UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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)
Alison Baur, 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: 12/31/22
Item 1. Reports to Stockholders.
a.)
The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.)
b.)
Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.
Not Applicable
.
Annual
Report
Franklin
Templeton
Variable
Insurance
Products
Trust
December
31,
2022
Not
FDIC
Insured
May
Lose
Value
No
Bank
Guarantee
MASTER
CLASS
-
5
Franklin
Templeton
Variable
Insurance
Products
Trust
Annual
Report
Table
of
Contents
Important
Notes
to
Performance
Information
...........
i
Fund
Summaries
Franklin
VolSmart
Allocation
VIP
Fund
............
FVA-1
*Prospectus
Supplement
....................
FVA-8
Index
Descriptions
..............................
I-1
Board
Members
and
Officers
.......................
BOD-1
Shareholder
Information
..........................
SI-1
*Not
pa
rt
of
the
annual
report.
Retain
for
your
records
.
i
Annual
Report
Important
Notes
to
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.
FVA-1
Annual
Report
Franklin
VolSmart
Allocation
VIP
Fund
This
annual
report
for
Franklin
VolSmart
Allocation
VIP
Fund
covers
the
fiscal
year
ended
December
31,
2022
.
Class
5
Performance
Summary
as
of
December
31,
2022
Average
annual
total
return
of
Class
5
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.
*Prior
to
5/1/15,
the
Fund
followed
different
investment
strategies,
had
different
subadvisory
arrangements,
allocated
its
core
portfolio
differently,
had
a
different
current
target
volatility
goal
and
made
different
use
of
derivative
instruments.
As
a
result,
the
Fund
generally
held
different
investments
and
had
a
different
investment
profile.
Gross
expenses
are
the
Fund’s
total
annual
operating
expenses
and
are
sourced
from
the
Fund's
prospectus
available
at
the
time
of
publication.
Actual
expenses
may
be
higher
and
may
impact
portfolio
returns.
Net
expenses
reflect
contractual
fee
waivers,
expense
caps
and/or
reimbursements,
which
cannot
be
terminated
prior
to
4/30/23
without
Board
consent.
Performance
reflects
the
Fund’s
Class
5
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.
Share
Class
Average
Annual
Total
Return
–
5
1-Year
-12.27%
5-Year
+5.73%
Since
Inception
(4/1/13)
+5.27%
FVA-2
Annual
Report
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
(4/1/13–
12/31/22
)
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
Standard
&
Poor’s
®
500
Index
(S&P
500
®
),
the
Bloomberg
U.S.
Aggregate
Bond
Index
and
the
Blended
Benchmark.
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.
**Source:
FactSet.
Please
see
Index
Descriptions
following
the
Fund
Summaries.
***Source:
FactSet.
The
Blended
Benchmark
was
calculated
internally
and
was
composed
of
60%
S&P
500,
30%
Bloomberg
U.S.
Aggregate
Bond
Index
and
10%
Bloomberg
1-3
Month
U.S.
Treasury
Bill
Index.
Please
see
Index
Descriptions
following
the
Fund
Summaries.
FVA-3
Annual
Report
Franklin
VolSmart
Allocation
VIP
Fund
Fund
Goal
and
Main
Investments
The
Fund
seeks
total
return
(including
income
and
capital
gains)
while
seeking
to
manage
volatility.
The
Fund
is
structured
as
a
limited
fund-of-funds
that
seeks
to
achieve
its
investment
goal
by
investing
its
assets
partially
in
other
mutual
funds,
which
include
other
Franklin
Templeton
and
Legg
Mason
mutual
funds
and
exchange-traded
funds
(ETFs)
and
third-party
ETFs
(underlying
funds).
Each
underlying
fund
is
allocated
to
the
equity,
fixed
income,
multi-
class
or
cash
asset
class
based
on
its
predominant
asset
class
and
strategies.
These
underlying
funds,
in
turn,
invest
in
a
variety
of
U.S.
and
foreign
equity,
fixed-income
and
money
market
securities.
The
Fund
also
obtains
exposure
to
certain
strategies
and
investments
in
its
core
portfolio
by
directly
investing
in
the
securities
and
instruments
in
that
strategy.
Fund
Risks
All
investments
involve
risks,
including
possible
loss
of
principal.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
There
can
be
no
guarantee
that
the
Fund
will
stay
within
its
target
volatility.
Also,
the
managed
volatility
and
tail
risk
strategies
could
negatively
impact
the
Fund’s
return
and
expose
the
Fund
to
additional
costs.
Generally,
investors
should
be
comfortable
with
fluctuation
in
the
value
of
their
investments,
especially
over
the
short
term.
Stock
prices
fluctuate,
sometimes
rapidly
and
dramatically,
due
to
factors
affecting
individual
companies,
particular
industries
or
sectors,
or
general
market
conditions.
Bond
prices
generally
move
in
the
opposite
direction
of
interest
rates.
Derivatives,
including
currency
management
strategies,
involve
costs
and
can
create
economic
leverage
in
the
portfolio
which
may
result
in
significant
volatility
and
cause
the
Fund
to
participate
in
losses
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.
Because
the
Fund
allocates
assets
to
a
variety
of
investment
strategies
and
other
mutual
funds,
which
involve
certain
risks,
it
may
be
subject
to
those
same
risks.
The
Fund
is
actively
managed
but
there
is
no
guarantee
that
the
manager’s
investment
decisions
will
produce
the
desired
results.
The
manager’s
portfolio
selection
strategy
is
not
solely
based
on
ESG
considerations,
and
therefore
the
issuers
in
which
the
Fund
invests
may
not
be
considered
ESG-focused
companies.
Integrating
ESG
considerations
into
the
investment
process
is
not
a
guarantee
that
better
performance
will
be
achieved.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
imposed
broad-
ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
*The
portfolio
composition
is
based
on
the
Schedule
of
Investments
(SOI),
which
classifies
each
underlying
fund
into
a
broad
asset
class.
Performance
Overview
You
can
find
the
Fund’s
one-year
total
return
in
the
Performance
Summary.
For
comparison,
the
Fund’s
equity
benchmark,
the
Standard
&
Poor’s
®
500
Index
(S&P
500
®
),
posted
a
-18.11%
total
return,
while
the
Fund’s
fixed
income
benchmark,
the
Bloomberg
U.S.
Aggregate
Bond
Index,
posted
a
-13.01%
total
return
for
the
period
under
review.
1
The
Fund’s
Blended
Benchmark,
a
combination
of
leading
stock
and
bond
indexes
that
better
reflects
the
asset
Portfolio
Composition
*
12/31/22
%
of
Total
Net
Assets
Common
Stocks
62.4%
Domestic
Fixed
Income
23.7%
Domestic
Hybrid
8.2%
Foreign
Equity
1.3%
Short-Term
Investments
&
Other
Net
Assets
4.4%
1.
Source:
Morningstar.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
Please
see
Index
Descriptions
following
the
Fund
Summaries.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Schedule
of
Investments
(SOI).
Franklin
VolSmart
Allocation
VIP
Fund
FVA-4
Annual
Report
allocation
of
the
Fund’s
portfolio,
posted
a
-14.40%
total
return
for
the
same
period.
2
Economic
and
Market
Overview
U.S.
equities,
as
measured
by
the
S&P
500
®
,
posted
a
-18.11%
total
return
for
the
12
months
ended
December
31,
2022.
1
High
inflation,
rising
interest
rates
and
geopolitical
instability
contributed
to
a
sharp
decline
in
equity
prices
and
contracting
economic
growth
in
the
first
half
of
the
reporting
period.
Nevertheless,
consumer
spending
continued
to
rise,
but
deteriorating
financial
conditions
and
investors’
expectations
for
slower
growth
continued
to
weigh
on
equity
markets.
Inflation
increased
during
the
first
half
of
the
period,
reaching
9.1%
in
June
2022,
the
highest
annual
rate
since
1981.
Continued
supply-chain
disruptions,
strong
consumer
demand,
and
volatile
energy
prices
drove
inflation
higher.
Russia’s
invasion
of
Ukraine
also
disrupted
financial
markets
and
led
to
a
rise
in
oil
and
commodity
prices
in
the
first
half
of
the
reporting
period.
Inflation
remained
elevated
but
abated
somewhat
in
the
latter
half
of
the
period,
decreasing
to
an
annual
rate
of
7.1%
in
November
2022.
The
labor
market
remained
strong
amid
the
high
level
of
nominal
growth,
which
drove
the
U.S.
unemployment
rate
down
to
3.5%
in
December
2022.
Wages
also
climbed
at
the
fastest
rate
in
decades,
which
added
to
some
investors’
inflation
concerns.
U.S.
gross
domestic
product
grew
in
the
second
half
of
2022
after
contracting
in
the
first
half
of
the
year.
Rising
interest
rates
translated
to
higher
borrowing
costs
for
individuals
and
businesses,
which
dampened
economic
activity,
especially
in
the
housing
and
financial
markets.
In
the
second
half
of
the
period,
rising
consumer
spending
and
increased
exports
amid
declining
inflation
led
to
solid
economic
growth.
In
an
effort
to
control
inflation,
the
U.S.
Federal
Reserve
(Fed)
undertook
a
rapid
shift
toward
restrictive
monetary
policy,
starting
in
March
2022
with
its
first
rate
hike
since
2018.
Thereafter,
the
Fed
raised
the
federal
funds
rate
at
each
of
its
six
subsequent
meetings
to
end
the
period
at
a
range
of
4.25%–4.50%.
Furthermore,
the
Fed
said
it
would
continue
to
reduce
its
bond
holdings
and
anticipated
additional
interest-rate
increases
at
future
meetings
to
curtail
inflation.
The
U.S.
bond
market,
as
measured
by
the
Bloomberg
U.S.
Aggregate
Bond
Index,
posted
a
-13.01%
total
return
for
the
12
months
ended
December
31,
2022.
1
High
inflation
amid
a
strong
labor
market
led
to
significantly
tighter
monetary
policy,
reducing
the
value
of
most
bonds.
Geopolitical
instability
disrupted
financial
markets
following
Russia’s
invasion
of
Ukraine,
adding
to
the
uncertainty
surrounding
the
course
of
the
global
economy.
While
interest
rates
increased
along
the
entire
yield
curve
(yields
for
all
Treasury
maturities),
relatively
large
increases
in
shorter-term
interest
rates
led
the
yield
curve
to
invert
during
the
reporting
period
as
investors
became
increasingly
concerned
about
the
economic
outlook.
UST
bonds,
as
measured
by
the
Bloomberg
U.S.
Treasury
Index,
posted
a
-12.46%
total
return
for
the
12-month
period.
1
The
10-year
UST
yield
(which
moves
inversely
to
price)
increased
sharply
amid
high
inflation
and
the
Fed’s
tightening
monetary
stance.
Mortgage-backed
securities
(MBS),
as
measured
by
the
Bloomberg
U.S.
MBS
Index,
posted
a
-11.81%
total
return
for
the
period
as
mortgage
rates
rose
to
the
highest
level
in
over
two
decades
and
modest
prepayment
rates
led
to
increasing
interest-rate
sensitivity.
1
Corporate
bond
prices
also
declined,
constrained
by
inflation,
rising
interest
rates
and
concerns
about
the
impact
of
elevated
interest
rates
on
corporate
borrowing
costs
and
the
wider
economy.
Corporate
yield
spreads,
a
measure
of
the
difference
in
yields
between
corporate
bonds
and
similarly-dated
USTs,
rose,
reflecting
investors’
increased
risk-aversion
preferences.
In
this
environment,
high-yield
corporate
bonds,
as
represented
by
the
Bloomberg
U.S.
Corporate
High
Yield
Index,
posted
a
-11.19%
total
return,
while
investment-grade
corporate
bonds,
as
represented
by
the
Bloomberg
U.S.
Corporate
Investment
Grade
Index,
posted
a
-15.76%
total
return.
1
Investment
Strategy
Under
normal
market
conditions,
the
Fund
seeks
to
achieve
its
investment
goal
by
allocating
its
assets
across
certain
asset
classes,
sectors
and
strategies
in
an
attempt
to
produce
a
diversified
portfolio
that
will
generate
returns,
while
minimizing
the
expected
volatility
of
the
Fund’s
returns
so
that
volatility
does
not
exceed
a
target
of
10%
per
year
(volatility
within
the
10%
target
is
referred
to
as
“Target
Volatility”).
The
Fund’s
assets
are
primarily
invested
in
its
“core
portfolio,”
which
is
principally
composed
of
various
U.S.
equity
and
fixed
income
investments
and
strategies,
2.
Source:
FactSet.
The
Fund’s
Blended
Benchmark
was
calculated
internally
and
was
composed
of
60%
S&P
500,
30%
Bloomberg
U.S.
Aggregate
Bond
Index
and
10%
Bloomberg
1-3
Month
U.S.
Treasury
Bill
Index.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
Please
see
Index
Descriptions
following
the
Fund
Summaries.
Franklin
VolSmart
Allocation
VIP
Fund
FVA-5
Annual
Report
including
investments
in
other
mutual
funds
and
ETFs
that
provide
exposure
to
such
investments
and
strategies.
In
addition,
the
Fund
employs
a
volatility
management
strategy,
which
is
designed
to
manage
the
expected
volatility
of
the
Fund’s
returns
so
that
volatility
remains
within
the
Fund’s
Target
Volatility.
Thus,
the
Fund
may
utilize
certain
derivative
instruments
(primarily
futures
contracts
on
indexes)
in
an
effort
to
adjust
the
Fund’s
expected
volatility
to
within
the
Target
Volatility.
There
is
no
guarantee
that
the
Fund
will
stay
within
its
Target
Volatility.
Manager’s
Discussion
The
Fund
declined
during
the
12-month
period
ended
December
31,
2022,
but
it
performed
considerably
better
than
its
blended
benchmark
index.
As
of
the
end
of
the
reporting
period,
at
the
asset
allocation
level,
the
Fund’s
equity
position
remained
near
the
upper
band
of
its
50%-
70%
allocation
range,
with
fixed
income
toward
the
middle
band
of
its
13%-33%
allocation
range
and
multi-asset
class
consisting
of
equities
and
fixed
income
also
at
the
middle
band
of
its
5%-15%
allocation
range.
Equities
The
Fund’s
overweight
to
equites
and
underweight
to
fixed
income
relative
to
its
blended
benchmark
limited
relative
performance
as
concerns
about
slowing
economic
growth
persisted
and
U.S.
equity
markets
declined
in
2022.
Fund
selection,
however,
was
positive,
overwhelming
the
allocation
detraction,
and
contributed
to
overall
positive
performance
relative
to
the
benchmark.
At
the
underlying
equity
strategy
level,
the
Franklin
Rising
Dividends
Strategy,
the
largest
underlying
equity
strategy
held
in
the
Fund,
declined
but
outperformed
the
S&P
500
®
,
contributing
to
positive
relative
performance.
The
strategy’s
sector
positioning
and
focus
on
dividend-paying
equities
were
beneficial.
The
Franklin
U.S.
Smart
Beta
Strategy
also
declined
but
contributed
to
positive
relative
performance,
outperforming
the
S&P
500
®
due
in
part
to
its
overweighting
to
quality
and
value
style
factors.
Fixed
Income
At
the
underlying
fixed
income
strategy
level,
the
Fund’s
core
bond
fixed
income
strategy
detracted
from
relative
performance
due
in
part
to
duration
positioning
and
the
rising
interest-rate
environment.
Multi-Asset
An
allocation
to
Franklin
Income
VIP
Fund
–
Class
1,
which
blends
equity
and
fixed
income
holdings,
generated
current
income
and
contributed
to
positive
relative
performance,
driven
in
part
by
equity
sector
positioning.
Hedging
The
Fund’s
risk-hedging
strategies
were
meaningfully
additive
to
relative
performance
during
a
period
of
mostly
high
volatility.
Positioning
During
the
reporting
period,
we
trimmed
our
exposure
to
equities
and
used
the
proceeds
to
add
to
our
positions
in
fixed
income
and
hedging
strategies.
Derivatives
The
Fund
made
use
of
two
hedging
strategies
to
reduce
risk
during
periods
of
market
volatility: a
volatility
overlay
for
risk
mitigation
and a
VIX-linked
strategy
for
tail-risk
protection.
During
the
reporting
period,
as
economic
uncertainties
increased
amid
concerns
over
inflation
and
the
war
in
Ukraine,
the
volatility
overlay
was
active
and
added
value.
Thank
you
for
your
participation
in
Franklin
VolSmart
Allocation
VIP
Fund.
We
look
forward
to
serving
your
future
investment
needs.
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
December
31,
2022,
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
Top
10
Holdings
12/31/22
Issuer
%
of
Total
Net
Assets
a
a
Franklin
U.S.
Core
Bond
ETF
16.0%
Franklin
Income
VIP
Fund,
Class
1
8.2%
Western
Asset
Core
Plus
Bond
Fund,
Class
IS
7.7%
Microsoft
Corp.
4.2%
Apple,
Inc.
2.0%
UnitedHealth
Group,
Inc.
1.5%
iShares
Core
MSCI
EAFE
ETF
1.3%
Texas
Instruments,
Inc.
1.3%
Roper
Technologies,
Inc.
1.2%
Johnson
&
Johnson
1.2%
Franklin
VolSmart
Allocation
VIP
Fund
FVA-6
Annual
Report
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.
Class
5
Fund
Expenses
Franklin
VolSmart
Allocation
VIP
Fund
FVA-7
Annual
Report
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:
(1)
transaction
expenses
can
include
sales
charges
(loads)
on
purchases,
surrender
fees,
transfer
fees
and
premium
taxes;
and
(2)
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
table
below
shows
Fund-level
ongoing
expenses
and
can
help
you
understand
these
costs
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
table
below
provides
information
about
the
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
ongoing
Fund
expenses
but
does
not
include
the
effect
of
ongoing
Contract
expenses,
is
used
to
calculate
the
“Ending
Account
Value.”
You
can
estimate
the
Fund-level
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
under
the
headings
“Actual”
and
“Fund-Level
Expenses
Paid
During
Period”
(
if
Fund-Level
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
estimated
expenses
paid
this
period
at
the
Fund
level
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Mutual
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
mutual
funds
offered
through
the
Contract.
To
do
so,
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds
offered
through
the
Contract.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
at
the
Fund
level
only
and
do
not
reflect
any
ongoing
expenses
at
the
Contract
level,
or
transaction
expenses
at
either
the
Fund
or
Contract
levels.
In
addition,
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.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
184/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
any
ongoing
expenses
of
the
Contract
for
which
the
Fund
is
an
investment
option
or
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
7/1/22
Ending
Account
Value
12/31/22
Fund-Level
Expenses
Paid
During
Period
7/1/22–12/31/22
1,2
Ending
Account
Value
12/31/22
Fund-Level
Expenses
Paid
During
Period
7/1/22–12/31/22
1,2
a
Net
Annualized
Expense
Ratio
2
5
$1,000
$1,021.00
$4.07
$1,021.18
$4.07
0.80%
FVA-8
Annual
Report
GOF
VIP
P1
P2
P4
P5
12/22
SUPPLEMENT
DATED
DECEMBER
23,
2022
TO
THE
CURRENTLY
EFFECTIVE
PROSPECTUSES
OF
EACH
FUND
LISTED
BELOW
FRANKLIN
ALLOCATION
VIP
FUND
FRANKLIN
DYNATECH
VIP
FUND
FRANKLIN
GLOBAL
REAL
ESTATE
VIP
FUND
FRANKLIN
GROWTH
AND
INCOME
VIP
FUND
FRANKLIN
INCOME
VIP
FUND
FRANKLIN
LARGE
CAP
GROWTH
VIP
FUND
FRANKLIN
RISING
DIVIDENDS
VIP
FUND
FRANKLIN
SMALL-MID
CAP
GROWTH
VIP
FUND
FRANKLIN
STRATEGIC
INCOME
VIP
FUND
FRANKLIN
U.S.
GOVERNMENT
SECURITIES
VIP
FUND
FRANKLIN
VOLSMART
ALLOCATION
VIP
FUND
TEMPLETON
DEVELOPING
MARKETS
VIP
FUND
TEMPLETON
FOREIGN
VIP
FUND
TEMPLETON
GLOBAL
BOND
VIP
FUND
TEMPLETON
GROWTH
VIP
FUND
(a
series
of
Franklin
Templeton
Variable
Insurance
Products
Trust)
I.
For
Franklin
Allocation
VIP
Fund,
Franklin
Global
Real
Estate
VIP
Fund,
Franklin
Income
VIP
Fund,
Franklin
Strategic
Income
VIP
Fund
and
Franklin
VolSmart
Allocation
VIP
Fund,
the
“ESG
Considerations”
risk
in
the
“Fund
Details
–
Principal
Risks”
section
of
the
prospectus
is
replaced
with
the
following:
ESG
Considerations
ESG
considerations
are
one
of
a
number
of
factors
that
the
investment
manager
examines
when
considering
investments
for
the
Fund’s
portfolio.
In
light
of
this,
the
issuers
in
which
the
Fund
invests
may
not
be
considered
ESG-
focused
issuers
and
may
have
lower
or
adverse
ESG
assessments.
Consideration
of
ESG
factors
may
affect
the
Fund’s
exposure
to
certain
issuers
or
industries
and
may
not
work
as
intended.
In
addition,
ESG
considerations
assessed
as
part
of
the
Fund’s
investment
process
may
vary
across
types
of
eligible
investments
and
issuers.
The
investment
manager
does
not
assess
every
investment
for
ESG
factors
and,
when
it
does,
not
every
ESG
factor
may
be
identified
or
evaluated.
The
investment
manager’s
assessment
of
an
issuer’s
ESG
factors
is
subjective
and
will
likely
differ
from
that
of
investors,
third
party
service
providers
(e.g.,
ratings
providers)
and
other
funds.
As
a
result,
securities
selected
by
the
investment
manager
may
not
reflect
the
beliefs
and
values
of
any
particular
investor.
The
investment
manager
also
may
be
dependent
on
the
availability
of
timely,
complete
and
accurate
ESG
data
reported
by
issuers
and/or
third-party
research
providers,
the
timeliness,
completeness
and
accuracy
of
which
is
out
of
the
investment
manager’s
control.
ESG
factors
are
often
not
uniformly
measured
or
defined,
which
could
impact
the
investment
manager’s
ability
to
assess
an
issuer.
While
the
investment
manager
views
ESG
considerations
as
having
the
potential
to
contribute
to
the
Fund’s
long-
term
performance,
there
is
no
guarantee
that
such
results
will
be
achieved.
II.
For
Franklin
Dynatech
VIP
Fund,
Franklin
Growth
and
Income
VIP
Fund,
Franklin
Large
Cap
Growth
VIP
Fund,
Franklin
Rising
Dividends
VIP
Fund,
Franklin
Small-Mid
Cap
Growth
VIP
Fund,
Templeton
Developing
Markets
VIP
Fund,
Templeton
Global
Bond
VIP
Fund,
Templeton
Foreign
VIP
Fund
and
Templeton
Growth
VIP
Fund,
the
“ESG
Considerations”
risk
in
the
“Fund
Details
–
Principal
Risks”
section
of
the
prospectus
is
replaced
with
the
following:
ESG
Considerations
ESG
considerations
are
one
of
a
number
of
factors
that
the
investment
manager
examines
when
considering
investments
for
the
Fund’s
portfolio.
In
light
of
this,
the
issuers
in
which
the
Fund
invests
may
not
be
considered
ESG-focused
issuers
and
may
have
lower
or
adverse
ESG
assessments.
Consideration
of
ESG
factors
may
affect
FVA-9
Annual
Report
Please
keep
this
supplement
with
your
prospectus
for
future
reference.
the
Fund’s
exposure
to
certain
issuers
or
industries
and
may
not
work
as
intended.
In
addition,
ESG
considerations
assessed
as
part
of
the
Fund’s
investment
process
may
vary
across
types
of
eligible
investments
and
issuers.
In
certain
circumstances,
there
may
be
times
when
not
every
investment
is
assessed
for
ESG
factors
and,
when
they
are,
not
every
ESG
factor
may
be
identified
or
evaluated.
The
investment
manager’s
assessment
of
an
issuer’s
ESG
factors
is
subjective
and
will
likely
differ
from
that
of
investors,
third
party
service
providers
(e.g.,
ratings
providers)
and
other
funds.
As
a
result,
securities
selected
by
the
investment
manager
may
not
reflect
the
beliefs
and
values
of
any
particular
investor.
The
investment
manager
also
may
be
dependent
on
the
availability
of
timely,
complete
and
accurate
ESG
data
reported
by
issuers
and/or
third-party
research
providers,
the
timeliness,
completeness
and
accuracy
of
which
is
out
of
the
investment
manager’s
control.
ESG
factors
are
often
not
uniformly
measured
or
defined,
which
could
impact
the
investment
manager’s
ability
to
assess
an
issuer.
While
the
investment
manager
views
ESG
considerations
as
having
the
potential
to
contribute
to
the
Fund’s
long-term
performance,
there
is
no
guarantee
that
such
results
will
be
achieved.
III.
For
Franklin
U.S.
Government
Securities
VIP
Fund,
the
“ESG
Considerations”
risk
in
the
“Fund
Details
–
Principal
Risks”
section
of
the
prospectus
is
replaced
with
the
following:
Social
and
Governance
Considerations
Social
and/or
governance
considerations
are
not
the
only
factors
considered
by
the
investment
manager
and
may
not
be
a
determinative
factor
in
the
investment
manager’s
selection
of
securities
for
the
Fund.
In
addition,
the
investment
manager
may
not
be
able
to
give
such
considerations
meaningful
weight
if
the
availability
of
appropriate
securities
for
the
Fund’s
portfolio
is
limited.
The
investment
manager
does
not
assess
every
investment
for
ESG
factors
and,
when
it
does,
not
every
ESG
factor
may
be
identified
or
evaluated.
The
investment
manager’s
assessment
of
certain
investments
may
differ
from
that
of
investors,
third
party
service
providers,
such
as
ratings
providers,
or
other
funds.
While
the
investment
manager
views
social
and
governance
considerations
as
having
the
potential
to
contribute
to
the
Fund’s
performance,
there
is
no
guarantee
that
such
results
will
be
achieved.
Franklin
Templeton
Variable
Insurance
Products
Trust
Financial
Highlights
Franklin
VolSmart
Allocation
VIP
Fund
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
FVA-10
a
Year
Ended
December
31,
2022
a
Class
1
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
.....................................................................
$13.60
Income
from
investment
operations
b
:
Net
investment
income
c,d
..........................................................................
0.17
Net
realized
and
unrealized
gains
(losses)
.............................................................
(0.18)
Total
from
investment
operations
......................................................................
(0.01)
Less
distributions
from:
Net
investment
income
............................................................................
(0.25)
Net
realized
gains
...............................................................................
(1.21)
Total
distributions
.................................................................................
(1.46)
Net
asset
value,
end
of
year
.........................................................................
$12.13
Total
return
e
.....................................................................................
0.15%
Ratios
to
average
net
assets
f
Expenses
before
waiver
and
payments
by
affiliates
g
.......................................................
0.81%
Expenses
net
of
waiver
and
payments
by
affiliates
g,h
.......................................................
0.65%
Net
investment
income
.............................................................................
2.20%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.......................................................................
$4
Portfolio
turnover
rate
..............................................................................
37.75%
a
For
the
period
May
20,
2022
(effective
date)
to
December
31,
2022.
b
The
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’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Recognition
of
net
investment
income
by
the
Fund
is
affected
by
the
timing
of
declaration
of
dividends
by
the
Underlying
Funds
and
exchange
traded
funds
in
which
the
Fund
invests.
e
Total
return
does
not
include
fees,
charges
or
expenses
imposed
by
the
variable
annuity
and
life
insurance
contracts
for
which
Franklin
Templeton
Variable
Insurance
Products
Trust
serves
as
an
underlying
investment
vehicle.
Total
return
is
not
annualized
for
periods
less
than
one
year.
f
Ratios
are
annualized
for
periods
less
than
one
year.
g
Does
not
include
expenses
of
the
Underlying
Funds
in
which
the
Fund
invests.
The
weighted
average
indirect
expenses
of
the
Underlying
Funds
was
0.09%
for
the
year
ended
December
31,
2022.
h
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Templeton
Variable
Insurance
Products
Trust
Financial
Highlights
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
FVA-11
a
Year
Ended
December
31,
2022
2021
2020
2019
2018
Class
2
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$15.57
$14.55
$12.60
$10.82
$11.67
Income
from
investment
operations
a
:
Net
investment
income
b
,c
........................
0.23
0.26
0.24
0.22
0.21
Net
realized
and
unrealized
gains
(losses)
...........
(2.15)
2.19
1.86
1.70
(1.02)
Total
from
investment
operations
....................
(1.92)
2.45
2.10
1.92
(0.81)
Less
distributions
from:
Net
investment
income
..........................
(0.25)
(0.64)
(0.15)
—
(0.04)
Net
realized
gains
.............................
(1.21)
(0.79)
—
(0.14)
—
Total
distributions
...............................
(1.46)
(1.43)
(0.15)
(0.14)
(0.04)
Net
asset
value,
end
of
year
.......................
$12.19
$15.57
$14.55
$12.60
$10.82
Total
return
d
...................................
(12.13)%
17.62%
16.85%
17.82%
(6.93)%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
e
.....
0.85%
0.88%
0.88%
1.12%
1.10%
Expenses
net
of
waiver
and
payments
by
affiliates
e,f
.....
0.65%
0.65%
0.65%
0.90%
0.75%
Net
investment
income
...........................
1.71%
1.75%
1.85%
1.87%
1.85%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$33
$48
$45
$39
$33
Portfolio
turnover
rate
............................
37.75%
41.28%
69.19%
4.99%
6.28%
a
The
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’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Recognition
of
net
investment
income
by
the
Fund
is
affected
by
the
timing
of
declaration
of
dividends
by
the
Underlying
Funds
and
exchange
traded
funds
in
which
the
Fund
invests.
d
Total
return
does
not
include
fees,
charges
or
expenses
imposed
by
the
variable
annuity
and
life
insurance
contracts
for
which
Franklin
Templeton
Variable
Insurance
Products
Trust
serves
as
an
underlying
investment
vehicle.
e
Does
not
include
expenses
of
the
Underlying
Funds
in
which
the
Fund
invests.
The
weighted
average
indirect
expenses
of
the
Underlying
Funds
was
0.09%
for
the
year
ended
December
31,
2022.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Templeton
Variable
Insurance
Products
Trust
Financial
Highlights
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
FVA-12
a
Year
Ended
December
31,
2022
2021
2020
2019
2018
Class
5
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$15.52
$14.52
$12.59
$10.80
$11.65
Income
from
investment
operations
a
:
Net
investment
income
b,c
........................
0.21
0.23
0.23
0.23
0.22
Net
realized
and
unrealized
gains
(losses)
...........
(2.14)
2.18
1.86
1.70
(1.01)
Total
from
investment
operations
....................
(1.93)
2.41
2.09
1.93
(0.79)
Less
distributions
from:
Net
investment
income
..........................
(0.23)
(0.62)
(0.16)
—
(0.06)
Net
realized
gains
.............................
(1.21)
(0.79)
—
(0.14)
—
Total
distributions
...............................
(1.44)
(1.41)
(0.16)
(0.14)
(0.06)
Net
asset
value,
end
of
year
.......................
$12.15
$15.52
$14.52
$12.59
$10.80
Total
return
d
...................................
(12.27)%
17.36%
16.78%
17.95%
(6.85)%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
e
.....
1.00%
1.03%
1.03%
1.02%
1.00%
Expenses
net
of
waiver
and
payments
by
affiliates
e,f
.....
0.80%
0.80%
0.80%
0.80%
0.65%
Net
investment
income
...........................
1.57%
1.57%
1.70%
1.97%
1.95%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$170,682
$209,784
$195,818
$185,381
$171,173
Portfolio
turnover
rate
............................
37.75%
41.28%
69.19%
4.99%
6.28%
a
The
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’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Recognition
of
net
investment
income
by
the
Fund
is
affected
by
the
timing
of
declaration
of
dividends
by
the
Underlying
Funds
and
exchange
traded
funds
in
which
the
Fund
invests.
d
Total
return
does
not
include
fees,
charges
or
expenses
imposed
by
the
variable
annuity
and
life
insurance
contracts
for
which
Franklin
Templeton
Variable
Insurance
Products
Trust
serves
as
an
underlying
investment
vehicle.
e
Does
not
include
expenses
of
the
Underlying
Funds
in
which
the
Fund
invests.
The
weighted
average
indirect
expenses
of
the
Underlying
Funds
was
0.09%
for
the
year
ended
December
31,
2022.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Templeton
Variable
Insurance
Products
Trust
Schedule
of
Investments,
December
31,
2022
Franklin
VolSmart
Allocation
VIP
Fund
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
FVA-13
a
a
Shares
a
Value
a
Common
Stocks
62.4%
Aerospace
&
Defense
2.4%
BWX
Technologies,
Inc.
..............................................
916
$
53,201
Curtiss-Wright
Corp.
.................................................
309
51,600
General
Dynamics
Corp.
..............................................
4,914
1,219,213
Huntington
Ingalls
Industries,
Inc.
.......................................
237
54,671
Lockheed
Martin
Corp.
...............................................
1,466
713,194
Northrop
Grumman
Corp.
.............................................
864
471,407
Raytheon
Technologies
Corp.
..........................................
15,810
1,595,545
4,158,831
Air
Freight
&
Logistics
1.0%
United
Parcel
Service,
Inc.,
B
..........................................
10,200
1,773,168
Airlines
0.0%
†
a
Copa
Holdings
SA,
A
.................................................
618
51,399
a
Automobiles
0.2%
a
Tesla,
Inc.
.........................................................
3,474
427,927
a
Banks
0.7%
First
Horizon
Corp.
..................................................
2,599
63,676
FNB
Corp.
........................................................
3,875
50,569
JPMorgan
Chase
&
Co.
...............................................
7,655
1,026,535
1,140,780
Beverages
0.7%
PepsiCo,
Inc.
......................................................
6,225
1,124,609
Biotechnology
2.1%
AbbVie,
Inc.
.......................................................
11,638
1,880,817
Amgen,
Inc.
.......................................................
2,621
688,380
a
Biogen,
Inc.
.......................................................
351
97,199
a
Neurocrine
Biosciences,
Inc.
...........................................
428
51,120
a
Regeneron
Pharmaceuticals,
Inc.
.......................................
566
408,363
a
United
Therapeutics
Corp.
.............................................
260
72,304
a
Vertex
Pharmaceuticals,
Inc.
...........................................
1,480
427,394
3,625,577
Building
Products
1.0%
a
Builders
FirstSource
,
Inc.
.............................................
919
59,625
Carlisle
Cos.,
Inc.
...................................................
2,501
589,360
Johnson
Controls
International
plc
.......................................
14,547
931,008
Owens
Corning
.....................................................
640
54,592
1,634,585
Capital
Markets
0.5%
FactSet
Research
Systems,
Inc.
........................................
149
59,780
Lazard
Ltd.,
A
......................................................
1,515
52,525
LPL
Financial
Holdings,
Inc.
...........................................
290
62,690
Nasdaq,
Inc.
.......................................................
12,203
748,654
923,649
Chemicals
3.4%
Air
Products
and
Chemicals,
Inc.
........................................
5,293
1,631,620
Albemarle
Corp.
....................................................
3,955
857,681
CF
Industries
Holdings,
Inc.
...........................................
1,251
106,585
Ecolab,
Inc.
........................................................
4,124
600,290
Linde
plc
..........................................................
5,995
1,955,449
LyondellBasell
Industries
NV,
A
.........................................
1,323
109,849
Mosaic
Co.
(The)
...................................................
1,948
85,459
Franklin
Templeton
Variable
Insurance
Products
Trust
Schedule
of
Investments
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
FVA-14
a
a
Shares
a
Value
a
Common
Stocks
(continued)
Chemicals
(continued)
Sherwin-Williams
Co.
(The)
............................................
1,600
$
379,728
5,726,661
Commercial
Services
&
Supplies
0.8%
Cintas
Corp.
.......................................................
2,290
1,034,210
Rollins,
Inc.
........................................................
1,412
51,594
Waste
Management,
Inc.
..............................................
1,649
258,695
1,344,499
Communications
Equipment
0.7%
a
Arista
Networks,
Inc.
.................................................
1,422
172,560
Cisco
Systems,
Inc.
.................................................
16,597
790,681
Motorola
Solutions,
Inc.
...............................................
644
165,965
1,129,206
Consumer
Finance
0.0%
†
Synchrony
Financial
.................................................
2,543
83,563
Containers
&
Packaging
0.1%
Packaging
Corp.
of
America
...........................................
466
59,606
Silgan
Holdings,
Inc.
.................................................
1,051
54,484
Sonoco
Products
Co.
................................................
891
54,093
168,183
Distributors
0.1%
Genuine
Parts
Co.
..................................................
829
143,840
LKQ
Corp.
........................................................
1,040
55,546
199,386
Diversified
Consumer
Services
0.1%
a
Grand
Canyon
Education,
Inc.
..........................................
483
51,034
H&R
Block,
Inc.
.....................................................
1,303
47,572
98,606
Diversified
Financial
Services
0.4%
a
Berkshire
Hathaway,
Inc.,
B
............................................
1,990
614,711
a
Diversified
Telecommunication
Services
0.9%
AT&T,
Inc.
.........................................................
35,662
656,538
Lumen
Technologies,
Inc.
.............................................
10,224
53,369
Verizon
Communications,
Inc.
..........................................
19,631
773,461
1,483,368
Electric
Utilities
0.1%
NRG
Energy,
Inc.
...................................................
1,470
46,775
OGE
Energy
Corp.
..................................................
1,365
53,986
100,761
Electrical
Equipment
0.3%
Hubbell,
Inc.
.......................................................
266
62,425
nVent
Electric
plc
...................................................
11,220
431,633
494,058
Electronic
Equipment,
Instruments
&
Components
0.3%
Amphenol
Corp.,
A
..................................................
3,021
230,019
a
Arrow
Electronics,
Inc.
...............................................
519
54,272
Avnet,
Inc.
........................................................
1,234
51,310
Corning,
Inc.
.......................................................
3,978
127,057
Franklin
Templeton
Variable
Insurance
Products
Trust
Schedule
of
Investments
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
FVA-15
a
a
Shares
a
Value
a
Common
Stocks
(continued)
Electronic
Equipment,
Instruments
&
Components
(continued)
Jabil,
Inc.
.........................................................
843
$
57,492
National
Instruments
Corp.
............................................
1,372
50,627
570,777
Entertainment
0.0%
†
World
Wrestling
Entertainment,
Inc.,
A
....................................
717
49,129
Equity
Real
Estate
Investment
Trusts
(REITs)
0.6%
EPR
Properties
.....................................................
1,338
50,469
Gaming
and
Leisure
Properties,
Inc.
.....................................
1,433
74,645
Kimco
Realty
Corp.
..................................................
3,130
66,293
National
Retail
Properties,
Inc.
.........................................
1,184
54,180
Omega
Healthcare
Investors,
Inc.
.......................................
1,847
51,624
Public
Storage
.....................................................
855
239,563
Realty
Income
Corp.
.................................................
2,887
183,123
SL
Green
Realty
Corp.
...............................................
1,342
45,252
STORE
Capital
Corp.
................................................
1,721
55,175
VICI
Properties,
Inc.
.................................................
5,545
179,658
WP
Carey,
Inc.
.....................................................
1,108
86,590
1,086,572
Food
&
Staples
Retailing
1.3%
Albertsons
Cos.,
Inc.,
A
...............................................
2,619
54,318
a
BJ's
Wholesale
Club
Holdings,
Inc.
......................................
731
48,363
Costco
Wholesale
Corp.
..............................................
1,617
738,160
Walgreens
Boots
Alliance,
Inc.
.........................................
3,339
124,745
Walmart,
Inc.
......................................................
9,130
1,294,543
2,260,129
Food
Products
1.2%
Archer-Daniels-Midland
Co.
...........................................
3,171
294,427
General
Mills,
Inc.
...................................................
3,212
269,326
Hershey
Co.
(The)
..................................................
762
176,456
McCormick
&
Co.,
Inc.
...............................................
9,623
797,651
Mondelez
International,
Inc.,
A
..........................................
7,670
511,206
2,049,066
Gas
Utilities
0.1%
Atmos
Energy
Corp.
.................................................
460
51,552
National
Fuel
Gas
Co.
................................................
829
52,476
104,028
Health
Care
Equipment
&
Supplies
3.0%
Abbott
Laboratories
..................................................
10,227
1,122,822
Becton
Dickinson
and
Co.
.............................................
5,420
1,378,306
Medtronic
plc
......................................................
11,200
870,464
Stryker
Corp.
......................................................
7,511
1,836,365
5,207,957
Health
Care
Providers
&
Services
3.1%
Cardinal
Health,
Inc.
.................................................
1,469
112,922
a
Centene
Corp.
.....................................................
2,822
231,432
Chemed
Corp.
.....................................................
106
54,106
Cigna
Corp.
.......................................................
1,755
581,502
CVS
Health
Corp.
...................................................
2,905
270,717
Elevance
Health,
Inc.
................................................
1,305
669,426
Encompass
Health
Corp.
.............................................
939
56,162
HCA
Healthcare,
Inc.
.................................................
1,062
254,837
Franklin
Templeton
Variable
Insurance
Products
Trust
Schedule
of
Investments
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
FVA-16
a
a
Shares
a
Value
a
Common
Stocks
(continued)
Health
Care
Providers
&
Services
(continued)
Humana,
Inc.
......................................................
475
$
243,290
a
Molina
Healthcare,
Inc.
...............................................
283
93,452
Premier,
Inc.,
A
.....................................................
1,636
57,227
Quest
Diagnostics,
Inc.
...............................................
583
91,205
UnitedHealth
Group,
Inc.
..............................................
4,856
2,574,554
5,290,832
Hotels,
Restaurants
&
Leisure
1.6%
McDonald's
Corp.
...................................................
7,263
1,914,018
Starbucks
Corp.
....................................................
5,754
570,797
Yum!
Brands,
Inc.
...................................................
1,494
191,352
2,676,167
Household
Durables
0.3%
DR
Horton,
Inc.
.....................................................
1,542
137,454
Lennar
Corp.,
A
.....................................................
1,251
113,215
a
NVR,
Inc.
.........................................................
15
69,189
PulteGroup,
Inc.
....................................................
1,254
57,095
Tempur
Sealy
International,
Inc.
........................................
1,737
59,631
Toll
Brothers,
Inc.
...................................................
1,151
57,458
494,042
Household
Products
1.0%
Colgate-Palmolive
Co.
...............................................
8,192
645,448
Procter
&
Gamble
Co.
(The)
...........................................
6,683
1,012,875
1,658,323
Industrial
Conglomerates
0.8%
Honeywell
International,
Inc.
...........................................
6,580
1,410,094
Insurance
1.0%
American
International
Group,
Inc.
......................................
3,426
216,660
a
Arch
Capital
Group
Ltd.
...............................................
920
57,758
Arthur
J
Gallagher
&
Co.
..............................................
763
143,856
Assured
Guaranty
Ltd.
...............................................
820
51,053
Axis
Capital
Holdings
Ltd.
.............................................
963
52,166
a
Brighthouse
Financial,
Inc.
............................................
980
50,245
Erie
Indemnity
Co.,
A
.................................................
2,282
567,579
Globe
Life,
Inc.
.....................................................
451
54,368
Principal
Financial
Group,
Inc.
..........................................
950
79,724
Progressive
Corp.
(The)
..............................................
2,537
329,074
Reinsurance
Group
of
America,
Inc.
.....................................
378
53,710
Unum
Group
.......................................................
1,446
59,329
W
R
Berkley
Corp.
..................................................
995
72,207
1,787,729
Interactive
Media
&
Services
0.9%
a
Alphabet,
Inc.,
A
....................................................
8,889
784,276
a
Alphabet,
Inc.,
C
....................................................
7,882
699,370
1,483,646
Internet
&
Direct
Marketing
Retail
0.4%
a
Amazon.com,
Inc.
...................................................
8,516
715,344
a
IT
Services
3.2%
Accenture
plc,
A
....................................................
6,265
1,671,753
Amdocs
Ltd.
.......................................................
793
72,084
Automatic
Data
Processing,
Inc.
........................................
1,561
372,860
Franklin
Templeton
Variable
Insurance
Products
Trust
Schedule
of
Investments
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
FVA-17
a
a
Shares
a
Value
a
Common
Stocks
(continued)
IT
Services
(continued)
a
Gartner,
Inc.
.......................................................
315
$
105,884
International
Business
Machines
Corp.
...................................
4,875
686,839
Jack
Henry
&
Associates,
Inc.
..........................................
361
63,377
Mastercard
,
Inc.,
A
..................................................
2,722
946,521
Paychex,
Inc.
......................................................
1,619
187,092
Visa,
Inc.,
A
........................................................
6,425
1,334,858
Western
Union
Co.
(The)
..............................................
3,672
50,563
5,491,831
Life
Sciences
Tools
&
Services
0.6%
Danaher
Corp.
.....................................................
760
201,719
West
Pharmaceutical
Services,
Inc.
......................................
3,610
849,614
1,051,333
Machinery
1.1%
Allison
Transmission
Holdings,
Inc.
......................................
1,225
50,960
Crane
Holdings
Co.
..................................................
512
51,430
Cummins,
Inc.
......................................................
552
133,744
Donaldson
Co.,
Inc.
.................................................
5,405
318,192
Dover
Corp.
.......................................................
5,654
765,608
PACCAR,
Inc.
......................................................
1,844
182,501
Pentair
plc
........................................................
4,425
199,037
Snap-on,
Inc.
......................................................
255
58,265
Toro
Co.
(The)
.....................................................
497
56,260
1,815,997
Media
0.1%
Interpublic
Group
of
Cos.,
Inc.
(The)
.....................................
1,606
53,496
Nexstar
Media
Group,
Inc.,
A
...........................................
302
52,859
Omnicom
Group,
Inc.
................................................
1,051
85,730
192,085
Metals
&
Mining
0.3%
Nucor
Corp.
.......................................................
1,520
200,351
Reliance
Steel
&
Aluminum
Co.
.........................................
323
65,388
Southern
Copper
Corp.
...............................................
900
54,351
Steel
Dynamics,
Inc.
.................................................
1,060
103,562
United
States
Steel
Corp.
.............................................
2,106
52,756
476,408
Mortgage
Real
Estate
Investment
Trusts
(REITs)
0.0%
†
Starwood
Property
Trust,
Inc.
..........................................
2,572
47,145
Multiline
Retail
0.8%
Dollar
General
Corp.
.................................................
947
233,199
Kohl's
Corp.
.......................................................
1,733
43,758
Macy's,
Inc.
........................................................
2,359
48,713
Target
Corp.
.......................................................
6,770
1,009,001
1,334,671
Multi-Utilities
0.2%
Consolidated
Edison,
Inc.
.............................................
1,813
172,797
Sempra
Energy
.....................................................
756
116,832
289,629
Oil,
Gas
&
Consumable
Fuels
3.7%
Chesapeake
Energy
Corp.
............................................
538
50,771
Chevron
Corp.
.....................................................
10,338
1,855,568
Franklin
Templeton
Variable
Insurance
Products
Trust
Schedule
of
Investments
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
FVA-18
a
a
Shares
a
Value
a
Common
Stocks
(continued)
Oil,
Gas
&
Consumable
Fuels
(continued)
ConocoPhillips
.....................................................
6,172
$
728,296
Coterra
Energy,
Inc.
.................................................
4,069
99,975
Devon
Energy
Corp.
.................................................
3,516
216,269
EOG
Resources,
Inc.
................................................
7,520
973,990
Exxon
Mobil
Corp.
...................................................
12,241
1,350,182
HF
Sinclair
Corp.
...................................................
895
46,442
Marathon
Oil
Corp.
..................................................
2,471
66,890
Marathon
Petroleum
Corp.
............................................
1,779
207,058
Ovintiv
,
Inc.
........................................................
1,131
57,353
PDC
Energy,
Inc.
...................................................
739
46,912
Pioneer
Natural
Resources
Co.
.........................................
1,191
272,012
Texas
Pacific
Land
Corp.
..............................................
21
49,229
Valero
Energy
Corp.
.................................................
1,786
226,572
6,247,519
Pharmaceuticals
3.6%
Bristol-Myers
Squibb
Co.
..............................................
9,650
694,317
Eli
Lilly
&
Co.
......................................................
2,631
962,525
Johnson
&
Johnson
.................................................
11,185
1,975,830
Merck
&
Co.,
Inc.
...................................................
8,360
927,542
Organon
&
Co.
.....................................................
2,102
58,709
Pfizer,
Inc.
.........................................................
29,732
1,523,468
6,142,391
Professional
Services
0.1%
Booz
Allen
Hamilton
Holding
Corp.
......................................
608
63,548
a
CACI
International,
Inc.,
A
.............................................
178
53,505
Leidos
Holdings,
Inc.
.................................................
740
77,840
Science
Applications
International
Corp.
..................................
504
55,909
250,802
Road
&
Rail
0.9%
JB
Hunt
Transport
Services,
Inc.
........................................
2,745
478,618
Knight-Swift
Transportation
Holdings,
Inc.
.................................
1,024
53,668
Norfolk
Southern
Corp.
...............................................
3,160
778,687
Ryder
System,
Inc.
..................................................
592
49,474
Schneider
National,
Inc.,
B
............................................
2,153
50,380
U-Haul
Holding
Co.
..................................................
899
54,111
1,464,938
Semiconductors
&
Semiconductor
Equipment
4.0%
Analog
Devices,
Inc.
.................................................
9,488
1,556,317
Applied
Materials,
Inc.
................................................
4,310
419,708
Broadcom,
Inc.
.....................................................
1,536
858,824
a
Cirrus
Logic,
Inc.
....................................................
738
54,966
KLA
Corp.
.........................................................
814
306,902
Lam
Research
Corp.
.................................................
693
291,268
a
Lattice
Semiconductor
Corp.
...........................................
781
50,671
Microchip
Technology,
Inc.
............................................
1,324
93,011
NVIDIA
Corp.
......................................................
1,648
240,839
a
ON
Semiconductor
Corp.
.............................................
2,523
157,360
QUALCOMM,
Inc.
...................................................
5,659
622,150
Texas
Instruments,
Inc.
...............................................
13,364
2,208,000
6,860,016
Software
6.0%
a
Cadence
Design
Systems,
Inc.
.........................................
1,336
214,615
Franklin
Templeton
Variable
Insurance
Products
Trust
Schedule
of
Investments
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
FVA-19
a
a
Shares
a
Value
a
Common
Stocks
(continued)
Software
(continued)
a
Dropbox,
Inc.,
A
....................................................
2,406
$
53,846
a
Fair
Isaac
Corp.
....................................................
89
53,274
a
Fortinet,
Inc.
.......................................................
3,426
167,497
a
Manhattan
Associates,
Inc.
............................................
435
52,809
Microsoft
Corp.
.....................................................
29,891
7,168,461
Oracle
Corp.
.......................................................
3,539
289,278
Roper
Technologies,
Inc.
..............................................
4,865
2,102,118
a
Synopsys,
Inc.
.....................................................
697
222,545
10,324,443
Specialty
Retail
2.4%
a
AutoNation,
Inc.
....................................................
456
48,929
a
AutoZone,
Inc.
.....................................................
121
298,408
Dick's
Sporting
Goods,
Inc.
............................................
464
55,815
Lowe's
Cos.,
Inc.
....................................................
8,708
1,734,982
a
O'Reilly
Automotive,
Inc.
..............................................
387
326,640
Penske
Automotive
Group,
Inc.
.........................................
444
51,029
Ross
Stores,
Inc.
...................................................
9,292
1,078,522
TJX
Cos.,
Inc.
(The)
.................................................
2,779
221,208
Tractor
Supply
Co.
..................................................
263
59,167
a
Ulta
Beauty,
Inc.
....................................................
247
115,860
Williams-Sonoma,
Inc.
...............................................
452
51,944
4,042,504
Technology
Hardware,
Storage
&
Peripherals
2.3%
Apple,
Inc.
........................................................
26,894
3,494,337
Dell
Technologies,
Inc.,
C
.............................................
1,489
59,888
Hewlett
Packard
Enterprise
Co.
.........................................
7,851
125,302
HP,
Inc.
...........................................................
6,101
163,934
NetApp,
Inc.
.......................................................
1,215
72,973
a
Pure
Storage,
Inc.,
A
.................................................
1,948
52,128
3,968,562
Textiles,
Apparel
&
Luxury
Goods
0.7%
NIKE,
Inc.,
B
.......................................................
9,130
1,068,301
Tapestry,
Inc.
......................................................
1,474
56,130
1,124,431
Thrifts
&
Mortgage
Finance
0.0%
†
MGIC
Investment
Corp.
...............................................
3,992
51,896
Tobacco
0.7%
Altria
Group,
Inc.
....................................................
10,170
464,871
Philip
Morris
International,
Inc.
.........................................
7,581
767,273
1,232,144
Trading
Companies
&
Distributors
0.6%
MSC
Industrial
Direct
Co.,
Inc.,
A
........................................
639
52,207
WW
Grainger,
Inc.
...................................................
1,681
935,056
987,263
Total
Common
Stocks
(Cost
$72,209,135)
......................................
106,543,370
Franklin
Templeton
Variable
Insurance
Products
Trust
Schedule
of
Investments
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
FVA-20
a
a
Shares
a
Value
a
Investments
In
Underlying
Funds
and
Exchange
Traded
Funds
33.2%
Domestic
Fixed
Income
23.7%
b
Franklin
U.S.
Core
Bond
ETF
..........................................
1,286,975
$
27,245,261
b
Western
Asset
Core
Plus
Bond
Fund,
Class
IS
.............................
1,406,906
13,168,638
40,413,899
Domestic
Hybrid
8.2%
b
Franklin
Income
VIP
Fund,
Class
1
......................................
902,748
13,893,295
Foreign
Equity
1.3%
iShares
Core
MSCI
EAFE
ETF
.........................................
36,862
2,272,174
Total
Investments
In
Underlying
Funds
and
Exchange
Traded
Funds
(Cost
$66,605,691)
................................................................
56,579,368
Total
Long
Term
Investments
(Cost
$138,814,826)
...............................
163,122,738
a
a
a
a
a
Short
Term
Investments
3.1%
a
Money
Market
Funds
3.1%
b,c
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
3.782%
..................
5,320,470
5,320,470
Total
Money
Market
Funds
(Cost
$5,320,470)
...................................
5,320,470
Total
Short
Term
Investments
(Cost
$5,320,470
)
.................................
5,320,470
a
Total
Investments
(Cost
$144,135,296)
98.7%
...................................
$168,443,208
Other
Assets,
less
Liabilities
1.3%
.............................................
2,276,524
Net
Assets
100.0%
...........................................................
$170,719,732
†
Rounds
to
less
than
0.1%
of
net
assets.
a
Non-income
producing.
b
See
Note
3(e)
regarding
investments
in
FT
Underlying
Funds.
c
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Franklin
Templeton
Variable
Insurance
Products
Trust
Schedule
of
Investments
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
FVA-21
At
December
31,
2022,
the
Fund
had
the
following futures
contracts
outstanding.
See
Note
1(c).
At
December
31,
2022,
the
Fund
had
the
following total
return swap
contracts
outstanding.
See
Note
1(c).
Futures
Contracts
Description
Type
Number
of
Contracts
Notional
Amount
*
Expiration
Date
Value/
Unrealized
Appreciation
(Depreciation)
Equity
contracts
S&P
500
E-Mini
Index
.........................
Short
220
$
42,471,000
3/17/23
$
1,801,411
Total
Futures
Contracts
......................................................................
$1,801,411
*
As
of
year
end
.
Total
Return
Swap
Contracts
Underlying
Instruments
Financing
Rate
Payment
Frequency
Counter-
party
Maturity
Date
Notional
Value
*
Value/
Unrealized
Appreciation
(Depreciation)
OTC
Swap
Contracts
Long
Dynamic
VIX
Backwardation
(BEFSDVB1
Index)
..
—
Monthly
BZWS
2/27/23
4,000,000
$
(984)
Total
Return
Swap
Contracts
....................................................................
$(984)
*
In
U.S.
dollars
unless
otherwise
indicated.
See
Note 9 regarding
other
derivative
information.
See
Abbreviations
on
page
FVA-
34
.
Franklin
Templeton
Variable
Insurance
Products
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
December
31,
2022
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
FVA-22
Franklin
VolSmart
Allocation
VIP
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$74,986,133
Cost
-
Non-controlled
affiliates
(Not
e
3e)
........................................................
69,149,163
Value
-
Unaffiliated
issuers
..................................................................
$108,815,544
Value
-
Non-controlled
affiliates
(Not
e
3e)
.......................................................
59,627,664
Cash
....................................................................................
185
Receivables:
Investment
securities
sold
...................................................................
4,470
Capital
shares
sold
........................................................................
6,468
Dividends
...............................................................................
106,213
Deposits
with
brokers
for:
Futures
contracts
........................................................................
2,332,000
Variation
margin
on
futures
contracts
...........................................................
118,250
Total
assets
..........................................................................
171,010,794
Liabilities:
Payables:
Capital
shares
redeemed
...................................................................
92,515
Management
fees
.........................................................................
100,076
Distribution
fees
..........................................................................
22,059
Professional
fees
.........................................................................
63,809
Trustees'
fees
and
expenses
.................................................................
1,133
Unrealized
depreciation
on
OTC
swap
contracts
....................................................
984
Accrued
expenses
and
other
liabilities
...........................................................
10,486
Total
liabilities
.........................................................................
291,062
Net
assets,
at
value
.................................................................
$170,719,732
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$133,095,349
Total
distributable
earnings
(losses)
.............................................................
37,624,383
Net
assets,
at
value
.................................................................
$170,719,732
Franklin
VolSmart
Allocation
VIP
Fund
Class
1:
Net
assets,
at
value
.......................................................................
$4,460
Shares
outstanding
........................................................................
368
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$12.13
Class
2:
Net
assets,
at
value
.......................................................................
$32,851
Shares
outstanding
........................................................................
2,695
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$12.19
Class
5:
Net
assets,
at
value
.......................................................................
$170,682,421
Shares
outstanding
........................................................................
14,050,369
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$12.15
Franklin
Templeton
Variable
Insurance
Products
Trust
Financial
Statements
Statement
of
Operations
for
the
year
ended
December
31,
2022
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
FVA-23
Franklin
VolSmart
Allocation
VIP
Fund
Investment
income:
Dividends:
Unaffiliated
issuers
........................................................................
$2,320,273
Non-controlled
affiliates
(Not
e
3e)
.............................................................
1,915,858
Interest:
Unaffiliated
issuers
........................................................................
24,243
Total
investment
income
...................................................................
4,260,374
Expenses:
Management
fees
(Note
3
a
)
...................................................................
1,437,739
Distribution
fees:
(Note
3c
)
Class
5
................................................................................
269,516
Custodian
fees
(Note
4
)
......................................................................
789
Reports
to
shareholders
fees
..................................................................
(22,782)
Professional
fees
...........................................................................
86,706
Trustees'
fees
and
expenses
..................................................................
3,086
Other
....................................................................................
14,274
Total
expenses
.........................................................................
1,789,328
Expense
reductions
(Note
4
)
...............................................................
(40)
Expenses
waived/paid
by
affiliates
(Not
e
3e
and
3f)
..............................................
(354,006)
Net
expenses
.........................................................................
1,435,282
Net
investment
income
................................................................
2,825,092
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
Unaffiliated
issuers
......................................................................
8,918,475
Non-controlled
affiliates
(Not
e
3e)
...........................................................
(250,438)
Futures
contracts
.........................................................................
75,051
Swap
contracts
...........................................................................
22,351
Capital
gain
distributions
from
Underlying
Funds:
Non-controlled
affiliates
(Not
e
3e)
...........................................................
265,359
Net
realized
gain
(loss)
..................................................................
9,030,798
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
(29,346,778)
Non-controlled
affiliates
(Not
e
3e)
...........................................................
(9,575,317)
Futures
contracts
.........................................................................
1,801,411
Swap
contracts
...........................................................................
(951)
Net
change
in
unrealized
appreciation
(depreciation)
............................................
(37,121,635)
Net
realized
and
unrealized
gain
(loss)
............................................................
(28,090,837)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$(25,265,745)
Franklin
Templeton
Variable
Insurance
Products
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
FVA-24
Franklin
VolSmart
Allocation
VIP
Fund
Year
Ended
December
31,
2022
Year
Ended
December
31,
2021
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$2,825,092
$3,214,793
Net
realized
gain
(loss)
.................................................
9,030,798
15,665,750
Net
change
in
unrealized
appreciation
(depreciation)
...........................
(37,121,635)
13,859,014
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
(25,265,745)
32,739,557
Distributions
to
shareholders:
Class
1
.............................................................
(536)
—
Class
2
.............................................................
(3,925)
(4,360)
Class
5
.............................................................
(18,414,714)
(18,228,062)
Total
distributions
to
shareholders
..........................................
(18,419,175)
(18,232,422)
Capital
share
transactions:
(Note
2
)
Class
1
.............................................................
5,000
—
Class
2
.............................................................
(5,000)
—
Class
5
.............................................................
4,572,930
(537,826)
Total
capital
share
transactions
............................................
4,572,930
(537,826)
Net
increase
(decrease)
in
net
assets
...................................
(39,111,990)
13,969,309
Net
assets:
Beginning
of
year
.......................................................
209,831,722
195,862,413
End
of
year
...........................................................
$170,719,732
$209,831,722
Franklin
Templeton
Variable
Insurance
Products
Trust
FVA-25
Annual
Report
Notes
to
Financial
Statements
Franklin
VolSmart
Allocation
VIP
Fund
1.
Organization
and
Significant
Accounting
Policies
Franklin
Templeton
Variable
Insurance
Products
Trust (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company,
consisting
of
eighteen separate
funds.
The
Trust
follows
the
accounting
and
reporting
guidance
in
Financial
Accounting
Standards
Board
(FASB)
Accounting
Standard
Codification
Topic
946,
Financial
Services
–
Investment
Companies
(ASC
946)
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP),
including,
but
not
limited
to,
ASC
946.
Franklin
VolSmart
Allocation
VIP
Fund
(Fund)
is
included
in
this
report.
The
Fund
invests
a
large
percentage
of
its
assets
in
mutual
funds
(Underlying
Funds)
and
exchange
traded
funds
(ETFs),
including
affiliated
funds
managed
by
Franklin
Templeton
(FT
Underlying
Funds).
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.
At
December
31,
2022,
98.3%
of
the
Fund's
shares
were
held
through
one
insurance
company.
Investment
activities
of
these
insurance
company
separate
accounts
could
have
a
material
impact
on
the
Fund.
The
Fund
offers
three
classes
of
shares:
Class
1,
Class
2
and
Class
5.
Effective
May
20,
2022,
the
Fund
began
offering
a
new
class
of
shares,
Class
1.
Each
class
of
shares
may
differ
by
its
distribution
fees,
voting
rights
on
matters
affecting
a
single
class
and
its
exchange
privilege.
The
accounting
policies
of
the
Underlying
Funds
are
outlined
in
their
respective
shareholder
reports.
A
copy
of
the
Underlying
Funds’
shareholder
reports
is
available
on
the
U.S.
Securities
and
Exchange
Commission
(SEC)
website
at
sec.gov.
The
Underlying
Funds’
shareholder
reports
are
not
covered
by
this
report.
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
each business
day as
of
4
p.m.
Eastern
time
or
the
regularly
scheduled
close
of
the
New
York
Stock
Exchange
(NYSE),
whichever
is
earlier.
Under
compliance
policies
and
procedures
approved
by
the
Trust’s
Board
of
Trustees
(the
Board),
the
Board
has
designated
the
Fund’s
investment
manager
as
the
valuation
designee
and
has
responsibility
for
oversight
of
valuation.
The
investment
manager
is
assisted
by
the
Fund’s
administrator
in
performing
this
responsibility,
including
leading
the
cross-
functional
Valuation
Committee
(VC).
The
Fund
may
utilize
independent
pricing
services,
quotations
from
securities
and
financial
instrument
dealers,
and
other
market
sources
to
determine
fair
value.
Investments
in
the
Underlying
Funds
are
valued
at
their
closing
NAV
each
trading
day.
Equity
securities,
exchange
traded
funds,
and
derivative
financial
instruments
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
4
p.m.
Eastern
time.
The
value
is
then
converted
into
its
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
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.
Certain
derivative
financial
instruments
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.
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 Fund
primarily
employs
a
market-based
approach
which
may
use
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
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
Franklin
Templeton
Variable
Insurance
Products
Trust
Notes
to
Financial
Statements
FVA-26
Annual
Report
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
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.
Trading
in
securities
on
foreign
securities
stock
exchanges
and
OTC
markets
may
be
completed
before
4
p.m.
Eastern
time.
In
addition,
trading
in
certain
foreign
markets
may
not
take
place
on
every
Fund's
business
day.
Events
can occur
between
the
time
at
which
trading
in
a
foreign
security
is
completed
and
4
p.m.
Eastern
time
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
4
p.m.
Eastern
time.
In
order
to
minimize
the
potential
for
these
differences,
an
independent
pricing
service
may
be
used
to
adjust
the
value
of
the Fund's
portfolio
securities
to
the
latest
indications
of
fair
value
at
4
p.m.
Eastern
time.
When
the
last
day
of
the
reporting
period
is
a
non-business
day,
certain
foreign
markets
may
be
open
on
those
days
that
the
Fund's
NAV
is
not
calculated,
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
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
in
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.
Derivative
Financial
Instruments
The
Fund invested
in
derivative
financial
instruments
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
in
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.
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.
1.
Organization
and
Significant
Accounting
Policies
(continued)
a.
Financial
Instrument
Valuation
(continued)
Franklin
Templeton
Variable
Insurance
Products
Trust
Notes
to
Financial
Statements
FVA-27
Annual
Report
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
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.
At
December
31,
2022, the
Fund
had
OTC
derivatives
in
a
net
liability
position
of
$984.
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
the
next
business
day,
or
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.
To
the
extent
that
the
amounts
due
to
the
Fund
from
its
counterparties
are
not
subject
to
collateralization
or
are
not
fully
collateralized,
the
Fund
bears
the
risk
of
loss
from
counterparty
non-performance.
The
Fund
entered
into
exchange
traded
futures
contracts
primarily
to
manage
and/or
gain
exposure
to
interest
rate
and
equity
price
risk.
A
futures
contract
is
an
agreement
between
the
Fund
and
a
counterparty
to
buy
or
sell
an
asset
at
a
specified
price
on
a
future
date.
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
in
the
Statement
of
Assets
and
Liabilities.
The
Fund
entered
into
OTC
total
return
swap
contracts
primarily
to
manage
and/or
gain
exposure
to
credit
and
other
market
risk
of
an
underlying
instrument
such
as
a
stock,
bond,
index
or
basket
of
securities
or
indices.
A
total
return
swap
is
an
agreement
between
the
Fund
and
a
counterparty
to
exchange
a
return
linked
to
an
underlying
instrument
for
a
floating
or
fixed
rate
payment,
both
based
upon
a
notional
amount.
Over
the
term
of
the
contract,
contractually
required
payments
to
be
paid
or
received
are
accrued
daily
and
recorded
as
unrealized
appreciation
or
depreciation
until
the
payments
are
made,
at
which
time
they
are
recognized
as
realized
gain
or
loss.
See
Note
9
regarding
other
derivative
information.
d.
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
may
recognize
an
income
tax
liability
related
to
its
uncertain
tax
positions
under
U.S.
GAAP
when
the
uncertain
tax
position
has
a
less
than
50%
probability
that
it
will
be
sustained
upon
examination
by
the
tax
authorities
based
on
its
technical
merits.
As
of
December
31,
2022,
the
Fund
has
determined
that
no
tax
liability
is
required
in
its
financial
1.
Organization
and
Significant
Accounting
Policies
(continued)
c.
Derivative
Financial
Instruments
(continued)
Franklin
Templeton
Variable
Insurance
Products
Trust
Notes
to
Financial
Statements
FVA-28
Annual
Report
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
statements
related
to
uncertain
tax
positions
for
any
open
tax
years
(or
expected
to
be
taken
in
future
tax
years).
Open
tax
years
are
those
that
remain
subject
to
examination
and
are
based
on
the
statute
of
limitations
in
each
jurisdiction
in
which
the
Fund
invests.
e.
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
for
certain
dividends
from
securities
where
the
dividend
rate
is
not
available.
In
such
cases,
the
dividend
is
recorded
as
soon
as
the
information
is
received
by
the
Fund.
Distributions
to shareholders
are
recorded
on
the
ex-dividend
date.
Distributable
earnings
are
determined
according
to
income
tax
regulations
(tax
basis)
and
may
differ
from
earnings
recorded
in
accordance
with
U.S.
GAAP.
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
or
based
on
the
ratio
of
number
of
shareholders
of
each
Fund
to
the
combined
number
of
shareholders
of
the
Trust.
Fund
specific
expenses
are
charged
directly
to
the
Fund
that
incurred
the
expense.
The
Fund
indirectly
bears
its
proportionate
share
of
expenses
from
the
Underlying
Funds
and
ETFs.
Since
the
Underlying
Funds
and
ETFs
have
varied
expense
levels
and
the
Fund may
own
different
proportions
of
the
Underlying
Funds
and
ETFs
at
different
times,
the
amount
of
expenses
incurred
indirectly
by
the Fund
will
vary.
Realized
and
unrealized
gains
and
losses
and
net
investment
income,
excluding
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.
f.
Accounting
Estimates
The
preparation
of
financial
statements
in
accordance
with
U.S.
GAAP
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.
g.
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.
1.
Organization
and
Significant
Accounting
Policies
(continued)
d.
Income
and
Deferred
Taxes
(continued)
Franklin
Templeton
Variable
Insurance
Products
Trust
Notes
to
Financial
Statements
FVA-29
Annual
Report
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
2.
Shares
of
Beneficial
Interest
At
December
31,
2022,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Fund's
shares
were
as
follows:
3.Transactions
with
Affiliates
Franklin
Resources,
Inc.
is
the
holding
company
for
various
subsidiaries
that
together
are
referred
to
as
Franklin
Templeton.
Certain
officers
and
trustees
of
the
Fund
are
also
officers,
directors
and/or
trustees
of
certain
of
the
Underlying
Funds
and
of
the
following
subsidiaries:
a.
Management
Fees
The
Fund
pays
an
investment
management
fee,
calculated
daily
and
paid
monthly,
to
Advisers
of
0.80%
per
year
of
the
average
daily
net
assets
of
the
Fund.
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
The
Board
has
adopted
distribution
plans
for
Class
2
and
Class
5
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
0.35%
and
0.15%
per
year
of
its
average
daily
net
assets
of
Class
2
and
Class
5,
respectively.
The
Board
has
agreed
to
limit
the
current
rate
to
0.25%
per
year
for
Class
2.
The
plan
year,
for
purposes
of
monitoring
compliance
with
the
maximum
annual
plan
rates,
is
February
1
through
January
31.
Year
Ended
December
31,
2022
a
Year
Ended
December
31,
2021
Shares
Amount
Shares
Amount
Class
1
Shares:
Shares
sold
...................................
368
$5,000
—
$—
Net
increase
(decrease)
..........................
368
$5,000
—
$—
Class
2
Shares:
Shares
redeemed
...............................
(366)
$(5,000)
—
$—
Net
increase
(decrease)
..........................
(366)
$(5,000)
—
$—
Class
5
Shares:
Shares
sold
...................................
1,453,858
$18,425,871
1,228,354
$18,215,053
Shares
issued
in
reinvestment
of
distributions
..........
1,550,060
18,414,714
1,272,021
18,228,062
Shares
redeemed
...............................
(2,469,708)
(32,267,655)
(2,466,397)
(36,980,941)
Net
increase
(decrease)
..........................
534,210
$4,572,930
33,978
$(537,826)
a
For
the
period
May
20,
2022
(effective
date)
to
December
31,
2022
for
Class
1.
Subsidiary
Affiliation
Franklin
Advisers,
Inc.
(Advisers)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Franklin
Templeton
Variable
Insurance
Products
Trust
Notes
to
Financial
Statements
FVA-30
Annual
Report
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
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.
e.
Investments
in
Underlying
Funds
The Fund
invests in Underlying
Funds
which
are
managed
by
affiliates
of
the
Fund’s
administrative
manager,
Franklin
Templeton
Services,
LLC.
As
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
“Controlled
Affiliate”
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
Underlying
Fund’s
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
Underlying
Fund.
The
Fund
does
not
invest
in
Underlying
Funds
for
the
purpose
of
exercising
a
controlling
influence
over
the
management
or
policies.
Management
fees
paid
by
the
Fund
are
waived
on
assets
invested
in
the
Underlying
Funds,
as
noted
in
the
Statement
of
Operations,
in
an
amount
not
to
exceed
the
management
and
administrative
fees
paid
directly
or
indirectly
by
the
Underlying
Funds.
Investments
in
Underlying
Funds
for
the
year
ended
December
31,
2022,
were
as
follows:
f.
Waiver
and
Expense
Reimbursements
Advisers
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
and
to
assume
as
its
own
expense
certain
expenses
otherwise
payable
by
the
Fund
so
that
the
operating expenses
(excluding
interest
expense,
distribution
fees,
acquired
fund
fees and
expenses
and
certain
non-routine
expenses
or
costs,
including
those
relating
to
litigation,
indemnification,
reorganizations,
and
liquidations) for
each
class
of
the
Fund
do not
exceed
0.65%,
based
on
the
average
net
assets
of
each
class
until
April
30,
2023.
Total
expenses
waived
or
paid
are
not
subject
to
recapture
subsequent
to
the
Fund's
fiscal
year
end.
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,
2022,
the
custodian
fees
were
reduced
as
noted
in
the
Statement
of
Operations.
aa
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares
Held
at
End
of
Year
Dividend
Income
a
a
a
a
a
a
a
a
a
Franklin
VolSmart
Allocation
VIP
Fund
Non-Controlled
Affiliates
Franklin
Income
VIP
Fund,
Class
1
$
16,987,187
$
961,317
$
(2,311,000)
$
115,320
$
(1,859,529)
$
13,893,295
902,748
$
961,317
a
Franklin
U.S.
Core
Bond
ETF
...
25,689,597
5,938,279
—
—
(4,382,615)
27,245,261
1,286,975
676,346
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
3.782%
......
4,067,757
60,577,031
(59,324,318)
—
—
5,320,470
5,320,470
83,402
Western
Asset
Core
Plus
Bond
Fund,
Class
IS
............
17,152,572
1,414,997
(1,700,000)
(365,758)
(3,333,173)
13,168,638
1,406,906
460,152
Total
Non-Controlled
Affiliates
$63,897,113
$68,891,624
$(63,335,318)
$(250,438)
$(9,575,317)
$59,627,664
$2,181,217
Total
Affiliated
Securities
....
$63,897,113
$68,891,624
$(63,335,318)
$(250,438)
$(9,575,317)
$59,627,664
$2,181,217
a
Dividend
income
includes
capital
gain
distributions
received,
if
any,
from
underlying
funds,
and
are
presented
in
corresponding
line
item
in
Statement
of
Operations.
3.Transactions
with
Affiliates
(continued)
Franklin
Templeton
Variable
Insurance
Products
Trust
Notes
to
Financial
Statements
FVA-31
Annual
Report
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
5.
Income
Taxes
The
tax
character
of
distributions
paid
during
the
years
ended
December
31,
2022
and
2021,
was
as
follows:
At
December
31,
2022,
the
cost
of
investments,
net
unrealized
appreciation
(depreciation),
undistributed
ordinary
income
and
undistributed
long
term
capital
gains
for
income
tax
purposes
were
as
follows:
Differences
between
income
and/or
capital
gains
as
determined
on
a
book
basis
and
a
tax
basis
are
primarily
due
to
differing
treatments
of
investments
in
regulated
investment
companies,
wash
sales
and
financial
futures
transactions.
6.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
year
ended
December
31,
2022,
aggregated
$65,729,036
and
$78,936,708,
respectively.
7.
Geopolitical
Risk
On
February
24,
2022,
Russia
engaged
in
military
actions
in
the
sovereign
territory
of
Ukraine.
The
current
political
and
financial
uncertainty
surrounding
Russia
and
Ukraine
may
increase
market
volatility
and
the
economic
risk
of
investing
in
securities
in
these
countries
and
may
also
cause
uncertainty
for
the
global
economy
and
broader
financial
markets.
The
ultimate
fallout
and
long-term
impact
from
these
events
are
not
known.
The
Fund
will
continue
to
assess
the
impact
on
valuations
and
liquidity
and
will
take
any
potential
actions
needed
in
accordance
with
procedures
approved
by
the
Board.
8.
Novel
Coronavirus
Pandemic
The
global
outbreak
of
the
novel
coronavirus
disease,
known
as
COVID-19, has
caused
adverse
effects
on
many
companies,
sectors,
nations,
regions
and
the
markets
in
general, and
may
continue for
an unpredictable duration.
The
effects
of
this
pandemic
may
materially
impact
the
value
and
performance
of
the Fund, its ability
to
buy
and
sell
fund
investments
at
appropriate
valuations
and its ability
to
achieve its investment
objectives.
2022
2021
Distributions
paid
from:
Ordinary
income
..........................................................
$4,908,576
$18,232,422
Long
term
capital
gain
......................................................
13,510,599
—
$18,419,175
$18,232,422
Cost
of
investments
..........................................................................
$146,395,893
Unrealized
appreciation
........................................................................
$39,575,498
Unrealized
depreciation
........................................................................
(15,727,756)
Net
unrealized
appreciation
(depreciation)
..........................................................
$23,847,742
Distributable
earnings:
Undistributed
ordinary
income
...................................................................
$2,850,390
Undistributed
long
term
capital
gains
..............................................................
10,926,257
Total
distributable
earnings
.....................................................................
$13,776,647
Franklin
Templeton
Variable
Insurance
Products
Trust
Notes
to
Financial
Statements
FVA-32
Annual
Report
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
9.
Other
Derivative
Information
At
December
31,
2022,
investments
in
derivative
contracts
are
reflected
in
the
Statement of
Assets
and
Liabilities
as
follows:
For
the
year
ended
December
31,
2022,
the
effect
of
derivative
contracts
in
the Statement
of
Operations
was
as
follows:
For
the
year
ended
December
31,
2022,
the
average
month
end
notional
amount
of
futures
contracts
and
swap
contracts
represented
$27,657,011
and
$4,400,000,
respectively.
See
Note
1(c)
regarding
derivative
financial
instruments.
10.
Credit
Facility
The
Fund,
together
with
other
U.S.
registered
and
foreign
investment
funds
(collectively,
Borrowers),
managed
by
Franklin
Templeton,
are
borrowers
in
a
joint
syndicated
senior
unsecured
credit
facility
totaling
$2.675
billion
(Global
Credit
Facility)
which
matured
on
February
3,
2023.
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
3,
2023,
the
Borrowers
renewed
the
Global
Credit
Facility
for
a
one-year
term,
maturing
February
2,
2024,
for
a
total
of
$2.675
billion.
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,
Asset
Derivatives
Liability
Derivatives
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Franklin
VolSmart
Allocation
VIP
Fund
Equity
contracts
...........
Variation
margin
on
futures
contracts
$
1,801,411
a
Variation
margin
on
futures
contracts
$
—
Unrealized
appreciation
on
OTC
swap
contracts
—
Unrealized
depreciation
on
OTC
swap
contracts
984
Total
....................
$1,801,411
$984
a
This
amount
reflects
the
cumulative
appreciation
(depreciation)
of
futures
contracts
as
reported
in
the
Schedule
of
Investments.
Only
the
variation
margin
receivable/payable
at
year
end
is
separately
reported
within
the
Statement
of
Assets
and
Liabilities.
Prior
variation
margin
movements
were
recorded
to
cash
upon
receipt
or
payment.
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Operations
Location
Net
Realized
Gain
(Loss)
for
the
Year
Statement
of
Operations
Location
Net
Change
in
Unrealized
Appreciation
(Depreciation)
for
the
Year
Franklin
VolSmart
Allocation
VIP
Fund
Net
realized
gain
(loss)
from:
Net
change
in
unrealized
appreciation
(depreciation)
on:
Equity
Contracts
..............
Futures
contracts
$75,051
Futures
contracts
$1,801,411
Swap
contracts
22,351
Swap
contracts
(951)
Total
.......................
$97,402
$1,800,460
Franklin
Templeton
Variable
Insurance
Products
Trust
Notes
to
Financial
Statements
FVA-33
Annual
Report
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
including
an
annual
commitment
fee
of
0.15%
based
upon
the
unused
portion
of
the
Global
Credit
Facility.
These
fees
are
reflected
in
other
expenses
in
the
Statement
of
Operations.
During
the
year
ended
December
31,
2022,
the Fund
did
not
use
the
Global
Credit
Facility.
11.
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.
A
summary
of
inputs
used
as
of
December
31,
2022,
in
valuing
the
Fund's assets
and
liabilities
carried
at
fair
value,
is
as
follows:
12.
New
Accounting
Pronouncements
In June
2022,
the FASB
issued
Accounting
Standards
Update
(ASU)
No.
2022-03,
Fair
Value
Measurement
(Topic
820)
–
Fair
Value
Measurement
of
Equity
Securities
Subject
to
Contractual
Sale
Restrictions.
The
amendments
in
the
ASU
clarify
that
a
contractual
restriction
on
the
sale
of
an
equity
security
is
not
considered
part
of
the
unit
of
account
of
the
equity
security
and,
therefore,
should
not
be
considered
in
measuring
fair
value.
The
ASU
is
effective
for
interim
and
annual
reporting
periods
beginning
after
December
15,
2023,
with
the
option
of
early
adoption.
Management
has
reviewed
the
requirements
and
believes
that
the
adoption
of
the
ASU
will
not
have
a
material
impact
on
the
financial
statements.
Level
1
Level
2
Level
3
Total
Franklin
VolSmart
Allocation
VIP
Fund
Assets:
Investments
in
Securities:
a
Common
Stocks
........................
$
106,543,370
$
—
$
—
$
106,543,370
Management
Investment
Companies
.........
56,579,368
—
—
56,579,368
Short
Term
Investments
...................
5,320,470
—
—
5,320,470
Total
Investments
in
Securities
...........
$168,443,208
$—
$—
$168,443,208
Other
Financial
Instruments:
Futures
contracts
........................
$
1,801,411
$
—
$
—
$
1,801,411
Total
Other
Financial
Instruments
.........
$1,801,411
$—
$—
$1,801,411
Liabilities:
Other
Financial
Instruments:
Swap
contracts
..........................
$
—
$
984
$
—
$
984
Total
Other
Financial
Instruments
.........
$—
$984
$—
$984
a
For
detailed
categories,
see
the
accompanying
Schedule
of
Investments.
10.
Credit
Facility
(continued)
Franklin
Templeton
Variable
Insurance
Products
Trust
Notes
to
Financial
Statements
FVA-34
Annual
Report
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
13.
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
Counterparty
BZWS
Barclays
Bank
plc
Selected
Portfolio
ETF
Exchange-Traded
Fund
REIT
Real
Estate
Investment
Trust
VIX
Market
Volatility
Index
Franklin
Templeton
Variable
Insurance
Products
Trust
Report
of
Independent
Registered
Public
Accounting
Firm
FVA-35
Annual
Report
To
the
Board
of
Trustees
of
Franklin
Templeton
Variable
Insurance
Products
Trust
and
Shareholders
of
Franklin
VolSmart
Allocation
VIP
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
schedule
of
investments,
of
Franklin
VolSmart
Allocation
VIP
Fund
(one
of
the
funds
constituting
Franklin
Templeton
Variable
Insurance
Products
Trust,
referred
to
hereafter
as
the
“Fund”)
as
of
December
31,
2022,
the
related
statement
of
operations
for
the
year
ended
December
31,
2022,
the
statement
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2022,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
periods
indicated
therein
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2022,
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
ended
December
31,
2022
and
the
financial
highlights
for
each
of
the
periods
indicated
therein
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2022
by
correspondence
with
the
custodian
and
transfer
agent.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
PricewaterhouseCoopers
LLP
San
Francisco,
California
February
17,
2023
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Franklin
Templeton
Group
of
Funds
since
1948.
Franklin
Templeton
Variable
Insurance
Products
Trust
Tax
Information
(unaudited)
FVA-36
Annual
Report
Franklin
VolSmart
Allocation
VIP
Fund
By
mid-February,
tax
information
related
to
a
shareholder's
proportionate
share
of
distributions
paid
during
the
preceding
calendar
year
will
be
received,
if
applicable.
Please
also
refer
to
www.franklintempleton.com
for
per
share
tax
information
related
to
any
distributions
paid
during
the
preceding
calendar
year.
Shareholders
are
advised
to
consult
with
their
tax
advisors
for
further
information
on
the
treatment
of
these
amounts
on
their
tax
returns.
The
following
tax
information
for
the
Fund
is
required
to
be
furnished
to
shareholders
with
respect
to
income
earned
and
distributions
paid
during
its
fiscal
year.
.
The
Fund
hereby
reports
the
following
amounts,
or
if
subsequently
determined
to
be
different,
the
maximum
allowable
amounts,
for
the
fiscal
year
ended
December
31,
2022:
Pursuant
to:
Amount
Reported
Long-Term
Capital
Gain
Dividends
Distributed
§852(b)(3)(C)
$13,510,599
Income
Eligible
for
Dividends
Received
Deduction
(DRD)
§854(b)(1)(A)
$2,032,283
Franklin
Templeton
Variable
Insurance
Products
Trust
Index
Descriptions
I-1
Annual
Report
The
indexes
are
unmanaged
and
include
reinvestment
of
any
income
or
distributions.
They
do
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
Net
Returns
(NR)
include
income
net
of
tax
withholding
when
dividends
are
paid.
For
Russell
Indexes:
Frank
Russell
Company
is
the
source
and
owner
of
the
trademarks,
service
marks
and
copyrights
related
to
the
Russell
Indexes.
Russell
®
is
a
trademark
of
Frank
Russell
Company.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Bloomberg
1-3
Month
U.S.
Treasury
Bill
Index
measures
the
performance
of
U.S.
Treasury
bills
that
have
a
remaining
maturity
of
greater
than
or
equal
to
one
month
and
less
than
three
months.
Treasuries,
if
held
to
maturity,
offer
a
fixed
rate
of
return
and
a
fixed
principal
value;
their
interest
payments
and
principal
are
guaranteed.
Bloomberg
U.S.
Aggregate
Bond
Index
measures
the
performance
of
the
investment-grade,
U.S.
dollar-
denominated,
fixed-rate
taxable
bond
market.
The
index
includes
Treasuries,
government-related
and
corporate
securities,
mortgage-backed
securities
(agency
fixed-
rate
and
hybrid
adjustable-rate
mortgage
pass-throughs),
asset-backed
securities
and
commercial
mortgage-backed
securities
(agency
and
nonagency).
Bloomberg
U.S.
Corporate
Investment
Grade
Index
measures
the
performance
of
the
investment-grade,
fixed-
rate,
taxable
corporate
bond
market.
It
includes
U.S.
dollar-
denominated
securities
publicly
issued
by
U.S.
and
non-U.S.
industrial,
utility
and
financial
issuers.
Bloomberg
U.S.
Corporate
High
Yield
Index
measures
the
performance
of
the
U.S.
dollar-denominated,
high-yield,
fixed-rate
corporate
bond
market.
Securities
are
classified
as
high
yield
if
the
middle
rating
of
Moody’s,
Standard
&
Poor’s,
and
Fitch
is
Ba1/BB+/BB+
or
below.
Bonds
from
issuers
with
an
emerging
markets
(EM)
country
of
risk,
based
on
Bloomberg
EM
country
definition,
are
excluded.
Bloomberg
U.S.
Government
-
Intermediate
Index
is
the
intermediate
component
of
the
Bloomberg
U.S.
Government
Index,
which
includes
U.S.
dollar-denominated,
fixed-rate,
nominal
U.S.
Treasuries
and
U.S.
agency
debentures
(securities
issued
by
U.S.
government-owned
or
government-sponsored
entities,
and
debt
explicitly
guaranteed
by
the
U.S.
government).
Bloomberg
U.S.
High
Yield
Very
Liquid
Index
is
a
component
of
the
Bloomberg
U.S.
Corporate
High
Yield
Index
that
is
designed
to
track
a
more
liquid
component
of
the
U.S.
dollar-denominated,
high-yield,
fixed-rate
corporate
bond
market.
Bloomberg
U.S.
Mortgage-Backed
Securities
(MBS)
Index
tracks
the
performance
of
fixed-rate
agency
mortgage-
backed
pass-through
securities
guaranteed
by
Ginnie
Mae
(GNMA),
Fannie
Mae
(FNMA)
and
Freddie
Mac
(FHLMC).
Effective
June
1,
2017,
hybrid
adjustable-rate
mortgages
were
removed
from
the
index.
Bloomberg
U.S.
Treasury
Index
measures
the
performance
of
U.S.
dollar-denominated,
fixed-rate,
nominal
debt
issued
by
the
U.S.
Treasury
with
at
least
one
year
until
final
maturity.
Treasuries,
if
held
to
maturity,
offer
a
fixed
rate
of
return
and
a
fixed
principal
value;
their
interest
payments
and
principal
are
guaranteed.
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
World
Government
Bond
Index
(WGBI)
measures
the
performance
of
fixed-rate,
local
currency,
investment-
grade
sovereign
bonds
and
is
stated
in
U.S.
dollar
terms.
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.
MSCI
All
Country
Asia
Index-NR
is
a
free
float-adjusted,
market
capitalization-weighted
index
designed
to
measure
the
equity
market
performance
of
developed
and
emerging
markets
in
Asia.
MSCI
All
Country
World
Index
(ACWI)-NR
is
a
free
float-
adjusted,
market
capitalization-weighted
index
designed
to
measure
the
equity
market
performance
of
global
developed
and
emerging
markets.
Franklin
Templeton
Variable
Insurance
Products
Trust
Index
Descriptions
I-2
Annual
Report
MSCI
All
Country
World
Index
(ACWI)
ex
USA
Index-NR
is
a
free
float-adjusted,
market
capitalization-weighted
index
designed
to
measure
the
equity
market
performance
of
global
developed
and
emerging
markets,
excluding
the
U.S.
MSCI
Emerging
Markets
(EM)
Index-NR
is
a
free
float-
adjusted,
market
capitalization-weighted
index
designed
to
measure
the
equity
market
performance
of
global
emerging
markets.
MSCI
Europe
Index-NR
is
a
free
float-adjusted,
market
capitalization-weighted
index
designed
to
measure
the
equity
market
performance
of
developed
markets
in
Europe.
MSCI
USA
High
Dividend
Yield
Index
is
based
on
the
MSCI
USA
Index,
its
parent
index,
and
includes
large-
and
mid-capitalization
stocks.
The
index
is
designed
to
reflect
the
performance
of
equities
in
the
parent
index
(excluding
real
estate
investment
trusts)
with
higher
dividend
income
and
quality
characteristics
than
average
dividend
yields
that
are
both
sustainable
and
persistent.
MSCI
USA
Index
is
designed
to
measure
the
performance
of
the
large-
and
mid-capitalization
segments
of
the
U.S.
market.
With
627
constituents,
the
index
covers
approximately
85%
of
the
free
float
adjusted
market
capitalization
in
the
U.S.
MSCI
World
ex
USA
Index-NR
is
a
free
float-adjusted,
market
capitalization-weighted
index
designed
to
measure
the
equity
market
performance
of
global
developed
markets,
excluding
the
U.S.
MSCI
World
Value
Index-NR
is
a
free
float-adjusted,
market
capitalization-weighted
index
designed
to
measure
the
performance
of
stocks
exhibiting
overall
value
style
characteristics
in
global
developed
markets.
Russell
1000
®
Growth
Index
is
market
capitalization
weighted
and
measures
the
performance
of
those
Russell
1000
®
Index
companies
with
relatively
higher
price-to-book
ratios
and
higher
forecasted
growth
rates.
Russell
1000
®
Index
is
market
capitalization
weighted
and
measures
the
performance
of
the
approximately
1,000
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
the
performance
of
those
Russell
1000
®
Index
companies
with
relatively
lower
price-to-book
ratios
and
lower
forecasted
growth
rates.
Russell
2000
®
Index
is
market
capitalization
weighted
and
measures
the
performance
of
the
approximately
2,000
smallest
companies
in
the
Russell
3000
®
Index
that
represent
a
small
amount
of
the
total
market
capitalization
of
the
Russell
3000
®
Index.
Russell
2000
®
Value
Index
is
market
capitalization
weighted
and
measures
the
performance
of
those
Russell
2000
®
Index
companies
with
relatively
lower
price-to-book
ratios
and
lower
forecasted
growth
rates.
Russell
2500
TM
Index
is
market
capitalization
weighted
and
measures
the
performance
of
the
approximately
2,500
smallest
companies
in
the
Russell
3000
®
Index
that
represent
a
modest
amount
of
the
Russell
3000
®
Index’s
total
market
capitalization.
Russell
3000
®
Index
is
market
capitalization
weighted
and
measures
the
performance
of
the
largest
3,000
U.S.
companies
representing
the
majority
of
the
U.S.
market’s
total
capitalization.
Russell
Midcap
®
Growth
Index
is
market
capitalization
weighted
and
measures
the
performance
of
those
Russell
Midcap
®
Index
companies
with
relatively
higher
price-to-book
ratios
and
higher
forecasted
growth
rates.
Russell
Midcap
®
Index
is
market
capitalization
weighted
and
measures
the
performance
of
the
approximately
800
smallest
companies
in
the
Russell
1000
®
Index
that
represent
a
modest
amount
of
the
Russell
1000
®
Index’s
total
market
capitalization.
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.
Franklin
Templeton
Variable
Insurance
Products
Trust
Board
Members
and
Officers
BOD-1
Annual
Report
The
name,
year
of
birth
and
address
of
the
officers
and
board
members,
as
well
as
their
affiliations,
positions
held
with
the
Trust,
principal
occupations
during
at
least
the
past
five
years
and
number
of
U.S.
registered
portfolios
overseen
in
the
Franklin
Templeton/Legg
Mason
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)
Trustee
Since
1988
119
Bar-S
Foods
(meat
packing
company)
(1981-2010).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
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).
Terrence
J.
Checki
(1945)
Trustee
Since
2017
119
Hess
Corporation
(exploration
of
oil
and
gas)
(2014-present).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
Years:
Member
of
the
Council
on
Foreign
Relations
(1996-present);
Member
of
the
National
Committee
on
U.S.-China
Relations
(1999-present);
member
of
the
board
of
trustees
of
the
Economic
Club
of
New
York
(2013-present);
member
of
the
board
of
trustees
of
the
Foreign
Policy
Association
(2005-present);
member
of
the
board
of
directors
of
Council
of
the
Americas
(2007-present)
and
the
Tallberg
Foundation
(2018-present);
and
formerly
,
Executive
Vice
President
of
the
Federal
Reserve
Bank
of
New
York
and
Head
of
its
Emerging
Markets
and
Internal
Affairs
Group
and
Member
of
Management
Committee
(1995-2014);
and
Visiting
Fellow
at
the
Council
on
Foreign
Relations
(2014).
Mary
C.
Choksi
(1950)
Trustee
Since
2014
120
Omnicom
Group
Inc.
(advertising
and
marketing
communications
services)
(2011-present)
and
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2017-present);
and
formerly
,
Avis
Budget
Group
Inc.
(car
rental)
(2007-2020).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Founder
and
Senior
Advisor,
Strategic
Investment
Group
(investment
management
group)
(2015-2017);
Founding
Partner
and
Senior
Managing
Director,
Strategic
Investment
Group
(1987-2015);
Founding
Partner
and
Managing
Director,
Emerging
Markets
Management
LLC
(investment
management
firm)
(1987-2011);
and
Loan
Officer/Senior
Loan
Officer/Senior
Pension
Investment
Officer,
World
Bank
Group
(international
financial
institution)
(1977-1987).
Franklin
Templeton
Variable
Insurance
Products
Trust
BOD-2
Annual
Report
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
Edith
E.
Holiday
(1952)
Lead
Independent
Trustee
Trustee
since
2005
and
Lead
Independent
Trustee
since
2019
120
Hess
Corporation
(exploration
of
oil
and
gas)
(1993-present),
Santander
Consumer
USA
Holdings,
Inc.
(consumer
finance)
(2016-present);
Santander
Holdings
USA
(holding
company)
(2019-present);
and
formerly
,
Canadian
National
Railway
(railroad)
(2001-2021),
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2004-
2021),
RTI
International
Metals,
Inc.
(manufacture
and
distribution
of
titanium)
(1999-2015)
and
H.J.
Heinz
Company
(processed
foods
and
allied
products)
(1994-2013).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
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)
Trustee
Since
2009
120
Boeing
Capital
Corporation
(aircraft
financing)
(2006-2010).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Counselor
and
Special
Advisor
to
the
CEO
and
Board
of
Directors
of
the
Coca-Cola
Company
(beverage
company)
(2021-present);
and
formerly
,
Counselor
and
Senior
Advisor
to
the
Chairman,
CEO,
and
Board
of
Directors,
of
The
Boeing
Company
(aerospace
company),
and
member
of
the
Executive
Council
(2019-2020);
Executive
Vice
President,
General
Counsel
and
member
of
the
Executive
Council,
The
Boeing
Company
(2006-2019);
and
Federal
Appeals
Court
Judge,
United
States
Court
of
Appeals
for
the
Fourth
Circuit
(1991-2006).
Larry
D.
Thompson
(1945)
Trustee
Since
2007
120
Graham
Holdings
Company
(education
and
media
organization)
(2011-2021);
The
Southern
Company
(energy
company)
(2014-2020;
previously
2010-
2012)
and
Cbeyond,
Inc.
(business
communications
provider)
(2010-
2012).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
Counsel,
Finch
McCranie,
LLP
(law
firm)
(2015-present);
John
A.
Sibley
Professor
of
Corporate
and
Business
Law,
University
of
Georgia
School
of
Law
(2015-present;
previously
2011-2012);
and
formerly
,
Independent
Compliance
Monitor
and
Auditor,
Volkswagen
AG
(manufacturer
of
automobiles
and
commercial
vehicles)
(2017-2020);
Executive
Vice
President
-
Government
Affairs,
General
Counsel
and
Corporate
Secretary,
PepsiCo,
Inc.
(consumer
products)
(2012-2014);
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).
Independent
Board
Members
(continued)
Franklin
Templeton
Variable
Insurance
Products
Trust
BOD-3
Annual
Report
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
Valerie
M.
Williams
(1956)
Trustee
Since
2021
111
Omnicom
Group,
Inc.
(advertising
and
marketing
communications
services)
(2016-present),
DTE
Energy
Co.
(gas
and
electric
utility)
(2018-present),
Devon
Energy
Corporation
(exploration
and
production
of
oil
and
gas)
(January
2021-present);
and
formerly
,
WPX
Energy,
Inc.
(exploration
and
production
of
oil
and
gas)
(2018-
2021).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Regional
Assurance
Managing
Partner,
Ernst
&
Young
LLP
(public
accounting)
(2005-2016),
various
roles
of
increasing
responsibility
at
Ernst
&
Young
(1981-2005).
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)
Chairman
of
the
Board
and
Trustee
Chairman
of
the
Board
since
January
2023
and
Trustee
since
2013
131
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Executive
Chairman,
Chairman
of
the
Board
and
Director,
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
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex;
Vice
Chairman,
Investment
Company
Institute;
and
formerly
,
Chief
Executive
Officer
(2013-2020)
and
President
(1994-2015)
Franklin
Resources,
Inc.
**Rupert
H.
Johnson,
Jr.
(1940)
Trustee
Since
1988
120
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
(Vice
Chairman),
Franklin
Resources,
Inc.;
Director,
Franklin
Advisers,
Inc.;
and
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Alison
E.
Baur
(1964)
Vice
President
Since
2012
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Deputy
General
Counsel,
Franklin
Templeton;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Breda
M.
Beckerle
(1958)
Chief
Compliance
Officer
Since
2020
Not
Applicable
Not
Applicable
280
Park
Avenue
New
York,
NY
10017
Principal
Occupation
During
at
Least
the
Past
5
Years:
Chief
Compliance
Officer,
Fiduciary
Investment
Management
International,
Inc.,
Franklin
Advisers,
Inc.,
Franklin
Mutual
Advisers,
LLC,
Franklin
Templeton
Institutional,
LLC;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Independent
Board
Members
(continued)
Franklin
Templeton
Variable
Insurance
Products
Trust
BOD-4
Annual
Report
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
Steven
J.
Gray
(1955)
Vice
President
and
Co-Secretary
Vice
President
since
2009
and
Co-Secretary
since
2019
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Assistant
Secretary,
Franklin
Distributors,
LLC;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Matthew
T.
Hinkle
(1971)
Chief
Executive
Officer
-
Finance
and
Administration
Since
2017
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Vice
President,
Franklin
Templeton
Services,
LLC;
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex;
and
formerly
,
Vice
President,
Global
Tax
(2012-April
2017)
and
Treasurer/Assistant
Treasurer,
Franklin
Templeton
(2009-2017).
Susan
Kerr
(1949)
Vice
President
-
AML
Compliance
Since
2021
Not
Applicable
Not
Applicable
620
Eighth
Avenue
New
York,
NY
10018
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Compliance
Analyst,
Franklin
Templeton;
Chief
Anti-Money
Laundering
Compliance
Officer,
Legg
Mason
&
Co.,
or
its
affiliates;
Anti
Money
Laundering
Compliance
Officer;
Senior
Compliance
Officer,
LMIS;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Christopher
Kings
(1974)
Chief
Financial
Officer,
Chief
Accounting
Officer
and
Treasurer
Since
January
2022
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Treasurer,
U.S.
Fund
Administration
&
Reporting;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Edward
D.
Perks
(1970)
President
and
Chief
Executive
Officer
-
Investment
Management
Since
2018
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
President
and
Director,
Franklin
Advisers,
Inc.;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Navid
J.
Tofigh
(1972)
Vice
President
Since
2015
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Lori
A.
Weber
(1964)
Vice
President
and
Co-Secretary
Vice
President
since
2011
and
Co-Secretary
since
2019
Not
Applicable
Not
Applicable
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Assistant
Secretary,
Franklin
Resources,
Inc.;
Vice
President
and
Secretary,
Templeton
Investment
Counsel,
LLC;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Interested
Board
Members
and
Officers
(continued)
Franklin
Templeton
Variable
Insurance
Products
Trust
BOD-5
Annual
Report
*We
base
the
number
of
portfolios
on
each
separate
series
of
the
U.S.
registered
investment
companies
within
the
Franklin
Templeton/Legg
Mason
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
an
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.
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
Mary
C.
Choksi
as
its
audit
committee
financial
expert.
The
Board
believes
that
Ms.
Choksi
qualifies
as
such
an
expert
in
view
of
her
extensive
business
background
and
experience.
She
served
as
a
director
of
Avis
Budget
Group,
Inc.
(2007-2020)
and
formerly,
Founder
and
Senior
Advisor,
Strategic
Investment
Group
(1987
to
2017).
Ms.
Choksi
has
been
a
Member
of
the
Fund’s
Audit
Committee
since
2014.
As
a
result
of
such
background
and
experience,
the
Board
believes
that
Ms.
Choksi
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.
Ms.
Choksi
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)
DIAL
BEN/342-5236
to
request
the
SAI.
Interested
Board
Members
and
Officers
(continued)
Franklin
Templeton
Variable
Insurance
Products
Trust
Shareholder
Information
SI-1
Annual
Report
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
Schedule
of
Investments
The
Trust
files
a
complete
schedule
of
investments
with
the
U.S.
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
for
each
fiscal
year
as
an
exhibit
to
its
report
on
Form
N-PORT.
Shareholders
may
view
the
filed
Form
N-PORT
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.
VIP5
A
02/23
©
2023
Franklin
Templeton
Investments.
All
rights
reserved.
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
help
ensure
we
provide
you
with
quality
service,
all
calls
to
and
from
our
service
areas
are
monitored
and/or
recorded.
Annual
Report
Franklin
Templeton
Variable
Insurance
Products
Trust
Investment
Manager
Fund
Administrator
Distributor
Franklin
Advisers,
Inc.
Franklin
Templeton
Services,
LLC
Franklin
Distributors,
LLC
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 13(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 Mary C. Choksi and she 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 $806,813 for the fiscal year ended December 31, 2022 and $782,449 for the fiscal year ended December 31, 2021.
(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, 2022 and $8,000 for the fiscal year ended December 31, 2021. The services for which these fees were paid included preparation of tax returns in relation to the liquidation of previously consolidated entities.
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 $289,850 for the fiscal year ended December 31, 2022 and $100,125 for the fiscal year ended December 31, 2021. The services for which these fees were paid included global access to tax platform International Tax View and tax compliance services related to year-end.
(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, 2022 and $7,312 for the fiscal year ended December 31, 2021. The services for which these fees were paid included review of materials provided to the fund Board in connection with the investment management contract renewal process.
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 not reported in paragraphs (a)-(c) of Item 4 were $525,076 for the fiscal year ended December 31, 2022 and $90,743 for the fiscal year ended December 31, 2021.The services for which these fees were paid included benchmarking services in connection with the ICI TA survey, professional fees in connection with determining the feasibility of a U.S. direct lending structure, compliance examination for Investment Advisor Act rule 206-4 (2), professional services relating to the readiness assessment over Greenhouse Gas Emissions and Energy, fees in connection with a license for accounting and business knowledge platform Viewpoint, fees in connection with a license for employee development tool ProEdge and professional fees in connection with SOC 1 Reports.
(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 $814,926 for the fiscal year ended December 31, 2022 and $206,180 for the fiscal year ended December 31, 2021.
(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.
(i) N/A
(j) N/A
Item 5. Audit Committee
of Listed Registrants.
N/AItem 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 provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, 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 control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.
Item 12
. Disclosure of Securities Lending Activities for Closed-End Management Investment Company. N/A
Item 13. Exhibits.
(a)(1) Code of Ethics
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer
(a)(2)(1) There were no written solicitations to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the Registrant to 10 or more persons.
(a)(2)(2) There was no change in the Registrant’s independent public accountant during the period covered by the report.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer
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\MATTHEW T. HINKLE______________________
Matthew T. Hinkle
Chief Executive Officer - Finance and Administration
Date February 27, 2023
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\MATTHEW T. HINKLE______________________
Matthew T. Hinkle
Chief Executive Officer - Finance and Administration
Date February 27, 2023
By S\CHRISTOPHER KINGS______________________
Christopher Kings
Chief Financial Officer, Chief Accounting Officer and Treasurer
Date February 27, 2023