UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Washington, DC 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-05583
Franklin Templeton Variable Insurance Products Trust
(Exact name of registrant as specified in charter)
One Franklin Parkway, San Mateo, CA 94403-1906
(Address of principal executive offices) (Zip code)
Craig S. Tyle, One Franklin Parkway, San Mateo, CA 94403-1906
(Name and address of agent for service)
Registrant's telephone number, including area code: (650)312-2000
Date of fiscal year end: 12/31
Date of reporting period: 6/30/21
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
.
Semiannual
Report
Franklin
Templeton
Variable
Insurance
Products
Trust
June
30,
2021
Not
FDIC
Insured
May
Lose
Value
No
Bank
Guarantee
MASTER
CLASS
-
5
Franklin
Templeton
Variable
Insurance
Products
Trust
Semiannual
Report
Table
of
Contents
Important
Notes
to
Performance
Information
...........
i
Fund
Summaries
Franklin
VolSmart
Allocation
VIP
Fund
............
FVA-1
*Prospectus
Supplement
....................
FVA-6
Index
Descriptions
..............................
I-1
Shareholder
Information
..........................
SI-1
*Not
part
of
the
semi
annual
report.
Retain
for
your
records
.
i
Semiannual
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
Semiannual
Report
Franklin
VolSmart
Allocation
VIP
Fund
This
semiannual
report
for
Franklin
VolSmart
Allocation
VIP
Fund
covers
the
period
ended
June
30,
2021
.
Class
5
Performance
Summary
as
of
June
30,
2021
The
Fund’s
Class
5
Shares
posted
a
+8.89
%
total
return*
for
the
six-month
period
ended
June
30,
2021.
*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.
The
Fund
has
an
expense
reduction
contractually
guaranteed
through
4/30/22.
Fund
investment
results
reflect
the
expense
reduction;
without
this
reduction,
the
results
would
have
been
lower.
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.
FVA-2
Semiannual
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
strategy
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.
Changes
in
the
financial
strength
of
a
bond
issuer
or
in
a
bond’s
credit
rating
may
affect
its
value.
Derivatives
involve
costs
and
can
create
economic
leverage
in
the
portfolio,
which
may
result
in
significant
volatility
and
cause
the
Fund
to
participate
in
losses
(as
well
as
gains)
in
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,
ETFs
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
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
*The
portfolio
composition
is
based
on
the
Statement
of
Investments
(SOI),
which
classifies
each
underlying
fund
into
a
broad
asset
class.
Performance
Overview
You
can
find
the
Fund’s
six-month
total
return
in
the
Performance
Summary.
For
comparison,
the
Fund’s
equity
benchmark,
the
Standard
&
Poor’s
®
500
Index
(S&P
500
®
),
posted
a
+15.25%
total
return,
while
the
Fund’s
fixed
income
benchmark,
the
Bloomberg
Barclays
U.S.
Aggregate
Bond
Index,
posted
a
-1.60%
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
allocation
of
the
Fund’s
portfolio,
posted
a
+8.47%
total
return
for
the
same
period.
2
Economic
and
Market
Overview
U.S.
equities,
as
measured
by
the
S&P
500,
posted
a
+15.25%
total
return
for
the
six
months
ended
June
30,
2021.
1
Stocks
benefited
from
the
continued
economic
recovery,
accommodative
monetary
policy,
additional
fiscal
stimulus
measures,
implementation
of
novel
coronavirus
(COVID-19)
vaccination
programs
and
easing
pandemic
restrictions.
As
many
businesses
reopened,
stimulus
payments
and
generally
high
household
savings
contributed
to
increased
consumer
spending.
The
progress
toward
a
bipartisan
infrastructure
bill
further
bolstered
investor
sentiment,
aiding
equities
to
reach
new
all-time
price
highs
toward
period-end.
The
U.S.
economic
recovery
accelerated
in
2021’s
first
quarter,
with
total
economic
output
nearly
reaching
pre-pandemic
levels,
as
the
lifting
of
many
COVID-19
Portfolio
Composition*
6/30/21
%
of
Total
Net
Assets
Common
Stocks
62.4%
Domestic
Fixed
Income
21.7%
Domestic
Hybrid
10.0%
Foreign
Equity
3.3%
Short-Term
Investments
&
Other
Net
Assets
2.6%
1.
Source:
Morningstar.
2.
Source:
FactSet.
The
Fund’s
Blended
Benchmark
was
calculated
internally
and
was
composed
of
60%
S&P
500,
30%
Bloomberg
Barclays
U.S.
Aggregate
Bond
Index
and
10%
Bloomberg
Barclays
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.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Statement
of
Investments
(SOI).
Franklin
VolSmart
Allocation
VIP
Fund
FVA-3
Semiannual
Report
restrictions
and
strong
consumer
spending
bolstered
growth.
The
inflation
rate
surged
during
the
period
amid
increased
demand
and
supply-chain
bottlenecks,
with
the
price
pressures
coming
largely
from
the
areas
particularly
impacted
by
the
shutdown,
such
as
used
vehicles,
airfares,
semiconductors
and
building
materials.
The
unemployment
rate
declined
from
6.7%
in
December
2020
to
5.9%
in
June
2021
as
job
openings
grew,
but
a
relative
lack
of
available
workers
fueled
wage
growth,
adding
to
some
investors’
inflation
concerns.
3
In
an
effort
to
support
the
economy,
the
U.S.
Federal
Reserve
(Fed)
kept
the
federal
funds
target
rate
at
a
record-low
range
of
0.00%–0.25%.
The
Fed
also
maintained
quantitative
easing
measures
aimed
at
ensuring
credit
flows
to
borrowers
and
providing
liquidity
to
credit
markets
with
open-ended
purchasing
of
government-backed
and
corporate
bonds.
In
its
June
2021
meeting
statement,
the
Fed
indicated
that
rising
inflation
largely
reflected
transitory
factors
and
it
would
monitor
incoming
information
and
adjust
its
monetary
policy
stance
as
needed
to
attain
its
employment
and
price
stability
goals.
The
U.S.
bond
market,
as
measured
by
the
Bloomberg
Barclays
U.S.
Aggregate
Bond
Index,
posted
a
-1.60%
total
return
for
the
six
months
ended
June
30,
2021.
1
As
the
economy
continued
to
recover
from
the
COVID-19
pandemic
and
the
inflation
rate
surged,
yields
(which
move
inversely
to
prices)
increased
for
most
bonds.
U.S.
Treasury
bonds,
as
measured
by
the
Bloomberg
Barclays
U.S.
Treasury
Index,
posted
a
-2.58%
total
return
for
the
six-month
period.
1
The
10-year
U.S.
Treasury
yield,
which
began
the
period
below
one
percent,
rose
notably
amid
many
investors’
increasing
inflation
expectations.
Mortgage-backed
securities
(MBS),
as
measured
by
the
Bloomberg
Barclays
MBS
Index,
posted
a
-0.77%
total
return
for
the
period,
as
low
interest
rates
led
to
accelerated
prepayments
from
mortgage
refinancing.
1
U.S.
corporate
bond
performance
varied
significantly
based
on
credit
rating,
reflecting
the
continued
recovery
of
credit
markets
following
the
onset
of
COVID-19.
Although
the
strengthening
economy
pressured
corporate
bonds
generally,
it
helped
temper
investor
concerns
about
credit
quality,
which
benefited
lower-rated
bonds.
In
this
environment,
high-yield
corporate
bonds,
as
represented
by
the
Bloomberg
Barclays
U.S.
Corporate
High
Yield
Bond
Index,
posted
a
+3.62%
return,
while
investment-grade
corporate
bonds,
as
represented
by
the
Bloomberg
Barclays
U.S.
Corporate
Bond
Index,
posted
a
-1.27%
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,
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
Asset
Allocation
The
Fund’s
cross-asset
allocation
positioning,
in
aggregate,
supported
relative
performance
as
the
portfolio’s
equity
position
remained
toward
the
upper
band
of
its
allowable
range.
The
overweight
exposure
to
equities
and
underweight
exposure
to
fixed
income
reflected
our
belief
that
as
COVID-19
vaccines
are
progressively
distributed
globally,
macroeconomic
conditions
should
continue
to
improve.
Within
equities,
the
Fund’s
portfolio
sold
into
strength
across
U.S.
markets,
and
we
began
to
build
a
position
in
non-U.S.
developed
market
equites.
Our
view
is
that
as
vaccine
distribution
accelerates
across
these
regions,
international
markets
should
benefit
from
the
uptick
in
economic
reopening.
We
believe
global
monetary
policy
will
remain
supportive
of
risk
assets,
but
we
remain
cognizant
that
pandemic-related
risks
may
return
to
the
forefront;
thus,
portfolio
hedges
continue
to
be
held
in
the
Fund.
3.
Source:
Bureau
of
Labor
Statistics.
Franklin
VolSmart
Allocation
VIP
Fund
FVA-4
Semiannual
Report
Equities
The
Franklin
Rising
Dividends
Strategy,
the
largest
underlying
equity
strategy
in
the
Fund,
detracted
from
performance
relative
to
the
S&P
500.
The
strategy’s
focus
on
dividend-paying
equities
was
generally
out
of
favor
during
the
period.
However,
the
strategy’s
focus
on
industrials
and
materials
benefited
performance
amid
the
sector
rotation.
The
Franklin
U.S.
Smart
Beta
Equity
Strategy
also
detracted
from
relative
results,
although
its
overweight
exposure
to
quality
and
style
value
factors
positively
contributed
to
performance.
Fixed
Income
The
Fund’s
fixed
income
exposures
contributed
to
relative
returns.
Franklin
Strategic
Income
Fund
–
Class
R6
and
Franklin
Low
Duration
Total
Return
Fund
–
Class
R6
outperformed
their
benchmark
indexes
due
to
their
respective
duration
positioning
and
sector
selection
across
corporate-credit
markets.
Multi-Asset
A
small
allocation
to
Franklin
Income
VIP
Fund
–
Class
1,
which
blends
equity
and
fixed
income
holdings,
generated
strong
positive
returns
for
the
period
that
outperformed
the
Bloomberg
Barclays
U.S.
Aggregate
Bond
Index
but
slightly
underperformed
the
S&P
500.
Equity
sector
decisions,
individual
issuer
selection
in
the
financials
and
energy
sectors,
and
high-yield
and
investment-grade
corporate
debt
allocations
contributed
to
performance.
Hedging
Overall,
hedging
strategies
had
a
neutral
to
slightly
positive
impact
on
Fund
performance.
Volatility
remained
low
during
the
period
and
approached
levels
logged
in
early
2020,
before
the
pandemic.
The
market
volatility
index-linked
hedge
strategy
incrementally
contributed
to
performance,
while
the
equity
volatility
hedge
strategy
detracted
slightly.
Positioning
During
the
six-month
reporting
period,
a
small
position
in
iShares
Core
MSCI
EAFE
ETF
was
initiated.
This
new
position
was
funded
with
gains
realized
from
the
strong
performance
of
U.S.
equities.
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
June
30,
2021,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Top
10
Holdings
6/30/21
%
of
Total
Net
Assets
a
a
Franklin
Liberty
U.S.
Core
Bond
ETF
13.7%
Franklin
Income
VIP
Fund,
Class
1
10.0%
Franklin
Low
Duration
Total
Return
Fund,
Class
R6
4.3%
Franklin
Strategic
Income
Fund,
Class
R6
3.7%
iShares
Core
MSCI
EAFE
ETF
3.3%
Microsoft
Corp.
3.2%
Accenture
plc,
Class
A
1.6%
Roper
Technologies,
Inc.
1.5%
Texas
Instruments,
Inc.
1.4%
Target
Corp.
1.3%
Class
5
Fund
Expenses
Franklin
VolSmart
Allocation
VIP
Fund
FVA-5
Semiannual
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
181/365
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
1/1/21
Ending
Account
Value
6/30/21
Fund-Level
Expenses
Paid
During
Period
1/1/21–6/30/21
1,2
Ending
Account
Value
6/30/21
Fund-Level
Expenses
Paid
During
Period
1/1/21–6/30/21
1,2
a
Net
Annualized
Expense
Ratio
2
5
$1,000
$1,088.90
$4.14
$1,020.83
$4.01
0.80%
FVA-6
Semiannual
Report
FVA
P2
P5
03/21
SUPPLEMENT
DATED
MARCH
1,
2021
TO
THE
PROSPECTUS
DATED
MAY
1,
2020
OF
FRANKLIN
VOLSMART
ALLOCATION
VIP
FUND
(a
series
of
Franklin
Templeton
Variable
Insurance
Products
Trust)
The
prospectuses
are
amended
as
follows:
I.
The
following
replaces
the
fourth
paragraph
under
the
“Fund
Summary(ies)
–
Franklin
VolSmart
Allocation
VIP
Fund
–
Principal
Investment
Strategies”
section
of
the
prospectuses:
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.
The
Fund
may
have
a
large
percentage
of
its
core
portfolio
assets
invested
in
underlying
funds
at
any
given
time;
however,
the
Fund
will
not
invest
more
than
25%
of
its
assets
in
any
one
underlying
fund
at
any
given
time.
The
Fund’s
investments
in
underlying
funds
will
change
over
time
depending
on
various
factors,
including
general
market
conditions.
II.
The
following
replaces
the
fourth
paragraph
under
the
“Fund
Details
–
Franklin
VolSmart
Allocation
VIP
Fund
–
Principal
Investment
Policies
and
Practices”
section
of
the
prospectuses:
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.
The
Fund
may
have
a
large
percentage
of
its
core
portfolio
assets
invested
in
underlying
funds
at
any
given
time;
however,
the
Fund
will
not
invest
more
than
25%
of
its
assets
in
any
one
underlying
fund
at
any
given
time.
The
Fund’s
investments
in
underlying
funds
will
change
over
time
depending
on
various
factors,
including
general
market
conditions.
III.
The
following
replaces
the
list
of
principal
investment
strategies
and
principal
underlying
funds
listed
under
the
seventh
paragraph
under
the
“Fund
Details
–
Franklin
VolSmart
Allocation
VIP
Fund
–
Principal
Investment
Policies
and
Practices
–
Core
Portfolio”
section
of
the
prospectuses:
Rising
Dividends
Strategy
(equity)
This
strategy
focuses
on
long-term
capital
appreciation
and
preservation
of
capital
by
investing
primarily
in
equity
securities
of
companies
that
the
investment
manager
believes
have
a
history
of
consistent
and
substantial
dividend
increases.
U.S.
Smart
Beta
Strategy
(equity)
Franklin’s
U.S.
Smart
Beta
strategy
seeks
to
provide
investment
results
that
closely
correspond
to
a
systematic,
rules-
based
proprietary
index
that
is
based
on
the
Russell
1000®
Index
using
a
methodology
developed
by
FTSE
Russell
and
Franklin
Templeton.
This
methodology
seeks
to
achieve
a
lower
level
of
risk
and
higher
risk-adjusted
performance
FVA-7
Semiannual
Report
Please
keep
this
supplement
with
your
prospectus
for
future
reference.
than
the
Russell
1000®
Index
over
the
long
term
by
applying
a
multifactor
selection
process,
which
is
designed
to
select
equity
securities
from
the
Russell
1000®
Index
that
have
favorable
exposure
to
four
investment
style
factors
–
quality,
value,
momentum
and
low
volatility.
Franklin
DynaTech
Fund
(equity)
The
fund
seeks
capital
appreciation
by
investing
primarily
in
equity
securities
of
companies
that
its
manager
believes
are
leaders
in
innovation,
take
advantage
of
new
technologies,
have
superior
management,
and
benefit
from
new
industry
conditions
in
the
dynamically
changing
global
economy.
Franklin
Growth
Fund
(equity)
The
fund
seeks
long-term
capital
appreciation
by
investing
substantially
in
the
equity
securities
of
companies
that
are
leaders
in
their
industries,
and
which
its
manager
believes
are
suitable
for
a
buy-and-hold
strategy.
Franklin
Low
Duration
Total
Return
Fund
(fixed-income)
The
fund
invests
primarily
in
debt
securities,
including
government
and
corporate
debt
securities,
mortgage-
and
asset-
backed
securities,
floating
rate
loans
and
debt
securities,
and
derivative
instruments
that
provide
exposure
to
such
securities
targeting
an
estimated
average
portfolio
duration
of
three
years
or
less.
Franklin
Strategic
Income
Fund
(fixed-income)
The
fund
seeks
to
earn
a
high
level
of
current
income
and,
secondarily,
seeks
capital
appreciation
over
the
long
term,
by
investing
at
least
65%
of
its
assets
in
U.S.
and
foreign
debt
securities,
including
those
in
emerging
markets,
and
derivative
instruments
that
provide
exposure
to
such
securities.
Western
Asset
Core
Bond
Fund
(fixed-income)
The
fund
invests
in
a
portfolio
of
fixed
income
securities
of
various
maturities
and,
under
normal
market
conditions,
will
invest
at
least
80%
of
its
net
assets
in
debt
and
fixed
income
securities.
The
fund
seeks
to
maintain
a
dollar-weighted
average
effective
duration
within
20%
of
the
average
duration
of
the
domestic
bond
market
as
a
whole.
Western
Asset
Core
Plus
Bond
Fund
(fixed-income)
The
fund
invests
in
a
portfolio
of
fixed
income
securities
of
various
maturities
and,
under
normal
market
conditions,
will
invest
at
least
80%
of
its
net
assets
in
debt
and
fixed
income
securities.
The
fund
seeks
to
maintain
a
dollar-weighted
average
effective
duration
within
30%
of
the
average
duration
of
the
domestic
bond
market
as
a
whole.
Franklin
Liberty
U.S.
Core
Bond
ETF
(fixed-income)
The
ETF
seeks
total
return
by
investing
in
bonds
of
U.S.
issuers,
including
government,
corporate
debt,
mortgage-
backed
and
asset-backed
securities.
Western
Asset
Short-Term
Bond
Fund
(fixed-income)
The
fund
invests
at
least
80%
of
its
assets
in
investment
grade
fixed
income
securities.
The
fund
normally
maintains
an
average
effective
maturity
of
not
more
than
three
years.
Franklin
U.S.
Government
Securities
Fund
(fixed-income)
The
fund
invests
at
least
80%
of
its
assets
in
U.S.
government
securities.
Franklin
Income
VIP
Fund
(multi-asset
class)
The
fund
seeks
income
by
selecting
investments
such
as
corporate,
foreign
and
U.S.
Treasury
bonds,
as
well
as
stocks
with
relatively
high
dividends.
Cash,
Cash
Equivalents
and
Money
Market
Securities
With
respect
to
its
cash
investments,
the
Fund
expects
to
hold
cash,
cash
equivalents
and
high
quality
money
market
securities,
including
U.S.
Government
securities,
U.S.
Government
agency
securities,
bank
obligations,
commercial
paper,
repurchase
agreements
and
affiliated
money
market
funds.
Franklin
Templeton
Variable
Insurance
Products
Trust
Financial
Highlights
Franklin
VolSmart
Allocation
VIP
Fund
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
FVA-8
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2020
2019
2018
2017
2016
Class
2
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$14.55
$12.60
$10.82
$11.67
$10.10
$9.68
Income
from
investment
operations
a
:
Net
investment
income
b,c
............
0.18
0.24
0.22
0.21
0.16
0.16
Net
realized
and
unrealized
gains
(losses)
1.14
1.86
1.70
(1.02)
1.41
0.28
Total
from
investment
operations
........
1.32
2.10
1.92
(0.81)
1.57
0.44
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.64)
(0.15)
—
(0.04)
—
(—)
d
Net
realized
gains
.................
(0.79)
—
(0.14)
—
—
(0.02)
Total
distributions
...................
(1.43)
(0.15)
(0.14)
(0.04)
—
(0.02)
Net
asset
value,
end
of
period
..........
$14.44
$14.55
$12.60
$10.82
$11.67
$10.10
Total
return
e
.......................
9.08%
16.85%
17.82%
(6.93)%
15.54%
4.39%
Ratios
to
average
net
assets
f
Expenses
before
waiver
and
payments
by
affiliates
g
..........................
0.87%
0.88%
1.12%
1.10%
1.14%
1.25%
Expenses
net
of
waiver
and
payments
by
affiliates
g
,h
.........................
0.65%
0.65%
0.90%
0.75%
0.73%
0.73%
Net
investment
income
...............
2.41%
1.85%
1.87%
1.85%
1.44%
1.50%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$44
$45
$39
$33
$36
$31
Portfolio
turnover
rate
................
23.94%
69.19%
4.99%
6.28%
5.69%
1.00%
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
Amount
rounds
to
less
than
$0.01
per
share.
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
0.10%
for
the
period
ended
June
30,
2021.
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.
Semiannual
Report
FVA-9
a
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2020
2019
2018
2017
2016
Class
5
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
period)
Net
asset
value,
beginning
of
period
.....
$14.52
$12.59
$10.80
$11.65
$10.07
$9.67
Income
from
investment
operations
a
:
Net
investment
income
b,c
............
0.17
0.23
0.23
0.22
0.17
0.16
Net
realized
and
unrealized
gains
(losses)
1.12
1.86
1.70
(1.01)
1.41
0.29
Total
from
investment
operations
........
1.29
2.09
1.93
(0.79)
1.58
0.45
Less
distributions
from:
Net
investment
income
and
net
foreign
currency
gains
....................
(0.62)
(0.16)
—
(0.06)
—
(0.03)
Net
realized
gains
.................
(0.79)
—
(0.14)
—
—
(0.02)
Total
distributions
...................
(1.41)
(0.16)
(0.14)
(0.06)
—
(0.05)
Net
asset
value,
end
of
period
..........
$14.40
$14.52
$12.59
$10.80
$11.65
$10.07
Total
return
d
.......................
8.89%
16.78%
17.95%
(6.85)%
15.69%
4.59%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
f
..........................
1.02%
1.03%
1.02%
1.00%
1.04%
1.15%
Expenses
net
of
waiver
and
payments
by
affiliates
f,g
.........................
0.80%
0.80%
0.80%
0.65%
0.63%
0.63%
Net
investment
income
...............
2.23%
1.70%
1.97%
1.95%
1.54%
1.60%
Supplemental
data
Net
assets,
end
of
period
(000’s)
........
$205,353
$195,818
$185,381
$171,173
$188,240
$124,581
Portfolio
turnover
rate
................
23.94%
69.19%
4.99%
6.28%
5.69%
1.00%
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.
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Does
not
include
expenses
of
the
Underlying
Funds
in
which
the
Fund
invests.
The
weighted
average
indirect
expenses
of
the
Underlying
Funds
was
0.10
%
for
the
period
ended
June
30,
2021.
g
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Templeton
Variable
Insurance
Products
Trust
Statement
of
Investments
(unaudited),
June
30,
2021
Franklin
VolSmart
Allocation
VIP
Fund
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
FVA-10
a
a
Shares
a
Value
a
Common
Stocks
62.4%
Aerospace
&
Defense
1.6%
BWX
Technologies,
Inc.
..............................................
370
$
21,504
General
Dynamics
Corp.
..............................................
4,200
790,692
Huntington
Ingalls
Industries,
Inc.
.......................................
381
80,296
Lockheed
Martin
Corp.
...............................................
1,505
569,417
Northrop
Grumman
Corp.
.............................................
829
301,283
Raytheon
Technologies
Corp.
..........................................
18,745
1,599,136
3,362,328
Air
Freight
&
Logistics
1.2%
CH
Robinson
Worldwide,
Inc.
..........................................
1,394
130,576
Expeditors
International
of
Washington,
Inc.
...............................
1,693
214,334
United
Parcel
Service,
Inc.,
B
..........................................
9,971
2,073,669
2,418,579
Auto
Components
0.0%
†
Gentex
Corp.
......................................................
2,642
87,424
Banks
0.6%
Associated
Banc-Corp.
...............................................
329
6,738
JPMorgan
Chase
&
Co.
...............................................
5,435
845,360
People's
United
Financial,
Inc.
..........................................
971
16,643
Wells
Fargo
&
Co.
...................................................
8,144
368,842
1,237,583
Beverages
1.3%
a
Boston
Beer
Co.,
Inc.
(The),
A
..........................................
38
38,790
Brown-Forman
Corp.,
A
...............................................
475
33,488
Brown-Forman
Corp.,
B
..............................................
967
72,467
Coca-Cola
Co.
(The)
.................................................
10,626
574,973
a
Monster
Beverage
Corp.
..............................................
3,358
306,753
PepsiCo,
Inc.
......................................................
10,575
1,566,898
2,593,369
Biotechnology
1.7%
AbbVie,
Inc.
.......................................................
11,079
1,247,939
Amgen,
Inc.
.......................................................
2,439
594,506
a
Biogen,
Inc.
.......................................................
1,539
532,909
a
Exelixis
,
Inc.
.......................................................
2,526
46,024
Gilead
Sciences,
Inc.
................................................
7,709
530,842
a
Horizon
Therapeutics
plc
..............................................
774
72,477
a
Regeneron
Pharmaceuticals,
Inc.
.......................................
546
304,963
a
Vertex
Pharmaceuticals,
Inc.
...........................................
1,057
213,123
3,542,783
Building
Products
0.8%
A
O
Smith
Corp.
....................................................
529
38,120
Allegion
plc
........................................................
470
65,471
Johnson
Controls
International
plc
.......................................
17,892
1,227,928
Lennox
International,
Inc.
.............................................
225
78,930
Trane
Technologies
plc
...............................................
526
96,858
a
Trex
Co.,
Inc.
......................................................
473
48,345
1,555,652
Capital
Markets
1.3%
Evercore
,
Inc.,
A
....................................................
152
21,397
FactSet
Research
Systems,
Inc.
........................................
390
130,888
Invesco
Ltd.
.......................................................
2,953
78,934
Jefferies
Financial
Group,
Inc.
..........................................
864
29,549
Franklin
Templeton
Variable
Insurance
Products
Trust
Statement
of
Investments
(unaudited)
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
FVA-11
a
a
Shares
a
Value
a
Common
Stocks
(continued)
Capital
Markets
(continued)
Lazard
Ltd.,
A
......................................................
1,050
$
47,512
MarketAxess
Holdings,
Inc.
............................................
369
171,065
Moody's
Corp.
......................................................
1,136
411,652
Morningstar,
Inc.
....................................................
180
46,280
Nasdaq,
Inc.
.......................................................
4,370
768,246
S&P
Global,
Inc.
....................................................
1,348
553,286
SEI
Investments
Co.
.................................................
997
61,784
T
Rowe
Price
Group,
Inc.
.............................................
1,242
245,879
2,566,472
Chemicals
3.7%
Air
Products
and
Chemicals,
Inc.
........................................
7,997
2,300,577
Albemarle
Corp.
....................................................
8,610
1,450,441
Celanese
Corp.
.....................................................
752
114,003
Eastman
Chemical
Co.
...............................................
1,027
119,902
Ecolab,
Inc.
........................................................
4,660
959,820
Huntsman
Corp.
....................................................
791
20,977
Linde
plc
..........................................................
7,300
2,110,430
LyondellBasell
Industries
NV,
A
.........................................
3,071
315,914
NewMarket
Corp.
...................................................
74
23,827
Sherwin-Williams
Co.
(The)
............................................
900
245,205
Valvoline,
Inc.
......................................................
1,145
37,167
7,698,263
Commercial
Services
&
Supplies
0.9%
Cintas
Corp.
.......................................................
3,984
1,521,888
a
Copart
,
Inc.
........................................................
1,983
261,419
Rollins,
Inc.
........................................................
2,311
79,036
1,862,343
Communications
Equipment
0.6%
a
Arista
Networks,
Inc.
.................................................
230
83,331
Cisco
Systems,
Inc.
.................................................
12,681
672,093
a
F5
Networks,
Inc.
...................................................
610
113,863
Motorola
Solutions,
Inc.
...............................................
1,548
335,684
1,204,971
Consumer
Finance
0.0%
†
Santander
Consumer
USA
Holdings,
Inc.
.................................
821
29,819
Containers
&
Packaging
0.1%
Ardagh
Group
SA
...................................................
38
932
Avery
Dennison
Corp.
................................................
332
69,799
International
Paper
Co.
...............................................
903
55,363
Packaging
Corp.
of
America
...........................................
819
110,909
Sonoco
Products
Co.
................................................
929
62,150
299,153
Distributors
0.1%
Pool
Corp.
........................................................
393
180,253
Diversified
Consumer
Services
0.0%
†
a
Grand
Canyon
Education,
Inc.
..........................................
180
16,195
H&R
Block,
Inc.
.....................................................
2,213
51,961
68,156
Diversified
Telecommunication
Services
0.5%
AT&T,
Inc.
.........................................................
18,990
546,532
Franklin
Templeton
Variable
Insurance
Products
Trust
Statement
of
Investments
(unaudited)
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
FVA-12
a
a
Shares
a
Value
a
Common
Stocks
(continued)
Diversified
Telecommunication
Services
(continued)
Lumen
Technologies,
Inc.
.............................................
2,434
$
33,078
Verizon
Communications,
Inc.
..........................................
9,065
507,912
1,087,522
Electric
Utilities
1.0%
Alliant
Energy
Corp.
.................................................
2,100
117,096
American
Electric
Power
Co.,
Inc.
.......................................
2,446
206,907
Evergy
,
Inc.
........................................................
1,613
97,474
Eversource
Energy
..................................................
2,721
218,333
Hawaiian
Electric
Industries,
Inc.
........................................
973
41,139
NextEra
Energy,
Inc.
.................................................
7,334
537,436
PPL
Corp.
.........................................................
5,487
153,471
Southern
Co.
(The)
..................................................
7,444
450,436
Xcel
Energy,
Inc.
....................................................
2,675
176,229
1,998,521
Electrical
Equipment
0.7%
Eaton
Corp.
plc
.....................................................
870
128,917
Emerson
Electric
Co.
................................................
5,603
539,233
a
Generac
Holdings,
Inc.
...............................................
216
89,672
GrafTech
International
Ltd.
............................................
415
4,822
Hubbell,
Inc.
.......................................................
118
22,047
nVent
Electric
plc
...................................................
12,600
393,624
Rockwell
Automation,
Inc.
.............................................
1,161
332,069
1,510,384
Electronic
Equipment,
Instruments
&
Components
0.0%
†
Vontier
Corp.
.......................................................
266
8,666
Entertainment
0.2%
Activision
Blizzard,
Inc.
...............................................
2,980
284,411
Electronic
Arts,
Inc.
..................................................
1,181
169,863
454,274
Equity
Real
Estate
Investment
Trusts
(REITs)
0.8%
CoreSite
Realty
Corp.
................................................
155
20,863
a
EPR
Properties
.....................................................
724
38,140
Extra
Space
Storage,
Inc.
.............................................
274
44,887
Gaming
and
Leisure
Properties,
Inc.
.....................................
16
741
Kimco
Realty
Corp.
..................................................
3,465
72,245
National
Retail
Properties,
Inc.
.........................................
1,679
78,712
Omega
Healthcare
Investors,
Inc.
.......................................
499
18,109
Public
Storage
.....................................................
1,705
512,676
Realty
Income
Corp.
.................................................
3,061
204,291
Simon
Property
Group,
Inc.
............................................
2,605
339,900
Spirit
Realty
Capital,
Inc.
..............................................
1,020
48,797
STORE
Capital
Corp.
................................................
1,948
67,226
VICI
Properties,
Inc.
.................................................
1,219
37,813
WP
Carey,
Inc.
.....................................................
1,400
104,468
1,588,868
Food
&
Staples
Retailing
1.3%
Casey's
General
Stores,
Inc.
...........................................
328
63,842
Costco
Wholesale
Corp.
..............................................
1,419
561,456
Kroger
Co.
(The)
....................................................
5,719
219,095
a
Sprouts
Farmers
Market,
Inc.
..........................................
946
23,508
Walgreens
Boots
Alliance,
Inc.
.........................................
6,322
332,600
Franklin
Templeton
Variable
Insurance
Products
Trust
Statement
of
Investments
(unaudited)
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
FVA-13
a
a
Shares
a
Value
a
Common
Stocks
(continued)
Food
&
Staples
Retailing
(continued)
Walmart,
Inc.
......................................................
10,017
$
1,412,597
2,613,098
Food
Products
1.1%
Campbell
Soup
Co.
..................................................
750
34,193
Flowers
Foods,
Inc.
..................................................
1,806
43,705
General
Mills,
Inc.
...................................................
6,099
371,612
Hershey
Co.
(The)
..................................................
1,648
287,049
Hormel
Foods
Corp.
.................................................
2,838
135,514
Ingredion,
Inc.
......................................................
610
55,205
J
M
Smucker
Co.
(The)
...............................................
886
114,799
Kellogg
Co.
........................................................
1,839
118,303
McCormick
&
Co.,
Inc.
...............................................
9,500
839,040
Tyson
Foods,
Inc.,
A
.................................................
2,695
198,783
2,198,203
Gas
Utilities
0.1%
Atmos
Energy
Corp.
.................................................
1,056
101,492
Health
Care
Equipment
&
Supplies
4.8%
Abbott
Laboratories
..................................................
11,860
1,374,930
a
ABIOMED,
Inc.
.....................................................
172
53,683
a
Align
Technology,
Inc.
................................................
346
211,406
Becton
Dickinson
and
Co.
.............................................
6,100
1,483,459
a
IDEXX
Laboratories,
Inc.
..............................................
229
144,625
Medtronic
plc
......................................................
14,200
1,762,646
a
Quidel
Corp.
.......................................................
88
11,274
ResMed
,
Inc.
......................................................
1,375
338,965
Stryker
Corp.
......................................................
9,200
2,389,516
West
Pharmaceutical
Services,
Inc.
......................................
5,809
2,086,012
9,856,516
Health
Care
Providers
&
Services
1.3%
Chemed
Corp.
.....................................................
138
65,481
CVS
Health
Corp.
...................................................
3,350
279,524
Humana,
Inc.
......................................................
508
224,902
Premier,
Inc.,
A
.....................................................
481
16,734
Quest
Diagnostics,
Inc.
...............................................
290
38,271
UnitedHealth
Group,
Inc.
..............................................
5,113
2,047,450
2,672,362
Health
Care
Technology
0.2%
Cerner
Corp.
.......................................................
2,664
208,218
a
Veeva
Systems,
Inc.,
A
...............................................
552
171,645
379,863
Hotels,
Restaurants
&
Leisure
1.1%
Domino's
Pizza,
Inc.
.................................................
425
198,258
McDonald's
Corp.
...................................................
7,498
1,731,963
Yum!
Brands,
Inc.
...................................................
3,334
383,510
2,313,731
Household
Durables
0.3%
DR
Horton,
Inc.
.....................................................
1,703
153,900
Garmin
Ltd.
........................................................
1,426
206,257
a
NVR,
Inc.
.........................................................
31
154,172
Franklin
Templeton
Variable
Insurance
Products
Trust
Statement
of
Investments
(unaudited)
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
FVA-14
a
a
Shares
a
Value
a
Common
Stocks
(continued)
Household
Durables
(continued)
PulteGroup,
Inc.
....................................................
1,732
$
94,515
608,844
Household
Products
1.6%
Church
&
Dwight
Co.,
Inc.
.............................................
2,437
207,681
Clorox
Co.
(The)
....................................................
1,438
258,710
Colgate-Palmolive
Co.
...............................................
15,437
1,255,800
Procter
&
Gamble
Co.
(The)
...........................................
11,203
1,511,621
3,233,812
Industrial
Conglomerates
3.2%
3M
Co.
...........................................................
3,133
622,308
Carlisle
Cos.,
Inc.
...................................................
2,860
547,347
Honeywell
International,
Inc.
...........................................
10,484
2,299,665
Roper
Technologies,
Inc.
..............................................
6,740
3,169,148
6,638,468
Insurance
0.4%
American
National
Group,
Inc.
..........................................
74
10,993
Erie
Indemnity
Co.,
A
.................................................
2,625
507,544
Progressive
Corp.
(The)
..............................................
2,301
225,981
744,518
Interactive
Media
&
Services
0.8%
a
Alphabet,
Inc.,
A
....................................................
155
378,478
a
Alphabet,
Inc.,
C
....................................................
151
378,454
a
Facebook,
Inc.,
A
...................................................
1,971
685,336
a
Match
Group,
Inc.
...................................................
831
133,999
1,576,267
Internet
&
Direct
Marketing
Retail
0.1%
eBay,
Inc.
.........................................................
1,473
103,419
Qurate
Retail,
Inc.,
A
.................................................
879
11,506
114,925
IT
Services
4.2%
Accenture
plc,
A
....................................................
11,104
3,273,348
a
Akamai
Technologies,
Inc.
.............................................
620
72,292
Amdocs
Ltd.
.......................................................
1,308
101,187
Automatic
Data
Processing,
Inc.
........................................
3,129
621,482
Broadridge
Financial
Solutions,
Inc.
......................................
1,164
188,021
Cognizant
Technology
Solutions
Corp.,
A
..................................
4,332
300,034
International
Business
Machines
Corp.
...................................
4,449
652,179
Jack
Henry
&
Associates,
Inc.
..........................................
775
126,720
Mastercard
,
Inc.,
A
..................................................
1,630
595,097
Paychex,
Inc.
......................................................
3,391
363,854
Visa,
Inc.,
A
........................................................
9,569
2,237,424
Western
Union
Co.
(The)
..............................................
978
22,465
8,554,103
Life
Sciences
Tools
&
Services
0.4%
a
Bio-Rad
Laboratories,
Inc.,
A
...........................................
48
30,926
a
Mettler
-Toledo
International,
Inc.
........................................
242
335,252
Thermo
Fisher
Scientific,
Inc.
..........................................
870
438,889
a
Waters
Corp.
......................................................
284
98,153
903,220
Franklin
Templeton
Variable
Insurance
Products
Trust
Statement
of
Investments
(unaudited)
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
FVA-15
a
a
Shares
a
Value
a
Common
Stocks
(continued)
Machinery
1.8%
Allison
Transmission
Holdings,
Inc.
......................................
853
$
33,898
Cummins,
Inc.
......................................................
1,475
359,620
Donaldson
Co.,
Inc.
.................................................
6,830
433,910
Dover
Corp.
.......................................................
6,944
1,045,766
Graco
,
Inc.
........................................................
1,584
119,909
Illinois
Tool
Works,
Inc.
...............................................
2,229
498,315
Lincoln
Electric
Holdings,
Inc.
..........................................
222
29,240
Otis
Worldwide
Corp.
................................................
1,533
125,354
PACCAR,
Inc.
......................................................
2,125
189,656
Pentair
plc
........................................................
11,000
742,390
Snap-on,
Inc.
......................................................
407
90,936
Toro
Co.
(The)
.....................................................
1,092
119,989
3,788,983
Media
0.4%
Comcast
Corp.,
A
...................................................
10,837
617,926
Interpublic
Group
of
Cos.,
Inc.
(The)
.....................................
3,120
101,369
Omnicom
Group,
Inc.
................................................
2,086
166,859
886,154
Metals
&
Mining
0.3%
Newmont
Corp.
.....................................................
3,025
191,725
Nucor
Corp.
.......................................................
1,896
181,883
Reliance
Steel
&
Aluminum
Co.
.........................................
341
51,457
Southern
Copper
Corp.
...............................................
177
11,385
Steel
Dynamics,
Inc.
.................................................
1,479
88,148
524,598
Multiline
Retail
1.5%
Dollar
General
Corp.
.................................................
2,313
500,510
Target
Corp.
.......................................................
11,018
2,663,491
3,164,001
Multi-Utilities
0.5%
Ameren
Corp.
......................................................
1,766
141,351
Consolidated
Edison,
Inc.
.............................................
2,942
211,000
Dominion
Energy,
Inc.
................................................
5,169
380,283
Public
Service
Enterprise
Group,
Inc.
....................................
4,798
286,633
WEC
Energy
Group,
Inc.
..............................................
1,199
106,651
1,125,918
Oil,
Gas
&
Consumable
Fuels
0.7%
Cabot
Oil
&
Gas
Corp.
...............................................
2,958
51,647
Chevron
Corp.
.....................................................
5,690
595,971
EOG
Resources,
Inc.
................................................
4,530
377,983
Exxon
Mobil
Corp.
...................................................
5,600
353,248
1,378,849
Personal
Products
0.3%
Estee
Lauder
Cos.,
Inc.
(The),
A
........................................
2,165
688,643
Nu
Skin
Enterprises,
Inc.,
A
............................................
470
26,626
715,269
Pharmaceuticals
2.5%
Bristol-Myers
Squibb
Co.
..............................................
8,789
587,281
Eli
Lilly
&
Co.
......................................................
3,756
862,077
Johnson
&
Johnson
.................................................
10,860
1,789,076
Franklin
Templeton
Variable
Insurance
Products
Trust
Statement
of
Investments
(unaudited)
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
FVA-16
a
a
Shares
a
Value
a
Common
Stocks
(continued)
Pharmaceuticals
(continued)
Merck
&
Co.,
Inc.
...................................................
6,722
$
522,770
a
Organon
&
Co.
.....................................................
671
20,305
Pfizer,
Inc.
.........................................................
26,509
1,038,092
Zoetis,
Inc.
........................................................
1,843
343,462
5,163,063
Professional
Services
0.2%
Booz
Allen
Hamilton
Holding
Corp.
......................................
923
78,621
a
FTI
Consulting,
Inc.
..................................................
131
17,896
Robert
Half
International,
Inc.
..........................................
1,297
115,394
Verisk
Analytics,
Inc.
.................................................
607
106,055
317,966
Road
&
Rail
0.9%
JB
Hunt
Transport
Services,
Inc.
........................................
840
136,878
Landstar
System,
Inc.
................................................
372
58,783
Norfolk
Southern
Corp.
...............................................
3,400
902,394
Old
Dominion
Freight
Line,
Inc.
.........................................
572
145,174
Schneider
National,
Inc.,
B
............................................
225
4,898
Union
Pacific
Corp.
..................................................
2,655
583,914
1,832,041
Semiconductors
&
Semiconductor
Equipment
5.1%
Analog
Devices,
Inc.
.................................................
13,014
2,240,490
Applied
Materials,
Inc.
................................................
6,508
926,739
a
Cirrus
Logic,
Inc.
....................................................
216
18,386
Intel
Corp.
.........................................................
11,408
640,445
KLA
Corp.
.........................................................
1,495
484,694
Lam
Research
Corp.
.................................................
1,185
771,080
Maxim
Integrated
Products,
Inc.
........................................
2,708
285,315
Monolithic
Power
Systems,
Inc.
.........................................
180
67,221
NVIDIA
Corp.
......................................................
1,001
800,900
QUALCOMM,
Inc.
...................................................
3,678
525,697
Skyworks
Solutions,
Inc.
..............................................
1,851
354,929
Teradyne,
Inc.
......................................................
366
49,029
Texas
Instruments,
Inc.
...............................................
15,375
2,956,613
Xilinx,
Inc.
.........................................................
2,549
368,687
10,490,225
Software
4.5%
a
Adobe,
Inc.
........................................................
1,136
665,287
a
Aspen
Technology,
Inc.
...............................................
519
71,383
a
Cadence
Design
Systems,
Inc.
.........................................
2,001
273,777
Citrix
Systems,
Inc.
..................................................
886
103,901
a
Fair
Isaac
Corp.
....................................................
106
53,284
a
Fortinet,
Inc.
.......................................................
504
120,048
Intuit,
Inc.
.........................................................
1,548
758,783
Microsoft
Corp.
.....................................................
24,072
6,521,105
Oracle
Corp.
.......................................................
7,098
552,508
a
Tyler
Technologies,
Inc.
...............................................
154
69,665
a
VMware,
Inc.,
A
.....................................................
281
44,952
9,234,693
Specialty
Retail
2.5%
a
AutoZone,
Inc.
.....................................................
194
289,491
Best
Buy
Co.,
Inc.
...................................................
2,386
274,342
Foot
Locker,
Inc.
....................................................
1,184
72,970
Franklin
Templeton
Variable
Insurance
Products
Trust
Statement
of
Investments
(unaudited)
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
FVA-17
a
a
Shares
a
Value
a
Common
Stocks
(continued)
Specialty
Retail
(continued)
Lowe's
Cos.,
Inc.
....................................................
7,200
$
1,396,584
a
O'Reilly
Automotive,
Inc.
..............................................
720
407,671
Ross
Stores,
Inc.
...................................................
13,386
1,659,864
TJX
Cos.,
Inc.
(The)
.................................................
8,542
575,902
Tractor
Supply
Co.
..................................................
1,196
222,528
Williams-Sonoma,
Inc.
...............................................
831
132,669
5,032,021
Technology
Hardware,
Storage
&
Peripherals
0.7%
Apple,
Inc.
........................................................
4,471
612,348
a
Dell
Technologies,
Inc.,
C
.............................................
599
59,702
HP,
Inc.
...........................................................
15,691
473,711
NetApp,
Inc.
.......................................................
2,168
177,386
Xerox
Holdings
Corp.
................................................
667
15,668
1,338,815
Textiles,
Apparel
&
Luxury
Goods
1.3%
Carter's,
Inc.
.......................................................
401
41,371
Hanesbrands,
Inc.
...................................................
2,244
41,895
a
Lululemon
Athletica
,
Inc.
..............................................
1,105
403,292
NIKE,
Inc.,
B
.......................................................
14,512
2,241,959
2,728,517
Tobacco
0.6%
Altria
Group,
Inc.
....................................................
12,523
597,097
Philip
Morris
International,
Inc.
.........................................
7,276
721,124
1,318,221
Trading
Companies
&
Distributors
0.6%
Fastenal
Co.
.......................................................
6,078
316,056
MSC
Industrial
Direct
Co.,
Inc.,
A
........................................
417
37,418
Watsco
,
Inc.
.......................................................
294
84,272
WW
Grainger,
Inc.
...................................................
2,010
880,380
1,318,126
Total
Common
Stocks
(Cost
$71,354,332)
......................................
128,222,265
a
Investments
In
Underlying
Funds
and
Exchange
Traded
Funds
35.0%
Domestic
Fixed
Income
21.7%
b
Franklin
Liberty
U.S.
Core
Bond
ETF
.....................................
1,105,450
28,200,030
b
Franklin
Low
Duration
Total
Return
Fund,
Class
R6
..........................
910,077
8,800,441
b
Franklin
Strategic
Income
Fund,
Class
R6
.................................
790,794
7,536,267
44,536,738
Domestic
Hybrid
10.0%
b
Franklin
Income
VIP
Fund,
Class
1
......................................
1,240,010
20,534,571
Foreign
Equity
3.3%
iShares
Core
MSCI
EAFE
ETF
.........................................
91,662
6,861,817
Total
Investments
In
Underlying
Funds
and
Exchange
Traded
Funds
(Cost
$72,139,479)
................................................................
71,933,126
Total
Long
Term
Investments
(Cost
$143,493,811)
...............................
200,155,391
a
a
a
a
a
Franklin
Templeton
Variable
Insurance
Products
Trust
Statement
of
Investments
(unaudited)
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
FVA-18
Short
Term
Investments
2.7%
a
a
Shares
a
Value
a
Money
Market
Funds
2.7%
b,c
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
...................
5,528,753
$
5,528,753
Total
Money
Market
Funds
(Cost
$5,528,753)
...................................
5,528,753
Total
Short
Term
Investments
(Cost
$5,528,753
)
.................................
5,528,753
a
Total
Investments
(Cost
$149,022,564)
100.1%
..................................
$205,684,144
Other
Assets,
less
Liabilities
(0.1)%
...........................................
(287,053)
Net
Assets
100.0%
...........................................................
$205,397,091
†
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
Statement
of
Investments
(unaudited)
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
FVA-19
At
June
30,
2021,
the
Fund
had
the
following total
return swap
contracts
outstanding.
See
Note
1(c).
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
8/31/21
4,000,000
$
(32)
Total
Return
Swap
Contracts
....................................................................
$(32)
*
In
U.S.
dollars
unless
otherwise
indicated.
See
Note 8 regarding
other
derivative
information.
See
A
bbreviations
on
page
FVA-
31
.
Franklin
Templeton
Variable
Insurance
Products
Trust
Financial
Statements
Statement
of
Assets
and
Liabilities
June
30,
2021
(unaudited)
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
FVA-20
Franklin
VolSmart
Allocation
VIP
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
...................................................................
$78,338,137
Cost
-
Non-controlled
affiliates
(Note
3e
)
........................................................
70,684,427
Value
-
Unaffiliated
issuers
..................................................................
$135,084,082
Value
-
Non-controlled
affiliates
(Note
3e
)
.......................................................
70,600,062
Cash
....................................................................................
25,089
Receivables:
Capital
shares
sold
........................................................................
17,097
Dividends
...............................................................................
158,931
Total
assets
..........................................................................
205,885,261
Liabilities:
Payables:
Investment
securities
purchased
..............................................................
23,650
Capital
shares
redeemed
...................................................................
303,835
Management
fees
.........................................................................
97,940
Distribution
fees
..........................................................................
25,063
Unrealized
depreciation
on
OTC
swap
contracts
....................................................
32
Accrued
expenses
and
other
liabilities
...........................................................
37,650
Total
liabilities
.........................................................................
488,170
Net
assets,
at
value
.................................................................
$205,397,091
Net
assets
consist
of:
Paid-in
capital
.............................................................................
$139,676,904
Total
distributable
earnings
(losses)
.............................................................
65,720,187
Net
assets,
at
value
.................................................................
$205,397,091
Franklin
VolSmart
Allocation
VIP
Fund
Class
2:
Net
assets,
at
value
.......................................................................
$44,205
Shares
outstanding
........................................................................
3,061
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$14.44
Class
5:
Net
assets,
at
value
.......................................................................
$205,352,886
Shares
outstanding
........................................................................
14,258,841
Net
asset
value
and
maximum
offering
price
per
share
.............................................
$14.40
Franklin
Templeton
Variable
Insurance
Products
Trust
Financial
Statements
Statement
of
Operations
for
the
six
months
ended
June
30,
2021
(unaudited)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Semiannual
Report
FVA-21
Franklin
VolSmart
Allocation
VIP
Fund
Investment
income:
Dividends:
(net
of
foreign
taxes
of
$2)
Unaffiliated
issuers
........................................................................
$1,254,798
Non-controlled
affiliates
(
Note
3e
)
.............................................................
1,757,509
Total
investment
income
...................................................................
3,012,307
Expenses:
Management
fees
(Note
3
a
)
...................................................................
795,983
Distribution
fees:
(Note
3c
)
Class
5
................................................................................
149,213
Custodian
fees
(Note
4
)
......................................................................
661
Reports
to
shareholders
......................................................................
9,948
Professional
fees
...........................................................................
47,038
Trustees'
fees
and
expenses
..................................................................
912
Other
....................................................................................
7,547
Total
expenses
.........................................................................
1,011,302
Expense
reductions
(Note
4
)
...............................................................
(248)
Expenses
waived/paid
by
affiliates
(Note
3e
and
3f)
..............................................
(215,063)
Net
expenses
.........................................................................
795,991
Net
investment
income
................................................................
2,216,316
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
Unaffiliated
issuers
......................................................................
7,493,023
Non-controlled
affiliates
(
Note
3e
)
...........................................................
1,648,657
Futures
contracts
.........................................................................
(1,524,228)
Swap
contracts
...........................................................................
26,085
Net
realized
gain
(loss)
..................................................................
7,643,537
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
......................................................................
8,370,676
Non-controlled
affiliates
(
Note
3e
)
...........................................................
(1,405,874)
Futures
contracts
.........................................................................
325,338
Swap
contracts
...........................................................................
448
Net
change
in
unrealized
appreciation
(depreciation)
............................................
7,290,588
Net
realized
and
unrealized
gain
(loss)
............................................................
14,934,125
Net
increase
(decrease)
in
net
assets
resulting
from
operations
..........................................
$17,150,441
Franklin
Templeton
Variable
Insurance
Products
Trust
Financial
Statements
Statements
of
Changes
in
Net
Assets
Semiannual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
FVA-22
Franklin
VolSmart
Allocation
VIP
Fund
Six
Months
Ended
June
30,
2021
(unaudited)
Year
Ended
December
31,
2020
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
.................................................
$2,216,316
$3,086,186
Net
realized
gain
(loss)
.................................................
7,643,537
15,170,163
Net
change
in
unrealized
appreciation
(depreciation)
...........................
7,290,588
9,681,207
Net
increase
(decrease)
in
net
assets
resulting
from
operations
................
17,150,441
27,937,556
Distributions
to
shareholders:
Class
2
.............................................................
(4,360)
(470)
Class
5
.............................................................
(18,228,062)
(2,132,195)
Total
distributions
to
shareholders
..........................................
(18,232,422)
(2,132,665)
Capital
share
transactions:
(Note
2
)
Class
5
.............................................................
10,616,659
(15,361,900)
Total
capital
share
transactions
............................................
10,616,659
(15,361,900)
Net
increase
(decrease)
in
net
assets
...................................
9,534,678
10,442,991
Net
assets:
Beginning
of
period
.....................................................
195,862,413
185,419,422
End
of
period
..........................................................
$205,397,091
$195,862,413
Franklin
Templeton
Variable
Insurance
Products
Trust
FVA-23
Semiannual
Report
Notes
to
Financial
Statements
(unaudited)
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
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP).
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
June
30,
2021,
98.15%
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
two
classes
of
shares:
Class
2
and
Class
5.
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 Fund's
administrator
has
responsibility
for
oversight
of
valuation,
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
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,
book
values,
and
other
relevant
information
for
the
investment
to
determine
the
fair
value
of
the
investment.
An
income-based
valuation
approach
may
also
be
used
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
to
calculate
fair
value.
Discounts
may
also
be
applied
due
to
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
Due
to
the
inherent
uncertainty
of
valuations
of
such
investments,
the
fair
values
may
differ
significantly
from
the
values
that
would
have
been
used
had
an
active
market
existed.
Franklin
Templeton
Variable
Insurance
Products
Trust
Notes
to
Financial
Statements
(unaudited)
FVA-24
Semiannual
Report
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
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
securities
to
the
latest
indications
of
fair
value
at
4
p.m.
Eastern
time.
At
June
30,
2021,
certain
securities
may
have
been
fair
valued
using
these
procedures,
in
which
case
the
securities
were
categorized
as
Level
2
inputs
within
the
fair
value
hierarchy
(referred
to
as
“market
level
fair
value”).
See
the
Fair
Value
Measurements
note
for
more
information.
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
(unaudited)
FVA-25
Semiannual
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
June
30,
2021, the
Fund
had
OTC
derivatives
in
a
net
liability
position
of
$32.
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
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
8
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
June
30,
2021,
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
(unaudited)
FVA-26
Semiannual
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
(unaudited)
FVA-27
Semiannual
Report
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
2.
Shares
of
Beneficial
Interest
At
June
30,
2021,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
During
the
period ended
June
30,
2021
and
the
year
ended
December
31,
2020,
there
were
no
transactions
of
the
Fund’s
Class
2
shares.
Transactions
in
the
Fund's
Class
5
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
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.
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.
Six
Months
Ended
June
30,
2021
Year
Ended
December
31,
2020
Shares
Amount
Shares
Amount
Class
5
Shares:
Shares
sold
...................................
697,703
$10,319,473
1,955,432
$26,179,712
Shares
issued
in
reinvestment
of
distributions
..........
1,272,021
18,228,062
165,415
2,132,195
Shares
redeemed
...............................
(1,193,064)
(17,930,876)
(3,368,455)
(43,673,807)
Net
increase
(decrease)
..........................
776,660
$10,616,659
(1,247,608)
$(15,361,900)
Subsidiary
Affiliation
Franklin
Advisers,
Inc.
(Advisers)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Templeton
Distributors,
LLC
(Distributors)
(formerly
Franklin
Templeton
Distributors,
Inc.)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Franklin
Templeton
Variable
Insurance
Products
Trust
Notes
to
Financial
Statements
(unaudited)
FVA-28
Semiannual
Report
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
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
period
ended
June
30,
2021,
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
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,
2022.
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
period
ended
June
30,
2021,
the
custodian
fees
were
reduced
as
noted
in
the
Statement
of
Operations.
aa
Value
at
Beginning
of
Period
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Period
Number
of
Shares
Held
at
End
of
Period
Dividend
Income
a
a
a
a
a
a
a
a
a
Franklin
VolSmart
Allocation
VIP
Fund
Non-Controlled
Affiliates
Franklin
Income
Fund,
Class
R6
.
$
15,594,859
$
4,138,736
$
(20,664,426)
$
1,750,536
$
(819,705)
$
—
a
—
$
218,735
Franklin
Income
VIP
Fund,
Class
1
—
21,443,624
(1,000,000)
16,110
74,837
20,534,571
1,240,010
951,401
Franklin
Liberty
U.S.
Core
Bond
ETF
....................
26,945,614
3,996,383
(2,000,602)
(93,824)
(647,541)
28,200,030
1,105,450
336,749
Franklin
Low
Duration
Total
Return
Fund,
Class
R6
............
6,591,183
4,189,954
(1,960,000)
(4,045)
(16,651)
8,800,441
910,077
90,449
Franklin
Strategic
Income
Fund,
Class
R6
................
6,368,172
4,160,029
(2,975,000)
(20,120)
3,186
7,536,267
790,794
160,030
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
0.01%
.......
3,563,810
19,635,641
(17,670,698)
—
—
5,528,753
5,528,753
145
Total
Non-Controlled
Affiliates
$59,063,638
$57,564,367
$(46,270,726)
$
1,648,657
$
(1,405,874)
$70,600,062
$
1,757,509
Total
Affiliated
Securities
....
$59,063,638
$57,564,367
$(46,270,726)
$1,648,657
$(1,405,874)
$70,600,062
$1,757,509
a
As
of
June
30,
2021,
no
longer
held
by
the
fund.
3.Transactions
with
Affiliates
(continued)
Franklin
Templeton
Variable
Insurance
Products
Trust
Notes
to
Financial
Statements
(unaudited)
FVA-29
Semiannual
Report
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
5.
Income
Taxes
At
June
30,
2021,
the
cost
of
investments
and
net
unrealized
appreciation
(depreciation)
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
swaps,
short
term
capital
gains
distributions
from
Underlying
Funds
and
corporate
actions.
6.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities)
for
the
period
ended
June
30,
2021,
aggregated
$46,714,190
and
$53,383,385,
respectively.
7.
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.
8.
Other
Derivative
Information
At
June
30,
2021,
investments
in
derivative
contracts
are
reflected
in
the
Statement of
Assets
and
Liabilities
as
follows:
For
the
period
ended
June
30,
2021,
the
effect
of
derivative
contracts
in
the
Statement
of
Operations
was
as
follows:
Cost
of
investments
..........................................................................
$149,312,865
Unrealized
appreciation
........................................................................
$57,720,077
Unrealized
depreciation
........................................................................
(1,348,830)
Net
unrealized
appreciation
(depreciation)
..........................................................
$56,371,247
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
...........
Unrealized
appreciation
on
OTC
swap
contracts
$
—
Unrealized
depreciation
on
OTC
swap
contracts
$
32
Total
....................
$—
$32
Franklin
Templeton
Variable
Insurance
Products
Trust
Notes
to
Financial
Statements
(unaudited)
FVA-30
Semiannual
Report
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
For
the
period
ended
June
30,
2021,
the
average
month
end
notional
amount
of
futures
contracts
and
swap
contracts
represented
$7,492,090
and
$3,642,857,
respectively.
See
Note
1(c) regarding
derivative
financial
instruments.
9.
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
matures
on
February
4,
2022.
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.
Under
the
terms
of
the
Global
Credit
Facility,
the
Fund
shall,
in
addition
to
interest
charged
on
any
borrowings
made
by
the
Fund
and
other
costs
incurred
by
the
Fund,
pay
its
share
of
fees
and
expenses
incurred
in
connection
with
the
implementation
and
maintenance
of
the
Global
Credit
Facility,
based
upon
its
relative
share
of
the
aggregate
net
assets
of
all
of
the
Borrowers,
including
an
annual
commitment
fee
of
0.15%
based
upon
the
unused
portion
of
the
Global
Credit
Facility.
These
fees
are
reflected
in
other
expenses
in
the
Statement
of
Operations.
During
the
period
ended
June
30,
2021,
the Fund
did
not
use
the
Global
Credit
Facility.
10.
Fair
Value
Measurements
The
Fund
follows
a
fair
value
hierarchy
that
distinguishes
between
market
data
obtained
from
independent
sources
(observable
inputs)
and
the
Fund's
own
market
assumptions
(unobservable
inputs).
These
inputs
are
used
in
determining
the
value
of
the
Fund's financial
instruments
and
are
summarized
in
the
following
fair
value
hierarchy:
Level
1
–
quoted
prices
in
active
markets
for
identical
financial
instruments
Level
2
–
other
significant
observable
inputs
(including
quoted
prices
for
similar
financial
instruments,
interest
rates,
prepayment
speed,
credit
risk,
etc.)
Level
3
–
significant
unobservable
inputs
(including
the
Fund's
own
assumptions
in
determining
the
fair
value
of
financial
instruments)
The
input
levels
are
not
necessarily
an
indication
of
the
risk
or
liquidity
associated
with
financial
instruments
at
that
level.
A
summary
of
inputs
used
as
of
June
30,
2021,
in
valuing
the
Fund's assets
and
liabilities
carried
at
fair
value,
is
as
follows:
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Operations
Location
Net
Realized
Gain
(Loss)
for
the
Period
Statement
of
Operations
Location
Net
Change
in
Unrealized
Appreciation
(Depreciation)
for
the
Period
Franklin
VolSmart
Allocation
VIP
Fund
Net
realized
gain
(loss)
from:
Net
change
in
unrealized
appreciation
(depreciation)
on:
Equity
Contracts
..............
Futures
contracts
$(1,524,228)
Futures
contracts
$325,338
Swap
contracts
26,085
Swap
contracts
448
Total
.......................
$(1,498,143)
$325,786
8.
Other
Derivative
Information
(continued)
Franklin
Templeton
Variable
Insurance
Products
Trust
Notes
to
Financial
Statements
(unaudited)
FVA-31
Semiannual
Report
Franklin
VolSmart
Allocation
VIP
Fund
(continued)
11.
New
Accounting
Pronouncements
In
March
2020,
the
Financial
Accounting
Standards
Board
(FASB)
issued
Accounting
Standards
Update
(ASU)
No.
2020-04,
Reference
Rate
Reform
(Topic
848)
–
Facilitation
of
the
Effects
of
Reference
Rate
Reform
on
Financial
Reporting.
In
January
2021,
the
FASB
issued
ASU
No.
2021-01,
with
further
amendments
to
Topic
848.
The
amendments
in
the
ASUs
provide
optional
temporary
accounting
recognition
and financial
reporting
relief
from
the
effect
of
certain
types
of
contract
modifications
due
to
the
planned
discontinuation
of
the
London
Interbank
Offered
Rate
(LIBOR)
and
other
interbank-offered
based
reference
rates
as
of
the
end
of
2021
and
2023. The
ASUs
are
effective
for
certain
reference
rate-related
contract
modifications
that
occur
during
the
period
March
12,
2020
through
December
31,
2022.
Management
has
reviewed
the
requirements
and
believes
the
adoption
of
these
ASUs
will
not
have
a
material
impact
on
the
financial
statements.
12.
Subsequent
Events
The
Fund
has
evaluated
subsequent
events
through
the
issuance
of
the financial
statements
and
determined
that
no
events
have
occurred
that
require
disclosure.
Abbreviations
Level
1
Level
2
Level
3
Total
Franklin
VolSmart
Allocation
VIP
Fund
Assets:
Investments
in
Securities:
a
Common
Stocks
........................
$
128,222,265
$
—
$
—
$
128,222,265
Management
Investment
Companies
.........
71,933,126
—
—
71,933,126
Short
Term
Investments
...................
5,528,753
—
—
5,528,753
Total
Investments
in
Securities
...........
$205,684,144
$—
$—
$205,684,144
Liabilities:
Other
Financial
Instruments:
Swap
contracts
..........................
$
—
$
32
$
—
$
32
$—
$—
$—
$—
a
For
detailed
categories,
see
the
accompanying
Statement
of
Investments.
Counterparty
BZWS
Barclays
Bank
plc
Selected
Portfolio
ETF
Exchange-Traded
Fund
VIX
Market
Volatility
Index
10.
Fair
Value
Measurements
(continued)
Franklin
Templeton
Variable
Insurance
Products
Trust
Index
Descriptions
I-1
Semiannual
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
Barclays
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.
Bloomberg
Barclays
U.S.
Aggregate
Bond
Index
measures
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
Barclays
U.S.
Corporate
Bond
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
Barclays
U.S.
Corporate
High
Yield
Bond
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,
Fitch
and
Standard
&
Poor’s
is
Ba1/BB+/BB+
or
below.
Bonds
from
issuers
with
an
emerging
markets
(EM)
country
of
risk,
based
on
Barclays
EM
country
definition,
are
excluded.
Bloomberg
Barclays
U.S.
Government
-
Intermediate
Index
is
the
intermediate
component
of
the
Barclays
U.S.
Government
Index,
which
includes
public
obligations
of
the
U.S.
Treasury
with
at
least
one
year
to
final
maturity
and
publicly
issued
debt
of
U.S.
government
agencies,
quasi-federal
corporations,
and
corporate
or
foreign
debt
guaranteed
by
the
U.S.
government.
Bloomberg
Barclays
U.S.
High
Yield
Very
Liquid
Index
is
a
component
of
the
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
Barclays
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.
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
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.
Lipper
Multi-Sector
Income
Funds
Classification
Average
is
calculated
by
averaging
the
total
returns
of
all
funds
within
the
Lipper
Multi-Sector
Income
Funds
Classification
in
the
Lipper
Open-End
underlying
funds
universe.
Lipper
Multi-Sector
Income
Funds
are
defined
as
funds
that
seek
current
income
by
allocating
assets
among
different
fixed
income
securities
sectors
(not
primarily
in
one
sector
except
for
defensive
purposes),
including
U.S.
and
foreign
governments,
with
a
significant
portion
rated
below
investment
grade.
For
the
six-month
period
ended
6/30/21,
there
were
375
funds
in
this
category.
Lipper
calculations
do
not
include
contract
fees,
expenses
or
sales
charges,
and
may
have
been
different
if
such
charges
had
been
considered.
Lipper
VIP
General
U.S.
Government
Funds
Classification
Average
is
an
equally
weighted
average
calculation
of
performance
figures
for
all
funds
within
the
Lipper
General
U.S.
Government
Funds
classification
in
the
Lipper
VIP
underlying
funds
universe.
Lipper
General
U.S.
Government
Funds
invest
primarily
in
U.S.
government
and
agency
issues.
For
the
six-month
period
ended
6/30/21,
there
were
24
funds
in
this
category.
Lipper
calculations
do
not
include
contract
fees,
expenses
or
sales
charges,
and
may
have
been
different
if
such
charges
had
been
considered.
Franklin
Templeton
Variable
Insurance
Products
Trust
Index
Descriptions
I-2
Semiannual
Report
MSCI
All
Country
Asia
Index-NR
is
a
free
float-adjusted,
market
capitalization-weighted
index
designed
to
measure
equity
market
performance
in
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
equity
market
performance
in
global
developed
and
emerging
markets.
MSCI
All
Country
World
Index
(ACWI)
ex
USA
Index-NR
is
a
free
float-adjusted,
market
capitalization-weighted
index
designed
to
measure
equity
market
performance
in
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
equity
market
performance
in
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
World
ex
USA
Index-NR
is
a
free
float-adjusted,
market
capitalization-weighted
index
designed
to
measure
equity
market
performance
in
global
developed
markets,
excluding
the
U.S.
MSCI
World
Growth
Index-NR
measures
large
and
midcap
securities
exhibiting
overall
growth
style
characteristics
across
23
developed
markets
countries.
MSCI
World
Index
is
a
free
float-adjusted,
market
capitalization-weighted
index
designed
to
measure
equity
market
performance
in
global
developed
markets.
MSCI
World
Value
Index-NR
is
a
free
float-adjusted,
market
capitalization-weighted
index
designed
to
measure
performance
of
stocks
exhibiting
overall
value
style
characteristics
in
global
developed
markets.
Russell
1000
®
Growth
Index
is
market
capitalization
weighted
and
measures
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
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
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
®
Growth
Index
is
market
capitalization
weighted
and
measures
performance
of
those
Russell
3000
®
Index
companies
with
relatively
higher
price-to-book
ratios
and
higher
forecasted
growth
rates.
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
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
Shareholder
Information
SI-1
Semiannual
Report
Board
Approval
of
Investment
Management
Agreements
FRANKLIN
TEMPLETON
VARIABLE
INSURANCE
PRODUCTS
TRUST
Franklin
Allocation
VIP
Fund
Franklin
Flex
Cap
Growth
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
Mutual
Global
Discovery
VIP
Fund
Franklin
Mutual
Shares
VIP
Fund
Franklin
Rising
Dividends
VIP
Fund
Franklin
Small
Cap
Value
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
(each
a
Fund)
At
a
meeting
held
on
April
20,
2021
(Meeting),
the
Board
of
Trustees
(Board)
of
Franklin
Templeton
Variable
Insurance
Products
Trust
(Trust),
including
a
majority
of
the
trustees
who
are
not
“interested
persons”
as
defined
in
the
Investment
Company
Act
of
1940
(Independent
Trustees),
reviewed
and
approved
the
continuance
of
the
(i)
investment
management
agreement
between
Franklin
Advisers,
Inc.
(FAI)
and
the
Trust,
on
behalf
of
each
of
Franklin
Allocation
VIP
Fund,
Franklin
Flex
Cap
Growth
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,
and
Templeton
Global
Bond
VIP
Fund;
(ii)
the
investment
sub-advisory
agreement
between
FAI
and
Franklin
Templeton
Institutional,
LLC
(FTIL),
an
affiliate
of
FAI,
on
behalf
of
Franklin
Allocation
VIP
Fund;
(iii)
the
investment
sub-advisory
agreement
between
FAI
and
Templeton
Global
Advisors
Limited
(TGAL),
an
affiliate
of
FAI,
on
behalf
of
Franklin
Allocation
VIP
Fund;
(iv)
the
investment
management
agreement
between
FTIL
and
the
Trust,
on
behalf
of
Franklin
Global
Real
Estate
VIP
Fund;
(v)
the
investment
management
agreement
between
Franklin
Mutual
Advisers,
LLC
(FMA)
and
the
Trust,
on
behalf
of
each
of
Franklin
Mutual
Global
Discovery
VIP
Fund,
Franklin
Mutual
Shares
VIP
Fund
and
Franklin
Small
Cap
Value
VIP
Fund;
(vi)
the
investment
management
agreement
between
Templeton
Asset
Management
Ltd.
(TAML)
and
the
Trust,
on
behalf
of
Templeton
Developing
Markets
VIP
Fund;
(vii)
the
investment
sub-advisory
agreement
between
TAML
and
Franklin
Templeton
Investment
Management
Ltd.
(FTIML),
on
behalf
of
Templeton
Developing
Markets
VIP
Fund;
(viii)
the
investment
management
agreement
between
Templeton
Investment
Counsel,
LLC
(TICL)
and
the
Trust,
on
behalf
of
Templeton
Foreign
VIP
Fund;
and
(ix)
the
investment
management
agreement
between
TGAL
and
the
Trust,
on
behalf
of
Templeton
Growth
VIP
Fund
(each
a
Management
Agreement)
for
an
additional
one-year
period.
The
Independent
Trustees
received
advice
from
and
met
separately
with
Independent
Trustee
counsel
in
considering
whether
to
approve
the
continuation
of
each
Management
Agreement.
Although
the
Management
Agreements
for
the
Funds
were
considered
at
the
same
Board
meeting,
the
Board
considered
the
information
provided
to
it
about
the
Funds
together
and
with
respect
to
each
Fund
separately
as
the
Board
deemed
appropriate.
FAI,
FTIL,
FTIML,
FMA,
TAML,
TICL
and
TGAL
are
each
referred
to
herein
as
a
Manager.
In
considering
the
continuation
of
each
Management
Agreement,
the
Board
reviewed
and
considered
information
provided
by
each
Manager
at
the
Meeting
and
throughout
the
year
at
meetings
of
the
Board
and
its
committees.
The
Board
also
reviewed
and
considered
information
provided
in
response
to
a
detailed
set
of
requests
for
information
submitted
to
each
Manager
by
Independent
Trustee
counsel
on
behalf
of
the
Independent
Trustees
in
connection
with
the
annual
contract
renewal
process.
In
addition,
prior
to
the
Meeting,
the
Independent
Trustees
held
a
telephonic
contract
renewal
meeting
at
which
the
Independent
Trustees
conferred
amongst
themselves
and
Independent
Trustee
counsel
about
contract
renewal
matters
and,
in
some
cases,
requested
additional
information
from
the
Managers
relating
to
the
contract.
The
Board
reviewed
and
considered
all
of
the
factors
it
deemed
relevant
in
approving
the
continuance
of
each
Management
Agreement,
including,
but
not
limited
to:
(i)
the
nature,
extent
and
quality
of
the
services
provided
by
each
Manager;
(ii)
the
investment
performance
of
each
Fund;
(iii)
the
costs
of
the
services
provided
and
profits
realized
by
each
Manager
and
its
affiliates
from
the
relationship
with
each
Fund;
(iv)
the
extent
to
which
economies
of
scale
are
realized
as
each
Fund
grows;
and
(v)
whether
fee
levels
reflect
these
economies
of
scale
for
the
benefit
of
Fund
investors.
Franklin
Templeton
Variable
Insurance
Products
Trust
Shareholder
Information
SI-2
Semiannual
Report
In
approving
the
continuance
of
each
Management
Agreement,
the
Board,
including
a
majority
of
the
Independent
Trustees,
determined
that
the
terms
of
each
Management
Agreement
are
fair
and
reasonable
and
that
the
continuance
of
such
Management
Agreement
is
in
the
best
interests
of
the
applicable
Fund
and
its
shareholders.
While
attention
was
given
to
all
information
furnished,
the
following
discusses
some
primary
factors
relevant
to
the
Board’s
determination.
Nature,
Extent
and
Quality
of
Services
The
Board
reviewed
and
considered
information
regarding
the
nature,
extent
and
quality
of
investment
management
services
provided
by
each
Manager
and
its
affiliates
to
the
Funds
and
their
shareholders.
This
information
included,
among
other
things,
the
qualifications,
background
and
experience
of
the
senior
management
and
investment
personnel
of
each
Manager;
as
well
as
information
on
succession
planning
where
appropriate;
the
structure
of
investment
personnel
compensation;
oversight
of
third-
party
service
providers;
investment
performance
reports
and
related
financial
information
for
each
Fund;
reports
on
expenses
and
shareholder
services;
legal
and
compliance
matters;
risk
controls;
pricing
and
other
services
provided
by
each
Manager
and
its
affiliates;
and
management
fees
charged
by
each
Manager
and
its
affiliates
to
US
funds
and
other
accounts,
including
management’s
explanation
of
differences
among
accounts
where
relevant.
The
Board
also
reviewed
and
considered
an
annual
report
on
payments
made
by
Franklin
Templeton
(FT)
or
the
Funds
to
financial
intermediaries,
as
well
as
a
memorandum
relating
to
third-
party
servicing
arrangements,
which
included
discussion
of
the
changing
distribution
landscape
for
the
Funds.
The
Board
noted
management’s
continuing
efforts
and
expenditures
in
establishing
effective
business
continuity
plans
and
developing
strategies
to
address
areas
of
heightened
concern
in
the
mutual
fund
industry,
such
as
cybersecurity
in
the
current
work-from-home
environment
and
liquidity
risk
management.
The
Board
also
reviewed
and
considered
the
benefits
provided
to
Fund
shareholders
of
investing
in
a
fund
that
is
part
of
the
FT
family
of
funds.
The
Board
noted
the
financial
position
of
Franklin
Resources,
Inc.
(FRI),
the
Managers’
parent,
and
its
commitment
to
the
mutual
fund
business
as
evidenced
by
its
reassessment
of
the
fund
offerings
in
response
to
the
market
environment
and
project
initiatives
and
capital
investments
relating
to
the
services
provided
to
the
Funds
by
the
FT
organization.
The
Board
specifically
noted
FT’s
commitment
to
enhancing
services
and
controlling
costs,
as
reflected
in
its
outsourcing
of
certain
administrative
functions,
and
growth
opportunities,
as
evidenced
by
its
recent
acquisition
of
the
Legg
Mason
companies.
The
Board
also
noted
FT’s
attention
focused
on
expanding
the
distribution
opportunities
for
all
funds
in
the
FT
family
of
funds.
Following
consideration
of
such
information,
the
Board
was
satisfied
with
the
nature,
extent
and
quality
of
services
provided
by
each
Manager
and
its
affiliates
to
the
Funds
and
their
shareholders.
Fund
Performance
The
Board
reviewed
and
considered
the
performance
results
of
each
Fund
over
various
time
periods
ended
January
31,
2021.
The
Board
considered
the
performance
returns
for
each
Fund
in
comparison
to
the
performance
returns
of
mutual
funds
deemed
comparable
to
the
Fund
included
in
a
universe
(Performance
Universe)
selected
by
Broadridge
Financial
Solutions,
Inc.
(Broadridge),
an
independent
provider
of
investment
company
data.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
a
Performance
Universe.
The
Board
also
reviewed
and
considered
Fund
performance
reports
provided
and
discussions
that
occurred
with
portfolio
managers
at
Board
meetings
throughout
the
year.
A
summary
of
each
Fund’s
performance
results
is
below.
Franklin
Allocation
VIP
Fund,
Franklin
Income
VIP
Fund,
Franklin
Strategic
Income
VIP
Fund,
Franklin
U.S.
Government
Securities
VIP
Fund
and
Templeton
Global
Bond
VIP
Fund
-
The
Performance
Universe
for
the
Franklin
Allocation
VIP
Fund
included
the
Fund
and
all
mixed-asset
target
allocation
growth
funds
underlying
variable
insurance
products
(VIPs).
The
Performance
Universe
for
the
Franklin
Income
VIP
Fund
included
the
Fund
and
all
flexible
portfolio
funds
underlying
VIPs.
The
Performance
Universe
for
the
Franklin
Strategic
Income
VIP
Fund
included
the
Fund
and
all
multi-sector
income
funds
underlying
VIPs.
The
Performance
Universe
for
the
Franklin
U.S.
Government
Securities
VIP
Fund
included
the
Fund
and
all
intermediate
US
government
funds
underlying
VIPs.
The
Performance
Universe
for
the
Templeton
Global
Bond
VIP
Fund
included
the
Fund
and
all
global
income
funds
underlying
VIPs.
The
Board
noted
that
each
Fund’s
annualized
income
return
for
the
one-,
three-,
five-
and
periods
was
above
the
median
of
its
respective
Performance
Universe.
The
Board
also
noted
that
each
Fund’s
annualized
total
return
for
the
one-,
three-,
five-
and
10-year
periods
was
below
the
median
of
its
respective
Performance
Universe.
The
Board
considered
that
the
income-oriented
investment
objective
of
each
Fund
is
the
primary
focus
for
the
Fund’s
portfolio
management
team
and
that
the
evaluation
of
the
Fund’s
Franklin
Templeton
Variable
Insurance
Products
Trust
Shareholder
Information
SI-3
Semiannual
Report
performance
relative
to
the
Fund’s
peers
on
an
annualized
income
return
basis
is
consistent
with
investor
expectations
and
the
Fund’s
investment
goals.
The
Board
concluded
that
each
Fund’s
performance
was
satisfactory.
Franklin
Growth
and
Income
VIP
Fund
-
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
equity
income
funds
underlying
VIPs.
The
Board
noted
that
the
Fund’s
annualized
income
return
and
annualized
total
return
for
the
one-,
three-,
five-
and
10-year
periods
were
above
the
medians
of
its
Performance
Universe.
The
Board
concluded
that
the
Fund’s
performance
was
satisfactory.
Franklin
Flex
Cap
Growth
VIP
Fund
and
Franklin
Small-Mid
Cap
Growth
VIP
Fund
-
The
Performance
Universe
for
the
Franklin
Flex
Cap
Growth
VIP
Fund
included
the
Fund
and
all
large-cap
growth
funds
underlying
VIPs.
The
Performance
Universe
for
the
Franklin
Small-Mid
Cap
Growth
VIP
Fund
included
the
Fund
and
all
mid-cap
growth
funds
underlying
VIPs.
The
Board
noted
that
each
Fund’s
annualized
total
return
for
the
ten-year
period
was
below
the
median
of
its
respective
Performance
Universe,
but
for
the
one-,
three-
and
five-year
periods
was
above
the
median
of
its
respective
Performance
Universe.
The
Board
further
noted
that
it
had
approved
at
its
February
2021
Board
meeting
various
changes
to
the
Franklin
Flex
Cap
Growth
VIP
Fund
expected
to
be
effective
May
1,
2021,
including,
among
other
things,
changing
the
Fund’s
name,
investment
strategy,
and
primary
benchmark.
The
Board
concluded
that
each
Fund’s
performance
was
satisfactory.
Franklin
Global
Real
Estate
VIP
Fund
-
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
global
real
estate
funds
underlying
VIPs.
The
Board
noted
that
the
Fund’s
annualized
total
return
for
the
one-,
three-
and
five-year
periods
was
below
the
median
of
its
Performance
Universe,
but
for
the
10-year
period
was
above
the
median
of
its
Performance
Universe.
The
Board
discussed
this
performance
with
management
and
management
explained
that,
effective
September
3,
2019,
a
change
was
made
to
the
Fund’s
portfolio
management.
Management
represented
that
since
this
change
in
the
Fund’s
portfolio
management
team
relative
Fund
performance
has
generally
been
positive,
outperforming
the
Fund’s
benchmark
by
approximately
150
basis
points.
Management
explained
that
the
Fund’s
relative
performance
lagged
that
of
peers
due
to
the
Fund’s
focus
on
sustainable
cash
flow
growth
at
a
time
when
the
market
returned
to
a
focus
on
value
post
the
favorable
news
regarding
vaccine
results
in
mid-November.
Management
further
explained
that
key
detractors
that
contributed
to
the
Fund’s
one-year
underperformance
included
the
Fund’s
exposure
to
technology-adjacent
subsectors
such
as
logistics
and
cellular
towers,
which
outperformed
prior
to
the
favorable
vaccine
news,
but
underperformed
thereafter.
Management
reviewed
with
the
Board
the
enhancements
to
the
Fund’s
investment
processes
in
an
effort
to
improve
performance,
which
included
making
specific
portfolio
holding
changes.
The
Board
concluded
that
the
Fund’s
Management
Agreement
should
be
continued
for
an
additional
one-year
period,
and
management’s
efforts
should
continue
to
be
closely
monitored.
Franklin
Large
Cap
Growth
VIP
Fund
and
Templeton
Developing
Markets
VIP
Fund
-
The
Performance
Universe
for
the
Franklin
Large
Cap
Growth
VIP
Fund
included
the
Fund
and
all
multi-cap
growth
funds
underlying
VIPs.
The
Performance
Universe
for
the
Templeton
Developing
Markets
VIP
Fund
included
the
Fund
and
all
emerging
markets
funds
underlying
VIPs.
The
Board
noted
that
each
Fund’s
annualized
total
return
for
the
one-,
three-,
five-
and
10-year
periods
was
above
the
median
of
its
respective
Performance
Universe.
The
Board
concluded
that
each
Fund’s
performance
was
satisfactory.
Franklin
Mutual
Global
Discovery
VIP
Fund
-
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
global
multi-cap
value
funds
underlying
VIPs.
The
Board
noted
that
the
Fund’s
annualized
total
return
for
the
one-
and
five-year
periods
was
below
the
median
of
its
Performance
Universe,
but
for
the
three-
and
10-year
periods
was
above
the
median
of
its
Performance
Universe.
The
Board
discussed
this
performance
with
management
and
management
explained
that
the
Fund’s
underperformance
in
2017
was
material
and
continues
to
adversely
impact
the
Fund’s
ranking
over
longer-term
periods.
Management
reminded
the
Board
of
the
primary
factors
that
impacted
the
2017
performance,
including,
among
factors,
exposure
to
non-US
equities
and
stock
selection.
Management
further
explained
that
the
Fund
is
one
of
the
few
funds
in
its
Performance
Universe
that
hedges
exposures
to
non-US
currencies
which
detracted
81
basis
points
from
the
Fund’s
performance
relative
to
its
benchmark
index,
the
MSCI
World
Value
Index
-
NR,
in
2020.
Management
also
explained
that
key
detractors
from
the
Fund’s
one-year
performance
included
the
Fund’s
stock
selection
in
the
financials
and
industrials
sectors
and
the
Fund’s
underweight
position
in
the
industrials
sector.
Management
reviewed
with
the
Board
recent
leadership
changes
implemented
for
the
Manager,
as
well
as
enhancements
made
to
the
Fund’s
investment
processes
in
an
effort
to
improve
performance.
The
Board
concluded
that
the
Fund’s
Management
Agreement
should
be
continued
for
an
additional
one-year
period,
and
management’s
efforts
should
continue
to
be
closely
monitored.
Franklin
Templeton
Variable
Insurance
Products
Trust
Shareholder
Information
SI-4
Semiannual
Report
Franklin
Mutual
Shares
VIP
Fund
-
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
multi-cap
value
funds
underlying
VIPs.
The
Board
noted
that
the
Fund’s
annualized
total
return
for
the
one-,
three-,
five-
and
10-year
periods
was
below
the
median
of
its
Performance
Universe.
The
Board
discussed
this
performance
with
management
and
management
explained
that
the
Fund’s
underperformance
in
2017
was
material
and
continues
to
adversely
impact
the
Fund’s
ranking
over
longer-term
periods.
Management
reminded
the
Board
of
the
primary
factors
that
impacted
the
2017
performance,
including,
among
factors,
exposure
to
non-US
equities
and
stock
selection.
Management
also
explained
that
the
Fund’s
underweight
position
in
US
securities
as
compared
to
its
peers
detracted
from
the
Fund’s
relative
performance.
Management
further
explained
that
key
detractors
from
the
Fund’s
one-year
performance
included
the
Fund’s
stock
selection
in
the
financials
and
industrials
sectors
and
the
Fund’s
underweight
position
in
the
industrials
sector.
Management
reviewed
with
the
Board
recent
leadership
changes
implemented
for
the
Manager,
as
well
as
enhancements
made
to
the
Fund’s
investment
processes
in
an
effort
to
improve
performance.
The
Board
concluded
that
the
Fund’s
Management
Agreement
should
be
continued
for
an
additional
one-year
period,
and
management’s
efforts
should
continue
to
be
closely
monitored.
Franklin
Rising
Dividends
VIP
Fund
-
The
Performance
Universe
for
the
Franklin
Rising
Dividends
VIP
Fund
included
the
Fund
and
all
large-cap
core
funds
underlying
VIPs.
The
Board
noted
that
the
Fund’s
annualized
total
return
for
the
three-,
five-
and
10-year
periods
was
above
the
median
of
its
Performance
Universe,
but
for
the
one-year
period
was
below
the
median
of
its
Performance
Universe.
The
Board
further
noted
that,
while
below
the
median,
the
Fund’s
one-year
annualized
total
return
was
14.22%
and
only
slightly
below
the
Performance
Universe
median
of
14.79%.
The
Board
concluded
that
the
Fund’s
performance
was
acceptable.
Franklin
Small
Cap
Value
VIP
Fund
-
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
small-
cap
value
funds
underlying
VIPs.
The
Board
noted
that
the
Fund’s
annualized
total
return
for
the
three-,
five-
and
10-year
periods
was
above
the
median
of
its
Performance
Universe,
but
for
the
one-year
period
was
below
the
median
of
its
Performance
Universe.
The
Board
further
noted
that,
while
below
the
median,
the
Fund’s
one-year
annualized
total
return
was
11.47%.
The
Board
concluded
that
the
Fund’s
performance
was
acceptable.
Franklin
VolSmart
Allocation
VIP
Fund
-
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
flexible
portfolio
funds
underlying
VIPs.
The
Board
noted
that
the
Fund
incepted
on
April
1,
2013
and
has
been
in
operation
for
less
than
10
years.
The
Board
further
noted
that
its
annualized
total
return
for
the
one-,
three-
and
five-year
periods
was
above
the
median
of
its
Performance
Universe.
The
Board
concluded
that
the
Fund’s
performance
was
satisfactory.
Templeton
Foreign
VIP
Fund
-
The
Performance
Universe
for
the
Fund
included
the
Fund
and
all
international
multi-
cap
value
funds
underlying
VIPs.
The
Board
noted
that
the
Fund’s
annualized
total
return
for
the
one-,
three-,
five-
and
10-year
periods
was
below
the
median
of
its
Performance
Universe.
The
Board
discussed
this
performance
with
management
and
management
explained
that
the
Fund
has
a
more
intense
value
tilt
than
the
Performance
Universe,
which
has
negatively
impacted
the
Fund’s
relative
returns
during
a
period
of
historic
and
sustained
outperformance
of
growth
over
value.
Management
further
explained
that
the
Fund’s
shorter-term
relative
returns
were
also
negatively
impacted
by
the
Fund’s
larger
allocation
to
the
energy
sector
versus
peers,
which
underperformed
the
broader
market.
Management
also
explained
that
the
Fund’s
one-year
relative
underperformance
was
primarily
attributable
to
the
Fund’s
health
care
holdings.
Management
then
discussed
with
the
Board
the
actions
that
are
being
taken
in
an
effort
to
address
the
sources
of
the
Fund’s
underperformance,
including
enhancements
to
the
Fund’s
portfolio
management
team
and
a
focus
on
constructing
a
more
diversified
and
high-conviction
portfolio.
The
Board
concluded
that
the
Fund’s
Management
Agreement
should
be
continued
for
an
additional
one-year
period,
and
management’s
efforts
should
continue
to
be
closely
monitored.
Templeton
Growth
VIP
Fund
-
The
Performance
Universe
for
this
Fund
included
the
Fund
and
all
global
multi-cap
value
funds
underlying
VIPs.
The
Board
noted
that
the
Fund’s
annualized
total
return
for
the
three-,
five-
and
10-year
periods
was
below
the
median
of
its
Performance
Universe,
but
for
the
one-year
period
was
above
the
median
of
its
Performance
Universe.
The
Board
discussed
this
performance
with
management
and
management
explained
that
the
Fund’s
higher
exposure
to
value
stocks,
which
have
experienced
a
period
of
historic
underperformance,
and
underweight
position
in
US
stocks,
which
have
led
market
returns
in
recent
years,
contributed
to
the
Fund’s
relative
longer-term
underperformance
versus
its
Performance
Universe.
Management
also
explained
that
weightings
in
particular
sectors
(such
as
consumer
discretionary,
energy,
financials,
information
technology
and
health
care)
and
Franklin
Templeton
Variable
Insurance
Products
Trust
Shareholder
Information
SI-5
Semiannual
Report
overall
stock
selection
contributed
to
the
Fund’s
relative
underperformance.
Management
then
discussed
with
the
Board
the
actions
that
are
being
taken/have
been
taken
in
an
effort
to
address
the
sources
of
the
Fund’s
underperformance,
including
enhancements
to
the
Fund’s
portfolio
management
team
and
a
focus
on
constructing
a
more
diversified
and
high-conviction
portfolio.
The
Board
noted
that
the
Fund’s
one-year
annualized
total
return
was
6.84%
and
in
the
second
quintile
of
its
Performance
Universe.
The
Board
concluded
that
the
Fund’s
performance
was
satisfactory.
Comparative
Fees
and
Expenses
The
Board
reviewed
and
considered
information
regarding
each
Fund’s
actual
total
expense
ratio
and
its
various
components,
including,
as
applicable,
management
fees;
transfer
agent
expenses;
underlying
fund
expenses;
Rule
12b-1
and
non-Rule
12b-1
service
fees;
and
other
non-
management
fees.
The
Board
also
noted
the
quarterly
and
annual
reports
it
receives
on
all
marketing
support
payments
made
by
FT
to
financial
intermediaries.
The
Board
considered
the
actual
total
expense
ratio
and,
separately,
the
contractual
management
fee
rate,
without
the
effect
of
fee
waivers,
if
any
(Management
Rate)
of
each
Fund
in
comparison
to
the
median
expense
ratio
and
median
Management
Rate,
respectively,
of
other
mutual
funds
deemed
comparable
to
and
with
a
similar
expense
structure
to
the
Fund
selected
by
Broadridge
(Expense
Group).
Broadridge
fee
and
expense
data
is
based
upon
information
taken
from
each
fund’s
most
recent
annual
report,
which
reflects
historical
asset
levels
that
may
be
quite
different
from
those
currently
existing,
particularly
in
a
period
of
market
volatility.
While
recognizing
such
inherent
limitation
and
the
fact
that
expense
ratios
and
Management
Rates
generally
increase
as
assets
decline
and
decrease
as
assets
grow,
the
Board
believed
the
independent
analysis
conducted
by
Broadridge
to
be
an
appropriate
measure
of
comparative
fees
and
expenses.
The
Broadridge
Management
Rate
includes
administrative
charges.
The
Board
received
a
description
of
the
methodology
used
by
Broadridge
to
select
the
mutual
funds
included
in
an
Expense
Group.
Franklin
Allocation
VIP
Fund,
Franklin
Growth
and
Income
VIP
Fund,
Franklin
Income
VIP
Fund,
Franklin
Small
Cap
Value
VIP
Fund
and
Templeton
Global
Bond
VIP
Fund
–
The
Expense
Group
for
the
Franklin
Allocation
VIP
Fund
included
the
Fund
and
10
other
mixed-asset
target
allocation
growth
funds
underlying
VIPs.
The
Expense
Group
for
the
Franklin
Growth
and
Income
VIP
Fund
included
the
Fund
and
12
other
equity
income
funds
underlying
VIPs.
The
Expense
Group
for
the
Franklin
Income
VIP
Fund
included
the
Fund
and
10
other
flexible
portfolio
funds
underlying
VIPs.
The
Expense
Group
for
the
Franklin
Small
Cap
Value
VIP
Fund
included
the
Fund
and
10
other
small-cap
value
funds
underlying
VIPs.
The
Expense
Group
for
the
Templeton
Global
Bond
VIP
Fund
included
the
Fund
and
11
other
global
income
funds
underlying
VIPs.
The
Board
noted
that
the
Management
Rate
and
actual
total
expense
ratio
for
each
Fund
were
below
the
medians
of
its
respective
Expense
Group.
The
Board
also
noted
that
the
Franklin
Allocation
VIP
Fund
and
Franklin
Growth
and
Income
VIP
Fund’s
actual
total
expense
ratio
reflected
a
fee
waiver
from
management.
The
Board
concluded
that
the
Management
Rate
charged
to
each
Fund
is
reasonable.
In
doing
so,
the
Board
noted
that
the
Franklin
Allocation
VIP
Fund’s
sub-advisers,
FTIL
and
TGAL,
are
paid
by
FAI
out
of
the
management
fee
FAI
receives
from
the
Fund.
Franklin
Small-Mid
Cap
Growth
VIP
Fund
and
Franklin
U.S.
Government
Securities
VIP
Fund
-
The
Expense
Group
for
the
Franklin
Small-Mid
Cap
Growth
VIP
Fund
included
the
Fund
and
11
other
mid-cap
growth
funds
underlying
VIPs.
The
Expense
Group
for
the
Franklin
U.S.
Government
Securities
VIP
Fund
included
the
Fund,
two
other
intermediate
US
government
funds
underlying
VIPs
and
10
inflation-protected
bond
funds
underlying
VIPs.
The
Board
noted
that
the
Management
Rate
for
each
Fund
was
below
the
median
of
its
respective
Expense
Group,
and
the
actual
total
expense
ratio
for
each
Fund
was
equal
to
the
median
of
its
respective
Expense
Group.
The
Board
concluded
that
the
Management
Rate
charged
to
each
Fund
is
reasonable.
Franklin
Rising
Dividends
VIP
Fund
-
The
Expense
Group
for
the
Fund
included
the
Fund
and
12
other
large-cap
core
funds
underlying
VIPs.
The
Board
noted
that
the
Management
Rate
for
the
Fund
was
equal
to
the
median
of
its
Expense
Group,
and
the
actual
total
expense
ratio
for
the
Fund
was
below
the
median
of
its
Expense
Group.
The
Board
concluded
that
the
Management
Rate
charged
to
the
Fund
is
reasonable.
Franklin
Large
Cap
Growth
VIP
Fund
and
Franklin
VolSmart
Allocation
VIP
Fund
-
The
Expense
Group
for
the
Franklin
Large
Cap
Growth
VIP
Fund
included
the
Fund
and
10
other
multi-cap
growth
funds
underlying
VIPs.
The
Expense
Group
for
the
Franklin
VolSmart
Allocation
VIP
Fund
included
the
Fund,
three
other
flexible
portfolio
funds
underlying
VIPs,
and
one
mixed-asset
target
allocation
growth
fund
underlying
VIPs.
The
Board
noted
that
the
Management
Rate
for
each
Fund
was
equal
to
the
median
of
its
respective
Expense
Group,
and
the
actual
total
expense
ratio
for
each
Fund
was
above
the
median
of
its
respective
Expense
Group.
The
Franklin
Templeton
Variable
Insurance
Products
Trust
Shareholder
Information
SI-6
Semiannual
Report
Board
also
noted
that
the
Franklin
VolSmart
Allocation
VIP
Fund’s
actual
total
expense
ratio
reflected
a
fee
waiver
from
management.
The
Board
concluded
that
the
Management
Rate
charged
to
each
Fund
is
reasonable.
Franklin
Flex
Cap
Growth
VIP
Fund
and
Templeton
Foreign
VIP
Fund
-
The
Expense
Group
for
the
Franklin
Flex
Cap
Growth
VIP
Fund
included
the
Fund
and
12
other
large-
cap
growth
funds
underlying
VIPs.
The
Expense
Group
for
the
Templeton
Foreign
VIP
Fund
included
the
Fund,
seven
other
international
multi-cap
value
funds
underlying
VIPs
and
five
international
large-cap
value
funds
underlying
VIPs.
The
Board
noted
that
the
Management
Rate
for
each
Fund
was
above
the
median
of
its
respective
Expense
Group,
but
its
actual
total
expense
ratio
was
below
the
median
of
its
respective
Expense
Group.
The
Board
further
noted
that
the
Management
Rate
for
the
Templeton
Foreign
VIP
Fund
was
approximately
six
basis
points
above
the
median
of
its
Expense
Group
and
that
the
Franklin
Flex
Cap
Growth
VIP
Fund’s
actual
total
expense
ratio
reflected
a
fee
waiver
from
management.
The
Board
also
noted
that,
in
connection
with
the
changes
discussed
above
that
are
expected
to
be
made
to
the
Franklin
Flex
Cap
Growth
VIP
Fund,
the
Fund
would
experience
a
reduction
in
its
Management
Rate.
The
Board
concluded
that
the
Management
Rate
charged
to
each
Fund
is
reasonable.
Franklin
Global
Real
Estate
VIP
Fund,
Franklin
Mutual
Global
Discovery
VIP
Fund,
Franklin
Mutual
Shares
VIP
Fund,
Franklin
Strategic
Income
VIP
Fund,
Templeton
Developing
Markets
VIP
Fund
and
Templeton
Growth
VIP
Fund
–
The
Expense
Group
for
the
Franklin
Global
Real
Estate
VIP
Fund
included
the
Fund
and
eight
other
global
real
estate
funds
underlying
VIPs.
The
Expense
Group
for
the
Franklin
Mutual
Global
Discovery
VIP
Fund
included
the
Fund,
one
other
global
multi-cap
value
fund
underlying
VIPs,
three
global
multi-cap
core
funds
underlying
VIPs,
and
four
global
multi-cap
growth
funds
underlying
VIPs.
The
Expense
Group
for
the
Franklin
Mutual
Shares
VIP
Fund
included
the
Fund
and
12
other
multi-cap
value
funds
underlying
VIPs.
The
Expense
Group
for
the
Franklin
Strategic
Income
VIP
Fund
included
the
Fund
and
11
other
multi-sector
income
funds
underlying
VIPs.
The
Expense
Group
for
the
Templeton
Developing
Markets
VIP
Fund
included
the
Fund
and
14
other
emerging
markets
funds
underlying
VIPs.
The
Expense
Group
for
the
Templeton
Growth
VIP
Fund
included
the
Fund,
one
other
global
multi-
cap
fund
underlying
VIPs,
three
global
multi-cap
core
funds
underlying
VIPs,
and
four
global
multi-cap
growth
funds
underlying
VIPs.
The
Board
noted
that
the
Management
Rate
and
actual
total
expense
ratio
for
each
Fund
was
above
the
median
of
its
respective
Expense
Group.
With
respect
to
the
Franklin
Global
Real
Estate
VIP
Fund,
the
Board
noted
management’s
explanation
that
the
Fund
was
the
second
smallest
fund
in
its
Expense
Group
and
had
experienced
declining
assets
under
management
resulting
in
higher
other
expenses.
The
Board
then
noted
that
the
Fund’s
actual
total
expense
ratio
reflected
a
fee
waiver
from
management
and
that
management
agreed
to
decrease
the
current
expense
cap
on
the
Fund’s
total
annual
operating
expenses
from
1.00%
to
0.90%,
effective
May
1,
2021.
With
respect
to
the
Franklin
Mutual
Global
Discovery
VIP
Fund,
the
Board
noted
management’s
explanation
that
the
portfolio
management
team
makes
investments
in
the
debt
and
equity
of
distressed
companies
and
merger
arbitrage
securities
that
are
specialized
in
nature
and
therefore
require
additional
expertise
and
resources,
whereas
the
Fund’s
Expense
Group
generally
does
not
make
such
investments.
With
respect
to
the
Franklin
Mutual
Shares
VIP
Fund,
the
Board
noted
that
the
Fund’s
Management
Rate
and
actual
total
expense
ratio
were
each
less
than
3
basis
points
above
the
respective
median
of
the
Fund’s
Expenses
Group.
With
respect
to
the
Franklin
Strategic
Income
VIP
Fund,
the
Board
noted
that
the
Fund’s
Management
Rate
and
actual
total
expense
ratio
were
less
than
2
basis
points
and
5
basis
points,
respectively,
above
the
applicable
median
of
the
Fund’s
Expenses
Group.
With
respect
to
the
Templeton
Developing
Markets
VIP
Fund,
the
Board
noted
that
the
Fund’s
Management
Rate
was
three
basis
points
and
the
Fund’s
actual
total
expense
ratio
was
less
than
three
basis
points
above
the
respective
median
of
the
Fund’s
Expenses
Group.
With
respect
to
the
Templeton
Growth
VIP
Fund,
the
Board
noted
management’s
explanation
that
the
Fund’s
total
expense
ratio
is
above
median
due
to
the
depth
of
the
Fund’s
fundamental
research
process
which
includes
extensive
fundamental
research
to
model
a
company’s
potential
future
earnings,
cash
flow,
and
asset
value
relative
to
its
stock
price.
The
Board
concluded
that
the
Management
Rate
charged
to
each
Fund
is
reasonable.
In
doing
so,
the
Board
noted
that
the
Templeton
Developing
Markets
VIP
Fund’s
sub-adviser
is
paid
by
TAML
out
of
the
management
fee
TAML
receives
from
the
Fund.
Profitability
The
Board
reviewed
and
considered
information
regarding
the
profits
realized
by
each
Manager
and
its
affiliates
in
connection
with
the
operation
of
each
Fund.
In
this
respect,
the
Board
considered
the
Fund
profitability
analysis
that
addresses
the
overall
profitability
of
FT’s
US
fund
business,
as
well
as
its
profits
in
providing
investment
management
and
other
services
to
each
of
the
individual
funds
during
the
12-month
period
ended
September
30,
2020,
being
the
most
recent
fiscal
year-end
for
FRI.
The
Board
noted
that
although
management
continually
makes
refinements
to
its
Franklin
Templeton
Variable
Insurance
Products
Trust
Shareholder
Information
SI-7
Semiannual
Report
methodologies
used
in
calculating
profitability
in
response
to
organizational
and
product-related
changes,
the
overall
methodology
has
remained
consistent
with
that
used
in
the
Funds’
profitability
report
presentations
from
prior
years.
The
Board
further
noted
management’s
representation
that
the
profitability
analysis
excluded
the
impact
of
the
recent
acquisition
of
the
Legg
Mason
companies
and
that
management
expects
to
incorporate
the
legacy
Legg
Mason
companies
into
the
profitability
analysis
beginning
next
year.
The
Board
also
noted
that
PricewaterhouseCoopers
LLP,
auditor
to
FRI
and
certain
FT
funds,
has
been
engaged
to
periodically
review
and
assess
the
allocation
methodologies
to
be
used
solely
by
the
Funds’
Board
with
respect
to
the
profitability
analysis.
The
Board
noted
management’s
belief
that
costs
incurred
in
establishing
the
infrastructure
necessary
for
the
type
of
mutual
fund
operations
conducted
by
each
Manager
and
its
affiliates
may
not
be
fully
reflected
in
the
expenses
allocated
to
each
Fund
in
determining
its
profitability,
as
well
as
the
fact
that
the
level
of
profits,
to
a
certain
extent,
reflected
operational
cost
savings
and
efficiencies
initiated
by
management.
As
part
of
this
evaluation,
the
Board
considered
management’s
outsourcing
of
certain
operations,
which
effort
has
required
considerable
up-front
expenditures
by
the
Managers
but,
over
the
long
run
is
expected
to
result
in
greater
efficiencies.
The
Board
also
noted
management’s
expenditures
in
improving
shareholder
services
provided
to
the
Funds,
as
well
as
the
need
to
implement
systems
and
meet
additional
regulatory
and
compliance
requirements
resulting
from
recent
US
Securities
and
Exchange
Commission
and
other
regulatory
requirements.
The
Board
also
considered
the
extent
to
which
each
Manager
and
its
affiliates
might
derive
ancillary
benefits
from
fund
operations,
including
revenues
generated
from
transfer
agent
services,
potential
benefits
resulting
from
personnel
and
systems
enhancements
necessitated
by
fund
growth,
as
well
as
increased
leverage
with
service
providers
and
counterparties.
Based
upon
its
consideration
of
all
these
factors,
the
Board
concluded
that
the
level
of
profits
realized
by
each
Manager
and
its
affiliates
from
providing
services
to
each
Fund
was
not
excessive
in
view
of
the
nature,
extent
and
quality
of
services
provided
to
each
Fund.
Economies
of
Scale
The
Board
reviewed
and
considered
the
extent
to
which
each
Manager
may
realize
economies
of
scale,
if
any,
as
each
Fund
grows
larger
and
whether
each
Fund’s
management
fee
structure
reflects
any
economies
of
scale
for
the
benefit
of
shareholders.
With
respect
to
possible
economies
of
scale,
the
Board
noted
the
existence
of
management
fee
breakpoints
for
each
Fund
(except
for
the
Franklin
Allocation
VIP
Fund
and
the
Franklin
VolSmart
Allocation
VIP
Fund),
which
operate
generally
to
share
any
economies
of
scale
with
a
Fund’s
shareholders
by
reducing
the
Fund’s
effective
management
fees
as
the
Fund
grows
in
size.
The
Board
considered
management’s
view
that
any
analyses
of
potential
economies
of
scale
in
managing
a
particular
fund
are
inherently
limited
in
light
of
the
joint
and
common
costs
and
investments
each
Manager
incurs
across
the
FT
family
of
funds
as
a
whole.
The
Board
concluded
that
to
the
extent
economies
of
scale
may
be
realized
by
each
Manager
and
its
affiliates,
each
Fund’s
management
fee
structure
(except
for
the
Franklin
Allocation
VIP
Fund
and
the
Franklin
VolSmart
Allocation
VIP
Fund)
provided
a
sharing
of
benefits
with
the
Fund
and
its
shareholders
as
the
Fund
grows.
The
Board
recognized
that
there
would
not
likely
be
any
economies
of
scale
for
the
Franklin
Flex
Cap
Growth
VIP
Fund,
Franklin
Global
Real
Estate
VIP
Fund,
Franklin
Growth
and
Income
VIP
Fund,
Franklin
Large
Cap
Growth
VIP
Fund
and
Franklin
VolSmart
Allocation
VIP
Fund
until
each
Fund’s
assets
grow.
The
Board
also
recognized
that
given
the
decline
in
assets
over
the
past
three
calendar
years
for
each
of
the
Franklin
Allocation
VIP
Fund,
Franklin
Income
VIP
Fund,
Franklin
Mutual
Global
Discovery
VIP
Fund,
Franklin
Mutual
Shares
VIP
Fund,
Franklin
Rising
Dividends
VIP
Fund,
Franklin
Small
Cap
Value
VIP
Fund,
Franklin
Strategic
Income
VIP
Fund,
Franklin
U.S.
Government
Securities
VIP
Fund,
Templeton
Foreign
VIP
Fund,
Templeton
Global
Bond
VIP
Fund
and
Templeton
Growth
VIP
Fund,
these
Funds
are
not
expected
to
experience
additional
economies
of
scale
in
the
foreseeable
future.
The
Board
concluded
that
to
the
extent
economies
of
scale
may
be
realized
by
each
Manager
and
its
affiliates,
each
Fund’s
management
fee
structure
provided
a
sharing
of
benefits
with
the
Fund
and
its
shareholders
as
the
Fund
grows.
Conclusion
Based
on
its
review,
consideration
and
evaluation
of
all
factors
it
believed
relevant,
including
the
above-described
factors
and
conclusions,
the
Board
unanimously
approved
the
continuation
of
each
Management
Agreement
for
an
additional
one-year
period.
Liquidity
Risk
Management
Program-
Funds
no
HLIM
Each
Fund
has
adopted
and
implemented
a
written
Liquidity
Risk
Management
Program
(the
“LRMP”)
as
required
by
Rule
22e-4
under
the
Investment
Company
Act
of
1940
(the
“Liquidity
Rule”).
The
LRMP
is
designed
to
assess
and
manage
each
Fund’s
liquidity
risk,
which
is
defined
as
the
risk
that
the
Fund
could
not
meet
requests
to
redeem
shares
issued
by
the
Fund
without
significant
dilution
of
remaining
Franklin
Templeton
Variable
Insurance
Products
Trust
Shareholder
Information
SI-8
Semiannual
Report
investors’
interests
in
the
Fund.
In
accordance
with
the
Liquidity
Rule,
the
LRMP
includes
policies
and
procedures
that
provide
for:
(1)
assessment,
management,
and
review
(no
less
frequently
than
annually)
of
each
Fund’s
liquidity
risk;
(2)
classification
of
each
Fund’s
portfolio
holdings
into
one
of
four
liquidity
categories
(Highly
Liquid,
Moderately
Liquid,
Less
Liquid,
and
Illiquid);
(3)
for
Funds
that
do
not
primarily
hold
assets
that
are
Highly
Liquid,
establishing
and
maintaining
a
minimum
percentage
of
the
Fund’s
net
assets
in
Highly
Liquid
investments
(called
a
“Highly
Liquid
Investment
Minimum”
or
“HLIM”);
and
(4)
prohibiting
the
Fund’s
acquisition
of
Illiquid
investments
that
would
result
in
the
Fund
holding
more
than
15%
of
its
net
assets
in
Illiquid
assets.
The
LRMP
also
requires
reporting
to
the
Securities
and
Exchange
Commission
(“SEC”)
(on
a
non-public
basis)
and
to
the
Board
if
the
Fund’s
holdings
of
Illiquid
assets
exceed
15%
of
the
Fund’s
net
assets.
Funds
with
HLIMs
must
have
procedures
for
addressing
HLIM
shortfalls,
including
reporting
to
the
Board
and,
with
respect
to
HLIM
shortfalls
lasting
more
than
seven
consecutive
calendar
days,
reporting
to
the
SEC
(on
a
non-public
basis).
The
Director
of
Liquidity
Risk
within
the
Investment
Risk
Management
Group
(the
“IRMG”)
is
the
appointed
Administrator
of
the
LRMP.
The
IRMG
maintains
the
Investment
Liquidity
Committee
(the
“ILC”)
to
provide
oversight
and
administration
of
policies
and
procedures
governing
liquidity
risk
management
for
FT
products
and
portfolios.
The
ILC
includes
representatives
from
Franklin
Templeton’s
Risk,
Trading,
Global
Compliance,
Investment
Compliance,
Investment
Operations,
Valuation
Committee,
Product
Management
and
Global
Product
Strategy.
In
assessing
and
managing
each
Fund’s
liquidity
risk,
the
ILC
considers,
as
relevant,
a
variety
of
factors,
including
the
Fund’s
investment
strategy
and
the
liquidity
of
its
portfolio
investments
during
both
normal
and
reasonably
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections;
and
its
cash
holdings
and
access
to
other
funding
sources
including
the
Funds’
interfund
lending
facility
and
line
of
credit.
Classification
of
the
Fund’s
portfolio
holdings
in
the
four
liquidity
categories
is
based
on
the
number
of
days
it
is
reasonably
expected
to
take
to
convert
the
investment
to
cash
(for
Highly
Liquid
and
Moderately
Liquid
holdings)
or
sell
or
dispose
of
the
investment
(for
Less
Liquid
and
Illiquid
investments),
in
current
market
conditions
without
significantly
changing
the
investment’s
market
value.
Each
Fund
primarily
holds
liquid
assets
that
are
defined
under
the
Liquidity
Rule
as
"Highly
Liquid
Investments,"
and
therefore
is
not
required
to
establish
an
HLIM.
Highly
Liquid
Investments
are
defined
as
cash
and
any
investment
reasonably
expected
to
be
convertible
to
cash
in
current
market
conditions
in
three
business
days
or
less
without
the
conversion
to
cash
significantly
changing
the
market
value
of
the
investment.
At
meetings
of
the
Funds’
Board
of
Trustees
held
in
May
2021,
the
Program
Administrator
provided
a
written
report
to
the
Board
addressing
the
adequacy
and
effectiveness
of
the
program
for
the
year
ended
December
31,
2020.
The
Program
Administrator
report
concluded
that
(i.)
the
LRMP,
as
adopted
and
implemented,
remains
reasonably
designed
to
assess
and
manage
each
Fund’s
liquidity
risk;
(ii.)
the
LRMP,
including
the
Highly
Liquid
Investment
Minimum
(“HLIM”)
where
applicable,
was
implemented
and
operated
effectively
to
achieve
the
goal
of
assessing
and
managing
each
Fund’s
liquidity
risk;
and
(iii.)
each
Fund
was
able
to
meet
requests
for
redemption
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
Proxy
Voting
Policies
and
Procedures
The
Trust’s
investment
manager
has
established
Proxy
Voting
Policies
and
Procedures
(Policies)
that
the
Trust
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities.
Shareholders
may
view
the
Trust’s
complete
Policies
online
at
franklintempleton.com.
Alternatively,
shareholders
may
request
copies
of
the
Policies
free
of
charge
by
calling
the
Proxy
Group
collect
at
(954)
527-
7678
or
by
sending
a
written
request
to:
Franklin
Templeton
Companies,
LLC,
300
S.E.
2nd
Street,
Fort
Lauderdale,
FL
33301,
Attention:
Proxy
Group.
Copies
of
the
Trust’s
proxy
voting
records
are
also
made
available
online
at
franklintempleton.com
and
posted
on
the
U.S.
Securities
and
Exchange
Commission’s
website
at
sec.gov
and
reflect
the
most
recent
12-month
period
ended
June
30.
Quarterly
Statement
of
Investments
The
Trust
files
a
complete
statement
of
investments
with
the
U.S.
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
for
each
fiscal
year
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
S
08/21
©
2021
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.
Semiannual
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. 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 Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer
(b)
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Robert G. Kubilis, Chief Financial Officer and Chief Accounting Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Franklin Templeton Variable Insurance Products Trust
By S\Matthew T. Hinkle__________________________
Matthew T. Hinkle
Chief Executive Officer - Finance and Administration
Date August 25, 2021
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 August 25, 2021
By S\Robert G. Kubilis_______________________________
Robert G. Kubilis
Chief Financial Officer and Chief Accounting Officer
Date August 25, 2021