		68,737,030,000	KRW		65,181,566
senior bond, 2.81%, 10/02/15		2,932,000,000	KRW		2,780,860
senior note, 3.28%, 6/02/14		24,224,170,000	KRW		23,008,056
senior note, 2.57%, 6/09/14		14,607,000,000	KRW		13,834,163
senior note, 2.82%, 8/02/14		31,785,420,000	KRW		30,141,691
senior note, 2.78%, 10/02/14		13,357,000,000	KRW		12,663,495
senior note, 2.84%, 12/02/14		22,065,270,000	KRW		20,936,073
senior note, 2.74%, 2/02/15		47,745,950,000	KRW		45,249,715
senior note, 2.76%, 6/02/15		51,516,200,000	KRW		48,822,799
senior note, 2.90%, 12/02/15		54,164,800,000	KRW		51,439,336
Korea Treasury Bond,
senior bond, 4.00%, 3/10/16		1,283,100,000	KRW		1,245,888
senior bond, 5.00%, 9/10/16		2,806,000,000	KRW		2,802,925
senior note, 3.25%, 12/10/14		13,830,700,000	KRW		13,173,046
senior note, 4.50%, 3/10/15		641,500,000	KRW		620,482
senior note, 3.25%, 6/10/15		4,668,800,000	KRW		4,454,846
senior note, 4.00%, 9/10/15		3,390,100,000	KRW		3,275,674
senior note, 2.75%, 12/10/15		32,942,000,000	KRW		31,190,316
senior note, 3.00%, 12/10/16		26,530,400,000	KRW		25,247,236
Korea Treasury Note, senior note, 2.75%, 6/10/16		18,308,100,000	KRW		17,318,320

					480,024,185

Sri Lanka 1.2%
Government of Sri Lanka,
A, 7.00%, 3/01/14		43,380,000	LKR		331,025
A, 11.25%, 7/15/14		773,000,000	LKR		6,001,358
A, 11.75%, 3/15/15		8,520,000	LKR		67,440
A, 6.50%, 7/15/15		239,920,000	LKR		1,778,049
A, 11.00%, 8/01/15		1,349,700,000	LKR		10,670,111
A, 6.40%, 8/01/16		109,200,000	LKR		782,571
A, 5.80%, 1/15/17		112,300,000	LKR		781,236
A, 8.00%, 11/15/18		512,300,000	LKR		3,639,778
A, 9.00%, 5/01/21		861,720,000	LKR		6,155,846
B, 11.75%, 4/01/14		68,370,000	LKR		526,938
B, 6.60%, 6/01/14		65,500,000	LKR		497,602
B, 6.40%, 10/01/16		119,100,000	LKR		849,589
B, 8.50%, 7/15/18		146,350,000	LKR		1,059,835
C, 8.50%, 4/01/18		241,930,000	LKR		1,765,710
D, 8.50%, 6/01/18		633,000,000	LKR		4,621,916

					39,529,004

TGB-14

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Global Bond Securities Fund	Principal Amount*			Value
Foreign Government and Agency Securities (continued)
ⁱSupranational 0.5%
Inter-American Development Bank, senior note, 7.50%, 12/05/24		200,000,000	MXN	$	16,379,549

Sweden 2.4%
Government of Sweden, 6.75%, 5/05/14		391,220,000	SEK		62,045,971
Kommuninvest I Sverige AB, 2.25%, 5/05/14		123,520,000	SEK		19,294,378

					81,340,349

Ukraine 3.0%
^dFinancing of Infrastructure Projects State Enterprise, 144A,
8.375%, 11/03/17		1,100,000			1,017,357
7.40%, 4/20/18		840,000			754,202
^dGovernment of Ukraine,
144A, 9.25%, 7/24/17		25,550,000			25,454,188
144A, 7.75%, 9/23/20		17,227,000			15,999,576
senior bond, 144A, 6.58%, 11/21/16		12,541,000			11,796,692
senior bond, 144A, 7.80%, 11/28/22		10,110,000			9,174,825
senior note, 144A, 4.95%, 10/13/15		290,000	EUR		381,826
senior note, 144A, 6.25%, 6/17/16		8,760,000			8,250,825
senior note, 144A, 7.95%, 2/23/21		24,098,000			22,365,956
senior note, 144A, 7.50%, 4/17/23		8,160,000			7,395,000

					102,590,447

Vietnam 0.4%
^dGovernment of Vietnam, 144A, 6.75%, 1/29/20		13,110,000			14,240,738

Total Foreign Government and Agency Securities (Cost $2,141,644,799)					2,244,885,649

Municipal Bonds (Cost $1,293,641) 0.0%†
United States 0.0%†
Bexar County Revenue, Venue Project, Refunding, Series A, BHAC Insured, 5.25%, 8/15/47		1,450,000			1,510,654

Total Investments before Short Term Investments (Cost $2,142,938,440)					2,246,396,303

Short Term Investments 25.0%
Foreign Government and Agency Securities 14.4%
Brazil 0.2%
Letra Tesouro Nacional, Strip, 4/01/14		18,450	^a BRL		7,628,846

Canada 1.3%
Government of Canada,
1.00%, 2/01/14		33,882,000	CAD		31,899,130
2.00%, 3/01/14		7,354,000	CAD		6,935,463
0.75%, 5/01/14		6,298,000	CAD		5,926,569

					44,761,162

Hungary 0.1%
^jHungary Treasury Bills, 1/08/14 - 6/25/14		356,460,000	HUF		1,637,274

Malaysia 4.4%
^jBank of Negara Monetary Notes, 1/09/14 - 11/18/14		496,745,000	MYR		149,780,015
^jMalaysia Treasury Bill, 5/30/14		1,140,000	MYR		343,547

					150,123,562

TGB-15

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Global Bond Securities Fund	Principal Amount*			Value
Short Term Investments (continued)
Foreign Government and Agency Securities (continued)
Mexico 3.0%
^jMexico Treasury Bills,
1/09/14 - 4/30/14		31,812,220	^k MXN	$	24,223,335
10/16/14		46,859,000	^k MXN		34,960,785
12/11/14		59,641,100	^k MXN		44,250,070

					103,434,190

Philippines 0.9%
^jPhilippine Treasury Bills, 1/08/14 - 10/08/14		1,289,295,000	PHP		28,952,151

Singapore 3.8%
Government of Singapore, senior bond, 0.25%, 2/01/14		21,600,000	SGD		17,116,947
^jMonetary Authority of Singapore Treasury Bills, 1/03/14 - 2/14/14		46,732,000	SGD		37,030,791
^jSingapore Treasury Bills, 1/10/14 - 5/30/14		96,960,000	SGD		76,800,680

					130,948,418

South Korea 0.7%
Korea Monetary Stabilization Bond, senior bond,
2.55%, 5/09/14		10,064,000,000	KRW		9,531,413
2.72%, 9/09/14		14,437,000,000	KRW		13,682,266

					23,213,679

Total Foreign Government and Agency Securities (Cost $503,106,917)					490,699,282

Total Investments before Repurchase Agreements (Cost $2,646,045,357)					2,737,095,585

Repurchase Agreements (Cost $362,770,388) 10.6%
United States 10.6%
^lJoint Repurchase Agreement, 0.008%, 1/02/14 (Maturity Value $362,770,540)		362,770,388			362,770,388
BNP Paribas Securities Corp. (Maturity Value $27,683,020) Credit Suisse Securities (USA) LLC (Maturity Value $83,049,060) Deutsche Bank Securities Inc. (Maturity Value $48,564,092) HSBC Securities (USA) Inc. (Maturity Value $116,271,586) Merrill Lynch, Pierce, Fenner & Smith Inc. (Maturity Value $53,983,884) Morgan Stanley & Co. LLC (Maturity Value $33,218,898)
Collateralized by U.S. Government Agency Securities, 0.00% - 4.125%, 1/15/14 - 3/07/18; ^jU.S. Government Agency Discount Notes, 8/19/14; ^jU.S. Treasury Bills, 9/18/14; U.S. Treasury Bonds, 8.875% - 9.125%, 5/15/17 - 5/15/18; U.S. Treasury Notes, 0.25% - 4.75%, 1/15/15 - 12/31/18; and U.S. Treasury Notes, Index Linked, 1.375% - 1.625%, 1/15/18 - 7/15/18 (valued at $370,038,148)

Total Investments (Cost $3,008,815,745) 90.7%					3,099,865,973
Other Assets, less Liabilities 9.3%					319,403,073

Net Assets 100.0%				$	3,419,269,046

See Abbreviations on page TGB-41.

TGB-16

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Global Bond Securities Fund

†Rounds to less than 0.1% of net assets.

*The principal amount is stated in U.S. dollars unless otherwise indicated.

^aPrincipal amount is stated in 1,000 Brazilian Real Units.

^bRedemption price at maturity is adjusted for inflation. See Note 1(g).

^cSecurity was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At December 31, 2013, the aggregate value of these securities was $38,250,884, representing 1.12% of net assets.

^dSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At December 31, 2013, the aggregate value of these securities was $266,213,599, representing 7.79% of net assets.

^ePrincipal amount is stated in 100 Mexican Peso Units.

^fPrincipal amount of security is adjusted for inflation. See Note 1(g).

^gPrincipal amount is stated in Unidad de Inversion Units.

^hThe coupon rate shown represents the rate at period end.

ⁱA supranational organization is an entity formed by two or more central governments through international treaties.

^jThe security is traded on a discount basis with no stated coupon rate.

^kPrincipal amount is stated in 10 Mexican Peso Units.

^lSee Note 1(c) regarding joint repurchase agreement.

TGB-17

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Global Bond Securities Fund

At December 31, 2013, the Fund had the following forward exchange contracts outstanding. See Note 1(d).

Forward Exchange Contracts


Currency	Counterparty^a		Type		Quantity		Contract Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Indian Rupee		CITI		Buy		34,491,000		533,446			1/06/14	$	23,633	$	—
Indian Rupee		HSBC		Buy		251,448,000		3,923,021			1/06/14		138,225		—
Indian Rupee		CITI		Sell		34,491,000		555,769			1/06/14		—		(1,311	)
Indian Rupee		HSBC		Sell		251,448,000		4,045,825			1/06/14		—		(15,422	)
Indian Rupee		DBAB		Buy		217,594,000		3,426,958			1/07/14		86,798		—
Japanese Yen		DBAB		Sell		770,370,000		8,897,885			1/07/14		1,581,670		—
Indian Rupee		DBAB		Sell		217,594,000		3,498,296			1/07/14		—		(15,460	)
Euro		DBAB		Sell		2,285,618		3,003,759			1/07/14		—		(140,098	)
Indian Rupee		DBAB		Buy		40,529,000		644,084			1/08/14		10,257		—
Malaysian Ringgit		DBAB		Buy		8,862,500		2,865,063			1/08/14		—		(162,856	)
Swedish Krona		DBAB		Buy		136,332,733		15,821,369	EUR		1/09/14		—		(572,377	)
Mexican Peso		CITI		Buy		109,357,558		8,363,867			1/10/14		24,207		—
Japanese Yen		CITI		Sell		138,680,000		1,589,474			1/10/14		272,408		—
Euro		CITI		Sell		5,040,000		6,611,220			1/10/14		—		(321,266	)
Chilean Peso		MSCO		Buy		2,254,600,000		4,581,124			1/13/14		—		(296,950	)
Euro		UBSW		Sell		15,572,000		20,393,838			1/13/14		—		(1,025,311	)
Euro		DBAB		Sell		9,460,000		12,533,554			1/14/14		—		(478,587	)
Euro		JPHQ		Sell		937,000		1,226,767			1/14/14		—		(62,067	)
Japanese Yen		UBSW		Sell		415,980,000		4,756,980			1/14/14		806,271		—
Indian Rupee		DBAB		Buy		239,338,000		3,824,390			1/15/14		34,344		—
Japanese Yen		HSBC		Sell		536,380,000		6,109,112			1/15/14		1,014,895		—
Malaysian Ringgit		JPHQ		Buy		1,856,000		604,856			1/16/14		—		(39,167	)
Japanese Yen		DBAB		Sell		139,110,000		1,567,896			1/16/14		246,706		—
Japanese Yen		UBSW		Sell		707,660,000		7,973,544			1/16/14		1,252,578		—
Indian Rupee		DBAB		Buy		383,041,000		6,111,193			1/17/14		61,943		—
Japanese Yen		DBAB		Sell		719,030,000		8,111,032			1/17/14		1,282,045		—
Euro		DBAB		Sell		4,856,000		6,497,328			1/17/14		—		(182,044	)
Japanese Yen		JPHQ		Sell		1,305,790,000		14,747,457			1/17/14		2,345,718		—
Indian Rupee		JPHQ		Buy		226,092,000		3,581,207			1/21/14		59,624		—
Euro		BZWS		Sell		2,638,000		3,467,255			1/21/14		—		(161,276	)
Chilean Peso		DBAB		Buy		2,227,910,000		4,528,272			1/22/14		—		(299,335	)
Indian Rupee		DBAB		Buy		79,271,000		1,265,178			1/22/14		11,095		—
Indian Rupee		JPHQ		Buy		152,363,000		2,432,127			1/22/14		20,936		—
Euro		JPHQ		Sell		300,000		403,658			1/22/14		—		(8,988	)
Chilean Peso		DBAB		Buy		3,160,140,000		6,428,929			1/24/14		—		(431,889	)
Singapore Dollar		JPHQ		Buy		5,740,000		4,629,032			1/24/14		—		(79,990	)
Japanese Yen		UBSW		Sell		944,420,000		10,705,282			1/27/14		1,735,197		—
Chilean Peso		DBAB		Buy		1,967,720,000		4,001,871			1/28/14		—		(269,473	)
Euro		CITI		Sell		4,998,400		6,690,208			1/28/14		—		(184,997	)
Japanese Yen		DBAB		Sell		897,860,782		10,026,363			1/28/14		1,498,453		—
Japanese Yen		HSBC		Sell		1,162,462,488		12,988,408			1/28/14		1,947,302		—
Chilean Peso		DBAB		Buy		635,690,000		1,295,608			1/29/14		—		(89,966	)
Indian Rupee		HSBC		Buy		531,272,000		8,425,533			1/29/14		116,138		—
Chilean Peso		JPHQ		Buy		675,370,000		1,372,703			1/30/14		—		(91,956	)
Malaysian Ringgit		JPHQ		Buy		11,703,000		3,767,869			1/30/14		—		(203,250	)
Chilean Peso		DBAB		Buy		1,271,380,000		2,582,793			1/31/14		—		(172,050	)
Euro		DBAB		Sell		65,773,000		88,728,713			1/31/14		—		(1,740,768	)
Chilean Peso		DBAB		Buy		1,186,400,000		2,402,106			2/03/14		—		(153,212	)
Euro		UBSW		Sell		5,540,000		7,513,071			2/03/14		—		(107,102	)

TGB-18

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Global Bond Securities Fund

Forward Exchange Contracts (continued)


Currency	Counterparty^a		Type		Quantity		Contract Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Malaysian Ringgit		JPHQ		Buy		9,715,000		3,085,596			2/04/14	$	—	$	(127,164	)
Indian Rupee		JPHQ		Buy		21,500,000		339,360			2/06/14		5,746		—
Malaysian Ringgit		HSBC		Buy		19,888,085		6,268,900			2/06/14		—		(213,078	)
Singapore Dollar		DBAB		Buy		6,207,000		4,875,348			2/07/14		43,827		—
Singapore Dollar		HSBC		Buy		6,206,000		5,016,571			2/07/14		—		(98,189	)
Indian Rupee		DBAB		Buy		39,609,000		624,182			2/10/14		11,075		—
South Korean Won		HSBC		Buy		21,363,430,000		18,962,746			2/10/14		1,217,420		—
Japanese Yen		CITI		Sell		366,860,000		3,724,013			2/10/14		239,348		—
Euro		CITI		Sell		6,572,000		8,899,605			2/10/14		—		(140,097	)
Euro		HSBC		Sell		1,800,000		2,434,230			2/10/14		—		(41,647	)
Euro		UBSW		Sell		4,929,000		6,673,472			2/10/14		—		(106,305	)
Chilean Peso		BZWS		Buy		1,142,900,000		2,317,315			2/11/14		—		(152,712	)
Polish Zloty		BZWS		Buy		17,528,000		4,066,538	EUR		2/11/14		195,525		—
Polish Zloty		DBAB		Buy		17,528,000		4,075,237	EUR		2/11/14		183,560		—
Euro		BZWS		Sell		1,412,000		1,907,753			2/11/14		—		(34,436	)
Euro		DBAB		Sell		1,738,000		2,332,274			2/11/14		—		(58,324	)
Chilean Peso		DBAB		Buy		1,145,000,000		2,318,283			2/12/14		—		(149,931	)
Indian Rupee		HSBC		Buy		42,784,000		664,952			2/12/14		20,944		—
Singapore Dollar		BZWS		Buy		1,717,028		1,353,269			2/12/14		7,516		—
Japanese Yen		GSCO		Sell		394,373,000		4,248,793			2/12/14		502,757		—
Japanese Yen		HSBC		Sell		1,035,240,000		11,130,177			2/12/14		1,296,727		—
Japanese Yen		JPHQ		Sell		1,034,700,000		11,130,223			2/12/14		1,301,902		—
Indian Rupee		HSBC		Buy		108,000,000		1,660,632			2/13/14		70,424		—
Japanese Yen		CITI		Sell		1,371,360,000		14,840,354			2/13/14		1,814,134		—
Japanese Yen		JPHQ		Sell		686,710,000		7,420,122			2/13/14		897,228		—
Euro		UBSW		Sell		657,000		881,234			2/13/14		—		(22,462	)
Chilean Peso		DBAB		Buy		964,250,000		1,956,001			2/14/14		—		(130,332	)
Chilean Peso		MSCO		Buy		2,590,220,000		5,239,648			2/14/14		—		(335,438	)
Malaysian Ringgit		DBAB		Buy		97,443,480		30,906,965			2/14/14		—		(1,246,514	)
Polish Zloty		DBAB		Buy		17,528,000		4,068,048	EUR		2/14/14		192,440		—
Chilean Peso		DBAB		Buy		2,188,820,000		4,439,527			2/18/14		—		(297,062	)
Indian Rupee		DBAB		Buy		108,614,000		1,656,850			2/18/14		82,258		—
Indian Rupee		JPHQ		Buy		127,745,000		1,949,576			2/18/14		95,855		—
Singapore Dollar		HSBC		Buy		3,667,000		2,901,108			2/18/14		5,090		—
Japanese Yen		GSCO		Sell		123,057,280		1,322,059			2/18/14		153,140		—
Japanese Yen		JPHQ		Sell		831,970,000		8,977,211			2/18/14		1,074,340		—
Malaysian Ringgit		HSBC		Buy		4,899,000		1,551,593			2/19/14		—		(60,738	)
Japanese Yen		CITI		Sell		684,870,000		7,420,164			2/19/14		914,563		—
Japanese Yen		GSCO		Sell		687,820,000		7,420,129			2/19/14		886,506		—
Euro		JPHQ		Sell		3,942,000		5,268,404			2/19/14		—		(153,790	)
Chilean Peso		CITI		Buy		2,285,090,000		4,646,381			2/20/14		—		(322,633	)
Indian Rupee		DBAB		Buy		98,937,000		1,537,124			2/20/14		46,387		—
Euro		BZWS		Sell		6,280,000		8,382,795			2/20/14		—		(255,307	)
Chilean Peso		JPHQ		Buy		1,055,800,000		2,145,935			2/21/14		—		(148,407	)
Euro		GSCO		Sell		2,038,000		2,728,067			2/21/14		—		(75,191	)
Chilean Peso		JPHQ		Buy		1,792,000,000		3,635,257			2/24/14		—		(245,945	)
Chilean Peso		MSCO		Buy		1,273,240,000		2,575,584			2/24/14		—		(167,432	)
Japanese Yen		HSBC		Sell		385,460,000		4,124,773			2/24/14		463,189		—
Chilean Peso		DBAB		Buy		1,455,470,000		2,942,721			2/25/14		—		(190,198	)
Japanese Yen		BZWS		Sell		343,460,000		3,710,113			2/25/14		447,483		—
Japanese Yen		JPHQ		Sell		385,700,000		4,160,621			2/25/14		496,741		—

TGB-19

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Global Bond Securities Fund

Forward Exchange Contracts (continued)


Currency	Counterparty^a		Type		Quantity		Contract Amount*		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Chilean Peso		DBAB		Buy		1,435,490,000		2,899,980		2/26/14	$	—	$	(185,529	)
Chilean Peso		MSCO		Buy		1,559,200,000		3,152,128		2/26/14		—		(203,746	)
Indian Rupee		DBAB		Buy		130,201,000		2,031,439		2/26/14		49,896		—
Euro		BZWS		Sell		9,771,593		13,027,122		2/26/14		—		(413,684	)
Japanese Yen		UBSW		Sell		937,086,000		9,517,428		2/26/14		615,724		—
Euro		UBSW		Sell		13,581,483		18,149,614		2/26/14		—		(531,687	)
Chilean Peso		DBAB		Buy		2,094,920,000		4,235,584		2/27/14		—		(274,597	)
Indian Rupee		DBAB		Buy		700,705,481		10,929,226		2/27/14		269,638		—
Indian Rupee		HSBC		Buy		148,257,000		2,311,207		2/27/14		58,276		—
Malaysian Ringgit		HSBC		Buy		2,087,700		622,265		2/27/14		12,833		—
Singapore Dollar		DBAB		Buy		7,749,500		6,059,978		2/27/14		81,757		—
Japanese Yen		BZWS		Sell		1,576,550,000		16,929,882		2/27/14		1,953,617		—
Euro		BZWS		Sell		3,902,180		5,212,328		2/27/14		—		(155,115	)
Japanese Yen		DBAB		Sell		229,660,000		2,508,999		2/27/14		327,369		—
Euro		DBAB		Sell		1,530,900		2,024,646		2/27/14		—		(81,105	)
Chilean Peso		DBAB		Buy		790,050,000		1,595,158		2/28/14		—		(101,522	)
Chilean Peso		JPHQ		Buy		593,800,000		1,200,445		2/28/14		—		(77,831	)
Indian Rupee		DBAB		Buy		211,714,000		3,313,364		2/28/14		69,613		—
Indian Rupee		JPHQ		Buy		181,822,000		2,841,685		2/28/14		63,647		—
Singapore Dollar		BZWS		Buy		21,427,761		16,716,930		2/28/14		265,293		—
Singapore Dollar		DBAB		Buy		5,960,000		4,731,641		2/28/14		37,801		(45,941	)
Euro		UBSW		Sell		2,694,506		3,608,644		2/28/14		—		(97,647	)
Chilean Peso		DBAB		Buy		1,253,970,000		2,533,529		3/03/14		—		(163,605	)
Indian Rupee		CITI		Buy		34,827,000		538,035		3/03/14		18,073		—
Indian Rupee		HSBC		Buy		240,033,500		3,705,936		3/03/14		126,852		—
Euro		DBAB		Sell		2,579,651		3,394,176		3/03/14		—		(154,129	)
Japanese Yen		JPHQ		Sell		401,100,000		4,410,794		3/03/14		600,508		—
Japanese Yen		HSBC		Sell		400,800,000		4,401,977		3/04/14		594,519		—
Japanese Yen		UBSW		Sell		447,200,000		4,864,571		3/04/14		616,329		—
Chilean Peso		BZWS		Buy		3,010,700,000		6,079,152		3/05/14		—		(390,393	)
Chilean Peso		DBAB		Buy		1,253,970,000		2,526,637		3/05/14		—		(157,243	)
Euro		DBAB		Sell		1,536,000		2,000,640		3/05/14		—		(112,122	)
Chilean Peso		DBAB		Buy		1,328,230,000		2,673,840		3/06/14		—		(164,412	)
Chilean Peso		DBAB		Buy		1,320,220,000		2,665,765		3/07/14		—		(171,748	)
Japanese Yen		BZWS		Sell		1,712,605,900		17,274,115		3/07/14		1,004,686		—
Euro		BZWS		Sell		3,441,044		4,502,400		3/07/14		—		(230,735	)
Chilean Peso		MSCO		Buy		662,100,000		1,337,576		3/10/14		—		(87,228	)
Mexican Peso		HSBC		Buy		135,500,950		10,314,452		3/10/14		30,526		—
Euro		BZWS		Sell		3,785,232		4,931,173		3/10/14		—		(275,379	)
Euro		CITI		Sell		31,404,613		41,028,557		3/10/14		—		(2,168,203	)
Euro		GSCO		Sell		21,480,000		28,010,350		3/10/14		—		(1,535,195	)
Euro		HSBC		Sell		1,844,000		2,406,420		3/10/14		—		(129,985	)
Euro		MSCO		Sell		5,225,000		6,827,769		3/10/14		—		(359,171	)
Singapore Dollar		CITI		Buy		21,075,381		16,932,505		3/11/14		—		(229,476	)
Chilean Peso		DBAB		Buy		1,284,460,000		2,596,967		3/13/14		—		(172,131	)
Euro		JPHQ		Sell		541,000		713,081		3/13/14		—		(31,058	)
Mexican Peso		CITI		Buy		25,894,900		1,967,204		3/14/14		9,139		—
Singapore Dollar		HSBC		Buy		10,521,600		8,436,177		3/14/14		—		(97,405	)
Euro		BZWS		Sell		1,161,439		1,511,346		3/17/14		—		(86,195	)
Japanese Yen		CITI		Sell		286,112,008		2,988,583		3/17/14		270,417		—
Chilean Peso		DBAB		Buy		2,600,220,000		5,271,072		3/18/14		—		(365,051	)

TGB-20

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Global Bond Securities Fund

Forward Exchange Contracts (continued)


Currency	Counterparty^a		Type		Quantity		Contract Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Indian Rupee		JPHQ		Buy		230,330,000		3,633,401			3/18/14	$	30,696	$	—
Euro		CITI		Sell		861,168		1,117,955			3/18/14		—		(66,566	)
Hungarian Forint		DBAB		Buy		2,348,675,000		7,437,753	EUR		3/19/14		584,620		—
Hungarian Forint		JPHQ		Buy		703,907,450		2,231,326	EUR		3/19/14		172,185		—
Singapore Dollar		DBAB		Buy		7,978,100		6,255,175			3/19/14		67,789		—
Singapore Dollar		HSBC		Buy		9,120,000		7,310,328			3/19/14		—		(82,364	)
Singapore Dollar		JPHQ		Buy		5,686,000		4,437,888			3/19/14		68,494		—
Japanese Yen		CITI		Sell		1,866,452,000		19,634,407			3/19/14		1,902,246		—
Japanese Yen		MSCO		Sell		575,230,000		6,012,962			3/19/14		548,010		—
Hungarian Forint		JPHQ		Buy		1,177,657,000		3,718,878	EUR		3/20/14		307,298		—
Chilean Peso		JPHQ		Buy		1,065,000,000		2,153,691			3/21/14		—		(144,951	)
Hungarian Forint		JPHQ		Buy		1,171,335,000		3,718,878	EUR		3/21/14		277,893		—
Euro		BZWS		Sell		744,197		966,414			3/21/14		—		(57,214	)
Mexican Peso		CITI		Buy		75,637,200		5,547,527			3/24/14		220,620		—
Japanese Yen		BZWS		Sell		740,940,000		7,832,595			3/24/14		793,119		—
Japanese Yen		DBAB		Sell		725,287,000		7,682,067			3/24/14		791,306		—
Japanese Yen		BZWS		Sell		242,774,840		2,559,566			3/25/14		253,013		—
Indian Rupee		DBAB		Buy		130,201,000		2,046,864			3/26/14		20,256		—
Malaysian Ringgit		DBAB		Buy		8,012,500		2,524,576			3/26/14		—		(90,645	)
Malaysian Ringgit		HSBC		Buy		7,634,000		2,404,107			3/26/14		—		(85,152	)
Euro		CITI		Sell		1,532,964		1,993,926			3/26/14		—		(114,627	)
Euro		DBAB		Sell		2,736,000		3,554,748			3/26/14		—		(208,551	)
Euro		BZWS		Sell		6,085,000		8,216,880			3/27/14		—		(152,879	)
Indian Rupee		DBAB		Buy		24,950,000		393,968			3/28/14		1,951		—
Indian Rupee		JPHQ		Buy		79,054,000		1,244,357			3/28/14		10,110		—
Chilean Peso		DBAB		Buy		1,330,940,000		2,695,302			4/04/14		—		(188,789	)
Euro		DBAB		Sell		6,200,000		7,980,330			4/04/14		—		(547,627	)
Indian Rupee		CITI		Buy		34,491,000		545,226			4/07/14		847		—
Indian Rupee		DBAB		Buy		217,594,000		3,435,333			4/07/14		9,690		—
Indian Rupee		HSBC		Buy		251,448,000		3,969,814			4/07/14		11,198		—
Euro		HSBC		Sell		8,692,000		11,359,314			4/10/14		—		(596,425	)
Euro		DBAB		Sell		7,243,000		9,479,276			4/11/14		—		(483,394	)
Euro		UBSW		Sell		4,346,000		5,690,001			4/11/14		—		(287,877	)
Chilean Peso		MSCO		Buy		2,645,530,000		5,408,423			4/14/14		—		(431,293	)
Euro		JPHQ		Sell		3,907,000		5,120,878			4/14/14		—		(253,181	)
Malaysian Ringgit		DBAB		Buy		16,369,588		5,106,241			4/16/14		—		(139,221	)
Euro		HSBC		Sell		6,919,000		9,056,487			4/16/14		—		(460,587	)
Chilean Peso		MSCO		Buy		2,370,410,000		4,812,527			4/21/14		—		(356,185	)
Malaysian Ringgit		JPHQ		Buy		15,728,213		5,098,286			4/21/14		—		(327,125	)
Japanese Yen		BZWS		Sell		700,840,000		7,204,618			4/21/14		544,890		—
Japanese Yen		JPHQ		Sell		421,090,000		4,322,751			4/21/14		321,346		—
Japanese Yen		CITI		Sell		261,800,000		2,675,387			4/22/14		187,617		—
Japanese Yen		JPHQ		Sell		496,560,000		5,072,581			4/22/14		353,990		—
Euro		DBAB		Sell		4,545,000		5,957,132			4/23/14		—		(294,566	)
Euro		BZWS		Sell		4,954,399		6,471,436			4/25/14		—		(343,412	)
Chilean Peso		JPHQ		Buy		1,501,938,000		3,023,529			4/28/14		—		(201,925	)
Swedish Krona		BZWS		Buy		122,773,200		14,205,258	EUR		4/30/14		—		(493,221	)
Euro		BZWS		Sell		6,575,679		8,576,001			4/30/14		—		(469,000	)
Euro		DBAB		Sell		11,263,000		14,952,984			4/30/14		—		(539,536	)
Euro		BZWS		Sell		7,026,829		9,313,640			5/05/14		—		(351,990	)
Euro		BZWS		Sell		1,259,000		1,652,249			5/07/14		—		(79,551	)

TGB-21

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Global Bond Securities Fund

Forward Exchange Contracts (continued)


Currency	Counterparty^a		Type		Quantity		Contract Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Euro		GSCO		Sell		2,990,000		3,933,644			5/07/14	$	—	$	(179,208	)
Euro		GSCO		Sell		2,045,000		2,678,152			5/08/14		—		(134,822	)
Chilean Peso		MSCO		Buy		1,150,200,000		2,333,063			5/12/14		—		(175,339	)
Japanese Yen		CITI		Sell		366,861,000		3,718,550			5/12/14		231,951		—
Euro		GSCO		Sell		1,259,000		1,663,328			5/12/14		—		(68,483	)
Euro		UBSW		Sell		629,000		830,516			5/12/14		—		(34,702	)
Euro		CITI		Sell		5,658,426		7,468,274			5/13/14		—		(315,155	)
Japanese Yen		GSCO		Sell		490,555,000		4,954,250			5/13/14		292,047		—
Euro		GSCO		Sell		4,115,000		5,502,990			5/13/14		—		(157,385	)
Japanese Yen		UBSW		Sell		366,681,000		3,702,540			5/13/14		217,627		—
Japanese Yen		CITI		Sell		366,680,000		3,644,713			5/14/14		159,786		—
Euro		BZWS		Sell		8,551,980		11,291,103			5/16/14		—		(472,589	)
Singapore Dollar		DBAB		Buy		3,667,000		2,891,728			5/19/14		14,856		—
Euro		GSCO		Sell		4,454,000		5,771,271			5/20/14		—		(355,470	)
Euro		BZWS		Sell		11,375,532		14,643,154			5/21/14		—		(1,004,583	)
Chilean Peso		MSCO		Buy		420,740,000		836,794			5/22/14		—		(48,310	)
Malaysian Ringgit		HSBC		Buy		298,500		96,950			5/22/14		—		(6,547	)
Euro		JPHQ		Sell		4,730,771		6,116,461			5/23/14		—		(391,019	)
Malaysian Ringgit		HSBC		Buy		1,229,300		397,484			5/28/14		—		(25,295	)
Euro		BZWS		Sell		2,836,669		3,664,976			5/30/14		—		(237,080	)
Euro		GSCO		Sell		463,000		596,969			5/30/14		—		(39,923	)
Euro		BZWS		Sell		7,895,591		10,294,504			6/05/14		—		(566,574	)
Mexican Peso		CITI		Buy		78,317,430		5,917,359			6/09/14		19,203		—
Japanese Yen		CITI		Sell		1,370,500,000		13,819,704			6/09/14		792,137		—
Euro		GSCO		Sell		2,033,100		2,667,793			6/09/14		—		(128,929	)
Japanese Yen		HSBC		Sell		2,052,400,000		20,729,219			6/09/14		1,219,714		—
Japanese Yen		JPHQ		Sell		1,375,900,000		13,819,113			6/09/14		740,216		—
Mexican Peso		CITI		Buy		78,230,000		5,901,657			6/10/14		27,814		—
Swedish Krona		DBAB		Buy		41,300,000		4,737,325	EUR		6/10/14		—		(113,951	)
Japanese Yen		BZWS		Sell		1,689,110,000		17,356,925			6/10/14		1,300,636		—
Japanese Yen		HSBC		Sell		1,798,900,000		18,596,742			6/10/14		1,496,814		—
Japanese Yen		JPHQ		Sell		1,219,900,000		12,397,806			6/10/14		801,719		—
Polish Zloty		CITI		Buy		5,990,000		1,365,927	EUR		6/11/14		84,980		—
Swedish Krona		MSCO		Buy		13,064,000		1,488,181	EUR		6/11/14		—		(21,875	)
Japanese Yen		DBAB		Sell		595,700,000		6,199,009			6/11/14		536,384		—
Euro		GSCO		Sell		8,105,300		10,738,712			6/11/14		—		(410,925	)
Japanese Yen		JPHQ		Sell		1,666,680,000		17,356,983			6/11/14		1,513,799		—
Mexican Peso		CITI		Buy		159,085,880		12,019,635			6/12/14		36,453		—
Polish Zloty		DBAB		Buy		30,704,000		7,052,392	EUR		6/12/14		365,071		—
Swedish Krona		MSCO		Buy		42,305,800		4,810,926	EUR		6/12/14		—		(59,504	)
Mexican Peso		CITI		Buy		99,058,800		7,396,698			6/13/14		109,740		—
Swedish Krona		BZWS		Buy		24,372,000		2,756,016	EUR		6/13/14		—		(13,004	)
Swedish Krona		MSCO		Buy		28,654,000		3,185,687	EUR		6/13/14		65,080		(5,339	)
Euro		DBAB		Sell		8,383,000		11,130,528			6/13/14		—		(401,143	)
Swedish Krona		MSCO		Buy		21,328,100		2,430,774	EUR		6/16/14		—		(37,648	)
Japanese Yen		CITI		Sell		310,702,000		3,270,547			6/16/14		316,964		—
Japanese Yen		JPHQ		Sell		702,800,000		7,438,218			6/17/14		757,241		—
Malaysian Ringgit		HSBC		Buy		36,880,000		11,242,874			6/20/14		—		(90,267	)
Mexican Peso		CITI		Buy		61,535,000		4,622,938			6/20/14		37,490		—
Singapore Dollar		HSBC		Buy		6,864,000		5,451,946			6/20/14		—		(10,917	)
Euro		BZWS		Sell		1,124,367		1,509,688			6/20/14		—		(37,008	)

TGB-22

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Global Bond Securities Fund

Forward Exchange Contracts (continued)


Currency	Counterparty^a		Type		Quantity		Contract Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Japanese Yen		DBAB		Sell		1,455,820,000		14,169,116			6/20/14	$	329,474	$	—
Singapore Dollar		DBAB		Buy		8,589,700		6,844,928			6/23/14		—		(35,905	)
Philippine Peso		JPHQ		Buy		392,700,000		8,866,561			6/25/14		—		(8,445	)
South Korean Won		DBAB		Buy		21,440,000,000		18,351,451			6/27/14		1,761,549		—
Swedish Krona		UBSW		Buy		302,991,000		34,200,332	EUR		6/30/14		—		(90,475	)
Mexican Peso		CITI		Buy		105,786,172		7,970,207			7/10/14		29,333		—
Malaysian Ringgit		DBAB		Buy		18,006,622		5,550,404			7/14/14		—		(111,679	)
Malaysian Ringgit		DBAB		Buy		13,610,000		4,232,360			7/15/14		—		(121,792	)
Euro		BZWS		Sell		2,243,000		2,932,498			7/16/14		—		(153,176	)
Euro		MSCO		Sell		9,679,000		12,627,320			7/16/14		—		(687,991	)
Euro		UBSW		Sell		17,930,000		23,415,056			7/16/14		—		(1,251,081	)
Malaysian Ringgit		DBAB		Buy		2,637,000		815,651			7/18/14		—		(19,326	)
Malaysian Ringgit		DBAB		Buy		11,455,000		2,704,841	EUR		7/18/14		—		(261,846	)
Euro		BZWS		Sell		3,518,000		4,627,050			7/18/14		—		(212,656	)
Malaysian Ringgit		DBAB		Buy		4,160,000		1,280,867			7/22/14		—		(24,868	)
Malaysian Ringgit		DBAB		Buy		12,933,000		3,029,870	EUR		7/22/14		—		(263,462	)
Euro		DBAB		Sell		1,935,000		2,538,372			7/22/14		—		(123,631	)
Euro		MSCO		Sell		12,182,000		15,957,689			7/22/14		—		(801,236	)
Euro		DBAB		Sell		1,759,000		2,311,361			7/23/14		—		(108,523	)
Japanese Yen		CITI		Sell		913,412,000		9,181,286			7/24/14		495,395		—
Japanese Yen		JPHQ		Sell		1,407,000,000		14,122,252			7/24/14		742,695		—
Malaysian Ringgit		DBAB		Buy		5,058,000		1,570,466			7/25/14		—		(43,564	)
Malaysian Ringgit		DBAB		Buy		16,628,000		3,903,470	EUR		7/25/14		—		(350,453	)
Euro		DBAB		Sell		4,715,000		6,236,219			7/25/14		—		(250,314	)
Euro		GSCO		Sell		4,711,000		6,236,704			7/25/14		—		(244,326	)
Japanese Yen		JPHQ		Sell		490,100,000		4,944,262			7/25/14		283,720		—
Euro		CITI		Sell		1,935,410		2,563,112			7/28/14		—		(99,496	)
Japanese Yen		BZWS		Sell		1,079,470,000		10,875,395			7/29/14		609,923		—
Malaysian Ringgit		JPHQ		Buy		5,318,000		1,632,139			7/30/14		—		(27,139	)
Malaysian Ringgit		JPHQ		Buy		16,628,000		3,857,826	EUR		7/30/14		—		(288,949	)
Chilean Peso		MSCO		Buy		1,963,430,000		3,690,311			7/31/14		—		(36,916	)
Malaysian Ringgit		HSBC		Buy		3,005,000		916,354			7/31/14		—		(9,473	)
Euro		JPHQ		Sell		11,263,000		14,973,201			7/31/14		—		(521,804	)
Euro		GSCO		Sell		11,263,000		14,951,745			8/01/14		—		(543,300	)
Euro		BZWS		Sell		282,898		375,646			8/04/14		—		(13,553	)
Euro		HSBC		Sell		11,263,000		14,928,318			8/04/14		—		(566,847	)
Euro		BZWS		Sell		7,003,000		9,287,659			8/05/14		—		(346,801	)
Malaysian Ringgit		JPHQ		Buy		1,100,000		331,655			8/06/14		218		—
Euro		JPHQ		Sell		5,724,900		7,572,342			8/06/14		—		(303,777	)
Euro		CITI		Sell		1,210,637		1,611,721			8/08/14		—		(53,840	)
Euro		CITI		Sell		351,512		468,384			8/11/14		—		(15,220	)
Euro		DBAB		Sell		4,845,000		6,460,081			8/11/14		—		(205,588	)
Euro		JPHQ		Sell		6,343,900		8,447,664			8/11/14		—		(280,166	)
Malaysian Ringgit		HSBC		Buy		6,100,000		1,853,146			8/12/14		—		(13,296	)
Singapore Dollar		DBAB		Buy		12,363,000		9,768,489			8/12/14		32,888		—
South Korean Won		HSBC		Buy		11,980,000,000		1,018,568,902	JPY		8/12/14		1,532,531		—
Euro		GSCO		Sell		30,376,000		40,668,604			8/12/14		—		(1,122,292	)
Euro		MSCO		Sell		1,962,500		2,604,218			8/15/14		—		(95,784	)
Singapore Dollar		BZWS		Buy		4,886,000		3,847,244			8/18/14		26,435		—
Polish Zloty		DBAB		Buy		59,155,000		13,693,287	EUR		8/19/14		474,018		—	��
Singapore Dollar		DBAB		Buy		3,667,000		2,892,412			8/19/14		14,837		—

TGB-23

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Global Bond Securities Fund

Forward Exchange Contracts (continued)


Currency	Counterparty^a		Type		Quantity		Contract Amount*			Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Singapore Dollar		HSBC		Buy		3,667,000		2,892,868			8/19/14	$	14,380	$	—
Euro		BZWS		Sell		7,066,000		9,363,510			8/19/14		—		(357,974	)
Japanese Yen		DBAB		Sell		838,612,000		8,543,578			8/19/14		567,004		—
Chilean Peso		MSCO		Buy		981,300,000		1,843,960			8/20/14		—		(21,745	)
Euro		DBAB		Sell		3,964,000		5,294,081			8/20/14		—		(159,650	)
Japanese Yen		HSBC		Sell		1,621,372,000		16,715,175			8/20/14		1,293,124		—
Japanese Yen		JPHQ		Sell		1,135,828,000		11,683,964			8/20/14		880,276		—
Euro		JPHQ		Sell		7,851,000		10,489,250			8/20/14		—		(312,274	)
Japanese Yen		BZWS		Sell		376,247,000		3,880,435			8/22/14		301,607		—
Euro		BZWS		Sell		2,680,925		3,594,021			8/25/14		—		(94,483	)
Japanese Yen		CITI		Sell		751,731,000		7,738,515			8/25/14		587,913		—
Japanese Yen		DBAB		Sell		371,821,000		3,825,870			8/25/14		289,041		—
Japanese Yen		HSBC		Sell		746,218,000		7,662,084			8/25/14		563,922		—
Malaysian Ringgit		HSBC		Buy		1,223,000		363,124			8/26/14		5,500		—
Swedish Krona		UBSW		Buy		30,000,000		3,417,246	EUR		8/26/14		—		(56,907	)
Japanese Yen		BZWS		Sell		1,085,075,000		11,038,403			8/26/14		716,873		—
Japanese Yen		JPHQ		Sell		750,133,000		7,630,942			8/26/14		495,471		—
Malaysian Ringgit		JPHQ		Buy		8,340,000		2,483,399			8/27/14		30,235		—
Singapore Dollar		DBAB		Buy		7,749,500		6,062,348			8/27/14		81,693		—
Euro		CITI		Sell		6,136,805		8,203,374			8/27/14		—		(239,887	)
Japanese Yen		DBAB		Sell		685,950,000		6,949,848			8/27/14		424,842		—
Japanese Yen		HSBC		Sell		1,247,125,000		12,637,176			8/27/14		774,069		—
Euro		HSBC		Sell		18,537,726		24,780,677			8/27/14		—		(724,268	)
Japanese Yen		JPHQ		Sell		751,903,000		7,628,692			8/27/14		476,317		—
Euro		JPHQ		Sell		14,996,625		20,054,025			8/27/14		—		(578,930	)
Euro		DBAB		Sell		1,058,312		1,413,270			8/29/14		—		(42,806	)
Japanese Yen		JPHQ		Sell		372,662,000		3,835,372			8/29/14		290,408		—
Euro		DBAB		Sell		1,732,000		2,293,688			9/03/14		—		(89,310	)
Euro		DBAB		Sell		8,105,300		10,696,483			9/05/14		—		(455,371	)
Japanese Yen		BZWS		Sell		285,057,504		2,895,749			9/18/14		183,609		—
Euro		BZWS		Sell		678,250		906,142			9/19/14		—		(27,077	)
Hungarian Forint		JPHQ		Buy		1,156,013,000		3,813,337	EUR		9/23/14		27,163		—
Euro		DBAB		Sell		8,070,000		10,949,537			9/23/14		—		(154,264	)
Euro		BZWS		Sell		1,647,381		2,230,159			9/24/14		—		(36,538	)
Hungarian Forint		JPHQ		Buy		925,405,000		3,021,829	EUR		9/25/14		63,697		—
Malaysian Ringgit		DBAB		Buy		11,080,500		3,390,087			9/26/14		—		(55,338	)
Malaysian Ringgit		HSBC		Buy		11,490,000		3,513,224			9/26/14		—		(55,234	)
South Korean Won		HSBC		Buy		9,530,000,000		8,719,122			9/26/14		192,355		—
Euro		DBAB		Sell		3,753,000		5,064,392			9/26/14		—		(99,535	)
Euro		BZWS		Sell		6,085,000		8,220,531			9/29/14		—		(152,182	)
Japanese Yen		JPHQ		Sell		285,510,329		2,905,810			9/29/14		189,062		—
Chilean Peso		DBAB		Buy		1,252,750,000		2,393,028			9/30/14		—		(76,402	)
Euro		DBAB		Sell		14,880,000		20,093,506			9/30/14		—		(380,838	)
Euro		GSCO		Sell		4,020,000		5,424,226			9/30/14		—		(107,149	)
Euro		HSBC		Sell		5,430,000		7,340,763			9/30/14		—		(130,722	)
Japanese Yen		JPHQ		Sell		172,207,000		1,746,477			9/30/14		107,837		—
Swedish Krona		DBAB		Buy		445,104,500		69,296,379			10/03/14		—		(431,145	)
Mexican Peso		HSBC		Buy		377,048,070		27,679,754			10/07/14		638,852		—
Euro		JPHQ		Sell		6,370,000		8,687,183			10/07/14		—		(77,915	)
Euro		DBAB		Sell		12,680,000		17,224,258			10/09/14		—		(223,497	)
Mexican Peso		DBAB		Buy		259,112,000		19,136,780			10/14/14		312,605		—
Chilean Peso		CITI		Buy		921,291,798		1,770,693			10/20/14		—		(70,470	)

TGB-24

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Global Bond Securities Fund

Forward Exchange Contracts (continued)


Currency	Counterparty^a		Type		Quantity		Contract Amount*		Settlement Date		Unrealized Appreciation		Unrealized Depreciation
Malaysian Ringgit		JPHQ		Buy		8,104,000		2,505,023		10/20/14	$	—	$	(70,029	)
Euro		HSBC		Sell		12,569,000		17,069,079		10/20/14		—		(226,585	)
Japanese Yen		JPHQ		Sell		1,233,160,000		12,562,755		10/20/14		825,740		—
Malaysian Ringgit		HSBC		Buy		14,613,000		4,556,311		10/22/14		—		(166,169	)
Japanese Yen		BZWS		Sell		735,200,000		7,538,966		10/22/14		541,283		—
Chilean Peso		CITI		Buy		2,420,966,000		4,646,768		10/24/14		—		(180,741	)
Malaysian Ringgit		DBAB		Buy		10,811,000		3,356,932		10/24/14		—		(109,459	)
Malaysian Ringgit		HSBC		Buy		7,209,825		2,226,629		10/24/14		—		(60,899	)
Chilean Peso		BZWS		Buy		199,342,000		381,370		10/27/14		—		(13,750	)
Euro		BZWS		Sell		649,907		894,805		10/27/14		474		—
Chilean Peso		DBAB		Buy		398,486,000		758,732		10/29/14		—		(24,006	)
Malaysian Ringgit		JPHQ		Buy		7,468,000		2,335,210		10/31/14		—		(93,001	)
Euro		DBAB		Sell		3,319,244		4,583,909		10/31/14		16,269		—
Euro		DBAB		Sell		224,556		309,000		11/03/14		—		(16	)
Euro		BZWS		Sell		1,581,109		2,138,292		11/05/14		—		(37,523	)
Japanese Yen		CITI		Sell		341,992,119		3,478,711		11/10/14		222,856		—
Japanese Yen		HSBC		Sell		413,563,000		4,194,351		11/12/14		257,026		—
Euro		JPHQ		Sell		8,969,211		11,959,905		11/12/14		—		(383,206	)
Japanese Yen		JPHQ		Sell		335,950,000		3,397,209		11/13/14		198,760		—
Japanese Yen		MSCO		Sell		300,000,000		3,019,202		11/14/14		162,984		—
Japanese Yen		CITI		Sell		429,663,000		4,339,154		11/17/14		248,301		—
Euro		DBAB		Sell		10,778,730		14,488,984		11/17/14		—		(344,573	)
Euro		MSCO		Sell		1,962,500		2,641,103		11/17/14		—		(59,666	)
Japanese Yen		SCNY		Sell		340,600,700		3,436,315		11/17/14		193,431		—
Malaysian Ringgit		DBAB		Buy		7,197,960		2,208,844		11/19/14		—		(50,517	)
Japanese Yen		CITI		Sell		986,239,000		9,872,460		11/19/14		482,177		—
Japanese Yen		DBAB		Sell		796,770,000		7,970,888		11/19/14		384,598		—
Euro		DBAB		Sell		3,953,398		5,324,831		11/19/14		—		(115,824	)
Malaysian Ringgit		HSBC		Buy		4,326,000		1,328,624		11/20/14		—		(31,550	)
Japanese Yen		CITI		Sell		1,107,834,000		11,116,135		11/20/14		567,981		—
Euro		DBAB		Sell		3,887,000		5,260,471		11/20/14		—		(88,825	)
Japanese Yen		HSBC		Sell		207,909,000		2,085,116		11/20/14		105,527		—
Japanese Yen		JPHQ		Sell		715,709,000		7,176,440		11/20/14		361,873		—
Euro		JPHQ		Sell		15,309,581		20,722,858		11/20/14		—		(346,216	)
Euro		DBAB		Sell		837,570		1,134,907		11/28/14		—		(17,789	)
Euro		DBAB		Sell		5,440,000		7,369,350		12/04/14		—		(117,543	)
Euro		HSBC		Sell		2,155,292		2,941,973		12/09/14		—		(24,334	)
Euro		SCNY		Sell		2,400,751		3,279,738		12/09/14		—		(24,393	)
Euro		JPHQ		Sell		5,095,000		7,027,712		12/15/14		15,369		—
Mexican Peso		CITI		Buy		95,083,400		7,164,750		12/16/14		—		(65,397	)
Malaysian Ringgit		JPHQ		Buy		13,361,013		4,058,384		12/17/14		—		(59,696	)
Mexican Peso		CITI		Buy		45,585,080		3,424,103		12/18/14		—		(21,087	)
Malaysian Ringgit		JPHQ		Buy		14,772,000		4,472,704		12/19/14		—		(52,338	)
Japanese Yen		DBAB		Sell		1,453,310,000		14,169,165		12/22/14		326,205		—
Japanese Yen		HSBC		Sell		1,455,540,000		14,169,149		12/22/14		304,948		—
Japanese Yen		BZWS		Sell		696,650,000		6,718,260		12/26/14		82,259		—
Japanese Yen		CITI		Sell		1,086,780,000		10,480,503		12/26/14		128,284		—

Unrealized appreciation (depreciation)												74,197,203		(52,426,649	)

Net unrealized appreciation (depreciation)											$	21,770,554

^aMay be comprised of multiple contracts using the same currency and settlement date.

*In U.S. dollars unless otherwise indicated.

TGB-25

Franklin Templeton Variable Insurance Products Trust

Statement of Investments, December 31, 2013 (continued)


Templeton Global Bond Securities Fund

At December 31, 2013, the Fund had the following interest rate swap contracts outstanding. See Note 1(d).


Description	Counterparty/ Exchange		Expiration Date		Notional Amount		Unrealized Appreciation		Unrealized Depreciation
Centrally Cleared Swaps
Receive Floating rate 3-month USD BBA LIBOR Pay Fixed rate 2.775%		DBAB		10/4/23	$	13,090,000	$	227,372	$	—
Receive Floating rate 3-month USD BBA LIBOR Pay Fixed rate 2.795%		DBAB		10/4/23		13,090,000		203,607		—
Receive Floating rate 3-month USD BBA LIBOR Pay Fixed rate 2.765%		HSBC		10/7/23		13,090,000		245,363		—
Receive Floating rate 3-month USD BBA LIBOR Pay Fixed rate 3.668%		DBAB		10/4/43		6,370,000		241,141		—
Receive Floating rate 3-month USD BBA LIBOR Pay Fixed rate 3.687%		DBAB		10/4/43		6,370,000		218,732		—
Receive Floating rate 3-month USD BBA LIBOR Pay Fixed rate 3.675%		HSBC		10/7/43		6,370,000		234,539		—

Centrally Cleared Swaps unrealized appreciation (depreciation)								1,370,754		—

OTC Swaps
Receive Floating rate 3-month USD BBA LIBOR Pay Fixed rate 3.558%		JPHQ		3/4/21	$	3,240,000	$	—	$	(266,148	)
Receive Floating rate 3-month USD BBA LIBOR Pay Fixed rate 3.523%		DBAB		3/28/21		14,630,000		—		(1,124,007	)
Receive Floating rate 3-month USD BBA LIBOR Pay Fixed rate 4.347%		CITI		2/25/41		7,460,000		—		(713,354	)
Receive Floating rate 3-month USD BBA LIBOR Pay Fixed rate 4.349%		JPHQ		2/25/41		7,460,000		—		(716,953	)
Receive Floating rate 3-month USD BBA LIBOR Pay Fixed rate 4.320%		JPHQ		2/28/41		5,600,000		—		(516,449	)
Receive Floating rate 3-month USD BBA LIBOR Pay Fixed rate 4.299%		JPHQ		3/1/41		1,870,000		—		(161,314	)

OTC Swaps unrealized appreciation (depreciation)								—		(3,498,225	)

Total Interest Rate Swaps unrealized appreciation (depreciation)								1,370,754		(3,498,225	)

Net unrealized appreciation (depreciation)									$	(2,127,471	)

The accompanying notes are an integral part of these financial statements.

TGB-26

Franklin Templeton Variable Insurance Products Trust

Financial Statements

Statement of Assets and Liabilities

December 31, 2013


	Templeton Global Bond Securities Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	2,646,045,357
Cost - Repurchase agreements		362,770,388

Total cost of investments	$	3,008,815,745

Value - Unaffiliated issuers	$	2,737,095,585
Value - Repurchase agreements		362,770,388

Total value of investments		3,099,865,973
Cash		200,014,736
Restricted Cash (Note 1e)		1,130,000
Foreign currency, at value (cost $55,664,573)		55,784,724
Receivables:
Capital shares sold		2,159,575
Interest		35,402,500
Due from brokers		15,102,968
Variation margin		235,528
Unrealized appreciation on forward exchange contracts		74,197,203
Other assets		72

Total assets		3,483,893,279

Liabilities:
Payables:
Capital shares redeemed		2,184,639
Management fees		1,316,004
Distribution fees		1,314,835
Due to brokers		1,130,000
Unrealized depreciation on forward exchange contracts		52,426,649
Unrealized depreciation on OTC swap contracts		3,498,225
Deferred tax		1,660,320
Accrued expenses and other liabilities		1,093,561

Total liabilities		64,624,233

Net assets, at value	$	3,419,269,046

Net assets consist of:
Paid-in capital	$	3,209,576,714
Undistributed net investment income		104,975,944
Net unrealized appreciation (depreciation)		109,051,786
Accumulated net realized gain (loss)		(4,335,398	)

Net assets, at value	$	3,419,269,046

The accompanying notes are an integral part of these financial statements.

TGB-27

Franklin Templeton Variable Insurance Products Trust

Financial Statements (continued)

Statement of Assets and Liabilities (continued)

December 31, 2013


	Templeton Global Bond Securities Fund
Class 1:
Net assets, at value	$	280,962,552

Shares outstanding		14,668,077

Net asset value and maximum offering price per share	$	19.15

Class 2:
Net assets, at value	$	2,826,039,424

Shares outstanding		151,940,953

Net asset value and maximum offering price per share	$	18.60

Class 3:
Net assets, at value	$	194,121,714

Shares outstanding		10,427,807

Net asset value and maximum offering price per share^a	$	18.62

Class 4:
Net assets, at value	$	118,145,356

Shares outstanding		6,229,133

Net asset value and maximum offering price per share	$	18.97

^aRedemption price is equal to net asset value less redemption fees retained by the Fund.

The accompanying notes are an integral part of these financial statements.

TGB-28

Franklin Templeton Variable Insurance Products Trust

Financial Statements (continued)

Statement of Operations

for the year ended December 31, 2013


	Templeton Global Bond Securities Fund
Investment income:
Interest (net of foreign taxes of $3,046,677)	$	125,459,123

Expenses:
Management fees (Note 3a)		15,206,841
Distribution fees: (Note 3c)
Class 2		6,709,408
Class 3		494,110
Class 4		512,425
Unaffiliated transfer agent fees		1,833
Custodian fees (Note 4)		1,262,335
Reports to shareholders		460,112
Professional fees		104,376
Trustees’ fees and expenses		13,018
Other		49,965

Total expenses		24,814,423
Expense reductions (Note 4)		(3,497	)

Net expenses		24,810,926

Net investment income		100,648,197

Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments		(4,233,228	)
Foreign currency transactions		52,343,687
Swap contracts		(996,665	)

Net realized gain (loss)		47,113,794

Net change in unrealized appreciation (depreciation) on:
Investments		(91,405,625	)
Translation of other assets and liabilities denominated in foreign currencies		(10,160,429	)
Change in deferred taxes on unrealized appreciation		3,057,943

Net change in unrealized appreciation (depreciation)		(98,508,111	)

Net realized and unrealized gain (loss)		(51,394,317	)

Net increase (decrease) in net assets resulting from operations	$	49,253,880

The accompanying notes are an integral part of these financial statements.

TGB-29

Franklin Templeton Variable Insurance Products Trust

Financial Statements (continued)

Statements of Changes in Net Assets


	Templeton Global Bond Securities Fund
	Year Ended December 31,
	2013			2012

Increase (decrease) in net assets:
Operations:
Net investment income	$	100,648,197		$	95,705,827
Net realized gain (loss) from investments, foreign currency transactions and swap contracts		47,113,794			113,860,368
Net change in unrealized appreciation (depreciation) on investments, translation of other assets and liabilities denominated in foreign currencies and deferred taxes		(98,508,111	)		173,490,240

Net increase (decrease) in net assets resulting from operations		49,253,880			383,056,435

Distributions to shareholders from:
Net investment income and net foreign currency gains:
Class 1		(14,463,879	)		(18,014,760	)
Class 2		(128,696,606	)		(133,749,946	)
Class 3		(9,351,774	)		(12,114,860	)
Class 4		(7,129,387	)		(9,763,141	)
Net realized gains:
Class 1		(3,587,066	)		(438,387	)
Class 2		(33,227,731	)		(3,357,784	)
Class 3		(2,438,218	)		(306,543	)
Class 4		(1,906,223	)		(251,144	)

Total distributions to shareholders		(200,800,884	)		(177,996,565	)

Capital share transactions: (Note 2)
Class 1		(13,273,114	)		15,415,298
Class 2		529,969,403			448,524,053
Class 3		4,794,164			(2,060,465	)
Class 4		(37,369,362	)		(394,730	)

Total capital share transactions		484,121,091			461,484,156

Redemption fees		7,288			6,086

Net increase (decrease) in net assets		332,581,375			666,550,112
Net assets:
Beginning of year		3,086,687,671			2,420,137,559

End of year	$	3,419,269,046		$	3,086,687,671

Undistributed net investment income included in net assets:
End of year	$	104,975,944		$	114,278,705

The accompanying notes are an integral part of these financial statements.

TGB-30

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements

Templeton Global Bond Securities Fund

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Franklin Templeton Variable Insurance Products Trust (Trust) is registered under the Investment Company Act of 1940, as amended, (1940 Act) as an open-end investment company, consisting of twenty separate funds. The Templeton Global Bond Securities Fund (Fund) is included in this report. The financial statements of the remaining funds in the Trust are presented separately. Shares of the Fund are generally sold only to insurance company separate accounts to fund the benefits of variable life insurance policies or variable annuity contracts. The Fund offers four classes of shares: Class 1, Class 2, Class 3, and Class 4. Each class of shares differs by its distribution fees, voting rights on matters affecting a single class and its exchange privilege.

The following summarizes the Fund’s significant accounting policies.

a. Financial Instrument Valuation

Debt securities generally trade in the Over-the-counter (OTC) market rather than on a securities exchange. The Fund’s pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Securities denominated in a foreign currency are converted into their U.S. dollar equivalent at the foreign exchange rate in effect at the NYSE close on the date that the values of the foreign debt securities are determined. Repurchase agreements are valued at cost, which approximates market value.

Derivative financial instruments (derivatives) listed on an exchange are valued at the official closing price of the day. Certain derivatives trade in the OTC market. The Fund’s pricing services use various techniques including industry standard option pricing models and proprietary discounted cash flow models to determine the fair value of those instruments. The Fund’s net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.

TGB-31

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Global Bond Securities Fund

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

b. Foreign Currency Translation

c. Joint Repurchase Agreement

The Fund enters into a joint repurchase agreement whereby its uninvested cash balance is deposited into a joint cash account with other funds managed by the investment manager or an affiliate of the investment manager and is used to invest in one or more repurchase agreements. The value and face amount of the joint repurchase agreement are allocated to the funds based on their pro-rata interest. A repurchase agreement is accounted for as a loan by the Fund to the seller, collateralized by securities which are delivered to the Fund’s custodian. The market value, including accrued interest, of the initial collateralization is required to be at least 102% of the dollar amount invested by the funds, with the value of the underlying securities marked to market daily to maintain coverage of at least 100%. Repurchase agreements are subject to the terms of Master Repurchase Agreements (MRAs) with approved counterparties (sellers). The MRAs contain various provisions, including but not limited to events of default and maintenance of collateral for repurchase agreements. In the event of default by either the seller or the Fund, certain MRAs may permit the non-defaulting party to net and close-out all transactions, if any, traded under such agreements. The Fund may sell securities it holds as collateral and apply the proceeds towards the repurchase price and any other amounts owed by the seller to the Fund in the event of default by the seller. This could involve costs or delays in addition to a loss on the securities if their value falls below the repurchase price owed by the seller. The joint repurchase agreement held by the Fund at year end, as indicated in the Statement of Investments, had been entered into on December 31, 2013.

d. Derivative Financial Instruments

The Fund invested in derivatives in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown on the Statement of Assets and Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statement of Operations.

TGB-32

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Global Bond Securities Fund

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

d. Derivative Financial Instruments (continued)

Derivative counterparty credit risk is managed through a formal evaluation of the creditworthiness of all potential counterparties. The Fund attempts to reduce its exposure to counterparty credit risk on OTC derivatives, whenever possible, by entering into International Swaps and Derivatives Association (ISDA) master agreements with certain counterparties. These agreements contain various provisions, including but not limited to collateral requirements, events of default, or early termination. Termination events applicable to the counterparty include certain deteriorations in the credit quality of the counterparty. Termination events applicable to the Fund include failure of the Fund to maintain certain net asset levels and/or limit the decline in net assets over various periods of time. In the event of default or early termination, the ISDA master agreement gives the non-defaulting party the right to net and close-out all transactions traded, whether or not arising under the ISDA agreement, to one net amount payable by one counterparty to the other. However, absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities. Early termination by the counterparty may result in an immediate payment by the Fund of any net liability owed to that counterparty under the ISDA agreement.

Collateral requirements differ by type of derivative. Collateral or initial margin requirements are set by the broker or exchange clearing house for exchange traded and centrally cleared derivatives. Initial margin deposited is held at the exchange and can be in the form of cash and/or securities. For OTC derivatives traded under an ISDA master agreement, posting of collateral is required by either the fund or the applicable counterparty if the total net exposure of all OTC derivatives with the applicable counterparty exceeds the minimum transfer amount, which typically ranges from $100,000 to $250,000, and can vary depending on the counterparty and the type of the agreement. Generally, collateral is determined at the close of fund business each day and any additional collateral required due to changes in derivative values may be delivered by the fund or the counterparty within a few business days. Collateral pledged and/or received by the fund for OTC derivatives, if any, is held in segregated accounts with the fund’s custodian/counterparty broker and can be in the form of cash and/or securities. Unrestricted cash may be invested according to the Fund’s investment objectives.

The Fund entered into OTC forward exchange contracts primarily to manage and/or gain exposure to certain foreign currencies. A forward exchange contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date.

The Fund entered into interest rate swap contracts primarily to manage interest rate risk. An interest rate swap is an agreement between the Fund and a counterparty to exchange cash flows based on the difference between two interest rates, applied to a notional amount. These agreements may be privately negotiated in the over-the-counter market (“OTC interest rate swaps”) or may be executed on a registered exchange (“centrally cleared interest rate swaps”). For centrally cleared interest rate swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable on the Statement of Assets and Liabilities. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized depreciation and appreciation until the payments are made, at which time they are realized.

See Note 9 regarding other derivative information.

e. Restricted Cash

At December 31, 2013, the Fund received restricted cash in connection with investments in certain derivative securities. Restricted cash is held in a segregated account with the Fund’s counterparty broker and is reflected in the Statement of Assets and Liabilities.

TGB-33

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Global Bond Securities Fund

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

f. Income and Deferred Taxes

g. Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Distributions to shareholders are recorded on the ex-dividend date and are determined according to income tax regulations (tax basis). Distributable earnings determined on a tax basis may differ from earnings recorded in accordance with accounting principles generally accepted in the United States of America. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Inflation-indexed bonds are adjusted for inflation through periodic increases or decreases in the security’s interest accruals, face amount, or principal redemption value, by amounts corresponding to the rate of inflation as measured by an index. Any increase or decrease in the face amount or principal redemption value will be included as interest income on the Statement of Operations.

h. Accounting Estimates

TGB-34

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Global Bond Securities Fund

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

i. Redemption Fees

j. Guarantees and Indemnifications

2. SHARES OF BENEFICIAL INTEREST

At December 31, 2013, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:


	Year Ended December 31,
	2013						2012
Class 1 Shares:	Shares			Amount			Shares			Amount
Shares sold		1,918,229		$	37,822,305			2,650,014		$	51,366,352
Shares issued in reinvestment of distributions		962,717			18,050,945			1,028,604			18,453,147
Shares redeemed		(3,563,965	)		(69,146,364	)		(2,823,320	)		(54,404,201	)

Net increase (decrease)		(683,019	)	$	(13,273,114	)		855,298		$	15,415,298

Class 2 Shares:
Shares sold		34,876,621		$	667,964,958			28,727,828		$	540,675,595
Shares issued in reinvestment of distributions		8,877,431			161,924,337			7,843,692			137,107,730
Shares redeemed		(16,008,448	)		(299,919,892	)		(12,232,820	)		(229,259,272	)

Net increase (decrease)		27,745,604		$	529,969,403			24,338,700		$	448,524,053

Class 3 Shares:
Shares sold		1,022,231		$	19,570,327			835,292		$	15,856,382
Shares issued in reinvestment of distributions		646,027			11,789,991			710,200			12,421,403
Shares redeemed		(1,409,425	)		(26,566,154	)		(1,613,494	)		(30,338,250	)

Net increase (decrease)		258,833		$	4,794,164			(68,002	)	$	(2,060,465	)

Class 4 Shares:
Shares sold		892,452		$	17,199,730			871,336		$	16,701,133
Shares issued on reinvestment of distributions		485,524			9,035,611			562,284			10,014,286
Shares redeemed		(3,385,215	)		(63,604,703	)		(1,421,448	)		(27,110,149	)

Net increase (decrease)		(2,007,239	)	$	(37,369,362	)		12,172		$	(394,730	)

TGB-35

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Global Bond Securities Fund

3. TRANSACTIONS WITH AFFILIATES


Subsidiary		Affiliation
Franklin Advisers, Inc. (Advisers)		Investment manager
Franklin Templeton Services, LLC (FT Services)		Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)		Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)		Transfer agent

a. Management Fees

The Fund pays an investment management fee to Advisers based on the average daily net assets of the Fund as follows:


Annualized Fee Rate		Net Assets
0.625%		Up to and including $100 million
0.500%		Over $100 million, up to and including $250 million
0.450%		Over $250 million, up to and including $7.5 billion
0.440%		Over $7.5 billion, up to and including $10 billion
0.430%		Over $10 billion, up to and including $12.5 billion
0.420%		Over $12.5 billion, up to and including $15 billion
0.400%		In excess of $15 billion

b. Administrative Fees

Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

c. Distribution Fees

d. Transfer Agent Fees

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

4. EXPENSE OFFSET ARRANGEMENT

TGB-36

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Global Bond Securities Fund

5. INCOME TAXES

For tax purposes, capital losses may be carried over to offset future capital gains. At December 31, 2013, the Fund had long-term capital loss carryforwards of $4,268,308.

The tax character of distributions paid during the years ended December 31, 2013 and 2012, was as follows:


	2013		2012
Distributions paid from:
Ordinary income	$	159,641,646	$	173,642,707
Long term capital gain		41,159,238		4,353,858

	$	200,800,884	$	177,996,565

At December 31, 2013, the cost of investments, net unrealized appreciation (depreciation) and undistributed ordinary income for income tax purposes were as follows:


Cost of investments	$	3,028,483,990


Unrealized appreciation	$	143,431,341
Unrealized depreciation		(72,049,358	)

Net unrealized appreciation (depreciation)	$	71,381,983

Distributable earnings - undistributed ordinary income	$	177,849,072

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of foreign currency transactions, bond discounts and premiums, tax straddles.

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments (excluding short term securities) for the year ended December 31, 2013, aggregated $1,063,004,404 and $826,160,004, respectively.

7. CREDIT RISK

At December 31, 2013, the Fund had 10.46% of its portfolio invested in high yield or other securities rated below investment grade. These securities may be more sensitive to economic conditions causing greater price volatility and are potentially subject to a greater risk of loss due to default than higher rated securities.

8. CONCENTRATION OF RISK

TGB-37

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Global Bond Securities Fund

9. OTHER DERIVATIVE INFORMATION

At December 31, 2013, the Fund’s investments in derivative contracts are reflected on the Statement of Assets and Liabilities as follows:

Asset Derivatives

Liability Derivatives

Derivative Contracts Not Accounted
for as Hedging Instruments

Statement of Assets and
Liabilities Location

Fair
Value
Amount

Statement of Assets and
Liabilities Location

Fair
Value
Amount

Interest rate contracts

Variation margin / Net assets consist of – net unrealized appreciation^a

1,370,754

Unrealized depreciation on swap contracts / Net assets consist of – net unrealized depreciation

3,498,225

Foreign exchange contracts

Unrealized appreciation on forward exchange contracts / Net assets consist of – net unrealized appreciation

74,197,203

Unrealized depreciation on forward exchange contracts / Net assets consist of – net unrealized depreciation

52,426,649

^aIncludes cumulative appreciation (depreciation) of centrally cleared swaps as reported in the Statement of Investments. Only current day’s variation margin is separately reported within the Statement of Assets and Liabilities.

For the year ended December 31, 2013, the effect of derivative contracts on the Fund’s Statement of Operations was as follows:


Derivative Contracts Not Accounted for as Hedging Instruments	Statement of Operations Locations	Realized Gain (Loss) for the Year			Change in Unrealized Appreciation (Depreciation) for the Year
Interest rate contracts	Net realized gain (loss) from swap contracts / Net change in unrealized appreciation (depreciation) on investments	$	(996,665	)	$	8,336,928
Foreign exchange contracts	Net realized gain (loss) from foreign currency transactions / Net change in unrealized appreciation (depreciation) on translation of other assets and liabilities denominated in foreign currencies		55,154,098			(9,671,096	)

At December 31, 2013, the Fund’s OTC derivative assets and liabilities, are as follows:


	Gross and Net Amounts of Assets and Liabilities Presented in the Statement of Assets and Liabilities
	Assets^a		Liabilities^a
Derivatives
Forward Exchange Contracts	$	74,197,203	$	52,426,649
Swap Contracts		—		3,498,225

Total	$	74,197,203	$	55,924,874

^a	Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

TGB-38

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Global Bond Securities Fund

9. OTHER DERIVATIVE INFORMATION (continued)

At December 31, 2013, the Fund’s OTC derivative assets which may be offset against the Fund’s OTC derivative liabilities and collateral received from the counterparty, is as follows:


			Amounts Not Offset in the Statement of Assets and Liabilities
	Gross and Net Amounts of Assets Presented in the Statement of Assets and Liabilities		Financial Instruments Available for Offset			Financial Instruments Collateral Received^a			Cash Collateral Received			Net Amount (Not less than zero)
Counterparty
BZWS	$	9,228,241	$	(7,879,050	)	$	—		$	(1,130,000	)	$	219,191
CITI		10,476,010		(5,323,823	)		(4,651,652	)		—			500,535
DBAB		13,615,878		(13,615,878	)		—			—			—
GSCO		1,834,450		(1,834,450	)		—			—			—
HSBC		15,523,320		(4,023,395	)		(10,901,026	)		—			598,899
JPHQ		17,306,073		(7,652,563	)		(9,142,201	)		—			511,309
MSCO		776,074		(776,074	)		—			—			—
SCNY		193,431		(24,393	)		—			—			169,038
UBSW		5,243,726		(3,611,556	)		(989,024	)		—			643,146

Total	$	74,197,203	$	(44,741,182	)	$	(25,683,903	)	$	(1,130,000	)	$	2,642,118

^a	At December 31, 2013, the Fund received United Kingdom Treasury Bonds and United States Treasury Notes as collateral for derivatives.

At December 31, 2013, the Fund’s OTC derivative liabilities which may be offset against the Fund’s OTC derivative assets and collateral pledged to the counterparty, is as follows:


			Amounts Not Offset in the Statement of Assets and Liabilities
	Gross and Net Amounts of Liabilities Presented in the Statement of Assets and Liabilities		Financial Instruments Available for Offset			Financial Instruments Collateral Pledged		Cash Collateral Pledged^a			Net Amount (Not less than zero)
Counterparty
BZWS	$	7,879,050	$	(7,879,050	)	$	—	$	—		$	—
CITI		5,323,823		(5,323,823	)		—		—			—
DBAB		18,018,700		(13,615,878	)		—		(4,402,822	)		—
GSCO		5,102,598		(1,834,450	)		—		(3,080,000	)		188,148
HSBC		4,023,395		(4,023,395	)		—		—			—
JPHQ		7,652,563		(7,652,563	)		—		—			—
MSCO		4,288,796		(776,074	)		—		(3,512,722	)		—
SCNY		24,393		(24,393	)		—		—			—
UBSW		3,611,556		(3,611,556	)		—		—			—

Total	$	55,924,874	$	(44,741,182	)	$	—	$	(10,995,544	)	$	188,148

^a	In some instances, the collateral amounts disclosed in the table above were adjusted due to the requirement to limit the collateral amounts to avoid the effect of overcollateralization. Actual collateral received and/or pledged may be more than the amounts disclosed herein.

TGB-39

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Global Bond Securities Fund

9. OTHER DERIVATIVE INFORMATION (continued)

For the year ended December 31, 2013, the average month end fair value of derivatives represented 3.58% of average month end net assets. The average month end number of open derivative contracts for the year was 454.

See Note 1(d) regarding derivative financial instruments.

10. CREDIT FACILITY

11. FAIR VALUE MEASUREMENTS

•

Level 1 – quoted prices in active markets for identical financial instruments

•

Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)

•

Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.

TGB-40

Franklin Templeton Variable Insurance Products Trust

Notes to Financial Statements (continued)

Templeton Global Bond Securities Fund

11. FAIR VALUE MEASUREMENTS (continued)

A summary of inputs used as of December 31, 2013, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:


	Level 1		Level 2		Level 3		Total

Assets:
Investments in Securities:
Foreign Government and Agency Securities	$	—	$	2,244,885,649	$	—	$	2,244,885,649
Municipal Bonds		—		1,510,654		—		1,510,654
Short Term Investments		—		853,469,670		—		853,469,670

Total Investments in Securities	$	—	$	3,099,865,973	$	—	$	3,099,865,973

Forward Exchange Contracts		—		74,197,203		—		74,197,203
Swaps		—		1,370,754		—		1,370,754
Liabilities:
Forward Exchange Contracts		—		52,426,649		—		52,426,649
Swaps		—		3,498,225		—		3,498,225

12. NEW ACCOUNTING PRONOUNCEMENTS

In June 2013, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2013-08, Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements. The ASU modifies the criteria used in defining an investment company under U.S. Generally Accepted Accounting Principles and also sets forth certain measurement and disclosure requirements. Under the ASU, an entity that is registered under the 1940 Act automatically qualifies as an investment company. The ASU is effective for interim and annual reporting periods beginning after December 15, 2013. Management has reviewed the requirements and believe the adoption of this ASU will not have a material impact on the financial statements.

13. SUBSEQUENT EVENTS


ABBREVIATIONS
Counterparty	Currency	Selected Portfolio

BZWS - Barclays Bank PLC	BRL - Brazilian Real	BHAC - Berkshire Hathaway Assurance Corp.
CITI - Citigroup, Inc.	CAD - Canadian Dollar	FRN - Floating Rate Note
DBAB - Deutsche Bank AG	EUR - Euro
GSCO - Goldman Sachs Bank	HUF - Hungarian Forint
HSBC - HSBC Bank USA, N.A.	IDR - Indonesian Rupiah
JPHQ - JPMorgan Chase & Co.	KRW - South Korean Won
MSCO - Morgan Stanley	LKR - Sri Lankan Rupee
SCNY - Standard Chartered Bank	MXN - Mexican Peso
UBSW - UBS AG	MYR - Malaysian Ringgit
	PEN - Peruvian Nuevo Sol
	PHP - Philippine Peso
	PLN - Polish Zloty
	SEK - Swedish Krona
	SGD - Singapore Dollar

TGB-41

Franklin Templeton Variable Insurance Products Trust

Templeton Global Bond Securities Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of

Franklin Templeton Variable Insurance Products Trust

In our opinion, the accompanying statement of assets and liabilities, including the statement of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of The Templeton Global Bond Securities Fund (the “Fund”) at December 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2013 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

February 14, 2014

TGB-42

Franklin Templeton Variable Insurance Products Trust

Tax Information (unaudited)

Templeton Global Bond Securities Fund

Under Section 852(b)(3)(C) of the Internal Revenue Code (Code), the Fund hereby reports the maximum amount allowable but no less than $41,159,238 as a long term capital gain dividend for the fiscal year ended December 31, 2013.

At December 31, 2013, more than 50% of the Fund’s total assets were invested in securities of foreign issuers. In most instances, foreign taxes were withheld from income paid to the Fund on these investments. The Fund elects to treat foreign taxes paid as allowed under Section 853 of the Code. This election will allow shareholders of record as of the 2014 distribution date, to treat their proportionate share of foreign taxes paid by the Fund as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.

TGB-43

INDEX DESCRIPTIONS

The indexes are unmanaged and include reinvested distributions.

For indexes sourced by Morningstar: © 2014 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Russell^® is a trademark and Russell^TM is a servicemark of the Frank Russell Company.

Barclays U.S. Aggregate Index is a market capitalization-weighted index representing the U.S. investment-grade, fixed-rate, taxable bond market with index components for government and corporate, mortgage pass-through and asset-backed securities. All issues included are SEC registered, taxable, dollar denominated and nonconvertible, must have at least one year to final maturity and must be rated investment grade (Baa3/BBB-/BBB- or higher) using the middle rating of Moody’s, Standard & Poor’s and Fitch, respectively.

Barclays U.S. Government Index: Intermediate Component is the intermediate component of the Barclays U.S. Government Index, which includes public obligations of the U.S. Treasury with at least one year to final maturity and publicly issued debt of U.S. government agencies, quasi-federal corporations, and corporate or foreign debt guaranteed by the U.S. government.

Citigroup World Government Bond Index is a market capitalization-weighted index consisting of investment-grade world government bond markets.

Consumer Price Index (CPI), calculated by the Bureau of Labor Statistics, is a commonly used measure of the inflation rate.

Credit Suisse (CS) High Yield Index is designed to mirror the investable universe of the U.S. dollar-denominated high yield debt market.

Dow Jones Industrial Average is a price-weighted average of blue-chip stocks that are generally the leaders in their industry.

Dow Jones-UBS Commodity Index is a broadly diversified index designed to allow investors to track commodity futures through a single, simple measure. The index reflects the return on fully collateralized positions in the underlying futures contracts on physical commodities, which are reweighted and rebalanced annually on a price-percentage basis. The Dow Jones-UBS Commodity Indices^SM are a joint product of DJI Opco, LLC, a subsidiary of S&P Dow Jones Indices LLC, and UBS Securities LLC (“UBS”) and have been licensed for use to S&P Opco, LLC and Franklin Templeton Companies, LLC. S&P^® is a registered trademark of Standard & Poor’s Financial Services LLC, Dow Jones^® and DJ are registered trademarks of Dow Jones Trademark Holdings LLC, and “UBS” is a registered trademark of UBS AG. All content of the Dow Jones-UBS Commodity Indices^SM © S&P Dow Jones Indices LLC and UBS and their respective affiliates 2014. Reproduction of Dow Jones-UBS Commodity Indices^SM in any form is prohibited except with the prior written permission of S&P. S&P does not guarantee the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions, regardless of the cause or for the results obtained from the use of such information. S&P DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall S&P be liable for any direct, indirect, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with subscriber’s or others’ use of Dow Jones-UBS Commodity Indices^SM.

FTSE EPRA/NAREIT Developed Index is a free float-adjusted index designed to measure the performance of publicly traded real estate securities in the North American, European and Asian real estate markets. FTSE^® is a trademark of London Stock Exchange Plc and The Financial Times Limited and is used by FTSE under license.

J.P. Morgan (JPM) Global Government Bond Index (GGBI) tracks total returns for liquid, fixed-rate, domestic government bonds with maturities greater than one year issued by developed countries globally.

Lipper Multi-Sector Income Funds Classification Average is calculated by averaging the total returns of all funds within the Lipper Multi-Sector Income Funds classification in the Lipper Open-End underlying funds universe. Lipper Multi-Sector Income Funds are defined as funds that seek current income by allocating assets among different fixed income securities sectors (not primarily in one sector except for defensive purposes), including U.S. and foreign governments, with a significant portion rated below investment grade. For the 12-month period ended 12/31/13, there were 226 funds in this category. Lipper calculations do not include contract fees, expenses or sales charges, and may have been different if such charges had been considered.

Lipper VIP Equity Income Funds Classification Average is an equally weighted average calculation of performance figures for all funds within the Lipper Equity Income Funds classification in the Lipper VIP underlying funds universe. Lipper Equity

I-1

Income Funds seek relatively high current income and growth of income through investing 60% or more of their portfolios in equities. For the 12-month period ended 12/31/13, there were 66 funds in this category. Lipper calculations do not include contract fees, expenses or sales charges, and may have been different if such charges had been considered.

Lipper VIP General U.S. Government Funds Classification Average is an equally weighted average calculation of performance figures for all funds within the Lipper General U.S. Government Funds classification in the Lipper VIP underlying funds universe. Lipper General U.S. Government Funds invest primarily in U.S. government and agency issues. For the 12-month period ended 12/31/13, there were 50 funds in this category. Lipper calculations do not include contract fees, expenses or sales charges, and may have been different if such charges had been considered.

Lipper VIP High Yield Funds Classification Average is an equally weighted average calculation of performance figures for all funds within the Lipper High Yield Funds Classification in the Lipper VIP underlying funds universe. Lipper High Yield Funds aim at high (relative) current yield from fixed income securities, have no quality or maturity restrictions, and tend to invest in lower grade debt issues. For the 12-month period ended 12/31/13, there were 110 funds in this category. Lipper calculations do not include contract fees, expenses or sales charges, and may have been different if such charges had been considered.

MSCI All Country World Index (ACWI) is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global developed and emerging markets.

MSCI Emerging Markets (EM) Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global emerging markets.

MSCI Europe, Australasia, Far East (EAFE) Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global developed markets excluding the U.S. and Canada.

MSCI Europe, Australasia, Far East (EAFE) Index Net Return (Local Currency) is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance of global developed markets excluding the U.S. and Canada. The index is calculated in local currency and includes reinvested daily net dividends.

MSCI World Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global developed markets.

Russell 1000^® Growth Index is market capitalization weighted and measures performance of those Russell 1000^® Index companies with higher price-to-book ratios and higher forecasted growth values.

Russell 1000^® Index is market capitalization weighted and measures performance of the largest companies in the Russell 3000^® Index, which represents the majority of the U.S. market’s total capitalization.

Russell 1000^® Value Index is market capitalization weighted and measures performance of those Russell 1000^® Index companies with lower price-to-book ratios and lower forecasted growth values.

Russell 2500™ Index is market capitalization weighted and measures performance of the smallest companies in the Russell 3000^® Index, which represent a modest amount of the Russell 3000^® Index’s total market capitalization.

Russell 2500™ Value Index is market capitalization weighted and measures performance of those Russell 2500™ Index companies with lower price-to-book ratios and lower forecasted growth values.

Russell 3000^® Growth Index is market capitalization weighted and measures performance of those Russell 3000^® Index companies with higher price-to-book ratios and higher forecasted growth values.

Russell 3000^® Index is market capitalization weighted and measures performance of the largest U.S. companies based on total market capitalization and represents the majority of the investable U.S. equity market.

Russell Midcap^® Growth Index is market capitalization weighted and measures performance of those Russell Midcap^® Index companies with higher price-to-book ratios and higher forecasted growth values.

Russell Midcap^® Index is market capitalization weighted and measures performance of the smallest companies in the Russell 1000^® Index, which represent a modest amount of the Russell 1000^® Index’s total market capitalization.

I-2

Standard & Poor’s 500 Index (S&P 500) is a market capitalization-weighted index of 500 stocks designed to measure total U.S. equity market performance. STANDARD & POOR’S^®, S&P^® and S&P 500^® are registered trademarks of Standard & Poor’s Financial Services LLC.

Standard & Poor’s/International Finance Corporation Investable (S&P/IFCI) Composite Index is a free float-adjusted, market capitalization-weighted index designed to measure equity performance in global emerging markets.

I-3

Board Members and Officers

The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Trust, principal occupation during at least the past five years and number of portfolios overseen in the Franklin Templeton Investments fund complex are shown below. Generally, each board member serves until that person’s successor is elected and qualified.

Independent Board Members


Name, Year of Birth and Address	Position	Length of Time Served	Number of Portfolios in Fund Complex Overseen by Board Member*	Other Directorships Held During at Least the Past 5 Years
Harris J. Ashton (1932) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 1988	141	Bar-S Foods (meat packing company) (1981-2010).

Principal Occupation During at Least the Past 5 Years: Director of various companies; and formerly, Director, RBC Holdings, Inc. (bank holding company) (until 2002); and President, Chief Executive Officer and Chairman of the Board, General Host Corporation (nursery and craft centers) (until 1998).
Sam Ginn (1937) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2007	114	ICO Global Communications (Holdings) Limited (satellite company) (2006-2010), Chevron Corporation (global energy company) (1989-2009), Hewlett-Packard Company (technology company) (1996-2002), Safeway, Inc. (grocery retailer) (1991-1998) and TransAmerica Corporation (insurance company) (1989-1999).

Principal Occupation During at Least the Past 5 Years: Private investor; Chairman, First Responder Network Authority (FirstNet) (interoperable wireless broadband network) (2012); and formerly, Chairman of the Board, Vodafone AirTouch, PLC (wireless company) (1999-2000); Chairman of the Board and Chief Executive Officer, AirTouch Communications (cellular communications) (1993-1998) and Pacific Telesis Group (telephone holding company) (1988-1994).
Edith E. Holiday (1952) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2005	141	Hess Corporation (exploration and refining of oil and gas), H.J. Heinz Company (processed foods and allied products)(1994-2013), RTI International Metals, Inc. (manufacture and distribution of titanium), Canadian National Railway (railroad) and White Mountains Insurance Group, Ltd. (holding company).

Principal Occupation During at Least the Past 5 Years: Director or Trustee of various companies and trusts; and formerly, Assistant to the President of the United States and Secretary of the Cabinet (1990-1993); General Counsel to the United States Treasury Department (1989-1990); and Counselor to the Secretary and Assistant Secretary for Public Affairs and Public Liaison – United States Treasury Department (1988-1989).
J. Michael Luttig (1954) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2009	141	Boeing Capital Corporation (aircraft financing) (2006-2013).

Principal Occupation During at Least the Past 5 Years: Executive Vice President, General Counsel and member of Executive Council, The Boeing Company (aerospace company); and formerly, Federal Appeals Court Judge, U.S. Court of Appeals for the Fourth Circuit (1991-2006).
Frank A. Olson (1932) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2005	141	Hess Corporation (exploration and refining of oil and gas) (1998-2013).

Principal Occupation During at Least the Past 5 Years: Chairman Emeritus, The Hertz Corporation (car rental) (since 2000) (Chairman of the Board (1980-2000) and Chief Executive Officer (1977-1999)); and formerly, Chairman of the Board, President and Chief Executive Officer, UAL Corporation (airlines) (until 1987).

BOD-1


Name, Year of Birth and Address	Position	Length of Time Served	Number of Portfolios in Fund Complex Overseen by Board Member*	Other Directorships Held During at Least the Past 5 Years
Larry D. Thompson (1945) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since 2007	141	Cbeyond, Inc. (business communications provider) (2010-2012), The Southern Company (energy company) (2010-2012) and The Washington Post Company (education and media organization).

Principal Occupation During at Least the Past 5 Years: Executive Vice President – Government Affairs, General Counsel and Corporate Secretary, PepsiCo, Inc. (consumer products) (July 2012); and formerly, John A. Sibley Professor of Corporate and Business Law, University of Georgia School of Law (2011-2012); Senior Vice President – Government Affairs, General Counsel and Secretary, PepsiCo, Inc. (2004-2011); Senior Fellow of The Brookings Institution (2003-2004); Visiting Professor, University of Georgia School of Law (2004); and Deputy Attorney General, U.S. Department of Justice (2001-2003).
John B. Wilson (1959) One Franklin Parkway San Mateo, CA 94403-1906	Lead Independent Trustee	Trustee since 2007 and Lead Independent Trustee since 2008	114	None

Principal Occupation During at Least the Past 5 Years: President, Staples Europe (office supplies) (2012); President and Founder, Hyannis Port Capital, Inc. (real estate and private equity investing); serves on private and non-profit boards; and formerly, Chief Operating Officer and Executive Vice President, Gap, Inc. (retail) (1996-2000); Chief Financial Officer and Executive Vice President – Finance and Strategy, Staples, Inc. (1992-1996); Senior Vice President – Corporate Planning, Northwest Airlines, Inc. (airlines) (1990-1992); and Vice President and Partner, Bain & Company (consulting firm) (1986-1990).

Interested Board Members and Officers


Name, Year of Birth and Address	Position	Length of Time Served	Number of Portfolios in Fund Complex Overseen by Board Member*	Other Directorships Held During at Least the Past 5 Years
**Gregory E. Johnson (1961) One Franklin Parkway San Mateo, CA 94403-1906	Trustee	Since June 2013	152	None

Principal Occupation During at Least the Past 5 Years: Chairman of the Board, Member – Office of the Chairman, Director, President and Chief Executive Officer, Franklin Resources, Inc.; officer and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 44 of the investment companies in Franklin Templeton Investments; and Chairman, Investment Company Institute.
**Rupert H. Johnson, Jr. (1940) One Franklin Parkway San Mateo, CA 94403-1906	Chairman of the Board and Trustee	Chairman of the Board since June 2013 and Trustee since 1988	141	None

Principal Occupation During at Least the Past 5 Years: Vice Chairman, Member – Office of the Chairman and Director, Franklin Resources, Inc.; Director, Franklin Advisers, Inc.; Senior Vice President, Franklin Advisory Services, LLC; and officer and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 41 of the investment companies in Franklin Templeton Investments.
Alison E. Baur (1964) One Franklin Parkway San Mateo, CA 94403-1906	Vice President	Since 2012	Not Applicable	Not Applicable

Principal Occupation During at Least the Past 5 Years: Deputy General Counsel, Franklin Templeton Investments; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 46 of the investment companies in Franklin Templeton Investments.

BOD-2


Name, Year of Birth and Address	Position	Length of Time Served	Number of Portfolios in Fund Complex Overseen by Board Member*	Other Directorships Held During at Least the Past 5 Years
Laura F. Fergerson (1962) One Franklin Parkway San Mateo, CA 94403-1906	Chief Executive Officer – Finance and Administration	Since 2009	Not Applicable	Not Applicable

Principal Occupation During at Least the Past 5 Years: Senior Vice President, Franklin Templeton Services, LLC; and officer of 46 of the investment companies in Franklin Templeton Investments.
Gaston Gardey (1967) One Franklin Parkway San Mateo, CA 94403-1906	Treasurer, Chief Financial Officer and Chief Accounting Officer	Since 2009	Not Applicable	Not Applicable

Principal Occupation During at Least the Past 5 Years: Director, Fund Accounting, Franklin Templeton Investments; and officer of 27 of the investment companies in Franklin Templeton Investments.
Aliya S. Gordon (1973) One Franklin Parkway San Mateo, CA 94403-1906	Vice President	Since 2009	Not Applicable	Not Applicable

Principal Occupation During at Least the Past 5 Years: Senior Associate General Counsel, Franklin Templeton Investments; officer of 46 of the investment companies in Franklin Templeton Investments; and formerly, Litigation Associate, Steefel, Levitt & Weiss, LLP (2000-2004).
Steven J. Gray (1955) One Franklin Parkway San Mateo, CA 94403-1906	Vice President	Since 2009	Not Applicable	Not Applicable

Principal Occupation During at Least the Past 5 Years: Senior Associate General Counsel, Franklin Templeton Investments; Vice President, Franklin Templeton Distributors, Inc.; and officer of 46 of the investment companies in Franklin Templeton Investments.
Selena L. Holmes (1965) 100 Fountain Parkway St. Petersburg, FL 33716-1205	Vice President – AML Compliance	Since 2012	Not Applicable	Not Applicable

Principal Occupation During at Least the Past 5 Years: Director, Global Compliance Monitoring; and officer of 46 of the investment companies in Franklin Templeton Investments.
Edward B. Jamieson (1948) One Franklin Parkway San Mateo, CA 94403-1906	President and Chief Executive Officer – Investment Management	Since 2010	Not Applicable	Not Applicable

Principal Occupation During at Least the Past 5 Years: President, Chief Investment Officer and Director, Franklin Advisers, Inc.; Executive Vice President, Franklin Templeton Institutional, LLC; and officer and/or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 10 of the investment companies in Franklin Templeton Investments.
Kimberly H. Novotny (1972) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923	Vice President	Since March 2013	Not Applicable	Not Applicable

Principal Occupation During at Least the Past 5 Years: Associate General Counsel, Franklin Templeton Investments; Vice President and Secretary, Fiduciary Trust International of the South; Vice President, Templeton Investment Counsel, LLC; Assistant Secretary, Franklin Resources, Inc.; and officer of 46 of the investment companies in Franklin Templeton Investments.

BOD-3


Name, Year of Birth and Address	Position	Length of Time Served	Number of Portfolios in Fund Complex Overseen by Board Member*	Other Directorships Held During at Least the Past 5 Years
Robert C. Rosselot (1960) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923	Chief Compliance Officer	Since March 2013	Not Applicable	Not Applicable

Principal Occupation During at Least the Past 5 Years: Director, Global Compliance, Franklin Templeton Investments; officer of 46 of the investment companies in Franklin Templeton Investments; and formerly, Senior Associate General Counsel, Franklin Templeton Investments (2007-2013); and Secretary and Vice President, Templeton Group of Funds (2004-2013).
Karen L. Skidmore (1952) One Franklin Parkway San Mateo, CA 94403-1906	Vice President and Secretary	Since 2006	Not Applicable	Not Applicable

Principal Occupation During at Least the Past 5 Years: Senior Associate General Counsel, Franklin Templeton Investments; and officer of 46 of the investment companies in Franklin Templeton Investments.
Craig S. Tyle (1960) One Franklin Parkway San Mateo, CA 94403-1906	Vice President	Since 2005	Not Applicable	Not Applicable

Principal Occupation During at Least the Past 5 Years: General Counsel and Executive Vice President, Franklin Resources, Inc.; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 46 of the investment companies in Franklin Templeton Investments.
Lori A. Weber (1964) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923	Vice President	Since 2011	Not Applicable	Not Applicable

Principal Occupation During at Least the Past 5 Years: Senior Associate General Counsel, Franklin Templeton Investments; Assistant Secretary, Franklin Resources, Inc.; Vice President and Secretary, Templeton Investment Counsel, LLC; Vice President, Fiduciary Trust International of the South; and officer of 46 of the investment companies in Franklin Templeton Investments.

*	We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton Investments fund complex. These portfolios have a common investment manager or affiliated investment managers.

Gregory E. Johnson is considered to be an interested person of the Fund under the federal securities laws due to his position as an officer and director of Franklin Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor. Rupert H. Johnson, Jr. is considered to be an interested person of the Fund under the federal securities laws due to his position as officer and director and major shareholder of Resources.

Note 1: Rupert H. Johnson, Jr. is the uncle of Gregory E. Johnson.

Note 2: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change.

Note 3: Effective June 13, 2013, Charles B. Johnson ceased to be a trustee of the Fund.

The Sarbanes-Oxley Act of 2002 and Rules adopted by the Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined that there is at least one such financial expert on the Audit Committee and has designated John B. Wilson as its audit committee financial expert. The Board believes that Mr. Wilson qualifies as such an expert in view of his extensive business background and experience, including service as chief financial officer of Staples, Inc. from 1992 to 1996. Mr. Wilson has been a Member and Chairman of the Fund’s Audit Committee since 2007. As a result of such background and experience, the Board believes that Mr. Wilson has acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in connection with the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that present a breadth and level of complexity of accounting issues generally comparable to those of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions. Mr. Wilson is an independent Board member as that term is defined under the relevant Securities and Exchange Commission Rules and Releases.

The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. Shareholders may call (800) 321-8563 or their insurance companies to request the SAI.

BOD-4

Franklin Templeton Variable Insurance Products Trust

Shareholder Information

Proxy Voting Policies and Procedures

The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.

Quarterly Statement of Investments

The Trust files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year on Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.

SI-1

VALUE

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Annual Report

FRANKLIN TEMPLETON

VARIABLE INSURANCE PRODUCTS TRUST

Investment Managers

Franklin Advisers, Inc.

Franklin Advisory Services, LLC

Franklin Mutual Advisers, LLC

Franklin Templeton Institutional, LLC

Templeton Asset Management Ltd.

Templeton Global Advisors Limited

Templeton Investment Counsel, LLC

Fund Administrator

Franklin Templeton Services, LLC

Distributor

Franklin Templeton Distributors, Inc.

Franklin Templeton Variable Insurance Products Trust (FTVIP) shares are not offered to the public; they are offered and sold only to: (1) insurance company separate accounts (Separate Account) to serve as the underlying investment vehicle for variable contracts; (2) certain qualified plans; and (3) other mutual funds (funds of funds).

Authorized for distribution to investors in Separate Accounts only when accompanied or preceded by the current prospectus for the applicable contract, which includes the Separate Account and the FTVIP prospectuses. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. The prospectus contains this and other information; please read it carefully before investing.

To ensure the highest quality of service, telephone calls to or from our service departments may be monitored, recorded and accessed. These calls can be identified by the presence of a regular beeping tone.


© 2014 Franklin Templeton Investments. All rights reserved.		VIP3 A 02/14

Item 2.

Code of Ethics.

(a)	The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.

(c)

N/A

(d)

N/A

(f)	Pursuant to Item 12(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.

Item 3.

Audit Committee Financial Expert.

(a)

(1) The Registrant has an audit committee financial expert serving on its audit committee.

(2) The audit committee financial expert is John B. Wilson and he is “independent” as defined under the relevant Securities and Exchange Commission Rules and Releases.

Item 4.

Principal Accountant Fees and Services.

(a)	Audit Fees

The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $883,945 for the fiscal year ended December 31, 2013 and $917,092 for the fiscal year ended December 31, 2012.

(b)	Audit-Related Fees

There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of Item 4.

There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.

(c)

Tax Fees

The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning were $0 for the fiscal year ended December 31, 2013 and $7,040 for the fiscal year ended December 31, 2012. The services for which these fees were paid included preparation of tax returns for foreign governments and consultation on foreign withholding tax reporting.

The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning were $6,930 for the fiscal year ended December 31, 2013 and $4,600 for the fiscal year ended December 31, 2012. The services for which these fees were paid included technical tax consultation for capital gain tax and withholding tax reporting for foreign governments and requirements on local country’s self certification forms.

(d)	All Other Fees

The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not reported in paragraphs (a)-(c) of Item 4 were $0 for the fiscal year ended December 31, 2013 and $17,390 for the fiscal year ended December 31, 2012. The services for which these fees were paid include review of materials provided to the fund Board in connection with the investment management contract renewal process and review on amortization/accretion matters.

The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant other than services reported in paragraphs (a)-(c) of Item 4 were $59,809 for the fiscal year ended December 31, 2013 and $158,267 for the fiscal year ended December 31, 2012. The services for which these fees were paid included preparation and review of materials provided to the fund Board in connection with the investment management contract renewal process, certifying asset under management, and XBRL tagging on financial statements.

(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:

(i) pre-approval of all audit and audit related services;

(ii) pre-approval of all non-audit related services to be provided to the Fund by the auditors;

(iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and

(iv) establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of

guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.

(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.

(f)	No disclosures are required by this Item 4(f).

(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $66,739 for the fiscal year ended December 31, 2013 and $187,297 for the fiscal year ended December 31, 2012.

(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.


Item 5. Audit Committee of Listed Registrants.		N/A

Item 6. Schedule of Investments.		N/A

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.		N/A

Item 8. Portfolio Managers of Closed-End Management Investment Companies.		N/A

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.		N/A

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that would require disclosure herein.

Item 11.

Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.

(b) Changes in Internal Controls. There have been no changes in the Registrant’s internal controls or in other factors that could materially affect the internal controls over financial reporting subsequent to the date of their evaluation in connection with the preparation of this Shareholder Report on Form N-CSR.

Item 12.

Exhibits.

(a) (1) Code of Ethics

(a) (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer

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.

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST


By		/s/ LAURA F. FERGERSON
		Laura F. Fergerson
		Chief Executive Officer –
		Finance and Administration

Date February 27, 2014

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		/s/ LAURA F. FERGERSON
		Laura F. Fergerson
		Chief Executive Officer –
		Finance and Administration

Date February 27, 2014


By		/s/ GASTON GARDEY
		Gaston Gardey
		Chief Financial Officer and
		Chief Accounting Officer

Date February 27, 2014

Franklin Templeton Variable Insurance Products Trust N-CSRCertified annual shareholder report (management investment company)